January 17, 2009

AP’s ‘Q&A’ on Geithner’s Taxes Has Excuses Galore, No Mention of ‘Reimbursements’ Pocketed

ObamaAndGeithner0109.jpgThe Associated Press’s record of running interference for Treasury Secretary nominee Timothy Geithner continues mostly unabated.

My chronicle of AP’s largely weak coverage, most of which has been previously detailed here at BizzyBlog, is at the end of this post.

No AP report I have seen has noted that Geithner applied for and merely pocketed partial “reimbursements” from the International Monetary Fund for payroll/”self-employment” taxes. He signed IMF forms saying that he had paid or would pay those taxes. He didn’t pay up for 2003 and 2004 until his returns were audited. He more than likely never would have paid up for 2001 and 2002 if he had not been nominated, even though a strong case could be made that he engaged in tax evasion.

These aspects of Geithner’s tax situation, if widely known, would, I believe, cause the average taxpayer to object strongly to the very idea of his nomination. AP’s alleged journalists appear to believe that this cannot be allowed to happen.

AP Personal Finance writer Dave Carpenter, in a mostly Q&A piece with a really weak title (“Meltdown 101: US tax laws can even foil the pros”), continued the silence on pocketed reimbursements yesterday afternoon (stored here for future reference). He also seems to have found every excuse for Geither except “the dog ate my W-2″:
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The POR (Pelosi-Obama-Reid) Economy: Tanks a Lot

Filed under: Economy,Taxes & Government — Tom @ 9:01 am

Note: This column originally appeared at Pajamas Media on Thursday.
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The President-elect and his party have “succeeded” in taking down the economy. Now that no one knows what the rules are, how can it come back?
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The country’s gross domestic product contracted for the first time in six years during the final quarter of 2007. After that, a bit of a recovery ensued. While official first-quarter growth was a paltry annualized 0.9%, the second quarter came in at a pretty decent 2.8%. Monthly economic growth estimates from Macroeconomic Advisers (MA) indicate that second quarter growth was much higher — a stunning 6.4%.

Besides giving rise to legitimate reasons to question the National Bureau for Economic Research’s assertion that the US has been in a continuous recession since December 2007, Uncle Sam’s and MA’s data show what the POR (Pelosi-Obama-Reid) Economy has been doing to us since last summer. Uncle Sam says that the economy contracted at an annualized 0.5% in the third quarter, while MA’s numbers for July through October annualize out to a mind-boggling -7.6% — and no one thinks that November and December were any better.

The POR Economy kicked in during the latter part of June, when its architects — Nancy Pelosi, Barack Obama, and Harry Reid — decided that starving the economy of energy by refusing to allow more offshore drilling in the face of $4 gas prices was a winning political position. Pelosi claimed that because we couldn’t totally “drill our way out of this,” we shouldn’t increase drilling at all. Reid put an exclamation point on Pelosi’s stubbornness by insisting that fossil fuels are “making us sick.” Ed Morrissey at Hot Air properly characterized Reid’s statement as economic “surrender.”

Democratic presidential nominee Obama’s unique contributions, beyond pathetically insisting that proper tire inflation and tuneups would solve our energy problems, consisted of promises to radically raise Social Security and federal income taxes on the country’s highest earners, who also happen to largely be its most productive contributors to the economy’s growth.

I observed in July that as a result of these economy-hostile positions, “Businesses and investors are responding to their total lack of seriousness by battening down the hatches and preparing for the worst.”

Those preparations were justified. “The worst” arrived; the prospect of a government infected with permanent energy antagonism and profoundly punitive taxes was just the beginning.

Decades-in-the-making meltdowns at Fannie Mae and Freddie Mac, aided and abetted over the years by Democrat cronies like Frank Raines, exposed how those agencies and the Community Reinvestment Act ruined the mortgage-lending market by lowering industrywide credit-approval standards.

As the Fan-Fred poison spread to other lenders, Henry Paulson panicked, and decided that he needed a made-up amount of $700 billion to buy “troubled assets,” principally mortgage loans in delinquency and foreclosure. Though President Bush was among those who allowed themselves to be stampeded by the Treasury’s Secretary’s threats of financial Armageddon, don’t forget that all three POR Triumvirate members proudly championed it.

Instead of using the money as promised, Paulson “put a (figurative) gun to the heads” of the major banks and forced them to accept direct government investment. As anyone could have predicted, bailing out one industry has already led to another bailout (GM-Chrysler), and endless calls for more, even going beyond private businesses to the states, local governments, and other public entities.

Why is it any surprise that investors, entrepreneurs, and business managers are in no mood to invest or expand, and are shedding employees at a scary rate? Last Friday’s employment data showed that the economy lost over 500,000 jobs on a seasonally adjusted basis for the second month in a row. The actual “on the ground” (not seasonally adjusted) numbers were worse. November and December 2008′s economy underperformed 2007 by almost 1.7 million jobs:

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This turndown has been much more severe than it should have been because of a serious breakdown in “the rules of the game.” Why invest in, start up, or expand any kind of business if there’s a realistic possibility that the government will aid your direct or indirect competitors, or otherwise radically and whimsically alter the playing field? This uncertainty has also taken its toll on consumers. Despite having billions of extra dollars available thanks to energy price drops and lower interest rates, their spending appears not to be ramping up proportionally.

The solution from Washington? More bailouts, leading to more uncertainty across the board. Another, bigger “stimulus,” and a less effective one at that. While tax “rebate” checks such as those sent out last year are not as effective as across-the-board rate cuts, at least they put money into consumers’ pockets quickly. But the new “stimulus” package evolving in Washington is dominated by public “investments” that, even if justified, would take much longer to make their way into the economy.

Roosevelt tried massive public works programs during the Depression. All he did is prolong it for seven years. Japan tried government stimulus for 10 years running in the 1990s. It only resulted in “the lost decade.”

What Pelosi, Obama, and Reid should do is expand the tax cut element of the stimulus plan to include all incomes, ditch almost all of the alleged “investments,” open up oil and gas exploration, and, eventually, watch the royalty money pour in. I know; that’s way too much to “hope” for.

Positivity: The Right Stuff

Filed under: Positivity,US & Allied Military — Tom @ 12:30 am

From IBDeditorials.com:

Posted Friday, January 16, 2009 4:20 PM PT

Heroes: The watery crash landing of US Airways flight 1549 with all 155 passengers emerging alive has been called a “miracle.” Miracle? We see something even better: True competence by a well-trained professional.

No doubt about it: US Airways pilot Chesley B. “Sully” Sullenberger III, a former fighter pilot with more than 40 years of flying under his belt, had the right stuff.

After hitting a flock of geese in his Airbus A320 shortly after takeoff and stalling out, he dead-sticked the plane into the Hudson River. Within five minutes, all 155 passengers had exited the stricken jet safely in 20-degree weather.

Only one word for this: Fantastic.

The story has captivated people. Maybe it’s the happy ending. The last time this happened, in 1982, an Air Florida jet hit a bridge over the Potomac and tumbled into the water. Sadly, the outcome was typical of wet landings: Just five of the 79 passengers survived.

But another reason people found this story thrilling is that, at a time of national crisis, it’s wonderful to see a person who’s extremely good at his job. Pilot Sulley, a 57-year-old Californian, is the walking, talking embodiment of a simple, old-fashioned virtue that seems missing from American life these days: Competence. …..

Go here for the rest of the editorial.