Wonkbook: Gun control legislation being introduced; the Fed is the most profitable bank in history; previewing the oil spill report
Companion bills banning the gun magazine used in the Tucson shooting are being introduced, reports Shira Toeplitz: "One of the fiercest gun control advocates in Congress, Rep. Carolyn McCarthy (D-N.Y.), pounced on the shooting massacre in Tucson, Ariz., Sunday, promising to introduce legislation as soon as Monday targeting the high-capacity ammunition clip the gunman used. McCarthy ran for Congress after her husband was gunned down and her son seriously injured in a shooting in 1993 on a Long Island commuter train...Sen. Frank R. Lautenberg (D-NJ) said he’s preparing to introduce a similar bill in the Senate. 'The only reason to have 33 bullets loaded in a handgun is to kill a lot of people very quickly,' Lautenberg said in a statement. 'These high-capacity clips simply should not be on the market.'"
The Fed is the most profitable bank in history, reports Robin Harding: "The US Federal Reserve made a record profit of $80.9bn in 2010 and sent $78.4bn to the US Treasury as income poured in from its programme of quantitative easing. The figures show how the financial crisis has turned the Fed into the most profitable bank in history, earning income of $88.1bn in 2010 but paying only $2.7bn in interest and $4.3bn in operating expenses. The Fed’s interest costs are minimal because almost all of its liabilities, such as bank reserves, are paid at the overnight rate of 0 to 0.25 per cent but many of the longer term assets it has bought yield 4 or 5 per cent."
The BP oil spill panel wants stricter rules, more money for those affected, report Steven Mufson and Juliet Eilperin: "The presidential oil-spill commission is planning to recommend tougher regulation, stiffer fines and a new industry-run safety organization in its final report Tuesday as part of an effort to prevent a repeat of the massive BP oil spill in the Gulf of Mexico last year. The report will recommend strengthening the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), calling it 'underfunded' with personnel who are 'often badly trained,' according to a person briefed by William K. Reilly, the commission's co-chairman. The report suggests that the bureau's head have technical expertise and that an office of safety and environment report directly to the interior secretary."
Got tips, additions, or comments? E-mail me.
Want Wonkbook delivered to your inbox or mobile device? Subscribe!
Late night indie interlude: No Age plays "Fever Dreaming" on Late Show with David Letterman.
Still to come: Wages are falling more than usual this recession; the Supreme Court declined to hear a case closely related to health-care reform; Michelle Rhee wants to see some teachers fired; drilling proponents are seizing on higher gas prices; and the world's most incompetent ketchup dispensing robot.
The recession is causing unusually large drops in wages, reports Sudeep Reddy: "Even at times of high unemployment in the past, wages have been very slow to fall; economists describe them as 'sticky.' To an extent rarely seen in recessions since the Great Depression, wages for a swath of the labor force this time have taken a sharp and swift fall...Between 2007 and 2009, more than half the full-time workers who lost jobs that they had held for at least three years and then found new full-time work by early last year reported wage declines, according to the Labor Department. Thirty-six percent reported the new job paid at least 20% less than the one they lost."
Wall Street is unloading Treasuries, signaling optimism about growth: http://bit.ly/eCfWUu
The new House trade subcommittee chair opposes legislation blocking Chinese imports, report Alan Beattie and James Politi: "The US needs to wake up its dormant trade policy by ratifying stalled bilateral pacts and eschewing damaging currency legislation to punish China, according to the new senior Republican on the trade issue in the House of Representatives. Kevin Brady, the Texas congressman who took over last week as chairman of the House ways and means trade subcommittee, said four years of foot-dragging in the Democratic-controlled House had left the US falling behind other countries on trade and tax reform...Mr Brady also said he would not pursue legislation allowing the US to restrict Chinese imports because that would undervalue its currency.'
The G-20 is divided over the role the dollar should play in the global currency system, report Damian Paletta and Ian Talley: "French President Nicolas Sarkozy said he recognized the importance of the dollar, but vowed after meeting President Barack Obama 'to propose new ideas' that could affect the international currency system--suggesting a divergence in economic priorities. Mr. Sarkozy, who will host the November summit of the Group of 20 leading industrialized nations, has pushed his foreign counterparts to consider reducing the role of the dollar as part of an overhaul of the international monetary system. French officials have said an overreliance on the dollar exacerbated the financial crisis by shifting capital from low-interest-rate rich countries to higher-yield emerging-market nations."
