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and no, I am not even an ordinary economist, much less one with the stature of a Nobel laureate.  Still, even a casual reading of Krugman's column this morning, entitled Failure to Rise should scare the living daylights out of anyone who reads it.  Consider this:  after writing about both the stimulus and the bailout, in the third to the last paragraph he offers

Over all, the effect was to kick the can down the road. And that’s not good enough. So far the Obama administration’s response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It’s early days yet, but we’re falling behind the curve.

 And then his very next sentence read

And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach — a feeling that America just isn’t rising to the greatest economic challenge in 70 years.

Read his column.  He has more to say.  So do I.

Hopefully you have now read the entire column.  If not, shame on you.  How can we have a conversation without being on the same page, which is the insights of our favorite Nobel laureate?

After all, if you have not read the column, you will miss all his delicious dissecting of Republican objections to the stimulus, quite usable in exchanges with wingnut relatives who insist on emailing to you the latest Limbaugh and company talking points.  He will remind you of the $2 trillion in Bush tax cuts and the $1 trillion (so far) on the Iraq debacle (and remember fellow Nobel Laureate Joe Stiglitz posits a figure at least twice that).  He will give you a description of the Republican reaction to the stimulus that you will cherish, that it

has bordered on the deranged.

You will realize that he still holds out hope that when the details of Geithner's bailout are sketched out, maybe, JUST MAYBE, there will be something of value - and yet note what he writes:

Will those public-private partnerships end up being a covert way to bail out bankers at taxpayers’ expense? Or will the required "stress test" act as a back-door route to temporary bank nationalization (the solution favored by a growing number of economists, myself included)? Nobody knows.

Here's the problem.  Obama talks about a shortfall in demand below capacity of $1 trillion over the next year.  Krugman cites figures of $2.9 trillion over three years.  A stimulus of 800 billion, with far too much in ineffective tax cuts (whose multiplier is relatively low), is simply insufficient to the task.  

Yes, in theory Obama could come back for more when the current amount proves, as Krugman strongly suspects, insufficient to the task at hand.  But here's the rub - by then the Republicans will use that as an ugly stick with which to beat up on the administration, and if people are still scared try to use that to regain power.  In the meantime people will continue to lose jobs, albeit not quite as quickly as without the stimulus.  It is not clear that housing prices will stabilize, that the so-called "toxic" assets will have been properly handled, that we will have functioning credit markets.

Hear's my fear - right now much of the rest of the world is waiting for us to make the kind of major commitment necessary to right the floundering American economy.  Without that happening, the chances of the problems in the rest of the world remain doubtful, and that will feed back into our economy (we are all too interlinked) with effects that could wipe out whatever gains we attain from this limited bailout.

Psychologically we would all have been better off with a figure over the magic number of $1 trillion, with perhaps 1/4 or less than that as targeted tax cuts.

And we had to do efforts to stabilize housing prices, or else everything else may well be useless, given how much debt is leveraged on to the value of the financial instruments based on our residential housing stock - and remember, that leverage is now world-wide.

Krugman is a penetrating writer, as well as being a brilliant economist.  Thus even if I have not already brought you to the level of fear I experienced in reading this column, which reinforced a lot of things I have read elsewhere and what limited understanding I might possess on my own, his last brief paragraph nailed it:  

There’s still time to turn this around. But Mr. Obama has to be stronger looking forward. Otherwise, the verdict on this crisis might be that no, we can’t.

no, we can't   -  Be scared.  BE VERY SCARED  And hope to hell his worries are misplaced.  Because if they are not, we are all royally $%^@&&*


Originally posted to teacherken on Thu Feb 12, 2009 at 09:33 PM PST.

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  •  I spent today in Richmond VA (272+ / 0-)
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    where I watched, listened, and heard from others about the games being played with Virginia's financial crisis.  The Old Dominion, like states all over the nation, cannot move forward on their own financial plans until the stimulus package is in place, signed into law, and they can evaluate the impact on their own situations.  Meanwhile hundreds of thousands of public employees do not know if they will have jobs, without which they do not know if they will be able to keep their homes.  People worry about whether they will be able to receive the most basic of services from governments at all levels.

    no, we can't????  Could it be?  I truly do not know.


    do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

    by teacherken on Thu Feb 12, 2009 at 09:36:24 PM PST

    •  The Virginia situation is why Krugman is WRONG! (94+ / 0-)

      Virginia is pretty typical.  Almost every state and local government in the country is facing a fiscal crisis, and constitutionally, they've all got to balance their budgets.  (Or at least the great majority of them do.)  Do I wish the balance of spending in the stimulus package had been somewhat different, and that the package had been considerably larger?  Yes, I do.  But do I think we could have gotten a much larger package, or one with a greatly different balance of spending?  No, I don't.

      Krugman seems to think that by asking for a lot more, President Obama could have gotten a lot more.  At this point, I've seen zero evidence of that.  Instead, I see a coalition at least two out of the three of Spector, Collins and Snowe as holding essentially all the cards at this point, and I see very little evidence that a greatly different package would have gotten their approval, at least at this point.

      If President Obama and the Senate Democrats had been willing to delay getting ANY bill for weeks, and if the economy had continued tanking, then maybe the 3 Senators holding the balance of power would have come around without any further movement on the Democrats' part.  But that would have meant continuation of the looming fiscal crisis in the states and localities, vastly greater numbers of layoffs, states running out of money for schools and other programs, and a host of other problems.

      We may well be looking at a situation resembling that of Japan in the 1990's, and that's not good.  While Japan's situation in the 1990's certainly wasn't good, it could have been a lot worse.  Even during the worst of Japan's economic downturn in the 1990's, the situation was nowhere near as bad as it was here in the 1930's.  My parents arrived at adulthood during the early part of the Great Depression, and I grew up hearing the stories of hunger and desperation, even though they always emphasized that others had it even worse than them.  Nothing like that happened in Japan during the 1990's.

      Playing chicken with the Republicans, and refusing to make the compromises necessary to get to 60 votes in the Senate might have eventually resulted in a better package, but the longer enactment of SOME stimulus pacakage was delayed, the greater would be the risk that we would see a series of cascading events that would take us much closer to America of the 1930's than Japan of the 1990's.  I guess the difference between Krugman and me is that he thinks that was a risk worth taking.  I don't.

      We can cry ourselves to sleep about how unfair it is that three Republican Senators have such disproportionate power, but the fact is that they DO HAVE IT, and I think we try to pretend that fact doesn't exist at the nation's peril.

      •  from what I heard from Virginia legislators (28+ / 0-)

        I am not sure they would agree with you.  And that includes people on both sides of the aisle from both chambers.  Their reasons might be different.  So be it.

        do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

        by teacherken on Thu Feb 12, 2009 at 10:39:15 PM PST

        [ Parent ]

        •  As an economist, Krugman is looking at (45+ / 0-)

          the most effective way to fix the economy, but the economy doesn't operate in a vaccuum.  Krugman is a nobel laureate, but he's not a politician, and has not always had the best political instincts.

          The problem we (all) face is that what's economically preferable may not be politically possible.  This may be the best deal we can hope for at present.

          Obama's reasoning--that delay is worse than an imperfect bill--is convincing to me.  

          •  Krugman is doing his job (55+ / 0-)

            in the sense that he should speak his mind without concern for political constraints. He should keep the pressure on, which is not so much on Obama -- who I would guess largely agrees with him -- but on the Hooverites (the entire Republican party, apparently) who are even more economically inept than most of us suspected.

            •  I agree with this...but (8+ / 0-)

              Krugman's words shouldn't be taken as sacred..

              he maybe right, but their is a political and economical reality that he is not taking into account.

              -There is no time to lose, the crisis is suffocating local governments

              -and because of the urgency....those 3 republicans have greater power

              it may not be perfect...but it's essential

              This year we can declare our independence...Barack Obama

              by PalGirl2008 on Fri Feb 13, 2009 at 06:00:09 AM PST

              [ Parent ]

              •  2010 will bring us 10 more democratic senators (6+ / 0-)

                This is all part of the plan for one-party Democratic rule.  I applaud Obama and the entire Democrat effort on this.  

                •  You think? (14+ / 0-)

                  If you are right I want you to write down the next 10 Super Bowl picks, but I think the opposite may happen, especially when you have a extremely pissed off population, feeling jack ain't being done.  Now the one advantage is that more people know that this financial f^&%-up was the work of the Bush Administration, but memories fade as the financial situation gets desperate, and either the Obama Administration shows some improvement, or it turn into a populist Palin or Huckabee revolt in 2012.

                  America, They were yours, Honor Them, Do Not forget them-IGTNT.

                  by Mr Stagger Lee on Fri Feb 13, 2009 at 06:45:55 AM PST

                  [ Parent ]

                  •  As long as the r's are obstructionists... (0+ / 0-)

                    the more likely rogue robots prediction may come true.

                    I am here to represent the democratic wing of the Democratic Party.

                    by Josiah Bartlett on Fri Feb 13, 2009 at 07:21:31 AM PST

                    [ Parent ]

                    •  Stiglitz is even more on target; many equilibria (25+ / 0-)

                      The problem is that Rubin's protege Geithner, and Rubin's compadre Summers, are trying to reconstitute virtually the same financial system that got us into this mess in the first place. That's not an effort worth spending a penny on, let alone $879 billion or more.

                      What's needed is in effect lopping off the heads of the executives (and their hired-gun economists and pundits) who created this system of complex derivatives, credit default swaps, and overly-securitized (and re-securitized) nonsense.

                      The Swedish model is the way to go. Obama is wrong: it doesn't matter if the US still had 20,000 banks (like when we grew up), the government could still take over as many as need be. In fact, it's mainly the largest 10 banks who are the problem, and the US could manage that easily. Insolvent banks should go bankrupt, period. The people who own their stock (note: this includes me, BoA) should lose all that money. They made a bad investment, tough. The executives who ran those companies should all be fired, with no payout, down to some reasonable level. (If there are currently-profitable divisions that did not lose their shirt, of course those execs should be retained or brought back and promoted.) The banks' Boards should be disbanded -- they failed to do their oversight job. As with other banks who go bankrupt, the Federal government should oversee their daily operations for a short period of time (typically less than a month), while guaranteeing consumer accounts. Banks' bad assets should be written off, marked to market, and sold at whatever fire-sale price they can get (if any). Then the cleaned up banks should be sold back into private hands, perhaps broken up into pieces.

                      Meanwhile, the government should be doing what it can to promote startup companies -- the real locomotive of economic growth and employment in this country. This would create value and jobs, help address income inequalities, promote technological innovation, increase demand, etc.  

                      The long-term problem for thinkers is that 10 years from now we'll have moved beyond this mess -- in any number of possible ways. THERE IS NO ONE WAY OUT.  There are "multiple equilibria" -- in which different people (and political factions) benefit. If Geithner-Summers-Rubin have their way, it will preserve the system of financial speculation and income inequality that so many of us are critical of.

                      •  Are you single? (3+ / 0-)
                        Recommended by:
                        Picot verde, bmcphail, thethinveil

                        I think I love your mind.

                      •  Great Plan (2+ / 0-)

                        Along the way banks and all retailers should have the option: unlimited market share in ONE state or no more than 5% in any two or more states.

                        The idea is to eliminate the "too big to fail stuff". Or else adopt an "Admiral Byng (sp)" policy. This worthy man did not exactly loose a battle but he failed to fight to a satisfactory conclusion. Was court martialed and executed.

                        Firing them without their bonuses and golden parachutes is certainly appropriate.

                        •  hanging is more appropriate imho (2+ / 0-)
                          Recommended by:
                          vigilant meerkat, Sharon Wraight

                          All of the major news outlets are reporting that the stimulus bill voted out of conference committee last night has a "meager" $789 billion price tag. This number is pure fantasy. No one believes that the increased funding for programs  like Head Start, Medicaid, COBRA, and the Earned Income Tax Credit is in anyway temporary. So what is the true cost of the stimulus if these spending increases are made permanent?
                          Rep. Paul Ryan (R-WI) asked the Congressional Budget Office to estimate the impact of permanently extending the 20 most popular provisions of the stimulus bill. What did the CBO find? The true 10 year cost of the stimulus bill $2.527 trillion in in spending with another $744 billion cost in debt servicing. Total bill for the Generational Theft Act: $3.27 trillion...

                          Note it is CBO saying this amount.

                          This doesn't even count the cost to society imposed by a lower dollar (higher food and energy costs than would otherwise be the case) or higher real interest rates (or crowding out of private borrowing) as the government has to finance this bill via printing or borrowing rather than higher taxes. There is no free lunch just more free stuff from the empty coffers of the "hyperpower"  formerly known as the U.S.

                          Bush fucked this country royally for 8 long years.... it now appears to be "our" team's turn

                          •  Well sooner... (1+ / 0-)
                            Recommended by:
                            Sharon Wraight

                            if the result is that the middle class regains strength and lets labor claim a bigger share of the value created by labors increased productivity, it may pay off in the end.

                            Yes, bush* screwed us but there is no way 90% of us really gained anything from it.  

                            Head Start, Medicaid and the EITC are all programs that have a multiplier greater than 1, they will stimulate the economy and are long term investments.  Tax cuts on the wealthy, on capital gains have multipliers much less than 1 and have proven to be deflationary.

                            There's an old saying about having to spend money to make money, the unspoken part is that you have to have the judgment to spend it in the right places to be effective.  This bill is a whole lot closer than bush* or his remaining cronies could ever come up with.

                            I am here to represent the democratic wing of the Democratic Party.

                            by Josiah Bartlett on Fri Feb 13, 2009 at 04:56:13 PM PST

                            [ Parent ]

                      •  Great answer Sharon... (3+ / 0-)
                        Recommended by:
                        high uintas, bmcphail, Sharon Wraight

                        I lean toward nationalizing the big bankrupt banks and breaking them apart.  Separate the regular banking, investment banking and insurance and re-establish a strict regulatory regime that will keep them separate..  Part of the regulation would be to either keep any bank from becoming "too big to fail" or placing any such bank that be under additional regulation and capital requirements.

                        If there suddenly are a lot fewer banks, don't worry.  New ones will be organized.

                        Protections must be developed to keep the strict regulatory from trends and fads that can undo them.  Banking should be stodgy and boring.

                        Finally, part of the re-regulation should include strong consumer protections, especially with regard to credit card interest rates, fees and charges.  Credit card portfolios will still be very profitable, they just won't be abusive to consumers.

                        I am here to represent the democratic wing of the Democratic Party.

                        by Josiah Bartlett on Fri Feb 13, 2009 at 10:24:33 AM PST

                        [ Parent ]

                  •  Make no assumptions for 2010 (6+ / 0-)

                    A lot will happen between now and then, and none of us know what electoral impact it will have.  If the economy continues tanking for the next 18 mos, I wouldn't predict a Dem victory w/ any certainty.

                    Krugman's focus today is much more on the bank bailout than on the stimulus package.  I share his views on the bailout in their entirety.  The still undefined plan is based much more on philosophical views of Geithner and others than it is on political considerations.

                    Some men see things as they are and ask why. I see things that never were and ask why not?

                    by RFK Lives on Fri Feb 13, 2009 at 08:28:44 AM PST

                    [ Parent ]

                  •  and if they run back to (0+ / 0-)

                    ...the Republicans, we are all toast.  Period.  End of Discussion.

                •  I optimistic there will be more, but ... (0+ / 0-)

                  I think expecting TEN more is wildly optimistic.  I'd happily take 4 or 5 more.

                •  There's guy from the DEA outside your door (1+ / 0-)
                  Recommended by:

                  because to believe this you have to be heavily medicated with schedule 1 drugs.

                  "I agree with you now make me do it!" FDR

                  by JC Dufresne on Fri Feb 13, 2009 at 07:55:32 AM PST

                  [ Parent ]

                •  will it? (0+ / 0-)

                  Or will independents decide to blame Obama and vote in the other party?

                  Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

                  by Benito on Fri Feb 13, 2009 at 08:14:29 AM PST

                  [ Parent ]

                •  Somewhere, you've got to . . (0+ / 0-)

                  Stick a fork in the Beast and declare it done, or at least unfit to continue in battle.

                  That's not going to be accomplished unless you make them irrelevant by passing a shock-the-world bill without them or rendering them complete fools by making them filibuster action that the country desperately needs.

            •  It's not that the Republicans are... (21+ / 0-)

              economically inept---it's that they simply don't care about the great mass of the people.  They know how their bread is buttered and they know that their only chance of regaining lost power (or at least retaining what they have) is to discredit the efforts of the Dems.  They, like Rush Limbaugh, want the stimulus to fail to do what most everyone hopes, that is, to stimulate the economy.  The American people are being held hostage to the vicious ideologues in charge of the Republican Party.  They need to be called out for it but as long as we are dependent on them to go along, they will be able to prance and posture and obstruct.

              •  It's that they are fascists. (4+ / 0-)

                Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

                by Benito on Fri Feb 13, 2009 at 08:15:23 AM PST

                [ Parent ]

              •  I agree they want to hold/regain power. (1+ / 0-)
                Recommended by:
                Wings Like Eagles

                But I think they're complete economic idiots as well.

                Partisanship is good. Just say no to ". . . [t]he mushy, cowardly middle, one that never stands for anything too much or critiques anything too loudly." (kos)

                by Orange County Liberal on Fri Feb 13, 2009 at 10:06:08 AM PST

                [ Parent ]

                •  Well, that is true to some degree... (0+ / 0-)

                  but, they have a very narrow focus on those who butter their bread and in that sense, they have done a good job of serving their masters.  We have the Republicans to thank from Reagan to Bush I and II (and unfortunately, some neoliberal Dems who went along with them) for the extreme concentration of wealth that we currently have.  I saw somewhere that we have now a tighter concentration of wealth in this country than France had before the French Revolution.  I think that the Republicans knew full well what they were about.  They have achieved it--much to our chagrin.  They have bankrupted our government by under-taxing the rich and spending enormous sums on their incessant wars.  They have bankrupted our financial institutions through excessively low interest rates and the removal of regulations so that the big investment houses leveraged themselves to death.  They have bankrupted our industries with competition by foreign sweatshops.  They have destroyed our unions by making it impossible for industries to compete without shipping jobs overseas.  They have destroyed living wages through the casual attitude toward illegal aliens flooding some labor sectors and driving down wages.  I saw an interview with a stone mason in southern Florida who said that ten years ago he used to make $14-$15 per hour (hardly a princely some) and that now because of illegals, the wages of stone masons have been driven down to $7 per hour.  How does one keep a roof over one's head and feed one's children on that?  Let's see, have I left anything out?  Oh yes, and now they have bankrupted the rest of us through trashing our savings and investments.  But I believe that is exactly as they intended to do in the service of making the super-rich into the uber-super-rich.  Wealth is never destroyed--it is merely transferred.

            •  Krugman, along with Stiglitz, Roubini, et al. (35+ / 0-)

              are accomplished economists with valid points of view that should be taken seriously. Unfortunately, that perspective has been squelched by the Summers-Geithner axis that defines and dominates Obama's economic approach. For good reason, that has a lot of people worried. Krugman is doing a real service in voicing his opinions in public given that they appear to be closed out of the discussions going on in the administration.

