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Mark Gongloff is off the newsletter this week, so today's 7.5 Things are brought to you by Jillian Berman.
Thing One: Meet The Star Of The Show: Meet the star of last night’s State of the Union: President Obama’s dream middle class. During his speech, Obama painted a picture of a future nation with a growing economy resting on the backs of Americans with an accessible pathway to the middle class. “It is our generation's task, then, to reignite the true engine of America's economic growth – a rising, thriving middle class,” he said. How does he to do that? By raising the minimum wage to $9, investing in infrastructure as a means to create jobs, establishing programs that encourage companies to bring manufacturing jobs back to the U.S. and invest in education.
But Obama has a long road ahead of him if he wants to recreate Pleasantville, USA. As the Wall Street Journal notes, many of the proposals require help from Congressional lawmakers, who have blocked his economic proposals in the past. In addition, Obama will have to reverse recent trends if he wants to create more middle class jobs -- three-fifths of the jobs created during the recovery have been low-wage work, according to the National Employment Law Project. And though boosting the minimum wage would do a lot to reduce income inequality, the change won't happen without a fight, according to The New York Times. Obama also touted a commitment to creating jobs last night, but that doesn’t mean his plans will come to fruition. Obama has highlighted the jobs crisis in all of his past State of the Union addresses and yet the nation still faces an unemployment rate of 7.9 percent.
In addition to his proposals aimed at boosting the middle-class, Obama proposed a variety of other ways to spur the nation’s economy, many of which will also face Congressional opposition. He called for reducing the budget deficit by raising taxes on the rich and closing some corporate tax loopholes as well as his own vague plan to rein in Medicare spending. He also urged lawmakers to pass two controversial trade agreements that would boost free trade with the European Union, but could also make it more difficult to get medicines and make labor standards worse, The Huffington Post's Zach Carter reports.
Obama proposed an ambitious agenda last night, let’s see if 4 years is enough time to get it done.
Thing Two: Banks To Review Their Own Shoddy Foreclosures: Government regulators are hoping the people that screwed struggling homeowners will now try to help them. Big banks are being asked to hand out billions of dollars to Americans, who are victims of foreclosure in part because of bank abuse, The New York Times reports. Regulators are asking big banks to review their shoddy foreclosures in an aim to speed the process up of giving relief to struggling homeowners after an independent foreclosure delayed relief. The government decided to axe the middlemen in the process because they had little other choice, according to the NYT. Still, housing advocates are worried banks will go too fast to try to end the process as quickly as possible, which could leave the neediest homeowners in trouble.
And as regulators are asking big banks to clean up their housing mess, President Obama is hoping more Americans will jump into the housing market. During his speech last night, Obama urged Congress to create an environment that would help potential homeowners with good credit take advantage of record-low mortgage rates.
Thing Three: Television On A TV Is Momentarily Relevant: Some people still watch TV on TV, at least according to Comcast. The company is paying $16.7 billion to buy General Electric’s stake in NBCUniversal, giving Comcast full ownership of the television network that includes channels like Bravo and MSNBC, according to the Wall Street Journal. The move represents a bet on traditional television networks, despite the rise online streaming services like Netflix and HBOGo. The deal is also a historic move for GE, which is making its final departure from the entertainment industry, according to the Financial Times.
Thing Four: Mr. Lew Heads To Washington: Treasury Secretary nominee Jack Lew will head to the Senate today for a light grilling. Though Senators aren’t expected to block his nomination, his confirmation hearing will likely include questions from Republicans about his time working at Citigroup and the $56,000 investment he stashed in the Cayman Islands during that time, according to the Financial Times. Lew has spent most of his career in government, but his time at Citi coincided with the financial crisis and bailout. In early 2009, Lew took home a $940,000 bonus -- a fact that Senators are unlikely to ignore. He’ll also probably face questioning over his own admission that he lacks experience in financial markets, according to Reuters. And of course what would Congress be if lawmakers didn’t take every opportunity possible for partisan grandstanding? The hearing will also give politicians a chance to fight about the budget, Reuters writes.
Thing Five: Apple Fights Back: Apple may give some of its cash pile to investors, but not because David Einhorn told them to. Apple CEO TIm Cook dismissed Einhorn’s lawsuit as a “silly sideshow” yesterday, but he said he was thinking about giving shareholders some of the company’s $137 billion cash hoard, according to the Financial Times. Cook also denied Einhorn’s claims that Apple is stashing the cash because the company has a “Depression-era” mentality and he said the company is looking for a variety of ways to spend the money. Cook argued that the cash “is not burning a hole in our pocket," saying that the company has made a variety of small acquisitions about every other month, according to the Wall Street Journal. He also urged Einhorn and his hedge fund Greenlight Capital to use the funds dedicated to the suit for a “worthy cause.” Meanwhile Apple is spending money on something: A team of at least 100 to come up with an iPhone or iPad like device you can wear on your wrist, according to Bloomberg.
Thing Six: Immigration Reform Produces More Odd Bedfellows: Once again, the push for immigration reform is producing some strange bedfellows: Silicon Valley leaders and undocumented immigrants. One of AOL’s founders, Steve Case, (pause for disclosure, The Huffington Post is owned by AOL) will testify at the first Senate hearing this year on immigration proposals, according to The New York Times, the head of a Latino rights group is also scheduled to testify during the same hearing. Silicon Valley has been pushing for immigration reform for some time, arguing that technology companies need easier access to highly-skilled immigrants in order to keep growing. But as the head of the Information Technology and Innovation Foundation told the NYT, immigration reform for highly-skilled immigrants has “close to zero” of passing without comprehensive reform.
Thing Seven: Horsemeat Scandal FTW: There may actually be a winner in the horsemeat scandal. Food testing companies are poised to gain now that people in Europe are concerned that when they buy beef it’s actually horsemeat, according to Reuters. Two European food testing firms said they’ve already seen a boost in demand since the horesemeat scandal emerged.
Thing Seven And One Half: Marco Rubio Gets Thirsty Sometimes: Last night Republican Senator Marco Rubio took a drink of water during his response to President Obama’s State of the Union. And then the Internet freaked out.
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Calendar Du Jour:
8:30 AM ET: Retail Sales
Deere & Co.
Dr Pepper Snapple Group Inc
Mondelez International, Inc.
Whole Foods Market
Heard On The Tweets:
@ReformedBroker: For the first time ever, the average Canadian household is now wealthier than the average US household. SHHHHH they're socialists!!!!!!
@moorehn: Explained Ted Nugent today as the survivalist version of Clint Eastwood. Think that's about right.
@morningmoneyben: Can reliably report from person close to Lloyd Blankfein's beard that it began on vacation, increased at Davos and is "starting to fill in"