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In what I conjecture is an end-run around the Wall Street types that currently dominate the economic advice President-elect Obama is getting, former Clinton Secretary of Labor Robert Reich late this afternoon uploaded a blog on TPMCafe entitled The Mini Depression and the Maximum-Strength Remedy. Reich writes that we are not in as bad shape as the Great Depression, but we are in worse shape than a "normal" recession. So, he calls it a "mini-depression." And he writes that the real problem is NOT the failure of banks to start lending again, but the collapsed earnings of American workers who have now tapped all available sources of credit, and are moreover holding back because they fear they may soon lose their jobs.

There's more downstairs

Reich argues the answer is a massive stimulus program of spending on infrastructure, and uses the figure of $700 billion. Reich then warns that there are two camps opposed to this idea. First are the conservative supply-siders who will demand tax cuts instead of enlarging government spending and programs. Reich quickly shows why these dead-enders are wrong. Second are the "fiscal hawks" who argue that the most important thing government can do is balance its budget, and are freaked out at the likelihood that the deficit for 2009 is going to be $1 trillion or more.

Besides the problems and proposed solution Reich lays out, I think it is extremely important to ask ourselves why Reich has gone public in the way he has, and, more importantly, at this time, just days after Reich was on stage for President-elect Obama’s press conference just a few days ago.

My thought on this point is that Reich is very upset to find that of the dozen or so economic advisors around President-elect Obama right now, only he, Reich, and former Michigan Congressman David Bonior are advocates for what can be termed Main Street’s interests. All the rest of the economic advisers, such as Robert Rubin, Larry Summers, Warren Buffet, and Paul Volcker, are advocates for Wall Street’s interests. And they're trying to maneuver Obama into the same bond market straight-jacket they were able to maneuver Bill Clinton into. So Reich is taking the fight into the open – an onto the tubes.

Which means he’s asking for our help.

First, of course, you should go read Recih’s blog.

Then I want to reiterate here something I’ve written many times in the past. Compared to what this country needs in terms of building infrastructure that will begin transitioning us away from a fossil-fuel based economy, even the stupendous sum of $700 billion is actually paltry. Yes, paltry. No where near enough. Just like after World War Two, we are sitting on top of a powder keg of pent-up demand. But this time the pent-up demand is for a green economy. Just think of what needs to be built:

Every single car and truck in the United States needs to be replaced with hybrids or super fuel-efficient vehicles.

A replacement for the entire system of gasoline delivery and distribution.

Almost the entirety of the U.S. housing stock needs to be replaced or retrofitted with green technology.

Same with commercial buildings, especially skyscrapers built in the 1950s to 1990s, which is almost all the core downtowns. Tear `em down and start over again, make them user friendly and environmentally neutral.

Urban mass transit rail systems. New York City has the most dense network, and it is only half as dense as what you find in Tokyo, London. Paris, Moscow. Cities like Miami and Phoenix, which are now in the top ten urban areas in the U.S. don't have ANY mass transit rail, or have a single line with one or two dozen stations.

Passenger rail with its own rights of way. How many people know Amtrak has to run on rails owned and maintained by the freight railroads? In the northeast corridor, from Washington DC to Boston, we really should build this entirely underground. One long tunnel from DC to Boston.
The entire grid for electricity generation and distribution needs to be almost entirely replaced.  

Just to give you some numbers to think about: Just to build rail transit systems in the 39 largest urban areas in America (all with over 1.5 million in population) to the same density as rail transit in New York City is going to require, by my estimate, $3.5 trillion, and two and one half years of total steel production in the U.S.

That’s just one program, folks - $3.5 trillion.

The Dept of Energy in May released its report on achieving 20 percent windpower by 2030 (warning – PDF). That is actually an extremely modest goal - and the price tag for it was over $1 trillion. Ramp it up to something like 50% windpower by 2020, and you're easily looking at a $3 or $4 trillion program.

So, I think the fight is on. Either we force Wall Street to back off, so that we can get going with building a new American economy for the twenty-first century. Or, we can sit back and try to reassure ourselves that President-elect Obama is a really smart guy, who will get it all figured out.

With a little help from his Wall Street advisers.

Originally posted to NBBooks on Sun Nov 09, 2008 at 04:38 PM PST.

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Comment Preferences

  •  tips. flames, rants, raves (59+ / 0-)

    Don't get me wrong - I'm giddily happy Obama is our next Prez, but the sad fact is that on economic policies, his team is almost completely from Wall Street. And that's going to mean big disappointment, because I think it will lead inevitably to a corporatist tilt in policies. And this is why I was so unhappy with some of the diaries that reached the rec list the past few days such as "Obama is smarter than you." I was telling everyone before the election, "Getting Obama elected is going to be the easy part. The hard part, and the real fight, is going to be afterward, when we have to obliterate the power of Wall Street."

