The government’s backing of Solyndra, which could cost taxpayers more than a half-billion dollars, came as the politically well-connected business began an extensive lobbying campaign that appears to have blinded government officials to the company’s financial condition and the risks of the investment, according to a review of government documents and interviews with administration officials and industry analysts.

While no evidence has emerged that political favoritism played a role in what administration officials assert were merit-based decisions, Solyndra drew plenty of high-level attention. Its lobbyists corresponded frequently and met at least three times with an aide to a top White House official, Valerie B. Jarrett, to push for loans, tax breaks and other government assistance.

Read it all. Also, see James Pethokoukis–“Solyndra, the logical endpoint of Obamanomics” which may be found over here.

Americans’ pessimism about the economy and its future is deepening, a USA TODAY/Gallup Poll finds, and they are increasingly willing to hold President Obama responsible for hard times.

Eight of 10 say the economy is in a recession, and nearly as many say it hasn’t improved over the past year. Even more ominous: Six in 10 predict the economy a year from now will be the same or worse than today, a downturn from the public’s views last year and the year before.

That gloomy outlook, economists say, can become a self-fulfilling prophesy.

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“Back in the 1990s, if Syria wanted credit and trade and loans that they couldn’t get from the United States, they went to the Europeans,” said Ray Takeyh, a senior fellow for Middle Eastern studies at the Council on Foreign Relations and a former Obama administration official. Now, Mr. Takeyh said, Europe has joined the United States in imposing sanctions on Syrian exports, including its critical oil sector.

Aside from Iran, he said, Syria has few allies to turn to. “The Chinese recognize their economic development is more contingent on their relationship with us and Europe than on whether Assad or Qaddafi survives,” he said, referring to the deposed Libyan leader, Col. Muammar el-Qaddafi.

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Shortly after the election of Barack Obama to the presidency in 2008, the cover of Time magazine featured a fabrication of an iconic photograph of Franklin Roosevelt, cigarette holder at a rakish tilt, sitting at the wheel of a convertible. FDR’s face and hands had been displaced by those of Obama’s above a headline speculating on the arrival of a “New New Deal.” That same week, the New Yorker featured an article by George Packer advancing a similar speculation, which was illustrated with a drawing of much the same invention.

What this image in two major American magazines mani-fested was the hope on the left and the fear on the right that Obama would revitalize and extend the New Deal order that had been significantly dismantled by the conservative ascendancy since the mid-1970s (and that “new Democrat” Bill Clinton did little if anything to stem in his eight years in office)….

In sum, FDR’s recovery policies centered on the un­employed, depositors and homeowners. Obama’s recovery policies have centered on employers, bank managers and shareholders, and mortgage lenders. FDR’s more egalitarian policies generated enormous political capital; Obama’s much less egalitarian policies have helped push him to the edge of political bankruptcy.

Read it all (requires subscription) and you may see more information about the author there.

On Monday, President Obama arrived at the place that many presidents reach when a recession won’t quit: He went after the rich.

Obama said he planned to increase tax rates on the wealthy, to ensure they “pay their fair share, just like everybody else.” Republicans called Obama’s ideas “class warfare” and suggested that they would hurt the economy by leaving small-business owners with less money to spend.

Their argument sets up a replay of an old American debate occurring across a new political landscape.

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All told, federal taxpayers last year received $1.08 trillion in credits, deductions and other perks while paying $1.09 trillion in income taxes, according to government estimates.

Only about 8 percent of those benefits went to corporations. (The write-off for corporate jets equals about .03 percent of the total.) The bulk went to private households, primarily upper-middle-class families that Obama has vowed to protect from new taxes.

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I found this very moving (about 10 minutes long), as was the talk by former President Clinton (before) and Vice President Biden (after) which I also recommend you take the time to hear. You can find all the talks at the link provided.

The dismal state of the economy is the main reason many companies are reluctant to hire workers, and few executives are saying that President Obama’s jobs plan ”” while welcome ”” will change their minds any time soon.

That sentiment was echoed across numerous industries by executives in companies big and small on Friday, underscoring the challenge for the Obama administration as it tries to encourage hiring and perk up the moribund economy.

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Please note that any comments not on the actual content of the speech will not be retained–thank you–KSH.

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The Joint Select Committee on Deficit Reduction, aka super Congress or super committee, is Congress’s answer to its own inability to break the hold of partisan gridlock that took America to the brink of default on Aug. 2, prompting the first-ever downgrade of the nation’s credit rating.

