Stimulus: Rushing Over the Cliff

While we didn’t see a Senate vote Thursday night on the stimulus package, it seems that it will only be a temporary reprieve. On such an important issue it is unfortunate that both the political generals and the talking heads have succeeded in turning it into a political football. One of the most annoying pieces of “analysis” for the week comes to us from Paul Krugman.

It’s time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation’s future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.

I’m no cheerleader for the GOP, but the arguments currently being put forth in favor of a slower, more measured analysis, a streamlined bill which targets the truly urgent challenges we face, and the opportunity to openly debate some of the less urgent “stimulus” dollars later on their own merit hardly seems like a rush to the brink. Quite the opposite, questions arising over this bill are coming from all quarters and would seem to indicate that a more considered, thoughtful approach is in order. Krugman himself gives a passing nod to one criticism, though in rather dismissive tones.

The Congressional Budget Office is slightly more sanguine, but its director, nonetheless, recently warned that “absent a change in fiscal policy … the shortfall in the nation’s output relative to potential levels will be the largest — in duration and depth — since the Depression of the 1930s.”

Did you really say that the CBO was, “slightly more sanguine” on this issue? Perhaps “outright dubious” might have been closer to the mark.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net.

I normally don’t find myself agreeing with Charles Krauthammer, as his hyperpartisan liberal bashing can quickly put most moderates off their feed, but he’s got a few good points to make today.

It’s the essential fraud of rushing through a bill in which the normal rules (committee hearings, finding revenue to pay for the programs) are suspended on the grounds that a national emergency requires an immediate job-creating stimulus — and then throwing into it hundreds of billions that have nothing to do with stimulus, that Congress’s own budget office says won’t be spent until 2011 and beyond, and that are little more than the back-scratching, special-interest, lobby-driven parochialism that Obama came to Washington to abolish. He said.

Let’s be clear on one thing. The blame for this did not originate with President Obama, as I see it. He seems to have been clearly and earnestly interested in hearing input from the Republicans and finding a bipartisan path forward on stimulus. Unfortunately, he utterly failed to exercise any control over Nancy Pelosi and, at least thus far, Harry Reid, and now the horse has escaped the barn. He is showing up on television looking angry that his will wasn’t implemented quickly enough and falling back on practiced habits of blaming any failures on the opposition party. If this is how the fairy tale story of the stimulus bill ends, it will be a sad and possibly crippling start to the Obama presidency. The new golden era of post-partisan progress will turn into more of the same old, same old.

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  • greenschemes

    During the campaign before the race for the White House began just after Obama secured the nomination Nancy Pelosi and Harry Reid were all over the air waves telling us just exactly what we were going to be seeing with a democratic tenure in the White House. Nanny Pelosi said NO to drilling, Harry Reid echoed the sentiment while Barak Obama indicated and I believe honestly so that he would look at it and find ways to compromise.

    Nanny Pelosi and Harry Reid laid out their visions for the future that when looked at carefully were FAR different then was Barak Obama's.

    So when the people started complaining and loudly so that Barak Obama was not in charge………that Harry Reid and Nanny Pelosi were in charge suddenly…overnight not another peep out of Nancy Pelosi and Harry Reid. NOT A PEEP.

    Well now the election is over…..the democrats won……and guess what?

    Nanny Pelosi and Harry Reid are showing us all what we knew. THEY are in charge. NOT Barak Obama. Its so bad already that Obama has text messaged the voters and is giving speeches urging even his own party to do what he says.

    Move over Jimmy Carter. You tried the same thing and even your own party hated you for it.

  • Don Quijote

    The new golden era of post-partisan progress will turn into more of the same old, same old.

    What new golden era of post-partisanship?

    The Republican are behaving the way they always have; if they can't get their way they will do every thing they can to destroy the Obama Administration, and even if they get things their way they will do every thing(see NAFTA, WTO, Welfare Reform and Clinton) they can to destroy the Obama Administration.