    A conservative is a scab for the oligarchy.

    by NBBooks on Sun Nov 09, 2008 at 04:43:19 PM PST

    •  I was disappointed that no labor or union (17+ / 0-)

      leaders were present at Obama's economic meeting last week.  But, anyway..

      I agree with you, we are in for the fight of a lifetime to wrestle control of the country from the corporatists.  

      Obama knows he will be compromised if he cannot depend on a strong and well organized opposition by the citizens of the country.  

      We have to drown out the voices of in corporate controlled media armed with corporatist talking points.

    •  Couldn't agree with you more.. (9+ / 0-)

      We must go into this presidency with our eyes open.

      "Whenever you find yourself on the side of the majority, it is time to pause and reflect." Mark Twain

      by dotdot on Sun Nov 09, 2008 at 05:01:29 PM PST

      [ Parent ]

    •  This is excellent (3+ / 0-)
      Recommended by:
      greenearth, Lefty Coaster, haremoor

      The writing you do for Kos is thoughtful, well-reasoned, and completely necessary.

      Thank you!

      Remember the I35W bridge--who needs terrorists when there are Republicans

      by techno on Sun Nov 09, 2008 at 06:10:59 PM PST

      [ Parent ]

    •  Reich's bandaid is a joke. (1+ / 0-)
      Recommended by:

      You want to create JOBS for people.  Given current circumstances they should be infrastructure and green energy jobs.

      You also want to bring back the HOLC (Home Owner's Loan Corporation) to get better loans out there that people can afford.

      Consumer spending is a side effect of the economy.  A measure that the people have enough money to spend -- possibly even surplus money to spend.

      If they have jobs and can manage their debt then they will spend that money, but it seems that someone is trying to manage a side-effect rather than the real problem.

      Happy little moron, Lucky little man.
      I wish I was a moron, MY GOD, Perhaps I am!
      -Spike Milligan

      by polecat on Sun Nov 09, 2008 at 06:25:29 PM PST

      [ Parent ]

      •  HOLC is the wrong idea (1+ / 0-)
        Recommended by:

        We should let housing prices fall so people can afford to own homes.

        As government tries to pump up the price of housing, the new bubble will be in food and groceries and the needs of life.

        If people cannot afford the price they paid for their house, they should move into a place they can afford.

        •  Let me know when the bankruptcy rate (0+ / 0-)

          starts to drop off.

          And you don't think it is important to keep people in their own homes?

          That's just plain evil.

          Happy little moron, Lucky little man.
          I wish I was a moron, MY GOD, Perhaps I am!
          -Spike Milligan

          by polecat on Sun Nov 09, 2008 at 06:43:14 PM PST

          [ Parent ]

          •  Affordable houses, (0+ / 0-)

            is not evil.

            What is evil is giving so much assistance to the real estate industry in tax breaks, government loans and all the rest that the price of housing went through the roof.

            And what about those that do not own?  You want to raise the price of real estate so they have no chance to own?

            They should pay taxes for the homeowners?

            Also, we have to let housing fall else the reinflation will destroy the value of the dollar.

            •  Too late for the dollar. (1+ / 0-)
              Recommended by:

              We've been exporting inflation for years.  It's coming home to roost.  And $1.4T or whatever the amount of extra currency we end up printing won't help.

              Sorry, but that loaf of bread is going to be $10 and we're inflating our way out of this "bubble."

              But unlike the early 70's there is no upward pressure on wages, so at the same time we're losing our standard of living.

              Remember how Greenspan changed the CPI to substitute hamburger for steak?  Welcome to catfood.

              Happy little moron, Lucky little man.
              I wish I was a moron, MY GOD, Perhaps I am!
              -Spike Milligan

              by polecat on Sun Nov 09, 2008 at 06:56:16 PM PST

              [ Parent ]

    •  I am personally very suspicious of Wall St. (0+ / 0-)


      It's been well demonstrated that "their" interests do not coincide with those of the little people-- of which I am a member!!

      Aloha   ..  ..  ..

  •  The worst hasn't happened yet, so how does (5+ / 0-)

    Reich know it won't be as bad (or worse) than the Great Depression? IF you look at the U6 measure for unemployment (about 11%) we are almost half way there.

    •  It's worse than that (17+ / 0-), which figures unemployment and GDP the way it used to be done before all the "qualitative improvements" reprortedly figures actual U.S. unemployment is near 15% and GDP is shrinking at an annual rate of two percent a year.

      I think most people have no real idea what's going on, how bad things are, and how much the immediate future is going to suck. And that includes a lot of people here.

      Also, I want to throw in here that I don't think that highly of Reich, either: he has never repudiated his position on free trade.