The panel, which on Thursday holds an organizational meeting open to the public, has a sweeping mandate to propose cuts to spending and entitlements and recommend tax reform by Nov. 23. Congress must vote the package up or down ”“ no amendments or filibuster ”“ by Dec. 23, or trigger a $1.2 trillion package of automatic spending cuts, equally divided between defense and domestic spending.

“Never has Washington had an all-or-nothing panel that is empowered and backed by a firm timeline like this one is,” says John Ullyot, a public-affairs consultant in Washington and former GOP Senate staffer. “The starter pistol will fire right after Labor Day.”

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Perhaps Secretary [Hilda] Solis, in her zeal to bolster U.S. manufacturing, could use her influence in high places to urge an NLRB retreat on this absurd action against Boeing — and on similarly misguided administration pandering to organized labor.

After all, as she writes in her column: “In the Charleston area alone, more than 900 manufacturing jobs have been added since July 2010 — an increase of 4.3 percent.”

In other words, President Obama’s labor secretary is bragging, in part, about jobs added in the Charleston area by Boeing, even as President Obama’s NLRB acting general counsel takes Boeing to court for adding those jobs.

And that, by any logical analysis, doesn’t add up.

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“These folks are not professional theologians and, except in a few cases like Huckabee, they haven’t been to seminary,” said Gary Smith, author of “Faith & the Presidency” and a historian at Grove City College, a Christian school in Pennsylvania. Mike Huckabee, the former Arkansas governor and 2008 GOP presidential hopeful, is a Southern Baptist minister.

“Most of them haven’t had more education about the relationship between Christianity and politics than the average person on the street,” Smith said. “While they have their own personal faith, it isn’t usually well informed by history and theology.”

Voters have started pushing for specifics because they no longer consider belief separate from action and faith unrelated to policymaking, said Kathleen Flake, who specializes in American religious history at Vanderbilt University.

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The nonfarm payrolls numbers were unchanged in August after a prolonged increase in economic anxiety that began with the brinksmanship in Washington’s debt-ceiling debate and was followed by the country’s loss of its triple-A credit rating, stock market whiplash and renewed concerns about Europe’s sovereign debt.

The jobs figure, a monthly statistical snapshot by the Department of Labor, may appear more negative because it does not include 45,000 Verizon workers who were on strike when the survey was taken.

Economists blamed both sluggish demand for goods and services and the heightened uncertainty over the economy’s direction for the slow pace of job creation, saying political deadlock was in effect creating economic paralysis.

Read it all.

When President Obama unveils his jobs plan to Congress next week, he’ll have to balance his desire for spending on programs that might stimulate the economy against the nation’s current appetite for cost cutting. We examine the pros, cons and politics of six proposals that might make Obama’s list….

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Federal Reserve Governor Elizabeth Duke called for government efforts to promote the rental of foreclosed homes, saying a recovery in the U.S. housing market hinges on clearing the backlog of such properties.

“We need to deal with the unprecedented number of loans in or still entering the foreclosure pipeline, the disposition of properties acquired through foreclosure, and the effect of a high percentage of distressed sales on home prices,” Duke said in a speech today in Washington. “We, as a nation, currently have a housing market that is so severely out of balance that it is hampering our economic recovery.”

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“The crisis is not over. Not just in Europe is it not over, it is also not over in other regions of the world,” he said, adding the United States had an “enormous” debt problem and lacked the structures to get the problem under control.

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If it sometimes seems as if Washington exists in a totally different economic universe from the rest of us, rest assured: it does. According to Gallup, the District of Columbia is the most economically optimistic part of the country.Every day, the polling organization surveys Americans of all income levels about whether they think current economic conditions are good, and whether the economy is getting better. The results of these two questions make up Gallup’s Economic Confidence Index.

The latest index report shows that the District of Columbia is far more confident in the economy than any state, by a long shot. In every state, most residents think the economy is getting worse; in the nation’s capital, fully 60 percent think the economy is getting better.

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This year’s Republican primary season offers us an important opportunity to confront our scruples about the privacy of faith in public life ”” and to get over them. We have an unusually large number of candidates, including putative front-runners, who belong to churches that are mysterious or suspect to many Americans. Mitt Romney and Jon Huntsman are Mormons, a faith that many conservative Christians have been taught is a “cult” and that many others think is just weird. (Huntsman says he is not “overly religious.”) Rick Perry and Michele Bachmann are both affiliated with fervid subsets of evangelical Christianity ”” and Rick Santorum comes out of the most conservative wing of Catholicism ”” which has raised concerns about their respect for the separation of church and state, not to mention the separation of fact and fiction.

