This administration has nothing to be proud of on the Economy front

[Kurt_and_Hunter]

It's an embarrassment and, much worse, a danger.

I know some folks derive their concept of the situation by working backward from the statement "whatever the administration did is the best possible thing," and that's not something with which to argue. It's a position designed to short-circuit argument so it's outside the realm of meaningful discourse.

But if this were an independent or pug administration, rather than a Democratic one, it would be easy to see that the first thing you do is stabilize the system and halt certain trends in their tracks by brute economic force. That's basic.

The administration's own rosy estimates have the number of under-water mortgages more than doubling in the next 18 months. But you'd never guess that from their actions.

The immediate threat to our collective well-being is an acute collapse of consumer demand. That must be countered with overwhelming force on its own terms. There is not time to ease the demand crisis indirectly by intervening in banking or individual mortgages.

The demand crisis must be met in the immediate term by massive short-term transfers of money into people's pockets.

Every week of delay on this, which should have been before or instead of the stimulus package, is another trillion dollars we will have to spend in the longer-term to dig out from the costs of our inaction.

The administration really is screwing the pooch on the economy, primarily because they don't get it.

Doing pretty well on everything else.

[babylonsister]

1. You sound like the GOP. Reich begs to differ...

Is Obama responsible for Wall Street's meltdown?

It's an absurd argument, but that's where populist rage on the right is heading.

By Robert Reich


March 5, 2009 | Is Obama responsible for the meltdown of the Dow? The consistently wrongheaded Wall Street Journal's editorial page says so, as does Republican Fox News, CNN's reliably demagogic Lou Dobbs, and now CNBC (where, full disclosure, I frequently appear as a token liberal). CNBC's Jim Cramer, who bloviates nightly about stock picks, says Obama is pushing a "radical agenda" that's destroying investors' wealth. My friend Larry Kudlow, who rants nightly about nearly everything, says Obama is destroying capitalism. CNBC reporter Rick Santelli's ballistic nonsense about Obama's mortgage plan made him a pop-populist icon for a week or so.

The argument that Obama is somehow responsible for the collapse of Wall Street is absurd. First, every major policy that led to this collapse occurred under George W.'s watch (or, more accurately, his failure to watch). The housing and financial bubbles were created under Bush and exploded under Bush. The stock market began to collapse under Bush.

Second, it's inevitable that stocks, led by the bloated financial sector, would lose their remaining hot air as the new administration begins "stress-testing" the big banks, many of which are technically insolvent. After all, their share prices were built on a tissue of lies and dreams. Other sectors whose values were similarly distorted and distended by years of financial deception and regulatory disregard, such as housing and insurance, will also have to return to the real world before they can recover. Which could mean more stock losses.

Finally, none of the financial wizards who are now charging Obama with leading America into the abyss have offered an alternative plan for getting us out of the mess that, not incidentally, many of these same wizards happily led us into. For years, the Wall Street Journal editorial page and the financial gurus of cable news cheered as Wall Street leveraged its way into oblivion.

This bizarre charge wouldn't be worth mentioning were it not a market test for a more intense attack from Wall Street and Republican media outlets next year as the nation moves into the gravitational range of the 2010 midterm elections. Republicans have made no secret of their wish to blame Obama for the bad economy, and to stir up as much populist rage against his so-called socialist tendencies as politically possible. History shows how effective demagogic ravings can be when a public is stressed economically. Make no mistake: Angry right-wing populism lurks just below the surface of the terrible American economy, ready to be launched not only at Obama but also at liberals, intellectuals, gays, blacks, Jews, the mainstream media, coastal elites, crypto socialists, and any other potential target of paranoid opportunity.

To complicate matters for Republicans, however, grass-roots populist rage is also building against Wall Street itself, and with some justification. Top Wall Streeters who raked in tens of millions of dollars a year for more than a decade have now effectively eviscerated the pension fund savings of millions of middle-class American workers and destroyed millions of Main Street jobs. The public is understandably appalled that its tax dollars are being used to pay and prop up the very people and institutions responsible for this debacle. And there seems to be no end in sight: Citigroup and the insurance mammoth AIG, in particular, have become giant ongoing sump-pumps for tens of billions of public dollars. Yet no one seems to know exactly where these dollars are going, or why.
Quantcast

more...

http://www.salon.com/opinion/feature/2009/03/05/populist_rage/

[Kurt_and_Hunter]

3. cheap and irrelevant

To say I sound like the GOP is just a cheap tactic.

I sound nothing like the GOP and do not blame Obama for the crisis. I blame Obama for not doing an excellent job dealing with a crisis that was thrown in his lap.

Please list GOPers who have proposed anything like the measures I throw out here every day. I don't see any GOP types proposing a direct payment of $5,000 to every citizen, regardless of whether they pay taxes or not.

I blame Obama for not doing a good job but that's not an endorsement of anything GOP. If McCain were in office things would be much worse. His proposal of a government spending freeze was the most insane economic policy anyone has ever put forth.

The fact Obama is better than Republicans is side-ways to this thing. Of course he is. I voted for the man because he's a zillion times better than the Republicans.

But that's not the standard. This is an emergency and it must be met on its own terms, not by the "better than the pukes" standard.

Obama has to do a better job because this is the only country we've got. It's not fair that he has to deal with this but he's the only president we have so he's the one who has to do it.

He has to be better than good because that's what is required.

[EmilyAnne]

18. There was an alternative stimulus bill that wanted to give 9000 to every tax payer. Proposed by

some GOP rep from Georgia.

http://www.11alive.com/rss/rss_story.aspx?storyid=126169

[leftstreet]

50. Wow. That sure didn't hit the M$M

Thanks for posting.

