I was working on this post for a good hour last night, and when I went to save what I had written, WordPress logged me out and wiped out the whole thing! I couldn’t begin to recall everything I had written, and I was extremely discouraged to put it mildly.
Next time, I’ll try to remember to save my work more often. For awhile there WordPress had managed to save posts even when they did their stupid logout trick. But not last night. I did my best to redo the stuff I lost, but I know I lost some bon mots.
After a brief truce in deference to the latest mass murder in the U.S., President Obama and Mitt Romney returned to campaigning yesterday. President Obama spoke to the Veterans of Foreign Wars while his challenger raised more millions. The LA Times summarizes the back and forth.
President Obama’s campaign…accus[ed] Romney of harboring a “secret” foreign policy, and pushing him to detail his plans to end the war in Afghanistan and his approach to Russia and Israel. The Romney campaign responded by saying the president had eroded key alliances and promising Romney would “restore the pillars of American strength.”
In a speech to the Veterans of Foreign Wars convention in Reno, Obama portrayed his foreign policy record as one of promises fulfilled, and he took veiled jabs at Romney and other critics of his withdrawal of U.S. troops from Iraq and drawdown of troops from Afghanistan.
Today Romney will speak to the VFW before heading off to London to see the Olympics, attend two posh fundraisers, and meet with some British VIPs. After that he heads to Israel for a meeting with Prime Minister Netanyahu and another fundraiser, and then on to Poland, where he
will visit Gdansk and Warsaw on July 30 and 31 at the invitation of Lech Walesa, the communist-era dissident who in 1983 won the Nobel Peace Prize for his defiance of the communist regime.
There were a couple of good hit pieces on Romney at the Huffington Post yesterday.
Mitt Romney accumulated more than $25 million in foreign income between 2005 and 2010, while he was governor of Massachusetts and a presidential candidate, according to an analysis of his 2010 tax return.
The 2010 return lists foreign tax payments Romney made dating back to 2000. By Romney standards, the payments were modest through 2004, averaging $37,000 a year. In 2005, however, his foreign tax bill shot up to $333,149 and stayed high for the next three years, before dipping in 2009, as the financial crisis hit hard.
In 2010, Romney’s foreign tax bill was down to $67,173 on declared foreign income of $1,525,982. That’s a 4.4 percent rate. After expenses and various other deductions, Romney declared a net foreign income of $392,000, making his net tax rate 17 percent.
Because the presumptive GOP presidential nominee has so far declined to release his earlier tax returns, HuffPost made a rough calculation of his prior foreign earnings by assuming he paid similar tax rates in previous years.
Read the rest at the link.
Jason Cherkis and Laura Bassett: Bain Capital Created ‘Demoralizing’ Culture of Layoffs At Florida Plant.
When Dade Behring started cutting employees under Bain Capital’s management in the late ’90s, Cindy Hewitt was on the front lines. As a human resources manager for the Dade East plant in Miami, Hewitt had to decide which employees had needed skills and whose jobs were expendable.
News of the latest layoffs trickled down to the Dade company cafeteria. The room could seat more than 1,000, and it had been enough of a draw that it even offered breakfast.
But as the layoffs hit, the mood in the cafeteria could be as somber as a funeral, Hewitt recalled. Multiple members of the same family might be gathered to commiserate over being laid off one by one by one. Some of them had worked for the medical diagnostics company for more than a decade.
Hewitt saw her colleagues crying on a daily basis and loudly celebrating on the rare occasion that someone found a comparable new job. “There was a tremendous sense of loss and this kind of outpouring of grief and mourning as every day they waited for the announcement of who was going next,” she said. “People were on pins and needles. Who’s going next? They’re worried for themselves, worried for their co-workers, worried for their families. They’d talk about how they were going to send their kids to college. It was an incredibly depressing and demoralizing environment.”
There’s lots more at HuffPo.
Here’s some more proof that the rich keep getting richer and the poor get poorer: Yankees Acquire Ichiro Suzuki From Mariners
With a little more than two months remaining in the season, the Yankees acquired Ichiro Suzuki, who became the first Japan-born position player in the majors when he joined the Mariners in 2001, when he was named the rookie of the year and the Most Valuable Player.