              •  Summers is a Dope. (6+ / 0-)

                I saw him on Today this a.m. and he couldn't even answer the simple question of whether the Dem's stimulus package is too small.

                Instead he just rambled and babbled about the general state of the economy and said nothing. No wonder we have a mess on our hands.

                •  To me, the big question no one has answered... (6+ / 0-)

                  ... is whether the "GDP gap," the difference between GDP and potential GDP, is as big as all the economists think it is.

                  I am concerned that the perception of a $1 trillion-a-year "hole" in the economy is based on the expected growth of an economy that two years ago was not as healthy as it looked.

                  The U.S. consumer economy -- which is now 70% of GDP -- was clicking along because consumer debt was piling up as unprecedented rates. As households deleverage, i.e., pay off debt, they are going to spend more money on debt service and less on new stuff. Good for families but not so good for the gross economy.

                  Isn't it possible that our economy needs to go on a diet for the next few years? Even if that means it won't return to "normal" anytime soon?

                  •  No, Diets DON'T Work! (2+ / 0-)

                    If you've ever gone on a real diet, you know that as you cut back, you feel hungry and obsess about food constantly. So while you may lose a few pounds initially, soon the vicious cycle starts and you end up gaining weight.  Counter-intuitive, but true.

                    Same thing with the economy. "Common Sense" is wrong because the real solutions are counter-intuitive:  as consumer demand falls, workers lose jobs or hours and their income falls, which reduces demand further thus setting off the vicious cycle down.

                    The only way out of this depression is for American consumers to increase spending again.  The government simply can't make up the difference in reduced demand that the economy requires for growth.  That's your $3 Trillion hole.

                    The only real answer is for the government to give consumers incentives to spend their money instead of hoarding it like they are now doing.

                    Unfortunately, the government is doing NOTHING to spur consumer demand for the biggest components of consumption: housing and autos.  In fact, government isn't spurring consumer demand for anything.

                    Nobody has learned the real lesson of the Great Depression: the Paradox of Thrift, as J.M. Keynes called it.

                    •  Diets were a bad analogy. (2+ / 0-)
                      Recommended by:
                      thethinveil, Fuzzy Dais

                      I said maybe we needed to go on an economic diet for the next few years, but you're right that diets are a short-term, unsustainable approach.

                      What I should have said is that the economy needs a lifestyle change. It needs to consume less junk food (consumer spending) and get more exercise (savings).

                      I'm not advocating an end to consumer credit, but our savings-vs.-spending economic behavior is very much a part of the problem. Having 70% of our economy come from GDP puts tremendous pressure on the retail sector to boom on all cylinders all the time.

                      That's not sustainable.

                      •  Last sentence: GDP = consumer spending. (1+ / 0-)
                        Recommended by:
                      •  Sure it's sustainable (0+ / 0-)

                        With rising incomes and increasing job opportunities, U.S. consumers can drive the world economy just as they have for the past 60+ years.

                        We need MORE spending now, not less.  Obama should be telling eveyone who can, to go out and buy a house or car made in North America this weekend. (Unfortunately for me, that would rule out the G-8 GT.)

                        There is simply no other way out of this crisis.  More saving is exactly the wrong thing for the economy now.

                      •  you got it.... (0+ / 0-)

                        borrowing to consume IS UNSUSTAINABLE.

                        Because it has to increase all the time.

                        What is abundantly clear, however, is that the new Administration intends to push spending back up to pre-crash levels and to fill the entire credit void that has disappeared into the black hole of the American financial system. Whether or not the prior levels of spending and lending were justified by market conditions then, or now, appears to be largely unexamined.

                        In the worldview of Geithner and like-minded economists, credit, rather than savings, is the central figure in the economic equation. Therefore, he sees anything that eases the process of lending to be an effective economic policy.

                        What they don't address is the ability to repay. Without rising wages or increased housing prices .... the wealth effect collapses. Case in point ... today. Printing money out of thin air will doom us all to inflation hell.

                        A business that makes nothing but money is a poor business. Henry Ford

                        by joeshwingding on Fri Feb 13, 2009 at 04:55:20 PM PST

                        [ Parent ]

                  •  One fundamental flaw (6+ / 0-)

                    Too many people can't afford to pay off debt. For a very large percentage, debt was used to buy food, fuel, and pay medical bills - it was used as a filler for the lack of income. Now with income drying up, an awful lot of people will not only be unable to pay debts, they'll be unable to buy basic necessities.

                    This is not going to be good for families. It's going to be a whole lot worse than a "normal" deflationary hoarding process.

                    In real life, a TARP is a cover-up.

                    by mataliandy on Fri Feb 13, 2009 at 09:04:30 AM PST

                    [ Parent ]

                    •  True that (3+ / 0-)

                      Many people are "sick and dying" economically.  For those who are still healthy, it is their duty to get out there into the market and buy American made cars, furniture, houses, etc. to get the economy back on track.

                      The Paradox of Thrift  is our real enemy and must be defeated.

                    •  But it's happening. (2+ / 0-)
                      Recommended by:
                      Feeling Blue, thethinveil

                      Consumer debt spending has dropped, and individual savings has increased over the past several months. That's good for individuals in the long run and bad for the economy in the short run -- the so-called thrift paradox.

                      The per-capita debt-to-savings numbers were too high -- that's largely what got us into this mess -- and a lot of the systemic problems are not going to get resolved until we settle back to more workable levels of debt and savings.

                  •  Paying down debt is certainly... (2+ / 0-)
                    Recommended by:
                    Betty Pinson, thethinveil

                    a good idea, Mister Savannah, but with what?  People without jobs do not pay down their debts.  The debt that has been built up will continue to cause pain for some time as it diverts more and more of the shrinking pie away from the middle class.  It is one of the ways that the wealthy rob the middle class (through debt peonage) --the other way is through inflation, and without tax increases on the wealthy (which I don't see being politically feasible with the current crop of Rethugs obstructing all the way) and the current level of government deficit spending--inflation, and perhaps severe inflation, will not be far behind.  That is the second way that the parasitic "ownership class" (the wealthy) robs the "productive class" (the middle class) and the poor.

                    •  It is a serious problem. No dispute there. (1+ / 0-)
                      Recommended by:
                      Wings Like Eagles

                      High debt-to-savings ratios are to a large extent the product of stagnant wages. Milk costs more, your salary stays the same, so you charge the difference. But that catches up with you at some point -- you're spending money on interest instead of milk and you've got a big principal balance sitting out there.

                      I'm just saying our expectations of potential GDP may be higher than what we should practically expect. If GDP in 2006 was based on charging flat-panel TVs on your Best Buy card, maybe GDP in 2009 should be based on paying it off and saving a little for the next one.

                      The economy can still grow. I just think we're overly optimistic about what the starting point should be.

                •  Summers isn't stupid... (0+ / 0-)

                  He knows that the stimulus package is too small--but he is operating as more of a politician than an economist at this point.  And his political ideology is neoliberal.  (Which is much more like the neocon ideology dominating the Rethugs than progressive/liberal ideals.)  Until we purge him (and others like him in the administration) and the Blue Dog Dems, it's going to be a hard slog.  For now, we appear to need them.  

              •  What was Obama thinking in selecting............. (0+ / 0-)

                .....Summers and Geithner to be on his economy team.  They both contributed to the economic mess that we're in.  Krugman, Stiglitz and Roubini would be far better choices.  I believe that Obama is catering far to much to the status quo.  This is no time for milk and weak tea solutions, bold action is absolutely mandatory to revive our sick economy which is now on life supports..

            •  right (14+ / 0-)

              And why all of a sudden are we all upset with Krugman for being critical of the stimulus package?  He has legitimate concerns.  we aren't republicans, only supporting ideas/opinions when they are convenient to our own ideologies and then crapping on someone the moment they disagree.  We are supposed to actually listen to and learn from constructive criticism - that's why we are the adults, right?

              •  I'm not upset with Krugman (6+ / 0-)

                He's got a valid view, and as a matter of economics, he may well be correct.  But I just don't see how he thinks we get from here to where he wants to go in the time during which we're required to do it.

                To modify an old saying, "Krugman may be right in the long run, but in the long run, we'll all be dead."  And if we couldn't get 60 votes in the Senate pretty soon, in the not very long run, the economy might well be dead.

                •  How is in our hands (4+ / 0-)

                  The problem is political. The right wing has a strong network of people who will agitate instantaneously in response to a dog whistle from the right wing noise machine. When the right wing calls to congress outstripped left wing calls by 100 to 1 last week, it was very telling.

                  We (not meaning specific individuals, but as a movement) are NOT dedicated to creating legislative change. We don't call every single time there's something to call about. We don't write letters to the editor every single time. We don't inconvenience ourselves often or consistently enough to apply effective pressure on our legislators. I can't tell you how many times I've heard someone say "there's no point contacting [my legislator], he's a republican." That's NO excuse. If they get enough noise for or against, they're going to think about their vote.

                  Anyway, I got to see Krugman speak earlier this week. This is a little piece paraphrased from his speech at the "Thinking Big, Thinking Forward: conference:

                  We're always making choices at the margin on how much to spend on public good vs private good.

                  For the last 30 years, we've pushed the margin way too far toward private.

                  Remember ketchup as a vegetable?

                  For 30 years, this country has been dominated by "govt is not the solution, the govt is the problem."

                  For those playing this game, there is an "outer truth" (the story you say out loud): Tell the rubes that tax cuts create revenue; but "inner truth" is you know cutting taxes will allow you to "starve the beast." ketchup did not end up classified as a vegetable, but school lunches were indeed cut. We now spend $2.57 for lunches. It's stretched a bit by unhealthy farm subsidies, but this "private good" (lower taxes) shortchanges the public good: the health of our children.

                  There is pressure to cut taxes, keep revenues down, cut govt spending.

                  But when we do that, the result is not that the most wasteful spending is cut, but that spending on those with the least voice is cut.

                  If you're a hard-pressed Governor, with balanced budget requirement, you cut the things that have their negative consequences in the future. With school lunches, the consequences of feeding kids badly show up 20 or 30 years later.

                  If you look at infrastructure spending: that well-known liberal, Eisenhower, was the peak. It fell after his administration, then took another big drop under Reagan. That's the gross of the investment, but doesn't take into account depreciation of the assets built back then.

                  Now we're lagging on transport, education, cutting edge of technology (that sense of ourselves as innovators is based on work done decades ago).

                  This crisis offers an opportunity to start that conversation. We've spent 30 years short-changing public investment. It's time to move that pendulum back a long ways in the other direction.

                  In real life, a TARP is a cover-up.

                  by mataliandy on Fri Feb 13, 2009 at 09:33:09 AM PST

                  [ Parent ]

          •  Absolutely. Krugman has the luxury as a professor (12+ / 0-)

            and columnist of thinking theoretically and operating in a vacuum. As a researcher myself, I spend a lot of time theorizing about best case scenarios in which all conditions are perfect and I am able to generate wonderful solutions to problems. However, outside of the laboratory, to obtain funding, I have to convince people spending real money that I am able to translate those Ivy Tower thoughts into solutions applicable to the real world with all of its inherent short comings.

            Krugman needs to realize that the economy and Capitol Hill do not exist in a college classroom. What is theoretically accurate, and what is actually feasible are two very different things.

            "Statistics are people with the tears wiped away." --Irving Selikoff

            by smartdemmg on Fri Feb 13, 2009 at 05:39:32 AM PST

            [ Parent ]

            •  As a researcher myself also (10+ / 0-)

              I can't tell you how many times the perfect I found in my lab ...was totally obliterated by reality.

              I respect Krugman greatly...but I don't think he accounts for the political reality.

              This year we can declare our independence...Barack Obama

              by PalGirl2008 on Fri Feb 13, 2009 at 06:01:39 AM PST

              [ Parent ]

            •  his point (12+ / 0-)

              his point is this, which people don't seem to grasp. There is NO time for politics. People say, but thats no reality, the republicans are playing politics,  thus HIS POINT IS.. if you play politics now, OUR NATION MAY FAIL.

              Thats the POINT.  We need a 2 trillion dollar stimulus and a lot more regulation etc, if we do not get it, it may NOT WORK.

              I have used the following analogy before but it bares repeating.  Its like going to the doctor because you are sick.  His perscribes anibiotics. You take them for a few days but not the whole 7 days because you can't afford em, and you think " well Iam feeling a iil better after 3 days.  SO after 3 days you stop taking them.  Then in a weeks time you are sick again.

              That is the same with the stimulus.  You either kickstart the economy or you don't.  Half ass is not an option, but yet that is what the Republcans are making us do.

              This is stimulus package is 2 days worth of anti biotics at best.

              (regarding the bank mess) They want to cure the patient but not deal with the disease.

              by dark daze on Fri Feb 13, 2009 at 06:30:24 AM PST

              [ Parent ]

              •  ??? (5+ / 0-)

                There is NO time for politics

                Damn the torpedos!  The stimulous package is an act of political will.  It isn't waved into existence by a magic wand.

                •  politics. (0+ / 0-)

                  politics is completely different than doing the nations business, such as passing needed bills.

                  (regarding the bank mess) They want to cure the patient but not deal with the disease.

                  by dark daze on Fri Feb 13, 2009 at 07:01:00 AM PST

                  [ Parent ]

                  •  How do you "pass needed bills" other ... (3+ / 0-)
                    Recommended by:
                    askew, smartdemmg, Radical Moderate

                    than through the POLITICAL process?

                    •  bills (0+ / 0-)

                      bills are created by the Governing of the people.  Politics is the "art" of governing.  Politics is the back room deals, the back scratching, the deal making,  There simply isnt time for that.  For this country to survive the government must do the people work, there is no time for politics.

                      (regarding the bank mess) They want to cure the patient but not deal with the disease.

                      by dark daze on Fri Feb 13, 2009 at 07:41:47 AM PST

                      [ Parent ]

                      •  What you're saying makes no sense at all (4+ / 0-)
                        Recommended by:
                        askew, dmh44, Sharon Wraight, smartdemmg

                        Bills aren't miraculously "created by the Governing of the people" (whatever that means).  The passage of bills and the execution of the laws contained in them IS the "governing of the people."  And those bills can only be passed by getting sufficient people to vote for them in the House and Senate, and having them signed by the President.  That's the political process, whether you like it or not.

                        Being a Protestant, I'll confess that I've never fully understood the doctrine of the "immaculate conception," but you seem to be positing a process of "immaculate legislation," which makes even less sense to me.  Babies don't get created without sex, and bills don't get passed without politics.  It's just that simple.

                        •  no (0+ / 0-)

                          no that you cant seperate the difference between doing the ntions bidding and politics which is sad and wrong.  I fail to see in the constitution anything about political parties.

                          (regarding the bank mess) They want to cure the patient but not deal with the disease.

                          by dark daze on Fri Feb 13, 2009 at 08:53:39 AM PST

                          [ Parent ]

                          •  So what? (1+ / 0-)
                            Recommended by:

                            The political parties EXIST, they're important, and you can't pretend that they don't exist simply because you don't like them.  You won't find anything in the Constitution about an air force, or space exploration, or food and drug inspection either, but that doesn't mean you can simply ignore them.  The Constitution certainly doesn't prohibit political parties, any more than it does those other things.

                            Even without formal political parties, politics (in the sense of making trade-offs and compromises) NECESSARILY exists.  In fact, it's clear that in providing for separate executive and legislative branches, and a separate House and Senate, the founders actually intended that nobody could advance any particular agenda without the type of compromises that you decry.  And they staggered the terms of Senators precisely to prevent whoever won a single election from having enough power to enact their agenda without making compromises.

                          •  again (0+ / 0-)

                            again you miss the point.  In certain historic times in a nation, politics must be cast aside.  Politics is a luxury we do not have right now.

                            Do you even understand how dire the situation is right now?

                            (regarding the bank mess) They want to cure the patient but not deal with the disease.

                            by dark daze on Fri Feb 13, 2009 at 09:17:06 AM PST

                            [ Parent ]

                          •  You don't understand the Constitution (1+ / 0-)
                            Recommended by:

                            Under the Constitution, it's simply IMPOSSIBLE to eliminate politics, in the sense of compromises in order to reach the required number of votes, and doing so was the last thing the Founders had in mind.  How would you propose that the President deal with the situation? Declare martial law and rule by decree?  Because that's the only way I can think of to pass laws without making compromises, if compromises are the only way to reach the required number of votes.

                          •  the patient (1+ / 0-)
                            Recommended by:

                            the patient lie dying on the table and you assert that is it still OK and normal for the surgeons to argue and allow ego to dictate the procedure needed.

                            The procedure is straight forward, yet the bickering is going to kill the patient.

                            (regarding the bank mess) They want to cure the patient but not deal with the disease.

                            by dark daze on Fri Feb 13, 2009 at 09:18:56 AM PST

                            [ Parent ]

                        •  political process and politics (1+ / 0-)
                          Recommended by:

                          the political process and politics are two seperate things.  The political process is laid out by our founders.   Politics is what happens when political parties and outside agendas interfer with the process.  Our founders warned us about political parties because they understood "politics" are a danger to this nation.

                          How right they were.

                          (regarding the bank mess) They want to cure the patient but not deal with the disease.

                          by dark daze on Fri Feb 13, 2009 at 08:59:46 AM PST

                          [ Parent ]

                      •  Politics is Power. (1+ / 0-)
                        Recommended by:

                        It is about the acquisition, maintenance, and wielding of power. For some reason our leaders think that politics and governance two are different things. They are not. They are intimately tied together into a seamless whole.

                        The problem is not that relatively like-minded individuals are having a problem agreeing on what should be done. The problem is that there are two factions with antithetical world views struggling for control of the body politic.

                        Democrats need to understand how to seize control of and use power in a way that effectively neuters, if not totally disenfranchises, the conservative movement. This is what they have been doing to us for decades. The favor needs to be returned.    

                        Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

                        by Benito on Fri Feb 13, 2009 at 08:25:45 AM PST

                        [ Parent ]

                        •  and this (0+ / 0-)

                          The problem is not that relatively like-minded individuals are having a problem agreeing on what should be done. The problem is that there are two factions with antithetical world views struggling for control of the body politic.

                          this is not a luxury we have any more.  When this country becomes a failed state, people will look back and say, why didnt they do more? why didnt they do something.

                          (regarding the bank mess) They want to cure the patient but not deal with the disease.

                          by dark daze on Fri Feb 13, 2009 at 08:56:13 AM PST

                          [ Parent ]

                          •  I agree completely (1+ / 0-)
                            Recommended by:

                            this is not a luxury we have any more.  When this country becomes a failed state, people will look back and say, why didnt they do more? why didnt they do something.

                            The problem is that our political INSTITUTIONS have effectively made the country ungovernable through the need to acquire near unobtainable super majorities in the Senate. Why is this? Because the Senate represents territory, not people. If the Senate did not exist, or existed with different rules, we would not be in the situation we are now. But we are - largely because Senate rules have now made most of our elections irrelevant to the actual process of governing the country. The result is no one can do anything about anything - an we slip toward disaster as a consequence.  

