Rolling US Economy Into The Shitbin Thread

I'm smarter than that and so are you tipsy. But let's not turn this into whose dick is bigger, okay?

I'm not advocating a bigger stimulus and yes, I'm saying that things are FAR worse than Obama said they would be w/r to employment. He trotted that chart out as evidence in January and it was wrong. People like me were highly skeptical of his claims at the time--not necessarily because we knew or know the right level (or even scope) of stimulus, but because by dumbing down the stimulus into some retarded, politically optimistic employment number was absurd to the point of being cynical.

I never advocated "doing less about it"--that's an argument you're making for me because it's convenient for you. But if you take an honest look at the stimulus package, you'll see that a huge chunk of it is a mind boggling political payoff. I think most economists agree a stimulus was in order, but there was a wide ranging debate on the tactics and how to employ it. The question here isn't maybe whether or not to pass a bill, but what the hell did the bill actually do, what actually worked and what didn't. Is it possible that the stimulus stabilized the economy but was horribly efficient in preventing rising unemployment? Is it possible to argue that the stimulus worked on some levels and failed on others?

The point I'm making is that Obama was wrong, wrong, wrong on how his stimulus would increase employment. But he--like any other pol--will simply move the goalpost and argue something that can't be proven (that without it, things would be worse, worse, worse!). Would things be worse? Which things would be worse? I guess we'll never know so why bother caring. My president--a guy I proudly voted for and like, despite his mediocrity--got what he wanted and now we have to live with it.

My fear--outside any philosophical or political reservations I have on healthcare reform--is that on the eve of committing trillions to our economic liability and obligations, we're asked by the same people to trust their economic projections. But as Bobby Knight once said...eh, why even bother to bring that up.

("horribly INefficient in preventing rising unemployment", obv)

The question here isn't maybe whether or not to pass a bill, but what the hell did the bill actually do, what actually worked and what didn't

I don't recall an alternative stimulus proposal offered by the GOP (not trying to be snide; I only recall general opposition to the notion of further gov't spending to jump-start the economy).

Obama was wrong, wrong, wrong on how his stimulus would increase employment.

Your own graph contradicts you: Obama said the stimulus package would make unemployment rise less than it would under other scenarios under consideration. Not that it would actually add net jobs. This graph doesn't speak to that at all.

The important thing here is that the worldwide economy almost collapsed last year and we should be mad that the magical Hope president can't fix everything in 10 months.

No unicorns, either. I was promised magic unicorns.

Tax cuts, people.

I mean he said "Hope" and everything is not completely back to 'normal' so that's just outright lying to us.

I think a round of GOP style tax-cuts, minus a stimulus bill, would have us facing a depression.

C'mon, you know you want to live Mexico City-style, with high thick walls around your house topped with broken bottles in cement to keep out the unsuccessful.

i wonder what bush's graphs looked like in 2007

or what senate republicans' graphs look like now; do they do graphs? maybe ron paul has a graph he could share

y'all get a load of this?

It took just five weeks after the WorldCom accounting scandal erupted in 2002 for Congress to pass, and President George W. Bush to sign, the Sarbanes-Oxley Act. That law required public companies to make sure their internal controls against fraud were not full of holes....

Sarbanes-Oxley was passed, almost unanimously, by a Republican-controlled House and a Democratic-controlled Senate. Now a Democratic Congress is gutting it with the apparent approval of the Obama administration.

The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009 — a name George Orwell would appreciate — to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well.

Some veterans of past reform efforts were left sputtering with rage. “That the Democratic Party is the vehicle for overturning the most pro-investor legislation in the past 25 years is deeply disturbing,” said Arthur Levitt, a Democrat who was chairman of the Securities and Exchange Commission under President Bill Clinton. “Anyone who votes for this will bear the investors’ mark of Cain.”

http://www.nytimes.com/2009/11/06/business/06norris.html?_r=1&ref=business&pagewanted=print

yeah i honestly don't understand that at all. what the fuck are they doing?

serving their paymasters?

is that what they tell their children?

sounds like companies worth under 75 mil won't be audited anymore, but it's all up in the air, and it has to go through the senate first

http://dealbook.blogs.nytimes.com/2009/11/05/committee-allows-a-break-on-certain-auditing-rules/

By a vote of 37 to 32, the House Financial Services Committee moved to permanently exempt companies worth less than $75 million from the auditing provisions of the Sarbanes-Oxley Act, a change that was promoted by the White House chief of staff, Rahm Emanuel.

