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There were 524,000 jobs lost in December, the 12th straight month of decline. Unemployment rose to 7.2%. Small wonder that a whopping majority of Americans prefer economic stimulus to come in the form of jobs creation rather than tax cuts, per a new Wall Street Journal/NBC News poll:
"By a nearly 2-to-1 ratio, people preferred government spending to create jobs over tax cuts to give Americans more money to spend. Large majorities endorsed many details in the plan, with 89% saying they like the idea of creating jobs through increasing production of renewable energy and making public buildings more energy efficient."
Meanwhile, the out-of-touch Republicans in the House insure their future as a small, regional party by proposing a stimulus plan of pure tax cuts that are both unpopular and unlikely to be effective. (Krugman explains "bang for the buck" here, but since the Republican commitment to tax cuts on display here is primarily philosophical and not practical, it probably won’t persuade them).
Meanwhile, it looks like bipartisan support for the stimulus plan grows dim:
The president-elect’s efforts to win over Republicans — in keeping with a campaign promise to end Washington gridlock — ignited a backlash within his own party. Obama has dedicated 40% of the package to tax reductions, divided evenly between business and middle-class tax cuts. But Democratic leaders are dissatisfied and want more focus on direct spending, less on tax relief.
House Speaker Nancy Pelosi (D-San Francisco) told reporters Wednesday the package needed a single focus: "Jobs, jobs, jobs, jobs."
While many will interpret this as "bipartisan bickering," Pelosi’s position has the advantage of overwhelming popular support. The Republicans are simply replaying the old joke: "The answer is cutting the capital gains tax. Now what’s the question?"
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News brief OT
US suspends munitions delivery to Israel
If anything those numbers should grow even more for jobs over the next few weeks.
Republicans really only favor tax cuts for the wealthiest Americans and big business. The rest of us can go Cheney ourselves.
Even the least thoughtful, low information voter might realize that without a job, there is no salary to tax anyway. Si?
I saw that yesterday morning. But, was out and about all day and into the evening, so I haven’t brought it up here. Good for you for bringing it up.
Isn’t it incredibly ironic that laypeople can make that kind of connection between jobs and taxes, yet the R’s in congress who we pay to understand these issues don’t get it? Their salaries are wasted money.
I’m going to take that as a compliment. Thanks. Seems to be a fairly simple connect. It helps that I’m one of those underemployed. The truth smacks me right between the eyes. Ha.
Slightly OT Obamas 1/2 of TARP monies to come up for vote this PM in Senate. Burris to be sworn in at 2:00, Biden resignation effective at 5:00 Vote on TARP to take place @ 3:00. HMMMMM. If vote to approve then Obama gets $ If defeated then goes to house.
119 hrs & 9 min
A majority of americans understand that they’ll have to pay for the follies of the bush administration. They’d rather have jobs, anyways, they’ll pay.
If Republicans are such an out of touch party, why does Obama spend so much time agreeing with them and accommodating their lunacy?
Krugman agreed with a long term capital investment as preferred to a jump start approach the Obama transition team is considering.
Ian, Greenwald, Rubini and many economists agree in principal that a stimulus to the economy gets more “bang for the buck” with capital funding than tax cuts. In addition a safety net program including adequate food stamps and extended unemployment benefits would be more effective in getting consumption moving.
The capacity of the US economy is around $15 Trillion, consumer driven, so more disposable income is needed or the recessionary spiral will continue downwards pulling the global economy with it.
Central banks have been dumping trillions into the banking system for 15 months but a new round of alpha-A mortgages will come due next fall. That and other forces are driving consumers out of the market. Also people are cashing in their stocks to pay bills and eat, adding to the sell off of stocks. That means less capital in the markets. All bets are off with the stimulus package as stated by the Obama transition team.
He is post-partisan. It’s for the good of the country, doncha know.
