...and to the banana republic, for which it stands...

by: Jay Stevens

Tue Mar 31, 2009 at 13:18:11 PM MST

The former chief economist at the IMF and MIT economics professor, Johnson notices the similarities of the collapse of the US economy with other collapses overseen by the IMF in "emerging markets." Basically a financial elite partners with its government to undertake ever increasing financial risks where profits are gobbled by the elites and losses underwritten by the government. According to Johnson, during the first throes of financial trouble, the government always ponies up to the economic oligarchs with tax breaks or government bailouts.

Sound familiar? It should. In essence, the financial industry has been leveraging its power over the US government into increasingly favorable deals, in which it receives oodles of taxpayer money while only delaying or mitigating the roots of the current crisis.

Johnson:

The challenges the United States faces are familiar territory to the people at the IMF. If you hid the name of the country and just showed them the numbers, there is no doubt what old IMF hands would say: nationalize troubled banks and break them up as necessary.

This may seem like strong medicine. But in fact, while necessary, it is insufficient. The second problem the U.S. faces-the power of the oligarchy-is just as important as the immediate crisis of lending. And the advice from the IMF on this front would again be simple: break the oligarchy.

The financial elite has too much power over the government and is blocking the most effective solutions to the financial crisis, which would put their power and money at risk. To do that, Johnson recommends breaking up the banks into smaller institutions after nationalization, policing them with robust anti-trust legislation, and capping executive pay.

Basically recreate the banking industry into something that's boring -- and safe. And preferably an industry that doesn't hold disproportionate power over our government.

If only...

by: Jay Stevens

Tue Mar 31, 2009 at 06:55:47 AM MST

Still and all, don't you wish that Obama were willing to treat bankers the same way he's treating the carmakers? It's pretty much impossible not to compare his tough words this morning with the conciliatory tone and even more conciliatory actions he's taken with the financial industry.

If anything, this only underscores how weak the auto industry is, both economically and politically.

The three-piece-suit Vandals at the gate

by: Jay Stevens

Fri Mar 20, 2009 at 06:50:06 AM MST

Last month, the same government that says it "cannot just abrogate" executives' bonus contracts used its leverage to cancel unions' wage contracts. As the Wall Street Journal reported, federal loans to GM and Chrysler were made contingent on those manufacturers shredding their existing labor pacts and "extract(ing) financial concessions from workers." In other words, our government asks us to believe that it possesses total authority to adjust contracts at car companies it lends to, and yet has zero power to modify contracts at financial firms it owns. This, even though the latter set of covenants might be easily abolished.

Sirota also mentioned that these AIG bonuses were crafted after corporate executives knew the company was collapsing, which reminds me of this danger Galbraith mentioned in the article I highlighted yesterday:

Delay is not innocuous. When a bank's insolvency is ignored, the incentives for normal prudent banking collapse. Management has nothing to lose. It may take big new risks, in volatile markets like commodities, in the hope of salvation before the regulators close in. Or it may loot the institution-nomenklatura privatization, as the Russians would say-through unjustified bonuses, dividends, and options. It will never fully disclose the extent of insolvency on its own.

Seems to me that some of these banks are probably ripe for nationalization, restructuring, and reselling...

Update: Oh, and another thing, this kind of hijinks should serve as a glaring reminder that management should not be trusted when it suddenly starts expressing concern for workers' rights...

Restoring the middle class is key to economic recovery

by: Jay Stevens

Thu Mar 19, 2009 at 07:30:55 AM MST

In other news, we're still in the middle of a recession.

For one, James K Galbraith thinks the Obama administration is underestimating the depth of the current crisis and isn't spending enough to blunt it. He argues that doling out cash to banks won't solve our problem: without borrowers -- that is, a financially robust middle class -- the credit crisis won't end:

A brief reflection on this history and present circumstances drives a plain conclusion: the full restoration of private credit will take a long time. It will follow, not precede, the restoration of sound private household finances. There is no way the project of resurrecting the economy by stuffing the banks with cash will work. Effective policy can only work the other way around.

To restore "private household finances," Galbraith puts forth an ambitious government program:

The first thing we need, in the wake of the recovery bill, is more recovery bills. The next efforts should be larger, reflecting the true scale of the emergency. There should be open-ended support for state and local governments, public utilities, transit authorities, public hospitals, schools, and universities for the duration, and generous support for public capital investment in the short and long term. To the extent possible, all the resources being released from the private residential and commercial construction industries should be absorbed into public building projects. There should be comprehensive foreclosure relief, through a moratorium followed by restructuring or by conversion-to-rental, except in cases of speculative investment and borrower fraud. The president's foreclosure-prevention plan is a useful step to relieve mortgage burdens on at-risk households, but it will not stop the downward spiral of home prices and correct the chronic oversupply of housing that is the cause of that.

