A series of initiatives to combat the financial crisis by Obama

The Bush administration came under renewed pressure from fellow Republicans who urged the government extract stiffer concessions from labor and other groups than Democrats and the White House previously agreed were needed to qualify for aid.

The incoming Obama administration is considering a series of initiatives to combat the financial crisis, including some efforts to help banks that the Bush administration has tried with limited success.

On Tuesday, members of President-elect Barack Obama's economic team briefed Mr. Obama on ways to address the financial crisis and also on plans for an economic-stimulus package.
While Treasury Secretary Henry Paulson has seized on equity investments in banks as Treasury's primary mechanism to help resolve the financial crisis, the Obama team is developing a broader approach that would likely incorporate multiple remedies.
The new administration is "trying to put components together that...will be complementary...while recognizing there's no easy answer," said a person familiar with its plans.
The Obama team, hoping to avoid the criticism leveled at Mr. Paulson by lawmakers that he lacks a consistent strategy, is also working to come up with a way to cogently explain the rationale behind its approach.
One key distinction will be in the approach to helping homeowners facing foreclosure. Mr. Paulson and the White House have resisted calls to embark on a government rescue of homeowners. The Obama team, by contrast, sees that as a critical leg of its financial-crisis rescue plan, people familiar with the matter said.
Democratic lawmakers are pushing for Mr. Obama to take steps quickly to help at-risk borrowers. Details of the Obama foreclosure plan aren't known, in part because they are still being hashed out.
In a fresh sign of the magnitude of the financial crisis, the Federal Deposit Insurance Corp. braced for more bloodletting in the U.S. banking industry. The five-member board of the FDIC, which is in charge of unwinding failed banks, voted Tuesday to increase the agency's 2009 budget to $2.24 billion, an increase of $1 billion, compared with 2008, and said it planned to beef up its bank-examination and supervisory staff by more than 500 to 6,269. It would pay for the increase by levying higher fees on banks.

While it is unclear exactly what the Obama financial rescue will look like, it is expected to continue Mr. Paulson's attempts at addressing the lack of capital at financial institutions. That could mean additional equity injections, as well as an effort to have the government boost the value of troubled assets, such as mortgage-backed securities.
"We are looking at a number of initiatives that will allow us to move aggressively and responsibly to address the economic and financial crisis both on Wall Street and Main Street, including programs to provide targeted foreclosure relief," said Stephanie Cutter, an Obama spokeswoman.
Mr. Paulson initially planned to help financial institutions by purchasing troubled assets through the $700 billion Troubled Asset Relief Program approved by Congress in October. Banks are struggling with a glut of those assets, which continue to fall in price, forcing the banks to write down the losses and take a financial hit.
But Mr. Paulson jettisoned that idea in favor of taking $250 billion of equity stakes in banks, arguing that was a quicker and more effective way to encourage banks to lend money to consumers, businesses and each other. However, the credit crisis has continued despite Treasury's efforts, prompting criticism from lawmakers and Wall Street.
On Tuesday, Mr. Paulson acknowledged that banks aren't lending enough money despite the government infusion, but said the U.S. didn't want to nationalize the industry and dictate the loans banks make.
Much of the Obama team's financial rescue package likely won't be known until the new administration takes office next month. Some of it depends on whether Mr. Paulson seeks the second half of the promised $700 billion. Treasury's initial $350 billion batch is rapidly dwindling and could be further drained by aid to struggling U.S. auto makers.
Lawmakers have made it clear that if Treasury wants to get the next tranche, it will need to come up with a foreclosure-mitigation plan and enact stricter requirements on banks that get government funds. Mr. Paulson has said he wants the Obama team to support any new programs, but the Obama team has yet to engage with Treasury on current efforts.
Mr. Paulson, in an interview with CNBC on Tuesday, said the government had enough "firepower," and suggested he had no current plans to tap the second tranche.
Some lawmakers want Mr. Paulson to request the funds. House Financial Services Chairman Barney Frank (D., Mass.) said he has told the Obama team it should work with Mr. Paulson to request the second $350 billion and embark quickly on a foreclosure-prevention plan.
"My hope is for them to agree with Paulson that he should request the second $350 billion as soon as we [Congress] reconvene," Mr. Frank said in an interview.

SBA Chief vs real story -Interviews on Small Business and the Economy

World economy fallen down! specially US economy.

As the numbers roll in -- jobs lost, financial markets fall, bailouts -- I'm sitting in the middle of a 40-person company I started in 1988 and wondering, as I assume so many others are, how bad this is for other small businesses.