The amendment was criticized by senior Democrats, including Representative Barney Frank of Massachusetts, the chairman of the committee. But at a news conference on Tuesday, Mr. Frank defended Mr. Emanuel’s involvement, saying he had helped to negotiate a substantial narrowing of the provision.

The companies that would be permanently relieved of auditing requirements under Sarbanes-Oxley have repeatedly won temporary exemptions from the Securities and Exchange Commission. The amendment approved by the committee was sponsored by two New Jersey congressmen, John Adler, a Democrat, and Scott Garrett, a Republican. Supporters said the more stringent auditing provisions were overly burdensome to small companies and that easing them would encourage job growth.

Consumer groups said the provision had no place in a bill that its sponsors say is supposed to help protect investors.

“The supporters of this amendment, including apparently the White House, have suggested that weakening protections against accounting fraud is justified in order to promote job growth,” said Barbara Roper, director of investor protection at the Consumer Federation of America. “That is precisely the sort of thinking that landed us in the current mess and precisely the sort of thinking Democrats criticized when they were blaming Republicans for the current financial crisis.”

The bill, part of a broader effort to overhaul the regulatory system in response to the crisis in the financial markets, would provide new powers and increased resources to the Securities and Exchange Commission. The legislation, approved 41 to 28, would give the commission the authority to end mandatory arbitration agreements that investors must sign with their brokers and financial advisers. And it would establish a whistle-blower bounty program for Wall Street employees.

I for one welcome our new wall street overlords

f you take an honest look at the stimulus package, you'll see that a huge chunk of it is a mind boggling political payoff

don last time you said this i asked for examples but i don't remember you giving any. what "huge chunk"? this was a republican talking point in february, when they were making a big deal about a couple little items (contraception is one i remember) that got removed from the bill. what "political payoff" are you talking about? as far as i know the package was mostly some extended or increased benefits (unemployment, food stamps), some aid to state and local governments, some tax cuts and some infrastructure spending. in other words the kinds of things governments usually spend stimulus money on.

and the white house wasn't wrong about the basic situation: that unemployment was going to get worse and the economy needed stimulus spending. it just used the least-apocalyptic of the forecasts available to it, partly in response to criticism from the right that it was "talking down" the economy. so unemployment is worse than their forecasts, as lots of people predicted. so what? how does that change anything, except to bolster the case that the stimulus bill should have been bigger?

anyway, here's what mark zandi (who argued for a bigger package to start with) said last week:

The fiscal stimulus is also working. The American Recovery and Reinvestment Act passed early this year has reduced payroll tax withholding, sent checks to Social Security recipients, and provided financial help to unemployed workers whose normal benefits have run out. The cash for clunkers program revved up vehicle sales, and the housing tax credit has boosted home purchases. It is no coincidence that the Great Recession ended just as the stimulus began providing its maximum economic benefit (see Chart 1). The stimulus is doing what it was supposed to do: short-circuit the recession and spur recovery.

Criticism that only $175 billion of the $787 billion stimulus plan has been distributed through tax cuts and increased government spending is misplaced (see Table 2). What matters for economic growth is the pace of stimulus spending, which surged from nothing at the beginning of the year to about $80 billion in the third quarter. That is a big change in a short period and is why the economy is growing again after more than a year.

The part of the stimulus providing the biggest bang for the buck—the most economic activity per federal dollar spent—is the extension of unemployment insurance benefits (see Table 3). Workers who lose their jobs before the end of 2009 can temporarily receive more UI, food stamps, and help with health insurance payments. Without this extra help, laid-off workers and their families would be slashing their own spending, leading to the loss of even more jobs.

Federal aid to strapped state and local governments also is providing significant economic benefits, lessening their need to slash programs and jobs or to hike taxes and fees. State and local tax revenues have fallen by nearly $120 billion during the past year, but government expenditures have merely gone flat, because federal grants in aid have soared by almost $110 billion (see Chart 2). The decline in income, sales, property and capital gains taxes has been unprecedented and shows only marginal signs of abating.