What's doin' in the legislature...

by: Jay Stevens

Wed Mar 18, 2009 at 09:05:22 AM MST

Jhwygirl has some excellent posts up. Earlier she posted the schedule for the first half of this week -- just to give you a taste of what contentious things were batted around in the legislative chambers.

Krazy Kerns' gun bill -- HB 228 -- had its hearing, and jhwygirl noted that opposition is increasing. And it's gaining wider attention, too. Gouras' AP report landed in the Seattle Times. I still don't get it: do Montanans think that needing to get a permit to carry a concealed weapon is a bad idea? And as jhwygirl noted, Larry Jent's SB 92 establishes a castle doctrine for Montanans that's reasonable. Why the love for Kerns' bill?

And the Horse Butcher bill sailed through its Senate committee yesterday. Now I'm not deaf to the need for a place to send horses to slaughter -- I'm not even against using the plant to slaughter wild horses -- but as jhwygirl points out, "this is one bill that has been cited as a violation of Montana's guaranteed right to a clean and healthful environment."

Another way of looking at this bill, is that it gives preferential legal and regulatory treatment to one particular industry. Why? Why not hold the horse slaughter industry to the same health and safety benchmarks as any other?

Mike Dennison's got a report on SB 499, which would lower the coal-severance tax for "green" projects. Its sponsor, Jeff Essman, argues that lowering the tax means more coal production and revenue. Opponents call it another boondoggle for the coal industry:

That same promise was made 22 years ago when the coal industry successfully lobbied to cut Montana's 30 percent coal-severance tax to 15 percent, they said - and it did not lead to more coal production.

"Except for a temporary increase to get the bill passed, there was no increase in production; if anything, it has gone down," said Verner Bertelsen of Helena, a former legislator and co-chairman of Montanans for the Coal Trust. "We doubt that reducing the tax will stimulate coal development in Montana. There are many more significant factors in siting a coal mine."

I'm leaning towards the boon-doggle side. That, and coal's a dying industry. Let it die, and let's think of better, more sustainable long-term use of our public lands...

And in Missoula, there's some buzz that it's not receiving its fair share of the stimulus money. And what money it is getting isn't going to mass transit or city infrastructure projects.

Can anyone explain Greg Barkus' rant on the Rotunda Report against government spending during a recession? It sounds like a theory patched together from shaky theoretical texts and right-wing blogs. We're in a Keynesian world right now; does Barkus not know that? In any case, it's kind of chilling to think that this man has any power over the state economy.

To panic, or not to panic...

by: Jay Stevens

Fri Mar 13, 2009 at 18:25:02 PM MST

"But panic ruled the day," Rehberg told the state lawmakers. "The idea that it was the bailout or nothing is a false choice that politicians invented to justify their votes to irate constituents back home."

Kalispell state senator, Greg Barkus, writing on the  Rotunda Report on why we need to toss aside environmental regulations for stimulus-funded projects:

The purpose of this bill is to make sure that we convert these federal stimulus funds directly into projects, and therefore jobs, as soon as possible.  I believe it's important that we don't delay these projects with paperwork and red tape.

There's no question that this is the worst I've seen our economy in my lifetime.  We've lost a couple of thousand jobs in the Flathead Valley in the past couple of months.  We need to get these funds moving and Montanans working as soon as possible.

Hm...looks like they forgot to coordinate their notes...

Stewart v CNBC

by: Jay Stevens

Fri Mar 13, 2009 at 05:42:12 AM MST

Not only does Stewart makes look Cramer look like a lying, groveling d*uche, but he pretty much, in just a few minutes, peels back the facade of news coverage. It's a game. The media starts know it's a game. They know what's going on, but they package the news for consumption, and a product that's very different from reality is what's shown.

You can speculate why. Media figures are herd animals; they're shy about stepping out alone into unchartered territory. They deliver content they think their audience wants. They don't think their audience is sophisticated enough to understand the subtleties of issues. Whatever.

But as Stewart pointed out, media coverage has consequences.  