Barack Obama needs to learn the Social Security lesson that Nancy Pelosi taught W: laser focus on what Americans want, with no deviation from the single goal. In the current case, jobs, jobs, jobs is right. She did it once before, she can do it again.
He get’s his news watching MSRNC?
MSNBC is asking for a live vote!
Give President Bush a Grade A-F are the choices.
Currently F is winning by 51%
Go get ‘em Firepups!
I would never call you low information or least thoughtful–I was referring to your observation that those types of voters understand the connection between jobs and taxes.
And since I have a history of underemployment since 2001, the truth hurts me as well.
So in our area, robberies have increased tremendously. This is partly due to the economic downturn and partly to drug problems exacerbated by a multi-agency take-down of a meth cartel.
I am battling with every insurance company over recent losses. I am ready for universal health care, which would be a HUGE economic boost for all of us who are paying for insurance and what passes for health care in hard times.
What about some of that health coverage that every other society has that we compete against?
Who in their right mind could be surprised by these results? i don’t get that. For too long them Dems have failed to call bullshit on the R’s “tax cuts will fix everything” line. If the economy wasn’t in the shitter, they probably still wouldn’t have done it. And even now they still felt compelled to float handing out tax cuts like the candy that’ll get enough R’s to go along so they’ll get a super-duper majority vote on the stimulus package. Man……. But an encouraging poll.
Let’s ask Harry and Nancy.
In America (and the rest of the world)when it comes to saving either the financial ‘games’ or the people, the money is ALWAYS put on ‘Institutions’ …
Unless Obama ‘changes’ this calculus, he will be the last of the traditional ‘Murkan pollytishuns, hoisted, in a form of poetic ‘justice’, on his own ‘post’.
You want both short and long term investment. You want something to keep the economy going now, but a point I have been trying to get across is that for the most part when the stimulus is done it’s done. So what do you do 2 years from now? That is why long term investments are important because they go beyond the 2 year timeline of the stimulus.
I see 3 things which are necessary.
The underlying problems which created the meltdown need to be fixed.
We need something to keep the economy going now.
We need a new industrial policy and long term investment to keep the economy growing after the stimulus.
Dang I forgot to pay my cable bill until yesterday :(
any suggestions on what we can do to help motivate her?
should read I’ve had.
Cut the capital gains tax. What bullshit!
We’re still writing off losses from the early to mid Bush years, because you can only write off so much per year.
During the Clinton years, a lot of people in the middle class made large gains through normal, prudent investing, even with taxes the way they were.
During the Bush years, people with less than $1,000,000 to invest – especially in mutual funds – did not do well. A majority did poorly or lost. Meanwhile, people with millions to invest, did rather well under Bush, even compared to the Clinton years. All the rest of America supported their greed and ridiculous Ponzi-like schemes, at the expense of our long-term financial health and security.
This new tax cut stuff for investors is pure bullshit. Reward honest, long-term investment in America. Only that.
How does taking own a meth cartel increase crime? I don’t doubt you but I am confused.
OT Are you all aware of this article http://www.nytimes.com/2009/01…..1&hp, titled “Intelligence Court Rules Wiretapping Power Legal”, h/t slashdot http://yro.slashdot.org/articl…..5/1623230?
is it possible to do this, at least in part, by providing a safety net to those put most at risk?
Seems like Bank of America is looking for more money. Didn’t they just spend $9 billion to buy a bank in China? If so screw that shit.
118 hrs & 55 min
Honestly, I am hurting for cash, but $500 would do little to help me, and I am in no danger of foreclosure or anything dire like that. We have already seen the “economic stimulus” and what that accomplished. People are in a world of trouble these days. A tiny bit of cash to individuals, after all the bonuses we have read about from the bank handouts, who could not have foreseen that people want jobs?
the “jump-start” metaphor is part of the problem
When (drug) supply goes down, price increases, there is scarcity, people are more desperate. Just part of the (non) supply-side of the deal.
marcy has posted links to the docs
Now they’re sayin’ that Merrill-Lynch had more toxic assets than originally thought. If Bof A didn’t do their due diligence, tough shit. There’s no Lemon Law for banking institutions.