...Criticism that infrastructure spending funded by the stimulus has been slow to get started is valid. But this is partly because safeguards against funding unproductive or politically driven projects have slowed things down. Infrastructure projects are now gearing up, however, and this will be particularly helpful next year, when the recovery will still be fragile.

Although the recession is over, the economy is struggling. Job losses have slowed significantly since the beginning of the year, but payrolls are still shrinking, and unemployment is still rising. The nation's jobless rate will top 10% in coming months—higher than the Obama administration forecast when it was trying to get the stimulus passed early in the year. That fact, however, says nothing about the program's efficacy. If anything, it suggests the $787 billion stimulus was too small. Administration economists, like most private forecasters—including Moody's Economy.com—underestimated how hard the financial shock would hit the U.S. job market.

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yeah i honestly don't understand that at all. what the fuck are they doing?

― Tracer Hand, Friday, November 6, 2009 12:42 PM (7 hours ago)

serving their paymasters?

― Your Favorite Saturday Night Thing (Dr Morbius), Friday, November 6, 2009 12:45 PM (7 hours ago)

lol'd

if anyone should be saying "told ya so," it's krugman.

Done.

http://www.nytimes.com/2009/11/06/opinion/06krugman.html

don last time you said this i asked for examples but i don't remember you giving any.

http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI=
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/12/AR2009021203502.html
http://www.usnews.com/money/business-economy/articles/2009/02/19/finding-the-pork-in-the-obama-stimulus-bill.html
http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html

and the white house wasn't wrong about the basic situation: that unemployment was going to get worse and the economy needed stimulus spending.

nobody was wrong about that assessment. The argument all along was how to do it. "We're all Keynesians now", right?

Anyway, here's this too:
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/06/AR2009110601900.html

If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.

i mean: why does it matter where the money goes, as long as it goes somewhere besides a bank account?

because tax cuts.

A new alliance of battery companies won $2 billion in grants and loans in the stimulus package to jump-start the domestic lithium ion industry. Filipino veterans, most of whom do not live in the United States, will get $200 million in long-awaited compensation for service in World War II.

The nation's small shipyards also made out well, with $100 million in grant money -- a tenfold increase in funding from last year, when the federal Maritime Administration launched the program to benefit yards in places such as Ketchikan, Alaska, and Bayou La Batre, Ala.

oh no!!! if those battery companies and shipyards get more money, why, theyll... theyll... hire new workers

yeah, don, none of those articles come anywhere close to substantiating your "huge chunk" of "political payoffs." like, they're indicting the entire $8 billion in high-speed rail spending because some of it might go to an l.a./las vegas train. (which doesn't in itself sound like a bad thing, tho obviously harry reid probably likes it.) and what's wrong with an icebreaker for the coast guard? these are just the same old republican squawking points from february, which were designed to baffle and confuse people who don't understand what "stimulus spending" is. while you're at it, why not trot out bobby jindal's "omg volcano monitoring!"

as far as i can tell, the republican definition of "real stimulus" is anything the democrats aren't doing. but it's about what i'd expect from the least economically literate group of politicians i've ever seen. modern conservatives have basically proved george bush sr. right -- they really do treat economics like it's voodoo, like it's all about reciting the right words in the right order: government bad, markets good, privatize privatize privatize. "stimulus" must be bad (even if they don't understand it), because it's obama magic. and since the unemployment rate keeps going up, it just shows that OBAMA MAGIC BAD!

$50 million for the National Endowment for the Arts
$380 million in the Senate bill for the Women, Infants and Children program
$300 million for grants to combat violence against women
$2 billion for federal child-care block grants
$6 billion for university building projects
$15 billion for boosting Pell Grant college scholarships
$4 billion for job-training programs, including $1.2 billion for “youths” up to the age of 24
$1 billion for community-development block grants
$4.2 billion for “neighborhood stabilization activities”
$650 million for digital-TV coupons; $90 million to educate “vulnerable populations”

MORE POLITICAL PAYOFFS

i mean the truth is the only thing i can find in any of those articles that wont in one way or another stimulate the economy is the payout to the filipino vets and... we kind of owe them

yeah what's a billion here or there among friends, right? I guess a billion isn't a huge number to anyone anymore. You know how those million or billion dollar line items get parceled out, right? You know how the oversight on those appropriations works, right?