[EmilyAnne]

69. It was on the MSM for a while, there was never any real chance that it would pass. The Republicans

were still really wanting tax cuts.

We discussed it on here for a while. The thread got pretty heated, but ultimately the argument against it seemed to be that the money would most likely go to savings or credit card bills which sounds really great, but will not move around enough to stimulate the economy.

Now, if something like this was done on top of everything else, maybe it would help.

[Numba6]

52. yes, the OP seems to like the Republican "ideas" that were thrown up to stop any stimulus bill

[Median Democrat]

47. Okay, Name Presidents That Have Accomplished More In 1st 60 Days

You are writing off the Obama presidency in less than 60 days? Amazing. Did you really expect him to be the messiah?

Sorry, this is not a dictatorship. For better or worse, Obama has to deal with Congress, and I think he is doing an excellent job with what he has. Yes, he could declare martial law, and immediately implement some measures, but I am not ready to go there. Thanks.

[Numba6]

54. IMPEACH'IM!!! IMPEACH 'EM ALL!!! IMPEACH'EM FROM THE HIGHEST TREE!!! HA HAAAHA HAAAHA HAAA!!!!

"Ve don't need no steenkin' reasons! IMMEDIATE GRATIFICATION NOW!!!"

The Mad Impeacher strikes again...

[vaberella]

67. How many of him are there? I see a lot. n/t

[Number23]

96. lol Num6, you are becoming my SECOND favorite number

:)

[FrenchieCat]

72. Sometimes cheap is good......

Personally, I think you are the one with cheap tactics...and it isn't going unnoticed.

We lost less jobs in February than we did in January, and we lost less jobs in January than we did in December.

That's my proof that Obama is doing this thing the right way regardless of the cynics and the pretend to know blowhards. What's your proof that it is doing things wrong? You expect someone to turn anything all the way around in 44 days? if you do, than yeah....you going with the cheap.

[Captain Hilts]

6. I agree with you on this topic, but labelling the OP as sounding "GOP" is unfair and not helpful. nt

[moundsview]

7. The stock market is NOT the economy

anymore than a blizzard is climate change.

[garryowenII]

44. The stock market IS the barometer of the economy. nt

[JuniperLea]

80. I just don't get why people don't get this!

The market will not stop plummeting until it hits it's support level, which is currently said to be somewhere between 5800 and 6200. Until we hit where the stocks are actually valued, this wild ride will continue and there's nothing anyone can do about it!

This is the fruit of BushCo's seed sowing, nothing less.

Unless there is a bona-fide analyst among us, no one here has the wherewithal to say that what Obama is doing is bad. It's just ridiculous.

[MadHound]

2. So in other words you think that the government should write all of us some more checks again?

First of all, such stimulants last for what, a month or so, with a large amount of that money going into people paying off debts or stashing the money away in a bank or mattress.

Secondly, we really do have very little wiggle room, what with our huge debt load that we're carrying. Each and every dollar for stimulus programs needs to be squeezed for maximum value. Jobs programs do indeed give us a better bang for our buck than about anything else, including simply giving money away.

Third, giving away money in the amount that you mentioned earlier this week (a $5,000 check to everyone) would jack the inflation rate through the roof, not really a bright idea at this point.

Give the stimulus time to take effect. In the end it will be a better bang for our buck.

[DevonRex]

21. Yes, but he didn't answer you. Wonder why? Is it because you refuted

his argument soundly? Yep, I think so.

[JoseGaspar]

41. First, you should stop listening to Herbert Hoover.

Such stimulants, to the degree that they are spent quickly, compensate for the initial fall-off of demand in economic recessions.

Second, you should listen to Keynes. No amount of spending will cause inflation at this point when the credit system has broken down. The real trick is to avoid deflation. The inflationary pressures come later, when there is greater ability to deal with them.

Third, the only thing that is in really short supply is time. Doing it "later" is the same as not doing it.

[liberal N proud]

4. This is what Obama was handed

And then the assholes who are doing everything they can to make sure he fails are out in full force.

Blaming Obama for this is playing right into the right wing extremist, dittohead mentality that has gripped the "liberal" media and all of the GOP.

[bdamomma]

15. the right wingers have nothing else, no leadership and

no remedies to the mess that they have created in the last 8 years, so again they are in full force against Obama. Obama inherited this mess, but that does not seem to be getting through their thick heads.

[EmilyAnne]

5. I don't know of any economists that agree with you. Do you? I am not asking this in a snarky way.

I am interested in all proposals and I'd like to hear about how this would stabilize the demand crisis.

[pocoloco]

10. "I don't know of any economists that agree with you."

Is this a bad thing?

[EmilyAnne]

16. No. I just hoped there would be an economist who has made the argument for this. I'd like to see

it explained by an economist because I know that there are so many factors that the average layperson doesn't consider when looking at economic policy.

[Kurt_and_Hunter]

12. In policy particular? No idea. In general, many.

We are in the same situation Japan was in that we cannot reduce Fed interest rates to spur the economy because they are already effectively at zero.

When the central bank is out of stimulus bullets and the private sector is not spending the entire burden falls on the government.

This is why so many were saying the stimulus was too small and too slow. We are in the position of the government having to provide the bulk of the heavy lifting, not merely priming the pump.

As for whether direct payments are correct, six weeks ago I thought massive consumer credit refinancing was a better idea than direct payments. But that was six weeks ago. Since anything we do has a lot of implementation time built in the passage of time makes some options less and less attractive.

Direct payments is merely an extrapolation of the basic concepts that 1) stimulus must be huge--beyond our usual framework of thinking about such things because the Fed is out of ammo, 2) a stitch in time saves nine... the deeper we sink the more it costs to dig out, so speed matters, and 3) that demand is the short term problem... particularly consumer demand. The American consumer is 2/3 of our economy so probably about as large as the entire economies of Japan and Germany combined. Our consumers are the single largest economic entity and happen to be on a profound buying strike.