Before Monday’s game between the two teams at Safeco Field, the Yankees sent minor league pitchers D. J. Mitchell and Danny Farquhar to the Mariners for Suzuki , whose five-year, $90 million contract expires after this season. The Yankees will also receive cash considerations to offset the financial commitment.
Wearing a dark blue suit with gray pinstripes, Suzuki walked down the hallway from the Seattle clubhouse over to the visitors’ side, stopping in the middle to speak at a news conference.
“I am going from a team with the most losses to a team with the most wins,“ he said through his interpreter, “so I am not able to contain my excitement in that regard.“
Once a great player, Suzuki is now just another mercenary.
Scott Brown has pulled another dumb trick. He’s using a line from a famous poem by Langston Hughes, “Let America Be America Again,” to attack President Obama and Elizabeth Warren for saying that governments provide services and infrastructure that support businesses. If that makes no sense to you, you’re not alone. Interestingly, Rick Santorum used the same line during the Republican presidential primaries and was mightily mocked for it. But Scott Brown was probably meeting with Kings and Queens at the time and missed the uproar. Besides, he’s really not all that bright, poor thing.
A new video from Brown, soliciting donations for his neck-and-neck campaign against Democrat Elizabeth Warren, is headlined “Let America Be America Again” – the title of Hughes’ well-known 1935 poem, first published in Esquire magazine, that suggests the American dream never really existed for many Americans, including the lower classes, blacks, Native Americans, and other minority groups.
“There’s never been equality for me/Nor freedom in this ‘homeland of the free,’” Hughes writes in an aside between verses. “America never was America to me.”
The Brown campaign’s two and a half minute video tribute to small business, complete with stirring music and iconic images such as flags and white picket fences, chronicles what it portrays as a change in the United States from the words of John F. Kennedy, Bill Clinton and Lyndon Johnson – Democrats all – as well as Gerald Ford and Ronald Reagan, to current President Barack Obama and Warren, his uber-progressive rival.
Langston Hughes died in 1967 at the age of 65, but chances are if he were still alive today he would not be a Republican. Hughes’s poetry was frequently published in the Communist Party USA newspaper and he was involved in various initiatives supported by leftist organizations. Hughes traveled widely in the Soviet Union in 1932, and was later inducted into the International Union of Revolutionary Writers.
Oh, and BTW, Hughes is believed to have been gay.
USA Today had an interesting article on a polar bear DNA study.
Polar bears split from ancient bears more than 4 million years ago, suggests ancient DNA and the gene maps of multiple bears.
The polar bear genome finding reported in the Proceedings of the National Academy of Sciences journal contradicts earlier gene studies finding much more recent times for the ancestral split, within 600,000 years, between polar bears and grizzly bears, which can still mate and produce viable offspring.
What’s more, the report suggests that polar bear numbers have been on the decline for at least 500,000 years, driven by climate fluctuations.
“Although polar bears ( Ursus maritimus) and brown bears (Ursus arctos) are considered separate species, analyses of fossil evidence and mitochondrial sequence data have indicated a recent divergence of polar bears from within brown bears,” begins the study led by Penn State’s Webb Miller.
For those who are still interested in thinking about the why of mass murders, I suggest reading a 2005 interview with Mark Ames, who wrote a book on school and workplace shootings called “Going Postal: Rage, Murder, and Rebellion — From Reagan’s Workplaces to Clinton’s Columbine and Beyond.”
Ames is a true radical, and so of course he has a radical hypothesis about these horrible murders that have become pretty common in our culture. He argues that they are rooted in Reganomics and the philosophy of greed and avarice that he made popular back in the ugly ’80s. From the interviewer’s introduction:
Ames takes a systematic look at the scores of rage killings in our public schools and workplaces that have taken place over the past 25 years. He claims that instead of being the work of psychopaths, they were carried out by ordinary people who had suffered repeated humiliation, bullying and inhumane conditions that find their origins in the “Reagan Revolution.” Looking through a carefully researched historical lens, Ames recasts these rage killings as failed slave rebellions.