      A conservative is a scab for the oligarchy.

      by NBBooks on Sun Nov 09, 2008 at 05:00:32 PM PST

      [ Parent ]

      •  they have distorted all the figures trying to (3+ / 0-)
        Recommended by:
        greenearth, lams712, dolphin777

        make things look better than they are.

        I read somewhere that what ever the Unemployment
        figure was add 10 to it and that is what the
        real figure would be.

        thanks for the link, very

        It is horrifying that we have to fight our own government to save the environment. Ansel Adams -6.5 -6.75

        by Statusquomustgo on Sun Nov 09, 2008 at 05:20:38 PM PST

        [ Parent ]

        •  Just read that ship contracts are being cancelled (8+ / 0-)

          Naked Capitalism quotes the Financial Times of London:

          Shipowners are forfeiting tens of millions of dollars to cancel contracts to buy vessels rendered uneconomic by one of the industry’s sharpest downturns.

          Last week, New York-listed Genco Shipping announced it was forfeiting $53m in deposits it had placed to buy six new vessels due to cost a total $530m.Hellenic Carriers, listed on London’s junior Aim market, said it was forfeiting a $6.97m deposit and making a further $1m payment to abandon a $69.7m contract sealed in July to buy a dry-bulk carrier.

          At the same time, Oslo-listed Golden Ocean told Lloyd’s List, the shipping daily, it was reviewing its ship orders, although none had yet been cancelled.

          The cancellations follow a collapse in the short-term, spot market rates for dry-bulk ships carrying iron ore, coal, bauxite, wheat and other commodities. The fall – of 71.9 per cent in October alone – has sent ship values tumbling. Consequently, it is often more worthwhile for shipowners to forfeit their deposits and pay compensation than to go through with deals on which they would never earn a reasonable return.

          I don't know what else to do to get people to wake up. This economy is already in depression. And it's going to get a lot worse. When people are willing to lose $45 million rather than take delivery of a $450 million ship, we are going to have problems for a very, very long time.

          A conservative is a scab for the oligarchy.

          by NBBooks on Sun Nov 09, 2008 at 05:42:09 PM PST

          [ Parent ]

      •  I take a dim view of Gov't stats. Think matters (0+ / 0-)

        are waaay worse than we know, true state of events leaking out now, and have a thoroughly bad feeling in re true depression!

        My DOB 1937 may have alot to do with my jaundiced POV--- plus much reading over the years!

        So many are dying off who personally recall Great Depression, Admin is counting on memories being absent, younger  folks too damn ignorant to begin with, and old expression: "Figures don't lie, but liars figure!" still holds true, IMHO!!

        This may be a grim Christmas for many American families, I fear.

        Aloha   ..  ..  ..

        •  Most govt. stats are pure nonsense... (1+ / 0-)
          Recommended by:

          from a conceptual/theoretical point of view. How does one calculate ALL economic activity without double or triple counting, and give proper weight to the various extrapolations that must be made? It's literally impossible.
          And they give us GDP numbers with fractions of a percent "accuracy". Ha ha ha.

          •  My fave: omitting food AND fuel from (1+ / 0-)
            Recommended by:

            calculations! ha ha ha!!!

            Aloha   ..  ..  ..

            •  The rent that you COULD charge for your home (1+ / 0-)
              Recommended by:

              gets included in GDP even if you DON'T rent your home out.

              •  Once, when his home on O'ahu was "increasing" (0+ / 0-)

                in value during Japanese "bubble", I attempted to explain to my son the vagaries of capital gains as per IRS regs!

                Early in the conversation, Larry's eyes glazed over.
                Tho I do believe the concept of paper enhancement of market value of residential property was understood.

                That rental stuff in GDP would completely boggle his mind-- as it does mine.

                Jes' how many (or few!) of us regular folks are aware of this BS, anyway?!

                Say again: "Figures don't lie, BUT liars figure!"!

                Aloha   ..  ..  ..

                •  If you're interested... (1+ / 0-)
                  Recommended by:

                  from this article...

                  The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption. For instance, if a government embarks on the building of a pyramid, which adds absolutely nothing to the well-being of individuals, the GDP framework will regard this as economic growth. In reality, however, the building of the pyramid will divert real funding from wealth-generating activities, thereby stifling the production of wealth.

    •  Actually if not for social (5+ / 0-)

      security, welfare, low income housing, etc. It would be worse then the great depression.

  •  Keynes vs. Friedman- (14+ / 0-)

    Reich and Krugman will push the Keynsian theory, but Wall St. is definitely in the tank for Friedman.  I hope the former win.

     I'd like some stuff to trickle UP, for a change.

