Bloomberg reports that Senators Carl Levin and Tom Coburn have formally referred their bipartisan investigation of the financial crisis, and Goldman Sachs in particular, to the Department of Justice and the SEC for possible prosecution.
I noticed The New York Times and Wall Street Journal failing to report the possible criminal-prosecution implications of the Levin-Coburn Report several weeks ago. It eventually showed up a week later in an Andrew Ross Sorkin column. This is why the likelihood of a referral (Levin said all along he wanted to refer it for criminal investigation) has always mattered:
A formal referral from the Senate is “much more than a symbolic gesture” because it would prompt an agency to put the matter “at the top of its list,” said Robert Hillman, a professor at the University of California, Davis, School of Law.
— The Huffington Post reports that the U.S. has become a net exporter of fuel for the first time in twenty years, in large part because of the falling dollar. But this is weird:
The data paints a grim picture of the role of the weakening U.S. dollar in the world.
“It’s a sign that the dollar has gotten weak enough that it’s actually starting to stimulate demand for the goods we produce here,” said Scott Anderson, Senior Economist at Wells Fargo. “We’re more of a price taker right now in the gasoline market than a price setter and that means we’re at the whims of global growth and global demand.”
It’s a grim picture that the weak dollar is stimulating demand for our exports? Sure, it hurts at the pump, but the dollar needs to fall sharply to reduce our massive trade deficit. That means that all of our goods will be cheaper to export, not just fuel, boosting jobs here. Higher oil prices here will be a counterweight on the economic boost we get, but the silver lining there is that less petroleum dependence will be a boon for the economy, not to mention national security, in the long term.
Lots of people, including journalists (who are people, too, you know), mistakenly think that it’s inherently a bad thing to have a falling dollar. It’s not. The dollar has been artificially inflated for some time and it’s been bad for the country. As Dean Baker says:
If the dollar is over-valued by 25 percent it has roughly the same impact as imposing a 25 percent tariff on all U.S. exports and giving a 25 percent subsidy to all imports. In other words, we expect a high dollar to be associated with a large trade deficit. This is exactly what happened in the late 90s, the high dollar sent the trade deficit soaring to record levels.
— The State reports that Amazon, rogue brash avoider of taxes everyone else pays, is bailing out of the state after the legislature voted down a huge corporate-welfare package for the company.
Amazon had been threatening the state, saying it would give it a warehouse and 1,200 jobs but only if it got a bunch of subsidies and an exemption from having to collect sales taxes in the state.
“Amazon has told lawmakers across the country that evading sales tax collection is not central to their business model,” said Brian Flynn, executive director of the South Carolina Alliance for Main Street Fairness, a mix of Midlands and national retailers. “Tonight (Wednesday) they’ve shown their true colors and proven they’ll go to any length to protect their unfair advantage. These bullying tactics have been seen across the country… I want to thank the South Carolina House for standing with small business owners who support our local companies.”
The outcome ends a conflict that began after other retailers learned shortly after Jan. 1 that the package of incentives offered Amazon included a promise to seek the tax collection exemption.
Here’s what Amazon was demanding:
Other critics called the exemption too much on top of a free site, property tax breaks on equipment, state job tax credits and abolition of longtime Sunday morning sales restrictions in Lexington County to facilitate Amazon’s round-the-clock opposition (sic).
The vote against the deal was a landslide—71-47—and got support from Tea Party factions and business groups.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.