Governor unveils details of stimulus package proposal for Montana

by: Jay Stevens

Thu Mar 12, 2009 at 10:50:01 AM MST

Again, don't forget about the website the Good Guv's office put up to track stimulus spending: Montana Reinvestment Act. I believe this pdf -- "ARRA allocation" -- is a detailed list of the proposed expenditure, and HB 645 (pdf) is the House bill that would enact the spending proposals.

Shall we guess what House Republicans will object to? I'm betting they'll look to excise anything to do with poor kids -- like lunch program or nutrition assistance, food stamps, etc. I mean, that's been the M.O. for these folks this session, right?

By the way, if you want some hilarious reading, check out Dave Lewis' avowed "reluctance" to spend the federal stimulus money. Wouldn't that have been funny if Lewis had actually tried to block this spending package? And hasn't Dave Lewis become the Mike Lange of the 2009 legislature? Whenever I think of the GOP's efforts to block a mandate supported by 70 percent of Montanans to extend health care coverage to uninsured children, I'll think of Dave....

GOP Introduces New Ridiculous Tax Measure at the State Level

by: Matt Singer

Mon Mar 09, 2009 at 15:17:48 PM MST

Mike Dennison reports via Twitter:

GOP proposes capital gains tax cut to attract new businesses to Montana

In other words, you cut capital gains taxes in Montana and Montanans invest...wherever the hell they want.

Second problem -- and I'm not entirely clear how this plays in Montana -- but federal income taxes generally make state taxes deductible, partially or wholly. So we cut capital gains taxes in Montana, Dennis Washington invests in New York, pays lower state taxes but higher federal taxes.

Third problem -- most investment is not driven by tax rates but by perceived success or failure of a business. The idea that huge numbers of people are scared out of investing because they'll pay a tax if the venture is successful is ludicrous.

Don't just take it from me, take it from the Institute on Taxation and Economic Policy's Issue Brief on the subject:

Advocates of capital gains tax cuts make no bones about the fact that working taxpayers receive very little benefit from such cuts. They argue that capital gains breaks are designed to encourage economic development by rewarding investment. But there are reasons to believe that capital gains tax breaks are an ineffective strategy for achieving state economic development.

First, capital gains tax breaks have not been shown to encourage additional investment on the federal level-and this linkage is even more tenuous at the state level. A general state capital gains tax break is highly unlikely to benefit that state's economy, since any new investment encouraged by the capital gains break could take place anywhere in the United States or the world.

Second, a substantial part of any state capital gains tax break will never find its way to the pockets of state residents. Because state income taxes can be written off on federal tax forms by those taxpayers who itemize their federal income taxes, and because the ability to write off state income taxes is most valuable for the wealthy Americans who realize most capital gains income, any reduction in state capital gains taxes will be partially offset by an increase in federal income tax liability. For example, ITEP has estimated that 25 percent of the state revenue losses from the Arkansas capital gains tax deduction are directly offset by federal tax increases, and that this "federal offset" increases to 34 percent for the wealthiest taxpayers.

Few policy makers would seriously propose an economic development program that simply threw away 25 percent of its allocated budget-yet that is essentially what lawmakers are doing when they propose a capital gains tax break.

Update -- Wow. Must have been in a hurry yesterday, I called Mr. Dennison, "Mike Dennis." My bad.

Charles Johnson has a story this morning fleshing out more of the details. The tax break is apparently aimed at capital gains tax cuts for new businesses starting or moving to Montana in the next three years. I'm not sure exactly how you do that on the personal income tax side of things instead of the corporate income tax side of things, but apparently this works.

This takes care of one in three of my concerns, but doesn't do anything to address the federal deductibility issue or the fact that capital gains tax cuts just haven't ever been shown to have a stimulative impact.

Will the recession upend the death penalty?

by: Jay Stevens

Mon Mar 09, 2009 at 07:46:27 AM MST

After decades of moral arguments reaching biblical proportions, after long, twisted journeys to the nation's highest court and back, the death penalty may be abandoned by several states for a reason having nothing to do with right or wrong:

Money.

Turns out, it is cheaper to imprison killers for life than to execute them, according to a series of recent surveys. Tens of millions of dollars cheaper, politicians are learning, during a tumbling recession when nearly every state faces job cuts and massive deficits.

So an increasing number of them are considering abolishing capital punishment in favor of life imprisonment, not on principle but out of financial necessity.

Our financial woes may indirectly lead to some good.

