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One of the most important things FDR did when he took office was to reassure the public that there was someone in office who cared about ordinary Americans, and who was working on their behalf.
I've watched Obama's public appearances over the past few days and I think he's doing an excellent job of that. It's not an easy task -- he has to communicate a sense of urgency about passing a stimulus package without panicking people, and at the same time quell the crisis of confidence that keeps them from spending and money out of circulation. Obama's clear compassion, his obvious intelligence and his reassuring manner have been impressive.
There are, however, serious concerns about the details of his stimulus package. Many are worried that it won't be enough to get the economy moving, and express doubts about the amount allocated to tax cuts. Kent Conrad and Ron Wyden have already questioned the wisdom of $310 billion in tax cuts out of a $775 billion plan. (For the sake of scale, remember that Obama's health care plan was supposed to be between between $55 and $60 billion a year when fully phased in -- something conservatives said we simply couldn't afford.)
There also have been suggestions that the plan’s inclusion of large business tax cuts, which add to its cost but will do little for the economy, is an attempt to win Republican votes in Congress.
But it isn't just people on the "left" who are voicing these concerns. Mark Zandi of Moody's, a Republican who was an economics advisor to John McCain, said this on Wednesday:
"This economy is shutting down," said Dr.Mark M. Zandi, the chief economist and cofounder of Moody's Economy.com, who predicted that the economy stands to lose 500,000 jobs a month for the foreseeable future. While both spending and tax cuts should be including in a package, spending provides a higher rate of return than tax cuts. Each dollar spent yields a return of $1.50 in economic growth; while each dollar in tax cuts yields $1 return.
Zandi has also said in the past that food stamps are the best bang-for-the-buck stimulus, but considering the fact that it would make Republican heads explode outright, Obama didn't even go there.
Obama faces a tough battle getting a stimulus package passed in a timely fashion. But much has been made of the "competence" of his staffing choices, and his desire to favor pragmatism over ideology. Considering the price tag -- not to mention the cost to the country of getting it wrong -- is it wise to be held hostage to failed Republican political philosophies in order to buy a "consensus" of 80 Senate votes we don't need?
Update: Obama says he will solicit advice "even from New York Times columnist Paul Krugman, whose column today criticized the initial stimulus proposal as insufficient."
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Obama claims he only reads his bad press, not the good stuff. Hopefully that means he is aware of Krugman’s criticism.
OT: But Thugojevich has been impeached by the Illinois House on a 114 to 1 vote:
http://www.huffingtonpost.com/.....56515.html
Oh and Roland Burris doesn’t seem like such a good guy after all. Having trouble keeping his
liesstories straight.http://www.huffingtonpost.com/.....56421.html
Wanna keep playing, tough guys?
What were the vote margins during the passage of the New Deal? I’m guessing FDR didn’t have a consensus of 80 votes in the Senate to pass some of the most important legislation our country has ever seen.
Republicans oppose social spending. Period. Leave them behind to rot in the moldy pages of history.
Republican wisdom is an oxymoron cuz they are morons.
Any idea who the lone Blago supporter was?
Funny how a DEM President needs 80 Senate votes to pass something and a GOP Senate Leader only needs 41 to shut everything down.
Apparently Obama’s still looking for advice on this:
http://www.huffingtonpost.com/.....56592.html
Seems like some of the critique is pretty basic and not sure why he didn’t include some of this stuff right away, but Obama’s attitude is encouraging so far. Talk is cheap, but stimulus packages aren’t. Let’s keep up the pressure!
From the same link.
As I read elsewhere several weeks ago, pragmatism is an ideology, especially as Obama seems stuck in pragmatism über alas rut.
Bullseye Jane, as per usual.
Thanks to DW Bartoo for opening digg
Extend food stamp eligibility upwards for two years.
Un-tax Social Security old-age and disability benefits.
Make immediate grants to states to balance their budgets for two years.
Broaden and extend unemployment benefits
Halt foreclosures; forgive all student loans; grant 6-month FICA tax holiday.
These steps aren’t hard, but they are all courageous and non-Republican. They will all put money in the hands of Americans who will spend it tomorrow. And there won’t be GOP votes for it.
Too bad.
You are too logical Teddy. Since you aren’t a Republican it isn’t acceptable to the new administration.
Yes, please.
Isn’t it interesting that the graph shows that direct money to people is far more effective than any other means to help the nation.
