Emergency Economic Stabilization Act Archives - Shopfloor

This Week on America’s Business Radio

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Americas-Business-logo.jpgThe National Association of Manufacturers, the Manufacturing Institute and the Manufacturers Alliance/MAPI recently released a study on the costs facing American manufacturers.

Manufacturing Alliance economic consultant Jeremy Leonard, a guest on this week’s “America’s Business with Mike Hambrick” radio program, will walk listeners through the study. Leonard says the report revealed some bad news as well as some good news about the state of American manufacturing.

There are several tax provisions in the 2008 Emergency Economic Stabilization Act that could help manufacturers weather these rough economic times. Mike will talk to Tom Catania from Whirpool Corp. about a provision that gives the appliance maker and other companies more incentive to build energy-efficient products.

The American manufacturing sector recently scored a major victory when Congress stopped the Federal Communications Commission from selling off radio frequencies. Manufacturers sometimes use radios to communicate with workers on busy shop floors. Frank Weaver, director of telecommunications policy at Boeing, will explain why it was so important to manufacturers to stop the radio frequency auction.

“America’s Business” this week will also take a break from heavy policy issues to talk about an interesting book on fatherhood from Steve Doocy, co-host of the TV news show “Fox and Friends.” The book has a catchy title – “Tales from the Dad Side: Misadventures in Fatherhood.”

In our regular segments, Renee Giachino of American Justice Partnership gives us the latest on tort reform and commentator Hank Cox recalls “The Way It Was.” And the National Association of Manufacturers President Gov. John Engler will close the program with “The Last Word.”

For more about “America’s Business with Mike Hambrick” check out www.americasbusiness.org.

MI Delegation Says More Consumer Credit Would Help Automakers

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The entire Michigan Congressional delegation today wrote Treasury Secretary Paulson urging the Administration to take steps to bring liquidity to auto financing, making it easier for consumers to buy U.S.-made vehicles. The just-passed Emergency Economic Stabilization Act adds to Paulson’s authority to do so, they contend. From the letter:

Historically, more than 94 percent of new vehicles sold to consumers in the U.S. have been purchased with financing. With the seizing up of credit markets, financing is not available for consumers seeking to buy or lease cars, nor is it available for dealers to purchase inventory. These circumstances have dramatically depressed vehicle sales, and declining sales put at risk not only auto manufacturers, but the widespread network of suppliers, vendors, and other peripheral businesses that provide goods and services to them. New vehicle sales in the United States fell 26.6 percent in September, and are expected to fall by 30 percent in October, bringing the industry to an annualized rate of 11 million vehicles, the lowest since 1983.

In this current economic environment it is imperative that the government ensures that liquidity is restored so that the U.S. auto industry is able to function until normalcy is restored to credit markets. We urge you to use your broad regulatory authority including the powers granted to you by EESA to take the necessary steps to promote liquidity in the U.S. auto industry in order to protect this critical sector of the economy.

At a news conference, House Energy and Commerce Chairman John Dingell said: “We need to do something to help unfreeze the credit markets for that industry, as well as all others. The Michigan Delegation is pursuing all options and asking that the Bush Administration – Treasury, Fed, FDIC – also consider all available options.”

Dingell told the AP that automakers were considering asking the Federal Reserve for access to its discount window to provide low-cost credit. (News story.)

This Week on America’s Business Radio

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Americas-Business-logo.jpgRep. Mike Conaway (R-TX) says he was under a lot of pressure from folks in the Texas 11th Congressional District to vote against the “Emergency Economic Stabilization Act of 2008.” But Conaway, a guest on this week’s “America’s Business with Mike Hambrick” radio program, decided he had to vote for the bill.

Congress approved the bill and President Bush signed the legislation into law a week ago. Supporters hope the bill will help prevent the American economy from sinking into another Great Depression.

“My job as I see it is to form the best opinion I can, the most informed, intelligent,” Conaway says. “And yes, you listen to the constituents. But at the end of the day I had to vote for what I believe is right.”

One of the most important pieces of legislation for businesses in 2009 will be the misnamed “Employee Free Choice Act.” That bill would strip away an employee’s right to a secret ballot on union organizing. One group fighting against the bill is the Coalition for a Democratic Workplace. Mike will talk to their spokeswoman Rhonda Bentz about their campaign.