[tonysam]

62. Ditch the Neoliberals

That is absolutely critical to this. Their economic ideas, similar to the GOP, are discredited. The economic policies of the past 30 years must, must, MUST be repealed.

There is no other option. Kowtowing to wealthy interests who continue to benefit from the theft from everybody else is not the answer.

[biopowertoday]

34. Read Krugman's article today.

[EmilyAnne]

68. I already did. His solution has no similarity to what the OP is saying about cutting checks to each

American so they can buy, increasing demand. I just don't see how this is a solution.

[Hippo_Tron]

85. It's certainly not a long term solution

Increased demand only helps in the short run. Prices and wages have to adjust to have an effect in the medium run. New investment has to be made in order to change the long run and that is partly what the stimulus was aimed to do.

[TexasObserver]

91. No, because it's a bad idea.

It's like taking a homeless person to a fancy Sunday buffet for brunch. Yeah, great meal, but then what about tomorrow?

Pumping a few thousand dollars into the hands of every adult in America would not do much. It would give us a short term burst of spending, but then what?

Obama is wise to pursue JOBS programs, things that will create or keep jobs. Tax cuts and cash payments to citizens in lump sum will not get us out of this trench. It's always people with little knowledge of economics or finance who propose these panaceas like "give everyone $5000."

[dionysus]

8. and you're a qualified economist becauuseeeeee......

:shrug:

[jonestonesusa]

53. It cracks me up that people on this board

chafe at concerned citizens who have strong opinions and are willing to put them out for discussion.

On a political opinion board, no less.

Oh well - with luck, I guess, democracy won't last forever, and the qualified experts can just take care of us all.


:sarcasm:

[phleshdef]

9. Your apparent expectations are not living in the bounds of the realistically possible.

If you thought things would be any better by now, you are kidding yourself. President Obama said before he was even elected that it would get worse before it got better, that it would take a good deal of time to even get things stable, let alone improve and fix them. You were warned that it would be this way. Its your fault if you didn't take that warning to heart and consider the realities that warranted such a warning.

Your point of view on this is absolutely ludicrous.

[Kurt_and_Hunter]

11. Not one word of your reply has any bearing on the OP

But thanks for sharing

[Peacetrain]

13. Talk to me next year.. you should have been afraid five years ago

this was barreling towards us.. now we are in the deep stuff, and fighting our way out.. it is not always pretty..

[phleshdef]

19. Its pretty hard to have any "bearing" on worthless insights that have no bearing on reality.

[anaxarchos]

20. You are dead right...

...but, you will get no points for it.

There are a dozen "bold", or "new" or simply practical ideas which would have immediate impact. The original $500 billion "infrastructure" program would have made an impact. Doubling unemployment compensation (in magnitude, not just duration) would make such an impact. The best of all would be to simply hire 5 or 10 million people (at significantly less than the cost of the "stimulus")... the "timing" is solved by hiring first and deciding what they do later. There are many ways to skin this cat.

What is reported in the thread is the opposite of the case. Most economists understand and support this basic idea in a fundamental way... even in the case of many conservative economists who are not supply-siders. Most disagreement comes from the secondary effects of such proposals: on "free-enterprise", on the current structure of capital and investment, and so on. You don't have to stop with Krugman or Stiglitz to confirm that. It is the equivalent on the "demand side" of measures such as "nationalization" on the financial side: there is a surprising degree of agreement once you leave the political "echo-chamber".

This Treasury/Fed group underlines the issue with "moderate" positions which so-many self-described "politicos" seem so enthralled with. What is the middle ground between letting a fire burn and putting it out? Is it to let it smolder and HOPE that it puts itself out?

(On edit - The post is intended as a response to the OP... not to post 11.)

[TreasonousBastard]

14. Precisely what "overwhelming force" is to be...

used to counter these bad things? It's easy to come up with some vague principle, but not so east to come up with the details, is it?

One paradoxical problem is that consumer demand was huge for years, but it was fueled almost entirely by credit. Now that the debts are coming due, how do we pay down the debt while maintaining demand?

Housing is right in the middle of all of this-- for years houses were used as ATMs with cheap borrowing against equity feeding demand. Now that the housing bubble has burst, we're going after the banks and lenders so people can keep their ridiculously overpriced homes, further squeezing liquidity. No one seems interested in the profiteers of the bubble-- the flippers, the long-term owners who cashed out, the realtors and mortgage brokers, the overbuilders, the speculators... That's where the money went, but it's not easy to get it back, even if anyone bothered to try.

[anaxarchos]

23. Apples and Oranges...

You are right... and it's irrelevant. The issue is "economic crisis", i.e. an unraveling of the structural issues you describe. At the moment, the issue is not one of "fundamentals" but of the many times magnified impact of the fall of the dominos, all at once. The next issue is whose back this particular steam-roller will roll over (or, properly, unroll over). The people you point to won't feel it. The people who will feel it (20 million unemployed, 10 million who can't retire, etc.) aren't on your list.

More to the point, your "fundamental" sits on top of a bigger "fundamental". Bubbles come from an overproduction of Capital - too much investment chasing too few "opportunities", which is what creates "over-heating". That is a "structural problem" which defies all such moralizing.

[NYC_SKP]

17. An acute collapse of consumer demand is, in the long run, a good thing.

But that's just me, an environmentalist at heart.

How very mainstream to define "health" of our society and economy by the level of "consumption".

I submit that the healthiest economy for our great grandchildren will not be based on high levels of consumption, but instead on sustainability.