Implementing quantitative easing requires the Fed to engage in high-speed trading: http://nyti.ms/h9pitE
The US should focus on creating the right jobs, writes Raghuram Rajan: "Policymakers should remember that the housing boom was fueled by easy monetary policy, which sought to expand job growth as the US recovered from the last recession. Indeed, high-school graduation rates dropped in Las Vegas as people left school for readily available unskilled construction jobs. Now those uneducated unemployed are experiencing more than three times the unemployment rate of college graduates. It will be very hard for them to return to the workforce. The lesson for policymakers is clear: instead of constantly trying to boost spending and potentially creating problems for the future, a more sustainable way to improve job growth is to facilitate the 're-skilling' of the unemployed."
Needs work interlude: An almost functional ketchup-dispensing robot.
Could the Supreme Court refuse to hear the cases involving health-care reform? Warren Richey reports: "In a case with potential implications for legal challenges to the Obama health-care reform law, the US Supreme Court on Monday refused to examine whether Congress overstepped its authority when it made it a federal crime for a convicted felon to possess a bullet-proof vest. The key question in Alderman v. US was whether there are limits to Congress’s ability under the Constitution’s commerce clause to outlaw a local, intrastate activity like wearing body armor...Had the high court taken up the Alderman case, it would have signaled a willingness by the justices to closely examine what limits, if any, apply to congressional power under the commerce clause."
State budget crunches should lead to layoffs for poor teachers, writes Michelle Rhee: "The budget crisis inevitably requires layoffs of school staff. Teacher-layoff policies are a good example of how recognizing quality over seniority translates into responsible decision-making during difficult economic times. Currently, layoff decisions are based on seniority, which means the last person hired is the first person fired. However, research, such as a recent study by Dan Goldhaber at the University of Washington, shows that when teacher layoffs are determined by seniority it hurts students and teachers... States will continue to find it difficult to solve budget deficits if they continue to ignore problems surrounding the current structure of their benefits and pensions for teachers and administrators."
Politicians need to stay in the open, writes former Rep. Paul Kanjorski: http://nyti.ms/dT7Pbb
Confusing hobbies interlude: Stacking oranges on cat paws.
The House GOP is planning to use rising gas prices to push for increased drilling, reports Darren Goode: "Rising crude oil and gasoline prices mean that Republicans and Democrats are getting their talking points ready for what some say could be a repeat of the partisan rancor in the summer of 2008. For Republicans, they hope the silver lining of higher prices will provide greater emphasis for their 'all of the above' strategy toward increasing domestic production of oil, gas, nuclear, coal and alternative energy sources. 'It’s obviously going to spur interest in Congress,' said Sen. Chuck Grassley (R-Iowa). 'Because I’ll tell you, there’s nothing more politically sensitive than the price of gasoline.'"
The Chamber of Commerce is pushing the administration to support fossil fuel industries: http://bit.ly/eLLppX
The federal government is making plans for controlling the Arctic once it melts, reports Jacquelyn Ryan: "The Obama administration, like the Bush administration before it, has identified the Arctic as an area of key strategic interest. The U.S. military anticipates the Arctic will become 'ice-free' for several summer weeks by 2030, possibly as early as 2013. But the United States does not have the military and civilian resources it says it needs to successfully operate there - and there are few indications that any significant ones will be forthcoming...The Arctic is believed to hold nearly a quarter of the world's untapped natural resources and a new passage could shave as much as 40 percent of the time it takes for commercial shippers to travel from the Atlantic to the Pacific."
The electric Chevrolet Volt has won the Detroit Auto Show's car of the year award: http://wapo.st/htu2bi
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams. Photo credit: Lori Moffett Photo
Posted by: paul314 | January 11, 2011 9:32 AM | Report abuse
Posted by: justin84 | January 11, 2011 9:42 AM | Report abuse
Posted by: justin84 | January 11, 2011 9:54 AM | Report abuse
Posted by: dbw1 | January 11, 2011 10:01 AM | Report abuse
Posted by: visionbrkr | January 11, 2011 10:08 AM | Report abuse
Posted by: dbw1 | January 11, 2011 10:10 AM | Report abuse
Posted by: dbw1 | January 11, 2011 10:26 AM | Report abuse
Posted by: eggnogfool | January 11, 2011 10:49 AM | Report abuse
Posted by: 54465446 | January 11, 2011 10:57 AM | Report abuse
Posted by: 54465446 | January 11, 2011 11:04 AM | Report abuse
Posted by: dbw1 | January 11, 2011 11:09 AM | Report abuse
Posted by: eggnogfool | January 11, 2011 11:20 AM | Report abuse
Posted by: 54465446 | January 11, 2011 12:01 PM | Report abuse