Ron Paul to Federal Reserve: Open your books

In February, Texas Republican and Libertarian darling Ron Paul introduced a bill directing the U.S. comptroller general to audit the Federal Reserve's books.

Paul, who ran for president last year, wants the Fed to open the door on all of its secret transactions -- the talks with foreign banks, the deliberations on monetary policy, the activities of the Open Market Committee, and the communications with the regional reserve banks.

In the shadows of Wall Street's collapse last year, he has attracted more 300 co-sponsors, including 130 Democrats.

But this week, he charged, the provision was gutted from the landmark financial reform legislation being marked up by Barney Frank's Financial Services Committee. Paul blamed the chair of the subcommittee on monetary policy, North Carolina Democrat Mel Watt, whose Charlotte district is home to the headquarters of Bank of America, the nation's largest commercial bank.

Arguing that the Fed is hiding the extent of U.S. dependence on printing new money, Paul -- who is hoping to get the provision restored in the bill before it gets to the House floor --  told MSNBC today that the big spending masks a serious crisis in the value of the dollar.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Critics worry that robbing the Fed of its ability to deliberate in private will result in a weakened central financial structure -- and put Congress in charge of managing the nation's money supply.

But Paul, a physician, argues that a doctor would never hide from a cancer patient the extent of his illness, and that hiding the Fed's books amounts to kidding ourselves about the impact of its policies.

"We're still kidding ourselves," he said. "You have to bite the bullet, you have to admit the truth.... It's sort of like trying to get somebody off drugs.... Keeping them on the drug -- which is  easy money, easy spending and huge deficits and all that -- that will kill the patient, and the patient for me is the dollar.... And when you see gold up at $1,100 at ounce, that's a little bit of a warning signal."

-- Johanna Neuman

Photo credit: Bleier / Getty Images

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Saudis deny secret plan to ditch dollar in oil trades

To paraphrase Mark Twain, reports of the dollar's demise may be exaggerated, but they are persistent.

Several British newspapers are reporting this morning that finance ministers and central bankers from Arab Gulf states -- Saudi Arabia, Abu Dhabi, Kuwait and Qatar -- have been holding secret meetings in Hong Kong with counterparts from China, Russia, Japan and Brazil to end the use of the dollar for oil trades.

Instead, according to the Independent, they are looking to peg oil trades to a basket of currencies including the Japanese yen, the Chinese yuan, the euro, gold and a new, yet-to-happen unified Arab currency.

This is all denied by the Saudis. The country's cental bank governor, Muhammad al-Jasser, in Istanbul for International Monetary Fund meetings, told reporters that there has been “absolutely nothing” of that nature discussed between Saudi Arabia, the world’s biggest oil exporter, and other countries.

Scrambling to protect the dollar's status as an international yardstick, Treasury Secretary Timothy F. Geithner told reporters the United States will do “everything necessary” to maintain confidence in its currency. Also in Istanbul for the IMF session, Geithner said, "We recognize that the dollar’s important role in the system conveys special burdens and responsibilities on us, and we are going to do everything necessary to make sure we sustain confidence.”

But the truth is that ever since the global financial crisis last fall, the dollar’s role as the world’s main reserve currency has been in peril. As Bloomberg points out, China and Russia agreed to increase use of each other’s currencies in trade deals at a meeting last June. They and Brazil and India -- called the BRIC nations -- have talked about buying each other’s bonds and swapping currencies. 

And, as the Economy News suggested, Russia and China have both been vocal in their call to end the dollar's reign in international trade. As for the other players, said the EN, "Japan will clearly do what it feels necessary to protect its deflationary economy from an over-strong currency. France, of course, would take any opportunity to give Washington one in the eye."

Gold opened today at record highs.

-- Johanna Neuman

Photo credit: AFP/Getty Images

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Bill Richardson: vindication that Hemingway would appreciate

Federal prosecutors have dropped a pay-for-play ethics investigation of New Mexico Gov. Bill Richardson. You may recall back in the halcyon days of the Obama administration he had to withdraw his nomination as Commerce secretary to attend to the inquiry.