                            Think about that. Miles of empty space in states like Wyoming, Alaska, and elsewhere get as much Senate representation as you or I. The problem is not that democracy has failed - it is that it hasn't been given a chance due to the rules of the game that it is currently operating under.

                            Our leaders need to use power in order to ensure they have a governing coalition in the Senate  big enough to overcome a filibuster. The problem is that they have no idea how to do this - primarily because they are under the mistaken impression that the remaining conservative Republicans from rural backwaters like Mississippi, Alabama, Alaska, or Utah are interested in making a 'deal'. Once this is understood, appropriate tactics that have the possibility of crushing the opposition can be used.

                            I myself favor defunding die-hard red states as much as possible. Turn off the blue-state funded welfare spigot that keeps these states afloat and watch them squirm. Make them pay for their opposition and obstructionism. Make it hurt. As it stands, they suffer nothing for their actions. Inflicting economic and political pain is one way to change this.

                            Furthermore, pay off those R's who cooperate with generous amounts of funding. Show that collaborators will be rewarded and respected. Establish, through tough negotiating positions and hardball tactics, that you will not roll over. Force an actual god-damned filibuster! Once credibility is established, all else will follow. Run ads against the opposition every day. Control the narrative every day. Manipulate public opinion in order to turn conservative into a dirty word.

                            It's that, or the very real possibility that nothing will get accomplished and things will get worse. Our current filibuster-induced political impasse needs to be removed. I don't see how 'jaw, jaw' will get us there.

                            Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

                            by Benito on Fri Feb 13, 2009 at 09:31:06 AM PST

                            [ Parent ]

                  •  Completely intertwined n/t (0+ / 0-)
                •  ps (1+ / 0-)
                  Recommended by:

                  when your house is on fire, you don't sit there an argue about who how much someone paid for the couch.

                  Once again, americans don't get it. This crisis may bring down this union.

                  (regarding the bank mess) They want to cure the patient but not deal with the disease.

                  by dark daze on Fri Feb 13, 2009 at 07:04:02 AM PST

                  [ Parent ]

                  •  It is not that we "don't get it" (0+ / 0-)

                    it is that we are not sure if you are aware of the refusal of the republican party to go along with your ideology. Look, I am that rare individual around here who actually likes bipartisanship and even I can read the writing on the wall. When not a single republican House member votes for a measure to rescue their own constituents from economic disaster, you have to acknowledge reality.

                    Most of us aren't suggesting that Krugman is incorrect on the economic theory. However, this is not a college classroom and we are not taking midterm exams. If he would like to make himself useful, he could start by explaining the mechanism by which one gets the republican party to go along with his economic theories. That or how to elect > 60 Democrats to the Senate. Otherwise, he should just publish his ideas in a journal of economic theory where other like minded individuals may read them because they will have as much impact there as they are having in his column.

                    "Statistics are people with the tears wiped away." --Irving Selikoff

                    by smartdemmg on Fri Feb 13, 2009 at 11:55:39 AM PST

                    [ Parent ]

                •  Politics is war (1+ / 0-)
                  Recommended by:

                  Our job is to crush and destroy the Republican Party and the Conservative movement.

                  Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

                  by Benito on Fri Feb 13, 2009 at 08:17:13 AM PST

                  [ Parent ]

              •  Analogy problem (0+ / 0-)

                If the patient's spouse states that they will not purchase those expensive antibiotics for 2 trillion dollars, either take the less expensive option or nothing, what is the patient to do?

                Do they simply take nothing and hope they do not go into sepsis and die or do they try the 3 days worth of antibiotics and hope their own immune system (ie the hopefully self-correcting market) kicks in.

                I'd rather try something and hope, rather than nothing and assure failure.

                "Statistics are people with the tears wiped away." --Irving Selikoff

                by smartdemmg on Fri Feb 13, 2009 at 11:45:40 AM PST

                [ Parent ]

            •  No. You need to realize that you need voices (2+ / 0-)
              Recommended by:
              mataliandy, LaFajita

              like Krugman's to help push the debate and the solutions to something that works.  I think Krugman understands that, but so what?  All you are implying is that he should say nothing and accept the reality of politics.  Well, newsflash, the reality of politics is constantly changing by those who have a soapbox to posh the meme and educate the electorate.  Krugman is one such person.

              The 4 boxes of Democracy: The soap box, the ballot box, the jury box and the ammo box. The 4 G's of survival: Gold, Grub, God and Guns.

              by FightTheFuture on Fri Feb 13, 2009 at 09:08:34 AM PST

              [ Parent ]

              •  asdf (1+ / 0-)
                Recommended by:
                political junquie

                When not a single republican House member votes for a measure to rescue their own constituents from economic disaster, you have to acknowledge reality.

                Most of us aren't suggesting that Krugman is incorrect on the economic theory. However, this is not a college classroom and we are not taking midterm exams. If he would like to make himself useful, he could start by explaining the mechanism by which one gets the republican party to go along with his economic theories. That or how to elect > 60 Democrats to the Senate. Otherwise, he should just publish his ideas in a journal of economic theory where other like minded individuals may read them because they will have as much impact there as they are having in his column.

                "Statistics are people with the tears wiped away." --Irving Selikoff

                by smartdemmg on Fri Feb 13, 2009 at 11:59:18 AM PST

                [ Parent ]

                •  Uh, the house is irrelevant and the Senate can (0+ / 0-)

                  be better handled by making the fuckers actually work for their filibuster, if that's what they really want to do.  In the meantime, get Obama and the gang of wallflowers need to get out there and explain why the stimulus parts, which also include unemployment benefits, SCHIP, etc. actually stimulate more than every dollar spent and why the tax cuts are so much BS, especially for the rich.

                  They need to contrast these rethugs who gladly supported 2Trillion in tax cuts with Bush and a 1-2trillion (so far) war of lies, while whining about 300+billion in real stimulus (if you do not count the useless tax cuts).

                  Harry "Brainstroke" Reid needs to control his attacks of the vapors at the first sign of resistance and fucking act like a leader of a party with a majority of the vote.  They can cote this bill in w/o the three fuckers and let they try to filibuster.  Let them stop the business of the country while it is burning.  If the dems play it right (I know a big IF with these assclowns) the rethugs will be slapped into oblivion.

                  I see that Obama is willing to put more pain on all of us with the half asses measure.  I hope he is able ot point the blame when he has to come back with a bill 4X as large later this year.

                  Krugman is just fine. If you think what he is saying has no impact then you are fooling yourself.

                  The 4 boxes of Democracy: The soap box, the ballot box, the jury box and the ammo box. The 4 G's of survival: Gold, Grub, God and Guns.

                  by FightTheFuture on Fri Feb 13, 2009 at 06:37:15 PM PST

                  [ Parent ]

            •  From the impression that I get from his columns (0+ / 0-)

              I feel like Krugman is a lot like a professor that I had during my first year of law school.

              The man was (and still is) absolutely brilliant, he puts most legal scholars to shame.

              A few years ago, the city was doing roadwork on the street where he lives and the mess from the construction started encroaching on his property. He filed a complaint with the court, seeking an injunction to have the city move the debris off of his yard. Rather than filing the usual motions, etc. he filed what was essentially a 50 page essay with the court explaining why he was right. He even cited to English common law to support his position. Needless to say, he was basically laughed out of court.

              Sometimes, professorial expertise doesn't translate so well into the real world.

          •  I urge you to read Samantha in Oregon's (7+ / 0-)

            diary from yesterday.  She predicted Krugman's tone and has been reading him carefully.  I think he's venturing out of economics and into politics with some bias against Obama in general.  


          •  See my sig line ... (17+ / 0-)

            I think Krugman is providing useful public pressure to move the window of what is politically possible.

            "I agree with you, I want to do it, now make me do it." - Franklin D. Roosevelt

            by jrooth on Fri Feb 13, 2009 at 05:57:27 AM PST

            [ Parent ]

          •  The notion that Krugman is politically tone-deaf (11+ / 0-)

            doesn't resonate with me.

            I believe, as Krugman does, that Obama and the D Congress lost the opportunity to construct and sell a larger, much better package, perhaps before inauguration day even happened.

            Three months pass there in which Obama, his economic advisors and Congressional leaders could have constructed this solution with folks like Roubini, Stiglitz, Krugman, Reich et al (I believe Reich was the only one actually on Obama's economic advisory group) as well as the marketing effort needed to sell the package to the public and the media. They failed during this period and then never recouped after inauguration day. What we are getting, IMO, as, I believe in Krugman, is a second or third tier effort compared to what could and should have been, given all the advatnages the Obama administration and Congress had going in...

            We have no time but the time to change.

            by Words In Action on Fri Feb 13, 2009 at 06:31:08 AM PST

            [ Parent ]

            •  well put - (2+ / 0-)
              Recommended by:
              mataliandy, Words In Action

              but it would also have had to included key figures in Congress who would have to take the heat for writing it up legislatively and getting it passed.

              do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

              by teacherken on Fri Feb 13, 2009 at 06:45:49 AM PST

              [ Parent ]

            •  I don't think they could have gotten anything (2+ / 0-)
              Recommended by:
              peglyn, Radical Moderate

              much better, and quite possibly, the longer they spent on it the WORSE bill we'd wind up with.

              Think about the bailout - the ONLY reason that got passed is because people were scared and not thinking. If that HADN'T passed, it NEVER would have, because unless the world totally collapsed, the crisis would be effectively over. And if it had totally collapsed, the bill would have been completely different.

              The longer things go on without completely falling apart, the less chance of getting things passed.

              You forget - even at the height of the Great Depression, the majority of people had jobs. Unemployment was estimated at 25% - but that means that 75% of people DID have jobs.

              What the Great Depression did is move this country into the 20th century, basically overnight. People became way more mobile - not because they wanted to, but because they had to move to where the work was. Towns died, and others sprung up in different places. Electricity and roads were brought to more remote areas, schools were built, etc.

              And those kinds of things are NOT fun times - but sometimes they're necessary.

              Frankly, I think the biggest changes today need to be in the banking/finance areas, and education. Those have yet to happen. But they will. The entire financial system needs flattening out, so that it's clear who holds the title/paperwork on real property. Right now, that's not so easy to figure out, which is a large part of the housing problem.

              Education needs to be overhauled too - there's no reason for children to spend 8-10 weeks sitting around doing nothing, to start with.

              But those things won't happen unless there's a real crisis, and we're not quite there yet.

              •  yeah (1+ / 0-)
                Recommended by:

                i agree - this has largely been a media echo chamber crisis - not that it isn't real, but there aren't soup lines and double digit unemployment - so people are always cautious not to change too much.

                Obama is also cautious too. I think it is generally true that he continuously is underestimated both on the left and right. This spending bill for example, is an enormous victory, historically speaking, though it may well not be enough, and it happened in the first 3 weeks, which means it gets associated with Bush's failure more than Obama's agenda. He still has plenty of capital, and I expect his budget to reflect the need for still more spending. Notice he's on the stump these days. When things get worse, as they will, the message that he's hammering home is going to sink in. He'll get the popular support for more action.

                I think that appointing people like Geithner and Summers who are linked to the old system is partly symbolic, and serves as a counterpoint against which the administration can argue itself forward. Obama also likes to be cautious and reassuring. He's also a genuine progressive and intellectual. I don't doubt he knows this debate inside and out. By all reports there's a battle going on over the financial bailout. Some have suggested that putting Geithner out there was a test of the man and his ideas. He didn't do so well. Expectations were lowered. Huge undefined areas exist. I personally don't doubt that there will be dramatic change. But of course Obama does things carefully. He doesn't want to spook anyone. We're watching an orchestrated game. We on the left get frustrated because it doesn't LOOK like change, but then ba-bing: change.

            •  Putting bipartisanship above results... (2+ / 0-)
              Recommended by:
              mataliandy, Words In Action

              ... allowed the Republicans a voice they never would have had if the president had sent the plan to the Hill, ignored the Republicans, jammed it through, and using his administration to the do the real heavy lifting.

              Obama's efforts at bipartisanship may pay dividends down the road, but the Lake Wobegon approach -- where all ideas have merit -- is wrongheaded and unnecessarily dilutes his mandate to act.

              He doesn't have to shut the Republicans out to be bipartisan; he can take private meetings with them, include them in House and Senate negotiations, etc. But people did not vote for a coalition government in November. People voted for Obama to be a strong executive and make things happen.

              I hope he takes a stronger approach with the budget, health care reform, and environmental, carbon, and renewable energy legislation.

          •  I am a pragmatist (1+ / 0-)
            Recommended by:

            But what happens when the best we can get through congress isn't good enough?  As Krugman states...

            And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach — a feeling that America just isn’t rising to the greatest economic challenge in 70 years.

            Here's an analogy.  Suppose you are hit by a bus and go to the emergency room.  You need a transfusion and an operation to stop internal bleeding or you will die.  They say, I'm sorry, but really we can only give you a partial transfusion.  Your dead whether it is a half measure or no measure at all.

            This is the potential that Krugman is talking about.  A larger bill may not be possible, but then I am left thinking...

            And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach — a feeling that America just isn’t rising to the greatest economic challenge in 70 years.

            An open mind gets filled with crap.

            by Empty Vessel on Fri Feb 13, 2009 at 07:41:56 AM PST

            [ Parent ]

          •  Buchanan or FDR? (1+ / 0-)
            Recommended by:

            Obama has made his choice.
            5% chance of civil war
            1 in 12 of a ten year long depression, complete with hooverite "four people living in one car" scenarios.

            Jesus ain't comin', go ahead and put the Nukes back now.

            by RisingTide on Fri Feb 13, 2009 at 07:56:42 AM PST

            [ Parent ]

            •  God Help Us (1+ / 0-)
              Recommended by:

              Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

              by Benito on Fri Feb 13, 2009 at 08:27:47 AM PST

              [ Parent ]

            •  I vote for 4 people in a garden shed myself (2+ / 0-)
              Recommended by:
              high uintas, RisingTide

              Since that's what our family of 4 lives in.

              This is going to be so much worse than most people seem to be able to get their heads around, and that includes people like Summers and Geithner, both of whom are too entrenched in the status quo.

              You know how sometimes, if you're too close to a problem, you can't see alternative solutions that might be more effective?  That's what I see with happening Geithner and Summers. They're so close to the existing financial system that they can only think of saving the banks. This, unfortunately, means they aren't thinking of saving the citizenry.  If they could step away from the banker mentality, they might see that saving the people first can save the banks later. They might also see that some banks can't be saved.

              In real life, a TARP is a cover-up.

              by mataliandy on Fri Feb 13, 2009 at 10:02:31 AM PST

              [ Parent ]

          •  He's a pundit (0+ / 0-)

            his opinion is of value but it's only one opinion.  No one has all the answers, including the good Professor.

      •  americanism (16+ / 0-)
        the current economic problem has been misdiagnosed. it is not a crisis of capitalism

        it is a crisis of americanism. a unique economic system that has created widespread
        affluence in a nation of several hundred million

        unfortunately its overwhelming success has convinced the rest of the world
        to embrace it and the result is the present crisis

        just as the laws of nature demand opposing systems manmade economic systems
        demand the same. the end of sovietism which is misnamed as communism
        foretold the severe crisis of americanism

        i believe history will view the bush cheney regime as ultranationalist and
        its actions desperate attempts to delay the current crisis as long as possible  

        •  Recognising common global interests (1+ / 0-)
          Recommended by:
          Picot verde

          is the key to a sustainable global economy.  Nationalism, particularly when practiced by a country as large (economically) as ours will inevitably lead to imbalances and instability, world wide.  We are now beginning to experience the results of our selfish imprudence, and it will be ALL who suffer the consequences.


          "If you don't read the newspaper, you're uninformed. If you read the newspaper, you're mis-informed." -- Mark Twain

          by ovals49 on Fri Feb 13, 2009 at 04:47:13 AM PST

          [ Parent ]

        •  widespread affluence? is that a joke? (4+ / 0-)

          Most "American" wealth is held by the top 1%.  Most Americans are either poor, or lower middle class.  Most Americans do not own homes or land.  We don't have investment portfolios, health insurance, or 36" HDTV sets in every room.  

          Sunshine on my shoulders...

          by pkbarbiedoll on Fri Feb 13, 2009 at 04:49:02 AM PST

          [ Parent ]

          •  Affluence is defined differently (12+ / 0-)

            in impoverished nations, of which there are many.  By realistic world standards, affluence is having a comfortable and secure place to live, enough food that starvation is not a threat, access to clean plentiful water, and the resources to move about from place to place.

            The American definition of affluence is more along the lines of what you cited, but that's a definition that is peculiar to affluent societies.  :)

            "It's not getting any smarter out there. You have to come to terms with stupidity, and make it work for you." (Frank Zappa)

            by cinnamondog on Fri Feb 13, 2009 at 04:56:27 AM PST

            [ Parent ]

            •  Resources to move about (2+ / 0-)
              Recommended by:
              rolandzebub, drmah

              Who has that?  

              Sunshine on my shoulders...

              by pkbarbiedoll on Fri Feb 13, 2009 at 05:00:04 AM PST

              [ Parent ]

              •  I can get to work in downtown Chicago (8+ / 0-)

                because I can buy a ticket on a commuter rail train.  Therefore, I can hold on to my job (-- for now, anyway).  I have the money to buy the ticket and more importantly, the infrastructure -- the railway -- exists.

                Definitions of things like this are much narrower in the rest of the world than we Americans tend to think of them.  

                "It's not getting any smarter out there. You have to come to terms with stupidity, and make it work for you." (Frank Zappa)

                by cinnamondog on Fri Feb 13, 2009 at 06:10:31 AM PST

                [ Parent ]

                •  AMEN! (5+ / 0-)

                  Anybody who has spent any time in the developing world (other than at a beach resort where they don't see how the locals live) knows that problems such as a 401(k) account that's declining in value, or whether you can afford to buy a house, or whether you can afford a car instead of having to use public transportation and then walk a couple of miles to get to work, aren't anything that most people even consider.  At the center of most people's thinking there is whether they'll have enough to eat TOMORROW.

                  •  I have a friend who moved to Panama (2+ / 0-)
                    Recommended by:
                    mataliandy, gatorcog

                    several years ago, from Oregon.  She loves it there, but the change in lifestyle and available amenities would be mind-boggling to many Americans, I'm sure.

                    "It's not getting any smarter out there. You have to come to terms with stupidity, and make it work for you." (Frank Zappa)

                    by cinnamondog on Fri Feb 13, 2009 at 07:41:04 AM PST

                    [ Parent ]

                    •  And Panama is relatively well-off ... (1+ / 0-)
                      Recommended by:

                      compared to places like Zimbabwe, the Democratic Republic of the Congo, Haiti, or even Guatemala, El Salvador or Honduras.  I've spent time in the latter three, and have friends who have spent considerable time in all of them, and most Americans simply have no idea how well off virtually everyone is here compared to people in those countries.

