Neon and Harleys and Golf Clubhouse Mansions, Oh My!
<a href="http://online.wsj.com/article/SB123369271403544637.html">Wh Wh What?</a>
At least It was refreshing to hear Obama admit he made a mistake yesterday (you would never hear that out of Bush in a million years) i/r/t Daschle.
Call me ridiculously skeptical on this bill. I hope Senate Republicans stick to their guns - stimulus spending got us nowhere last year - I have no confidence that stimulus spending this year will yield a different result.
It would be nice if the Senate/WSJ did a similar chart of the jobs that were created with the banking bailout last year, which was probably zero. All I can say is at least this is cold job creation.
My concern on getting someone like Moses involved is - what if the next big 'shovel ready' project turns out to be another Bridge To Nowhere a'la Alaska? It might be great for 2 or 3 folks on either side of the bridge but how does it help everyone (We The People) in the US?
Also: I am becoming more weary than I was in the fall about the Gov't providing bailouts to the financial industry, the auto industry or any industry. How does the idea of gov't buying up troubled assets help investor confidence? To the best of my understanding, there is no consensus from anyone on what these assets are worth anyway, so even if Unc Sam buys them , no one will have faith in investing in them when no one knows what they are worth. Has anyone reported favorable results from the US Gov't after its intervention w/ AIG last fall? I can't imagine the answer to that question being yes.
Even more disturbing - if our US GOV't Policymakers gain more control of the financial system, I suspect this won't be control you will ever be able to wrestle back - seems like a good recipe for tyranny to me.
How about lowering Capital Gains and Interest taxes giving Americans an incentive to invest, thus shoring up more investor confidence and leave the markets alone as much as possible?
I'm probably summoning the rideside Ref, but it's been a while since we've had a good political fight on RSN - bring it!
While I don't disagree in theory with leaving the markets alone as much as possible, I do think that a true "free market" is highly improbable given the historical context of economic development. Nor do I think that strong regulation and oversight are incompatible with free (free-ish?) markets, per se.
I should have said that we need a Robert Moses who is not a douchebag. Or, rather, a Robert Moses who's a douchebag, but who wants to create useful things (which isn't to say all of what he did was not useful - but a lot of what he did was building bridges for the sake of building bridges [a la the Bridge to Nowhere], at the expense of established communities and public transportation, and with the result of hyperpopularizing the automobile). If there were someone like him who had the middle class in mind, that would be phenomenal.
Um, this is exactly what the country doesn't want, and sounds like olde proven false policy. The capital gains tax is already lower than income tax, so the rich continue to get richer. The idea is not to raise the tax burden on the bottom 95%, especially when they are the ones who spend additional income (Old RS.N topic). I also believe this would hurt investor confidence.
We also need MORE regulation. Madoff scandals can't just let slide. We need SEC's investigative powers increased if you want to boost confidence. Look at the markets. Shit is cheap, but no one is buying. Why? Because there isn't enough regulation to play a fair game.
The $750 billion financial industries bailout? That wasn't a stimulus package. The tax rebate checks? That was intended as stimulus, and an example of why tax rebates as an indirect stimulus of the economy don't work.
Obama/Dems should concede on all the pork highlighted by the GOP, to get this bill passed. Let's build some highways!
However, here's the debate we should be having: Is having a GDP that grows 3-5% per year, based primarily on consumer & healthcare spending, the right economy to have? Would we be better off with a stagnant GDP and more people living within their means and working for less $/hr?
Wanna create jobs? Howz about we pink slip theses SEC nimwits, and hire twice as many good ones?
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All the dinner and Superbowl watching invites in the world doesn't change the fact that neither side is budging.
I see yr resistance to tax policy changes - can you explain how 300+ Million to be spent on STD research / prevention will stimulate our economy in the short term?
Regardless of how you feel about the spending on these social programs, how can it be argued that they will help in the economic present?
What would you do with $300 million if you were tasked with ending AIDS? Direct government spending means that we suddenly have $300 million in consumption that we wouldn't have otherwise.
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Obama needs to talk about bipartisanship even if he doesn't really need it to pass this bill. Building up goodwill, getting Dems/GOP to interact socially, all these things are necessary to change the culture of Washington, DC.
Ever notice that the morons in the office seem less moronic after going to a social event with them? Or at least, more tolerable?
However... seeing the Senate GOP come up with federal mortgage support is pretty crazy. Who would have thunk that? Seems like Obama's bipartisan posturing is paying off.
I'm not aware of people at the SEC or even the GAO not doing this, but it wouldn't surprise me. Is this an old Bush Admin thing?
There were <a href="http://www.npr.org/templates/story/story.php?storyId=100272812">several people</a> like Harry Markopolos that continually fed the SEC info about Madoff's Mythical 'Unicorn' like returns to no avail - I dont believe putting more cooks in the SEC kitchen will make that office more efficient.
