Rolling US Economy Into The Shitbin Thread

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.

Elizabeth Warren on credit card interests rates, bailout money, and why plutocracy reigns supreme.

great great blog: http://fourteenpercent.typepad.com/

don't know if this blog is great or not, yet: http://firelarrysummersnow.blogspot.com/

Fabulous Frontline episode last night about the credit card companies.

http://www.andrewrosssorkin.com/?p=386

Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6962632/America-slides-deeper-into-depression-as-Wall-Street-revels.html

not having the DJIA widget and screaming dollar bill on top makes me sad

It was tough for me to watch the market inexplicably surge over the last couple months so I dont miss it much.

Re: market surging. Rescuing the economy from collapse entailed installing a huge money-chute with its terminus in Wall Street and the Fed and the Treasury pouring huge amounts of cash into the top end. The result is a certain kind of success, albeit a success that still tastes like a lollipop dropped in hair clippings, but at the final cost of no change to the system.

One million American families lost their homes in the fourth quarter.

Jesus fucking Christ. lot of human misery in that statistic.

not having the DJIA widget and screaming dollar bill on top makes me sad

cosign

First our economy is like "Hey, here's a home that's four times the size of what you need!" And then it's like "Give that back. Now you don't have a home at all!"

http://www.time.com/time/business/article/0,8599,1953136,00.html?xid=rss-topstories

Goldman received $12.9 billion when the government bailed out the insurer.

In all, the firm is expected to have earned $12 billion in 2009.

I'm assuming these 'earnings' are including taxpayer money.

The $2 trillion conjured up by the Federal Reserve to buy toxic assets at face value is not taxpayer money. And Goldman Sachs was one of the biggest beneficiaries when the feds bailed out AIG and decided to honor its contracts on CDOs.

Didnt every bank basically profit off of federal guarantees and assurances along with 0% interest rates? This is why these fuckers getting huge bonuses pisses everyone off.

But... but... they were smart enough to be on the receiving end, weren't they?

I'm assuming these 'earnings' are including taxpayer money.

― Adam Bruneau, Wednesday, 13 January 2010 16:52 (2 hours ago)

Actually I don't think so - Goldman Sachs paid back its TARP money in the middle of the year IIRC.

TARP was only the most prominent and direct taxpayer subsidy. GS has profited enormously from the more indirect and less obvious taxpayer subsidies cited in my post above. The AIG takeover resulted in an enormous windfall for GS.

http://www.cnbc.com/id/34842647

Just look at the slaughter across the board: BofA, Citi, Morgan Stanley, Goldman, JPMorgan — all of them down 2.5 to 3.5 percent. This had nothing to do with China. What it’s all about is a ridiculous bank-tax proposal that is anti-growth, anti-capital, anti-profits, anti-shareholders, and anti-bank-lending.

the best thing about this is as of now the live bank quotes are all in the green.

Link above proves Larry Kudlow is either as ignorant as mud, or he hides his knowlege very well.

jobless rate to stay above 8 percent until 2012

it's alarming and all, but i think it's disingenuous to blame it on "the downturn." the downturn was the popping of an unsustainable bubble. it's possible that the united states is going to have persistent unemployment at a rate that would have been unthinkable not long ago, but that has more to do with structural problems in our society and economy, and the acceleration of global trade, than with "the downturn."

Agreed.

I feel the same way about the term "wealth destruction" - the wealth wasn't really there to begin with.

Anyone have any thoughts about Obama's bank plan / Glass Steagall 2?