It's the economy, stupid: The New York Times' John Harwood writes on how the GOP is pushing a one-word answer when it comes to hitting Obama and the Democrats on the economy: jobs. "Republicans entered the age of Obama with hope in the traditional pattern of midterm election losses by a president's party. But now unemployment trends have heightened their confidence that their political luck has turned more sharply and rapidly than most Republicans had expected." Harwood also spotlights the White House's potential decision to propose a new package of tax cuts to spur job growth: "Mr. Obama's economic advisers are sifting options for a new package of tax cuts and other job creation measures to be unveiled in next year's State of the Union address— or earlier if pressure for action becomes irresistible."
An early audit of the $700 billion TARP program doesn't make Fed Chair Bernanke or Bush Treasury Secretary Hank Paulson look good. "TARP Special Inspector General Neil Barofsky says senior government officials and Wall Street regulators, including Mr. Bernanke and Mr. Paulson, had "affirmative concerns" that several of the nine institutions were financially shaky. "By stating expressly that the 'healthy' institutions would be able to increase overall lending, Treasury may have created unrealistic expectations about the institutions' condition and their ability to increase lending," the audit says.
"Treasury and the TARP program lost credibility when lending at those institutions did not in fact increase and when subsequent events - the further assistance needed by Citigroup and Bank of America being the most significant examples - demonstrated that at least some of those institutions were not in fact healthy." The report makes no recommendations but argues that Treasury, the Federal Reserve and other federal agencies "should take more care in publicly characterizing the nature and objectives of their initiatives."
More: "The Treasury Department, which at times has clashed with the TARP special inspector's office, took some issue with the audit's accusation that the agency lacks sufficient transparency.
"While people may differ today on how the contemporaneous announcements about the reasons for selecting the initial nine recipients should have been phrased, any review of such announcements must be considered in light of the unprecedented circumstances in which they were made," Assistant Treasury Secretary Herb M. Allison Jr., who oversees TARP, said in a written response to Mr. Barofsky. However, the Federal Reserve generally agreed with the report's findings."
It appears what Barofsky had the biggest problem with was the statements of doom and gloom Paulson and Bernanke made.