Now, top Justice Department officials have signaled their decision not to pursue indictments.

“It’s over,” one investigator told the Associated Press. “There’s nothing. It was killed in Washington.” The governor's office issued a statement hailing the move, saying the governor "has known all along that neither he nor any staff members committed any transgressions during their successful fundraising back in 2004. The U.S. attorney's thorough and lengthy investigation has apparently determined the same thing -- that no indiscretions occurred."

Political foes are not so sure. The state's Republican Party chair, Harvey Yates Jr., wondered whether the Obama administration dropped the inquiry for political reasons. “Was this decision made contrary to the advice of experienced, nonpolitical, career prosecutors and the FBI?” he asked.

For his part, Richardson has made no public comment. He and staffers are in Cuba for a trade mission, where he was photographed imitating an iconic Ernest Hemingway image from the author’s onetime home near Havana (photo above).

What next for the popular Latino politician? His term as governor expires in 2010, and New Mexico has term limits on its governors. So the Democratic politician with the long Washington resume will be looking for something to do.

Maybe it’s not too late to save Obamacare.

-- Johanna Neuman

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Photo credit: Javier Galeano / Associated Press

 

New Orleans' Mayor Nagin: Free from Chinese quarantine

As Ticket reported the other day, New Orleans Mayor Ray Nagin, along with his wife Seletha and their security guard, were quarantined by Chinese officials on their arrival in Shanghai on Sunday because one of the passengers on their plane -- a French student seated a few rows from them -- had the swine flu.

In China on a trade mission, Nagin was also in danger of missing a global warming conference in Sydney, Australia, where he was to be the keynote speaker. Meanwhile Fox News reported that Chinese officials were screening the mayor's calls, "to keep him safe."

The news that Nagin was waylaid in Shanghai occasioned great mischief on the part of the mayor's political foes. One radio talk show host, Jeff Crouere, suggested that the Chinese keep the controversial Nagin -- who after Hurricane Katrina urged African Americans to rebuild New Orleans as a "chocolate" city -- for the remaining 11 months of his term.

So, in the interest of keeping faith with all those Nagin fans and foes, the Ticket can now report that the Nagins have been released from quarantine and are heading to Australia. Nagin spokeswoman Ceeon Quiett said this morning that the mayor will now complete the second leg of his trip, out of China.

--Johanna Neuman

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Photo: Max Whittaker / Getty Images

Obama promises Government Motors won't run General Motors (full text)

President Obama today made it official. The U.S. government will infuse another $30 billion into GM, the fabled American auto manufacturer that makes Buicks, Cadillacs, Chevrolets and Hummers, and which filed a massive bankruptcy petition today.

With the U.S. government now owning at least 60% of General Motors, many are labeling the company Government Motors.

But Obama said taxpayers are "reluctant shareholders," and that GM executives, not the government, "will call the shots." Which is a relief to anyone who wants to buy a racy Corvette and doesn't want some Washington bureaucrat picking out the color.

Still, the government ownership comes with a lot of strings -- incentives for energy-efficient cars that so far have not wowed consumers, pay cuts for union workers and the like.

The political upside for Obama: if the deal works, putting GM back on its feet within a few years, he will be a hero to the American voters, especially in the battleground Midwest, whose jobs often revolve around the manufacturing sector. If it doesn't, look for Republicans to decry the Obama takeover of private industry and its disastrous impact on a private sector economy.

For his part, Obama seemed sanguine about his course. "What is good for General Motors and all who work there," he said, "is good for United States of America."

For more details, check out the White House fact sheet below, and the text of the president's remarks this morning.

-- Johanna Neuman

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Photo credit: General Motors

Vice President Joe Biden has left the house for Herzegovina

In fact, he's left the country. But not for a royal funeral yet.

With Herzegovina on everyone's mind these days, Vice President Joe Biden has been dispatched by the Obama White House to settle things down over there and ensure they understand what the new American administration wants and expects.

And the interpreters can clean up any Biden verbal gaffes or swearing before they get translated to the foreign leaders, some of whom Biden knows from his Foreign Relations Committee days and the many, many years he served in the Senate while Barack Obama was growing up.