In the simplest terms REPUBLICANS SUCK !!!!!!!
Merrill-Lynch had more toxic assets than originally thought. . .
I’m sorry, but who could have foreseen this?
Thanks Jane.
This morning on CNBC’s Squawk Box, they had three economists on and all three agreed that tax cuts were a bad idea.
Thanks to Katiedogg for opening the digg.
If they bought it sight unseen they deserve to go belly up.
118 hrs & 49 min
Yes, absolutely. But we also need to avoid pumping money into non-productive tax cuts or into banks who will not use it.
40 percent of the stimulus to tax cuts is wasteful considering the number of people in your (and my!) situation. Any check the govt cuts for me will go back to the banks as credit card payment or back to the oil companies as payment for winter heating bills.
That may be correct.
FWIW, another theory I’ve heard is that Countrywide is the source of the bad assets.
I’m shocked too.
Not sure if the link is right… where is that?
Icymi, the bastion of the robber baron, CNBC’s Squawk Box, had Roubini on this morning. Nobody objected, when he said the banks were insolvent.
I have to deposit a rental property owner’s check each month at my local BofA. Yesterday I saw half the staff I usually see and of those half I’d never seen before. Mayhaps they’re walking a tightrope.
Get to leave hospital and head south if I behave. Booyah! Go, pups.
sorry! trying again here.
You mean like Costa Rica
http://www.costarica.com/Retir…..alth-Care/
77.2 years of life expectancy vs 78 years in America
http://www.infoplease.com/ipa/A0004393.html
We can sell National Healthcare as Costs Rica has it they pay less to insure everyone than we do to insure some and they live almost as long as we do …and they are gaining.
The GOP says we can’t afford it but this is more short term GOP thinking YES WE CAN AFFORD IT!
Because its cheaper than our current system anymore. Where the GOP learned Math some fancy prep school I don’t know.
Whoa, yer in the hospital? What’d I miss?
Yes, Countrywide was another brilliant move by BoA. People can correct me but BoA IIRC had worked closely with Countrywide. BoA had a fair amount of exposure to Countrywide so by buying it BoA was able to hide that exposure for a while.
I still don’t understand how when at the start of all this it was said that these banks were to big to fail. Now they are merging and getting bigger. Something is very wrong with this picture.
118 hrs & 40 min
Because its cheaper than our current system. Where the GOP learned Math some fancy prep school I don’t know.
The anymore should have been deleted.
A ’stimulus package’ which provided $10,000.00 to each citizen (except those who ‘have’ or ‘have more’), would just about equal the opportunity cost, per citizen, of our two recent military ‘adventures’.
If the one figure is ‘outrageous’, then what is the other?
Yeah, Barbara, what up? You gave me a towel to cry in on Monday afetr the Giants lost. Was it sterile?
Must be a mindset that if they buy up smaller banks they’ll be able to use those assets to offset their toxic securimatilized securities. Didn’t bother to look at the books.
Was Countrywide BOA’s front company to hide debt off its books?
Sounds like a Diary what would you buy with 10,000?
$10K would pay off my student loan balance and leave me a little dust to put in my savings acct. Or buy books, which is why my savings acct couldn’t get me out of sight if I could go around the world for a buck.
Bank insolvency is a root cause of the meltdown. They will not act any differently until they are re-capitalized and they can not be re-capitalized until the full extent of their insolvency is made known. For this reason as well as mortgage renegotiation and freeing up credit, I continue to advocate bank nationalization. The Fed and Treasury have tried everything in their power to re-capitalize banks without nationalization and it plain and simply, as we can all see, has not worked.
I will be retiring to Costa Rica someday because my wife is from there. She thinks the US system not very friendly to it citizens
BoA was rather Countrywide’s banker and partner in the housing bubble.
