Friday, February 13, 2009

More Smack hurled at Krugman...

Again, I still like, respect, and will continue to listen to Paul Krugman,'s nice to see a little pushback now and again. This one comes from the admittedly conservative Time Magazine. So read, and consider the source.

Obama has been in office for all of three weeks. In that time he has gotten a stimulus package of a size that would have been pretty much unimaginable (except maybe to Krugman) a couple of months ago almost all the way through the legislative process, filled his cabinet and top advisory ranks at dizzying speed but made a few missteps along the way, and has yet to unveil a definitive plan for fixing a banking system embroiled in a once-in-a-century crisis. So yeah, the guy should probably just admit his utter failure and resign right now. Seriously, has the news cycle really sped up so much that a presidency is to be judged on its first three weeks, against a standard that I really don't think any previous White House would have met?

But more to the point that Krugman makes in the paragraph cited above, is the current approach really "reminiscent of Japan in the 1990s"? Japan didn't even begin to attempt a serious cleanup of its banking system until a decade after its real estate bubble burst. We're about a year-and-a-half or two into our financial meltdown in the U.S. Where did Sweden--now everybody's favorite example of how to tackle a banking crisis right (although you read about it here first)--stand two years into its early 1990s financial debacle? Pretty much where we are now, with the economy in a deep recession and a half-baked financial rescue effort that had averted total meltdown but had come nowhere near resolving the banks' problems.

"Basically we did all the same mistakes," said Anders Borg, Sweden's current finance minister (whose pony tail Tim Geithner really ought to think about emulating) at Davos a couple of weeks ago. "In the end, the U.S. and U.K. will probably end up as we did." That is, forcing a sweeping writedown of bad assets and fully nationalizing (albeit only temporarily) a few big banks in the process.

Now I'm all for avoiding mistakes, and for speeding things up on the whole stress-testing-and-nationalization front. But to imply that we're currently moving at a pace similar to that of Japan in the 1990s is nonsense.

Kos: Excellent Smacktalk...

Not to worry, I still love Krugman, even though he hasn't been helpful as late. But I did enjoy this smacktalk from Kos:

Paul Krugman's column today wasn't bad, exactly.

It seems one could say it was somewhat helpful, though inadequate in describing the state of the economy.

It's clear Mr. Krugman should have thought bigger, been bolder in his assertions. These aren't normal times, and a normal column won't do.

Wednesday, February 11, 2009

What Obama tries to giveth, Congress giveth away:

From the Washington Post.

Even after the Senate scaled down its version to $838 billion, approved 61-37 Tuesday, the centrists continued to demand more reductions. The likely targets are reducing Obama's "Make Work Pay" tax cut, from $500 a year for most individuals and $1,000 a year for most families, down to $400 and $800 respectively. Other reductions are likely in a $15,000 tax credit for all home purchases in the next year as well as a tax credit for the purchase of new cars, both of which were added to the Senate bill after little debate.

House Democrats have objected to wholesale deletions from their original bill during the Senate debate, but they are likely to see some return of aid to states that their plan priced at $79 billion. The Senate reduced that figure to $39 billion, while it also zeroed out a fund that would finance school construction, another priority for which House Democrats are pushing to restore funds.

Hillary is good...

Not too long ago, in the waning days of that "other" President, things were bad with Russia...and I mean, bad. Hell, we spent pretty much all of August shaking our fist helplessly at them as they invaded the Georgian Republic.

Then, we decided that it'd be a great idea to put elements of a missile shield (radar stations, I believe) in Poland and the Czech Republic.

This of course prompted a hostile reaction from the Russians, who know...kinda threatening war over the missile shield. (Okay, just a Nuclear Strike on Poland, same diff.)

I wouldn't say that our relationship with Russia was on a war footing, but it wasn't far off. (By the way, thanks Joe Lieberman and Lindsey Graham for all the warm thoughts!)

Well, the new guys finally moved into the White house. And almost immediately, a frosty relationship seemed turn, uhhh...frostier.

On top of that, the nation of Kyrgyzstan terminated a deal allowing us to use their airbases to resupply our forces in Afghanistan, seemingly at Russian direction.

But then Joe Biden went to Europe and gave a little speech saying that we needed to hit the reset button on U.S. Foreign Policy.

And we let the Russians know that, while we're going ahead with our plans for the shield, we don't necessarily need the dang thing.

This apparently made the Russians feel better...

And then our new Secretary of State Hillary Clinton added an interesting litle kicker. "Gee, of course, if we had help with the Iran-going-nuclear-problem, it'd make this whole missile shield thing go away even faster."