    Anyone who thinks that the Republicans were going to behave in any other way is to stupid to be an elected official.

    So my advice to you Mr Obama, get all the elected Democrats together, ignore the Republicans and write the best bill you can. If it's a success you'll get nothing for it and if it fails you'll get blamed for it anyway no matter how many Republicans voted for it. There is no upside to cooperating with Republicans, as soon as you learn that Mr Obama, you will be the President this country needs.

  • casualobserver

    H/T Instapundit..

    CHICAGO’S MAYOR DALEY REFUSES TO RELEASE STIMULUS PROJECT LIST:

    “Yes, we do, we have our list, we’ve been talking to people. We did not put that out publicly because once you start putting it out publicly, you know, the newspapers, the media is going to be ripping it apart,” Daley said.

    Hope, change, and transparency!

  • bacalove

    In regards to the Stimulus controversy, some in the media, earning cushy salaries, unaffected by the impending crisis, asks what's the rush? But, thank God, there is a new Sherrif in town as President Obama takes his fight to the people. He understands the American people are hurting and needs help NOW, found here due to greed and neglect!

    Republicans' new talking points regarding help to the people in the form of a stimulus – is that the polling shows the American people are against this Stimulus (against help)! What planet do they live on. By the day, Blue and White collar workers are losing thier jobs, homes, cars. They are resorting to food and bread lines; unemployment compensation and food stamps (by the way the GOP calls this Welfare). The American people are hurting and the GOP are playing political games — let's damage the President, instead of putting their time and care on the crisis looming large for the American people. At least for Once!

    Not unexepectedly, the GOP cry loudly, that that is not the way for Pres. Obama to win — taking it to the airwaves, (however, he tried being diplomatic and nice)! They don't want him to fight — to Expose their phony objections and impediment to this catastrophe. They don't want light but President Obama believes in transparency, and there is no time to lose in this situation. This patient, the U.S. economy, needs emergency care, now. Thank God, a new Sheriff is in town and President Obama is fighting for You. This country has waited long enough for a blood transfusion, and theres no time to lose!

    This is not about Pork, as GOP wants you to believe — this is about the saving of our economy, our way of life. America is crumbling all around us and the GOP wants to play political games, as usual! As custodians of the people, President Obama assumed that due to the direness of the situation, Congress would Act accordingly and pass a stimulus, not try to Revive their policical party, when the country needs to be revived, for once to act selfless and put others before themselves!

    We must remember, that when the GOP were in control they held no oversight hearings on anything, they did not increase the minimum wage, their concern was not about our crumbling bridges or dirty air, water, contimanted food and Ponsy Schemes that robbed people of millions.

    We will know what to do in 2010.

  • casualobserver

    What's in the Stimulus?: An Earmark as Big as the Ritz [Mark Hemingway]

    Buried in the 800 page stimulus bill is this seemingly innocuous allocation — “$2,000,000,000 is available for one or more near zero emission powerplant(s).”

    Interstingly enough, there's no such thing as a “near zero emission powerplant” — yet. The Department of Energy scuttled the project last year in part due to rising costs.

    Further, technological advancements had made the project obsolete. In a letter to the St. Louis Post-Dispatch, headlined “New technology makes FutureGen a waste of tax money,” then Secretary of Energy, Samuel W. Bodman, wrote:

    The project's estimated cost has almost doubled and innovations in technology and changes in the marketplace have created other viable options for demonstrating carbon capture and storage on a commercial scale.

    It became clear the Department of Energy could not, in good conscience, continue to support the program. The likelihood that it would fail, leaving the American people with hundreds of millions of dollars in sunk cost and none of the benefits, is not acceptable.

    So in effect the inclusion of $2 billion for a near zero emissions powerplant amounts to a staggering earmark — one that's nine times the cost of the bridge to nowhere.

    ********************************************************

    It is now abundantly clear that the real “emergency” here is to hurry up and try to pass this before the American public has an opportunity to absorb what is in this bill. The Dems don't have the balls to take these items before the American public as stand-alone spending appropriations.