It’s PEBO’s secret plan to change everything. /s
The banks created some of these companies as special purpose entities to make crappy home loans and hide the debt from their books.
However the banks said they would buy the bad debt back if they had to so when the market tanked there was so much bad debt that they had to buy the entire company.
This debt should have been on their books I smell a lawsuit coming.
Nothing wrong. Just a normal part of the perpetual looting plan.
I’m thinking of Belize myself but thats decades away.
Gangs that murder and kidnap ie meth dealers need to be stopped.
Treatment yes your statement ludicrous. I have suspected meth user, up all night playing repetitive rap rythms, barrells full of alcohol bottles in the trash. People moving in and out weekly. No stop meth the higher the better. It is one of the cheapest drugs and the most addictive and fosters crime, neglect and squalor.
Great. All the corporate lawyers will get a ton of money and once again we’ll hear that sucking sound that is the elites Hoovering the money out of our pockets to pay for it all.
have you decided where in costa rica? i haven’t been there for a long while, but remember it as a very beautiful place. was also the first time i began to understand the damage of deforestation in tropical rain/cloud forests, which i think is quite different than in the temperate forests i am used to
I agree. Another thing that bank nationalization would do would be to allow the government to split banks up so that they were not too big to fail. The standard philosophy of bank mergers now is for the banks which are too big to fail to buy up undervalued ones and sell off or keep their good assets and somehow dump their crap ones on the government or get the government to bail them out.
One of the key ingredients in meth can only be made in a complex chemical factory I think there are only a few in the world. We can stop meth by closing the factories we can throw cash into research to look for another drug to help allergic people and smokers breathe.
Her family is in San Jose. THe coasts are getting expensive partly due to all the foreigners buying land there to have houses.
The corporate lawyers gave the banks advice on how to form these special purpose companies if they get sued the banks will sue them.
Anyone care to give Bush a grade on this msnbc survey ? Anyone ? Bueller ? Anyone ?
Another infinite loop.
Done. Bush now at 46% F. Down from 51% earlier.
Come on everyone. Vote. 46% F as of now. I’m sure we can get it over 50%.
Thanks Bush at 46% F we need more votes Pups!
banks whether investment or commerdcial class shlould be tightly regulated against gambling with Credit Default Swaps, CDOs and other instruments that are not backed by real assests that carry no or minimal risks without leveraging. That is what got the economy into the recession.
Bring this link up next thread please!
F at 46% now.
ah, well it was about 20 years ago i was last there. i expect it is much changed. nothing was very expensive then – except the english-language hotels in san jose. never stayed in them though – i traveled with a tico and was the only gringa loca.
Just to be clear, I believe the cops should shut meth operations down. It is just a side effect that when the supply goes down, the cost goes up, the drug is (temporarily) scarce, and people do more and more desperate things, like more burglaries, even coming into your house while you are asleep. Meth is a terrible problem, and right now, here, we see the effects.
I serve to live ! *g* Done !
Jane there are a lot of eager beavers lining up for the “big easy payday”.
Thr rush rush will bring a lot of ill thought out…not well vetted projects out. Oner runs, mistakes anf bad technology will be built. I am hoping for a sensible approach rather than “Jump Start”.
This mess was three decades in the making…so we we need the safety nets while an investment into the technologies that will bring us away from big carbon.
Old engineering of water and wastewater should be on the abandoned in favor of those that address emerging problems such as those that remove the carcinigens that have poisened us. Healcare is essential and so is prevention. Both need investments.
I also think investment tax credits for preferred technologies is a way to move us in the best direction.
Exxon/Mobil came out surprisingly in support of a carbon tax. Move off of those investments in carbon by getting those new sustainable industries a tax break. Solar panels, wind turbines and wave technology could provide a lot of permanent jobs to replace our lost manufacturing sector thsat was offshored by NAFTA.