And on top of that, get the Russians are talking about letting us use their airbases as a way for us to resupply our troops in Afghanistan. But, they still want that Missle shield outta there, and won't take any steps unless we physically deploy the dang thing.

See, Previous President? This is the power of talking...

Monday, February 9, 2009

My-Way-Or-The-Highway Disease...

I'm sorry, but does Paul Krugman, esteemed Professor of Economics, Nobel Prize Winner, understand how the Constitution works?

Now, I'm not about to dismiss what Paul Krugman generally has to say. Let me acknowledge something that too many writers are afraid to: SOMEONE WHO IS NOT ME KNOWS MORE ABOUT THE FREAKIN' ECONOMY THAN I DO.

Wow. That wasn't hard.

At the same time, I'm not sure Dr. Krugman knows more about Politics than I do. That's what's been scaring me about his last few columns and blogposts.

Then again, he was a Hillary supporter.

(Sorry Hillary Supporters out there, but I've come to notice that some Hillary supporters out there in the Press and Blogosphere are quicker than most to slam the President when he miffs them for whatever reason. Steve Clemons is another example of this.)

Okay, back to Krugman.

He knows more about the Economy than I do. (Duh.)

He knows more about the Economy than you do. (Double Duh.)

He's right about the size of the Stimulus (hint: it's not big enough).

He's right that Obama got nothing for his outreach to Republicans (hint: they gave him nothing for trying to reach across the aisle).

But whether we like it or not, the Senate Republicans had a right to try and derail this thing.

They're going to fail, and fail miserably…but they had a right.

Would that Democrats had shown the same spine during the Patriot Act debate, or when they were hemming and hawing over Bush's Tax Cuts.

Now, let's be honest, it's incredibly stupid policy, and politically suicidal for the GOP to do this. (Polls are showing that the Congressional GOP is taking it in the shorts.)

Note: Before we all go hand-in-hand into the insanity of repealing the filibuster, let us remember that one day we won't be in the majority, and that throwing away the minority's power isn't exactly thinking-ahead. Plus, how loud were we all --rightly-- howling when they wanted to take away the filibuster with the Nuclear Option not that long ago??

In his article: The Destructive Center, Paul Krugman doesn't spend two pages eviscerating brain-dead "moderates" like Ben Nelson (D-NE), Susan Collins (R-ME) and Olympia Snowe (R-ME) (the people who jammed this compromise down our throats). No instead, he spends his time eviscerating President Obama.

All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.

But how did this happen? I blame President Obama’s belief that he can transcend the partisan divide — a belief that warped his economic strategy.

After all, many people expected Mr. Obama to come out with a really strong stimulus plan, reflecting both the economy’s dire straits and his own electoral mandate.

Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts. Why? Because he wanted the plan to have broad bipartisan support, and believed that it would. Not long ago administration strategists were talking about getting 80 or more votes in the Senate.

But wait! There's more:

So has Mr. Obama learned from this experience? Early indications aren’t good.

For rather than acknowledge the failure of his political strategy and the damage to his economic strategy, the president tried to put a postpartisan happy face on the whole thing. “Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,” he declared on Saturday, and “the scale and scope of this plan is right.”

No, they didn’t, and no, it isn’t.

Your confidence is always appreciated, Professor Krugman.

Dr. Krugman does understand that Legislation originates in the Congress, right?
I mean, as much as Obama can offer up suggestions, or even make demands, it's going to start in some poor schmuck Congressman's (or Congresswoman's) hands first, and then get exposed to the rotting open air of the Leglistative process, where we've gone from a few egos, to 535 of them.

But the egos aren't just on Capitol Hill. I think a lot of pundits seem to be suffering from some kind of left-wing variant of George Bush syndrome (also known as My-Way-Or-The-Highway Disease). Wherein everyone with a soapbox declares their economic plan as the only way out, and then follow it up by declaring if his (or her) plan "isn't passed exactly as I have written it, the economy will implode and it'll all be Obama's fault for not listening to me."

Obama campaigned on a promise to change Washington and reach across the aisle. Now suddenly, a lot of people on our side of the aisle seem to be saying "You really didn't mean that, did you?"

The President clearly reached across the aisle as promised. The Republicans slapped him in the face for it. Message received. Obama turned around and started firing back in the last couple of days, culminating in tonight's Presser and the Town Hall in Elkhart, Indiana (a safe McCain district rewarded for their loyalty with %15 Unemployment.)

Krugman's take is only valid if you do not accept what the President was doing was part of a larger strategy.

There is the Banking Strategy, Regulatory Reform, and Health Care Reform.

More importantly, there is Stimulus Parts 1 and 2.