    Auntie Em: Hate you. Hate Kansas. Taking the dog. Dorothy

    by haremoor on Sun Nov 09, 2008 at 04:49:39 PM PST

  •  We can do both. (4+ / 0-)
    Recommended by:
    Coldblue Steele, peraspera, Urizen, kck

    The Wall Streeters are only afraid that the capital gains taxes will kick in.

    They are not afraid of a stimulus package.

    We can do a stimulus package and give them the stooge that will give them confidence in the markets.

    Confidence in the markets is key right now because there is a lot of money sitting on the sidelines, and the market contraction has caused downsizing in cirporations who are nervous about their cap position. That means huge layoffs.

    Huge job losses don't help anybody. Main Street and Wall Street lose.

    I maintain that you can absolutely do both. Don't raise taxes right away. Give Wall Street the signal that it's ok to invest again. Then give a stimulus package for Main Street.

    Look at these people! They suck each other! They eat each other's saliva and dirt! -- Tsonga people of southern Africa on Europeans kissing.

    by upstate NY on Sun Nov 09, 2008 at 04:51:37 PM PST

    •  Yes, of course. It s not ether/or. In fact... (2+ / 0-)
      Recommended by:
      Urizen, chigh

      the solutions should be integrated, as I explained below. Naturally, the press paints an exclusive conflict out of the two but an Obama admin won't.

      There is some danger inherent in a complete market recovery. I suspect savvy boomers are poised to cash out as soon as they can recover enough and reinvest elsewhere. As Wall St. starts reinvesting, sell offs will also heat up until we see a rebalancing of boomer retirement funds in less risky forms (e.g., real estate rentals) and more secure products than equities.  

  •  Anyone With A Net Worth Over 10 Million..... (5+ / 0-)

    .....should be excluded from Obama's economic team. The ultra rich are part of the problem.

    Well I've been from Tucson to Tucumcari... Tehachapi to Tonopah--Lowell George/Little Feat

    by frandor55 on Sun Nov 09, 2008 at 04:52:26 PM PST

    •  They are actually a big part of the solution. (2+ / 0-)
      Recommended by:
      kck, haremoor

      They are on the sidelines with trillions of dollars. They need to invest that money on Wall Street. If they don't, Main Street will suffer. The last thing you want to do is piss off the billionaires in this climate.

      Look at these people! They suck each other! They eat each other's saliva and dirt! -- Tsonga people of southern Africa on Europeans kissing.

      by upstate NY on Sun Nov 09, 2008 at 04:54:11 PM PST

      [ Parent ]

      •  I love how the rich are always defended no (7+ / 0-)

        matter the context..  No matter how dramatic their crimes, apparently capitalism really is just organized crime.  

        They fuck up repeatedly and commit untold crimes yet never meet justice.  Their greed and hubris drive the economy into spasms that cause real harm to millions (and on the scales we are dealing with presently billions) of people.  

        Yet they 'they are a big part of the solution' and 'last thing you want to do is piss of the billionaires'.

        Actually the first thing I want to do is piss of the billionaires and relieve them of their misbegotten wealth and power.  Their recklessness caused the current problem.  Their belief they would always be bailed out caused the current crisis.  

        Their actions that wagered the well-being of millions of people for quick profit needs to be punished.  

        •  You don't know me. (5+ / 0-)

          To say I'm defending them is silly.

          I'm defending middle class people with jobs.

          Why do you think half a million jobs were lost the last two reports? Because the stock market sucked. When the stock market sucks, a company's cash position becomes a problem. When that happens, the first thing they do is fire people.

          Did you even read the article I was responding to? Reich said middle class people and small investors are tapped out.

          Other than gov't money, what money is left out there to invest in public companies and get the market moving again? All the money sitting on the sidelines. That's where it is.

          You want to complain to someone about how the rich killed us? Complain to your Democratic and Republican representatives who voted overwhelmingly for the CFMA Act of 2000, and Bill Clinton signed it.

          Look at these people! They suck each other! They eat each other's saliva and dirt! -- Tsonga people of southern Africa on Europeans kissing.

          by upstate NY on Sun Nov 09, 2008 at 05:07:42 PM PST

          [ Parent ]

        •  Like Haliburton, they'll just move elsewhere. (0+ / 0-)

          We need them to invest their money, not move it to the EU.

      •  This is an inconvenient truth (6+ / 0-)

        The problem, then, is how do we create incentives that get investment going into real economic areas, and create disincentives for investment into speculation, usury, and economic "rent."

        One thing that would clearly help would be a Tobin - Pigou tax on all financial transactions, to start squeezing out short term buying and holding, and flipping of "investments." This could be coupled with a big reduction in the capital gains tax, but only if thse gains come after holding for along period of time, like five to ten years.

        The fact that no major players including the msm are even discussing such a securities transaction tax is a good indication of how tilted the discussion is right now.