The capital that goes out as balance of payment then stays in boosting our caps very signifigantly. We have to be smart not desparate an economic recovry plan needs to be created while the safety net is provided ASAP. The bank rescue has not turned the recession around.
Volcker: Regulate to prevent future crisis
I am sure there is still plenty of space for gringas locas!
Thanks Jane!
Perhaps I’ll find myself in the extreme left minority (moronity?), but I’m in favor of tax cuts to help stimulate the economy!
Payroll tax cuts!
People who pay taxes before they even see their wages will likely spend increases in their take home pay, buying frivolous things like food, heating oil, gasoline, cars, appliances, electric bills and a small amount for entertainment, thereby stimulating the real economy, not the “Wall Street Journal Economy”.
Absolutely, cut the taxes. You want to stimulate the economy and create jobs at the same time…CUT THE CORPORATE TAX RATE. Believe it or not, it won’t even be the money saved by companies that will cause this to work, it will be the fact that companies will know what is going to happen in the future. Uncertainty is a killer of business and it does have a trickle down affect. Also, this would fix the big-3’s problems overnight, at least temporarily.
Jobs. The Krugman and Zandi “most bang for the buck” is exactly right. An employed person can buy a car, a house, refinance a mortgage, go to a doctor, pay bills – which keeps employing more people.
Jobs, jobs, jobs – go Speaker Pelosi!
BTW, if this is what Obama goes with, it will fail http://online.wsj.com/article/…..lenews_wsj
Kurt that works for stockholders getting more dividends and executive bonuses. It does not create disposable income. Without buyers there is no market growth. Consumers drive the economy. Main street does not do well with your plan, The fat cats do. Trickle econ does not work. Give to the wealthy 5% that own our capital will not get disposable income to the consumer. You are wrong…very wrong, The tax shelters that exist should also be stopped. The deficit will shrink and the dollar will strengthen. You are so out in right field we cannot hear you. Could you please yell.
Kurt, meet George W. Bush. He pushed your plan.
What corporations are even paying taxes?
It has been a Republican Free Market Mantra as far back as Reagan’s presidency. His director of OMB, David Stockman, said (paraphrasing here) “Any corporation paying taxes in the U.S. should fire it’s accountants”.
The primary result of lowering corporate taxes has been the astronomical shift of income upward to the richest Americans.
Hate to break it to you, but if a corporation doesn’t make a profit or has a loss, it doesn’t pay any taxes. So cutting the corporate tax rate will do absolutely nothing, especially in the short term.
If this is Dean Baker, man, you rocked the House on NPR the other day. Huzzah!
Part of the problem that I see is that all of talk radio (including “moderate”) as well as Fox News has the GOP Talking Point out there that FDR prolonged the Depression in 1937 through excessive government spending. I heard this again today. I heard the Britt Hume version of “many economists say” by some caller as well. (to which I say, “name one!”)
On another note, it is unfortunate that there are no incentive provisions from the tax code side of things to actually encourage job growth, such as the tax credit for business that stop outsourcing. I am not surprised that some corporate Dems, such as Shumer, are against this.
There are ways within the tax code, outside of expanding capital expenditures, which apparently is included, to encourage job growth. A lot of people forget that salary, in whatever form, is always a “necessary and ordinary business expense.” Right now a CEO can pay himself whatever he wants, pay the employees low wages and outsource the rest of the jobs out of the country and the CEO wages are still deductible from the corporation’s income for tax purposes. Limit deductability of CEO pay, for example and limit their ability to outsource and the only other option is to hire more workers at better wages.
“‘fraid not.” He posts as Dean Baker, although I wish I was as smart as he.
Speaking Dean Baker, he was on Fresh Air the other day, followed by Greg Mankiw, who probably is one of the few economist who does agree with Britt Hume.
Amity Schlaes, whose book, The Forgotten Man, is often cited by conservatives, is taken to town by James Galbraith here.