It'll be interesting to see which conservative ideology wins out in Montana -- the rhetoric advocating smaller and less intrusive government, or thirst for revenge.

Here's a great quote from the article that should help satisfy their desire to see bad people suffer, were the death penalty ban to go into effect:

"If you really want to kill someone, give them life without parole," [exonerated former prisoner Randy] Steidl said in an even voice. He speaks of his troubled past as if it was trapped under glass or locked behind bars - visible but no longer able to torture him.

"It's worse than dying."

Don't turn me into a cynic, Montana Legislature

by: Jay Stevens

Tue Mar 03, 2009 at 19:32:47 PM MST

One bill gets straight to the issue, promising to exempt hundreds of millions in economic stimulus projects from the state's landmark environmental policies. Environmentalists are ramping up lobbying efforts as a wave of measures eroding regulatory rules gain serious traction in the face of a recession and shrinking state coffers.

"It is about jobs," said Sen. Jim Keane, a Democrat from the mining town of Butte. "But I think the issue is much bigger than that. All these projects also generate new taxes and revenue for the state government."

Proponents are hoping to ease the way for everything from new coal plants to electricity transmission lines. They say complex rules killed a utility's recently failed plan to build a coal-fired electricity plant near Great Falls; the utility now plans a smaller, natural-gas-fired plant.

Get it? It's a friggin' boondoggle. All these projects that were halted or turned away because they didn't meet contemporary requirments for keeping Montana's natural and wild spaces free from pollution will now be built, pell-mell, under the blanket of the stimulus package. (That's not to mention that the Great Falls coal plant failed because of shy investors, not environmental regulation as Keane claims.)

It's obsence.

Frankly, it's unconstitutional. Read the state constitution. Read Article II, Section 3:

All persons are born free and have certain inalienable rights. They include the right to a clean and healthful environment and the rights of pursuing life's basic necessities, enjoying and defending their lives and liberties, acquiring, possessing and protecting property, and seeking their safety, health and happiness in all lawful ways. In enjoying these rights, all persons recognize corresponding responsibilities.

And lastly, it's short-sighted. So short-sighted it borders on idiocy. Build a slew of coal-fired power plants with the stimulus money? Just before an ambitious cap-and-trade program is instituted in the US? (Perhaps the cynic in me is thinking that folks want these plants built, post-haste, so they can be grandfathered in under the system and not have to buy the right to pollute after the federal regulations kick in.)

This stimulus package is an opportunity to do things right. Don't blow it.

Obama unveils his agenda

by: Jay Stevens

Wed Feb 25, 2009 at 08:32:30 AM MST

Some other reactions:

Obsidian Wings' publius: "And it's hard to translate into words how refreshing - how deeply satisfying - it was to see a President stand up and openly embrace such a progressive platform. Having watched the defensiveness of Clinton, Daschle, and John Kerry over the years, it's just cathartic to see it on a national stage."

Michael Tomsky: "US politics has been defined by bashing poor people (or at best ignoring them) since Ronald Reagan's time. Now, it's rich people who are on the carpet.

"But not only rich people. Everybody who isn't helping is part of the problem. Probably the best line of the speech was directed at people at the bottom of society - high-school dropouts. When you quit school, Obama said, "it's not just quitting on yourself. It's quitting on your country." That's a Kennedyesque call that signals to everyone listening that Obama is holding everyone to a standard of behaviour."

Ezra Klein: "Obama doesn't talk to us like we're stupid. This wasn't an inspiring speech. And it wasn't a terrorizing speech. It was an explanation. The president told us what he was planning to do. And the speech was written as if he believed that we could understand him. He didn't wrap his agenda in a lot of rhetoric about America's mettle or hide it behind stories and icons. He just sort of said it."

Steve Benen: "It was an implicit acknowledgement of the ways in which the political discourse can stray from the factual path. The president had the bully pulpit, and he was determined to use it to set the record straight -- before it got corrupted by those less interested in 'honest debate.'"

Ed Morrisey: "...SOTU speeches usually are nothing more than legislative wish lists. Presidents tell Congress what they want, and Congress applauds when they agree. If you like Barack Obama's populist wish list, you probably liked the speech, and if not, you probably hated it. But it's no different than hearing one of his campaign speeches in that regard - and no different than any other president's SOTU speech. Given that Obama won a national election using essentially the agenda he had last night, I'd say he did himself a lot of good, and will get a temporary bump in the polling from it."