  • Dave_Schuler

    I wish that the advocates for a large fiscal stimulus were as eager to make predictions about the size of the Keynesian multiplier that the bills making their way through the Congress would engender through, say, a calendar 2010 timeframe as they are to condemn opponents of a large fiscal stimulus as not taking the current economic downturn seriously.

    I don't think that either party is taking the downturn seriously. If they were Republicans wouldn't be acting as though there's no such thing as a bad tax cut and Democrats wouldn't be putting every porkbarrel spending measure they could find into it and calling it fiscal stimulus.

  • Jcavhs

    A few comments. First of all, the CBO says a lot of this will happen “absent a change in fiscal policy”. So if President Obama does fulfill his promise to reign in spending once we get the economy to stop bleeding a lot of CBO's conclusions are invalid.

    Secondly, 'crowding out' is a theory but with mixed evidence. Given the levels of debt from the Reagan and Bush eras we should have seen it but we haven't. Partially because crowding out is largely based in a closed economy which isn't the case. One reason we haven't seen crowding out is because a lot of foreign countries (i.e. China) buy our government debt. It screws up the exchange rate but it does prevent crowding out. The CBS analysis also likely assumes the savings rate stays constant to recent levels. Yet the savings rate has increased dramatically recently. If that continues it would mitigate a crowding out effect since higher demand for loanable funds from the government would be met with an increase in the supply for loanable funds which would offset each other.

    Finally, GDP is decreasing by much larger amounts than 0.1 to 0.3 percent per year. That would actually be an improvement to what we are experiencing now.

  • AustinRoth

    “Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery. Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging American economy, many economists are taking a fresh look at Japan’s troubled experience. . . . Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. Much of the blame has fallen on the Liberal Democratic Party, which has long used government spending to grease rural vote-buying machines that help keep the party in power.”

    http://www.nytimes.com/2009/02/06/world/asia/06

    hat tip: Instapundit

  • casualobserver

    First of all, the CBO says a lot of this will happen “absent a change in fiscal policy”. So if President Obama does fulfill his promise to reign in spending once we get the economy to stop bleeding a lot of CBO's conclusions are invalid.

    *****************************One rebuttal assumption defeated by two rebuttable presumptions?

    Yet the savings rate has increased dramatically recently.

    *************************So then why are you proposing to increase transfer payments?…….you'll just be exacerbating the effect of the paradox of savings.

  • greenschemes

    News flash for you all.

    GOP……bad economy means they get back in power in 2010.

    Democrats……bad war means they get back in power in 2008.

    Does anyone really expect our politicians to take care of anyone other then themselves?

  • AustinRoth

    Also:
    “First, they wanted to use the crisis to create a fraudulent 'stimulus' bill. Now, they want to decide who makes how much. Next will come the 5-year plans. I have heard this tune before, and it doesn't end on a good note.

    FYI – for those that think I am overstating the long-term plan, Goldman Sachs has already started talking about paying back the $10B they received right now. They are being told they will not be allowed to. Why? Well, the government wants to be able to keep control under the giuse of a 'bailout' that GS did not want, was forced to take, and now sees was nothing more than a power grab.

    http://money.cnn.com/2009/02/06/news/companies/

    And so, for all of us that predicted that Obama and the Democrats would try to turn us into a more socialist-oriented country, we have to say we were wrong. It is communism that now seems to be the goal, and it is happening so much faster, and with way more 'audacity', than ever could have been expected.”

    hat tip: me

    And this bill will only be used as even more justification for the Federal government to decide which companies should produce what goods, in what quantities, over what time frame; what risks they can take; what hiring and compensation environments they are allowed; what suppliers to use, etc.

    Change is coming, alright, and it carries a big hammer (and sickle) for us, it seems.

  • casualobserver

    AR—I guess there is no sense fretting about the Pelosi Legacy Spending Bill any longer.