And there is none planned. It smells like the number on that second door down the hall.
The sole vote against impeachment of Blagojevich was Milton Patterson of Chicago.
Now is not the time to make the mistake FDR did in 1937. Go for the gusto!
At this point pandering to the Grand Obstructionist Party is exacerbating an already critical situation.
Who gives a flying fuck what they want?
They had eight years to dig this hole and they dug it deep.
Ram it down their throats and let ‘em choke, just get the damn thing going sometime after noon on January twentieth.
Like how you put that! ;>
BTW the December job figures from the Bureau of Labor Statistics show a loss of 524,000 jobs.
That’s what makes the 80 vote thing so silly. Republicans oppose social spending–the method most likely to achieve the best result.
Unfortunately we are unable to deal with the madness infecting the entire country. For some reason we cannot tax the greedy (wealthy). The would be wealthy harbor delusions of future wealth. We dig hierarchy. We think it matters even though those on top prove again and again they aren’t especially smart. If they were they would see that concentrating wealth removes purchasing power from an economic system that needs purchasing power to keep going.
Teddy Partridge’s suggestions in #11 are all good, but if we can’t bring ourselves to tax the wealthy say by removing the FICA cap (If FICA tax went to support Social Security there’d be no problem. FICA taxes get syphoned off into the general fund to limit damage done by tax cuts for the wealthy). We could also return to 1980 tax rates. We can also go to our biggest creditors to renegotiate our debt, offering China clean coal technology (as soon as we develop it) in exchange for the debt. Have to agree on terms, but it is better than printing money full blast. Nothing good can come of that.
this is what I’ve been saying for years, that government programs usually yeild a POSITIVE return, in other words they don’t cost a penny they usually save us money
something even the republican base will have an easy time getting a handle on, the republican politicians will have a really hard time going against programs if statements like this by concervatives are publisized
Brilliant point. Democratic spinelessness may yet again do us in.
Is that number adjusted seasonally? It seems like Oct. Nov. and Dec. should be better than the average during the year because there is hiring for the Christmas shopping season.
this is because we frame the discussion in their terms, this is not a “tax” on the wealthy it is a useage fee, they are NOT paying “more” then what they use they are paying less of a percentage overall
for instance a person who owns a retail store uses more of the roads for people to get to his place then any person does, this is the way “progressive taxes” need to be discussed, NOT “taxing the wealthy”
My diary on this morning’s employment report.
http://oxdown.firedoglake.com/diary/2901
Is Pellosi taking the tax cuts off the table?
Yes, the data are seasonally adjusted.
I do not believe each dollar of tax cuts yields a dollar return, there is of course overhead, there is of course inflation, there is of course dept service, I will therefore point out that zandi is painting an even prettier picture for tax cuts then reality demonstrates
Yes, this is seasonally adjusted. I went to the table itself and did the mth myself. This takes you to the page but you have to set the forms yourself, i.e. click on total nonfarm seasonally adjused.
http://www.bls.gov/webapps/legacy/cesbtab1.htm
Well, lets see here.
1. Bush’s stimulus checks didn’t work. Thats 1/3 of O’s recovery plan.
2. Bush’s tax breaks for Big Business didn’t work. Thats another 1/3 of O’s recovery plan. (CEOs got to pocket more cash, didn’t create jobs)
3. $300 billion for infastructure won’t TOUCH the HOLE we’re in. That’s the last 1/3 of O’s recovery plan.
Uh, I deninately can see the problem here.
One question, how come no one is talking about SMALL BUSINESS??
Thats how Clinton did it!! Small Business do more for the community, and they DON’T take their jobs OVERSEAS!!
What is the 80 vote thing about, anyway? What kind of super-super-majority requirement is that!??
Thanks, will go take a look.
It’s my understanding that we’ve so far committed almost $2tn to the Financial sector bailout with not much to show for it.
Now we’re going to spend another $trillion split between direct stimulous and tax cuts which sounds to me as if the total effort extended so far has been $2.5tn poured down the rat-hole on the top of the pyramid, and $.5tn promised to be spent at ground level.
That’s 5/6ths of the pie going to placate the GOP base and 1/6th going to the rest of us.
Sorry, but it sounds like business as usual.
PS: You cannot placate the GOP base.
tax cuts for the middle and lower class should certainly not be taken off the table, middle and lower class should enjoy revenue that was taken from them by bush and reagan, reclaiming those assets from the wealthy can be used to stimulate the middle class with investments in small business, local schools, etc
there is quite a bit to show for it, about 2 trn in debt
I have Bush job creation to date at 3.02 million.
