Some Really Lazy Blogging About How I’m Awesome…Just Like the Stimulus Bill

I know. I’m so good, it’s scary. Like macroeconomic scary and shit. Congressional Budgetary Office take me home please:

The Congressional Budget Office late Monday said it estimates that the federal stimulus package sustained between 600,000 and 1.6 million jobs in the third quarter, and raised gross domestic product by 1.2 to 3.2 percentage points higher than it would have been without the program.

That sound you just heard was Glenn Beck’s head exploding.

For all the talk about skyrocketing budget deficits, the massive expansion of government, and the spread of the socialist “disease” it looks the President’s stimulus bill is *gasp* working. When the Wall Street Journal is reporting that democratic economic policies are working, you know the GOP is in trouble. Oh well, so much for Republicans getting their Christmas wish this year. (Clearly they’ve been naughty). I suppose the country will just have to avoid collapse one more day. *sigh* Sadness.

But as Ezra Klein notes, the CBO analysis provides even more oh so interesting information for Democrats:

Leading the list of high-multiplier items is direct spending by the federal government, infrastructure aid to states and localities, other types of aid to states and localities, and transfer payments (think unemployment insurance and food stamps) to individuals. At the bottom of the list are corporate tax cuts, the new homeowner’s tax credit and individual tax cuts.

In other words, the breakdown of the stimulus shows us that the most effective parts of the stimulus were those championed by progressives (government spending, state aid, infrastructure investment) while the least effective were conservative policies democrats included in order to draw bipartisan support (that never showed up).

Government Spending: 1,649
Tax Cuts: 3

Damn it feels good to be a gangster.


The Conservative Argument For Regulation

For those of you who haven’t heard of him, Paul Singer is a very conservative man. Just look at his resume. Board member of the preeminent right wing publication Commentary, Chairman of leading free market think tank The Manhattan Institute, and occasional op-ed contributor for the Wall Street Journal.

So imagine my surprise when Mr. free market penned a column in today’s Wall Street Journal which not only places the brunt of the blame for the financial crisis on the private sector, instead of “minority homeowners”, but also calls for an increase of more government regulation.

Holy Crap!

While many of Mr. Obama’s ideas warrant skepticism, conservative opposition to any expanded role for government is a mistake. There is an urgent need for a new global regulatory initiative that addresses the primary cause of the financial collapse: highly leveraged and concentrated positions.

Reform must begin with a regulatory regime focused on “behavior” instead of “systemically important institutions.” Today, even small entities that trade complex instruments or are granted sufficient leverage can threaten the global financial system.

It’s true that monetary policy was too lax for too long, and the government encouraged lending to people who were unlikely to repay their loans. But this crisis was primarily caused by managements and individuals throughout the financial system who exercised extremely poor judgment. The private sector, not the public sector, is where the biggest mistakes were made.

Holy crap! Happy birthday to me…

The rest of Singer’s article is pretty good. In fact, when compared to the typical conservative argument, Singer provides several specific policy recommendations to fix our current broken system

But his basic point, that the free market can benefit from regulation, is a point worth repeating. What often gets lost in the conversation about regulation is the fact that a regulation is just a law that applies to businesses instead of individuals. But we have laws that govern individuals because without them we’d live in a chaotic society. The same is true for the free market. Can you imagine what would happen if a business just decided that it wouldn’t pay another business for a service rendered. Or if copyright laws didn’t allow pattens on new products? Luckily, you’ll never have to because the government, through regulation, stops these things from happening.

Bailouts vs Government Intrusion: In Defense of Obama’s GM and Chrysler Plan

Looks like GM was operating even worse than I thought:

Mr. Wagoner had managed the company through some of its most difficult moments. The company hasn’t logged a profit since 2004, reporting losses since then of $82 billion. It nearly ran out of money at the end of 2008 before the Treasury Department provided emergency loans. GM’s stock was trading above $70 when Mr. Wagoner took over as CEO in June of 2000. Shares closed last week trading at $3.62, placing the company’s market capitalization at $2.21 billion.

There’s a reason automakers like GM and Chrysler are begging the federal government for help to stay afloat. Two of them actually. First, they need A LOT of money. About $22 billion between the two automakers. Second, and this one’s key here so pay attention, there is no bank in their right mind that would ever give them that kind of money.

And so here we are today, with President Obama laying out new guidelines GM and Chrysler must meet in order to receive another billion dollar bailout.

Of course, conservatives were quick to bring up fears of government controlled auto industry and more “government intrusion.” But this, aside from being wrong, misses the point.