I liked this bit:

The fact is, our economy did not fall into decline overnight. Nor did all of our problems begin when the housing market collapsed or the stock market sank. We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before. The cost of healthcare eats up more and more of our savings each year, yet we keep delaying reform. Our children will compete for jobs in a global economy that too many of our schools do not prepare them for. And though all these challenges went unsolved, we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before.

In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.

Well, that day of reckoning has arrived, and the time to take charge of our future is here.

It's a recognition that our economic crisis is the result of systemic problems, not merely a run on bad loans.

Besides promoting the recent stimulus package and his housing plan, the president went on to outline some upcoming plans for an ambitious agenda: energy efficiency, producing renewable energy, energy infrastructure, a cap-and-trade system for carbon emissions, aid for the auto industry, health care reform, education reform, tax reform, Social Security and Medicare reform, budgetary transparency, and an end to the Iraq War.

Wow.

So, it begins. Tommorrow, the president is expected to unveil his budget; in it will be a plan to reduce the federal deficit in half by 2012. On Friday, Obama is to announce "that he will remove all US combat troops from Iraq by August 2010." Then there'll be the institution of a carbon cap-and-trade system. Of course, there's still the matter of the banks, which may require another handout, and there's always wasteful Pentagon spending to deal with, like Bush's helicopter program and the F-22.

I wonder what next week will bring.

More on Rehberg & Stimulus

by: cleveland

Tue Feb 17, 2009 at 05:51:17 AM MST

Well, Denny is out there trying to make the GOP Congressional talking points stick to the wall.

My favorite quote: "This is not free money," Rehberg said.

Well, Denny, were the Bush tax cuts for the richest of the rich free money?  Was the Iraq War free money?  Tax cuts for the rich?  Good.  A couple trillion to "free Iraq"? Good.  $300 billion in middle class tax cuts? Bad.  $600 million in fiscal relief for the state of Montana? Bad.

The most interesting part of the interview is that Congressional Republicans are offering no solutions.  Their talking points amount to: This is bad.  

I also found his analogy comparing a rail-system to link Las Vegas (2 million people) to greater LA (14 million) to the bridge to nowhere to be completely absurd.  

Montanans are losing their jobs.  The GOP made a political gambit that if the stimulus worked Obama would get the credit, so they opposed it, or they thought it needed more tax cuts for the richest of the rich, so they opposed it.

As Mr. Rich noted on Sunday:

Republicans will also be judged by the voters. If they want to obstruct and filibuster while the economy is in free fall, the president should call their bluff and let them go at it. In the first four years after F.D.R. took over from Hoover, the already decimated ranks of Republicans in Congress fell from 36 to 16 in the Senate and from 117 to 88 in the House. The G.O.P. is so insistent that the New Deal was a mirage it may well have convinced itself that its own sorry record back then didn't happen either.

Americans are expecting a new, New Deal.  The modern day ideology of GOP, their own echo chamber-swirling with Russ Limbaugh's voice and their own talking points, are running the party off a cliff.

Thank God, they are in the minority now:  for the past 8 years they ran the country off a cliff, at least now, it is just their own future.  

Beware the echo chamber!

by: Jay Stevens

Mon Feb 16, 2009 at 19:13:35 PM MST

Sunday Frank Rich wrote a much more erudite column on this topic than I could muster. In short, Rich noted that the cable tv and talk radio doom-and-gloom talk about Obama, Congressional Democrats, and the stimulus plan and the subsequent suberserviance to the punditocracy to that message was the result of the DC-insider "echo chamber." But here, on the other side of a passed bill, and a quick look at some polls, show that -- by golly! -- people liked the stimulus bill, Democrats, and Obama! And...well...generally despise Congressional Republcians.

Rich:

Overdosing on [DC insider] culture can be fatal. Because Republicans are isolated in that parallel universe and believe all the noise in its echo chamber, they are now as out of touch with reality as the "inevitable" Clinton campaign was before it got clobbered in Iowa. The G.O.P. doesn't recognize that it emerged from the stimulus battle even worse off than when it started. That obliviousness gives the president the opening to win more ambitious policy victories than last week's. Having checked the box on attempted bipartisanship, Obama can now move in for the kill.

Kos' Research 2000 poll shows that Congressional Dems gained three points during the stimulus debates, and Congressional Republicans dropped ten points to a 39-percent approval rating. And lest you think Research 2000 is biased, Gallup showed the Republican Congress critturs with a 31-percent approval rating.