                      •  Very true. And Panama has a stable (0+ / 0-)

                        government, which has a lot to do with the livability of a country.

                        A guy I know spent several years traveling in South America on business, and he said Venezuela is just scary.  You expect to be robbed.  Civil law is non-apparent.  It was really hard for me to comprehend that kind of daily living, in fact, I'm not sure that I really could.

                        "It's not getting any smarter out there. You have to come to terms with stupidity, and make it work for you." (Frank Zappa)

                        by cinnamondog on Fri Feb 13, 2009 at 08:08:38 AM PST

                        [ Parent ]

                    •  Not for long (0+ / 0-)

                      the change in lifestyle and available amenities would be mind-boggling to many Americans

                      Soon, it will be the daily reality for many Americans.

                      In real life, a TARP is a cover-up.

                      by mataliandy on Fri Feb 13, 2009 at 10:07:47 AM PST

                      [ Parent ]

                  •  ALl I ever wanted out of life (0+ / 0-)

                    Was the ability to live on my own (and thus not have the failure of being an adult living with my parents, which is a stain on your honor that never washes off) and have a family of my own.  Unless most documentaries and newscasts are lying to me this is possible in all but the worst countries.

                    I wouldn't miss most amenities that you get for being an American (my books, pretty much period).

                    "An army of principles can penetrate where an army of soldiers cannot." - Thomas Paine

                    by Mister Gloom on Fri Feb 13, 2009 at 09:56:17 AM PST

                    [ Parent ]

            •  we are 36th (4+ / 0-)

              quality of life the us is like 36th in the world or something.  Please put down the foam finger.

              (regarding the bank mess) They want to cure the patient but not deal with the disease.

              by dark daze on Fri Feb 13, 2009 at 06:34:31 AM PST

              [ Parent ]

              •  Affluence and quality of life are two different (3+ / 0-)

                things.  Quality of life is generally defined as

                economic wellbeing, health, education, freedom, social participation and self perceived wellbeing or satisfaction (André and Bitondo, 2001)

                --and clearly, an affluent society should also rank very high in quality of life in that society.  It's a source of shame that the US does not -- that infant mortality rates are higher than they should be, etc.

                But that doesn't mean that the US as a whole is not an affluent society, and I think that was the comment in the OP here.

                Sorry, I don't get the "foam finger" reference.  You mean, like "we're number one"?  I didn't say that.  I merely pointed out that there are various definitions of "affluent."

                "It's not getting any smarter out there. You have to come to terms with stupidity, and make it work for you." (Frank Zappa)

                by cinnamondog on Fri Feb 13, 2009 at 07:18:59 AM PST

                [ Parent ]

              •  That's a lot better than where the vast ... (3+ / 0-)

                majority of the world's people are.  Things could certainly be much better here, but we should never forget that we're STILL extremely fortunate compared to most of the world's people.

        •  huh? (0+ / 0-)

          wallstreet funded mortgages to anyone who could breath for years.  Thats your crisis.  A bank worth 400 billion has bad debt worth 600 billion.  Thats your crisis.

          (regarding the bank mess) They want to cure the patient but not deal with the disease.

          by dark daze on Fri Feb 13, 2009 at 06:33:29 AM PST

          [ Parent ]

        •  blklikeme (1+ / 0-)
          Recommended by:

          i believe history will view the bush cheney regime as ultranationalist and
          its actions desperate attempts to delay the current crisis as long as possible

          Not sure I agree with the delaying this crisis part, or the ultranationalist for that matter.
          Bush-Cheney put their party over country every time and never had the national interest at heart, only their pockets.  From what I saw, their whole intent was to bring us to the brink we're at.  They broke the country and brought it to its knees.

          Well, I guess I don't know what you mean by "equal justice under the law." - Bushy McSpokesperson

          by gatorcog on Fri Feb 13, 2009 at 08:06:47 AM PST

          [ Parent ]

          •  But that's the case for all nationalists, yes? (1+ / 0-)
            Recommended by:

            They first cheerlead for "the homeland," then work to reserve the word "patriot" for members of their party. It's a way of entrenching power in the hands of their party, by making people afraid of being labeled unpatriotic in a country where patriotism is the highest "good."

            In real life, a TARP is a cover-up.

            by mataliandy on Fri Feb 13, 2009 at 10:14:31 AM PST

            [ Parent ]

        •  Excellent comment, blklikeme... (0+ / 0-)

          This crisis has been brewing for a very long time.  I think the Republican idiots actually think that war is important to stave off economic crises (check out McConnell's comments a la the "WWII getting us out of the Great Depression").  The PROBLEM is really the concentration of wealth among too few and too much debt, (the co-rider of wealth concentration--one of the means that the wealthy use to extract money from the middle (read productive) class.  I agree with Krugman that it is too little and I believe likely too late but given the political realities (which I am sure he is well aware of) it was probably the best that could be managed.  I think we are likely looking at an L-shaped recession, with some short-term improvements from time to time, but a long period of diminished returns.  

        •  Technically, it's a crisis of greed (1+ / 0-)
          Recommended by:

          We just managed to redefine "American" to mean "Greed."

          In real life, a TARP is a cover-up.

          by mataliandy on Fri Feb 13, 2009 at 10:03:47 AM PST

          [ Parent ]

      •  Republicans Are Easy to Buy Off (23+ / 0-)

        All it takes to get Specter, Snowe and Collins, or any other Republican senators, to vote for the stimulus, is to include in it a few $billion more for projects in their state. Especially Specter, running for reelection in 2010, by which time there'll be a verdict in PA on whether this bill was worth voting or. Republican "loyalty" is nothing compared to their dependence on pork. If faced with $5B more in "PA infrastructure" vs losing $5B or more over the rest of the 11th Congress depending on his vote, Specter is going to go with the pork.

        I'm tired of hearing these excuses for failing to get small numbers of congressmembers to vote with bills popular with the public. Their entire jobs revolve around bringing money to their cronies. Even if $5B is totally wasted buying off each of Specter and a couple Maine senators (though it isn't - it's stimulus when spent), that's nothing compared to the rest of the package, or to the abominable costs for failing to revive the economy.

        "When the going gets weird, the weird turn pro." - HST

        by DocGonzo on Thu Feb 12, 2009 at 10:40:32 PM PST

        [ Parent ]

      •  I don't know that Japan of the 1990's (5+ / 0-)

        is an option for us. I'm sure that by the end of the Lost Decade there, quite a few people looked back and wished they'd pulled their money out of there at the beginning of it, rather than at the end. If people begin to believe that the U.S. is repeating the same mistakes, they will have the benefit of hindsight to be able to avoid taking 10 years of losses, as opposed to one or two.

        Also, I'm not even sure that Japan of the 1990's is so much better than America of the 1930's. If I'm not mistaken, the economy actually grew at a pretty good clip through middle and late 1930's, with a short exception when FDR tried to balance the federal budget too early. Yes, the absolute level of deprivation was higher, but it was also starting from a much lower level. We were materially significantly better off in 2007 than we were in 1929.

        •  Economic growth is a bad measurement (10+ / 0-)

          Japanese unemployment was low for much of that decade.  No one was in soup lines, etc.  The depression caused a lot more suffering because of the rapid contraction in the economy displaced many workers.  Even if you end up in the same place, 10 years of no growth is infinitely better than 3 years of sharp contraction, followed by renewed growth.  The latter scenario means a number of years when people are out of work and in bad straights, until the economy finally recovers enough, while in the former people may be stuck in one place, but not really suffering.  The depression was also worse, because we had next to no social safety net at the time.  Lose your job at that time and you might have serious concerns about starving.  

          The stock market performance of the Nikkei had much more to do with it being obscenely overpriced (think the Nasdaq in 1999), than it had to do with their lackluster economic performance.  Even had they continued to grow throughout that entire decade, the severe losses would eventually have occurred anyway.  In comparison the U.S. stock market is currently on the cheap side, so it is unlikely we'll see another 10 years of losses (except looking back, where we've already experienced that many years).  

          Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

          by Asak on Fri Feb 13, 2009 at 01:27:42 AM PST

          [ Parent ]

        •  The US has been the engine of global growth (2+ / 0-)
          Recommended by:
          VA Breeze, thethinveil

          Turn off the engine here, you turn it off everywhere - with likely dark consequences.

          We must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

          by Minerva on Fri Feb 13, 2009 at 02:37:35 AM PST

          [ Parent ]

          •  That's been true since WWII (0+ / 0-)

            But China and India (because of our consumption) have started developing their own insulation. Mind you, they are still very dependent on our markets, but their middle class may be feeling rosier than ours does right now.

            IGTNT...Honor the Fallen...Respect Their Loved Ones.

            by geez53 on Fri Feb 13, 2009 at 02:48:27 AM PST

            [ Parent ]

            •  Yes. Heard that a Chinese tour group (2+ / 0-)
              Recommended by:
              drmah, geez53

              arranged to come to California to look at foreclosed properties.  They expected a few hundred, and got 40,000 requests.  They had to close it down and cancel the trip.

              I love my President! Who'da thought THAT was possible?

              by livjack on Fri Feb 13, 2009 at 05:00:00 AM PST

              [ Parent ]

      •  Japan is not a bad outcome, relatively speaking (11+ / 0-)

        Sure, I'd like to do better, but in all honesty if we end up with a "lost decade" like Japan, we won't be that bad off.  Measures of Japanese happiness increased throughout that entire period, so the public as a whole was better off even after that "lost decade".  The failure was one of economic growth, not societal stability, or even personal happiness.  

        I agree that the current stimulus is too small, and it frustrates me.  But this is the "moderate" Obama that everyone was so head over heels for in the primary.  He is concerned with bipartisanship and is too centrist to request a truly substantial stimulus (rougly twice what we got), let alone to consider nationalizing banks.  I am not surprised by the President we got, just somewhat dismayed that others did not see it before hand.  BUT it could be worse, we could have John McCain, who probably would do next to nothing to address the crisis!

        Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

        by Asak on Fri Feb 13, 2009 at 01:18:59 AM PST

        [ Parent ]

      •  the reduction in stimulus can be directly (4+ / 0-)
        Recommended by:
        mmacdDE, hopeful, pat bunny, LaFajita

        attributable to the 60-vote filibuster rule, a bizarre, illegal legislative practices that has eliminated the majority vote provisions of the Constitution.  This will cripple Congress' ability to respond -- that is, assuming that Congress wants to do the right thing instead of taking more payoff from campaign contributors.

      •  "Playing chicken with the Republicans" (7+ / 0-)

        Baloney.  Take the nuclear option, get rid of the filibuster and pass the kind of bill that will actually jolt the economy in a beneficial way.  Screw the Republicans.  We don't need them for a simple majority in both houses.

        "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" Dwight D. Eisenhower

        by bobdevo on Fri Feb 13, 2009 at 04:58:19 AM PST

        [ Parent ]

        •  oh, God forbid, we actually assess the almighty (2+ / 0-)
          Recommended by:
          bobdevo, LaFajita

          forefathers' reasoning for what worked in the 1700s and what would work best today.  Oh, no!  We must hold true to what the forefathers in their infinite wisdom could fortell into the infinite future.  Hold fast to the most arcane procedural rules! Hold fast!

          I love my President! Who'da thought THAT was possible?

          by livjack on Fri Feb 13, 2009 at 05:04:59 AM PST

          [ Parent ]

          •  sorry-need to correct myself (1+ / 0-)
            Recommended by:

            the first congress didn't have the fillibuster option.  It wasn't until the early 1800's (after Aaron Burr raised the issue)that the stage was set for one. Mea culpa.

            I love my President! Who'da thought THAT was possible?

            by livjack on Fri Feb 13, 2009 at 05:19:30 AM PST

            [ Parent ]

        •  How would we take the "nuclear option?" (0+ / 0-)

          Remember, it depended upon a decision by the President of the Senate that under the rules, filibusters didn't apply to nominations.  What would the President of the Senate rule in this case, that the filibuster rule doesn't apply to ANYTHING?  That would be a truly bizarre ruling, and a more naked power grab than anything the Republicans were talking about in their version of the "nuclear option."

          •  Power grab??? As Cheney would say: "SO?" (0+ / 0-)

            Joe Biden, the president of the Senate, is a pretty craft lawyer. If he can't come up with some rationale, however thin, then he should e-mail me, and I'll come up with one.

            My take on the nuclear option is that it may be used for more than just contesting judicial nominations. Let the Republicans whine about it like middle schoolers. As Harry S Truman said:

            Senator Barkley and I will win this election and make these Republicans like it -- don't you forget that. We'll do that because they are wrong and we are right, and I'll prove it to you in just a few minutes.

            "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" Dwight D. Eisenhower

            by bobdevo on Fri Feb 13, 2009 at 05:21:55 AM PST

            [ Parent ]

            •  Being the parent of a middle schooler (2+ / 0-)
              Recommended by:
              Pescadero Bill, bobdevo

              I'll admit that they do whine a lot, but not nearly as much as do the puling cowards of the Republican party. Comparing Republicans to middle schoolers is grossly insulting to middle schoolers.

              •  I apologize to middle schoolers everywhere....... (1+ / 0-)
                Recommended by:

                who I have tarred with a too broad brush, the little bastards.

                "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" Dwight D. Eisenhower

                by bobdevo on Fri Feb 13, 2009 at 07:56:37 AM PST

                [ Parent ]

            •  As someone else has pointed out, even ... (0+ / 0-)

              without a filibuster, under the paygo rules, you still need 60 votes if you aren't generating enough new tax revenue to offset the spending (which would of course defeat the entire purpose of the package).

              •  My understanding of PAYGO (0+ / 0-)

                is from Wikipedia::

                The PAYGO rules were allowed to lapse in the House and watered down in the Senate . . . The White House admitted that the Medicare prescription drug plan would not meet the PAYGO requirements:

                Any law that would reduce receipts or increase direct spending is subject to the PAYGO requirements of the Balanced Budget and Emergency Deficit Control Act and could cause a sequester of mandatory programs in any fiscal year through 2006. The requirement to score PAYGO costs expires on September 30, 2002, and there are no discretionary caps beyond 2002. Preliminary CBO estimates indicate that the bill would increase direct spending by $340 billion over the next ten years. The Administration will work with Congress to ensure fiscal discipline consistent with the President's Budget and a quick return to a balanced budget. The Administration also will work with Congress to ensure that any unintended sequester of spending does not occur.


                The PAYGO system was reestablished as a standing rule of the House of Representatives (Clause 10 of Rule XXI) on January 4, 2007 by the 110th Congress . . . Less than one year later though, facing widespread demand to ease looming tax burdens caused by the Alternative Minimum Tax, Congress abandoned its pay-go pledge.

                So it appears to me that PAYGO rules certainly do not control the Senate, and probably do not control in the House

                "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" Dwight D. Eisenhower

                by bobdevo on Fri Feb 13, 2009 at 07:56:03 AM PST

                [ Parent ]

      •  Obama and the Dems had complete (4+ / 0-)

        control over this:

        Krugman seems to think that by asking for a lot more, President Obama could have gotten a lot more.  At this point, I've seen zero evidence of that.  Instead, I see a coalition at least two out of the three of Spector, Collins and Snowe as holding essentially all the cards at this point, and I see very little evidence that a greatly different package would have gotten their approval, at least at this point.

        and gave it away in the name of bi-partisanship.  Totally insane.  You don't play games like this when the situation is so dire.  You pass the damn bill, and you don't give up what you say are your values, giving all "the cards" to three Republicans.  That's how they came to hold all the cards - the cards were given to them!  It's dispicable.  We all know that if it were the Republicans, they would never have lost control like this.  I'm really disappointed in Obama and all the Dems.  They really fell down on this.  

        •  Much easier to say than do! (1+ / 0-)
          Recommended by:

          How do you "pass the damn bill" if you don't have 60 votes in the Senate.  Answer:  You DON'T.

        •  Serious questions (0+ / 0-)

          you don't give up what you say are your values

          I am developing serious questions about the democratic values of our politicians unfortunately.  

          I am seeing way too much status quo with a bit of minor change here and there.  I just heard we are sending another 30,000 troops to Afghanistan.  We passed the regressive SCIP tax which taxes the hell out of the poor for the benefit of all.  Not to mention all the neocons, republicans and DLC types appointed to various important positions.  A stimulus bill that appears to avoid confronting the problems which are killing the ecomony.

          I am getting very tired of this.  Is it time to start looking at 3rd parties or just say to hell with it all?  

      •  best analysis i've seen anywhere (2+ / 0-)
        Recommended by:
        askew, leevank

        fantastic write up. you capture it all. and your line of thinking can be applied to the bank bailout as well. we are literally caught between a group of people trying to do the right thing within the limits imposed by those who are trying to avoid blame, responsibilty for the costs, or any admission that there are no easy solutions.

        the President is trying to find a way out of this mess for all of us. GOPers are trying to find a way back to power. and if that means prolong the crisis and wrecking President Obama's first term, so bet it.

      •  armchair psychology on Krugman (2+ / 0-)
        Recommended by:
        Benito, MoshebenAvraham

        He sees Obama going for the "one bird in hand."
        Krugman sees that as too little and wants Obama to go for two in the bush (knowing that two is closer to sufficient, that Obama's got two hands, etc.).

        The other possibility, that Krugman does not trust in, is that Obama might be going for the birds, one at a time, with two hands, and putting them one by one into a nice liberal burlap sack.  All three, or four, of five of them.

        Psychologically, that's intolerable for Krugman because he has no real way of knowing if Obama will (1) actually do that and (2) actually succeed.


        Those birds are:
        --The stimulus package as written.
        --The stuff that was cut or never included in the first place.
        --Universal healthcare.
        --Energy/Environmental reform.
        --"Middle class" tax cut.
        --and if/when state and local governments start breaking down, i'm pretty sure there will be large-scale federal assistance.

        "I don't dislike all Republicans--just the disingenuous idiot liars."

        by chicago jeff on Fri Feb 13, 2009 at 06:04:54 AM PST

        [ Parent ]

      •  I agree, the act of the first stimulus (1+ / 0-)
        Recommended by:

        was to demonstrate how well it could be administered and pave the way for new and most ambitious stimulus bills.

        Once this thing gets rolling, it will strengthen the case for more.

      •  Are you kidding? (0+ / 0-)

        I think the administration has set the wrong tone by appearing to knuckle under coming out of the gate.  

      •  I agree (1+ / 0-)
        Recommended by:

        Krugman seems to think that Obama isn't going to do anything else to try to stimulate the economy in the near future.

        I think that Obama took all that he could get in this package with the idea that he can still go back and get more later.

        I do agree that it would be preferable that Obama go back and get more sooner, rather than later.  But he had to take as much as he could get and still leave the door open for more.

        Indeed, by leaving the total spending on the bill shy of what certain Nobel Laureates are saying is needed to turn this around, Obama preserves the possibility that he can get more later.