Thanks for the info.. It seems that jobs tend to be available under the Dems and rather scarce during the goops. But what is the unemployment % of exactly? The total # of persons above the age of 16(?), does it include non-citizen workers?
Are women only considered as 3/4 of a job /s*
One assumption I see behind the Obama stimulus proposal is that the US economy is structurally sound, and the stimulus should respect as much as possible what the supposed “free market” and “political market” has done with regard to US capital structure and public and private investment for infrastructure and social goods. This seems a very “Summers’” idea to me: the idea we want a big punchy stimulus that can come and go quickly, leaving as little trace as possible on the economy as it has developed over the last ten to twelve years.
As Joseph Stiglitz has said explicitly, the unregulated and opaque ultra-free capital markets have done a lousy job of allocating capital since the last years of the Clinton administration. And, virtually alone among the bigshot famous economists in the news recently, Stiglitz can explain from soupt to nuts why this would be so. So why be so sure the assumption above is true? I also think that Stiglitz’ idea is behind Ian Welsh’s thinking, though I do not remember his saying this as bluntly as Stiglitz has.
So, as an example of specific projects that are not sufficiently considered in Obama’s proposals: SUPERTRAIN UP! and explicit plan for bringing internet infrastructure up to international standards. Also aid to state and local governments for capital maintenance and improvement of public health services and social ameneties that would improve public health, and primary and secondary education.
Obama has talked about energy efficient projects, etc. but needs to emphasize them much more in the stimulus plan -and explain why. That would also further the vital need for more extensive reform of capital markets now, rather than later.
The massive and catastrophic failure of capital markets has left deep scars in the detailed micro structure of the economy, not just at an aggregate level. A stimulus policy that focus on just the latter will not help us recover from prolonged Japan 90s style recessionary conditions.
Oh yeah, and I’m with Pelosi as far as letting Bush’s original tax breaks expire. That’s also digging us deeper into a hole
OT, but there is a petition folks may want to sign…
‘In April of 2003, members of the Indiana National Guard were protecting KBR employees at a power plant in Southern Iraq. After their service, some of these troops exhibited signs of cancer, tumors and rashes, and new reports indicate that these injuries may be the result of exposure to toxins present at the site.’
http://www2.iava.org/o/436/t/8.....n_KEY=1797
good diary, recommended.
Thanks.
Read my original diary for the As. The link is now fixed in the diary.
Thanks.
how about stimulating your economy by bringing home the military bases in Germany, and Japan (there since 1945) and Korea (there since 1952) ?
relocate them in the USA.
Not much dooubt what would that do for the economies in the regions the three bases were established.
Americans should pull in their horns: dismantle at least part of the empire’s military apparatus.
I wouldn’t mind dismantleing the profit portion, we would start by federalizing haliburton and blackwater
Exactly correct.
This is core to why our discourse is bass ackwards. Most any company or wealthy person, most often than not, freely uses much more of the government (taxpayer) provided infrastructure to accomplish their financial/business model than the average joe. These services, and not just transportation infrastructure, but governmental structures such as the State Department (enforcing business agreements, etc.) and even the sadly misnamed Defense Department to protect business assets at home as well as abroad.
Yes, there are fees, etcetera, but those barely supplement the taxpayer paid environment that allows corporations and the wealthy to prosper and are normally passed onto the taxpayer joe.
Just one issue, that of Walmart, encouraging, among other things, employees to utilize government provided healthcare services in order that the corporation can lower cost. That they used a lot of government services negotiating with the far east while paying a pittance of corporate tax to the US, saying their “profit” was overseas and therefore, untaxed. Is it any wonder, that, until it was pointed out, that the mother and four kids of the family starting Walmart were numbers four through eight of the wealthiest people in the US?
this is just one example where going with a compromise is flat out stupid. have none of these people ever done any project management?
some advisors think a big stimulus is needed and others think a smaller one. rather than compromise on some averaged sized stimulus, what needs to be done is to design a stimulus package that is flexible enough to work if either the “big stimulus” or the “small stimulus” advisors are correct. have any of obama’s people given a thought to risk management? what if their forecasts for the economy are wrong? what are the most likely ways for things to go wrong?
i’m an idiot about this stuff - that’s why all obama’s happy talk does not inspire any confidence in me. i would like to hear something of substance to give me some reason to think that his team is not batshit crazy, at least about the blindingly obvious stuff.