So...why would, say, Dennis Rehberg shout from the rooftops his opposition to the stimulus package? Sure, there are some legitimate concerns with the bill...but then Rehberg's opposition seemed purely political. Or did the constituent calls lend him courage? Is Montana against the stimulus package by a 10-to-1 margin, or are the calls from the Representative's base, the folks whose stance on the stimulus was already created by the Rush Limbaughs and Dave Bergs of the world?

What's a politico to do? Do you believe the calls...or the polls?

How Walmart shifts its corporate expenses to taxpayers

by: WakeUpWalmart

Fri Feb 13, 2009 at 13:47:25 PM MST

Gazette: Montanans need help now

by: Jay Stevens

Thu Feb 12, 2009 at 08:07:09 AM MST

As Congress and President Barack Obama debate the final size and content of a massive federal economic stimulus bill, indications are increasing that emergency relief will be needed in Montana.

"We know there will be a greater demand for our services," said Anna Whiting Sorrell, director of the Montana Department of Public Health and Human Services. "The most dramatic increase has been in food stamps"....

The stimulus packages that the U.S. House and Senate are considering at the insistence of President Barack Obama include multibillion dollar boosts for SNAP, TANF, Medicaid and extended unemployment benefits. These appropriations would be spent in local communities by the neediest citizens on groceries, medical care and other essentials.

These programs are needed by more Americans during economic downturns - the times when state governments can least afford to increase their support. Sen. Max Baucus, D-Mont., authored the Senate proposals for Medicaid support and tax cuts. Sen. Jon Tester, D-Mont., is on record supporting proposed Senate appropriations for job creation. However, most Republicans in Congress, including Rep. Denny Rehberg, R-Mont., have so far said no to stimulus legislation. Those votes go against helping workers who have lost their jobs and families whose income has shrunk. This state needs a boost to get through this recession, a boost only the U.S. government can provide. We call on our entire delegation to support recession relief for needy Montanans.

What the Gazette doesn't mention is that this kind of spending - assistance to families and workers on the edge of poverty - is also one of the most efficient means of creating jobs and stimulating the economy. Which makes sense; giving struggling families assistance in buying a basic necessity still enables those families to, say, pay mortgage or rent payments, buy clothes and cars, and make other essential purchases. In short, the help will keep those families solvent.

Do you think Rehberg is regretting his then-politically-expedient stand against the stimulus bill a few days ago? Because it looks like the recession is hitting Montana, and the help that Rehberg's constituents need he only recently called "ideological."

And there are monsters under my bed!

by: Jay Stevens

Sat Feb 07, 2009 at 21:18:34 PM MST

Keep a citizenry in submission to whatever it wants? What, like passing trillion dollar spending package in one month's time?  Like the daily doom and gloom tour, promising that the economy will face an "economic crisis as deep and dire as any since the days of the Great Depression" unless this spend-ulus bill is passed? (Is President Obama guaranteeing that if the bill is passed, catastrophe will be avoided?)

I have to think that a terrorist attack on the US (which has actually happened) is at least as likely as an "irreversible" recession (which has not).

The US recession began in December 2007.

Job losses in recent recessions:

Note that the green line is not projected job losses, but actual job losses.

Let's see. On one hand, you have the right-wing fantasy of the extinction of Western civilization by "Islamo-fascists" and the need to jettison all of our civil liberties to prevent it...

...on the other, you have an actual recession, thousands out of jobs, foreclosures, and an economic stimulus strategy that's supported by Nobel winners that should, at least, mitigate the effects of the downturn.

Hmm. That's exactly alike!

Update: Marc Ambinder, "It's OK to be Afraid of Something that's Really Scary":

The terrorist threats might have been real, but we know now that a lot of the "facts" marshalled to support the rhetoric wasn't.  In the case of the economic crisis, though, maybe Americans aren't panicking as much as they should: the job market spiraldown continues, and more apocalyptically, the rate of decline is picking up. The labor force is contracting rapidly; the unemployment rate is close to its 1990s peak at 7.8%. (Want higher than that? Go to the 1970s.) Americans are working fewer hours, too. Scary! Christina Romer, the White House's chief economist, noted that of the 3.6 million jobs lost over the past year, most of them have been lost in the last four months. The rate is comparable to the rate recorded by economists in 1938, during the....yep.