For the economy to transform into a sustainable model, there will be some suffering.

Unless like Reagan, Clinton, and Bush, a healthy economy is based on the four year picture.

[anaxarchos]

24. So is bubonic plague... n/t

[NYC_SKP]

26. total non-sequitur. Present economic "success" depends on growth. Growth is...

unsustainable if it's based on the consumer society we presently have.

Moreover, the "economic growth" of the past few decades as measured by the Dow and levels of economic activity, has depended largely upon the rich getting richer and globalism. If you like that sort of thing, fine.

Present an economic model that survives to the benefit of all into the next three generations, that doesn't require the collapse of much of the present situation.

Go ahead and try.

[BeyondGeography]

28. To your point, there was no meaningful "growth" this entire decade

Factor out the money people took against home equity loans and the temporary appreciation of home values, and 2002-2007 would have featured three years of growth of less than 1% and three down years. This came from Wilbur Ross on Squawk Box a couple of weeks ago. Wish I had a link, but we all know average HHI went down during the period, so it makes sense.

And before that, the Internet bubble drove plenty of ephemeral "growth."

The Obama Administration is the first in memory to try to solve the problem of how to create the foundation for real, sustainable growth. It's going to take more than 45 days.

[NYC_SKP]

30. Agreed on all points.

And yes, it's gonna take a bit longer than 45 days.
And longer still for people to understand what a real healthy economy looks like.

[anaxarchos]

29. Don't have to...

Thomas Malthus was discredited while he was alive.

Your solution is to ascribe the problem to "people", over-population, or whatever. Most people simply live the lives they are given. You don't like the choices? Fine, you have a problem with "free-enterprise" (Good... I do, too). You want nature or social crisis to do your work for you? Good luck with that.

[NYC_SKP]

31. Nature and social crisis are historically the most common precursors to major change.

It's happening right now.

Climate change or collapse of an unsustainable economic model.

Or both.

No luck needed, it's happening now.

[JoseGaspar]

42. Illogical conflation.

Natural crisis causes mega-change. Social crisis causes social change. I don't think you can account for the stagnation of Chinese civilization by pointing to icebergs.

[Abq_Sarah]

79. yeah, my employees just love it

When demand is down.

[Hippo_Tron]

87. Bingo, our lust for more junk is partly why we are in this mess in the first place

I support increasing programs to help people stay in their homes, pay their bills, and buy groceries and other essentials. But this problem is not going to be solved by just increasing consumption. We need to invest in our country both in the short term and long term.

Also, people forget that health care reform is coming pretty soon. That is going to to be a huge bail-out for working families as well as an essential investment in our nation's infrastructure.

[Occam Bandage]

22. I agree with you in that the administration needs to keep acting strongly, but

I absolutely disagree with your proposal that direct payments to citizens will do much of anything for the economy.

[Kurt_and_Hunter]

36. It would reduce longer-term costs

A money drop will not fix the economy. It would, however, do much to arrest some declines while other measures percolate through the system medium-term. I am not so naive as to think the economy just needs a swift kick in the ass. It needs way more than that, but first it needs a kick in the ass.

A money drop would be devoured by the hole in the economy just like anything else will. It would run its course and we would then continue back down.

But in the context of a broad set of policies leading to eventual sustainable recovery, short-term stabilization will make all other policies perform better. Momentum and velocity are real effects in the web of economic activities.

It makes an immense difference whether business X shrinks to a shadow of itself for a while or closes its doors for good. In the former case it can easily ramp back up and hire some people if things turn around. In the latter case there is much more drag on the process of rehiring people.

There are countless thousands or marginal situations in the economy; things that are 1) less costly to prevent than to fix after the fact, and 2) have a not insignificant effect on mass psychology.

Short term relief could keep millions of actors in the game for a while (small business game, mortgage game, buying new shoes game). Retaining maximum practical ongoing participation in the economy would be a multiplier of any subsequent recovery.

It's like the difference between preventive medicine and emergency room care. Solutions usually get more costly when problems are allowed to multiply.

And all I have said is independent of the moral dimension. There is an independent, albeit unquantifiable good to relieving some pain and anxiety through measures that would probably not even add much to the national debt long term.

And if Mister Krugman was right about Japan then we need to induce inflation for the sake of inflation itself so I am not as concerned with the monetary effects of a money drop as I might be in an environment where the Fed were not already largely out of the game.

FDR did too little too slow. Japan did too little too slow. I think our bias should be in favor of much and fast. I would be delighted if we could do a $ Trillion of infrastructure because that would be better long term, but it's too slow to arrest a mass psychology that will devolve well beyond what folks seem to be anticipating.

People are already going crazy. Only one stock on the NYSE is at an all time high today. It is a manufacturer of hand guns.

If things are the way they are today how will they be when 17 million households are underwater on their mortgage next year, versus 8.5 million today? When unemployment is 9.8%?

These are the administration's own predictions, not my gloomy forecasts.

[biopowertoday]

25. and unemployment is up to 8.1--much worse that predicted.....

and you are right. people are not buying. How can they with no jobs or fear of losing jobs which brings along no health insurance for so many.



http://news.yahoo.com/s/ap/20090306/ap_on_bi_st_ma_re/wall_street/print

Stocks turn lower after February jobs data

By MADLEN READ, AP Business Writer Madlen Read, Ap Business Writer 28 mins ago

NEW YORK – Wall Street gave up an early gain and turned lower Friday after a jobs report that was bad but not as horrific as many traders feared.

The Labor Department said Friday employers cut 651,000 jobs last month, and the unemployment rate jumped to 8.1 percent. The government also upwardly revised its December and January job loss figures to 681,000 and 655,000, respectively.