And from Ames himself:
Put it this way: rage murders in the workplace never existed anywhere in history until Reagan came to power. Reagan made it respectable to be a mean, stupid bastard in this country. He is the patron saint of white suckers. He unleashed America’s Heart of Vileness — its penchant for hating people who didn’t get rich, and worshipping people who despise them, and this is the essence of Reaganomics.
I hate to sound like a Clintonite here, but let’s remember Hillary Clinton became the most hated human being alive because she tried to give most Americans the opportunity to lead longer, healthier lives, while these same Americans adored goons like Sam Walton, George W. Bush, Ronald Reagan, Donald Trump — everyone who has dedicated their lives to transferring wealth, health and pleasure from the masses to a tiny elite. Liberals are hated in America precisely because they want to help people, which is seen as “patronizing.”
You can see how this kind of cultural insanity, unleashed by Reaganomics after decades of New Deal (relative) harmony, could make someone snap, when the cognitive dissonance suddenly strikes on a very personal level, and you realize that you’ve been screwed hard by your own dominant ideology.
Here’s an interesting 2007 review of Ames’ book by Ed Vulliamy from The Guardian UK.
Ames also wrote a lengthy analysis of One L. Goh’s rampage at Oikos University in Oakland, CA.
For a more mainstream take on the recent events in Aurora, Colorado, check out this piece by Dave Cullen, author of the book “Columbine.” He points out that just about everything the media immediately assumed about Harris and Klebold was wrong and that we still know almost nothing about James Holmes or his motives. Obviously, I agree.
Finally, here’s a piece that provides some support for Mark Ames’ argument that our culture has just plain turned mean and is getting meaner all the time: The Elites Are Unanimous: Lower Everyone’s Wages and Standard of Living — Except They Don’t Say it Out Loud
That’s it for me for today. What are you reading and blogging about?
One of my neighbors is a public defender who is a New Orleanian by birth and fits all the standard eccentricities of New Orleanians. He spent some time in the Navy during the Vietnam period. Now my friend is very liberal, but one of his buddies from the Navy time that visits frequently is not. The buddy lives in rural Washington state and teaches in a small college there. How he every managed to get a gig teaching economics with just an MBA still boggles my mind, but that is the deal. When you do a stint in actual economics–not just managerial economics and your basic theory classes–you spend a lot of time proving theoretical models. By the time you get farther in a program and have completed your first few econometrics courses, you’re taught how to empirically validate or destroy other folk’s academic work and their models.
One of the easiest groups of hypotheses to shoot down empirically came from the Reagan years. The results were pretty astounding–we would call that highly significant to what ever statistic was used–so much that David Stockman and Bruce Bartlett gave those hypotheses up rather quickly and they were key architects of the Reagan Economic Revolution. You can’t find a’ conservative’ economist in the sense of Reaganomics unless it’s one at the Heritage Foundation that is paid to deliberately ignore the facts. In which case, that explains why they’re no place else BUT the Heritage Foundation.
Or they’re like my friend’s buddy who still goes back to the 1980s and pulls out old articles about things like the Laffer curve and teaches it because he wants to show all “opinions”. That’s what he says to me any way, when I ask him why he teaches a failed hypothesis. Frankly, he teaches it because he wants others to share his hopes and wishes that the silly thing is true. Because he’s not had the rigorous training to prepare to do actual economics, he just teaches want he wants to teach. He also hasn’t gone through publish or perish where you don’t get to have opinions without peer-reviewed facts. This drives me nuts. You can’t teach theory or empirical evidence or the scientific approach by clinging to a failed hypothesis. This makes you an intellectual flat earther.
What we currently have right now is a president that is giving the Flat Earth Society the primary voice in NASA policy and funding when it comes to economic policy. Paul Krugman has an op-ed from this weekend that firmly states that Obama has empowered the economics version of the Flat Earth Society. His op ed is called ‘When Zombies Win.’ It’s exactly what needs to be said.
First, the original Obama stimulus plan was anything but text book Keynesian economics and can’t be seen as a way to shout fail on Keynesian theory. It was more based in Reagan philosophy and those failed hypotheses than any neoKeynsian model. While I’ve continually called the Supply Side wishful thinking as a failed hypothesis, Krugman is more direct. He refers to it as failed doctrine.