        "Unseen, in the background, Fate was quietly slipping the lead into the boxing glove." P.G. Wodehouse

        by gsbadj on Fri Feb 13, 2009 at 06:34:10 AM PST

        [ Parent ]

      •  I think the Krugman worship is a little (2+ / 0-)
        Recommended by:
        askew, Ilikepie

        bit much sometimes.  He is an idealogical economist who tends be a little dramtic when his view of policy isn't enacted.  The President has to live in the real world of governing with some republican help.  

      •  Japan (0+ / 0-)

        The only similarity with Japan in the 1990s is that there are insolvent financial institutions.  The scale is not comparable, nor is the social milieu.  

        Japanese had over $100,000 in per capita cash savings.  Japan's real estate system is different, too -- most people do not have a monthly payment beyond utilities and upkeep.  People were able to ride it out because they had saved for the rainy day.

        In the U.S., everyone has to pay a lot every month just to keep a roof over their heads, and most people have debt, not savings.

        I loved your point about waiting it out instead of rushing the bill through!  They should have called the 'Pubbies' bluff and raised.

      •  there are several things wrong here (2+ / 0-)
        Recommended by:
        askew, left turn

        First of all, no one knows what he could have gotten.  The real question is, was his proposal the right one, with the correct mix of spending and cuts?  Krugman is arguing it was not, and I agree (not because he is a Nobel Laureate and I am not, but because I can think and analyse as well).

        Secondly, the economy will not get much worse than it is within days or weeks.  A 12 trillion economy does not turn on a dime.  So, if the stimulus package had taken another three or four weeks but emerged as the right bill, that would have been much better.

        the longer enactment of SOME stimulus pacakage was delayed, the greater would be the risk that we would see a series of cascading events that would take us much closer to America of the 1930's than Japan of the 1990's.  I guess the difference between Krugman and me is that he thinks that was a risk worth taking.  I don't.

        Fair enough. But the risk of not doing anything for a few weeks must be weighed against the risk of doing something inadequate in a hurry.

        Perhaps I can use a firefighting analogy: when the first two trucks roll up, we hit the fire with everything we have. We certainly run the risk of emptying the tank before reinforcements arrive but we always hit it with everything we have, especially if it threatens to spread.  In the same vein, we will wait for the second truck to arrive and launch a co-ordinated attack even if it takes a few more minutes to position the trucks just right.  The point is, you always want to do the right thing while facing an emergency and not necessarily the most expedient thing.

        As for republican support, I would have loved to have seen a televised filibuster of a 1.2 trillion package designed to pump money into an economy where more than two million people have lost their jobs and just gained a lot of free time to watch the filibuster on their televisions.

        yeah, I would have played that game of chicken just so I could see how quickly the naysayers folded.

        •  The timing is especially critical right now (1+ / 0-)
          Recommended by:

          Most state legislatures are currently in session and drafting budgets for the upcoming fiscal year (which in most states begins on July 1).  Many states are spending more than their budgets, and taking in much less revenue than they had budgeted for, durng the current fiscal year.  Since most states and local governments are required by their constitutions or charters to balance their budgets, if the provisions of the stimulus package relating to fiscal relief for them aren't solidified in the next couple of weeks, they're going to have to start laying people off, furloughing people, and otherwise making draconian cuts in their spending.  That would send the economy into a much worse tailspin than it's currently in, since demands on state and local governments are going up at precisely the time that their resources (aside from federal assistance) are going down.

      •  The Senate (0+ / 0-)

        should be abolished. Miles of empty space are as equal as millions of people. This is shameful in 2001.

        Think about it. A handful of Senators representing a very small part of the American population is blocking  much needed legislation. Just like during the civil rights era.

        The Senate is the house of reaction and our Senators are their handmaidens. Do away with it.  

        Sponge Bob, Mandrake, Cartoons. That's how your hard-core islamahomocommienazis work.

        by Benito on Fri Feb 13, 2009 at 08:13:05 AM PST

        [ Parent ]

        •  How would you propose doing that? (0+ / 0-)

          You'll never get the smaller states to vote for a constitutional amendment to abolish the Senate, and without that, you can't amend the Constitution.  But go right ahead, start your campaign to abolish the Senate in Delaware, or Wyoming, or New Hampshire, or any of the other small states, and see how far you get.

      •  Screw Specter, Collins and Snowe. (0+ / 0-)

        They were only ever useful for getting the number of senators voting for the package past 60.  A better course of action would have been to force the Republican senators to filibuster--which they happily would have done--and then hold them up to the American people, in prime time, as a mockery of lawmaking.  "Republicans are fighting against the American people!" should have been the rallying cry.  And Administration personnel should have fanned out pointing out how destructive Republicanism really is in times of economic trouble.

        But none of that ever happened, and Specter, Collins & Snowe were given an inordinate amount of power, simply because the Administration wanted to appear bipartisan.  And now everyone's listening to the Republicans, even though Krugman accurately describes that what they are saying is "deranged."

        I'd rather have a bottle in front of me than a frontal lobotomy.

        by TheOrchid on Fri Feb 13, 2009 at 08:21:53 AM PST

        [ Parent ]

      •  They have it because dipshit Dem leadersheep (0+ / 0-)

        give it to them!  It's fucking ridiculous.  The only thing the Rethuglicans can do is attempt to filibuster.  Fine, Harry, let them, make them REALLY filibuster.  Let the work of the Senate grind to a halt while they prattle on about why they want to keep on fucking America.

        Of course, this would require real Democratic Leadership to sling the shit back at them plus some.  Not dreams of Bipartisanship for its own sake or Senate comity, obviously so much more important to Harry "Branistroke" Reid than what this country actually requires.  Get him some smelling salts and a spine support for cripes sake.

        My only hope with this mess is more and more people start seeing what obstructions, greedy, petty little fuckwads Republicans really are while the Democrats tried (such as it is) to bring them onboard for the good of the country.  

        Still, a little clarification from the pussycat Democrats as to what is occurring might help.  The rethugs enjoy a better than 2-1 media advantage (gratis to the corprotacracy) even though they are the minority, and getting smaller still.  The Dems need to counter this by all means possible.  Obamas last press conference was a start, even though is started weak and did not finish all that strong.

        What I find rediculous is Obama won my a very large margin for modern elections.  He has a real mandate, not some made up bullshit like Bush tried to peddle to the ignoramuses of America.  He needs to start acting like it already and stop appointing right wing asses and DLC DINO Democrats who helped usher in this this mess in the first place!

        The 4 boxes of Democracy: The soap box, the ballot box, the jury box and the ammo box. The 4 G's of survival: Gold, Grub, God and Guns.

        by FightTheFuture on Fri Feb 13, 2009 at 09:04:28 AM PST

        [ Parent ]

        •  The Corporate News Media (0+ / 0-)

          ...which still dominates the public's attention, is fully capable of convincing a large number of voters that a filibuster is "heroic", "courageous" and a "last stand" on behalf of "ordinary American".

          The Dem leaderships has to factor that in to every political calculation.

          BushCheney Inc. - They lied to me, they lied to you, they lied to our troops.

          by jjohnjj on Fri Feb 13, 2009 at 01:39:11 PM PST

          [ Parent ]

          •  What they need to do is start speaking out, (0+ / 0-)

            forcefully and minimize the weasel words or concerns of setting the pansies in the Senate and Congress.  Take control of the dialogue rather than blather about working together while the rethugs are stabbing them in the back.

            The calculations are not that complex here, except for the pansy dem leadersheep.

            The 4 boxes of Democracy: The soap box, the ballot box, the jury box and the ammo box. The 4 G's of survival: Gold, Grub, God and Guns.

            by FightTheFuture on Fri Feb 13, 2009 at 06:27:36 PM PST

            [ Parent ]

      •  Tax Incentives do not create demand, (0+ / 0-)

        without demand there is no incentive.

        Once again many politicians are approaching the economy from the point of view 'what is best for my constituents' and not what is best for the Country!

        Tax cuts to the rich did not stimulate the economy, if it had stimulated the economy we would not have seen a doubling of the National Debt, Record levels of Unemployment, contracting and finally negative GDP growth, and record foreclosures and the collapse of Wall Street.

        What tax cuts to the Rich created was a culture of greed, privilege and opulent grandiosity, obnoxiously detached from reality.

        What is needed is a stimulus package that creates demand FIRST so that there is incentive to increase manufacturing and hiring. Tax cuts to business facilitates the expansion of business but does not create the demand to do so.

        For business to expand, there must be demand. Demand is created by consumers spending and buying increasing levels of gods. If middle class America does not have the disposable income to make these purchases then it is up to government to temporarily fill the void.

        The Stimulus Package needs three components to work. Generate consumption of goods, create jobs and create a safety net floor for the middle class.

        Generating consumption of goods is important because it maintains the demand for production which keeps businesses open and slows or eliminates the number of those being fired.

        Shovel ready projects pumps much needed money into State coffers and creates jobs increasing GDP growth and renewing the cycle of GDP growth. It also keeps State and Municipal workers employed!

        Finally there is a need give aid to the middle class to slow foreclosures and to supplement and replace the benefits that the Unemployed have lost and put a floor on the fear so that deflation can end and consumers are no longer fearful of spending.

        Once these issues are addressed, then the next phase of the economic plan can be addressed. This approach is best, bottom up rather than top down. There needs to be demand for jobs before you give incentives to create them. If the stimulus package is about facilitating growth without first creating it, then it is a plan for failure.

        I am already known as VirtualTruth, times have changed and so has my cause. The Far left can not become the new radical far right

        by Liberal Reality Check on Fri Feb 13, 2009 at 09:06:48 AM PST

        [ Parent ]

      •  Rattling a Paper Saber (0+ / 0-)

        Just how powerful are those three? The reason they were willing to deal was because a failure to strike a deal posed a political hazard for them. To be seen with the other Republican knuckleheads filibustering as the country went down the tubes would have spelled the end of their political careers.

        If the Rethugs are so willing to filibuster, I say go for it! Two weeks of television reports showing them reading from the phone book juxtaposed with reports of another 50,000 people being laid off every couple of days probably would bring the Grand Ole Party of Little Minds to an end.

        From there, Healthcare, Energy, Education and true Job Creation could occur. Hey, throw in a little Immigration Reform for good measure. Hell, we're all hurting anyway, so spend another three weeks and slay the peddlers of this nonsense once and for all.

        Maybe the best way to have bi-partisanship is to dish up some humble pie so that everyone understands their true role.

      •  ..the Overton window IS the political strategy... (0+ / 0-)

        Had he nominated someone like Nouriel Roubini or Joseph Stiglitz I would think that Wall Street would have simply shut down!

        Geithner (and Gary Gensler nominated to head the CFTC, who actually teamed up with Phil Gramm on the CFT Modernization Act) - these are small moves to reassure (or confuse?) the bankers.

        Knowing where all the bodies are buried, Geithner may actually be able to change things at the banks - but not enough. Naked credit default swaps are the problem, and until these are 'handled,' there will be no recovery from the 'credit crisis.'

        But Obama is a lot shrewder than that, and Geithner will need help to truly turn things around, or Geithner will be gone.

        I think Obama is discretely furious - but he remains calm and collected at all cost - and I think the Obama plan for politics and economics is truly one of the most progressive agendas we will have ever seen - far surpassing FDR's New Deal!

        I will not forget Obama's meeting with Bush under the portico striding to the Oval Office. He was giving Bush a tongue thrashing even before they got to the Oval.

        I think his little talk with Lieberman was similar to this: "Don't make me make YOU look like a complete lunatic, or I will have to. Are you guys completely crazy? Your party will never recover!"

        The facts of the matter are simple: the clock is already ticking, and there has been only obstruction from the Republicans and few facts - just more lies and slime. Republicans have not yet sunk to their lowest ebb. I don't think Obama will be satisfied until they are completely shut down, and if they are not he will simply and suddenly execute State of Emergency orders, take over the banks, and there may even be arrests to follow. Geithner will be out, back to the  NY Fed, and he may not even be replaced.

        The torches have been lit, and the pitchforks are on their way.  

        "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." -Thomas Jefferson

        by ezdidit on Fri Feb 13, 2009 at 11:57:22 AM PST

        [ Parent ]

    •  GREAT diary, Teacherken. Good to hear from you. (14+ / 0-)

      I share your sentiments and keep wondering when more people we wake up to the music. It's a dirge.

      We have no time but the time to change.

      by Words In Action on Thu Feb 12, 2009 at 10:35:53 PM PST

      [ Parent ]

    •  apologies - have to go to bed (15+ / 0-)

      need four hours of sleep to function.  Will catch up with this when I can.  

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Thu Feb 12, 2009 at 10:39:53 PM PST

      [ Parent ]

    •  what about signing statements? (0+ / 0-)

      whaat about line item vetos? What about the fact that he still has all this exec power that bush claimed. maybe O will use it for the stimulus package and get us what we need...?

      "Imagine better than the best you know." Neville Goddard.

      by boatsie on Thu Feb 12, 2009 at 11:28:29 PM PST

      [ Parent ]

      •  Bush had no authority to do (4+ / 0-)

        most of what he did, and in a just world he would have been impeached, brought up on charges and convicted.  There is no line item veto for the POTUS, it was struck down by the courts and signing statements are basically notes and do not have the weight of law.

        The bottleneck is the Senate.  The bill required 60/100 to pass and so Republican support was still needed and so the "middle" became the most powerful group again.  That "middle" did what they always do, push everything to the right. The only thing president Obama could have done was to start with a package that was beyond what was necessary so that it could be torn apart.  The problem with that is that it would have probably still ended up being similar to the plan as it stands now, and President Obama would have come off looking unreasonable by asking for too much.

        The next step if this package doesn't work is to haul out economists from across the spectrum and try to scare congress into backing a supplemental package.  Pressure needs to exerted from the people in each state to force thier Senators to do the right thing.  When the Republicans have taken the unreasonable position of letting the economy die, there really is no hope for getting through a good package.   The only real fix is to primary Senators to get real progressives in the Senate and to change the filibuster rules back from the procedural filibuster that they use today.

    •  question (2+ / 0-)
      Recommended by:
      askew, Yoshimi

      Name one person who, if currently serving as our president, could have gotten a better stimulus package.

      "We must all hang together, or most assuredly we shall all hang separately." - Benjamin Franklin

      by CaptUnderpants on Fri Feb 13, 2009 at 05:24:16 AM PST

      [ Parent ]

    •  There are too many O-bots on this site (0+ / 0-)

      Most of them won't agree with what you wrote-it's heresy to criticize Obama!! However it is time to be very afraid. The economy isn't going to turn around with this stimulus and the cowardly Democrats will be to afraid to do what's right-pass more stimulus. I think the turds have a very good chance of bringing themselves out of the wilderness-using this crisis as a pretext.

    •  two local newspaper headlines (2+ / 0-)
      Recommended by:
      left turn, Susipsych

      One trumpets the stimulus plan, the other announces layoffs of up to 30 teachers at local high school because of budget shortfalls in the state and town.

      I am extremely disappointed that the original 80 billion in aid to states for education, and other local needs has been cut nearly in half.

      Talk about stealing our children's future! The new GOP talking point. They would be happy stealing their present (and future earning power).

      I am absolutely furious about the behavior of GOP. It is shameful, and anti-American.

      I feel a bit of post-partisan depression coming on. Krugman

      by coral on Fri Feb 13, 2009 at 06:04:06 AM PST

      [ Parent ]

    •  the contagion has already spread. (0+ / 0-)

      we are IN a worldwide depression.

      Action is needed.


      Jesus ain't comin', go ahead and put the Nukes back now.

      by RisingTide on Fri Feb 13, 2009 at 07:55:10 AM PST

      [ Parent ]

    •  "spin-the-bottle" morphed into an s & m dungeon (0+ / 0-)

      Geithner presided over the debauch - he actually watched their backroom game of "spin-the-bottle" morph into a full-blown s & m dungeon, AND he failed to post EMT's outside in case things got out of hand.

      So when there's even a hint of stimulus as "...a covert way to bail out bankers..." I'm not at all surprised.

      The question in my mind is where does Geithner stand on NAKED credit default swaps.

      That is the wretched and excessive perversity and profiteering that makes it worthwhile for bankers to screw family mortgage holders, homeowners, their own bank trading partners, holders of mortgage-backed securities and other derivatives - and themselves!

      If the depravity of the current opaque system, with no bank for settlement for toxic assets, continues for another six months, the game will be over.

      We are already printing money that has no value.

      "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." -Thomas Jefferson

      by ezdidit on Fri Feb 13, 2009 at 11:13:56 AM PST

      [ Parent ]

  •  i AM very scared. (29+ / 0-)

    Not scared enough to stock up on ammo, mind you... but mighty scared.  We are at one of those moments, at which every single person is going to have to sacrifice, and sacrifice a lot.  Many of us already have.  Many of us (at the high end of wealth) haven't even started.  People in the position of strength and comfort are going to have to give back big time, in order to preserve this country's existence.  Many of them will just abandon ship, I suppose.  Those of us left behind will suffer the consequences.

    (-8.00,-7.85) 'The idiot is not our greatest problem. It is the moron type that is our great problem." -- H. H. Goddard

    by bubbanomics on Thu Feb 12, 2009 at 09:39:31 PM PST

    •  I'm scared too, every time they talk about (30+ / 0-)

      the new bailout I get physically ill. I want them to seize the troubled banks and the assets of their management/board, including their off shore accounts. We are being played, absolutely played by these crooks. They need to be charged, tried and jailed. We are getting ready to sue one of the big lenders and were told today by our regular attorney we shouldn't ask for much in damages or the bank would just declare bankruptcy. Not likely our damage award would put them under, but it will open the floodgates for other suits just like it, which is the argument. I'm not too worried about it because as long as Washington is willing to give them billions for bad behavior they will run their scam as long as they can, until the money presses have broken down and there is no blood left in any of us.

      •  i wish we had used the first 350 billion (22+ / 0-)

        to buy the banks outright.  We could have picked up the largest 8-10 banks by buying all the shares.  Then we could do what we want with them.  As it is, we threw 350 billion into a black hole of infinite greed, which sucks in every dollar and nothing can escape.

        (-8.00,-7.85) 'The idiot is not our greatest problem. It is the moron type that is our great problem." -- H. H. Goddard

        by bubbanomics on Thu Feb 12, 2009 at 09:55:41 PM PST

        [ Parent ]

        •  I agree - misbehaving children should lose their (3+ / 0-)
          Recommended by:
          bubbanomics, snackdoodle, thethinveil

          Bank managers/CEOs have played fast and loose with their "toys" (their banks), and like misbehaving children, they should have their toys taken away from them until they learn how to behave properly.  I support a temporary nationalization or outright purchase (after all, we still have $350 bn left, along with all of the uncounted Fed money being thrown at the problem).  I also suggest that we once purchased, we fire all of the people responsible for the destruction of our economy (if they feel that they are so much in demand, then let another company hire them for $10 million/year).  I think that they'll end up like Ashcroft!

          People do not need religion. They need effective coping mechanisms to deal with existential anxieties. Patricia Guzikowsk

          by a lien on everything on Thu Feb 12, 2009 at 10:31:40 PM PST

          [ Parent ]

        •  we never needed (14+ / 0-)

          to pay a penny for them.

