If the stimulus bill in its current form is the bill that becomes law, is this a victory or a defeat for progressivism? Or something in between?
Arguing for “defeat” is Paul Krugman —
What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?
A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.
Professor Krugman explains why the stuff the mushy moderates cut out of the bill were the most economically stimulating parts, while much of what they left in will provide little stimulus. He is put out with President Obama for compromising away too much in the name of “bipartisanship.”
Republicans also believe they have defeated progressivism, and so they are celebrating. Alec MacGillis and Perry Bacon Jr. write in the Washington Post ,
Rep. Pete Sessions (R-Tex.) suggested last week that the party is learning from the disruptive tactics of the Taliban, and the GOP these days does have the bravado of an insurgent band that has pulled together after a big defeat to carry off a quick, if not particularly damaging, raid on the powers that be. …
…The fact that the stimulus legislation keeps moving forward nonetheless has done nothing to dim Republicans’ satisfaction. Rather, they sense a tactical victory, particularly in the framing of their opposition to the plan as a clash with congressional Democrats instead of with President Obama, who remains far more popular with voters than does Congress.
Republicans are holding congressional Democrats responsible for the wasteful spending they say is in the stimulus package, even though most of the big-ticket items — for renewable energy, health care and schools — are ones that Obama wanted in the package to advance his long-term goals.
President Obama seems to have picked up on this and is moving to take more ownership of the bill. E.J. Dionne writes at WaPo,
By evening, when the president spoke to Democratic House members in Williamsburg, he had cast aside his efforts to placate Republicans who had no intention of reasoning with him on the stimulus bill. Obama had turned the other cheek often enough.
“Don’t come to the table with the same tired arguments and worn ideas that helped to create this crisis,” the born-again campaigner thundered. “We are not going to get relief by turning back to the very same policies that, for the last eight years, doubled the national debt and threw our economy into a tailspin.”
Deploying a preacher’s unapologetically judgmental cadences, Obama denounced “the losing formula that says only tax cuts will work for every problem we face.” He reiterated that argument in his Saturday radio address and will press it in speeches on the road this week.
Gallup reports that Obama is way ahead of congressional Republicans in approval polls.
At The Guardian, Michael Tomasky argues that liberals are worryworts and should be celebrating.
Think back. Two months ago, people were talking nervously about a stimulus package worth about $400bn. Now? Assuming the Senate and House of Representatives more or less split the difference between their two versions of the bill – they will likely iron those out this week and vote on the final passage of the new product by the week’s end – we’re talking twice that, with at least $500bn in new spending (the rest is tax cuts). That is, by some distance, the largest public spending bill ever conceived in the US.
Republicans are in disarray. First, this approach goes against everything they believe. Second, they are suddenly losing an argument that they thought they were winning. To hear cable television tell the story last week, they had Obama on the ropes. Support for the package was allegedly sinking like a stone in the country. Then he goes out and gives a grand total of one speech, not even one of his better ones, and bam, suddenly they’re losing. They must be absolutely irate – and privately very, very nervous about the future.
Futher, he says, this bill isn’t the only program in the works to stimulate the economy.
Treasury secretary Tim Geithner is rolling out a plan today to get credit flowing and protect homeowners. Soon, the administration will present a proper budget, in which it can signal priorities about things like transport and the greening of the economy, which are multi-year projects in the best of circumstances.
There’s also the view that a flawed stimulus is better than no stimulus.
Krugman says the size of this measure was never big enough to begin with, so it would always have required another bite at the apple anyhow. I think it’s politically astute of Obama to let the Republicans show their colors on this, though the tax cuts are ridiculous and ineffective stimulus compared to spending on public works, infrastructure, green energy and everything that creates not only jobs but a sustainable future.
The bottom line is that we’re going to have another round, and probably more than one. Economists are pretty certain that the shortfalls will be in the multiple trillions of dollars, after all.
Is something better than nothing? Yes!
However, I agree with those who think Obama should have gone in with a proposal for 1.3+ trillion and negotiated away a bit of it.
There are those who think that this is the first of many stimulus packages.