        A conservative is a scab for the oligarchy.

        by NBBooks on Sun Nov 09, 2008 at 05:08:11 PM PST

        [ Parent ]

        •  I like your ideas but... (3+ / 0-)
          Recommended by:
          highacidity, Urizen, frandor55

          again, the rich people who have absolutely no conscience in these matters would simply do one thing when your proposal comes out. They would plug your numbers into their models and figure out the new delta for the market. If that number isn't attractive enough relative to other investments, we'd be stuck in the same hole.

          For me this means we do what we can to establish confidence in the markets, and then when the market gets moving again and we're growing slightly, it's time to change the system ENTIRELY.

          One concern I have in line with yours is that there would AT LEAST be regulation on credit default swaps so that only those owning the paper can take out insurance.

          Lastly, the people on Wall Street already know the old ways are over.

          They are just waiting for word of a new possible tax regime so that they can program their investment models and figure out what the upside is. They have no conscience. They are looking at the numbers solely.

          Look at these people! They suck each other! They eat each other's saliva and dirt! -- Tsonga people of southern Africa on Europeans kissing.

          by upstate NY on Sun Nov 09, 2008 at 05:21:19 PM PST

          [ Parent ]

    •  Bring back the 70% bracket. nt (1+ / 0-)
      Recommended by:

      Happy little moron, Lucky little man.
      I wish I was a moron, MY GOD, Perhaps I am!
      -Spike Milligan

      by polecat on Sun Nov 09, 2008 at 06:27:12 PM PST

      [ Parent ]

  •  First rule of emergency medecine - (1+ / 0-)
    Recommended by:
    Julie Gulden

    First rule of emergency medicine - Stabilize the Patient.

    (okay I made up the "first rule" part, but I bet it's up there)

    Nov 4th 2008 - Turn off the dark tonight.

    by Jonze on Sun Nov 09, 2008 at 05:01:01 PM PST

  •  Reich is also preening for a job... (6+ / 0-)

    I suggest an integrated approach focused on the consumer. Instead of giving GM a bailout, give $2k rebate to anyone buying an American car, and a $3k rebate if the car is a hybrid.

    Subsidize solar roof tiles so they cost they same as clay tiles. They are too expensive and at current prices take over 15 years for ROI. The feds could sponsor a year of near-free solar tiles and we'll see JOBS, JOBS, JOBS throughout the sunbelt and in the southwest.  

    They need to look at energy, the economy, jobs, and health care reform, and education as a holistic set of opportunities and build an integrated set of solutions architected to enhance each other. Each solution is a multiplier of others stretching the resources.

    •  BOOYAH! (1+ / 0-)
      Recommended by:

      Create MARKETS with customers who have money in hand for the new green economy.

      Make the Billionaires invest in financing solar roof tiles instead of phony paper profits.

      Absolutely make the capital gains tax take longer to kick in.


      The Bushiter's Iraq 2004 - 1268 Dead, about 25K Medivacs and 9000 Maimed... It's the Bushiter Way, wasting other people's money and lives. And it's worse now.

      by RedMeatDem on Sun Nov 09, 2008 at 06:19:27 PM PST

      [ Parent ]

  •  nobody is telling the truth (5+ / 0-)

    Reich gets close but doesn't have the courage to go there. Bottom line is that the US consumer has been living beyond their means for at least 10 years and gorging themselves on debt to do so. Restore a normal saving level of 8% and eliminate the housing as an ATM and consumption has to decline about 1 trillion dollars i.e. about 7% of GDP.

    Policy should focus on cushioning the impact of getting to that lower and sustainable level of consumption not on trying to goose the economy back to its pre bust levels.

  •  On Friday I went to a seminar (3+ / 0-)
    Recommended by:
    Julie Gulden, mbzoltan, haremoor

    held by my alumni association--Weathering an Uncertain Financial Climate or something like that.

    There were 3 panelists in finance. One a financial planner, and 2 analysts.  

    They weren't selling anything--it wasn't that kind of talk at all.  They all agreed that this was a historic time, absolutely one that you will tell your grandchildren that you lived through...."This cataclysmic change is historic" is what I have in my notes.

    They were not hair-on-fire types.  But had a serious and knowledgeable take on this--and that it is far from over.  That's pretty scary to me.

    Darwinic pilgrims claim the image fills them with an overwhelming feeling of logic. --The Onion

    by mem from somerville on Sun Nov 09, 2008 at 05:03:47 PM PST

  •  Note that Villaraigosa is also there (6+ / 0-)

    on that economic panel.  That's important.

    The big missing link?  No labor union representation.

    On the other hand it's encouraging that people like Fareed Zakaria are calling for a public works type of stimulus.

    •  I just looked him up on Wikipedia (4+ / 0-)
      Recommended by:
      Urizen, Julie Gulden, lams712, haremoor

      I confess I was not familiar with the name.