From the beginning, Candidate Obama hammered home the failure of the “trickle down” economic theory. And yet, and the economic situation worsened, he began to backtrack on reversing Bushes tax cuts to the most wealthy of americans. The reason cited was that ‘now was not the time to increase taxes on the rich’–that those tax-cuts were needed to help stimulate the flagging economy. IOW, a complete contradiction of just about every stump speech Obama has ever given.
Sooner or later, Obama is going to have to decide whether he won the election or not. Sooner or later, he will have to decide whether there are healthy democratic majorities in both house and senate. Sooner or later, he will have to disagree with the opposition party. This is why they are called “the opposition”.
Obama seems to hate ideology, and love pragmatism. But what good is pragmatism if the compromises reached through it are bad deals? You won, Mr. Obama. It is up to you to make that victory mean something.
I am happy to receive it but I gotta say, $40/month will NOT get me out shopping again (to re-start the totally unacceptable consumption/shopping economy). What I will do with that money is put more in savings, a bit into gold, and a bit into bullets and emergency food.
Seriously, that one is a very minor campaign promise to fulfill but it will NOT do anything for the economy as a whole. No way, no how.
Tax cuts for companies to hire people wont do it either. It SOUNDS good but wont do anything. The spending needs to be heavy on mass transit (to get the entire nation setup with good mass transit focusing on commuter rail, light rail, long-haul rail), energy efficiency, renewables, credits/grants for solar/wind energy improvements for homes, and the like. The rest is crap.
I don’t want him to throw ANY bones to the Blue Dogs or the GOP (same thing). They don’t know what they’re doing, believe that reality is wrong for not matching up with their economic theories, and are totally out to lunch. We don’t NEED anything but a handful of GOP votes. Kiss of the Blue Dog idiots and the vast bulk of the criminal GOP. Pick off the easier, more moderate (such as are left) and let the rest swing in the wind of irrelevance. In other words, pass good bills, not bills poisoned with tax cut nonsense drooled for my the greedy reichwing.
Unfortunately caught a glimpse of PoxNews this AM while in a public place. They had Steve Forbes commenting on Obama’s stimulus plan and he thought the whole plan was terrible. He made comments like, ” No investment in stimulus…blah, blah, blah…only tax cuts, tax cuts, tax cuts.” Forbes then stated that there has never been a time in our history when an economic stimulus has paid off. I started to laugh quite loudly and all heads snapped and looked at me. I said, “Can you believe this guy or this news report? Then I made eye contact with a women in her eighties. Her eyes got big and asked, “Do mean FDR?”
“Most certainly. And what was that stimulus program called? Yeah, The New Deal!”
She shook her head in agreement.
I said, “How can Steve Forbes even be associated with Forbes magazine? He knows little about US history or economic history at that.”
I worry that we are going to be going into hock for a stimulus package that isn’t anything but more of the same. What America needs is a retooling for the hard times ahead and I don’t see it happening. America is crumbling shambling mess. Hooked on the big fancy life with the big cars the fancy house, cities that are sabotaged into the gutter. There’s a lot of talk of roads and building sewer systems for suburbs we’ll never be able to afford. You talk about revenue streams that we should be tapping and you get labeled a fool. The conventional wisdom is broken but don’t you fly in it’s face. The powers that be have no priorities wouldn’t know a rational investment from investing with Bernie Maddoff. I’ve no hope for the Smiley Face of the same old crap. Cause that’s all Obama can be. Traitors fill the government nothing will happen except the urgency of the graft will speed up as the rats sense the waters rising.
Teddy, I’ve been thinking about a great way (it seems to me) to save loads of dough. Let’s review our corrections policies and reduce the number of people in jails and prisons. Incarceration is a significant budget item at the state level and not cheap for the feds. Our incarceration rate leads the world (at least, the developed world.). It seens to me we could release many non-violent offenders, work out resitution agreements for many offenders whose crimes were against property, eliminate prison sentences for most drug & alcohol related offenses, release pychotics from prison and treat them medically and, generally, replace our present insane and extremely expensive system with one that would work & also be cheaper.
Hey, why not?
There you go being all rational and all. The Sadists can’t have your plan cause where would they get off and all.
The best way to stimulate the economy is to put a $5,000 (or more) check in the hands of those making less than $250,000 for them to spend.