I disgree. The Rethug’s, sensing some sort of victory for themselves (not the American people) with their ability to set-up speedbumps for recovery by opposing this bill, will feel only more emboldened in the future.
I am much more pessimisic about our future today than I was even last week. Even I, who normally think that Rethug’s can’t and won’t do anything as far as helping others, thought they would see reason and think that government stimulus was the only solution. But I should have known better.
They are so far removed from the lives of regular people, that they might as well live on another planet.
I’m almost 51 years old, unemployed, no medical insurance, and broke (beyond the minimal amount left of my 401k plan – which I’m cashing out this week).
I don’t have a lot of hope for the near future, and little, if any, for the long term future either. And not just for myself, but for all of the people in this world.
My niece and nephew will not know a life without want. My generation is fortunate in that, until now, we were without want – for the most part. We can always remember what things were like in the past.
We are all facing an economic cataclysm. Those yonger than us are facing not just that, but an environmental one as well.
I’m not sure that there is any solution to the mess we have created. I know the President is trying. But there are too many short-sighted people in this country to have it do much good.
Sorry for the pessimism. Please tell me I’m wrong.
Sorry for the pessimism. Please tell me I’m wrong.
Gulag, I wish I could look into the future and then tell you for sure if you’re wrong or right. Of course, if I could do that, you and I could head for Vegas, and then both our economic futures would be golden. No such luck.
By your description of yourself, you and I are the same age. I also have a nephew (age 19) and a niece (turning 14 on Feb. 25). No kids of my own, so all my hopes and fears for the future center on them. As you point out, they could inherit this country’s massive indebtedness to the Heartless Republic of China (where dissidents are shot, and a bill is sent to their family for the bullet). They could inherit the planet’s wrecked climate (tornado and thunderstorm warnings in KS and NE on Feb. 9!). Unlike you, though, I still have a steady job with sort-of-OK health insurance and even dental. I know that, for the moment, I’m luckier than I deserve. And I get angrier every day that acquaintances, family and friends all over the U.S. are getting pink slips, losing health insurance, finding no prospects for a new job. My heart goes out to you all, as well as my anger on your behalf, for the situation you’re in. I’ve been laid off twice in my working life (still incredibly lucky, I know); I’ve known depression and pessimism and even, at times, black despair. For me, the first spark of hope always shone when someone said: “I see you. I hear you. I’m so sorry… please don’t give up.” So, Gulag who’s made me laugh so often when I needed it… please try not to despair. I know that’s asking a lot… but please try.
Try to remember that it took more than eight years of Bush to get to this mess. By contrast, today is the 21st day Barack Obama has been in office. He’s an extremely bright guy, with experience in both the U.S. Senate and the roughest, ugliest state legislature in the land. I’m sure he knew he’d have to battle devils every day just to get anything done; I’m less sure that he expected them to come at him from all sides. (On the plus side, who expected he’d find temporary allies in Charlie Crist and Arnold Schwarzenegger?) So, please try to remember that we need to grit our teeth and hang on for dear life, and realize that one or two bills in Congress will only scratch the surface. More will come. The American public will get really, really angry if Congress just gives up on the problem. And I don’t believe for a minute that Barack Obama will give up. He’s one stubborn kid.
Some weeks back he warned us that things will get worse before they get better. (Yes, say it with me: “No shit, Sherlock.”) But this also means he knows it’ll take time to stop the hemorrhaging of our jobs, our investments, and our faith in our own lives. Many in Congress, even if just the Dems, know this too.
And as for the dipshits, the Michael Steeles, the Pete Sessionses, the McConnells and Boehners and even the sad-sack Ben Nelsons, when Americans get mad enough, which is already happening, these guys are going to know fear. They have to fundraise, they have to go home and hold town meetings, they have staff in D.C. and back home with unemployed cousins and siblings, and parents and grandparents who’ve lost their retirement money. One thing we Americans can do, when we’re pissed off, is make a big noise. There’s that old saying– “Don’t mourn; organize.”
In the meantime, Gulag, I think everyone agrees, you’re always a ver welcome, bright spot here.