      Turns out the Mayor of Los Angeles, Antonio Villaraigosa, is the first Latino elected to the position in over a century, and "had a long career as a labor organizer."

      I'm very, very glad you brought him up.

      A conservative is a scab for the oligarchy.

      by NBBooks on Sun Nov 09, 2008 at 05:20:33 PM PST

      [ Parent ]

  •  I would just add (4+ / 0-)

    the emphasis that the current infrastructure is really adapted for conditions of the last 50 years when we had dirt cheap oil. It will not be suitable for the next 50. It's not only falling apart, it's obsolete, so let's fix both problems at once this time around.

  •  NB - as usual, I agree with (3+ / 0-)
    Recommended by:
    tmo, Urizen, lams712

    your main points.

    However, there are plenty of targets way ahead of pulling down the skyscrapers. They are - or can be - relatively efficient in terms of energy use. Make them shut off their lights when not in use; install CFL or LED lights; retrofit the windows when appropriate; improve insulation; turn down the thermostat in winter, up in summer.

    You're also correct to show caveats with respect to Reich. 'Free trade' is one; lack of recognition of true(r) economic statistics is another. Shadowstats methodology is the only useful comparison, if we're trying to compare apples with apples. Reich doesn't seem to recognize his role in the degradation of these statistics during Clinton's terms - granted that the changes started at the end of LBJ's time and was boosted big-time during Reagan's regime.

    Got to give him credit for consistency, though, as he's been talking infrastructure since the first Clinton campaign.

  •  um, Robert Reich IS one of those advisors (0+ / 0-)

    No "end-around" necessary.

    Obama already has him on his board of advisers.

    Every time a Republican is convicted, an angels gets its wings.

    by AlyoshaKaramazov on Sun Nov 09, 2008 at 05:16:31 PM PST

  •  Diarist over the top.... (6+ / 0-)

    and here's the best example, among others...

    Same with commercial buildings, especially skyscrapers built in the 1950s to 1990s, which is almost all the core downtowns. Tear `em down and start over again, make them user friendly and environmentally neutral.

    What is the carbon cost....steel, energy, transportation etc for an average downtown commercial building....lets say 20 stories of 10,000 sq ft each.

    I won't do the math, but even if we had the latest state of the art...even next decades state of the art efficiency, the savings in carbon pollution would never be realized in the life of the building.

    But even homes, and small buildings...and for that matter many existing cars never make up the pollutions or greenhouse gases.

    •  OK, you caught me (4+ / 0-)
      Recommended by:
      Urizen, NoMoreLies, lams712, arodb

      a big reason I want to "tear 'em all down and start over" is because so many of them are just plain UGLY. As in Jim Kuntsler's "Architectural Eye Sore of the Month" ugly.

      A conservative is a scab for the oligarchy.

      by NBBooks on Sun Nov 09, 2008 at 05:30:14 PM PST

      [ Parent ]

    •  When I think about it (1+ / 0-)
      Recommended by:

      I think it's very cheeky of you to say this diary ifs "over the top."

      The financial system has collapsed, the real economy is in free fall, and now Dr. Robert Reich thinks it's accurate to call it a depression, and you think it's over the *%#@# top?!?

      What's it going to take to wake you up. A pink slip? A foreclosure notice? Believe me, the ones with your names on it are coming.

      A conservative is a scab for the oligarchy.

      by NBBooks on Sun Nov 09, 2008 at 06:21:05 PM PST

      [ Parent ]

  •  What if instead he is "softening" (6+ / 0-)

    us (i.e. telegraphing P-E Obama's desired plan) up so that we are comfortable with and supportive of any proposal once it's publicly released to America?
    Obama needs the grassroots to ask so that he can answer the call.  This is a good way to preview his intentions.

    Reich is respected in the progressive blogosphere so he is an obvious choice to get the message out and comments can be used to gauge response.

    The supply siders may be doing the same in their circles.  Wall Street will need to have their concerns allayed to get on board and perhaps one of their own can convince them to accept a plan that is less than they want but better for the long term health of the economy.

    I have doubts that Reich would have appeared with Obama publicly if he couldn't get behind his basic plan nor do I think that Obama would have had him there if he wasn't comfortable about where he stood on the issue.  

    Just a possibility and you may well be right.

    •  Wall Street Is A Casino, the Croupiers Don't Care (3+ / 0-)
      Recommended by:
      NBBooks, phonegery, EmmaKY

      Who is putting the money on the table.

      So the money could be invested in 'looking back' towards fossil fuels and a lower standard of living for 98% of all Americans,


      The government can change the rules and the casino can be investing in the new economy and a higher standard of living for ALL Americans.