For the fact is that the Obama stimulus — which itself was almost 40 percent tax cuts — was far too cautious to turn the economy around. And that’s not 20-20 hindsight: many economists, myself included, warned from the beginning that the plan was grossly inadequate. Put it this way: A policy under which government employment actually fell, under which government spending on goods and services grew more slowly than during the Bush years, hardly constitutes a test of Keynesian economics.
Now, maybe it wasn’t possible for President Obama to get more in the face of Congressional skepticism about government. But even if that’s true, it only demonstrates the continuing hold of a failed doctrine over our politics.
I wrote repeatedly at the time–no Nobel winning economist am I either–that the stimulus was bound to be way too little to be of any use. You can read me screaming ‘Tax Cuts Don’t Cut It or Cure It’ from January 2006, 2009 where I quote John Mishell’s study that talks about how the Bush tax cuts didn’t grow jobs and didn’t grow the economy. As a matter of fact I have many posts up along that line. Here’s one covering the FT’s Martin Wolf where I talk about the same thing and it’s even called ‘Still Too Little and WAY TOO Republican” from January 17, 2009. You can search my archives during that time period and find I’m very consistent at writing how the Obama stimulus would fail and that it was primarily because it was based on tax cuts.
It’s really quite a logical situation and one the most flawed precepts sits right there in the Obama-McConnell tax travesty. There’s a huge tax write off in the bill for companies buying new equipment. This is something completely ineffective because it just helps the few companies that would’ve done that any way. The majority of companies are hurting for customers. No amount of tax write offs for equipment or even employees is going to make them expand if they don’t have customers or revenue. In fact, my guess will be that an academic study some where down the line will show that the majority of those tax cuts were used by corporations who expanded in emerging markets instead of here. That’s because that’s where the inflation, growth and action is and there’s nothing in the bill that says tax benefits stay here.
Krugman also talks about something I spoke to recently in that nearly every Republican put in charge of some committee dealing with some aspect of the economy is so far out there on doctrine and short on economic theory and evidence that we’re bound to see more of the same stuff that tanked us the last time out. The Republicans sitting on the Financial Crisis panel just put out their financial version of the Earth is Flat manual last week. They said it was too much regulation which is pretty much the exact opposite of everything that every empirical study has shown us. Here’s one I keep pushing called “Slapped in the Face by the Invisible Hand” because it’s nontechnical in nature. Krugman called the release of the document ‘Wall Street Whitewash’.
So, Krugman’s op ed from this weekend isn’t astounding in that we all know what neoKeynisans like Stiglitz, and Blinder, Sachs and Krugman have been saying for months now. Now that I’ve read BB’s morning links, I’m even getting a better feel for the source of my weekend wonderment on Krugman’s bottom line. Krugman was one of a group called before the President in an attempt to get them to STFU. The deal is this. The Nobel Peace Prize may now be given on an ‘aspirational’ basis, but the Nobel Prize for economics is not. Stiglitz and Krugman earned their Nobel Prizes. I admit to having empirically tested some of Blinder’s models doing my first Masters in Economics so I’m very familiar with his contributions to the literature. These economists live in a world of peer review where there’s a very dim view of people who cling to failed hypotheses.
So, here’s the wonderment from Krugman’s December 19, 2010 op-ed.
President Obama, by contrast, has consistently tried to reach across the aisle by lending cover to right-wing myths. He has praised Reagan for restoring American dynamism (when was the last time you heard a Republican praising F.D.R.?), adopted G.O.P. rhetoric about the need for the government to tighten its belt even in the face of recession, offered symbolic freezes on spending and federal wages.
None of this stopped the right from denouncing him as a socialist. But it helped empower bad ideas, in ways that can do quite immediate harm. Right now Mr. Obama is hailing the tax-cut deal as a boost to the economy — but Republicans are already talking about spending cuts that would offset any positive effects from the deal. And how effectively can he oppose these demands, when he himself has embraced the rhetoric of belt-tightening?