The readings were worse than analysts' estimates. Many market participants, however, had braced for even grimmer data, and so the market had an early bounce. But analysts believe there is little keeping them from sinking further.

"My sense is we haven't discounted all the negatives out there as of yet," said Rob Lutts, president of Cabot Money Management. He added that investors have to account for not only the gloomy data from the government and companies, but also the pessimism of other participants in the market.

[dkf]

27. I agree with you 100%.

They needed to triage the economy because everything else won't fall into place if we can't stabilize it.

The fact that Geithner has no people to help him out is ridiculous. Changing the subject to Healthcare shows me a lack of seriousness.

They are really screwing up.

[4lbs]

33. Yeah, other than the fact that health care costs are one of the main costs for many businesses and a

large reason for many family bankruptcies.

Other than that, there is no economic link to health care.

[Beacool]

32. Economists React: ‘Staring Into the Abyss’

Economists and others weigh in on the sharp drop in nonfarm payrolls and increase in the unemployment rate to 8.1%.

The recession is intensifying and the economy is rapidly shrinking. We are staring into the abyss. –Stephen A. Wood, Insight Economics

We suspect that the employment outcome would have been even worse in February were it not for unusual mild weather conditions across much of the country. Our favorite proxy for weather-related influences on employment — the “not at work due to bad weather” component of the household survey — came in at a much lower than normal reading of 199,000. There have only been three occasions in the past twenty years that showed a lower result for the moth of February. –David Greenlaw, Morgan Stanley

Is this good news or bad news? On the one hand, the new estimates suggest that the contraction in employment peaked in December with a 681,000 decline, followed by a 655,000 loss in January. In other words, the worst could be behind us. On the other hand, it turns out that the labor market was in an even worse state than we previously thought and any improvement over the past couple of months is marginal at best. –Paul Ashworth, Capital Economics

Job declines were widespread with losses in manufacturing and construction. The only bright spots remaining are health care & education, which reflect demographic trends. In contrast to the broad trend of declines in the private sector, government employment continues to grow. This suggests a change in the composition of the job market and economy. –John Silvia, Wachovia Economics Group

There is nothing redeeming about this employment report. The 0.5 percentage point increase in the unemployment rate is a fairly solid barometer of what is occurring in the economy. These job losses for February and the downward revisions are a function of sharp decline in economic activity in the final three months of 2008. Given the continuing slide in economic activity in the first quarter of 2009 there is a strong probability that over the next three months we will see a slow bleed in employment as the retail, financial and business services sector of the economy continue to shed jobs. –Joseph Brusuelas, Moody’s Economy.com

The new headline GDP number Within the major private sectors only education and health jobs rose, as usual, but the 29,000 gain was trivial compared to the losses elsewhere. Manufacturing and construction both lost fewer jobs than in Jan but services were worse, down 375,000 compared to 276,000. Retail losses have slowed to 40,000 average in the past two months, down from 90,000 in the previous two but the trend is still awful; business services losses are rising. Wage gains finally slowing; year-to-year down to a five-month low of 3.6%. Long way to go. –Ian Shepherdson, High Frequency Economics

Sharp, broad-based job losses continued into February, compounded by net downward revisions of 161,000 to December-January tallies. Manufacturing industries, which make up only 12.5% of private sector employment, accounted for 30% of the 2 million jobs shed from nonfarm payrolls over the past three months. For those looking for any signs of “second derivative” stabilization — in which the rate of decline stops increasing — nonmanufacturing employment offers a glimmer. The pattern of job loss has been relatively stable since November, and rising productivity suggests that this pace of job losses may prove sufficient to restore profitability. –Alan Levenson, T. Rowe Price

http://blogs.wsj.com/economics/2009/03/06/economists-react-staring-into-the-abyss/

I have two economists close to me, my brother who has two PhDs in economics and is an economist in France and Spain (he is very liberal); and a close friend who is a top economist in NY and a conservative. Neither one has much faith in the stimulus package and the overinflated budget makes them right down nervous. Me? What the hell do I know about economics.....

:(

[biopowertoday]

35. Wel, you are in the position

to know a whole lot more than I do. Thanks for the post.

[Beacool]

39. True.......

I always pepper them with questions. My brother (he's 14 years older) lives in Europe and commutes from France to Spain every few days. He hosts his own radio program in Spain on Saturday mornings. He has also written a few books on economics, no dope is he. Well, if an avowed liberal like him is unhappy about the American economic plan, then I get nervous too.

My friend, he is actually the husband of one of my best friends, is one of the top economists in this area. His comments are regularly printed in the business section of the WSJ and NY Times and he appears once in a while on CNBC. He's a conservative who was so disgusted with his own party that he registered as a Democrat so that he could vote for Hillary in the primaries. He believed that she had the better economic plan of the major candidates of either party (remember that she was talking about dealing with the mortgage foreclosures since 2007). Anyway, he's positively having hives over the economy.

I don't know, I wake up and sometimes I feel that this is just a nightmare.

x(

[biopowertoday]

45. I think

it is a nightmare. If I know more I probably would freak out. te he.

Anyway, bravo to your conservative friend---I do recall Hillary talking of that long ago.

later.

[laugle]

83. I'm in the

Real Estate profession and I remember Hillary saying she would put a moratorium on the foreclosures for 4 months. I just don't understand why Barack hasn't done this. 1 in 8 homes are now in foreclosure, and property values for everyone are in a major slide.

Banks have not been lending and I suspect they will resist re-negotiating underwater mortgages. I think all people should have access to lower interest rates, not just people underwater, this would spur a re-financing boom and might stop some of the declining values.

Also, I think that the tax on small businesses making more the $250,000 is a bad idea, since they employ almost 70% of the people. That really is not a lot of money if your business has 10 employee's. IMO, it should be a higher income, maybe 1 million.