      The Bushiter's Iraq 2004 - 1268 Dead, about 25K Medivacs and 9000 Maimed... It's the Bushiter Way, wasting other people's money and lives. And it's worse now.

      by RedMeatDem on Sun Nov 09, 2008 at 06:26:22 PM PST

      [ Parent ]

    •  I also think this is very likely closer to (1+ / 0-)
      Recommended by:

      the truth.

  •  Agree with Reich (5+ / 0-)

    And Krugman ...

    We gotta spend, spend, spend.

    The country is running on WPA-era infrastructure.  Seems like a great time to built our next generation transportation network and figure out new ways of getting energy, etc.

    You can call me "Lord Bink Forester de Rothschild."

    by bink on Sun Nov 09, 2008 at 05:37:55 PM PST

  •  Let's wait and see what happens (1+ / 0-)
    Recommended by:

    Obama may not disappoint us.

  •  Low hanging fruit - Reich is correct. (0+ / 0-)

    Especially retrofitting of existing homes and businesses to upgrade energy efficiency. These are labor intensive actions, which employ people [kills two birds with one stone]. The impact on energy stockpiles, prices, pollution and CO2 generation is immediate.

    Reducing electrical power demands will reduce the need to rush into building expensive upgrades to the power grid or building new power plants.

    Decentralization of the power distribution, local production and consumption of energy is a key component to a sustainable energy future.

    2008, the Year the Republican Party dissolved into a little pond of goo

    by shpilk on Sun Nov 09, 2008 at 05:54:06 PM PST

  •  Keynes' theory was proven wrong in the 1970's (0+ / 0-)

    when we had stagflation. Stagflation is impossible under Keynesianism, yet there it was...
    If the government could save us by spending, we should let it loose. It could print all the money it wants and in no time flat we'll be in the garden of eden!!
    Of course, in reality, the money has to come from somewhere. Funding one thing means DE-funding another thing (possibly defunding some future economic activity if the govt. confiscates savings through inflation of the money supply).
    This is pure magical thinking. Par for the course for Reich.

    •  Keynesianism was under attack by that time (0+ / 0-)

      and there were a number of other factors. Most importantly, the development of the Euro-dollar market, which became a very damaging pool of speculative money; and then the "controlled disintegration" policies introduced by an Undersecretary of the Treasury named Paul Volcker, who of course was later made Fed Chairman.

      William Engdahl posted a great 3-part series on this last year.

      A conservative is a scab for the oligarchy.

      by NBBooks on Sun Nov 09, 2008 at 06:35:53 PM PST

      [ Parent ]

      •  I think you'd have to say that either... (0+ / 0-)

        stagflation didn't happen, or that Keynes' theory didn't say stagflation was impossible in order to continue defending him. But you can't make either case.
        And Keynes is wrong in so many other ways. Keynesianism is clearly just a justification for central banking.
        Henry Hazlitt debunked Keynes' "General Theory ... " line by line AND showed exactly how and why the Bretton Woods system would collapse decades in advance.

    •  Keynes aside, (0+ / 0-)

      Depends on what the spending is on. If it's on science/technology, infrastructure and on building productive capacity, it's a useful investment that pays back in the end. If you just toss out money in an undirected, purposeless fashion, like those rebate checks Bush mailed out, it doesn't do anything. But if you direct it to useful things that build for the future, for sure it's a great help.

      700 billion is not going to cut it, though. Current infrastructure defecit is 1 trillion. So more like several trillion is needed.

      But forget about this greenie horseshite for now. Focus needs to be on the nuts and bolts. Bare necessities are a tall enough order by themselves. High speed rail for passenger and freight. Water generation and distribution. Urban water, sanitation and transportation. Irrigation. Agricultural technology. Bridges and dams and locks. Power plants (preferably nuclear). Put millions to work in decent jobs directly for construction, plus millions more upstream for parts and materials extraction and manufacturing.

      This of course in the context of reforms to banking and finance, reform of international trade and exchange rates regimes.

      I pray that Obama has the stones to take on the people he needs to to do this right. I always thought in the primaries that his opponent had a definite advantage in this respect, as a fighter.
      I pray he surprises me.

      And I pray he lives to see it through.

    •  Spending has to be on something worthwhile (0+ / 0-)

      in order to help. Something like the ridiculous stimulus check that was mailed out to all of us last summer was a waste of money...purely an attempt to make things look better until after the election. Too bad that didn't work out, eh? The massive defense build-up started under Carter and exponentiated under Reagan was an even worse terms of driving us drastically further into debt and having negative social consequences besides. If Keynes's approach was just to throw money around indiscriminately it's surprising he was given so much credence for so long.

