Wonkbook: Obama backs Fed; South Korea trade deal; courts block foreclosures
President Obama supports the Fed's quantitative easing plan, reports Neil Irwin: "Speaking at a news conference in New Delhi with Indian Prime Minister Manmohan Singh, Obama stressed that the Fed acts independently from his administration but left little doubt that he has Chairman Ben S. Bernanke's back. 'The Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole,' Obama said Monday. 'The worst thing that could happen to the world economy ... is if we end up being stuck with no growth or very limited growth. And I think that's the Fed's concern, and that's my concern as well.'"
The U.S. is trying to conclude a free trade agreement with South Korea, reports Howard Schneider: "By the boatload, South Korea ships half-finished flat-panel televisions and other gadgets to Korean-owned factories in China, where they are assembled by lower-paid Chinese workers and sent abroad to the United States and elsewhere. This pattern helps run up the U.S. trade deficit with China while taking international pressure off South Korea to revamp its trade practices. ... For the United States, an agreement could represent the most-promising chapter in a long effort to recalibrate the balance of trade between the Western developed world and the world's manufacturing center in Asia."
Courts are ruling in favor of homeowners in cases with faulty foreclosure paperwork, reports Ariana Eunjung Cha: "A year ago, Long Island Judge Jeffrey Spinner concluded that a mortgage company's paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so "repugnant" that he erased the family's $292,500 debt and gave the house back for free. The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation's biggest lenders, who say it could establish a dramatic new legal precedent and roil the nation's foreclosure system."
Swedish pop interlude: Air France's "Collapsing at Your Doorstep".
Still to come: Most reject the World Bank president's gold standard proposal; an investigator says cost-cutting didn't cause the BP oil spill; the Supreme Court rejects a challenge to health-care reform; and if you want your cat to paw at your iPhone, there's an app for that.
Economists and policymakers are dismissing World Bank President Robert Zoellick's call to revive the gold standard, reports Robin Harding: "'I think [Mr Zoellick] is living in the past, in particular in the period from 1980-92, when there was a periodic flirtation with gold,' said Edwin Truman, senior fellow at the Peterson Institute. 'It’s not constructive and it’s inappropriate.' Jean-Claude Trichet, president of the European Central Bank, said that central bankers meeting in Basel had not discussed the use of gold. 'We did not discuss the gold standard,' he said. 'In my memory such an idea was mentioned a long time ago by Jim Baker when he was a [US] secretary of the Treasury in the 1980s. I have no particular comment.'"
International backlash to the Fed's quantitative easing plan is growing.
A World Bank study shows that Western countries have targeted China with protectionist measures, reports John Miller: "Ahead of the G-20's meeting in Seoul on Thursday and Friday, a World Bank-backed study released Monday shows the U.S., European Union and G-20 allies have recently outpaced other countries in measures that have defended domestic producers, from France's $2.3 billion payout to its farmers in October to a South Korean program that is giving export subsidies to 100 hand-picked companies. China has been the biggest target of these measures, the study said."
Some Democrats are urging a compromise on extending tax cuts for under-$500,000 earners.
Low business demand for loans is casting doubt on the Fed's quantitative easing plan, reports Robin Harding: "Twenty-nine per cent of banks said that demand for loans from companies with sales below $50m had fallen, compared with only 7.1 per cent of banks that reported a rise, according to a Federal Reserve survey of senior bank loan officers. The tepid demand for loans from small businesses reduces the chance of a strong rebound in growth in 2011 and suggests that even rock-bottom interest rates and easier borrowing conditions may not persuade them to invest...Every bank reporting a decline in small business loan demand said that its customers had cut back on their investment in plant or equipment."
The sole Fed dissenter on quantitative easing will address House Republicans.
Congress will leave hundreds of thousands without aid if it doesn't extend unemployment insurance, writes Chad Stone: "Full federal funding will expire along with the EUC program on November 30 -- even though over two-fifths of the unemployed have been looking for a job for more than 26 weeks. If that happens, all federal unemployment insurance benefits will end in 40 states, and the number of weeks available in the rest of the states will shrink significantly, as the map below shows. Most of the several hundred thousand workers who exhaust their regular state benefits each month would receive no further help, and many of the 5 million workers now receiving federal emergency benefits would lose their remaining weeks."
We cannot return to the gold standard, writes Martin Wolf.
The G-20 is not just split between the U.S. and China, writes Gideon Rachman: "The G20 nations face a fundamental philosophical issue -- should they be looking for legally binding new agreements or should they proceed on a voluntary basis? For once, America and China - as big countries that care a lot about national sovereignty -- tend to be on the same side. They are both wary of agreeing to new international legal regimes. The countries of the European Union, however, adore new international treaties and were hoping that the G20 might one day develop into the 'planetary' government that Mr Sarkozy spoke of. The Europeans are liable to be disappointed."
Child prodigy interlude: The world's best 6-year-old skateboarder.