My guess is there will be more trips to the well. If conditions worsen, there will be immense pressure to do more. This is going to come not only from ordinary citizens, but from governors and state officials. The congressional ReThuglicans are going to find themselves surrounded.
Moonbat, they are surrounded and their bravado is false.
Grandpaw McCain is decrying spending and stimulus in defiance of reason. Republican governors who have to balance budgets are in direct opposition of Republicans in Congress. The media may be the very last to desert the congressional GOP resisting the body of establiished economic theory shared in less dire times by folks of all political persuasions.
What I do not understand though is how this can be quantified. How could the GOP persuade anyone that tax vuts will create more jobs than spending on infrastructure? Where is the cutoff point for extremely stupid electorate. Are they 25%? And if so, what is sustaining the GOP? Media only? Media who not only holds both sides up to the light solely because they are the two sides, without respect to fact or reason? Will this translate to a mid-term tsunami? It should.
So Obama is doing the right thing. America is in bad need of an economic primer for the ignorant. If just one really charismatic one of them could be turned and educated he might be sued to teach the rest. Maybe it is not fair to give the GOP credit for leading them astray but lower class…lowbrow America is incredibly distrustful of anything resembling science or academia.
Sometimes I just can’t believe it….all this that seems to be playing out in slow motion. On some days I need a break from it all.
Joan those pink slips are hopefully doing what liberal education was unable to do. Making disbelievers out of former stalwart GOP idealogues one at a time. The problem is that those who were not heartily pushing behind a lot of the insantify we’ve seen over 8 years also get swept up in this.
Some get what they deserve while others get what they don’t deserve.
I was laid off but I got really lucky. I had worked in internet marketing adn profits in that sector have plunged. I was just selected for a senior position in the defense sector of all things. LOL. It is a living, a good one. I don’t control military spending and I do hope our military has technology…cog in the machine that I am. As soon as my security clearance goes through I start work. I have no problem getting behind the idea of what I am doing but at the same time agree with Obama that there needs to be cost cutting in all sectors and military certainly is one sector.
I just get concerned that all the coming pain will not teach many a lesson. They will stubbornly hunker down and advocate mistaken beliefs and belief systems even more rigidly.
I am wishing Obama success. His election seems to be one of our few hopes for turning things around. With a job I can contribute more come time for the mid terms. Volunteer more time with my Dem political consultant/iorganizer buddy, wherever needed.
Gulag…I’m hoping that things break for you, and that your emotional torment of being unemployed and without prospect ends soon, I’ve been were you’re at, and I know how devastating and frighting an experience it can be. Like joanr16 I also want to reach out and express compassion and understanding for your difficult situation. It’s important to know that at least you’re being heard by someone when the powers that be aren’t hearing you. I believe Obama has the heart and genuine concern for people such as yourself who are approaching desperation due to circumstances that are not of their making.
So, hang in there, buddy.. you’re not alone. Things will get better.
I met with my financial planning guy this morning and got some interesting advice. (This is advice to me; it’s not advice to you, please.)
1. Don’t convert your 401K to cash; keep buying securities. Because if the whole system crashes, the cash won’t be worth anything anyway, will it? And you’re buying securities at the bottom so you can get well on the rise when it’s all over. (That bit of advice, the way he put it, pretty much ruined my day.)
2. Don’t pay down debt; instead, build up your cash reserves. And buy an extra can of soup and tuna fish every week; be prepared. (Again … pretty much ruined my day.)
3. (Per some source that was never very clear to me, ’cause I don’t do finance) there’s another load of short-term toxic home loans (a different category than the ones that killed us late last year, but very similar) that are coming up for refinance mid year; could be another gut punch to banking. He may convert my funds to cash in a couple of weeks to ride it out, then reinvest after the carnage. (Three strikes and I was out.)
Again, this was advice to me in my retirement planning situation; your mileage can and will vary. But what struck me is that I’ve known this guy for a number of years, he’s a very positive and upbeat person, and he’s thinking 1929 V2.0 and planning accordingly. It left me a bit stunned. Note to Washington: Please fix this now.
Personally, I decline to celebrate or mourn until the conference bill is reported. Until then, everything is just kabuki theater.