The currently Stimulus Package may be too small for what needs to be accomplished, but ripping the President makes sense only if you assume that this is the only Stimulus package we need this year.

Back on January 5th, Richard Wolffe of Newsweek posited that very notion on Countdown with Keith Olbermann.

(Richard's part begins about 2:47 into the video, but his part about a second stimulus begins about 5:58 into the video).

But at the same time, believe it or not, there was a warning of the dangers of too much stimulus.

Under current conditions, however, it's much better to err on the side of doing too much than on the side of doing too little. The risk, if the stimulus plan turns out to be more than needed, is that the economy might overheat, leading to inflation

Who left us with that little nugget?

Oh yeah, Paul Krugman.

Now, to be fair, he said more than that, and that certainly wasn't the crux of his argument. He was, and remains, afraid that any Stimulus Shortfall won't be made up by the Fed or anybody else.

Clearly, someone in the Obama Administration is also afraid of the Economy overheating, and leading to inflation (I am SO learning this on the fly), so why not break the Stimulus into two parts?

The overall strategy, I think, was to have a big, broad, bi-partisan bill come out early on, get signed; and then see what happens. With the size of the Stimulus Package we're talking now, the Economy would start to get a little better, but at the same time, not be totally on the road to recovery. Thus, Obama would turn to the Congress and say we need more, and while some bellicose Republicans would throw up their arms in the air (like they just don't care…'cause they don't), but by then they would have already invested too much in the Stimulus to let it fail.

Clearly, that's not going to happen now.

But it's going to be interesting. A second round of stimulus is clearly going to be a harder sell than the first. But there are tricks (of the dirty underhanded partisan kind) that can get around that. Attaching said Stimulus II to the Defense Appropriations Bill comes right to mind.

I'm not 100% sure how Banking Reform and Regulatory Reform fit within the Congress? Does Obama have to do to them, or is he going to make sweeping changes to the way they do business without them?

And then there's Health Care Reform. I really want to see what happens with that one. We've had the Republicans freaking out over the concept of Stimulus. I've long assumed that the Health Care debate was going to be one of the Senate's uglier chapters.

But if you see…night after night…day after day…of Republicans on the T.V., arguing against Health Care the way they've argued against the Stimulus Package?

Christmas could be coming early this year.

Obama: "Now Is The Time"... (VIDEO)

"Now I'm not going to tell you that this bill is perfect. It isn't. But it is the right size, the right scope, and has the right priorities to create jobs that will jumpstart our economy and transform it for the twenty-first century.

I also can't tell you with one hundred percent certainty that everything in this plan will work exactly as we hope. But I can tell you with complete confidence that endless delay or paralysis in Washington in the face of this crisis will bring only deepening disaster.

We've had a good debate. Now it's time to act. That's why I am calling on Congress to pass this bill immediately. Folks here in Elkhart and across America need help right now, and they can't afford to keep on waiting for folks in Washington to get this done."

--President Barack Obama. Elkhart, Indiana.

The President playing it cool during the same apperance.

Complete Text of the remarks is as follows:

I want to start by thanking Ed for coming here today and sharing his family's story with all of us.

You know, we tend to take the measure of the economic crisis we face in numbers and statistics. But when we say we've lost 3.6 million jobs since this recession began - nearly 600,000 in the past month alone; when we say that this area has lost jobs faster than anywhere else in America, with an unemployment rate over 15 percent; when we talk about layoffs at companies like Monaco Coach, Keystone RV, and Pilgrim International - companies that have sustained this community for years - we're talking about Ed Neufeldt and people like him all across this country.

We're talking about folks who've lost their livelihood and don't know what will take its place. Parents who've lost their health care and lie awake nights praying the kids don't get sick. Families who've lost the home that was their corner of the American dream. Young people who put that college acceptance letter back in the envelope because they just can't afford it.

That's what those numbers and statistics mean. That is the true measure of this economic crisis. Those are the stories I heard when I came here to Elkhart six months ago and that I have carried with me every day since.

I promised you back then that if elected President, I would do everything I could to help this community recover. And that's why I've come back today - to tell you how I intend to keep that promise.

The situation we face could not be more serious. We have inherited an economic crisis as deep and as dire as any since the Great Depression. Economists from across the spectrum have warned that if we don't act immediately, millions more jobs will be lost, and national unemployment rates will approach double digits. More people will lose their homes and their health care. And our nation will sink into a crisis that, at some point, we may be unable to reverse.

So we can no longer afford to wait and see and hope for the best. We can no longer posture and bicker and resort to the same failed ideas that got us into this mess in the first place - and that the American people rejected at the polls this past November. You didn't send us to Washington because you were hoping for more of the same. You sent us there with a mandate for change, and the expectation that we would act quickly and boldly to carry it out - and that is exactly what I intend to do as President of the United States.