I guess when it comes to Obama-driven spending, all of it is appropriate and can't be criticized, no matter the amount or the result and we'll just deny the political elements of the process. The only criticism can be that we have not spent enough, not that--god forbid--some of the stimulus could be directed towards different sources or--god forbid--delivered more efficiently. The time for discussion is over. The rich are still too rich. Businesses are still making too much off of the back of workers. Profit margins are still too high. We need to give Obama whatever he wants for round two because round one--with it's creation of "more than 600,000 jobs" was a raging success.

now youre not even making an argument, youre making a straw man

i mean--is your argument that the stimulus could have been given to more deserving sources or delivered more efficiently? because, like--"duh"

you know what else could have happened, is that people could have not invested heavily in mortgage-backed securities

I guess when it comes to Obama-driven spending, all of it is appropriate and can't be criticized, no matter the amount or the result and we'll just deny the political elements of the process.

i mean, i still dont have any clue what this means?? what is the "result" youre referring to so obliquely here? why does the fact that government spending is a political process bother you so much??? whats the alternative??

what is the "result" youre referring to so obliquely here?

The result is that not very many jobs were created from the stimulus program thus far. Given that Obama's goal was to put together a program that "not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term." Where are the jobs?
http://www.google.com/hostednews/ap/article/ALeqM5jMNoef6xDenBbHWO0Im6rIjDmAgAD9BKKBIG0

maybe the jobs are coming down this slick pipeline
http://www.usnews.com/money/business-economy/articles/2009/02/19/finding-the-pork-in-the-obama-stimulus-bill.html?PageNr=2&-C=

why does the fact that government spending is a political process bother you so much??? whats the alternative??

Wow. Just wow.

can u answer that question or no

the most "political" part of the stimulus process had nothing to do with a few small projects here or there and everything to do with making it smaller than it should have been so that blue-dog dems (and, what, 3 republicans) would vote for it.

and for all the incoherent bitching and whining from the right, i've heard very, very few ideas about what would have made the spending "more stimulative." it's all well and good to say "create jobs," but that's not just a rub-the-magic-lantern thing. infrastructure projects actually take a little time to get rolling. the idea of a payroll tax holiday has some support on the left and right and is maybe a potentially stimulative thing, but for the most part the right has no actual ideas, didn't want any stimulus spending in the first place, and at this point is just in a mode of rolling out that graph every month on unemployment-rate day so they can go NYAH NYAH, and fervently hoping things keep getting worse and stay bad enough that they'll be able to retake the house next november -- so they can get back to doing all that really important, productive stuff they did from 1994-2006.

Where are the jobs?
dude this is the worst recession in 70 years. shit wasn't gonna turn around just cuz bush no longer "steered" the ship of state anymore. wake me up in a couple years when your eagerness to criticize obama makes more sense

i'll agree that the white house presenting that chart was a mistake in all aspects.

im not so sure. doesnt it imply the need for further stimulus, because the problem was worse than we thought? if anything being conservative the first time thru lets them get away with more the 2nd time right?

votes are harder to get now though. which sure demonstrates more integrity than we're used to, but "skeptics" won't budge from their conviction the stimulus was completely political to begin with. anyways whatever krugman was right -- they should have gone big or gone home

I don't know of one credible economist who thinks or thought that a stimulus was unnecessary. There was a wide variety of ideas of how not only how much to spend, but how to spend it.

But here's why (as abanana noted) the chart was a mistake. I think this is point I've been trying to make (and have been admitted retarded in my execution, which likely shocks no one.):

One interpretation is that the fiscal stimulus has failed to achieve what Team Obama thought it would. Another interpretation is that the baseline was worse than they believed at the time. I am confident the report authors would adopt the second interpretation. If so, that fact is consistent with what I said in a previous post: In light of the shifting baseline, it is impossible to hold the administration accountable for whether its policies are achieving their intended effects.

Pressers like these pretty much show that there's a lot of SWAGging going on when it comes to measuring the effects of the stimulus. We're not likely to have much concrete evidence for years, as far as causal relationships go. Inadvertently or not, a lack of compelling evidence makes these issues far more political.