    The tinfoilers see it all a moot point soon………….

    http://www.rasmussenreports.com/public_content/

  • greenschemes

    However Im not sure if AR is being honest or not but the power grab that the government took upon themselves was certainly insane and now Obama is trying to dictate to these companies how much they can pay their senior officers.

    Secondly this is a recession and its not nearly as GAWD damn bad as the democrats are making it out to be. 4.8 million are unemployed. Roughly 197 million are working……….WOE is us.

    If they want to fix this and feel good about themselves.

    1. Increase unemployment to 1 year and raise the amount by 25 percent.
    2. Send out two stimulus checks over the next year.

    Cost……….about 400 billion dollars. Length of bill? 12 pages. Effect on the economy? Priceless.

  • AustinRoth

    I am indulging in a slight bit of hyperbole, but not much.

    No one on this board should be naive – exec pay is the first step, the breaking of the barrier. There is already 'who you must buy from' language in the bill (at least at this point), and more and more ominous signs that Congress will use the model of 'if you get ANYTHING from us, we get to tell you how to run your business'. It worked for drunk driving laws via highway funds as just a small example. There are many.

    The link to the Times article is another. They don't WANT GS to pay them back, so they can run their bank. GS sees this already, but it may be too late.

    Government expands its powers to the full extent they are allowed to and can get away with, and this is a huge barn door to drive through.

  • casualobserver

    IN THE ROAD TO SOCIALISM-Rahm Emmanuel: “A crisis is a terrible thing to waste.”

  • DLS

    This bill by the House is bad, saner minds in the Senate will hopefully exercise at least some discipline in revising it, there is no excuse for panic or rushing (or anything else hacks like Krugman can supply as “reasons”), much less to blindly waste money, and the House Democrats need to be told to control their childish urges and conceits, by Obama himself — he's a failure if he doesn't muzzle them.

  • CStanley

    the House Democrats need to be told to control their childish urges and conceits, by Obama himself — he's a failure if he doesn't muzzle them.

    Unfortunately though, he not only has failed to muzzle them, he's now praising them and warning the GOP not to obstruct.

  • DLS

    “Change is coming, alright, and it carries a big hammer (and sickle) for us, it seems.”

    Or more examples of what we've had since the 1930s here in the USA, a fraternal twin, smiley-faced fascism.

    As for the Patriot Act that the idiots have overreacted to, just wait until the Dems experience (or engineer) the equivalent of a Reichstag fire in Washington or New York — no doubt the work of “right wing domestic terrorists.” It's possible given the no-limits, no-cooperation ways of the Congressional Democrats. (Will Obama stand up to them, or will he fear the “imperial Presidency” lies and propaganda?)

  • AustinRoth

    DLS – you are going off the tracks.

    Such theatrics will not happen. They don't need to. This is still part of the slow, inevitable slide. Baby steps and patience is what they have been doing for years, with the occasional 'land grab', like now, when the circumstances allow for it.

  • DLS

    “he's now praising them and warning the GOP not to obstruct.”

    Where? At a resort? Where he was with TARP Democrats outraged at any visits by people in private industry to resorts or anywhere nice?

  • CStanley

    LOL, yes, DLS, that was the pep talk I'm referring to. And then he capped it off by thanking them for giving him a reason to fly on that nice jet he has at his disposal. Tone deaf, a bit?

  • mikkel

    Well I think the Democrats have officially shown that they are as bad as the Republicans now. I mean I foresaw all this stuff coming a couple years ago and kept worrying that political self interest would prevent good bills from getting passed that helped the most at risk. But, not only are they doubling down on all this — which will not work and then destroy people's support for future action — but I've heard rumblings that the cuts are to things like basic science and health research. Hooray the things that have been woefully underfunded and have been shown to be the most important for the bedrock of society.

  • CStanley

    I agree with your first statement, of course, Mikkel, and I can understand your feelings about the cuts to science research. But first off, I don't know that anyone really knows what cuts are going to end up forming the final Senate bill yet (yesterday there were several stories circulating about Collins' staff leaking what was being proposed by the compromise group of Senators, and then before the stories were even published there were denials that those were final decisions, etc, etc.)