The biggest criticism about the stimulus bill is that it does not seem poised to be able to answer the problems that we are currently facing economically as a nation and that there is significant risk with the debt the government is thinking about backing: http://www.weeklypoint.com/2009/02/09/the-stimulus-plans-big-risk/
The question is then what is really going? Is this nothing more than an opportunity for the Democrats to get some pet projects funded?
What will the voters think of this abuse of power?
Gulag, I am mentally ill, but draw a pension. Contact this blog with an address and ask them to forward it to me. I will send you a check for $300.
Not much but you need help if only to know that someone really and truly gives a damn about whether you make it.
I will not put my email up on blog because the last time they drowned my email with offers to make me rich. I was just trying to help Riverbend at Bagdad Burning to get out of the hell called
Iraq.
Everybody is unhappy with the bill, some say it’s too small, some say it’s too big, nobody thinks it’s just right. Why? Because nobody will take the rap when it don’t work. That is the reason the wing-nuts opposed it in the first place, they don’t give two shits about the “working folks or the deficit” they just don’t want to be blamed when it doesn’t work. Now many progressives are saying too many tax cuts, now they can say the wing-nuts fucked it up when it doesn’t work.
It’s not going to work because the expectations are way too high. The economy is really fucked up, the money changers on Wall-street have raped and pillaged the economy like never before, then with no economy left, our government gave them the keys to the treasury and they raided it as well. This recession will be alot worse than any we’ve seen. The stimulus will most likely soften the effects but we are still in for some rough times. It doesn’t matter what the bill contains it will not end the pain immediately, and therefore will be deemed a failure by both sides of the aisle.
Gulag, I sincerely wish you the best. I am lucky at this point, but I know a lot of people aren’t, and it’s getting worse. I am sending good thoughts your way, and appreciate your thoughtful comments.
One scathing comment I have to make about the moderates & GOP-How much more has the war in Iraq cost than the stimulus package? I would think it’s been far more expensive than helping fellow citizens. I really hope the GOPers and moderates get an earful when they go home and speak to their constituents. Krugman has been right all along, but people ridicule him for being shrill. They should have been listening to Krugman, Nouriel Roubini and Joseph Stiglitz, and now it’s too late.
I am beginning to think that the liberals are whining as badly as the conservatives. Give the guy an effing chance. I think Obama has cards up his sleeves; and, I would like to see this bill done and signed so we can move on. Bitch, bitch, bitch that’s all you hear from both sides. Unfortunately, I don’t think that even if Obama had a magic wand, it would work any way. The situation cannot be resolved by magic. That doesn’t mean that Krugman isn’t correct; but, let’s move on. I feel like I have been drowning in quicksand (slow quicksand) for 8 years, pulling me out of this stuff is not going to be easy.
Thanks to all for your concern. I am truly touched. Sorry, but I had a bummed-out moment this morning.
I know we have a great group in the White House that is trying to do what they can.
I’ve not given up on hope!
I’m lucky in that my parents are still alive and that I’m able to be with them, and to help them out.
Joan, thanks for letting me know that I made you laugh. It meant a lot ot me. My niece is 21 and my nephew is 14, so we have a lot in common.
Swami, thanks for caring. I love what you and Joan and maha and a lot of the contributors here have to say. I’ve learned a lot from you all.
regulararmyfool,
Thank you so much for your kind, kind offer. But. I’m not needy yet. Perhaps some day… I can’t tell you how touched I am by your offer. But, perhaps give the money to a children’s charity. The kids will need it more than I will.
khughes 1963, thanks for your thought’s as well.
Everyone, thanks for your your kind thoughts. That is what makes maha’s a special site.
Back to the old fighting spirit: DON’T YOU DARE START THE REVOLUTION WITHOUT ME!!!
Comment #10 — Troll alert.
Gulag, when you’re ready, open a paypal account, and post your email address (the one you told paypal about) – maybe not directly on this blog, but in some way make it known. In this way, people can directly donate to you through paypal, if they know the email addr you told paypal about. I (and dozens of others) have sent people money this way through pleas on DailyKos and elsewhere.
Dave S #8, some thoughts on what your financial planning guy told you.