It not only makes accountability impossible, it feeds people like me with skepticism for all the new charts that are bandied about with regards to $1.1T in healthcare reform.

god, give me a break. i'm so tired of hearing this same stupid bullshit every month when the unemployment rate comes out. "ooo, lookit the chart! lookit the chart!" it's silly to treat their estimates of unemployment as a "baseline" -- that's just a willful and totally political-hack distortion of the situation. if you were somebody arguing for a bigger stimulus, like krugman et al, then you're totally justified in now saying "told ya so." if you were somebody arguing for a smaller or no stimulus -- like the republican party and right-wing media -- then it's total chicanery to now be complaining about the stimulus not "working" because things are even worse than the white house estimates. it's a level of intellectual dishonesty that doesn't even deserve the adjective "intellectual."

and i've spent too much time this past year having this same idiotic discussion with people who couldn't care less about any of this shit except insomuch as it's a chance to go NYAH NYAH OBAMA. so i'm stopping now. you can come back next month and do your same little chart-dance and i won't say a word.

I don't think anyone in this thread is treating their estimates as a baseline. maybe the michaelscomments blog guy is.

mankiw is in the link dandy don posted, and don is apparently too. both of them presumably know better.

"Last month, Sunoco became the first oil company to say it will close a U.S. refinery, a ploy aimed at getting that segment to break even this year. All of the units at Eagle Point plant in Westville, N.J., ceased production this week..."

So demand for crude is down so much that we’re actually closing refineries in this country, but the price of crude is up 150% since the beginning of the year. Makes sense, right?

Thanks to my friends in the commodities business for pointing this out. We continue to see pricing in the commodities markets that is disconnected from reality, which makes it all the more distressing that the bill currently being shepherded though Barney Frank’s Financial Services Committee (and which still has to be reconciled with an AG committee bill) seemingly doesn’t do a whole lot to correct these problems.

http://trueslant.com/matttaibbi/2009/11/08/commodities-casino-keeps-rolling/

I guess it won't be taken seriously, since it's from the "Democratic Socialist" Senator from Vermont, but there's a beauty in the simplicity of this ''too-big-to-fail'' bill.

So while Congress is busy working on reform legislation, Wall Street’s lawyer-lobbyists in Washington are working hard to neutralize such efforts.

Who’s winning? Over lunch across town from Capitol Hill, I recently asked that question of a very smart attorney endowed with deep experience in keeping Washington safe for Wall Street. In answer, he pointed to this seven-line paragraph buried in a 26-page amendment to “HR 3795, Over-The-Counter Derivatives Markets Act of 2009,” passed in a voice vote by the House Agriculture Committee the night before. Following the vote, the committee had issued a press release hailing their vote for “strengthening” regulation.

On the contrary, said my friend, “I guarantee you that not a single member, and almost certainly no one else, apart from the traders on Wall Street and the lobbyist who inserted it on their behalf, understood the significance of this paragraph. It means that nothing will change.”

http://counterpunch.org/andrew11112009.html

Bob Herbert:

Mr. Obama announced this week that he would convene a jobs summit at the White House next month to explore ways of putting Americans back to work. It remains to be seen whether the summit will yield anything substantial. But it’s fair to wonder why the president and his party have not been focused like fanatics on job creation from the first day he took office.

It was the financial elites who took the economy down, and it was ordinary working people, the longtime natural constituents of the Democratic Party, who were buried in the rubble. Mr. Obama and the Democrats have been unconscionably slow in riding to the rescue of those millions of Americans struggling with the curse of joblessness.

We’ve been hearing that there are six unemployed workers for every job opening in the U.S., but even that terrible figure is deceptive. There are 25 unemployed construction workers for every job opening in their field, and more than a dozen for every opening in the durable goods industries, according to the Center for Labor Market Studies at Northeastern University in Boston.

This was not a normal recession, and we are not on the cusp of anything like a normal recovery. The unemployment rate for black Americans is 15.7 percent. The underemployment rate for blacks in September (the latest month for which figures are available) was a gut-wrenching 23.8 percent and for Hispanics an even worse 25.1 percent. The poverty rate for black children is almost 35 percent.