NPR takes a look at the "explosion" of federal contracts (the most in history) under the Bush administration and discusses the implications of this outsourcing of the federal government.
Also, reaction to the Citigroup bailout and Obama's stimulus and tax plans.
And, if you want even more Obama you can now play him in an online video game - and battle Sarah Palin!
NPR's Morning Edition looks at yet another issue facing Obama when he takes office - what to do about the "explosion" of federal contracts under the Bush administration:
Since President Bush took office, the government has doubled the amount of contracts with industry. The administration paid corporations more than $400 billion last year to work for everybody from the Forest Service to the CIA.
The administration has given the majority of that contract money to companies that didn't have to compete to get it — or faced only limited competition.
Bush has contracted out the work of the federal government to such an extent that it breaks all previous records, and the GAO is finding an appalling lack of federal supervision over contractors' activities:
The GAO staff has investigated contracts all across the government. Schinasi says that in many cases, officials at the agencies hardly even supervise the corporations they've hired. So, she says, they can't answer the most basic questions about what the companies are doing — including how many contractors have done a good job or a bad job, and whether they have saved or wasted taxpayers' money.
She says that's what convinces her that contracting is out of control and that the new president needs to do something about it.
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On a related note - and in case you missed it last week - Amy Goodman of Democracy Now had an interesting interview with Naomi Klein where she discusses the parallels between the government contracting and outsourcing in Iraq and the outsourcing taking place in regards to the financial bailout. Klein calls it the "Green zoning of the U.S. Treasury."
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Obama wants a stimulus package passed by Congress on his desk by January 20th, and he may decide to delay repealing the Bush tax cuts for those making over $250,000:
Obama's plans, outlined by his transition team yesterday, could put aside his campaign pledge to repeal a Bush tax cut for the wealthy. With the downturn in the economy, those tax cuts may remain in place until they are scheduled to die in 2011, said William M. Daley, an economic adviser.
Throughout the general election, Obama did reserve the right to delay rolling back the tax cuts if the economy worsened, so I'm not buying into the whole "he's already contradicting his campaign promises" meme the media is trying to spin.
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While the news broke this morning that Citigroup is the latest to be bailed out by the U.S. government (the Treasury's eagerness to jump in to rescue Citigroup stands in marked contrast to their opinion on bailing out the automotive industry), the Wall Street Journal reports that the nation's homebuilders are also pushing for a stimulus that will benefit their industry:
The builders' lobby is ramping up its sales pitch for a $250 billion stimulus package called "Fix Housing First," arguing that financial markets won't recover until home prices stop falling. They are calling for a generous tax credit for home purchases and a federal subsidy that would lower a homeowner's mortgage rate.
And/but:
But to some economists, "Fix Housing First" strikes an all-too-familiar refrain of "build more homes." Housing economist Thomas Lawler implores builders to "stop building." He and others argue that effectively setting a floor for home prices will prolong the pain because it will keep supply and demand out of sync.
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Kevin Drum at Mother Jones remarks that the bailout looks like a pretty good deal for Citigroup:
So that's that. But I guess I have one more question. Up until a couple of days ago, Citigroup was insisting that they were very adequately capitalized, thankyouverymuch. But tonight they accepted $20 billion in fresh capital. So either (a) their position deteriorated a lot in the past 48 hours, (b) the government's terms were so spectacularly generous that they figured they'd be stupid to turn it down, (c) Paulson insisted they take it even though they didn't want it, or (d) they've been lying. Which do you think it is?
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Reuters details the reaction of several financial analysts:
Rory Robertson, Interest Rate Strategist, Sydney
The move will help the markets not implode today. It's another one of a series of moves where the US government and the Fed do whatever they can from preventing the financial system to fall over. It's all good stuff but the fact that the Fed has to bail out one of the biggest banks in the world is not exactly a vote of confidence. It's another example of institutions getting caught with too many bad loans in their books.
Dariusz Kowalczyk, Chief Investment Strategist, CFC Seymour, Hong Kong
We expect the US bail-out of Citigroup as well as Obama's promise of a major stimulus plan – with key Democrats suggesting numbers between $500bn and $700bn, much bigger than expected – to allow stock markets to gain across the globe.
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Moving back to politics, the editor of The Nation, Katrina Vanden Heuvel, discusses her publication's response to Obama's cabinet picks:
I think that we progressives need to be as clear-eyed, tough and pragmatic about Obama as he is about us.
President-elect Obama is a centrist at a time when centrism means energy independence and green jobs and universal health care and massive economic stimulus programs and government intervention in the economy. He is a pragmatist at a moment when pragmatism and the scale of our financial crisis compel him to adopt bold policies. He is a cautious leader at a time when, to paraphrase New York Times columnist Paul Krugman, caution is the new risky. The great traumas of our day do not allow for cautious steps or responses.
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The Los Angeles Times Editorial board says opposition to the war in Iraq should not be a litmus test for Obama appointees:
Some ardent supporters of Barack Obama are aggrieved because the president-elect's emergent national security team includes supporters of the Iraq war, which Obama famously opposed. Making opposition to the war a litmus test for service in the new administration would be both unfair and impractical.
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I haven't heard any new gossip about Obama appointments, other than Desiree Walters being named White House social secretary. It also appears to be confirmed that Richardson will be appointed Secretary of Commerce. Pete Engardio at BusinessWeek thinks Richardson will be a good fit for the position:
If New Mexico Governor Bill Richardson is named Commerce Secretary by President-elect Barack Obama—as reports over the weekend indicate— his record suggests that Commerce could push for a much bolder role in supporting such strategic industries as renewable energies, nanotech, and green vehicles by investing alongside corporations and universities.
Richardson is one of the nation's most aggressive proponents of public-private economic partnership. After he became New Mexico's governor in 2003, he launched one of the most rule-bending development programs in the U.S., toppling old barriers between the private and public sectors.
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Hillary Clinton is the subject of a new off-Broadway play entitled "Hillary: A Modern Greek Tragedy With a (Somewhat) Happy Ending."
And for when you're bored at work, now you can "relive the excitement" by playing Super Obama World:
Obama collects American flag lapel pins while fending off lipstick-wearing pigs, lobbyists and out-of-control racks of Sarah Palin's wardrobe (knocking one over is worth 150,000 points. Ba-dum), all the while maintaining his trademark grin and superhuman cool. Watch out for that bridge to nowhere, though — and those piles of burning books at the Wasilla library.
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So what's on your mind this morning?