What’s the Real Issue Here?

When the government unilaterally tells a business to act a certain way without cause or compensation, thats a form of government intrusion. When a corporation begs the government and American taxpayers for emergency funds to keep their business alive, that’s a bailout. Read this and repeat it to yourself aloud. Take a deep breath and let it sink in because there’s a fundamental difference between the two.

GM and Chrysler are asking the American taxpayers for more money than any one of us is likely to ever see in our lives. They owe the American public a justification for recieving another bailout. If a business or an individual has to meet certain preconditions for a loan, why shouldn’t a corporation who hasn’t turned a profit in 5 years have to as well?

In the case of GM and Chrysler, the situation is simple. Either you oppose bailing out the two automakers and you’re proposing an alternative that I’m waiting to hear. Or, realizing the crippling damage the collapse of two US automakers would create, you support extending additional low interest loans to GM and Chrysler.

Assuming you fall into the later category, why wouldn’t you impose certain preconditions on another loan? I suppose we could just throw money at the problem and hope it works itself out, silly liberals, but that quite frankly is the stupid hands off approach that lead us to this economic recession in the first place. Not to mention the stupid hands off approach thats causing GM and Chrysler to seek even more in federal funds.

So please, spare me the lame overused talking points about “government intrustion” “free markets” and other bullshit the House GOP is having their interns write. If the automakers don’t like these terms they’re free to take their sterling credit and excellent business model to a bank and apply for the loan there.

Essential Readings: The Geithner Toxic Assets Bank Plan

Trying to understand Tim Geithner’s latest banking proposal for Toxic Assets? Here’s some required reading:

U.S. Sets Plan for Toxic Assets- Wall Street Journal

Treasury Presses Ahead With Plan For Toxic Assets – Washington Post

The Geithner Plan FAQ by Brad DeLong

A really really useful explanation by analogy – Mark Thoma

My Plan for Toxic Assets- A Tim Geithner Op-Ed

Yeah yeah yea, you’re welcome.


McCain: Being “Mean” To Reagan is Reason to Oppose Confirmation

Who cares if a deputy nominee for the Department of Interior is well qualified and capable of helping the country. He “insulted” Reagan. NO CONFIRMATION FOR HIM!

I’m eagerly await my conservative readers arguing “Well LIBERALS once did something sort of like this too!!!!!” *tear* *tear*

A Uniter or a Divider? : Can Obama Keep Democrats From Blowing It

I guess a significant amount of people are still unhappy with the current Democratic nominee for president.

Sen. Barack Obama, the presumed Democratic presidential nominee, faces dissent from dozens of top fund-raisers and other supporters of former rival Sen. Hillary Clinton, who are angry over how she was treated during their bruising primary battle and are hesitating to back Sen. Obama.

Some leading Clinton supporters are starting new Web sites or political action committees aimed at prodding Sen. Obama on issues or pressuring him to give Sen. Clinton a big role in the general-election campaign. People familiar with the matter say the effort involves dozens of the roughly 300 Clinton “Hillraisers,” individuals who raised at least $100,000 apiece for her campaign.

It seems every time you think the Democratic party has healed and united around Obama there’s talk about significant wings of the party still being unsatisfied. It’ll be interesting to see what the Obama campaign has planned to appease the angry Clinton voters. I wonder if another female as VP will quell their rage? I get the feeling it won’t be enough. Most Clinton supporters are die hard Clinton supporters who might even be insulted by the idea that another female candidate is supposed to make up for the blatant sexism and bias they believe occurred during the primary.

But it looks like Obama has other problems aside from the “Clinton Backlash”:

Recently, Sen. Obama has made a flurry of pronouncements signaling broader support for the death penalty and his backing for an expanded terrorism bill he once opposed. He has also made statements on the Iraq war that some interpreted as a softening of his promise for an immediate withdrawal of American troops. The new rhetoric seems calculated to push Sen. Obama to the political center, but he says it doesn’t represent any policy changes.

Even so, it is threatening his support among liberal Democrats, many of whom make up his small-donor base

“Many progressives were shocked” late last month “when Obama flip-flopped on wiretapping immunity,” President Bob Fertik said in an email to supporters. “We are absolutely not trying to hurt Obama — we’ll give him our money at some point. We’re just asking for a little R-E-S-P-E-C-T like Aretha Franklin sang about.”

I get the feeling that a liberal backlash poses a greater threat to Obama than a Clinton backlash. However between millions of liberal voters and millions of women voters, there very well might be trouble come November. But still…President John McCain? Pretty hard to imagine