    And anyway, if those things were cut it could well be because they weren't representative of quick stimulus spending and would be more appropriately funded via normal channels. Being cut from the current bill doesn't mean that there's not political support for funding of any particular need- and people who have a vested interest in each area shouldn't insist that Congress show it's dedication to their cause through this particular package. That's part of the problem, isn't it?

  • mikkel

    Yes and no. Yes because of course it shouldn't be in this bill, no because the bill is being used as a grab bag of stuff already and there will probably be little support for addressing issues down the line because “we already addressed those things.” It just shows priorities that if they're going to have tons of bad stuff but then cut those things as proof of “fiscal responsibility” that they are really dumb. Although I agree to wait until the final bill is put together.

  • CStanley

    AR: it gets even worse.

    The only thing I can hope is that idiots like Frank are sooo overplaying this hand that the public will wake up to it sooner rather than later. For some reason, Frank seems to think that Americans still view Congress as the white knight riding in to save us from the evil corporations.

  • mikkel

    See CS, this is what happens. You might disagree with me, but I think that the GOP messed (ok much worse but can't use that word) things up so badly over the last 8 years that it is a big part of the problem…and now they are just angling for the continuation of those policies! I disagree with elrod who says “Well a party can do it their way and if they mess up then the other party gets in. That's politics.” Instead the reaction of both parties is just causing greater division because now everyone is just pointing out the truly crazy positions of leaders in each party.

    Really the only thing holding it together right now is Obama went in and yelled at all the Democrats…but then what did the Republicans do? Nothing except propose crazy alternatives that there is no chance ever that Obama would support, and then declared that was the only thing they would back and start licking their lips over political failures. So they are putting him in an insanely difficult position because going back to our thread yesterday, he might hate a lot of the Congressional Democratic platform but he supports quite a bit of it and he has no maneuvering room.

    I hope he mans up and just declares Congress broken and that we won't sign anything…but of course that won't happen.

  • CStanley

    I hope he mans up and just declares Congress broken and that we won't sign anything…but of course that won't happen.

    See, what I can't figure out yet is what he actually believes or wants for the outcome of this. Is it really a lack of fortitude keeping him from taking that approach (or perhaps doing what no sane person could really object to- telling them that the only thing he'll sign is a pure, short term relief package with a commitment to go back and begin doing the long term planning next?)

    How do you explain his pep rally for the House Democrats yesterday if that's what he'd truly want to do? Why won't he put any pressure on them at all, if he expects to be taken seriously as a moderator between the two sides?

  • CStanley

    I disagree with elrod who says “Well a party can do it their way and if they mess up then the other party gets in. That's politics.

    I don't disagree with him as a general principle, but the trouble is we don't have the luxury of waiting for a correction to happen and the corrections themselves aren't working (because as you said, each side just keeps on doing the same failed policies over and over again, and if there is a 'compromise' at all it's actually a blend of the worst aspects of both sides instead of actually figuring out how to blend ideas from each side in a way that could work.)

    For instance, I'm not in agreement with you about tax cuts- but that doesn't mean I support all tax cuts, all the time. I think right now there certainly could be sensible and helpful types of business tax cuts that would benefit small businesses- and I can't imagine why we can't do those things without extending favors to large corporations. At the same time, even though I strongly disagreed with Obama's proposed 'tax rebates' to non-income tax payers because the semantics is very deceptive, that's actually a type of stimulus spending that I'd now support. Go ahead and cut checks to people who have such low incomes that they don't pay income tax; these people will necessarily spend the money and that's good for the businesses in their communities.

    That's an example of taking ideas that run counter to ideologies on both sides, but examining whether or not those ideas would actually be helpful in the current situation. If they would, then tell both sides they have to put aside their ideological objections- and also insist that these measures be short term so that no one can accuse the other side of a long term power grab.

