Tag Archives: Jobs

Commentary

Which politician received the most money from Wall Street in the last 20 years?

1 Comment

The Daily Caller explains how Barack Obama has received the most money from Wall Street bankers of all politicians in the last 20 years. (H/T Neil Simpson)

Excerpt: (with links removed)

Despite his rhetorical attacks on Wall Street, a study by the Sunlight Foundation’s Influence Project shows that President Barack Obama has received more money from Wall Street than any other politician over the past 20 years, including former President George W. Bush.

In 2008, Wall Street’s largesse accounted for 20 percent of Obama’s total take, according to Reuters.

When asked by The Daily Caller to comment about President Obama’s credibility when it comes to criticizing Wall Street, the White House declined to reply.

[…]In fact, the Sunlight Foundation, a nonpartisan watchdog group that tracks lobbyist spending and influence in both parties, found that President Obama has received more money from Bank of America than any other candidate dating back to 1991.

An examination of the numbers shows that Obama took in $421,242 in campaign contributions in 2008 from Bank of America’s executives, PACs and employees, which exceeded its prior record contribution of $329,761 to President George W. Bush in 2004.

According to the Center for Responsive Politics, Wall Street firms also contributed more to Obama’s 2008 campaign than they gave to Republican nominee John McCain.

“The securities and investment industry is Obama’s second largest source of bundlers, after lawyers, at least 56 individuals have raised at least $8.9 million for his campaign,” Massie Ritsch wrote in a Sept. 18, 2008 entry on the Center for Responsive Politics’s OpenSecrets blog.

By the end of Barack Obama’s 2008 campaign, executives and others connected with Wall Street firms, such as Goldman Sachs, Bank of America, Citigroup, UBS AG, JPMorgan Chase, and Morgan Stanley, poured nearly $15.8 million into his coffers.

Goldman Sachs contributed slightly over $1 million to Obama’s 2008 presidential campaign, compared with a little over $394,600 to the 2004 Bush campaign. Citigroup gave $736,771 to Obama in 2008, compared with $320,820 to Bush in 2004. Executives and others connected with the Swiss bank UBS AG donated $539,424 to Obama’s 2008 campaign, compared with $416,950 to Bush in 2004. And JP Morgan Chase gave Obama’s campaign $808,799 in 2008, but did not show up among Bush’s top donors in 2004, according to the Center for Responsive Politics.

Obama’s close relationship with JP Morgan Chase was highlighted earlier this year when he tapped Bill Daley, a former top executive with the bank, to replace Rahm Emanuel as his chief of staff.

Wall Street’s generosity to Obama didn’t end with his 2008 campaign either. Wall Street donors contributed $4.8 million to underwrite Obama’s inauguration, according to a Jan. 15, 2009 Reuters report.

So far Wall Street has raised $7.2 million in the current electoral cycle for President Obama, according to the Center for Responsive Politics. Obama’s 2012 Wall Street bundlers include people like Jon Corzine, former Goldman Sachs CEO and former New Jersey governor; Azita Raji, a former investment banker for JP Morgan; and Charles Myers, an executive with the investment bank Evercore Partners.

This ought to put to rest the myth that Wall Street is composed of greedy Republicans. But it will only work for people who care about the facts.

I blogged before about the Wall Street bailout that Obama pushed through – remember that? Do you think that maybe he was paying off the people that got him elected? Is that what “stimulus” spending really means? Is Solyndra just another example of “stimulus” spending to bail out the people who got him elected?

News

Dodd-Frank causes Bank of America to cut 30,000 jobs and raise debit card fees

Leave a comment

From the Wall Street Journal.

Excerpt:

What is the cost of overregulation? Bank of America appears to have provided part of the answer by announcing yesterday that the nation’s largest bank will cut 30,000 jobs between now and 2014. CEO Brian Moynihan said the bank’s plan is to slash $5 billion in annual expenses from its consumer businesses.

Mr. Moynihan didn’t say this, but we will: These layoffs are part of the bill for the last two years of Washington’s financial rule-writing. After loose monetary policy had combined with insane housing policy to create a financial crisis, the Democrats who ran Washington in 2009 and 2010 enacted myriad new rules that had nothing to do with easy money or housing.

Take the amendment that Illinois Democrat and Senator Dick Durbin (with the help of 17 Senate Republicans) attached to last year’s Dodd-Frank financial law. Mr. Durbin’s amendment instructed the Federal Reserve to limit the amount of “swipe fees” that banks can charge merchants when customers use debit cards.

How exactly does forcing banks to charge Wal-Mart less money for operating an electronic payment system prevent the next financial crisis? Readers may wait a long time for a satisfactory answer, but the cost of this Dodd-Frank directive is straightforward.

The Fed dutifully ordered banks to cut their fees almost in half. Bank of America disclosed in its most recent quarterly report that this change will reduce the bank’s debit-card revenues by $475 million in just the fourth quarter of this year. The new rules take effect on October 1, so BofA seems to have sensible timing as it begins to shed workers from a consumer business that has become suddenly less profitable by federal edict.

Make that the latest federal edict. In 2009, when a comprehensive overhaul of financial regulation was still a gleam in Barney Frank’s eye, President Obama signed the CARD Act into law. It limited the ability of banks to increase rates on delinquent borrowers and to charge fees on unprofitable customers. As Washington encouraged card issuers to be more selective in advancing credit and to demand higher rates when they do, interest rates on card customers predictably increased relative to other types of lending in the months after the law took effect.