          The proper course would have been to demand open books, which would have shown them all to be bankrupt, at which point the government picks them up for nothing.  And then put all employees on civil service payscale to clean out the parisites.  They could still do it, but they are not doing it.

          That would bring down the whole house of cards, of course, but the whole house of cards has to come down anyway.

          Obama's mistake was he let them talk him into being a "flipper" . . . to slap a coat of paint on the wreck, put in a couple new appliances, and put it back on the market as if it was really "fixed".

          It ain't fixed.  It ain't even close to fixed.  The "stimulus" will soften the blow for a few people, temporarily, but as long as the underlying goal is to preserve "the system" (the house of cards) and save the banks (and the bankers) it will not get fixed.

          You'll know there's a chance of things getting better when Goldman and Morgan and Citi fail.  As long as they continue to exist you'll know we are screwed, because the real problems have not been addressed.

          •  We don't have to, but we should (2+ / 0-)
            Recommended by:
            LI Mike, In her own Voice

            If we go the nationalization route, buying the shares would promote more confidence in the system then just seizing them.  I know, most people around here don't give a damn.  I personally am not concerned about the shareholders losing money.  But I am concerned that if you just seize the banks, you'll see a massive flight of all private equity out of the banking sector.  Even relatively sound banks will end up failing.  

            If all private capital flees, then the burden on the government gets that much larger.  As a result, I think that buying the shares would be much safer and have fewer unintended negative consequences.  

            Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

            by Asak on Fri Feb 13, 2009 at 01:32:43 AM PST

            [ Parent ]

            •  Even a hostile takeover (0+ / 0-)

              Would have the "flight" effect on banks down the line, and you'll NEVER see these boards approve a non-hostile buyout.

              This is our story...

              by Karmakin on Fri Feb 13, 2009 at 05:31:51 AM PST

              [ Parent ]

            •  they are already bankrupt (0+ / 0-)

              They are just hiding it.  Without the bailout money there is no stockholder equity, so nothing can "flee".  "Sound" banks (anc credit unions) will not fail . . . it will be obvious from their "open books" that they are sound.

              Why should the government buy shares in a bankrupt company for anything more than their value in bankruptcy liquidation?  Why prop up the stock and then buy it at the propped up price?  What would be the "unintended consequences" of such behavior on the government's part?  The "common wisdom" is that it would encourage irrational risk since the government would be expected to cover the downside.

        •  They also need to regulate the banks to a fare (1+ / 0-)
          Recommended by:

          thee well and cut off off shore accounts. Get rid of all the destructive but oh so profitable new loans types and investment schemes. Back in the 50's and 60's our banks and Wall Street seemed to work pretty well, need to get back to that level of control over them. And we need to enforce those laws, hell we don't even bother to enforce the few laws governing their behavior now.

      •  Reminds me of this article: (1+ / 0-)
        Recommended by:

        More Than 3/4 Of Men And Women Report Unhealthy Side Effects From Ongoing Financial Crisis

        I say we dust off, nuke the site from orbit. It's the only way to be sure.

        by fearisthemindkiller on Thu Feb 12, 2009 at 09:59:00 PM PST

        [ Parent ]

        •  I think the psychological impact of the too low (4+ / 0-)

          stimulus would make a great diary topic.  So far we have participated greatly, in minute detail, in financial meltdown porn.  About how each compnent will or will fail to economically improve its target.

          Teacherken has a point.  What is the magic Stimulus Package number that calms the masses?  What number would result in an uptick in that all important consumer confidence number?  Are there the same amount of people insisting the stimulus is dire because it is TOO GREAT an amount?

          Did Obama capture the average between those two groups?  Yes Krugman is important, but what do the masses need to hear to feel psychologically comfortable?

          ~Connect the dots, la la la la la~

          by CWalter on Thu Feb 12, 2009 at 10:19:50 PM PST

          [ Parent ]

          •  Good questions with no good answers. (2+ / 0-)
            Recommended by:
            CWalter, thethinveil

            For some, yes, the Stimulus probably felt like a HUGE number, and that can cause some panic:  "OMG Things must be really F--D up if they need to spend that much so fast."  Then for some, like Krugman, the bill is too low and the panic is that it won't work.

            I don't think there is a magic number.  To feel safe people need to hear that things are getting better.  Until there are some positive indicators, particularly around job creation, there will be widespread stress.

            More accurately, until the Media starts saying things are getting better, there will be widespread stress.

            I say we dust off, nuke the site from orbit. It's the only way to be sure.

            by fearisthemindkiller on Thu Feb 12, 2009 at 10:33:37 PM PST

            [ Parent ]

            •  800 Billion... (0+ / 0-)

              sounded like the 700 Billion of the bank bailout.  Remember how people reacted to that number before it had been repeated ad nauseum?

              Obama decided the public wouldn't support "Trillion" with a "T".  At least not 69% of them.

        •  We have been going thru this for nearly (12+ / 0-)

          three years altho the problems with our mortgage started with the original loan papers. It has been hell trying to hang on to our house, while the lender lied and lied trying to wrest it away from us. The house is a 1929 character house in a historic neighborhood, my family has lived in it for almost 60 years, not something that is easy to walk away from. I am soon to be 65 my blood pressure is a mess and not getting better on my third different medication. My stress level is off the charts and finally have an ulcer. I am the sole support of three other adults. One with an uncontrolled seizure disorder, one with a traumatic brain injury, suffers from debilitating migraines, going blind and deaf on one side and a 88 year old mother. All this and I have a stressful job. There is no amount of money that can get that time back for us, just because we are still standing doesn't mean they haven't done their level best to destroy us. We aren't even close to the only ones, there are millions of us all over the country. We got mad, really mad and altho we don't have resources in the way of money we have smarts and access to the Cornell Law Library and Westlaw. All of the work done to put our case together we have done ourselves, not everyone can do that or have the stamina to see it thru.

          •  Dear snackdoodle (4+ / 0-)

            Please please take care of yourself as best you can. Set aside a time several times a week, every day if you can, to meditate or walk or use an exercise bike.

            I have found that I can lower my recalcitrant blood pressure about 20 points by meditating, even when I am stressed badly. I have to go to a quiet place and use a mantra; I mean I have to actually physically recite a calming and centering phrase over and over, and use "lamaze" type measured breathing ("in one two three, out one two three").

            If you can do that for even half an hour a day, you will be giving yourself a gift. My 102 year old aunt says her rosary twice each day, which is really meditation as well as prayer if you think about it, and I'm sure that is part of why she has lasted so long, because she has never had an easy life.

            Lots of us are out there fighting the same battles as you are. Be well.

            •  Or better yet... (2+ / 0-)
              Recommended by:
              snackdoodle, moira

              15-20 minutes twice a day, once in the morning and once before dinner.

              Makes a world of difference.

            •  I meditated for years and years, from childhood (2+ / 0-)
              Recommended by:
              moira, Susipsych

              if you include deep "day dreaming".  When my oldest son developed seizures in the fall of 2001 there seemed never to be the time and eventually even less time. I would guess I have meditated no more than a handful of times in the last eight years. I need to make the time. About 25 years ago I went thru a pain clinic and they taught meditation, they helped me by teaching me circular breathing. Yep me and Kenny G, LOL. But it is a very fast and effective trigger for me. I have been torn by two needs first the need to do something constructive to give myself the sense of still having some control of a situation. And of course taking care of myself, the most important part of all of it. We know which has been winning. There are several mornings a week I can get up ahead of the house and get that time for myself, I need to start doing that. You take care too, these a terrible times for so many people. Thank you too for reminding me of something so important I can do for myself.

    •  I almost bought a car for my wife last Sat. (2+ / 0-)
      Recommended by:
      CWalter, bubbanomics

      If I had read Krugman after doing that, I would have really freaked out.

      •  Everybody needs to STOP freaking out (3+ / 0-)

        ... the world is the same. You are the same, I am the same. The cash flow system is royally ***ked up.  This can be fixed.  Because it is a man- made system. Geebus Cricket on a cracker.  

        That being said, stick with cash transactions as much as possible for the next year until we see what happens.

        "Toads of Glory, slugs of joy... as he trotted down the path before a dragon ate him"-Alex Hall/ Stop McClintock

        by AmericanRiverCanyon on Thu Feb 12, 2009 at 10:54:52 PM PST

        [ Parent ]

        •  You must be someone (6+ / 0-)

          Who has a job and either has a pension or is young enough not to have to worry about one yet.

          Trillions of dollars have vanished from our financial system. That's gonna hurt. All of us. Aren't you looking at unemployment numbers?

          I thought I was comfortable and looking forward to retiring in the next 5 years. Not now. Maybe not ever.

          Telling people to stick to cash transactions assumes they have cash.

          •  if he's young (0+ / 0-)

            Then he probably has student loans

            One more reason why this crash in consumer spending will not rebound

          •  No, but (5+ / 0-)

            .... okay, sit down, I have been married to a numbers person for nearly 3 decades. Not a glib one. A really dry one.  Who didn't even readily believe the sons of bitches were manipulating the gasoline commodities market before the election. I said wake up and smell the fumes, they did it the last time in 2004, how many times do you need to get screwed over on this?  Do you know how annoying it is to try to have a conversation about this with somebody who thinks like that?  But it's his training.  

            Yes this economic crisis is a mega event and yes this will have a tremendous impact on life, but most people are not thinking of it in actual economic terms (all of economics is a sort of fairy tale, a made up thing consisting of a human system of trading values)  but treating it as a physical reality.

            If someone is "freaking out" about the thought of making monthly payments on a vehicle because of reading a krugman kolumn then they shouldn't be entering into a legal contract to assume more debt. They have issues.  If they have the cash available to make the down payment and the income to make monthly payments, and they need a vehicle, then maybe they should sock the money away for a few months, save a little more, and pay a few thousand cash for an older, functional vehicle instead of a nice shiny new one.  This would at least give them the emotionally secure feeling that they had some control over their own situation, and they would still own a car if they lost their job.  

            Anything you need to have to exist you need to either make yourself, purchase or trade for.  It's called barter.  The government is letting the big failing banks dick around with every one else's barter system.

            This is about to change.   It is not sustainable.  

            I told people the other day to listen to what Treas. Sec Geithner was actually saying during his debut, and all I got were comments about his ears and his lack of ability at  bullsh*tting at speaking.  And then everybody, and I mean everybody, is sucking up the Republican's talking points about how the stimulous package is supposedly going to fail. They want that to happen so bad.  The sky is falling.  No sh*t. You know why they think the sky is falling? Because it's going to fall a lot harder on them. Trillions of dollars vanished, all right, they don't know where the **** it went either.  All a big bluff.

            I'm glad that reeper asshole dropped out of the Commerce cabinet position after begging for it, turns out he had a thing about not counting all the (Latino) people during the Census which will determine districts in 2010, so **** him,  and I wish the President would get a clue, but after watching him the past week, he just might have the clue. If he doesn't yet all the way, he at least shows signs of being flexible enough and a quick learner that he will be able to adapt to the next situation.

            You didn't think the neoconartist wing Republican Party was going to go down easy, did you ?

            Something big is going down during the next two weeks.

            "Toads of Glory, slugs of joy... as he trotted down the path before a dragon ate him"-Alex Hall/ Stop McClintock

            by AmericanRiverCanyon on Fri Feb 13, 2009 at 01:00:32 AM PST

            [ Parent ]

        •  Oh, and sell all your stocks and buy gold. n/t (0+ / 0-)

          In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican. - H.L. Mencken

          by Simian on Fri Feb 13, 2009 at 12:38:28 AM PST

          [ Parent ]

          •  I'm not buying a damn thing I don't need to (2+ / 0-)
            Recommended by:
            gatorcog, mississippi boatrat

            ... sustain myself, my spouse, and the fur friends.

            "Toads of Glory, slugs of joy... as he trotted down the path before a dragon ate him"-Alex Hall/ Stop McClintock

            by AmericanRiverCanyon on Fri Feb 13, 2009 at 01:03:38 AM PST

            [ Parent ]

          •  Can you eat gold? (2+ / 0-)

            If you're really of an apocalyptic, end of days mindset then just skip gold and buy a bunch of canned food, guns and ammunition.  If everything collapses that gold won't be worth more than a cow patty.  People won't part with essentials, like food, for a worthless metal.  What's more, if someone wants it, they'll just come along and take it from you.  

            Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

            by Asak on Fri Feb 13, 2009 at 01:37:43 AM PST

            [ Parent ]

            •  Gold (2+ / 0-)
              Recommended by:
              Pluto, bubbanomics

              Sometimes gold is the only exchange mechanism, if people don't trust the money system. TakeZimbabwe for instance.

              •  Plus it is Small... (1+ / 0-)
                Recommended by:

                ...protable, and discrete.

              •  True, but... (2+ / 0-)
                Recommended by:
                gatorcog, In her own Voice

                that is assuming that there is any sort of exchange taking place.  Considering how complex our economy is, with food being transported hundreds or thousands of miles, I believe the most likely result of a total collapse will be that nothing moves.  You won't get food to the cities, so no one will be able to buy it.  Probably there won't be any sort of fuel available to transport it either.  

                Gold could very well eventually end up being the medium of exchange.  Unfortunately, you'd have to survive long enough for it to attain that value.  Probably a good 90% wouldn't, unless the government stepped in and just took control of everything, and in that case they might just take your gold as well.  

                Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

                by Asak on Fri Feb 13, 2009 at 01:46:42 AM PST

                [ Parent ]

                •  yes (0+ / 0-)

                  As I remember, FDR did confiscate gold. If I were of a survivalist bent (and I'm not), I would buy silver instead. It's not quite as portable, but easier to value because it's more familiar to the average Joe, and less likely to be confiscated.
                  Your point about survival when nothing is being shipped is a valid one. If I were an urban dweller, I'd be nervous at this point. There is some value in living in an environment considered backward in good times. Nothing essential has really changed here for 50 years and so retreating 10 or even 20 years in terms of development means less. If we can't get coffee, that will be sad but not the end of the world. The only alarming thing would be a notable upswing in infections because most modern people don't have a clue about hygiene, and medecines might get scarce. That's a worst case scenario though.

        •  our school system losing 900 jobs (3+ / 0-)

          and closing 12 schools, and that was BEFORE the governor announced his additional cuts in state aid.  From what I can see,most of impact of the stimulus will simply offset the lost of state aid.  Best case scenario at current levels of stimulus look to be that we will still close six school and lose 400-500 jobs.

          do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

          by teacherken on Fri Feb 13, 2009 at 03:47:05 AM PST

          [ Parent ]

          •  And this is horrible and it sucks (0+ / 0-)

            .... I'm not trying to belittle people's fear and suffering.  But again, nothing has changed.  The kids are still there and need to be educated, the parents are still there needing schools to send them to, the teachers are still there.  But the economic system is having convulsions and the "value" of what they do has been downgraded to nothing.   This is a temporary state.  When a computer program crashes, you redesign the system.  When an engineering project is needed to fix a problem, you redesign the system.  

            The economic system is crashing. Redesigns are being proposed, and the dead- enders are still doing their craptastic denial thing and the President is letting them hang themselves.


            "Toads of Glory, slugs of joy... as he trotted down the path before a dragon ate him"-Alex Hall/ Stop McClintock

            by AmericanRiverCanyon on Fri Feb 13, 2009 at 09:09:41 AM PST

            [ Parent ]

    •  And the very rich... (8+ / 0-)

      ...can sacrifice a lot and still be very rich. We need to start moving resources out of the hands of the very rich and into the hands of the not so rich .

      •  you're right. (2+ / 0-)
        Recommended by:
        alizard, In her own Voice

        I'm working through the computations on tax rates and wealth distributions.  I want to see how these things have worked out over time.  Back in the 50s, the maximum marginal rate was 90%.

        (-8.00,-7.85) 'The idiot is not our greatest problem. It is the moron type that is our great problem." -- H. H. Goddard

        by bubbanomics on Thu Feb 12, 2009 at 10:21:20 PM PST

        [ Parent ]

        •  It was still... (3+ / 0-)
          Recommended by:
          lightfoot, Neon Mama, orangedem

          around 70% when Ronnie took over.  From wikipedia:

          Therefore, in 1909 Congress proposed the Sixteenth Amendment, which became part of the Constitution in 1913 when it was ratified by the required number of states. The Amendment modified the requirement for apportionment of direct taxes by exempting all income taxes—whether considered direct or indirect—from the apportionment requirement. Congress re-adopted the income tax that same year, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000) to finance World War I. The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925, and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% (on all income over $200,000) in 1945. During World War II, Congress introduced payroll withholding and quarterly tax payments. Top marginal tax rates stayed near or above 90% until 1964 when the top marginal tax rate was lowered to 70%. The top marginal tax rate was lowered to 50% in 1982 and eventually to 28% in 1988. However, in the intervening years Congress subsequently increased the top marginal tax rate to 35% (the top marginal tax rate as of 2007).

          Raise it back to 60% on the top 1% of earners, that helps a bit.

        •  We badly need to raise tax rates back up (2+ / 0-)
          Recommended by:
          lightfoot, In her own Voice

          It should be at least 50% on income over a million.  Maybe 45% on over half a million (40% replacing the current highest rate).  At least.  In fact, I'd argue it should be higher, but that would be an adequate starting point.  

          I don't see a snowball's chance in hell of Obama delivering that, however.  

          Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

          by Asak on Fri Feb 13, 2009 at 01:40:51 AM PST

          [ Parent ]

      •  We need to put back (3+ / 0-)
        Recommended by:
        Neon Mama, orangedem, Susipsych

        We need to put back the laws and regulations that gave us the prosperity in the first place.

        Reverse the Reagan revolution. Put us back before Nixon re banking, the SEC, rules and regs. Get rid of derivatives and all the shell game finance that's screwed us so badly. Make banks do banking and break up the finance cartels. Stop usury in the credit card business.

        Give back power to unions and ordinary working people. Put in place legislation, don't leave it up to the individual trying to fight in conservative-packed courts.

        That's a start.

    •  Fear right response? (1+ / 0-)
      Recommended by:

      Many of them will just abandon ship, I suppose.  Those of us left behind will suffer the consequences.

      You sound like someone who is about to be left behind from the rapture of Christ. lol ... Assuming such a thing will happen, which it won't. (But that's another debate.)

      I've heard many reactions to this economic crisis, but fear should not have been among them. Should we not just continue doing what we are doing? Continue putting money into the economy and living our lives? If, as you say ...

      People in the position of strength and comfort are going to have to give back big time, in order to preserve this country's existence.

      ... we are in trouble. From what I've seen, the bank execs and the auto execs have been reluctant or unwilling to do either, and then only under intense pressure from lawmakers.

      I'm just not sure that fear should be our response. Resolve and steadfastness should be our response.

      •  Fear is rarely a worthwhile response (1+ / 0-)
        Recommended by:
        Alex Terrieur

        If people are choosing to go around feeling afraid, then that is just about pointless.  We need to feel empowered to fix the problem.  That is why all this crap about Great Depression 2, etc, to me is just a counter productive waste of time.  This crisis is within our power to fix, if we choose to do so.  Unfortunately, we do have the difficulty of convincing Obama and our moderate politicians to do what is necessary.  The lackluster stimulus we've received so far is not close to enough.  

        Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

        by Asak on Fri Feb 13, 2009 at 01:43:24 AM PST

        [ Parent ]

    •  Me too. The world unrest is very scary. nt (1+ / 0-)
      Recommended by:
  •  Republican reaction has bordered on deranged? (25+ / 0-)

    Bordered on?

    Bordered on the deranged?

    And I'm getting very annoyed with people who want to "stabilize" housing prices.  This is not a one-size-fits-all solution.  In California and certain other parts of the country, housing prices need to come down.

    Healthy Minds in Healthy Bodies, now discussing fitness Tuesdays at 6 PM PST

    by indigoblueskies on Thu Feb 12, 2009 at 09:43:42 PM PST

    •  here's the problem (5+ / 0-)

      there is no way to stabilize the housing market without, unfortunately, propping up some properties that are overpriced.  The market is simply not functioning in a fashion right now that allows for any other solution.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Thu Feb 12, 2009 at 09:48:33 PM PST

      [ Parent ]

      •  Why should the CA market be "stabilized"? (2+ / 0-)

        Why should the California real estate market not just continue rolling back to 2000 levels?  So far our time machine has only taken us back to 2002-03, and housing prices are only 7x annual salaries.  I'd like to roll prices back without the pain of foreclosures, but I don't see how.

        If anyone is interested, click on my name for my latest diary on the same subject.

        Healthy Minds in Healthy Bodies, now discussing fitness Tuesdays at 6 PM PST

        by indigoblueskies on Thu Feb 12, 2009 at 10:25:18 PM PST

        [ Parent ]

        •  many of people losing houses not rich (4+ / 0-)

          and their houses were not exhorbitantly overpriced.  I have listened to Dennis Cardoza talk about how the working class people of his district are being clobbered. In trying to find a way to help them he came to the conclusion that we might have to bail out some les than worthy types in order to save those who truly need and deserve help.  

          do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

          by teacherken on Thu Feb 12, 2009 at 10:32:22 PM PST

          [ Parent ]

          •  I disagree with Cardoza's point of view: (2+ / 0-)
            Recommended by:
            Aquarius40, thethinveil

            by helping the people of his district now, he's both hurting them long term and hurting potential homebuyers.  (To be blunt, the apt comparison is giving a shot full of morphine to a heroin addict.)  And I'm not even considering the people who don't deserve help -- flippers and speculators and such.  

            In the long run, there needs to be a rational relationship between home prices and salaries.  We don't have that in California now.  We achieve that rational relationship by either rolling back housing prices or -- better idea -- increasing salaries.  

            Healthy Minds in Healthy Bodies, now discussing fitness Tuesdays at 6 PM PST

            by indigoblueskies on Thu Feb 12, 2009 at 10:43:23 PM PST

            [ Parent ]

            •  Above is the proper progressive response but (0+ / 0-)

              the likelihood of it happening seems low to me.

              "I can't read! I sign my name with an X! I once tried to make mashed potatoes with laundry detergent! I think I voted for Nader! NADER!" TJ

              by thethinveil on Fri Feb 13, 2009 at 03:19:53 AM PST

              [ Parent ]

            •  Wouldn't this make more sense though? (0+ / 0-)

              Rather than rooting for continued devaluation of home values to bring them back to a "rational relationship" with salaries, wouldn't it be better for the majority of people to craft policy that would stabilize the market with the goal of simply holding current value roughly where it is?  Follow that with tax policies (after recovery begins) which draws down more wealth from the top, say, 5%, and maybe some business tax incentives aimed at encouraging a sane proportional relationship between pay at the top and the bottom.  

              What I'm saying here is that the objective should be to bring wages up, in line with GDP (as they used to be) rather than further destroying the value of people's homes.

              "You must be the change you wish to see in the world." -Gandhi

              by Triscula on Fri Feb 13, 2009 at 04:01:46 AM PST

              [ Parent ]

        •  CA prices will always be elevated (0+ / 0-)

          As long as a bunch of people continue to want to move to California, our housing prices are going to be elevated, even overpriced.  There are simply too many people who want to live here.  Unaffordable housing is just a sign that people need to look elsewhere, where the population is at a more reasonable level.  

          Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

          by Asak on Fri Feb 13, 2009 at 01:56:07 AM PST

          [ Parent ]

    •  they are getting IOU's in CA for their refunds (5+ / 0-)

      on their state taxes....I'm starting to wonder if we might see this in other states, and perhaps even our own refunds from the Feds.....Our own money, our tax refunds could be 'gone, baby, gone.'

      God forbid anyone should start bringing our troops home and start cutting the ever loving shit out of the Pentagon/Military budget.....but of course, 'that is the Holy Cow' that we must not even say out loud. If ever there was a time for sanity, it would be to end these fucking wars now!!!! The trillions we needed to get us out of this mess are over in the middle-east.

      At this point I think the only way anything will ever change is when people march on Washington by million, or godzillions of people, spitting mad. The power of gridlock by proxy of the Corporations is in full swing, and no one, and I mean NO ONE is showing any real courage to change the way things are and have always been done these past 50 years. It's all about getting reelected and screw the people living in their cars. We've already 'gone off the cliff' we're just like zombies walking around, not realizing just how 'dead' in the water we are because the 'deal makers' have finished us off.  Fact is even if Obama had asked for 1.5 trillion, the Republicans would have done exactly what they have done difference. Too little, too late.

      9/11 was a tragedy.  This is a travesty because, the bottom line is that Congress is a bunch of self centered greedy cowards, just like the crooks they support.

      "When the house is on fire, it's time for everyone to grab a hose." President Obama

      by Badabing on Thu Feb 12, 2009 at 10:17:34 PM PST

      [ Parent ]

      •  Maybe It Is Time To Bring Them Down (5+ / 0-)

        We do not need to march or hit the streets.

        All we need to do is withdraw our money from the big banks and put it into Credit Unions and locally owned banks.

        Change your auto deposits and set up auto payments.

        Without our deposits in savings, checking and money markets they have no way to continue the ridiculous fantasy that they are not bankrupt.

        In fact you better move your money NOW while you still can. One day you won't be able to get it unless it is in a local credit union or bank.

        A guy I know claims the bank took nearly a week to get him $20,000 in cash from his savings account so he could buy a used car. The bank said it had no money!!!!

      •  Friends who are CA state employees (7+ / 0-)

        I have friends who are employees in the CA state university system. They are terrified. One friend who works with returning adult students has had programs slashed and the whole staff may be put on part-time although numbers of students are growing. CA is a mess.

        •  I am in CA and in school and they just (2+ / 0-)
          Recommended by:
          Badabing, indigoblueskies

          announced more instructor cuts yesterday.
          Along with an announcement that there would be no more paper or toner given out for classroom use.I am bringing my own toilet paper just in case they announce that next. People are scared.

          On the other hand our planning department who have been notoriously difficult to deal with was so amicable I couldn't believe it. (we aren't building anything just doing septic work) Just about the time you start to think your shit doesn't stink, they red tag your  failing septic system. Damn.

          We were going to build at one point but the building fees here for the permit alone were $50,000.00 and that was what we had planned on using for a house. So I think we could use a little adjusting here in CA.

          chance favors the prepared mind - pasteur

          by CaCowGal on Fri Feb 13, 2009 at 06:27:15 AM PST

          [ Parent ]

    •  Geithner would not commit to preforming loans (3+ / 0-)

      That moment when Geithner would not commit to leaving preforming loans in place sent chills up my spine, and that of all Main Street.

      This guy needs to be replaced.

      •  What's a preforming loan? (1+ / 0-)
        Recommended by:

        If you mean a performing loan, I still don't know what you mean about not committing to leaving them in place.

        •  Performing Loans=loans in good standing (4+ / 0-)

          Loans that are paid current.
          During the S&L bailout Bush 1 Adm  increased the capitalization ratio for S&Ls to 2% from 1.5% and gave them 6 months to do it.
          The capitalization ratio is the ratio of stock value to loans. So an S&L with 10,000,000 in stock value could have  over 666,666,000 loaned out at the old Cap ratio, but under the new Cap ratio they were allowed to have only 500,000,000 in loans out, regardless of their deposits.
          Now they could have raised more capitol by doing a stock offering, but it takes a year to comply with the waiting periods for an S-1 filing.  
          So many S&Ls were screwed and so were their customers. The S&L had to cut back their loan portfolio to conform to the new reg. This caused them to call in good loans, which forced a distress sale of the underlying asset, even though the loan was in good standing.

          This was a way of liberating assets from their owners. It is feared that another such RTC scheme is in the works.  

          •  I know what a performing loan is (0+ / 0-)

            I just wasn't sure what was meant by leaving them in place.  I hadn't heard that loans in which there had been no default under the terms of the loan.  What was the legal basis for doing so?  And do you have some indication that this is taking place now (as opposed to during the S&L bailout)?

    •  they have their hands full (6+ / 0-)

      just saving Goldman and Citi.

      They don't have time for the rest of us.

    •  I trust Geithner but not Summers (0+ / 0-)

      But I would like to be a fly on the wall in their offices hearing what they talk about.  Now talk about some stress.  We're talking about the world financial system.  

      There is no other world financial system.

    •  Agreed about not trusting (3+ / 0-)
      Recommended by:
      jxg, CWalter, thethinveil

      Summers or Geithner, but doesn't this de facto also mean that you don't trust Obama?  He picked them.

      I want my Constitution back!

      by jaf49 on Thu Feb 12, 2009 at 10:10:00 PM PST

      [ Parent ]

      •  I trust Obama, but not with the same conviction (2+ / 0-)
        Recommended by:
        slinkerwink, thethinveil

        as before.  Which is probably good as he is not all-perfect.   I am not sure Obama even wanted the Gawd status some put on him.

        ~Connect the dots, la la la la la~

        by CWalter on Thu Feb 12, 2009 at 10:30:26 PM PST

        [ Parent ]

      •  I trust no politician. (3+ / 0-)
        Recommended by:
        LI Mike, jaf49, thethinveil

        I did put faith in Obama but I ended up doing so for the wrong reasons.  

        When he said change I thought he meant overall, not just the quixotic pursuit of bipartisanship with psychopaths and convenient transparency.  The makeup of his administration is anything but change.  His economic team is not really about change--they're about tweaking the status quo in an un-tweakable situation. His teams of rivals are repubs and centrists with very little progressive voices to be found.

        I suppose the irony for me is I voted for Obama in the primary because I knew Clinton would stack her cabinet with a bunch of corporate loving DC insiders and DLC retreads and I suppose I thought Obama wouldn't.  Joke is on me.
        It wasn't Obama's fault my faith was misplaced, he just failed to live up to my expectations which I based on the way he ran his primary when I should have based it on the political reality that he was never really a progressive and bold, boat-rocking politician to begin with. My bad, not his. Still don't regret my vote but I have turned my expectations way down.

        Inside every cynical person is a disappointed idealist.-George Carlin

        by mentaldebris on Fri Feb 13, 2009 at 12:52:04 AM PST

        [ Parent ]

        •  Hate to say it. (2+ / 0-)
          Recommended by:
          mentaldebris, jaf49

          The only reason I voted for Obama was that he is a very bright man. Maybe trusting in smarts is the wrong thing to do, but there you go.
          If you look beyond the hype, and the admittedly brilliant way the election was handled, he comes across as someone who is relatively conservative (with a small C!) rather than a revolutionary. Anyone expecting a revolution before a smart but conservative thinker feels the need for one will be disappointed.

    •  Noone can stop it but good leaders (1+ / 0-)
      Recommended by:

      can mitigate damage, and so far Summers and Geithner have left us wanting.

      Market to Market RIGHT now would redeem my faith in them and the Obama administration.
      Short of that, no hope for my faith or our economy.

      At the core of the human spirit there is a voice stronger than violence and fear - S. dianna ortiz

      by Rachel Griffiths on Thu Feb 12, 2009 at 10:13:33 PM PST

      [ Parent ]

      •  I heard Steve Forbes talking about this. (0+ / 0-)

        Don't know enough about it.

        "I can't read! I sign my name with an X! I once tried to make mashed potatoes with laundry detergent! I think I voted for Nader! NADER!" TJ

        by thethinveil on Fri Feb 13, 2009 at 03:27:36 AM PST

        [ Parent ]

      •  you mean mark to market? (0+ / 0-)

        financial institutions are screaming that mark to market so lowers the value of their assets that they are legally restricted from further lending, especially in a time when housing prices are depressed.   There is an issue that some of the assets are listed at impossibly inflated values, but there is also a reality for some financials that did everything right but are suffering because of the general depression of the value of housing stock on which they do have outstanding mortgages.  That is the idea of trying to classify toxic assets that really seem to lack the underlying listed value and addressing them.

        do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

        by teacherken on Fri Feb 13, 2009 at 03:52:37 AM PST

        [ Parent ]

  •  I think we need to have a series of (8+ / 0-)

    infrastructure bills.

    I think we need a series of bills for two reasons.

    1.  I think it will be easier to bet passed in congress because of the high price tags.
    1. So we can take the time to make sure the projects are well focused and well planned.  We talking about bills for these large of sums we want to eliminate as much waste as possible.
    •  infrastructure bills too much one sex jobs (11+ / 0-)

      since construction trades are heavily male, even when office staff is included.  One reason for other things in stimulus is because there are many women who will need jobs as well.  That is one reason for trying to ensure school jobs, which are heavily female.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Thu Feb 12, 2009 at 09:50:37 PM PST

      [ Parent ]

      •  We have plenty of need for more schools. (3+ / 0-)
        Recommended by:
        Chicago Lulu, Literacy, geez53

        More schools require more teachers.  I didn't mean to give the impression that infrastructure should be the only spending, but we have a great need to invest in our infrastructure to keep pace with the rest of the world.

        •  Not just to keep pace with the rest of the world. (4+ / 0-)

          To keep pace with ourselves. The population of our country has doubled in my life far!

          Nearly all our current infrastructure was originally designed with some percentage of future expansion in mind. The engineers at the time would add 10, 20 even 40% extra capacity to a particular system. They couldn't have perceived 100% extra, but that's close to what has happened between the early 50's and now.

          Even out here, in Small Town, USA, I've been involved in say ... water line projects, that in less than 6 years had to be replaced with pipes 3x the dia., in less than a decade. Or expanding an old (1920's) 2 lane to a four lane, and now the engineers are praying for funding to make it 6 lane, or 4 lane plus light rail.

          Generationaly speaking, I don't think we have fully grasped just how large the herd has become.

          IGTNT...Honor the Fallen...Respect Their Loved Ones.

          by geez53 on Fri Feb 13, 2009 at 01:28:26 AM PST

          [ Parent ]

      •  Or more women need to get jobs in construction. (2+ / 0-)
        Recommended by:
        shenderson, Jon Says

        It's fairly well paid for blue collar work, especially for those in the union.

      •  We need to do what is most effective... (0+ / 0-)

        the gender repercussions at this point should be a secondary consideration.  Arguably since construction has seen the most job losses, by the same token more men are out of work.  If construction results in the most effective stimulus, then that should be what we do, unless we can find a virtually equally effective alternative that favors a fairer gender distribution.  Also, considering that women are looking for work in Nevada brothels, maybe some would be willing to try their hand at construction work.  

        Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

        by Asak on Fri Feb 13, 2009 at 02:00:17 AM PST

        [ Parent ]

        •  might be secondary to you (0+ / 0-)

          but it sure as hell would not be to a lot of single moms whose employment disappears, or to married women whose income is necessary to pay the mortgage and so on...

          and at a time when many construction workers do not have jobs, assuming that women who have worked jobs in offices or retail would be able to easily transition to construction is ludicrous.

          We have an overall responsibility to the economy, to be sure.  But in the sure term we sure as hell cannot totally screw almost 1/2 of the workforce.  You want to talk about political realities, just remember - there are more female voters than there are male voters.

          do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

          by teacherken on Fri Feb 13, 2009 at 03:55:02 AM PST

          [ Parent ]

    •  i will, but you know it's gonna get (3+ / 0-)
      Recommended by:
      slinkerwink, Bensdad, RaulVB


      "there's a bailout coming but it's not for me!" Neil Young

      by UTvoter on Thu Feb 12, 2009 at 09:46:36 PM PST

      [ Parent ]

      •  yeah. No one wants to hear the unpleasant truth (10+ / 0-)

        that Obama and his economic team may not be doing enough to address this crisis.

        •  I think they have more planned. (12+ / 0-)

          but since we cannot know that for sure I think it is prudent to do all we can to make sure we put pressure on them to do the right thing regardless.

          •  that's why it's important to be an activist (5+ / 0-)

            progressive Democrat.

          •  Obama keeps saying that this (9+ / 0-)

            is just the first bite of the apple. This round is intended only to stop, or at least to slow, the slide. That's what he says, anyway.

            And you bet he can come back for more. What The Mighty Krug (whom I adore) keeps missing (as he missed it in the primaries) is that Obama is a better salesman even than Raygun was.

            He's keeping up with his road trips, even after this bill (presumably) passes. Now why would he do that?

            Most likely it's because he intends to control the game.

            Note that last week, the approval of the bill was hovering just above 50%. Now it's 59%. The only thing that changed was that Obama took charge of the message. He provided that poll bump with just two town halls and a news conference.

            If (when) he wants more he can get it by swaying public opinion.

            Stay tuned.

            May your entire existence be one sensuous, frolic-filled experience lived in defiance of care!

            by Fonsia on Thu Feb 12, 2009 at 10:07:26 PM PST

            [ Parent ]

            •  the first round has to stabilize, slow the fall (3+ / 0-)
              Recommended by:
              mentaldebris, CWalter, pstoller78

              and if it is not big enough to do that, do not be sure that the Dems will necessarily hold together.  The Repubs will continue pounding, and if the first bite at the apple is not showing sufficient progress . . .

              that is the worry.

              The first bite is also what Geithner and company do about the financial markets

              do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

              by teacherken on Thu Feb 12, 2009 at 10:10:08 PM PST

              [ Parent ]

              •  So here's the thing: (0+ / 0-)

                The preliminary outline of Geithner's plan shows that it could cost up to $2 trillion.  Can we, or should we, be weighing that number against the $2.9 trillion loss in demand that Krugman argues we need to cover?  

                •  Sadly, no. (2+ / 0-)
                  Recommended by:
                  mentaldebris, alizard

                  I think that Geither's $2 trillion is just bank payoff.  That money's already gone, we the taxpayers just haven't paid the bill yet.

                  Krugman's $2.9 trillion is economic activity that's not happening over the next three years.  It's an academic number - the difference between a theoretical maximum GDP and the real one.

                  •  But presumably, if the plan creates more liquid (0+ / 0-)

                    capital, then it would itself be stimulating economic activity.  The aim of the plan is to get the money flowing again.

                    •  The stimulus does not dump money into (0+ / 0-)

                      the sick banks.  It just injects funding and demand into a variety of projects across the country.  That is supposed to increase GDP and provide employment and economic relief to people.