Yes, politics is the art of the possible. We all understand the need to deal with one’s political enemies. But it’s one thing to make deals to advance your goals; it’s another to open the door to zombie ideas. When you do that, the zombies end up eating your brain — and quite possibly your economy too.
What is even more significant is that this horrible tax bill was put forward so as not to stall things like START. So, what is the status of the START Treaty and the Republicans who said they’d play ball if the Tax Cuts for Billionaires program was passed. Has this eased the hostage crisis?
Well, the vote is supposed to be held tomorrow so we shall see. But, this is quote is fresh from the AFP 4 hours ago from the moment I’ve hit the publish button.
Democrats expressed astonishment that top Republicans continued to oppose ratification when virtually every present and past foreign policy or national security heavyweight backed the move, regardless of their political stripes.
In that same announcement, Mitch McConnell was quoted as saying he’d vote against it the ratification. So is John Kyl. Collin Powell and Condoleeza Rice support the ratification of this treaty. This is what you get when you negotiate with terrorists; domestic or otherwise.
This President has consistently used the failed dogma of Reaganomics in economic policy. It makes no difference if the wackiest of the right wing say he is a socialist. The evidence clearly points to his obsession with failed tax cut dogma. I don’t know if his reasons are political or if–deep down–he is a Republican in Democrat Clothing. All I know is that we can no longer empower a failed hypothesis. I certainly hope that Michael Hirsch’s list of ‘Disillusionati’ continue to expose this economic policy for what it really is.
File this under we told you so,
love, the Sky Dancing Cassandras
Bruce Bartlett has just released a new book–and a mea culpa of sorts– for supply side economics (SSE). As an ex-aide to the late Jack Kemp and author of a book on Reaganomics, Bartlett’s got an interesting perspective from having a seat near the table. He also takes a few undeserved potshots at some Keynesians that were slow to embrace a few ideas that later proved to be good ones. As an example, Bartlett mislabels the District’s discovery of the importance of monetarism as something that could be credited to supply-siders. Reaganuts frequently try to take credit for that even though credit should rightly go to President Jimmy Carter and his appointment of Fed Chair Paul Volker.
There’s also a bit of clinging to that magical marginal tax rate idea the Laffer curve which has been seriously debunked by empirics during the Reagan and Clinton years. However, I will give the Kemp-Roth tax bill–and hence, Bartlett and his Supply Side–credit for two positive policies. The first was a Keynsian style spending/tax fiscal policy during the last bad recession we had back in the 1980s. The other is the realization that it’s good to provide tax incentives for long term supply curve enhancement. This would be tax credits for re-capitalization for industry which should actually be more part of a national industrial plan, but I’ll just leave it at that. The other would be the idea of tax sheltering money for retirement. 401(k)s were a good innovation. The Clinton administration was also instrumental in sheltering long term savings from current taxes. These two things do help with long run economic growth and capital formation which are lofty and necessary goals.
However, for the little bit of good coming from SSE, also came a lot of bad. I found it interesting that in Bartlett’s piece today he reveals the bad with almost what appears to be relish. That is how most Republicans turned the idea that you can promote long term economic growth with some good, targeted tax policy into the mess that Dubya/Cheney wrought with the frightful combination of tax cuts are good for everything that ails you and deficits never matter as long as you spend the money on wars and enriching the military industrial complex.
During the George W. Bush years, however, I think SSE became distorted into something that is, frankly, nuts–the ideas that there is no economic problem that cannot be cured with more and bigger tax cuts, that all tax cuts are equally beneficial, and that all tax cuts raise revenue.
These incorrect ideas led to the enactment of many tax cuts that had no meaningful effect on economic performance. Many were just give-aways to favored Republican constituencies, little different, substantively, from government spending. What, after all, is the difference between a direct spending program and a refundable tax credit? Nothing, really, except that Republicans oppose the first because it represents Big Government while they support the latter because it is a “tax cut.”
I think these sorts of semantic differences cloud economic decisionmaking rather than contributing to it. As a consequence, we now have a tax code riddled with tax credits and other tax schemes of dubious merit, expiring provisions that never expire, and an income tax that fully exempts almost on half of tax filers from paying even a penny to support the general operations of the federal government.
