Friday, September 9, 2011

Morning Brief: President Obama outlines 'American Jobs Act'; Fed Chief Bernanke blames depressed consumers; MediaNews Group deal with Righthaven ends this month

Last night the President gave a speech before Congress timed to avoid the start of the NFL's first football game, but smack in the middle of rush hour on the west coast. But whether you were able to see the speech or not the reactions to it were incredibly predictable.

Called the American Jobs Act, the President's proposals are a mix of tax cuts and credits with investments, adding up to a $447 billion package. "It will provide a jolt to an economy that has stalled," the President said last night. "You should pass this jobs plan right away."

So does the President's plan have a chance of passing?

"This isn't a jobs plan. It's a re-election plan," said Senate Republican leader Mitch McConnell.

"I worry a little bit about what he's going to do for Medicare, Medicaid," Rep. Maxine Waters (D-CA) told CBS News' Scott Pelley last night.

So there you have it. But for what it is worth, the UPI actually bothered to ask an economist what they thought the plan would achieve. According to their story, Mark Zandi, chief economist at Moody’s Analytics, said the Obama plan would probably cut the unemployment rate by a percentage point.

Apparently the Fed Chief thinks past of the problem for the slowing economy lies with consumers. Speaking at an event in Minneapolis yesterday, Federal Reserve Chairman Ben Bernanke said that “Even taking into account the many financial pressures that they face, households seem exceptionally cautious.”

According to the NYT story of the speech, the Fed Chairman did recognize the blows consumers have suffered. “The persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high," Bernanke said.

But, you see, if only those laid off, unemployed consumers would just start buying cars, houses and jewelry the economy would be OK again. Damn those wretched poor!

Speaking of those pessimistic unemployed, reports this morning say that Bank of America could layoff 30,000 (Charlotte Observer) to 40,000 (WSJ) employees in a major restructuring. This is on top of the cuts to staff the embattled bank is making in its investment banking division.

Bank of America has become a catch phrase for everything that is wrong in banking today, but younger readers probably are unaware that this is not the same bank that helped build California and was once known as the Bank of Italy because it served the immigrant community of San Francisco. No, this current BofA is the result of Nation's Bank acquiring the company in 1998 and changing the new entities name to Bank of America.

In a phone interview with Wired, John Paton, the head of Digital First Media, the combination of the Journal Register Company and MediaNews Group, said that the deal MediaNews Group had with Righthaven will end at the end of this month. Righthaven is the Las Vegas company that files copyright infringement lawsuits against bloggers and other website owners over copying clips of news stories that appear on their client's websites.

“I come from the idea that it was a dumb idea from the start,” Paton told Wired.

The idea may be dumb, but as Wired reminds readers, the lawsuits have proved even dumber as most have been instantly thrown out by the presiding judges.