Not as many Senate years as Robert Byrd, mind you. But then the ailing Byrd at 91 has a few years on Biden.

Also the vice president, who had a free weekend and then a graduation speech Monday, will travel to Serbia, Kosovo and one other place in southeastern Europe. What was it? Oh, Bosnia.

Joe left his basement VP bunker Monday for the jammed three-day trip and many meetings with people with difficult-to-pronounce names. Joe's probably sound asleep over the Atlantic as we write this. So read quietly.

The main point of the trip, according to a recent briefing by "a senior administration official," is not so much to change anything on the ground there but to demonstrate a renewed United States interest in the region and a continued commitment to its progress toward economic development and peaceful democratization as part of a greater Europe. 

A number of the world's lesser countries have learned over the years to be very wary when the U.S. government  demonstrates a renewed interest in them. American soldiers have often followed, demonstrating an armored American interest.

It does seem like some of this message-sending could have been handled via e-mail. But then you don't get to use the big plane. And maybe get some media coverage.

In Biden's absence the president will be left to handle the automotive emissions problem and the windmill building by himself. Then, on Friday Obama gives his third and final commencement address of the diploma season, at the U.S. Naval Academy, where abortion is not likely to be on the agenda. Protests neither.

-- Andrew Malcolm

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Photo: Associated Press (Biden tells Obama he's going to Herzegovina this week).

Obama on Jon Huntsman and vice versa about 出任美国驻中国大使

With his wife Michelle way, way out in California, giving an eagerly-awaited commencement address in Merced, which The Ticket already wrote about here, President Obama made a meaningful Saturday parental excursion outside the White House today to watch daughter Sasha play soccer.

But before that he made some major international and domestic political news.

As initially reported by The Ticket here late Friday evening (see what you'd already know if you checked back here more often!), President Obama appointed Utah's popular Republican Gov. Jon Huntsman Jr. as U.S. ambassador to China. (Not much worry over Senate confirmation either with fellow Mormon Harry Reid of Nevada at the helm of the Democratic majority there.)

We fully examined the political import of this very savvy move a few hours ago here; be sure to check it out. Appointing the national co-chair of Sen John McCain's losing Republican presidential campaign against Obama is not only bipartisan, it is very useful; it gets the potential GOP candidate out of the country and on the Democrat's team with only 42 months until the next presidential election. Beijing's a long ways from those Lincoln Day dinners in Ames and Clear Lake.

Right now, we have the full remarks of both the president and his new bipartisan, bilingual team member -- and one who's not from New Hampshire. (As previously reported here, Vice President Joe Biden had today off in Delaware. Also tomorrow.)

Or as Gov. Huntsman might put it:** 

你好，我叫洪博培，我从犹他州来的

-- Andrew Malcolm

Remarks by President Obama nominating Gov. Jon Huntsman Jr. of Utah as Ambassador to the People's Republic of China

THE PRESIDENT: Good morning, everybody. I am here to announce today the distinguished public servant I'm appointing as our nation's new ambassador to the People's Republic of China. I'm making this appointment mindful of its extraordinary significance. 

Given the breadth of issues at stake in our relationship with China, this ambassadorship is as important as any in the world –- because the United States will best be able to deal effectively with....

Wanna get "nasty"? For a good time call 1-900-WhiteHouse

Don't you just hate it when you recommend a great new restaurant to your parents and their minister and you write down the phone number and when your mother calls on the speakerphone to make a reservation, she gets a sultry come-on female voice asking if she wants to get "nasty" right now right there?

And your mother turns pale and the minister pretends not to hear and your father reaches for his cell to speeddial you? And he wonders out loud how you happened to possess that porn number or have it on your mind and you know that he knows that nothing you can say about innocently transposing two numbers will ever erase 100% of the doubt in anyone's mind.

And suddenly you wanna get away on Southwest Airlines?

Well, that's sorta what happened today when the White House press office was facilitating an on-the-record conference call between stateside reporters and Secretary of State Hillary Clinton  (oh, yes) and National Security Advisor Jim Jones, both in Europe with President Obama. 