The supply-siders are to a large extent responsible for this mess, myself included. We opened Pandora’s Box when we got the Republican Party to abandon the balanced budget as its signature economic policy and adopt tax cuts as its raison d’être. In particular, the idea that tax cuts will “starve the beast” and automatically shrink the size of government is extremely pernicious.
It’s a great read for any one that wants to understand the economic policy making of the last 30 years or so. This was the best part for me, the stalwart Keynesian when it wasn’t popular. He actually mentions that Keynes isn’t all about government spending and budget deficits all the time. That is the part that the Dubyas and Cheneys of the world always conveniently or ignorantly overlook.
So basically the book is about the rise and fall of Keynesian economics followed by the rise and fall of SSE. Although the Keynesian part of the book was originally intended to flesh out my model of the rise and fall of economic theories, it turned out to have very valuable lessons for today. Indeed, the circle appears to have come around to where Keynesian theories are now the best ones we have for dealing with today’s economic crisis.
Maybe Bruce, who now writes for the Daily Beast and was fired from a conservative think tank for writing a book that criticized Dubya, has found that with age comes wisdom. Also worth a read are two Bartlett’s pieces from the blog new majority. The first is Tax Tea Party Fantasy from last spring and Why I Am Anti-Republican from late this summer. It seems old dogs do occasionally learn new tricks.
You may remember back in January that I was not happy and very outspoken about the size of the Obama Stimulus plan. I was not impressed by the content or with the mix between tax cuts and direct government spending. You may recall that the Blue Dogs interminable resistance to do anything that might wake their sleeping Republican voters and the desire on the part of POTUS to appease the unappeasable remnants of the Republican party led to a very watered down plan. At the time, all that I could hope was that it might be enough to get the ball rolling. However, I felt that the historical multiplier –especially for taxes– was not going to kick in the way it had in the past.
The release of the miserable unemployment data yesterday (not all that unexpected as you’ll recall) as well as an estimate of our output gap now clearly squares with my earlier view as well as the earlier views of Brad deLong, Paul Krugman, Mark Thoma and Joseph Stiglitz among others. The stimulus was clearly not the blue pill the economy needed. (That last link is from me saying this same thing in July.)
The Washington Monthly says the decision to appease centrists and Republicans looks even worse in retrospect. Now, the media gets it. Color me completely unsurprised because I told you so back then that it wasn’t going to be enough. I even mentioned it recently when it appeared the stimulus plans of German, France, and Japan had already lifted those economies from the worst of it last spring. These countries emphasized direct government spending. We mostly shuffled a few funds as stop gaps and the created a bunch of tax cuts that no one really needs right now.
In February, when the debate over the economic stimulus package was at its height, a handful of “centrist” Senate Republicans said they’d block a vote on recovery efforts unless the majority agreed to slash over $100 billion from the bill.
The group, which didn’t have any specific policy goals in mind and simply liked the idea of a small bill, specifically targeted $40 billion in proposed aid to states. Helping rescue states, Sen. Collins & Co. said, does not stimulate the economy, and as such doesn’t belong in the legislation. Democratic leaders reluctantly went along — they weren’t given a choice since Republicans refused to give the bill an up-or-down vote — and the $40 billion in state aid was eliminated.
In the past, government hiring had managed to somewhat offset losses in the private sector, but government jobs declined by 53,000, with the biggest number of cuts on the local and state levels. Even the Postal Service, which is included in the public-sector job statistics, dropped 5,300 jobs.
“The major surprise came from the public sector, where every level of government cut back,” Naroff said. “The budget crises at the state and local levels have caused an awful lot of belt-tightening.”
As the details of Obamanomics finally roll out to the public, it is increasingly obvious that what we are seeing is some kind of Reaganomics lite. I mentioned this in a post on January 5th trying to answer Paul Krugman’s concerns on how ‘bold and swift’ the Obama plan will be. Today, Krugman answered strongly not bold enough in the Obama Gap.