My third point would be to do something about these greedy credit card companies; raising rates on everyone, closing their credit cards, decreasing their credit limits even on customers with high FICO scores. Obama says it will take a year to do anything about it, I think he's just kicking the can down the road and I don't understand it!

I'm not into bashing or blaming, I want people to have productive discussions about solutions.

I hope you will tell us more about solutions, since you have an in with your family/friends in the know.

I forgot, I have to get one bit of snark in; take that $7.00 borrowed from China, and stick it where the sun don't shine.................LOL

I feel better now............

[Yavin4]

37. You Honestly Think That Unwinding Trillions of Dollars of Defaults Should Be Quick and Painless?

You are extremely naieve if you believe that there some magic button that Obama can push which will mitigate the damage that's been done to this economy over the past 8 years.

This economy has to unwind trillions of dollars of defaulted loans and guarantees, and this process will be slow and painful. Whatever Obama does, it will be met with political opposition from both Dems and Repubs. Remember he's not a CEO running a company wherein he can govern by fiat. Rather he's the head of one branch of the govt., and the congressional branch can block him in a number of ways. The reason why the stimulus wasn't larger was because Dems. like Ben Nelson of Neb. threatened to veto it.

Thus, your call for "massive short-term transfers of money into people's pockets" is unrealistic given the current political climate.

[Kurt_and_Hunter]

40. You do not read very closely

If someone who agrees with the roster of thing you think I think shows up maybe they can debate you.

[TeamJordan23]

38. Geithner has been underwhelming, but Obama has great policies. nm

[leftofthedial]

43. every nickel they throw at Wall Street is wasted.

those banks are toast. Their boat is taking on water in such quantities that no government on earth--ALL the governments on earth--could not possibly bail them out.

But even if the government gave the three trillion bucks (or whatever they've wasted so far) directly to people, it would still only be about $10K per person, which is not enough to buy a car. It won't be enough stimulus.

I say give the whole Three Trillion smackers to the poorest 10% of Americans and see if it trickles up.

[Median Democrat]

46. What A Crock. In Less Than 60 Days You Expect An Immediate Fix?

What do you disagree with?

The mortgage plan?

The $800 billion stimulus?

The increase in taxes for people making over a quarter million?

The plan to allow bankruptcy courts the ability to revise mortgage terms?

That sounds like a lot of action to me in less than 60 days. Heck, what President accomplished more in his first 60 days?

[Numba6]

58. "I find false populist outrage quite... arousing." -- Jon Stewart

The shit stirrers of the world have to do something for attention, they don't get any in the basement of their parent's homes

[Kurt_and_Hunter]

74. Learn to READ

[Jennicut]

48. So we can have inflation after the government gives us all the worthless money it has?

The economy stinks but the stimulus was passed not even a month ago. To say the economy will take time to get better is an understatement. I wonder what FDR would have faced if there was internet and 24 hour news channels back then? Too many people talking over and over again in one big circle. We either spend money or don't spend money to get out of this. We only have a limited amount to spend. Some day it will get better. For those in the Depression it took years. This will take 1 to 2 years before any positive news comes out. The Repubs did this and yet Shrub gets off easy for not having to be around to face it.

[Numba6]

49. how'd this dupe post get there?

.

[Numba6]

51. Your ignorance of the reality of what Obama's done -- it's in Fox News territory

or at least CNBC

This administration has nothing to be proud of on the Economy front
It's an embarrassment and, much worse, a danger.

You seem to enjoy tearing down Obama at any opportunity. This is hardly the first time you've shown you know little about what Obama's actually done.

The embarrassment is that someone who might claim to be a Democrat or on the left would make such a statement.

Facts for the uninformed: "half hearted?" The Size of the Stimulus Plan is MASSIVE and there's more to come

Sometimes facts don't matter to people, we'll see if they matter now. I won't be holding my breath.

We'd be in Herbert Hoover land if the Republicans, or a conservative "Democrat" like Bayh or the DLC were in charge.

You seem to enjoy playing the role of the shit stirrer, it's all I've seen of you since I joined this board. I guess you like the smell.

Rush & his legion of doom applaud your principled stand against helping people!

"I find false populist outrage quite... arousing."
-- Jon Stewart

[ChiciB1]

55. I've Thought This & Have Heard Many Others Now Saying It... But Would It

or would it not be cheaper and wiser to give a substantial amount of money to every man, woman and child who makes less than a certain amount in America?

I'm no economist, far from it, but "to stimulate" means to pass the bucks around and it would benefit millions of people in America who are faced with no future. And since there are approximately 350 million people in the country, given the figures being thrown around, that's a LOT cheaper in the long run.

I'm sure there must be someone who can give me a good reason why this won't work, so as Rachel Maddow would say, "can you talk me down?" There must be some reason why those in D.C. have for not doing this, I just don't know enough to understand why not.

[geek tragedy]

56. 1) How do you propose to enact your proposal without

approval from both Houses in Congress?

2) Why do you think people who get a bunch of cash would spend it all on consumer goods instead of socking as much as possible away until they absolutely have to spend it?

3) What would this do to solve the housing crisis? Should people in underwater mortgages get a lot more money than renters?

[SemiCharmedQuark]

65. As it is, people here on DU are already talking about stuffing money under their mattresses

[Kurt_and_Hunter]

66. In order...

1) A tremendous amount of direct cash dispersal could pass Congress if presented as a tax cut. Say a one time tax year 2008 refund of all federal tax including FICA up to $5,000. That would not be optimal, but it would be similar and could pass. I would prefer to include low-wage workers and non-taxpayers if at all possible. But if politics restricted a money-drop to taxpayers it would still be a help.