1) All the debt in our system – and it’s massive, thirty or more years worth – will mostly need to be cleared out, written off, kissed good bye – before any serious recovery will take off. This will take at least four or five years or more is my guess. It depends on how long Paulson and now Geithner will continue to inject money into the banks, to forestall their day of reckoning. The Japanese were able to keep this going, “zombifying” their banks, as it’s called, for a decade or more, and this is the path Geithner is on, in the name of stability.
My take on the stimulus bill is that it is largely a make work bill, providing jobs for the unemployed, among other things. If done properly, it will build some mighty necessary things our country really needs, which will outlast the current crisis. A chief purpose is to ease the pain of the debt unwinding, for those who are out of work.
You’re trapped in a 401k where probably the only choices are to buy stocks or bonds, or mutual funds. IMO, neither is a good choice right now – stocks will decline further, is my bet. Even if you call the bottom correctly, it will be a long time before the stock market takes off again. The Great Depression is instructive – look at a price chart from the 1930s – stocks took three years to reach bottom, in 1932 – after several false rallies. We’re now only a year plus into the present-day decline. Stocks didn’t reach their 1929 peak again until 1954. Can you wait that long?
The great tragedy is that 401ks, IRAs, etc can legally be invested in other vehicles besides stocks and bonds, such as real estate. The majority of plans however restrict the universe of choices, and few participants are aware of the possibilities. If you could quit your job, then roll your 401k into an IRA that allowed these wide open choices, you’d escape being trapped in stocks. I have done something like this. Look up a company called Equity Trust Company – they’re a self directed IRA custodian that supports this kind of thing.
An even greater tragedy is that when IRAs and 401ks were invented – moving away from defined benefit plans to defined contribution plans – think about that piece of Republican “you’re on your own” – few people were taught how to invest, spawning an entire industry of “investment advisors”. Even fewer take advantage of these tax deferred plans. The boomers and beyond are therefore going to have an extremely rude awakening, a few years hence.
2) Cash is king in deflation, which is where we’re at right now. It’s wise to build a cash reserve. When inflation finally does hit – the backside of the hurricane – your debts, denominated in yesterday’s dollars – will begin to shrink, assuming you can lock in a low interest rate. If you’re able, before inflation hits, invest your cash into hard assets such as income producing real estate or gold – things that hold their value during inflation.
3) the mortgages you’re thinking of are Alt-As and Option ARMs. This blog entry talks a bit about them, graphically showing when they’re due to reset.
I’m not a certified financial advisor, planner or any such thing, so take what I’ve said with the appropriate grain of salt.
Moonbat, thanks for the link. Figure 1.7 is the exact chart he showed me this morning, and Option ARMs were indeed the loans that he’s personally freaked out about.
moonbat,
Thanks. But, mercifully, I’m not needy yet. And, thanks especially, thanks for all of the things I’ve learned from you.
An aside: What a difference a couple of weeks make! Listening to a Presidential Press Conference where the man at the podium actually has some real thoughts; and some carefully measured answers to good questions. No stupid pet nicknames like Stretch, or Biff, or Bedwetter, or Weepy, or The Blind Dude with the Shades. Or, having a male prostitute toss-up softball questions about patriotism.
Jesus, it’s a miracle that any of us didn’t blind and deafen ourselves on purpose over the last 8 years! If Bush had actually had more presser’s, that might have happened.
President Obama was tough, he was funny, and he was thoughtful. I have some renewed hope for this country after listening to President Obama. President Obama! God, I still can’t get over how good that sounds!!!
I have some critisism of him, as I’m sure, do we all. But, God, after that presser, how could you not feel at least a lttle bit better!
🙂
An opinion:
Re the “Stimulus package” before congress(sic); if you have never imagined what it is like for the cat, tied into a bag with rocks and thrown into a river (Disclaimer: absolutely NOT advocating such action), America will shortly be experiencing such circumstance, put there by the concerted efforts of your congress(sic) who have shown all the economic intelligence of a cow-pie. The American public is as helpless as said cat.