The Manufacturing Extension Partnership helps American manufacturers grow and compete in the global marketplace. For the past 17 years it has helped manufacturers achieve $1.3 billion in cost savings annually. But the program has been unfairly criticized as a government handout.

Mike will talk to Arkansas Manufacturing Solutions Director Dan Curtis about why the program is crucial to manufacturers in his state and around the country. In fact, Lee Morgan, president of Farr Air Pollution Control in Jonesboro, Arkansas, will tell Mike how MEP helped save his company and jobs.

In our regular segments, Renee Giachino of American Justice Partnership gives us the latest on tort reform, NAM Executive Vice President Jay Timmons offers an update on the 2008 political campaign season, and commentator Hank Cox recalls “The Way It Was.” And our program will close with “The Last Word” from the National Association of Manufacturers President Gov. John Engler.

For more about “America’s Business with Mike Hambrick” and to listen to the program online check out http://www.americasbusiness.org.

NAM President John Engler on WJR Radio with Paul W. Smith

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Veteran Michigan radio personality Paul W. Smith spoke with John Engler, president of the National Association of Manufacturers, Tuesday on WJR Radio in Detroit. After some friendly, family-oriented chit chat, the two talk about the economic stabilization legislation and the global financial crisis.

You can listen to the interview here. An excerpt:

PWS: Gee, did the trillion dollar bail-out help the National association of Manufacturers?

JE: Well, we felt that the rescue package needed to pass because everywhere we looked we could see signs of this spilling over and becoming a much broader, more serious problem. So, you’ve got to get the liquidity back into the system. I just hope that all of these tools now that have been given to the Treasury, to the FDIC, to the SEC, to the Fed, that that’s enough and there’s the flexibility to be able to response.

You can see what’s happened over the weekend and certainty yesterday, my goodness, the global nature of this now. Last night I heard the French ambassador talking about how Europe was going to response. It’s pretty clear that the response in this country has been at a rapid pace compared to maybe where they are in Europe right now.

PWS: Well, in Europe, they’re not sure they like the idea of this buy-out, obviously.

JE: Part of this is to think about how you are going to, as they say, keep the system liquid. You’ve got to have the ability to go to the bank. And you’ve got to have, if you’re in manufacturing for sure, lines of credit. Your customers have to have lines of credit or they’re not going to be able to buy anything. You’ve got to have this ability to have operating capital…there’s a lot of issues here and everything’s pretty interconnected.

I think, when we look ahead, the market I think in part is going to respond to some pretty serious diminished economic prospects around the world in 2009, too. It does not look like a good year ahead.

On the Financial Stabilization Bill

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Wrapping up the coverage of NAM activities last week in support of H.R. 1424, the Emergency Economic Stabilization Act.

CNN on Friday interviewed NAM board member Fletcher Steele of Pine Hall Bricks in North Carolina in anticipation of the vote. From the transcript, with CNN anchor Tony Harris posing the questions:

STEELE: Well, first of all, I don’t think this is a bailout of Wall Street. Wall Street has already imploded. This is a bailout for consumers and people in small businesses all over the country. But when this passes, I do think it will give people some confidence.

The stock markets have been dropping. We have our employees coming, asking to take out money out of their 401(k) and take and put it in a mattress.

HARRIS: Yes. Yes.

STEELE: We need people that have the confidence in the banking system, and the confidence and ability to go out and repair their refrigerator in their house or buy a new car or get the kids in school, or clothes or whatever.

And the NAM’s news release hailing passage.

Giving Credit to the Commentators

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We detect a theme emerging from the commentary on the financial crisis. The real source of the problem: Too much debt, period.

Sebastian Mallaby, drawing on Columbia’s Charles Calomiris, in today’s Washington Post column, “Blaming Deregulation“:

So the first cause of the crisis lies with the Fed, not with deregulation. If too much money was lent and borrowed, it was because Chinese savings made capital cheap and the Fed was not aggressive enough in hiking interest rates to counteract that. Moreover, the Fed’s track record of cutting interest rates to clear up previous bubbles had created a seductive one-way bet. Financial engineers built huge mountains of debt partly because they expected to profit in good times — and then be rescued by the Fed when they got into trouble.