The chief counsel of the commission investigating the BP oil spill says cost-cutting didn't cause the spill, reports Steven Mufson: "The comments about cost run counter to those of other panels investigating the accident that triggered the massive oil spill in the Gulf of Mexico. Those inquiries have alleged that bad decisions by BP were driven by a desire to save money because the rig and its contractors were costing about $1.5 million a day and the exploration well was running behind schedule. 'To date, we have not seen a single instance where a human being made a conscious decision to favor dollars over safety,' said Fred H. Bartlit, Jr., general counsel for the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling."
Bartlit also wants the committee to have subpoena power.
A majority of senators will back legislation blocking EPA action on climate change, report Robin Bravender and Darren Samuelsohn: "At least 56 senators next year are likely to support efforts to block the Environmental Protection Agency’s plans to regulate greenhouse gas emissions, a POLITICO analysis shows. That’s just short of the 60 they’d need to overcome a filibuster, but a slew of moderate Democrats facing reelection in 2012 could put that number within reach. Democratic senators including Sherrod Brown of Ohio, Bob Casey of Pennsylvania, Debbie Stabenow of Michigan and Jon Tester of Montana haven’t supported past efforts to stall climate rules, but they could change their minds with an eye on their 2012 races."
The ranking Republican on the House climate change committee wants to preserve it, reports Patrick O'Connor: "Back in 2007, Rep. James Sensenbrenner (R., Wis.) didn’t want Congress to create a special panel to study global warming. But now that his party will control the House, he’s lobbying colleagues to keep it. His pitch: It’s the best vehicle for fighting any new rules issued by the Environmental Protection Agency. He’s also in line to be the committee’s chairman. 'Electing a Republican House of Representatives is not enough to stop some of the administration’s most economically damaging environmental proposals,' Mr. Sensenbrenner said in a brief statement circulated by his office today."
Green jobs programs are training workers for positions that don't exist, writes Monica Potts: "The American Wind Energy Association says the industry as a whole lost about 1,500 manufacturing jobs last year, leaving the number of manufacturing jobs at 18,500. Turbine installations are dropping, too, and the industry projects they will return to 2007 levels by the end of the year. That means the 40 or so facilities that produce primary turbine parts, like blades or towers, are operating below capacity, and there will be less demand for wind technicians in the near future because there will be fewer turbines for them to work on."
Adorable animals playing with electronics interlude: An iPhone app designed as a toy for cats.
The Supreme Court rejected its first challenge to health-care reform, reports Robert Barnes: "There is no indication that Justice Elena Kagan sat out the decision on a challenge brought by a former California legislator. That could be an indication she sees no conflict in hearing cases involving health-care reform, despite her role in the Obama administration. During her confirmation hearings, Kagan said that as President Obama's solicitor general, she had not been involved in legal strategy sessions about how to defend the health-care plan against charges that it is unconstitutional. She declined to say whether she would recuse herself if the issue reached the Supreme Court."
States are slashing anti-smoking programs.
State governments will be able to affect health-care reform's implementation significantly, reports N.C. Aizenman: "Although the law requires states to review 'unreasonable' premium increases, it will largely be up to each state to determine what that review process entails. ... States will also be in a position to exert pressure on the federal government when it comes to the law's requirement that insurers spend 80 to 85 percent of the premiums they collect to pay medical claims or otherwise improve their customers' health. If a state thinks the requirement would cause too many insurers to drop out of its market, it can ask the Department of Health and Human Services for a waiver. Iowa and Maine have already done so, and other states are likely follow."
House Democrats are trying to quiet the race for minority whip.
A Senate earmarks ban could pass, reports Janet Hook: "South Carolina Sen. Jim DeMint on Monday was collecting signatures on a letter calling for a vote by his fellow Senate Republicans to ban earmarks, in which spending is channeled to projects favored by individual lawmakers, outside the competitive federal funding system. House Republicans and President Barack Obama have endorsed such a ban, and a wave of Republicans who oppose earmarks were elected to the Senate last week. But Mr. DeMint's move puts him at odds with Senate Minority Leader Mitch McConnell, a Kentucky Republican who has defended earmarking as a legitimate exercise of Congress's power of the purse."
Sen.-elect Mark Kirk could back the Disclose campaign finance bill.
A rivalry between Elena Kagan and Sonia Sotomayor would be good for the Supreme Court, writes Noah Feldman: "Once a new appointee has fulfilled every lawyer's ambition by making it onto the court, the next step is to become a great justice. In an insular group of highly intelligent people sentenced to work together for life, the question of leadership can be vexing. Sometimes, a justice makes his case for leadership by defining himself in subtle opposition from a colleague. The potential jockeying for position between Sotomayor and Kagan is foreshadowed by the relationship between two of the most interesting justices of the 20th century, Felix Frankfurter and Hugo Black. Their intense rivalry pushed each to heights of constitutional greatness."
Dylan Matthews is a student at Harvard and a researcher at The Washington Post.
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