Restricting bank profits on a particular product may have obvious populist appeal, but politicians shouldn’t be surprised if banks decide that such consumer credit operations aren’t good businesses and can function with fewer employees. Add in the various federal programs aimed at extracting penalties for this or that mortgage-foreclosure error and it’s understandable that a bank would have trouble forecasting growth to justify its current work force.

But that’s not all. The Dodd-Frank regulation also caused Bank of America to raise fees on debit cards to $5 a month ($60 a year).

Excerpt:

Throwing their weight around at the height of the banking crisis, House Financial Services Chairman Barney Frank of Massachusetts and Sen. Chris Dodd of Connecticut vowed to stick it to banks. They blamed them for the mess to cover up the fact that they forced banks to lend to favored constituencies who could not repay.

The two Democrats pushed through the much-vaunted Wall Street Reform and Consumer Protection Act, which President Obama signed and touted as one of the signature accomplishments of his presidency.

That act, which included a micromanaging amendment on fees, carried a $2.9 billion implementation cost for that alone over five years, according to the Government Accountability Office.

It was nothing but the same old pandering to special interests. Named after Illinois Democratic Sen. Dick Durbin, the amendment limited fees that banks can collect from sellers when their customers make debit card purchases — cutting 44 cent fees to 21 cents.

That little bomb is now why battered Bank of America has no choice but to impose a $5 monthly fee — $60 a year — to consumers to make up for lost revenue.

The “economics of offering a debit card have changed with recent regulations,” a bank spokeswoman told ABC News Friday.

BofA says it stands to lose $2 billion from the arbitrary Durbin price-fixing amendment and now has no choice but to make up for the lost revenue some other way.

Now that consumers will be stuck with that fee, they can thank Dodd, Frank and Obama for that special little spike in inflation tailored just for them.

Other banks, by the way, might follow. And like banks, consumers may respond in a way that is logical to their interests, too.

If there is one person who is to blame for this recession, it’s Barney Frank. Chris Dodd isn’t far behind. Who elected these people, and do they understand economics? I think not.

Related posts

News

House passes bill to protect cement industry from job-killing EPA regulations

1 Comment

The EPA is considering regulations that would kill American jobs by the bushel.

Excerpt:

According to [Sen. James] Inhofe, the administration’s proposed CO2/greenhouse gas-emission regulations—due out in November—could chop $300 billion to $400 billion alone off the nation’s gross domestic product (GDP) each year.  Estimates from the Senate Energy and Public Works Committee’s Republican staff estimates this regulation could cost in excess of the 2 million jobs that would have been lost as a result of Waxman-Markey Climate Change Bill.

Other estimates suggest that the EPA’s Utility MACT and Transport Rule could cost $184 billion and 1.4 million jobs.  Statistics Inhofe provided suggest the rule could shutter hundreds of coal-fired power plants around the country—equaling as much as 20% of the nation’s total energy output.

[…]“We are relying on coal for as much as 45% of our nation’s energy,” Inhofe said.  “He’s intentionally passed a rule that will shut down coal in America, and there are lots of jobs that either directly or indirectly rely on coal.  It’s going to make it a lot much more expensive.”

These increased costs are underscored by a  Bernstein Research report that found:  “We expect the loss of this generation to translate into higher wholesale energy and capacity prices.  … We estimate that this will raise the price of electricity during on-peak hours by $3 to $5 per MWh.”

The rule’s impact hit closer to home for 120 workers at a Cincinnati-area coal-fired power plant when Duke Energy announced it would be closing the plant if the rule is approved in November.

“The anticipated retirement date is contingent on potential changes to the implementation [of the] EPA’s MACT rule and other environmental regulations,” Duke Energy said in a statement released in July.

And Texas-based Luminant followed suit last week, announcing it would be laying off 500 workers in anticipation of the implementation of the EPA’s cross-state air pollution rule, set to take effect on Jan. 1, 2012.

[…]The National Associations of Manufacturers estimates the Utility MACT and cross-state air pollution rules will cost its members $18 billion annually, and drive its members’ electricity costs up by 11.5%.  It also shares Inhofe’s analysis that these regulations could cost 1.4 million jobs annually.

But there is some good news from the Energy and Commerce Committee.

Excerpt:

The U.S. House of Representatives declared another victory today in its ongoing battle against destructive regulation with passage of H.R. 2681, the Cement Sector Regulatory Relief Act. The measure passed the full House with strong bipartisan support by a vote of 262 to 161.

H.R. 2681, authored by Reps. John Sullivan (R-OK) and Mike Ross (D-AR), will protect the domestic cement manufacturing industry from costly new rules issued by the EPA, which currently threaten widespread plant closures and thousands of American jobs. This legislation provides a remedy to EPA’s flawed cement MACT rules with a directive to EPA to propose achievable standards and timelines. This legislation will ensure public health and the environment is protected without sacrificing jobs.

“President Obama likes to talk about the need to invest in our nation’s infrastructure and this bipartisan legislation will remove regulatory barriers to growth in the construction and cement manufacturing industries,” said Sullivan. “The bottom line is that if EPA’s Cement MACT rules are not revised, thousands of jobs will be lost due to cement plant closures and higher construction costs. These rules threaten to shut down up to 20 percent of the nation’s cement manufacturing plants in the next two years, sending thousands of jobs permanently overseas and driving up cement and construction costs across the country.  Additionally, the Portland Cement Association estimates it will cost $3.4 billion – half of the industry’s annual revenues – just to comply with EPA’s current Cement MACT rule.”

I was surprised that a Democrat supported this bill, but it’s really important to protect American jobs.