Dear Mr. President, Please Call Paul Krugman!
As usual, Nobel Prize winning economist Paul Krugman was right. President Obama’s jobs & tax cut bill (i.e. the stimulus) was too small. Krugman, economist Dean Baker, Joe Stiglitz (also a Nobel winner) and some members of the Obama economic team (is this why Christina Romer left?) knew it at the time. The President proved that when you’re cautious to a fault, you lose. Today, the great Krugman gets a well-deserved “I told you so” moment.
The Fed Admission & Republican Sabotage
As Robert Reich has posted yesterday, the Fed’s injection of $600 million to keep long term interest rates down is an admission that the jobs & tax cuts bill (a.k.a. the stimulus) was too small. The problem is that it won’t be effective since the current problem is not a lack of money to lend, but a lack of demand and credit-worthy lendees, for lack of a better term.
What’s needed is more government spending in the short term and a long term commitment to reducing the deficit that doesn’t tamp down the recovery. According to economist Dean Baker of the Center for Economic and Policy Research, we suffered a $2 trillion loss in annual demand (consumer, residential real estate and commercial real estate combined). To make a substantial dent in that, we needed to get money in the hands of middle class consumers to the tune of $1.2 trillion in a year.
With growing income inequality, a lack of demand and banks flush with cash, we’ve set the stage for another bubble. Yet the Republican House has every incentive to follow the tactic of the Republican Senate minority of 2006 to present — stop everything. Their formula is to prevent any jobs bills from passing, wreak havoc on the middle class, let Wall Street run wild again, and hope that torturing the middle class and the poor while sucking up to Wall Street will lead them to victory in 2010.
The problem is that the strategy is a formula for economic ruin, the kind of ruin that can lead to another lost decade and the decline of the United States into a second world nation. We will never be Somalia, but if Republicans get their way, we might just get half-way there…not that they care.
Meghan McCain – what her father used to be
Like her dad, she’s an extreme conservative on most issues, but she’s liberal on some social issues, knows little about economics, is no fan of Karl Rove and is more than willing to take shots at fellow Republicans like Christine O’Donnell. She’d probably be a better member of the House than any of the whack-jobs they put in office Tuesday. It’s clear she is no fan of the Palin-Tea Party wing and it’s easy to imagine her following in her father’s footsteps in about 5 years.
Run, Nancy, Run!!!
Nancy Pelosi is running for Minority Leader!
What Obama and the Democrats need is more toughness, conviction and courage. Nancy Pelosi knows she did the right thing, pushing through an agenda to modernize America and make it more competitive in the world by having a health care system for almost everyone and an economic system that serves everyone, not just multinational corporations that will never get enough middle class blood.
Like 2002, this election proved that Democrats lose when they act Republican-lite. Bill Clinton is often held up as an example, but no one can say that his signature act (the 1993 Recovery Act) was Republican in any way (not a single one voted for it) and he always fought for the middle class (sometimes expediantly dropping resistance to GOP efforts to make life tougher on the poor).
So I’m pulling for her 100% for minority leader. And with the progressive caucus in tact while the Blue Dogs were crushed in the election, she just might win it!!!
Rasmussen = Republican
Rasmussen polling overestimated Republican performance in over three-quarters of its races Tuesday. On average, Republicans performed almost 3.9% worse than Rasmussen predicted, by far the worst of all pollsters. This confirms a long-held belief in political circles that Rasmussen’s polling has a substantial Republican bias.