Obama's “2.5 million jobs” promise is laughable, as is any fixation currently on “green” jobs or anything else; rescuing the economy overall, in general, comes first and foremost. That means fighting unemployment and related costs — as undeserving as Detroit is (which is to say, accurately and morally, highly undeserving, not at all, in fact) of a bailout, something will probably be done. I'm also interested in any kind of employment and improvement-related actions in the realm of bridge and road repair and replacement (and even building new highways — Los Angeles metro could use two large, all-new freeways and one or two other sections of freeway to reasonably complete its network, for example) and in repair of old, substandard, perhaps-foreclosed housing (this would be a better way of steering money to the building industry than merely handing it money as they now want). Aside from any strictly economic matter, I'm interested to see what changes are sought by the Obama people. The $500M figure he's using is perfectly reasonable and leaves probably another trillion on the shelf ready to be used if we gauge or scale intervention in terms of China's recent “breathtaking” intervention amounting to 15 per cent of gross national product. $500M now and a trillion on hand is not out of line if a major intervention is to be sought, _and_ it leaves the other money on hand as well for other projects like health care provision and control (or at least, nominally, “financing” or “paying” for it by Washington, in reality with strings attached) as well as, say, clean-energy R&D and possibly new federal financial aid for higher education (not to be neglected, either).

The author of a book that is prescient about this has written elsewhere — he is a normal person, i.e., favoring the free market, but is willing to look at intervention and even demand it if he believes it is appropriate or even imperative (in order to forestall deflation). I may quote from the book later; here is what he recently wrote in an up-to-date article about the situation we face. Be calm, people, and just consider what may or may not work, think about your own details of what you might want to see not only next year but in the next _four_ or more years (not necessarily in a slump that long, but in terms of long-term interest of the nation and what the federal government could to to improve it), but realize that we've had slumps before, and intervention has helped before. (At other times, it has not helped and even harmed things, so don't have naive, blind, silly faith in government salvation.)

The most important thing, Do we want to try to forestall deflation? A broader slump in the economy can be addressed at the same time…

http://www.telegraph.co.uk/finance/comment/roge…

Yes, I think so, too. Though I would prefer for a hard landing (in the stock market now) than a landing that takes another year or so to come about. The stock market at this point is pretty much a self-fulfilling prophecy…. the more people think it will go down, the more it will go down. Half steps taken now will only prolong reaching the bottom, which will be lower the longer it lasts. If it's a hard landing now, then we can start to recover.

It's really amazing how much the economy is tied to investor sentiment. That's one thing I've learned so far out of this mess.