But Mr. Obama’s prescription doesn’t live up to his diagnosis. The economic plan he’s offering isn’t as strong as his language about the economic threat. In fact, it falls well short of what’s needed.”
Today’s Market Watch outlines the abysmal labor market.
Total hours worked in the economy fell 1.1%, with the average workweek falling to the shortest ever, signaling an annualized decline of 6% in gross domestic product in the fourth quarter, wrote John Silvia, chief economist for Wachovia. Hours worked have declined “at an eye-watering” 7.7% annual pace in the quarter, Shepherdson said.
An alternative measure of unemployment that includes workers too discouraged to look for a job rose to 13.5% from 12.6% in November; it’s the highest in the 13 years since those data have been kept.
These are serious numbers that followed the even MORE serious numbers in manufacturing reported earlier in the week. Rather than repeat what I said earlier, I’d like to show some that I’m not alone out there in the liberal wilderness. Yes, I said LIBERAL wilderness. The Black Agenda Report which has never been in the Obama corner and endorsed Cynthia McKinney outlines Obama’s hostility to both Universal Health Care and what is traditionally the Democratic Party’s approach to the economy.
In a similar vein, “Obamanomics” at best falls short of the bold progressive initiatives and challenges to financial and corporate power required to spark equitable domestic development. As adjusted in response to the banking crisis and deepening recession, moreover, Obama’s economic program could well amount to “something akin to a national austerity program….” Instead of forward movement on jobs, education, retirement, and health care, Jack Rasmus finds, “what me may well get is ‘Let’s all tighten our belts to get through this crisis.”
Turning away from the op-ed pieces, let’s examine this front page headline from the NY Times: Senate Allies Fault Obama on Stimulus.
WASHINGTON — President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.
Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation’s energy infrastructure rather than cutting taxes.
So here we have more evidence that many are beginning to see that the Obama plan is not bold and will not be swift. Back on MarketWatch, we once again have the winds of cold, harsh reality hitting the face of any one connected to the U.S. Economy.
WASHINGTON (MarketWatch) — The U.S. recession will last two full years, with gross domestic product falling a cumulative 5%, said Nouriel Roubini, chairman of RGE Monitor. Roubini was one of the first economists to predict the recession and the credit crunch stemming from the housing bubble. For 2009, Roubini predicts GDP will fall 3.4%, with declines in every quarter of the year. The unemployment rate should peak at about 9% in early 2010, he said. Consumer prices will fall about 2% in 2009. Housing prices will probably overshoot, dropping 44% from the peak through mid-2010. “The U.S. economy cannot avoid a severe contraction that has already started and the policy response will have only a limited and delayed effect that will be felt more in 2010 than 2009,”
As we get more and more evidence that Obama’s actions never reach anywhere near the level of his rhetoric, will the koolaide start wearing off even before the President Elect gets to give his first State of the Union Address? I’m waiting to see if it comes any where near even one of FDR’s minor fireside chats.
Meanwhile, Senator Harkin from Iowa, the state where, oddly enough, I attended Herbert Hoover Elementary School had this to say in the Times article today.
“There is only one thing we have got to do in the stimulus, and that is how can we create jobs,” said Senator Tom Harkin, Democrat of Iowa, as he left the meeting. “I am a little concerned by the way that Mr. Summers and others are going at this in that, to me, it still looks like a little more of this trickle-down, if we just put it in at the top, it’s going to trickle down. A number of people in there said, ‘Look, we have got to have programs that actually create jobs and put people to work.’ ”
Okay, did Senator Harkin just call Obamanomics more trickle down economics, voodoo economics, Reaganomics? Can I get a witness? Again, it’s very hard to argue for business tax credits when most businesses are just looking for customers. If you don’t put the money into the hands of customers, a few tax credits here and there aren’t going to accomplish anything. There has to be income first.
Anyway, is it too early for me to buy an ‘I told You So’ bumper sticker for my poor worn-down mustang yet?
NOTE: For those of you into really snarky satire, there’s a post at today’s Daily Beast about Obama’s package being inadequate. Also, other blogs are discussing this same topic. Jane at FDL and even HuffPo have put up threads. The link to FDL is on the right side. I think you can manage to find the other on your own.