Reporters called the number they were given and the woman's voice sure didn't sound like the former first lady and the issues at hand had more to do with credit card numbers than missile arsenals.

A quick call to the White House got the correct number for the call, which was joined in progress.

But apparently the boss took the presidential sense of humor with him on Air Force One. Because the deputy press secretary didn't find the incident as funny as the TV network.

-- Andrew Malcolm

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Michelle Obama, Carla Bruni Sarkozy: the fashionistas meet in France

President Obama and French President Nicolas Sarkozy were kind of wallpaper to their wives' outfits, mere witnesses to a moment of fashion history between two high-profile women who represent modernity with very different styles.

First Lady Michelle Obama is known for mixing up everyday clothes from J. Crew with designer wear. And even at that, her high-end selections often highlight new emerging American designers such as Jason Wu. Today, she wore a dramatic magenta-and-black dress with matching coat and kitten heels.

Carla Bruni Sarkozy, the former fashion model and singer who married Nicolas Sarkozy last year, is known for glamour and for wearing haute couture. A former girlfriend of Mick Jagger and Eric Clapton (maybe that's why POTUS was taking a good look?), Carla Sarkozy today opted for gray silk with a dramatic bow at the neck, with flats.

We will leave it to the fashion police to dissect the encounter. Suffice it to say, as the Daily Beast's Editor Tina Brown breathlessly put it, their meeting was "the most delicious, sartorial fashion moment that we are all going to be deconstructing for next two or three weeks."

So what do you think?

-- Johanna Neuman

Top photo: Michelle Obama, Carla Bruni Sarkozy and their husbands meet. Credit: Jason Reed / Reuters

Middle photo: The two first ladies meet other spouses before an official dinner. Credit: Philippe Wojazer / Reuters

Bottom photo: The first couples take it all in. Credit: Eric Feferberg / AFP/Getty Images

Full text of Barack Obama G-20 remarks and news conference

Following is the full text of the April 2, 2009, statement and Q & A of President Obama following the Group of 20 Summit in London at the ExCel Center. 6:44 P.M. (Local time) We have two video summaries of the proceedings below too.
 
PRESIDENT OBAMA:  Earlier today, we finished a very productive summit that will be, I believe, a turning point in our pursuit of global economic recovery.
 
By any measure, the London summit was historic. It was historic because of the size and the scope of the challenges that we face, and because of the timeliness and magnitude of our response.
 
The challenge is clear. The global economy is contracting. Trade is shrinking. Unemployment is rising.  The international finance system is nearly frozen. Even these facts can't fully capture the crisis that we're confronting, because behind them is the pain and uncertainty that so many people are facing.  We see it back in the United States. We see it here in London.

We see it around the world: families losing their homes, workers losing their jobs and their savings, students who are deferring their dreams.  So many have lost so much. Just to underscore this point, back in the United States, jobless claims released today were the highest in 26 years. We owe it to all of our citizens to act, and to act with a sense of urgency.
 
In an age where our economies are linked more closely than ever before, the whole world has been touched by this devastating downturn. And today, the world's leaders have responded with an unprecedented set of comprehensive and coordinated actions.
 
Now, just keep in mind some historical context. Faced with similar global challenges in the past, the world was slow to act, and people paid an enormous price. That was true in the Great Depression, when nations prolonged and worsened the crisis by turning inward, waiting for more than a decade to meet the challenge together. Even as recently as the 1980s, the slow global response deepened and widened a debt crisis in Latin America that pushed millions into poverty.
 
Today, we've learned the lessons of history.  I know that in the days leading up to the summit, some of you in the press, some commentators, confused honest and open debate with irreconcilable differences.  But after weeks of preparation, and two days of careful negotiation, we have agreed on a series of unprecedented steps to restore growth and prevent a crisis like this from happening again.
 
Let me outline what I think has been most significant.
 
Number one, we are committed to growth and job creation. All G20 nations have acted to stimulate demand, which will total well over $2 trillion in global fiscal expansion.  The United States is also partnering with the private sector to clean out the troubled assets, the legacy assets that are....