That is why I put forth a Recovery and Reinvestment Plan that is now before Congress. At its core is a very simple idea: to put Americans back to work doing the work America needs done.

The plan will save or create three to four million jobs over the next two years. But not just any jobs - jobs that meet the needs we've neglected for far too long and lay the groundwork for long-term economic growth: jobs fixing our schools; computerizing medical records to save costs and save lives; repairing our infrastructure; and investing in renewable energy to help us move toward energy independence. The plan also calls for immediate tax relief for 95 percent of American workers.

Now I know that some of you might be thinking, well that all sounds good, but when are we going to see any of that here in Elkhart? What does all that mean for our families and our community? Those are exactly the kind of questions you should be asking of your President and your government, and today, I want to provide some answers - and I want to be as specific as I can.

First, this plan will provide for extended unemployment insurance, health care and other assistance for workers and families who have lost their jobs in this recession.

That will mean an additional $100 per month in unemployment benefits to more than 450,000 Indiana workers, extended unemployment benefits for another 89,000 folks who've been laid off and can't find work, and job training assistance to help more than 51,000 people here get back on their feet.

That is not only our moral responsibility - to lend a helping hand to our fellow Americans in times of emergency - but it also makes good economic sense. If you don't have money, you can't spend it. And if people don't spend, our economy will continue to decline.

For that same reason, the plan includes badly needed tax relief for middle class workers and families. The middle class is under siege, and we need to give you more of the money you've earned, so you can spend it and pay your bills. Under our plan, individuals get $500 - families, $1,000 - providing relief for nearly 2.5 million workers and their families here in Indiana.

The plan will also provide a partially refundable $2,500 per-student tax credit to help 76,000 Hoosier families send their kids to college. This will benefit your household budgets in the short run, and will benefit America in the long run.

But providing tax relief, and college assistance and help to folks who've lost their jobs is not enough. A real recovery plan helps create more jobs and put people back to work.

That's why, between the investments our plan makes - and the tax relief for small businesses it provides - we'll create or save nearly 80,000 badly needed jobs for Indiana in the next two years. Now, you may have heard some of the critics of our plan saying that it would create mostly government jobs. That's simply not true. More than 90 percent of these jobs will be in the private sector. More than 90 percent.

But it's not just the jobs that will benefit Indiana and the rest of America. It's the work people will be doing: Rebuilding our roads, bridges, dams and levees. Roads like US 31 here in Indiana that Hoosiers count on, and that connect small towns and rural communities to opportunities for economic growth. And I know that a new overpass downtown would make a big difference for businesses and families right here in Elkhart.

We'll also put people to work rebuilding our schools so all our kids can have the world-class classrooms, labs and libraries they need to compete in today's global economy.

Investing in clean alternative sources of energy and the electric grid we need to transport it from coast to coast, helping make Indiana an energy-producing state, not just an energy-consuming state. Weatherizing homes across this state, and installing state of the art equipment to help you control your energy costs.

Building new high-speed broadband lines, reaching schools and small businesses in rural Indiana so they can connect and compete with their counterparts in any city in any country in the world.

And there is much, much more.

Now I'm not going to tell you that this bill is perfect. It isn't. But it is the right size, the right scope, and has the right priorities to create jobs that will jumpstart our economy and transform it for the twenty-first century.

I also can't tell you with one hundred percent certainty that everything in this plan will work exactly as we hope. But I can tell you with complete confidence that endless delay or paralysis in Washington in the face of this crisis will bring only deepening disaster.

We've had a good debate. Now it's time to act. That's why I am calling on Congress to pass this bill immediately. Folks here in Elkhart and across America need help right now, and they can't afford to keep on waiting for folks in Washington to get this done.

We know that even with this plan, the road ahead won't be easy. This crisis has been a long time in the making, and we know that we cannot turn it around overnight. Recovery will likely be measured in years, not weeks or months. But we also know that our economy will be stronger for generations to come if we commit ourselves to the work that needs to be done today. And being here in Elkhart, I am more confident than ever before that we will get where we need to be.

Because while I know people are struggling, I also know that folks here are good workers and good neighbors who step up, help each other out, and make sacrifices when times are tough. I know that all folks here are asking for is a chance to work hard - and to have that work translate into a decent life for you and your family.

So I know you all are doing your part out here - and I think it's about time the government did its part too. That's what the recovery plan before Congress is about. And that is why I hope Congress passes it as soon as humanly possible, so we can get to work creating jobs, helping families and turning our economy around.

Thank you, and I'd now like to open this up for questions.