April 4, 2009
Simon Johnson makes an excellent point:
Remember this. If you run an expansionary fiscal policy (building bridges), I have an incentive to free ride (selling you BMWs) and not engage in a similar fiscal stimulus. But if you run an expansionary monetary policy, your exchange rate will tend to depreciate, putting pressure on my exporters and I’ll be pushed – by BMW-type producers – towards providing a parallel monetary stimulus.
Europe will come around. But 1 trillion to Eastern Europe and Latin America from the IMF will help a lot for now.
February 8, 2009
Just came back from an Organizing for America recovery house meeting.
It was half twelve-step support group (hi, my name is Andy and I/my brother/my friend just lost his job/pension/savings), and half organizing a response to the Republican nonsense machine.
The outrage against the way Republicans had made a mockery of this recovery bill (while the country burns) is boiling over. I’m talking pitchforks.
I’m probably giving him too much credit, but it almost feels like Obama’s bipartisanship little stint was (among other things) a way to rally his own troops.
We’ll see this week just how much of a backlash there is against the dittoheads.
February 7, 2009
I’ve been listening to KNX 1070 radio (CBS affiliate in Los Angeles) for years.
But these last 2 weeks their coverage of the recovery bill has been so slanted and superficial, I barely recognize them. It’s almost as if they are trying to do their part to obstruct it, or to help Republicans convert it into all tax-cuts.
Night after night I’ve been treated to Mitch McConnell or John McCain saying some nonsense (e.g. “… this is not a stimulus bill, it’s a spending bill”), with no Democrat clips to counter them. Not Schumer’s excellent
…we tried tax cuts last year.. it was a dud!
The largest spending bill in history is going to turn out to be the war in Iraq … And I don’t understand why, from some of my conservative friends, building a road, building a school, helping somebody get health care, that’s — that’s wasteful spending, but that war in Iraq, which is going to cost us over $1 trillion before we’re through — yes, I wish we hadn’t have done that. We’d have been in a lot better shape fiscally.
No tax cut builds a road. No tax cut puts a cop on the street. No tax cut educates a child
or any of the other great quotes from Dems on news shows or during deliberations.
Then Friday on my way home they had that radical Tom McClintock attacking Obama and the bill for two or three minutes, unchallenged. Some of the misconceptions he was peddling:
- FDR’s infrastructure spending didn’t help end the Depression. That has been refuted over and over.
- Japan’s stimulus package didn’t help them in the nineties: Sure they made mistakes we can learn from when implementing our plan, but it still saved them from an outright depression, and ultimately their biggest problem was their ‘zombie’ banks not being properly capitalized (which we can also learn from).
- Deficit spending crowds out private investment and accomplishes nothing: Under normal circumstances, but in a downturn, without confidence, private capital will not be put to work to an extent sufficient to stop the downward spiral of reduced spending > employment > spending.
- Government doesn’t create jobs: Apparently he hasn’t heard of NASA or the NSF or the Department of Energy. Anyways, Obama’s approach is to funnel most of the bill’s money through private contracts.
February 7, 2009
…for Ben Nelson’s primary challenger in 2013.
Without centrist senators that can be swung one way or another the legislative process would not work.
But what Nelson is currently doing with the recovery bill is ignoring the change we demanded last November and playing the hand of entrenched interests while removing what is actually needed:
63.4 billion LESS for school constructions and public transit.
Increases in defense spending and transportation.