Sandy K. Baruah, Acting Administrator of the U.S. Small Business Administration, has media availability in Detroit, MI Wednesday, Dec. 17 to discuss the auto industry's impact on small business, the current economy, what SBA is doing to help small businesses, and how to keep America's entrepreneurs competitive.
Baruah will lead a small business town hall hosted by the Detroit Regional Chamber of Commerce that morning, from 7:30am - 9am, to address the challenges confronting entrepreneurs in the Detroit region. Information on the town hall can be found at http://www.detroitchamber.com/. Media is welcome to interview him at the event or schedule an interview at another time.
WHO: SBA Acting Administrator Sandy K. Baruah
WHAT: Media interviews on the auto industry's impact on small business, the current economy, what SBA is doing to help small businesses during the economic downturn, and how to keep America's entrepreneurs competitive.
WHERE: Detroit, MI
WHEN: Wednesday, December 17, 2008
CONTACT: Christine Mangi at 202-205-6948 or Christine.mangi@sba.gov to arrange an interview.
BACKGROUND:
Sandy K. Baruah was designated Acting Administrator of the U.S. Small Business Administration on August 15, 2008. He has served in the Bush Administration since 2001. Prior to SBA, he was the Assistant Secretary for Economic Development at the Department of Commerce, and comes to SBA with a keen understanding on how to promote local business growth, manage organizational change, and respond to federal disasters.
Before joining President Bush's team, he spent seven years with a Portland, Oregon-based corporate management consulting firm. As a business consultant, he worked on engagements with clients such as Walt Disney World, Intel, Key Bank and Citizens Bank.
SOURCE: U.S. Small Business Administration U.S. Small Business Administration
Christine Mangi, 202-205-6948
Internet Address: www.sba.gov/news/
Copyright Business Wire 2008.

Real story on Small business:

I've been through recessions before. I was looking for my first job in 1971, buying our first house in 1982, and moving a company in 1992. In 2001 I laid off five people (of 33) in a single day.
That one was really hard. Our sales dropped steeply when the tech stocks fell, and we waited too long, got into real trouble, before we finally bit the bullet and cut the staff. What I discovered then was 1.) the 28 people who didn't get laid off were relieved to see we were dealing with the problem; they thought our response was long overdue; and 2.) hard as it is to lay off several people at once, it's not as hard as laying off an individual. An individual feels personal failure, but when it's a group, it's the company, or the economy, that caused it.
Now in this recession, which is certainly the worst in my lifetime, there's so much we don't know. I've read a lot of the available information of course, but it's pretty hard to gauge. For example, I've been watching as the official stats showed half a million jobs lost last month. And I followed as ADP showed small businesses increased jobs in September, but lost them in October and again in November. At the same time the SBA released a report showing that small businesses generate 80% of the new jobs.
But things are not that simple. Scott Shane asked Can Entrepreneurs Fix the Job Loss Problem on Small Business Trends earlier this week, and his answer is "the scale of the economic downturn is so large that we can't offset it just by boosting our level of entrepreneurial activity."
And then there are surveys like this one, which supposedly shows that 43% of small businesses aren't feeling the recession, and 4% say they're better off. Which is why I'm suggesting the survey we're going do to here.
One of the most important realities of small business in this country is how diverse and disconnected we really are. Small business owners don't vote alike, don't think alike, and don't respond to business crisis alike either. Four out of five small businesses are personal businesses with no employees. They're freelance writers, business consultants, graphic artists, designers, real estate brokers, butchers, bakers ... well, you get the idea.
While economists and politicians give "small business" credit for creating jobs, and there are several well meaning public agencies and business groups, we're still mostly out here in the trenches minding our own businesses, worrying, and wondering how bad things are and how bad they'll get. And when they'll turn around.
So I'd like to ask any and all small business owners, and yes definitely including those 21 million personal businesses, how are you doing? How bad is (or isn't) it?
With that in mind, please join me in collecting some real information, one person at a time, on what's going on throughout the economy with all those businesses that aren't big enough to attract news media attention, but are still there and, presumably, hurting as much as Wall Street and Detroit.
And to make this work, we want to start with the basics: Do you own the business? Do you have employees? How many people did you have six months ago, and how many today? What do you see happening to sales -- in percent growth or percent decline -- next year?
And from there, the stories. Add your own story. How are you weathering it, how bad is it, when will it turn around, what do you need, what have you done, what surprised you, what are you hoping, and what are you fearing?
And we'll be tracking responses and general results, so you can check back here to see what we come up with!