Of course, the financiers did create those piles of debt, and they certainly deserve some blame for today’s crisis. But was the financiers’ miscalculation caused by deregulation? Not really.

The “too much debt” analysis was also the bottom line for a very good explanative show on the financial crisis on NPR’s “This American Life” broadcast over the weekend. Good radio, really.

365: Another Frightening Show About the Economy

Alex Blumberg and NPR’s Adam Davidson—the two guys who reported our Giant Pool of Money episode—are back, in collaboration with the Planet Money podcast. They’ll explain what happened this week, including what regulators could’ve done to prevent this financial crisis from happening in the first place. You can learn more about the daily ins and outs on the Planet Money blog.

Featured is the first comprehensible description we’ve heard of credit-default swaps. 

In other WaPo news, media critic Howard Kurtz covers the possibility that perhaps the media were insufficiently attentive to the potential of there conceivably being a problem, maybe.

Beyond Wall Street, what about Washington? Most news organizations fell short in reporting on the lax federal regulation that everyone — even the Bush administration — now admits was at the root of the problem.

Everyone admits? Reconcile that with Mallaby’s observations. (And for the sake of exercise, let’s find out how much Fannie and Freddie advertised in the newspapers.)

In any case, the most striking mistake in the lust for deregulation was clearly introduction of interstate banking. 

That Was Quick: Bill Signed

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Office of the Press Secretary


For Immediate Release                           October 3, 2008


On Friday, October 3, 2008, the President signed into law:

H.R. 1424, the Emergency Economic Stabilization Act of 2008, Energy Improvement and Extension Act of 2008, and Tax Extenders and Alternative Minimum Tax Relief Act of 2008, which authorizes the Secretary of the Treasury to establish a Troubled Assets Relief Program to purchase troubled assets from financial institutions; provides Alternative Minimum Tax relief; extends expiring tax provisions and establishes energy tax incentives; and temporarily increases Federal Deposit Insurance limits.



# # #

Bill Passes: 263-171

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A remarkable turnaround. Congratulations to everyone who presented their case to their elected members of Congress, and congratulations to the House members who reconsidered their previous vote in light of new provisions and new information.

H.R. 1424, the Emergency Economic Stabilization Act

UPDATE: Yes: 172 Democrats, 91 Republicans

No: 63 Dems, 108 Republicans


The roll call tally is here.

The House Vote Begins

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Speaker Pelosi makes the closing speech, highlighting accountability but eschewing the harsh partisan tone that caused so much unhappiness on Monday.

The vote begins on H.R. 1424.

Addendum: Speaker Pelosi noted upcoming hearings. From the House Oversight Committee

In light of the dramatic events that have occurred in global financial markets, the Oversight Committee will hold five hearings in October to examine the regulatory mistakes and financial excesses that led to the market breakdowns on Wall Street. In announcing the hearings, Chairman Waxman stated: “This financial crisis has shaken the global economy. Congress cannot wait until a new administration arrives in January to examine what went wrong and who should be held accountable.”


On Those Tax Provisions

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Jim Angle at Fox News explains the tax provisions included in the financial markets bill are, in fact, non-controversial and provisions already passed in the Senate by a vote of 93-2. And the AMT fix. 

And that wooden arrow provision that’s drawn such critical attention?

ANGLE: The bill also extends things such as deductions for tuition expenses, allowing teachers to continue to deduct out-of-pocket expenses for their classrooms, and allowing taxpayers in states that have high sales taxes instead of state income taxes to deduct the sales tax instead. Some reports ridiculed a provision that exempts from taxes wooden arrows for children.

MCCRERY: The fact is that boy scouts and camps all over the United States use these wooden arrows for practice, for archery practice and so forth, and the instruction of archery.

ANGLE: The tax was intended for professional bows and arrows, not those used to teach boy scouts but an earlier effort to change the law inadvertently saddled 30-cent arrows for children with a 39-cent tax, thereby doubling the price, a mistake the extender package fixes.

MCCRERY: While some may look at this and say oh, that’s terrible, when in fact, it’s good tax policy.

Shorter version: It’s the Tax Extenders Bill.