To save money? Cut NASA’s budget, as well as, Israel’s. LOL If anything, it would make me feel better knowing our money wasn’t be wasted.
I don’t understand how increasing spending on food stamps and unemployment benefits will stimulate the economy and encourage people to find new jobs, or urge business’s to create new jobs. I agree that in this time a certain portion is necessary to get us through but not as the primary objective. People don’t seem to understand The United States has splashed into a global economy that has faster growth and potential in many other countries. Lowering corporate tax might not help immediately but it will encourage companies to come to or stay in America. We have one of the, if not the hardest, especially longest working workforce in the developed world. Government is to encourage business to come to the US and also encourage new entrepreneurs to start new businesses and products. Infrastructure and “investment” in our country is a great idea, it is necessary and would create an immediate jobs. Creating a greater demand for work in the US should be the only goal. Increasing the size of government should not even be considered. Consider the path we seem to be going, the apparent liberal agenda. It is very similar to France and Germany and they are not doing great to say the least. Biggest thing is to teach financial literacy to children from young on. People can do a lot on $30,000 a year if used properly but we as Americans are greedy and do not seem to understand how to handle money. Drilling into children how to handle money and how it works in schools would do a hell of a lot more than learning to play sports or cooking ever will. Not that those are bad at all but our priorities are misconstrued.
The bush tax cuts created millions of jobs. They were apparently not the proper type thou.
The top 50% of wage earners in America pay for 97% of the income taxes, the top 5% around 40%. Why do liberals seem to insist on demonizing the wealthy, those who have used the rules that we all play by, risking thier own money and taking chances to achieve wealth which in turn creates jobs and grows the economy!!!
All those except student loans look like good ideas. And, if BO has an Ed plan which helps students, then the loans might get paid for anyway.
All around it sounds pretty good to me. Those ideas are all worth having and the stimulus is here to make things happen.
I don’t know the numbers on the “loan states money to balance their budgets”, but I do like the idea — and it’s a new one I hadn’t seen before.
I think what happened was that the Goopers helped Wall Street dig this hole to win their favor and to make profits. But, in so doing, they increased money supply far beyond what our real economy was producing. It wasn’t seen as price inflation because it stayed in investments. But, a lot of it was on paper and has now vanished. So, we have a fluffed economy going flat as a souffle, a banking system not loaning money properly, oil price spikes last summer which drained many home bank accounts, wars and a continuing growth in cost of health care and credit card debt.
If a lot of that money growth had stayed with individuals, then they could withstand this current problem a lot better. But, of course, there would be price inflation too.
So, we have two economies in a sense: the financial economy which has gone flat, but with many keeping the profits of the last decade or two; the real economy which has trudged along on zero profit growth and families sinking slowly into the mire.
The financial economy is further along in getting fixed. Price deflation happened, scandals have been revealed and regulation is (and hopefully some prosecutions are) on the way.
The real economy is still deflating (along with housing prices) and we need to push money into that area to enable businesses to keep on employees and to simply do business in a normal way and that includes state & local governments which have been hit by decreased tax revenues.
People want to work. Businesses want to make and sell. The cash has to be there like so much gasoline or oil running through the system.
Tax holiday?
Government doesn’t have a standing way to just hand out money to individuals — they’ve always given it to businesses (ha!).
What’s the best way to get it out there?
Because they have kept everyone else from improving their standard of living and their economic security. People produce more and are more efficient, particularly when they can use new computer technologies, and yet their incomes, adjusted for inflation, have been flat for about 30 years.
Is it fair for some to benefit so much and others, who produced the wealth with their own hands, should receive no more than families did 30 years ago?
They have created jobs, they have tput money back into the economy thru investments. Those investments when successful make them a lot of money but also create jobs which is always good.
If the rich make 5% on a $100,000 investment they make $5,000. They scale of their investments are larger so they are looked at having all the benefits but they are playing for the most part by the same rules. Just because making $50 on a $1000 investment doesn’t sound as good or worth it. It is necessary to develop the scale and develop discipline to get there. The “rags to riches” stories that are so prevalent in America isn’t because our journalists work so hard to dig up these hard to find stories, it is because people do it so often. If people continue to cry for government help and say everything is so unfair to them it will never work. People need to not blame others and they must accept that they are the only ones to get them out. Then they can face it and develope are workable solution. Then if outside help does come they will be even better off.