  • Jim_Satterfield

    If you actually look deeper into the article the terrible restriction on executive pay is looking like they just won't be able to soak the taxpayer for excessive compensation.

    Treasury Secretary Timothy Geithner said last month that he might try to extend to all U.S. companies a restriction that prohibits bailout banks from taking a tax deduction of more than $500,000 in pay for each executive.

    So they won't get a tax deduction for pay over a half million a year. Boo hoo.

  • mikkel

    I think he believes close to what you said in the other thread because that is what the orthodox economists are telling him. It is a personality flaw/strength that I have long noticed and have repeatedly worried about…if Obama has enough time to process information he starts rejecting obvious falsehoods and reaching out to different experts, but if he doesn't then I feared that he would lean to his advisors and trust them too much. This is why I wish I could have an hour to be in a room with him and his economic team and just eviscerate them.

  • mikkel

    I would like to see some numbers on the small businesses before I made up my mind about that. Of course I'm not completely opposed because those tax cuts could be “good.” However, I have to admit that I am skeptical. I believe that the two major components that are affecting small businesses are a real credit crunch (lack of credit extended for good uses) and also a collapse in demand. Neither of those would be affected by small business tax rates and I think the money would be better spent providing liquidity.

  • CStanley

    Jim, I don't feel sorry for the big CEOs, but I trust the government to regulate them not at all, and I know that any attempts to regulate these things just lead to worse unintended consequences. People will find a way to continue seeking (and getting) huge compensation packages- they'll just structure it differently. So in the end this is a combination of a deflection from the real issues at hand and an attempt to put more power in the hands of Washington DC.

    That said, I don't think the particular measure you quote is that bad.

  • CStanley

    I believe that the two major components that are affecting small businesses are a real credit crunch (lack of credit extended for good uses) and also a collapse in demand. Neither of those would be affected by small business tax rates and I think the money would be better spent providing liquidity.

    Well, it's not just 'tax rates' but a whole slew of tax policies, some of which can help increase liquidity (I guess that was my fault for phrasing it as 'tax cuts' which would imply a simplistic cut in rates.) Here are some examples where the Chamber of Commerce agrees with some of Obama's proposals (I'm not sure how much of that has made it into the bill at this point) and gives other suggestions that they'd like to see.

  • mikkel

    Well all that the provisions in the bill do are front load tax benefits in an effort to give a one time shot to demand. Those proposals have been around for over a year. As for the other, only the SBA fees would really affect small businesses that much, which is a good idea.

  • DeathDealer

    If you follow the money in the 1930's you will find a whole lot of the same thing happening then as now. The spending authorised by FDR and the democrats back then did nothing but drive the country into depression. At that time the rest of the world was well into recovery, we were in the throes of depression, follow the money, remember – what you were taught in school is revisionist history. Research for your self and always”follow the money” the trail will tell the truth. I remember when JFK cut taxes – and the democrats screamed that we would go bankrupt, wrong. The economy took off. Ronald Reagan cut taxes, again the democrats screamed bloody murder – the economy surged. Then a strange thought came to mind, back when the full benifits of the JFK taxs cuts were being realised, banks started to fail and then savings and loans went down. when Reagans tax cuts were in full swing the Penn Square bank in Oklahoma City fell and snowballed across the country, Bush'stax cuts resulted in 51 months of ecnomic growth (believe it or not – I don't care either way) the sub-prime fiasco heaped its pile on us. As for the former I haven't found the money trail, I will, but as for the latter – start with Jimmy Carter and the Community Reinvestment Act later increased by Bill Clinton and an executive order to lower the qualifing standards for mortague loans, what happened? The default rate went up, then doubled and then tripled all the while Barney Frank and the finance commity said and assured the people that there was nothing wrong. Follow the money. It NEVER lies, it might misdirect you and try to confuse you but IF you look hard enough you will find the truth, and the truth is we got screwed by politicans trying to cover their behinds. The really scary truth is, if you listen to the retoric in DC and what is being said about the bailout money, this is nothing more than a grab to nationalize the banks and lending houses, follow the money. When government controls the banks it controls the country. When it controls the country we all become servents and not citizens. Goldman-Sachs is a prime example, they got 10B in bailout funds, then Obama says that HE, catch that HE was imposing salary caps (remember when Nixon imposed salary caps?) Immediately Goldman-Sachs went about trying t repay the money only to be told -NO- that the finance commity was now in charge. Say What?
    Wake up people!!! Socialism leading to comminism is headed our way like a steamroller and if we don't step aside we are going to be flattened by the Socialist in congress.