McConnell fighting for his "people," at the cost of his constituents

by: Jay Stevens

Sat Feb 07, 2009 at 08:56:10 AM MST

Whatever. Here's the part that interests me now: statements made by Senate minority leader McConnell:

But Senate Minority Leader Mitch McConnell has the intellectual honesty to come right out and say that he's opposed to the concept that massive public expenditure will save a tailspinning economy -- and he's already sparking a lively, healthy debate on the efficacy of The New Deal and Japan's $5 trillion infrastructure binge in the 90s.

McConnell's been respectful to Barack Obama, but he's pure hell on FDR, as evidenced by tonight's peroration on the stimulus:

"But one of the good things about reading history is you learn a good deal. And, we know for sure that the big spending programs of the New Deal did not work. In 1940, unemployment was still 15%. And, it's widely agreed among economists, that what got us out of the doldrums that we were in during the Depression was the beginning of World War II."

Now this is pretty much Heritage Foundation propaganda, and not supported by most economists and historians. FDR's programs had an immediate and positive impact on the US workforce; there's little doubt that the New Deal dulled the Depression's edge and paved the way for a large and prosperous middle class. And, er, wasn't World War II a huge public expenditures project, as Krugman noted?

Whatever. The point here isn't to argue about interpretation of economic history, it's this: McConnell was one of the main ringleaders for the $800-billion bank bailout bill. H*ll, remember this quote?

"This is a big moment in the Senate," said Minority Leader Mitch McConnell (R-Ky.). "This is the kind of vote we are sent by our people to cast."

Given that handout went to multi-billion dollar Wall Street financial institutions with few strings attached -- money that went largely unaccounted for -- it's clear which "people" sent McConnell to the Senate to cast votes for them. Hint: it's not the everyday Kentucky taxpayer.

So much for McConnell's "intellectual honesty" in opposing government expenditures to save a flagging economy, eh? When it comes to giving billions in our money to the richest people in the country -- the same people that caused the current recession -- McConnell and many of his pals are on board. But when it comes to giving our money to us -- building bridges, schools, rail, and roads, things that we can build and we can use, it's no go. Suddenly it's ideologically inconvenient.

Right.

The Two Percenters

by: Jay Stevens

Tue Feb 03, 2009 at 19:12:11 PM MST

And yet, while Montanans are watching our economy keel over, the Pelosi-Obey "so-called" Stimulus Package that the House passed on Wednesday was packed full of new government programs, long-term spending and even a facelift for the grass on the National Mall.

Ultimately, it did more to stimulate the government than to stimulate the economy.

Rehberg said he wanted a stimulus package to be "timely, targeted, temporary, and transparent," and claimed that it didn't meet any of those criteria. Of course, it is all those things; the most efficient means to creating jobs and jump starting the economy is spending for unemployment and food stamps, spending that helps people keep their heads above water, and spending that's most likely to be directly injected into the economy in a meaningful way as soon as it's given out. Then there's the infrastructure investment, which puts money into workers' hands and returns tangible, useful roads, bridges, and rail to taxpayers.

But let's get past that for a moment. Let's say the stimulus bill is wasteful and ideological. Okay. So. What would the Republicans have trimmed from the bill?

Yesterday, the House Republican caucus released a list of "what they call wasteful provisions in the Senate version of the nearly $900 billion stimulus bill that is being debated." It is, to be sure, a pretty long list, identifying 32 specific spending measures that the GOP considers either wasteful, lacking stimulative value, or both.

Now, putting aside the merit of the provisions, I went ahead and did some back-of-the-envelope math, adding up the grand total of all of the measures in question. I came up with a total of roughly $18.7 billion....
While $18.7 billion is a serious chunk of change, it's also just 2% of the $884.5 billion package under consideration in the Senate.

In other words, after House Republicans carefully combed through the bill, searching for anything they could deem "wasteful," and finding 32 specific measures they found offensive, the GOP lawmakers are still comfortable with 98% of the Democrats' bill.

Better yet, check out the list. Among the expeditures the Republicans object to include purchases of computers for public community colleges, Amtrak funding, FBI salaries, renovation of public buildings, remediation of lead-based paint, etc & co. In short, the list contains mostly infrastructure projects; few, if any, long-term left-based "ideological" projects.

(For the record, I'd like to see the $2 billion for the "zero-emission" Illinois coal plant to be scratched, too. Same with the $246 million tax break for movie producers.)

So...let me get this straight. The projects the House Republicans object to...are mostly infrastructure projects...some of which would even pay for themselves (like buying hybrid vehicles for federal employees)...and comprise only 2 percent of the bill's entire proposed expenditure? And this is why all of the Representatives voted it down?