I honestly don’t care if Mitt Romney wears Mormon undergarments beneath his Gap skinny jeans, or if he believes that the stories of ancient American prophets were engraved on gold tablets and buried in upstate New York, or that Mormonism’s founding prophet practiced polygamy (which was disavowed by the church in 1890). Every faith has its baggage, and every faith holds beliefs that will seem bizarre to outsiders. I grew up believing that a priest could turn a bread wafer into the actual flesh of Christ.

But I do want to know if a candidate places fealty to the Bible, the Book of Mormon (the text, not the Broadway musical) or some other authority higher than the Constitution and laws of this country….

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The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

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It will be a relief when the war and the killing are actually over. At the same time, many questions remain. One, on the U.S. side, is whether it was worth it. There is little to regret in the departure from the Libyan and world scene of Mr. Gadhafi. He may have started well with a popular revolution in 1969 that overthrew a corrupt monarchical regime, aligned Libya’s role in the Middle East and Africa more closely with that of its neighbors, and put the country’s oil wealth in Libyan hands.

But Mr. Gadhafi became the perfect illustration of the adage that power corrupts and absolute power corrupts absolutely as his views and behavior, backed by his country’s considerable wealth, became increasingly bizarre, culminating in his agents’ attack on Pan Am 103 over Scotland in 1988, killing 270.

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I have spoken to this many times in public. Those with the capacity to hire American workers”•small businesses as well as large, publicly traded or private”•are immobilized. Not because they lack entrepreneurial zeal or do not wish to grow; not because they can’t access cheap and available credit. Rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy. In an environment where they are already uncertain of potential growth in demand for their goods and services and have yet to see a significant pickup in top-line revenue, there is palpable angst surrounding the cost of doing business. According to my business contacts, the opera buffa of the debt ceiling negotiations compounded this uncertainty, leaving business decisionmakers frozen in their tracks….

…put yourself in the shoes of a business operator. On the revenue side, you have yet to see a robust recovery in demand; growing your top-line revenue is vexing. You have been driving profits or just maintaining your margins through cost reduction and achieving maximum operating efficiency. You have money in your pocket or a banker increasingly willing to give you credit if and when you decide to expand. But you have no idea where the government will be cutting back on spending, what measures will be taken on the taxation front and how all this will affect your cost structure or customer base. Your most likely reaction is to cross your arms, plant your feet and say: “Show me. I am not going to hire new workers or build a new plant until I have been shown what will come out of this agreement.” Moreover, you might now say to yourself, “I understand from the Federal Reserve that I don’t have to worry about the cost of borrowing for another two years. Given that I don’t know how I am going to be hit by whatever new initiatives the Congress will come up with, but I do know that credit will remain cheap through the next election, what incentive do I have to invest and expand now? Why shouldn’t I wait until the sky is clear?”

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Standard and Poor’s, the agency responsible for Friday’s downgrade, merely confirmed what anyone with their eyes open for the past decade or two already knew: The U.S. has a huge and growing debt problem that it is resolutely unwilling to solve.

Not unable. Just unwilling.

Not just politicians, but anyone who buys into their divisive, fanciful rhetoric.

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“You do have a sense that this is tough territory,” said Mark Tompkins, University of South Carolina political science professor. “Romney is a fiscal moderate who happens to be Mormon. Huntsman is a fiscal moderate who happens to be Mormon.

“Neither of them has an obvious constituent base in South Carolina.

“It is not about religion so much as it is about ideology.”

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[Boston University’s Laurence] Kotlikoff explains that America’s “unofficial” payment obligations ”” like Social Security, Medicare and Medicaid benefits ”” jack up the debt figure substantially.

“If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.”

We don’t hear more about this enormous number, Kotlikoff says, because politicians have chosen their language carefully to keep most of the problem off the books.

Read (or much better) listen to it all.

…among the rulers, only 63 percent — triple the fraction of the general populace but still less than two-thirds of the political class — regard the federal government as legitimate by the standards of America’s founding document. The remainder, presumably, are comfortable being tyrants.