      Reich was ineffective under Clinton and would be similarly ineffective under Obama. It looks like Obama is bringing in the right wing Democratic team that Clinton had egging him on in the battles for "free" trade and deregulation—one can only hope he's doing them the courtesy of an audition and won't hire many of them for real, but it's not encouraging. Plus we have the "humanitarian war" crowd like Ross, Holbrooke and Albright trying to get in on the Defense and State side of the house. Doubly not encouraging.

      Buffett and Volcker seem like they would have useful knowledge to contribute, if balanced by a couple of folks with a more leftward slant, but the rest of this crew have outsized but undeserved reputations thanks to their connections and ability to baffle the media with BS. I guess we'll see come January to what extent this is going to be an attempted replay of the Clinton years.

  •  a $3trillion investment (1+ / 0-)
    Recommended by:

    "50% windpower by 2020, and you're easily looking at a $3 or $4 trillion program."

    How much will that energy be worth by 2020, by 2050? I've read that windpower pays for itself over 20 years. After that wouldn't there be only maintenance, infrastructure costs, jobs and profits?  If it's an investment, even a 10% return over 40 years would be more than worth it.  I think it'll be more if you factor in the multiplier from direct and indirect spending.

  •  Excellant diary and analysis! (2+ / 0-)
    Recommended by:
    phonegery, RadicalGardener

    I worry too that the much anticipated Obama adminstration will be nothing more than a "kinder and gentler" Transnational Corporate agenda gravy-train, thinly disguised in mere rhetorical or symbolic pleasantries.

    American taxpayers should not be the ones bailing out CEOs and stockholders of Automaker, Banks, Investment Firms (Goldman Sacs, etc.), and the Federal Reserve should not be printing money (devaluing the U.S. Dollar over time) to feed these pigs either.

    American taxpayers are also not responsible for the military defense of Israel, or other geopolitical (Oil-rich nations) interests.

    I'm tired of accepting the idea that socialism for Transnational corporations and the War Establishment (and Oil Industry) is necessary in order to preserve our "free market" system.

    This is a lie and, in the meantime, the standard-of-living for Mainstreet goes down and down as American taxpayers get their pockets picked clean, once again.

    Obama is a bright guy, but if he surrounds himself with the same old corrupt Wall Street/Transnational Corporate elites that have run this Country into the ground, then he is not going to be much more than a cosmetic change from the rule of the GOP.

  •  Investing in highways is problem, (1+ / 0-)
    Recommended by:

    investing in high speed rail and mass transit is the solution.

  •  While I recommend this for the valuable (0+ / 0-)

    discussion it generates - I do not believe the tenor of fear in your middle section:

    My thought on this point is that Reich is very upset to find that of the dozen or so economic advisors around President-elect Obama right now, only he, Reich, and former Michigan Congressman David Bonior are advocates for what can be termed Main Street’s interests.

    Which leads you to conclude that Obama risks being fitted with a bond-laden strait-jacket.

    In answer to your assumption I'd offer first Reich's own words.

    Because I'm an informal economic adviser, I should warn anyone who reads this that it reflects only my thoughts and therefore should not be attributed to him or to anyone else advising him.

    Plainly stated - Reich is stating Reich's opinion - yet nowhere does he evince significant distaste with the composition of the group surrounding Obama, nor with the directions proposed by that group nor by Obama before or after that meeting. Certainly he makes no mention of the need to emphasize the needs of Main Street over Wall Street. His piece propounds the merits of such measures as the infrastructure directed stimulus - which can yield jobs, and thus help free up credit by improving the degree of security of Consumers. Now, given his quoted caveat, the TPM piece would provide a perfect venue in which to state concerns about the overall direction coming out of the first meeting between Obama and those 17 advisors - if he truly shared your fears. Yet no such explicit declaration is made, nor need it be made. Reich instead emphasizes one (important) aspect of the overall package of solutions discussed.

    I conclude that he does not have the concerns with policy direction that you think underlie his TPM piece - the content in which is little different from other recent writing by Reich.

    I also arrive at this conclusion from another avenue -  the composition of the group that surrounded Obama on that day. David Bonior is a well respected voice on Labor issues, and the woman who beat him the 2002 fight to become the Governor of Michigan, Jennifer Granholm is also part of that group. Governor Granholm lives with the dire state of the US automobile industry, and all the pain that inflicts on workers every day.

    Moreover, there needs to be a distinction drawn between Wall Street and plainly put, Banking or Business. While it is true (and to be expected) that there is significant representation from those attuned to the needs of Wall Street among the 17 advisors, there are others who do not so neatly fit that definition.

    I value Reich's piece as a means to propound the agenda he likely brings to his role as a member of the Transition Economic Advisory Board. In like fashion, Likewise, I value the discussion of the relative merits of the different components of the likely economic agenda that this diary sparks.

    However, I simply don't buy your thesis that Reich wrote his TPM piece to do an end around the Obama Transition team.

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