Yes, it was a political stunt. It has to be. There's no ideology in the programs marked by the GOP, there's none of what Rehberg, for one, claims was in the bill and should be hacked away. There's no long-term, social programs here. Politics. An attempt to divide the electorate, build an opposition bloc to, if not the overwhelmingly popular President Obama, than his allies in the Congress.

But, given the fact that 2% of the proposed bill seems easy enough to compromise, and given the stimulus bill's national popularity, look for some "compromises," a billion or two shaved here and there, and more Republicans supporting this thing, then claiming victory at having stood up to Obama and the Congressional Democrats, and "won."

In fact, when it comes back to the House after changes made in the Senate, expect Rehberg to vote for the bill, still touting its imperfection, but saying we need to do something now for the economy, even if imperfect. (After all, Montana is getting a lot of money in this thing...) That's how Rehberg operates. We've been down this road before with Real ID, CHIP and Mother's Day. You know the drill: Dennis Rehberg votes down a bill, trash talks it, then when he realizes people are paying attention, he turns around, supports the bill and claims he was for it all along.

Heck, he'll probably even use my patented, extra-handy "Double Backflip" template the next time you hear from him on the subject...

Stimulus passes House -- with mass transit money and without Rehberg

by: Jay Stevens

Wed Jan 28, 2009 at 20:08:32 PM MST

I suppose I could write something pithy, like, "I guess they don't give a d*mn about the economy or their constituents," but of course the vote is political. An effort to defang Obama's "bipartisan" rhetoric -- can't you hear them now? "it was a partisan spending bill!" despite the myriad concessions made to the GOP -- an attempt to paint Congressional Democrats as the bad guys, and all done without a single bit of pressure. The bill didn't need any Republican votes. If it had -- like it will in the Senate -- it would have attracted Republican votes. Trust me, no one wants to be the guy who blocked the stimulus package.

In short, it's the perfect "no" vote for Dennis Rehberg.  

As promised in a press release a few days ago, Rehberg voted against the bill. Here's the rhetoric:

"Despite the name, this isn't a stimulus bill - it's an unprecedented attempt to advance the interests of very few special interest groups at the expense of hardworking taxpayers."

"There's no reason to permanently medicate a temporary illness," said Rehberg. "It's a mistake to use this legislation as the launch pad for a lot of new government programs and government jobs that we'll be paying for long after the economy has recovered. We need to quickly get the medicine where it will do the most good - in the hands of the small businesses that create jobs and the taxpayers who will keep them in business. And we need to take all necessary precautions to guard against the fleecing of the American taxpayer."

The usual fare. Note, of course, how fantastic Rehberg's claims about the bill are. As mentioned in previous posts, this bill deals little with "special interest groups" and mostly with bridges and roads. H*ll, Montana got $607 million, and here's how it'll come down:

The largest portion of the Montana money - $280 million - would be spent on highways and bridges.

Another big chunk of the stimulus money goes toward health care, jobless benefits, food stamps and other programs that benefit victims of the downturn. The state government, which administers those programs, would get almost $200 million in stimulus money.

The rest of the state money is split up among school modernization, wastewater treatment, transit, education, Head Start and low-income heating assistance.

Doesn't sound like the weird ramblings from Rehberg's press release, but it does seem like projects that Montanans would overwhelmingly support. No doubt if Rehberg's vote had been meaninful, he'd switch it in a hurry, just like he did with, say, CHIP.

Enough about our flip-floppin' gutless Representative, and on to more details about the stimulus package! First...drum roll, please...Jerrold Nadler's $3 bill amendment for mass transit...passed! On a voice vote!

Additionally, as Elana Schor notes, some good, progressive expenditures made it into the bill. Notice that most of Schor's list -- increased money for food stamps, expanded unemployment benefits, etc. -- are the most efficient means of adding jobs to the economy. And behind them, are the infrastructure projects...

The bill seems to be what's needed, but let's face it, there's nothing in this bill that's new or transformative. No overhaul for our transportation system. No carbon tax. No massive investment into green tech or energy efficiency.

I realize I may just be impatient, but this bill looks like a list of projects and programs that Democrats have favored for years, but haven't been able to implement because of Republican rule. Now, a lot of this stuff is good spending -- on schools, bridges and other things you and I will use and benefit from (unlike corporate tax cuts, say) -- but let's face it: it's the same ol' game so far...