These numbers should raise deep worries about the future of our republic. A nation whose government does not rest on the consent of the governed is a nation whose government holds sway only by inertia, or by force.

It is a nation vulnerable to political shocks, usurpation, or perhaps even political collapse or civil war. It is a body politic suffering from a serious illness. Those who care about America should be very worried.

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The global economy faces a deep crisis ”” deeper, in some ways, than the panic that struck financial markets in August 2008. At least then there was the prospect of short-term government action: tax cuts and spending increases, quantitative easing, and the like. Those measures averted total meltdown, yet the United States, Europe and Japan failed to restore strong, self-sustaining growth, leaving governments so deeply indebted that aggressive new policy interventions are probably not feasible for now. Indeed, what seems to have sent markets panicking last week is a dawning sense that capitalist democracies may have made more promises than their economies are capable of fulfilling ”” without significant growth-generating structural reforms. Or so it would appear from the recent dramas over bailing out Greece and raising the U.S. debt ceiling.

For Americans, a dead-in-the-water economy would be not only a colossal waste of productive potential but also a human tragedy, as Friday’s announcement of another U.S. unemployment rate above 9 percent cruelly demonstrated. “We need to create a self-sustaining cycle where people are spending, companies are hiring and our economy is growing,” President Obama said.

Well said. But how?….

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[If done properly]….Tax reform will already have slashed rates radically. In one Simpson-Bowles scenario, the top rate plunges to 23 percent. Conservatives could at that point contemplate increasing net revenue by slightly tweaking these new low rates, say, back to Reagan’s 28 percent, still much lower than the current 35 percent and Obama’s devoutly desired 39.6 percent. The deviation from revenue neutrality would yield new tax receipts for the Treasury, in addition to those resulting from the economic growth stimulated by the lower rates.

Democrats would have to respond by crossing their own red line on entitlements. That means real structural changes. That means raising the Medicare and Social Security ages, indexing them to longevity (until 70 becomes the new 65) and changing the inflation formula. Perhaps even means-testing Social Security (after one has recouped what one originally paid in).

The result of such a grand bargain would be debt reduction on a scale never before seen. World confidence in the American economy would rise dramatically. Best of all, we would be back on the road to national solvency….

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Just as the Y2K threat was overstated but nevertheless had unexpected, adverse intermediate term consequences, I doubt this chicanery will be cost free to the public at large. But the debt overhang that ideologues have used to whip the public into a funk is profoundly deflationary unless addressed head on, via writedowns and bankruptcies offset by fiscal stimulus. Deflation means that high quality bonds are the place to be, as the market action of last week confirmed, so Treasuries benefit from the very condition that S&P depicts as a disaster.

Thus the best outcome would be if the bond and currency markets shrug off the S&P action, which would reveal that the much feared downgrade was a paper tiger. But even if the marker response is underwhelming, it is hard to imagine that Obama will not take a political toll for his colossal miscalculation. It was he who stoked the debt ceiling phony crisis to implement a neoliberal agenda, who refused to reverse course and threaten to circumvent the debt limits when the process had clearly spun out of his control.

So even if S&P fails to land a body blow in the markets, its ploy has garnered press that seems certain to taint the Administration, and thus confirms the power of its reckless conduct. Thus the cost is not likely to show up in bond yields, but in something far more fundamental: in yet more destruction of the foundations of our society for short-term, selfish ends.

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1. The change in trajectory of US debt was in service of Banks: It began with TARP, and continued with every other bailout/stimulus/economic plan. What was S&P’s role in creating that crisis?

2. How will non-US investors (Private and Central Banks) view the downgrade?…

9. The Rating Agencies were downgraded by Dodd-Frank, with all regulatory and legal references to be removed. Was S&P’s move retaliatory?

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…there a sliver of a silver lining ”” and an important one. America’s downgrade may serve as a wakeup call for its policymakers. It is an unambiguous and loud signal of the country’s eroding economic strength and global standing. It renders urgent the need to regain the initiative through better economic policymaking and more coherent governance.

There is a risk, of course, that different political factions will use S&P’s action as a vindication of their prior beliefs. Democrats would argue that it is recent Republican political sabotage that pushed S&P over the edge while Republicans would argue that we are here due to irresponsible government spending by the Democrats.

For the sake of their country and the wider global economy, both parties should resist the urge to begin bickering. Instead they should seize this potential “Sputnik Moment…”

Read it all.