The recent stimulus offered a good range of tax cuts, of course. But we ned a lump sum that feels to people that it changes their circumstances some... whether reality or perception.

Of course the first step in any such plan would be to ask for it and make a case for why it's a good idea. 90% of life is showing up.

It isn't correct to compare this politically to the bail-out or stimulus in political terms. Individuals would not riot to prevent themselves from getting a check. Opposition to other measures is not driven by the voters' deep sense of fiscal responsibility but by the sense that "their" money is being given to someone else. If "their" money were being given to them they would feel that this is their part of the stimulus effort to which they're entitled after seeing the banks, robber-barrons, deadbeats, etc.. get big checks. Once dangled before the voters it might be down-right dangerous to oppose.

2) I do not think people would spend it all. I have suggested, as an idea, a debit card that could be used for everything a credit card can be used for except cash advances or balance transfers, which would be a slight incentive to spend. But of course people could use it for necessities like utility bills and save the cash they would have used to pay the light-bill. All stimulus faces such problems. If someone gets a job building a bridge she might save most of her new income. Probably not, but if that's her choice there's no way around it. Fortunately, since a low savings base is one of our long term problems the effect is sub-optimal but not malignant. If someone saves $5,000 that is helping the bank somewhat. Same goes for paying down debt. It's not optimal, but not a disaster.

The near simultaneity of the payments would create short-term inflationary pressure just as a fact of human nature and that is probably a good thing. At this highly unusual point in time some level of inflation is our friend.

3) The housing crisis isn't something that can be solved by direct intervention in housing because when push comes to shove the homes really are too expensive by historical norms--even after all these declines--and people are poorer. It's a long, ugly problem that will hurt people no matter what.

But if someone has to leave their home I want them to at least be able to get a job, or have the two months rent needed up front to move into an apartment, or have the money to move somewhere where there are jobs.

Any substantial money-drop would have a positive short-term effect on both foreclosures and home purchases. I don't say a great effect, but certainly not negative. Even people with good steady jobs often have trouble amassing down-payments and a decent sized lump sum would increase the population of people who can even think about buying. "We have $4,000 saved, and $5,000 from the government and my parents will help us with $3,000..." (A lot of the most distressed properties are condos, duplexes, small houses... low end stuff where $5,000 makes a difference. And if it was $10,000 for a couple, a huge difference.

For people who cannot pay their next mortgage bill the effect is obvious. Their problem is money so money helps their problem. Perhaps not optimally, but it sure wouldn't hurt their situation.

[ProSense]

73. You're just throwing out opinions as if they have any real basis in fact

3) The housing crisis isn't something that can be solved by direct intervention in housing because when push comes to shove the homes really are too expensive by historical norms--even after all these declines--and people are poorer. It's a long, ugly problem that will hurt people no matter what.

But if someone has to leave their home I want them to at least be able to get a job, or have the two months rent needed up front to move into an apartment, or have the money to move somewhere where there are jobs.

What utter nonsense---as if every foreclosure is due to a lost job and the intervention has nothing to do with bringing rates down.

[laugle]

84. Your idea of a debit card is a good one!

It's better then $7.00 more on your paycheck. Also, Barack's plan cuts out the newly unemployed, people on disability, seniors, and spouses who don't work but file jointly. He promised stimulus checks and reneged on it. I'm surprised there is not more outrage.

[jonestonesusa]

57. I agree with you in part, that the economic team has much to do.

It took a lot of bad luck and bad decisions to get in this economic mess, and it will take more innovation than has been shown so far to get us out. I don't envy the job that Obama faces, but it's a job we desperately need done well.

IMO, short-term stimulus makes sense as part of a package, but there are opportunity costs to the stimulus that we must account for in the equation. Every time we throw $20 billion (AIG last weekend) or $120 billion (the first Bush stimulus) or hundreds of billions(Obama's/Bush's tax cuts) at the problem of demand, we're not creating transportation or education infrastructure. We're not giving aid to states, where $20 billion would make a HUGE difference in what's available for services. We're not helping our industries develop new business models that can carve out a new share of international markets. We're ignoring regions of our country that are suffering negative economic shifts (Michigan, Ohio, inner cities and rural towns alike). We're ignoring escalating energy needs and dwindling supplies. And the amounts of the bailouts keep climbing. While I understand that a crash landing of the economy would bring all sorts of problems, right now we're spending good money after bad.

What I'd like to see in a stimulus package is greater aid to states because they spend money in more targeted and efficient ways, moderating the pace of tax cuts so we do not create a devastating fiscal hole (and that's where even Obama has to stop playing politics with the popular notion of endless tax cuts), and a SERIOUS ECONOMIC SUMMIT that gives us a chance to evaluate what future industries will thrive in the private economy. Green technology, light rail so that metro systems can build connected and powerful regional economies, MICRO-LENDING and a small business Marshall Plan so that entrepreneurship can thrive beyond the corporate level, this would be where I would start.

Anything too big to fail that eats up money by the tens of billions is no longer a good investment.

I hope fervently that the economic conversation at the presidential level continues, and Obama is not hesitant to bring in new talent if Geithner, Summers, etc. prove to be not up to this monumental task, and I'm not personally confident in that team, sad to say.

[Name removed]

59. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Numba6]

60. Facts about Obama's plan don't matter to those who won't read them

It's the shit stirrers of the world that get all the attention.

Facts for the uninformed: "half hearted?" The Size of the Stimulus Plan is MASSIVE and there's more to come


"I find false populist outrage quite... arousing."
-- Jon Stewart

[vaberella]

61. I'm so thankful you're around Frenchie...seriously.

Between you and Babylonsister, I stay sane.