  • DLS

    “DLS – you are going off the tracks.”

    Woo-wooooooooooooooooooooo

    Nope, (I'm not the one who mentioned the hammer and sickle, or proceeding to ancitipate a complete federal takeover of the private sector basedon the TARP-related antics), just showing where this is leading. The USA has been more subtle than that. Expect more smiley-faced fascism to follow federal equity stakes, such as federal corporate charters or (not waiting for charters) the installation of federal officials on boards of directors (beginning with any firms with federal equity stakes in them), as well as fascistic “regulation” like air travel in the old days that was fascistic, a managed cartel with a large federal government regulatory and other kinds of presence. That points the way for the financial industry, at least (followed possibly by the energy industry, later health care).

  • skylights

    Instead of taking the neoconservative Moonie rag Washington Times at face value, how about listening to the director of the CBO?

    “CBO estimates that the Senate legislation would raise output by between 1.4 percent and 4.1 percent by the fourth quarter of 2009; by between 1.2 percent and 3.6 percent by the fourth quarter of 2010; and by between 0.4 percent and 1.2 percent by the fourth quarter of 2011. CBO estimates that the legislation would raise employment by 0.9 million to 2.5 million at the end of 2009; 1.3 million to 3.9 million at the end of 2010; and 0.6 million to 1.9 million at the end of 2011.”

    http://cboblog.cbo.gov/?p=205

  • CStanley

    Nice try, skylights, but here's the rest of the story (not from a secondary biased source, but from the same report that you linked to):

    In contrast to its positive near-term macroeconomic effects, the Senate legislation would reduce output slightly in the long run, CBO estimates, as would other similar proposals. The principal channel for this effect is that the legislation would result in an increase in government debt. To the extent that people hold their wealth in the form of government bonds rather than in a form that can be used to finance private investment, the increased government debt would tend to “crowd out” private investment—thus reducing the stock of private capital and the long-term potential output of the economy.

  • DLS

    '”Tone deaf, a bit”

    Not merely him and the Congressional Dems, but the many whom they exploit among the public, and a number of this site, no doubt.

  • AustinRoth

    Well, I think it is one thing to talk about the already existing signs of federal expansion of control over the means of production (another, “hmm, where have I heard THAT phrase before?” moment), and to talk about 9/11 Truther-type stuff.

    And if you, too, were just indulging in some of your own hyperbole, then to quote the great, late, Emily Litella, 'Oh, that's very different. Never mind.”

  • DLS

    “This is still part of the slow, inevitable slide. Baby steps and patience is what they have been doing for years”

    Most of the time, yes, true. Incrementalism, or “the ratchet” or ratcheting, in other words. The Congressional Dems are too gorilla-like with their hand on the ratchet currently, though. Obama is being disgraceful if he chooses their rather than saner people's side on this.

  • DLS

    “9/11 Truther-type stuff”

    I was being deliberately provocative, while also being very cynical — people in Washington live differently, view themselves differently, and would be all too happy to impose all kinds of new security measures to preserve or protect this difference in the future if they felt it needed.

    No, I am not another Timothy McVeigh or KKK member in waiting.

  • DLS

    “See, what I can't figure out yet is what he actually believes or wants for the outcome of this.”

    It's possible he doesn't know, and he and we may face the complication that his inner circle may be giving him bad advice.