The world is watching the political insanity transpiring and will not wait for reason to prevail. American leadership is slipping into a thing of the past, the world will slowly disconnect from the present regime and replace the hegemon with a more appropriate and less damaging structure, avoiding the pitfalls learned from the American experience, and history will move on to record the doings of others.
expat, I’m unclear on what you hate so much– Congress, capitalism, or Obama. I had no idea he had a “regime,” at least not so soon. As for Congress and (sometimes) capitalism, yes, they suck. And history shows they both can be changed. Perspective, my friend.
The world is watching the political insanity transpiring and will not wait for reason to prevail.
At the moment, the nation with the biggest grudge to bear is Iceland. Sorry, Bjork– will it help if I say I got what you were going for with that swan gown?
joanr16, I actually agree (for the most part) with expat (#20). When s/he says “regime” I take this to mean American empire – the whole system we’ve been under since we emerged victorious from WW2. The 700 or so military bases around the world, the belief that we have the right to meddle anywhere to advance our corporate interests. The belief that we are lords of creation, riding around in our bloated SUVs. The belief that our vaunted, hyper-materialistic Way of Life is the best thing to ever hit planet earth, and that we are so special in God’s eye. This mentality came to its full flowering (if that’s the word) during the last eight years.
Obama will bring some needed sanity back to this country, but it’s my belief that the forces unleashed over the last couple of generations are beyond any one individual’s power to correct. Most importantly, Obama hasn’t even begun to talk about the need to rollback our empire, to begin to live within ours’ and the planet’s means, to rejoin the rest of the human race, and give up the childish notion of Amercan exceptionalism. I’m not even sure if he fully grasps this.
moonbat, over the years I’ve grown intentionally deaf to nihilism. I’ve heard way too many oracles hold forth in bars and at backyard barbecues, always loving to hear themselves talk but never trying to change or mend anything, because: the system’s too big… everyone’s in on it… we deserve what’s coming… etc.
I know there are ready examples of better modern societies than ours, and the average American shrieks and runs away when we mention them, so for a long time I tried to listen to the anti-capitalist and quasi-Luddite screeds, in hopes of gleaning something helpful. But eventually I grew tired of all the empty fulminating when instead, imo, these self-proclaimed oracles could have been creative, could have been doing some good in the world. In the meantime, I’ve had no trouble finding examples of Americans who spent their lives working very hard to make this society better, even though their eyes were open, and they could see all our faults and failings.
joanr16 @ 23
Over the years I’ve grown intentionally indifferent to the opinions of the ignorant, who hold forth firmly planted in their belief that their limited knowledge of the world is all and ends all. Their numbers are myriad, and their minds are closed, but they are Gods chosen.
Did it ever occur that the level of economic knowledge and understanding in the country is probably in negative numbers, just as the knowledge of propaganda free history is. But then facts are of little use to those who are exceptional, and exceptionally gifted. The response you take exception to was noting the helplessness of the public, held hostage to “leaders” seemingly incapable of thought. However you manage to get hate out of that is beyond my poor powers, but somehow you have managed to bring that part of yourself into the discussion. And since Obama was not even in the comment, maybe you should leave your luggage out as well. The question was the competency of the public in regard to economic affairs.
The last paragraph was noting that what foolish things are politically done in Washington are on view for the rest of the world, peoples not brain dead, able to critically decide how to conduct their lives, and that these peoples will, not having any other input, divest themselves of continuing the relationship with a failed hyper-power, and they will continue on, writing history.
Whichever way you wish to address this, is certainly subject to your freedom to choose.
I really was not going to respond at all, but that is discourteous.
In the meantime, I’ve had no trouble finding examples of Americans who spent their lives working very hard to make this society better, even though their eyes were open, and they could see all our faults and failings.
And thank God for them, and for each of us, who, in small ways or large do the same. I’m not at all into nihilism or a Luddite (we live in extremely exciting and auspicious times), but it is important for me to assess probabilities of what may come. The first requirement for this is to have my eyes wide open, to cut through the ever deepening BS we’re all immersed in, either official BS or the self-defeating, self-generated kind. I’m a surfer of change – on the beach at times, on the waves at times, always looking ahead to see what the ocean is bringing me, so I can trim my path accordingly.