[Yavin4]

63. People Are Having A Hard Time Adjusting To This Crisis

There are still people who believe in the quick fix, and the irresponsible news reporting on CNBC is feeding them this myth.

This is an economic crisis of epic proportions which will fundamentally change how we live for years going forward.

[FrenchieCat]

64. There are folks who want the President to fail,

and are looking for any excuse not to give him anytime
for his attempts in righting the ship to take hold,
let alone take effect.

Far as I'm concerned, they aren't worth a damn thing.
They might as well go get jobs with CNBC,
since that is who they are parroting anyways!

[ProSense]

70. "administration really is screwing the pooch on the economy...because they don't get it" BS

More pretend experts.

[Name removed]

71. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

75. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[anonymous171]

76. WE NEED JOBS NOT STIMULUS CHECKS. nt

[Ikonoklast]

77. More doom and gloom from the OP.

"The administration really is screwing the pooch on the economy, primarily because they don't get it."

Your solution was examined and discarded by people that see exactly what is happening in the mortgage markets with ARM resets looming. What you are advocating is a short-term fix of consumer spending that will not have any impact on declining real estate values.

You got the cure and the cause inverted.

[Grateful for Hope]

78. "More doom and gloom from the OP"

I have been noticing this, and, it does surprise me that, after only 45 days in office, the OP has such unrealistic expectations of our President.

It does get old after awhile.

[quiller4]

81. The administration does get it and demand is already improving

in some sections of the country. I live in Washington state. Our retail numbers were better in February than January. While condo values and sales are still dropping, median home prices actually increased last month in King, Pierce, Thurston, Whatcom, Spokane, Yakima and Skagit counties. Washington was the first state to pass the enabling state legislation necessary to accept federal stimulus dollars. Local economists analysed the February sales figures and say just the promise of job creation has been enough to spur demand.

Demand can pick back up even while people are underwater on their mortgages. Consumer demand and unemployment rates inproved throughout the 1930s but home values didn't return to their 1928 values until well into the 1940s.

[crimsonblue]

82. In case you didn't get it,

it is Congress that makes laws and divvies out the money. Doh!

[CTLawGuy]

86. if a person does not have a job

he or she will NOT spend the extra money given to him or her, because he or she is worried about the long term. If you create JOBS, you will get people spending again, because they will know that they won't be up the creek without a paddle tomorrow.

[SunsetDreams]

88. This OP is an embarrassment

[Uzybone]

89. I wonder where all these economic experts were 2 -3 years ago

When we were bing duped by the billions. Now the chickens have come home to roost, and everyone is pointing at the guys who want to change how the game has been played.

When the DOW was shooting up no one wanted to look under the covers.

[TexasObserver]

90. They get it. You don't.

I'm pleased with the administration's actions. You're naive if you think they could have done anything to alter our current course.

[freemarketer6]

92. Excellent! A shift is now occuring.

dd

[TheKentuckian]

93. There is nothing to fill the hole left in the economy by the shenanigans of the robber barons

There is no mechanism to make up for the 14-50 trillion that underwent sudden existence failure. All we can do is put a floor in. There is no possibility of a stimulus equal to a year or more of the entire world's GDP required to reboot the system. Let's give the next generation clean renewable energy, health coverage, and a top notch education. That is a foundation they can build a decent world from but the world we grew up in is over.

[tonycinla]

94. Time will tell

A large part of being successful whether you are a general ,football coach or president of a democratic country is your ability to inspire and lead people,especially in difficult times.You can be very intelligent and knowledgeable and still not have this "gift",think George Will.It is a visceral thing.If Obama cannot by the strength of his personality motivate and convince a critical mass of powerful people and leaders in this country to accept and actively work for a large part of his programs it is not going to work.Even if only 35% of the people oppose him ,or even perhaps less,if these people have their hands on the levers that move this country He will fail unless he finds a way to motivate them to be on his team.This is part of what is blocking his progress now.

[freemarketer6]

95. Time is telling now. Obama at 56 % approval by one of the two

polls most accurate on the last election day, and, I believe, the one before that.

http://www.rasmussenreports.com/public_content/politics/obama_administration/obama_approval_index_history

[Number23]

97. LOL

[mvd]

98. Obama's doing fine on Gallup

Rasmussen's national election poll might be ok, but everything else has been suspect.

[freemarketer6]

99. You could be right. I don't know much about polls, but I think I heard

Gallup poll results can be bought.

[mvd]

100. Not sure about that, but..

personally I don't trust the Repuke Rasmussen, especially on approval ratings.

[firedupdem]

101. Bullshit and you know it. n/t

[freemarketer6]

102. I'll demur on that one. I'll research polls today, to see what other

ones have to say. Thanks for your succinct response.

[firedupdem]

103. sure you will. n/t

[tonycinla]

105. Not the same

56% of the people does not always translate into 56% of the power in a country.I am not sure if you took the combined power,position,wealth,expertise,experience etc. of those who voted for Obama and weighed it against those who voted against him ,it would "weigh" more .In fact I think it would weigh less.He needs a substantial number of the titans of industry and business on his team or his programs will fail.Anybody can take over any position anywhere and say "things are going to get worse before they get better".

[cooolandrew]

104. The President's called it so right on so many things that I rely on his better judgment on this >

one. As great as Krugman is from all I have heard an economy is open to vast amounts of interpretation. I think the President is doing the best he can with the political will he has, if he could do more I imagine he would. No matter who we had selected this would be the best bill would could of hoped for given the congress we attained. More help is down the line. Now given a more honest media Republican senators who put America first no doubt a bill that you suggest could get past but in the parameters we got he did amazing. I'd imagine single payer would be on the table too, if the political winds blew the right way. So, things will take time and work and that's all we can do.