I know I am mixing apples and oranges between the SEC and the President's cabinet, but where seemingly every other person vetted so far seems to have forgotten that they need to deal with the IRS, I am just not that confident that adding additional layers is going to add security to the financial system.
More incomes -> more spending -> economy grows (by a factor larger than 100% of the job income because the spending then goes to others and their businesses)
Fiscal policy change based on taxes has a dramatic time lag. From the changes in percentage taken out of a check, to the filing with the IRS. (Say taxes were changed today, it might take till 15 April 2010! before it affected a lot of people). Plus if you lower taxes to the wealthiest, nothing happens, because it doesn't affect their spending habits.
There are lots of good economic books that explain this in macro and micro terms. Most are better and more engaging than all the text books I read in college.
I guess if you're more concerned with $500,000 pork projects rather than our $1,500,000,000,000 economy, than you'll never be happy with a stimulus package (and probably voted for McCain). This is the sausage part of governing.
It's big picture time. Again: Why isn't the debate about whether or not the idea of stimulus is a good thing instead of nitpicking every detail. There will be wasteful spending, period. Get over it. Luckily even wasteful spending fits the goal: a cash infusion into the economy.
How do you propose we stop Madoff scams?
I have no idea what you are talking about in the last paragraph.
Heck of a job, <a href="http://www.sec.gov/about/commissioner/cox.htm">Chris</a>.
Maybe paying taxes isn't a good predictor of performance in public office? Ostensibly, Bush's Cabinet members and SEC appointments were all in the clear with the IRS... they've done quite a job in office, wouldn't you say?
<a href="http://www.reason.com/news/show/131480.html">How many smoke pot?</a>
I hope you are right, TGL, but call me a skeptic.
I'm glad Obama went on the attack today. The "issues" around this bill are more about controlling the message more than anything else.
Of course, they're not really blocking anything. This should pass over GOP opposition... although the spectacle of the GOP filibustering in the Senate might be a good one. I'm glad Obama's going on the offense.
OK... end rant.
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I think arguing over $500,000 is wasted energy. Here's what our politicians should be talking about:
1) Do you think that the economy warrants a short-term stimulus?
2) If so, what is the best way to do that?
I'll give a crack at it:
1) Me, I'm not sure. I think I'd prefer the free market to work here. Companies that weather this storm will certainly come out of it stronger. I'd like to see a broader safety net for the un-employed... that'd be good for the economy too.
2) So, if we're going to do stimulus, and keeping in mind that tax cuts, rebates, and incentives to invest take a long time to effect GDP, just call me John (M. Keynes), but it seems to me that direct spending is the way to go.
-Cut $8 billion to refurbish federal buildings and make them more energy efficient
-Cut $1 billion for the early childhood program Head Start
The lack of foresight is startling. These are the programs that create jobs AND pay off huge in the future. Looks like those oil/gas/electric bills in DC will still eat away tax $, and our prisons will stay full.
See also <a href="http://yglesias.thinkprogress.org/archives/2009/02/the_time_for_bipartisanship.php">Matt Y.'s</a> post.
It'd be nice if Collins & Nelson had good reasons for cutting these specific programs, other than they had the weakest constituent support. However, if Susan Collins is now the deal-maker in the Senate, I can live with that for two years.
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An aside: How cool is it that New England has four female Senators?
Obama's wrist slaps to naysayers on pm TV last night and Geithner's new 4 point plan don't seem to be garnering much enthusiasm...
Why are we doing this again? How about we scratch this and keep the Head Start, College Loan, and Energy Efficiency programs.
Let's keep regulating 'em until we get it right... Unbelievable.
Let it go Indy.
I have no idea what you were saying then.
Maybe the Dow is tanking as investors continue to realize how much shit we're in based on the bad decisions made *before* the federal funds started flowing?
"Today's DJIA is a further indication of the lack of confidence investors have in what the govt has done to get AIG on its feet again."
Do you have any evidence of this?
From what I've read it's the opposite. Investors have a lack of confidence in AIG.
And since when is the difference between regulation and payment semantics?
Even if I can't attribute that to AIG directly, wouldnt someone other than myself at least agree that there has to be a pretty major specific event occur for the Dow to drop that much in a single day?
When the Dow has dropped hundreds of points in the past few months it is typically investor reaction to details (or lack thereof) provided by Geithner et. al in some type of confrence or hearing.
The government is involved in a deal with AIG, yes? (Of which we got the news of a 4th revision today, yes?) That is all I was trying to say. I regret leading people to a conclusion that I was saying regulation and payment are the same thing. That was not my point.
"Let's keep regulating 'em until we get it right... Unbelievable." would have been more clear if my initial comment did not use the word 'regulate.'
I would guess, and from <a href="http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=2&pagewanted=all">what I've been reading online</a>, the catalyst was the fact AIG is such a failure. Add to that HSBC PLC, Europe's largest bank said this morning that it needs to raise $17.7 billion, and Buffet gave a grim annual letter Saturday.
Take the US government out of the equation, and I think the Dow still loses 300.
Still looking for the bottom, methinks.