                      But unless the banks get fixed so that they can make loans again, they will keep the money from flowing smoothly through the economy.  We don't know how sick the banks are, or if they are dead already, or if we are piling $100 bills all the way to Mars to fix them, or what.  So they are a separate problem that needs a whole other pile of money.

                      I'm not an economist, but that's my understanding at the moment.

                    •  does not create demand by itself (0+ / 0-)

                      but is necessary to get the credit markets working properly.  Without functioning credit markets the stimulus will not work effectively.  

                      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

                      by teacherken on Thu Feb 12, 2009 at 10:33:35 PM PST

                      [ Parent ]

                •  ddn't have to be 2.2 trill (1+ / 0-)
                  Recommended by:

                  could have been 965 if you still insist on less than a trillion.  And it could have had far less in ineffective tax cuts.  

                  Yeah, I know there are political considerations.  On this methinks the better read was to put out your best ideas.  Rather than worry about the sweeteners for Republicans, have put out a truly clean bill might have worked just as effectively, and less would have had to be given in the tax cuts.

                  Granted, Obama wanted to try to include Republicans.  So if you want their sweeteners, then make the entire package bigger to begin with, so you can cut more out of their tax cuts to get the overall size down.  

                  It is still no where big enough, stimulative enough, and it is taking too long to get into place.  Among other things.

                  do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

                  by teacherken on Thu Feb 12, 2009 at 10:27:18 PM PST

                  [ Parent ]

                  •  It was an anchoring problem. (0+ / 0-)

                    They needed, originally, to anchor these numbers into what would be a politically stratospheric range--multiple trillions that Republicans wouldn't be seen dead voting for.

                    Then, Obama could have negotiated the stimulus down--although only slightly--satisfying few Republican demands, but enough to grant the appearance of bipartisanship.  

                    A party-line vote would have been inevitable in any case--but the case of the current present bill, our  efforts at compromise, along with Democrats' own reluctance to enact a bold spending program, had the end result of compromising ourselves, and our economic prospects in the process.

                    •  Don't forget the Blue Dogs. (2+ / 0-)
                      Recommended by:
                      pstoller78, thethinveil

                      Putting this thing in the stratospheric range might have caused Dems who are fiscal conservatives in both houses to jump off the bus.

                      One of the amazing accomplishments getting this thing passed has been keeping nearly all the Blue Dogs and their Senate equivalents on board.

              •  Yes, listen to Obama (3+ / 0-)
                Recommended by:
                askew, geez53, Rachel Q

                Obama himself has been VERY clear that this is going to be along, hard slog to make the turnaround. He said again today in Springfield that it will likely get worse before it gets better. They know unemployment is not going to turn around fast, and a whole 'nother slug of the goofy mortgages and paper is getting ready to reset in a way that lower interest rates won't help.

                •  Agree, What frustrates me is "House" thinking.. (0+ / 0-)

                  Members of the House have not been as candid about the longer time frame. I understand the pressures of their shorter cycle, but i think they run a greater risk for future electability by being more optimistic than current conditions allow. Pelosi knows what kind of road block we face in the Senate, and unless Reid or someone new can channel LBJ, or some other Great Pusher spirit, that blockage is going to be there for a while.

                  IGTNT...Honor the Fallen...Respect Their Loved Ones.

                  by geez53 on Fri Feb 13, 2009 at 01:51:35 AM PST

                  [ Parent ]

            •  But with time, the public can lose an appetite (3+ / 0-)

              if Obama repeatedly returns to the trail to campaign for a piecemeal, incremental solution to the economic crisis.  

              What goes up must come down, and nothing lasts forever--Obama's approval rating included.  He must make use of the enormous political capital he has now to enact not just a real stimulus, but a massive public works, yet targeted, spending program.  

            •  right. K ignores the political reality ... (1+ / 0-)
              Recommended by:

              things have to get those 2 votes!!!!

              AND, Obama can't scare people to death b/c of Bush's build up to war.

            •  He will have to thoroughly discredit (1+ / 0-)
              Recommended by:

              every right wing thinker in the eyes of a huge majority of the American public. This will not be easy considering who owns the media. He can speak before crowds and perhaps get unbiased internet coverage, but if the TV networks slice and dice his speeches, how many people will notice. He also has a sizable population of people who would love to see him fail, especially on the right but on the left as well.
              I am counting on him to be bright enough to accomplish at least stability, but I also have all fingers and toes crossed as well.

        •  i hear you. (3+ / 0-)
          Recommended by:
          Bob Love, SecondComing, soms

          but i'm not entirely convinced that we could do enuf to address this crisis. i have that same bad feeling in my gut that krugman has.

          "there's a bailout coming but it's not for me!" Neil Young

          by UTvoter on Thu Feb 12, 2009 at 09:49:21 PM PST

          [ Parent ]

        •  Obama got the best deal he was gonna get (5+ / 0-)
          Recommended by:
          askew, CWalter, Triscula, sillycilla, Rachel Q
          Krugman can yap all day and night about $1.3 trillion or $2 trillion or $7 trillion ... and it was simply never going to happen.  It's the sad truth.  We're gonna sink or swim on things as the are in the real world, and while Obama will get blamed, the culprits are the Republicans.  So why does Krugman keep up with his 'Obama hasn't grasped the gravity of the situation' and 'Obama hasn't tried to get enough in the stimulus bill' and all the rest?  If I could snap my fingers and be 25 years old again, I would.  Obama had a much chance at $1.3 trillion as I have of pulling off that little trick.

          Wingnuts, asshats, losers: your time is OVER ...

          by Tuffie on Thu Feb 12, 2009 at 10:15:04 PM PST

          [ Parent ]

          •  We don't know that..Obama should have (0+ / 0-)

            lowballed the tax cuts.  He left little room to negotiate...just the condom bait and some other bits and pieces scattered throughout the bill.

            ~Connect the dots, la la la la la~

            by CWalter on Thu Feb 12, 2009 at 10:34:41 PM PST

            [ Parent ]

  •  I would normally not be posting now (15+ / 0-)

    but I was out of town all day, my wife will be out of town all of tomorrow, so I stayed up until she could leave work and head home.  I will feel it tomorrow, but my student teacher is doing about half of my classes, and the other classes are simply reviewing for a quiz on Tuesday (off on Monday) so I can collapse tomorrow night.

    When I read the Krugman piece, I checked, no one had posted on it yet, so I figured what the heck.  I suspect those with more economic competence than me might weigh in later, but for now. . .


    do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

    by teacherken on Thu Feb 12, 2009 at 09:46:13 PM PST

  •  Another elite coup? (6+ / 0-)

    I'm very uncomfortable with the way this economic crisis is being framed......"Shock Doctrine" feeling to it.........

    Do you know the work of Prof. David Harvey? I heard him for the first time on the radio today.........Worth following up on his analysis. I don't mean to add to the gloom, but rather hope for more democracy....better informed.......

    Media Reform Action Link

    by LNK on Thu Feb 12, 2009 at 09:47:49 PM PST

    •  The Shock Doctrine is a means to nefarious ends. (2+ / 0-)
      Recommended by:
      LNK, geez53

      If the reality of the times merit fear -- and IMO they do -- then acknowledging those fears and working to address them directly is wise leadership.

      I simply do not believe that Obama, et al., have nefarious motives here.

      If my students can't explain it, they don't understand it.

      by Jimdotz on Fri Feb 13, 2009 at 01:51:29 AM PST

      [ Parent ]

      •  Conditioned responce....... (2+ / 0-)
        Recommended by:
        LNK, Jimdotz

        I agree with you Jimdotz, i think the Prez is just being honest about current and likely conditions.

        But after 8 years of Bush Fears, it's easy to see why some many might be feeling like LNK.

        IGTNT...Honor the Fallen...Respect Their Loved Ones.

        by geez53 on Fri Feb 13, 2009 at 01:59:16 AM PST

        [ Parent ]

    •  David Harvey is Worried Too (1+ / 0-)
      Recommended by:

      From Professor Harvey's recent blog post, Why the U.S. Stimulus Package is Bound To Fail:

      The problem for the United States in 2008-9 is that it starts from a position of chronic indebtedness to the rest of the world (it has been borrowing at the rate of more than $2 billion a day over the last ten years or more) and this poses an economic limitation upon the size of the extra deficit that can now be incurred. (This was not a serious problem for Roosevelt who began with a roughly balanced budget). There is also a geo- political limitation since the funding of any extra deficit is contingent upon the willingness of other powers (principally from East Asia and the Gulf States) to lend. On both counts, the economic stimulus available to the United States will almost certainly be neither large enough nor sustained enough to be up to the task of reflating the economy. This problem is exacerbated by ideological reluctance on the part of both political parties to embrace the huge amounts of deficit spending that will be required, ironically in part because the previous Republican administration worked on Dick Cheney’s principle that "Reagan taught us that deficits don’t matter."

      It is shocking that our country's future is being held hostage by blind adherence to economic and ideological doctrines that have plainly failed under Bush.  Neither party is willing to take the bold action necessary to get us out of this situation, for fear of bucking the two-party neoliberal orthodoxy.

      The overall effect will be to accelerate the drift of wealth from West to East in the global economy and rapidly alter the balance of hegemonic economic power. The tectonic movement in the balance of global capitalist power will intensify with all manner of unpredictable political and economic ramifications in a world where the United States will no longer be in a dominant position even as it possesses significant power. The supreme irony, of course, is that the political and ideological barriers in the United States to any full-fledged Keynesian program will almost certainly hasten loss of US dominance in global affairs even as the elites of the world (including those in China) would wish to preserve that dominance for as long as possible.

      The Democrats seem to be saying that they'd rather let our economy fail than be called "socialist".  Who cares what names the idiot Republicans call you? They oppose everything, even when we bend over backwards to accommodate them.  Let's do what needs to be done.

      Worth reading the whole article.

      •  I see Obama as centrist who inherited economic (0+ / 0-)

        'coup' in progress.......He has to clean up the mess.............

        I don't expect Obama to turn America as Progressive as the best of the European nations, though. Alas.

        We have a long way to go.

        Maybe it's time to let housewives run the world............They know how to handle budgets, priorities, etc.

        Media Reform Action Link

        by LNK on Fri Feb 13, 2009 at 08:59:13 PM PST

        [ Parent ]

  •  I still want to see a PATRIOT TAX, PATRIOT BONDS (5+ / 0-)

    To pay for the Iraq War............

    Media Reform Action Link

    by LNK on Thu Feb 12, 2009 at 09:49:25 PM PST

  •  We have to rise to the challenge (6+ / 0-)

    That was the theme of my diary today, so I'm nodding my head in violent agreement with you, teacherken, and with Krugman.

    Small-minded, fear-driven paradigms are not going to get us out of this mess. We have to think bigger and not fear the Republican bogeyman.

    President Obama has the mandate. The election in November and the polls today continue to affirm that NOBODY with 12 brain cells firing properly wants to let the Republicans steer the wheel now. EVERYBODY is looking to the Obama administration and the American people to do something big.

    Make some investments. Stop the insane bleeding from derivatives. And above all, LEAD.

    "Respect for the rights of others is peace." Benito Juarez

    by Blue Boy Red State on Thu Feb 12, 2009 at 09:49:52 PM PST

  •  Is this the first time? (0+ / 0-)

    Krugman cannot possibly be worried. This man is unflinching in the face of adversity. I hope I didn't lay it on too thick there. lol

  •  The stimulus is the best that will pass. (12+ / 0-)

    If Krugman thinks he can get 60 senators to sign off on a bailout over $1 trillion, I wish he'd run for president.  The best politician of our generation can't.

    The bailout on the other hand... ack, what a mess.  I share Nate Silver's conviction that Obama's presidency rides on this, but not his faith that it's being done properly.  I hope Krugman is right and that the "stress tests" are an opening gambit that will forced failed banks into receivership, where we need them.

    This would be easier to believe if Geithner didn't turn me off a little when I watch him. :-)  Hard not to let those personal responses get in the way.

  •  Agreed (5+ / 0-)
    Recommended by:
    bibble, CWalter, Ky DEM, Literacy, soms

    The Republicans "deep voo-doo" might lead us to "knee deep doo doo."

    Or somehow "the team" hits its' stride and starts educating the 70% of America that are educable regarding the depth and breadth of this mess and why we need to spend our way (leading the world's economies in the process) out of this Republican created mess.

    The 30% brain-dead "Fox & Friends" can piss and moan and go along for the ride while the Democrats fix the problem.

    Obama is still itent on not letting the failed banks fail. That worries the hell out of me too.

    Sure wish Geithner had a sudden, uncontrollable desire to "spend more time with his family" and fade into the woodwork.

    I don't believe that he's up to the unforseen "change" that's probably going to be required.

    Just can't seem to win - If I'm standing still, I'm loitering. If I'm walking; I'm a vagrant.

    by SecondComing on Thu Feb 12, 2009 at 09:52:07 PM PST

  •  Poor Krugy. He is just not a good student of (2+ / 0-)
    Recommended by:
    sillycilla, soms
    history.  If I remember my Great Depression history right, FDR's initial programs from '33-'35 were not particularly "stimulative" in the sense that Krugy is speaking.  They did "avert the worst" (unemployment did subside and the downward slope in growth was stopped and began to rise), but it was not until WWII (whose stimulative effect is way larger than anything that Krugy has been asking for) that growth really shot up (albeit after the war and the lifting on the rationing that took place during the war itself).  So no I'm not as doom and gloom as Krugy is and methinks that he is "worried" to often.  Is the jobs bill and financial rescue big enough, bold enough, or heck even detailed enough to get us to the post-WWII boom, no they are not.  Are they enough to stop the slide into a real Depression (a la '29 to '32 style)?  Yes.  Should we ask for more?  Yes.
    •  "Poor Krugy" is doing just fine (8+ / 0-)

      Thanks for your concern though.

    •  bullshit - (26+ / 0-)

      you'd better go look at the data.  There was one downturn, in 1937, when Roosevelt listened to the budget hawks,and back off from the aggressive deficit funding that was in fact growing the economy and helpng recover some activity and jobs.

      Oh,and I almost never curse here, but the statement about only WWII getting us out has been so thoroughly debunked here multiple times the term seems appropriate.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Thu Feb 12, 2009 at 09:57:43 PM PST

      [ Parent ]

      •  Yes the '37 downturn was when FDR CUT spending (2+ / 0-)
        Recommended by:
        soms, Randtntx

        as far as I can tell Obama is not proposing that!

        •  Oh and even Krugman agrees with the (1+ / 0-)
          Recommended by:

          stimulative effect of WWII as really serving to push the nose up on the economy in the sense he is now asking for, so perhaps you should have a discussion with Krugy on that one.

          •  no one said the war wasn't stimulative (6+ / 0-)

            the bullshit is the garbage about only the war

            do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

            by teacherken on Thu Feb 12, 2009 at 10:02:03 PM PST

            [ Parent ]

          •  One final point. I did NOT say that FDR's (2+ / 0-)
            Recommended by:
            CWalter, soms

            '33 to '35 programs did not stimulate the economy and were a positive in terms of stablize and turn the economy around, it was just that the programs (and the money behind them) were too small to create the kind of jet rocket effect on the economy.  It took the level of gov't spending seen during WWII to really shoot the economy into the stratosphere (ie the post-war boom).  

            •  Post script. The point of my post is that (4+ / 0-)
              Recommended by:
              Fonsia, sillycilla, soms, OnlyWords

              krugman sometimes likes to equate the early FDR programs as being the right size and scope for ending the Great Depression.  They were not.  They DID stop the economy from sliding further into Depression and they DID start the economy turning around (although again the unemployment rate in '36 was still higher than it was in the beginning of '29).  What I am saying and what Krugman really does not say, is that for this downturn to end and for us to be where we were before this recession/depression began requires such a large amount of cash (on the order of $2 trillion over 2 years) that I really do not see how it happens given the political climate in DC where Reps are bound and determined that money not be spent.  Should Obama have pushed for and sought more money?  Yes.  Would he have gotten nearly enough to truly turn this thing around in the manner sought by Krugman?  No.  That is my point.  Krugman acts as if the $1 trillion he is pinning for would serve the trick while the $790 billion will be worthless in that regard.  My point is that NEITHER would be nearly enough.  So if Krugman wants to complain about the size of the jobs bill then I think he should also own up to what the real size of that bill was needed to be, not only to stop the slide and perhaps turn the nose slightly up on the economy(which I noted in the original post is pbly what the current bill does) but to turn things around in the manner sought by Krugman.

            •  This is so. (5+ / 0-)

              Also, the Depression had a good four-year head start by the time FDR even took office.

              FDR was flying blind. He did pretty well, methinks, but he was inventing it as he went along. He also had to fight the Supreme Court every step of the way.

              Only with WW2 did the imperative to dive that deeply into debt become obvious. But in '33, as with Obama now, FDR could never have passed that much spending, even if he'd known the necessity of it.

              Obama does know the necessity of it, but he also knows that he's going to get more than just this one shot.

              May your entire existence be one sensuous, frolic-filled experience lived in defiance of care!

              by Fonsia on Thu Feb 12, 2009 at 10:21:29 PM PST

              [ Parent ]

      •  teacherken (1+ / 0-)
        Recommended by:

        you'd better go look at the data.  There was one downturn, in 1937, when Roosevelt listened to the budget hawks,and back off from the aggressive deficit funding that was in fact growing the economy and helpng recover some activity and jobs.

        Of course you can "grow the economy" while deficit spending. It's exactly what we've been doing the last decade. GDP grows, but so does debt alongside it.

        However, as soon as you stop deficit spending, the growth you thought you had implodes. It's easy to have a "good economy" while importing stuff from other countries and telling them "we'll pay you later", in the same sense that it's easy to run up massive credit card debt and "be rich" for awhile, until you hit your credit limit, at which point you are worse off than you were to start.

        So, you saying how much the economy grew during New Deal deficit spending does not impress me. What would impress me is an example of a nation massively deficit spending as you propose, and then returning current account deficits to zero while maintaining the "bubble" standard of living they had while running the deficits.

        And no, WWII doesn't count, unless you want to flatten the rest of the planet this time around again.

        •  not what I am saying (1+ / 0-)
          Recommended by:

          it is what serious historians of the New Deal point out.  It is what economic historians point out.  It is the analysis of the majority of economists.   You give me too much credit, when all I am doing is pointing out the work of others.

          do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

          by teacherken on Fri Feb 13, 2009 at 03:57:15 AM PST

          [ Parent ]

    •  Uh... (7+ / 0-)

      Actually, the New Deal was incredibly stimulative during that period, with GDP experiencing the greatest percentage jump during that period, along with commensurate job and earnings gains. The "dip" occurred two years later when deficit hawks exerted pressure to cut back on the spending side in deference to deficit concerns, and the reduction in gross spending levels reverted the gains for a period of two years.

      In '39, the curve reverted again as a new wave of spending was resumed - a program we called wartime production. The notion that somehow because they were tanks, bullets and planes being built somehow renders this type of government spending ANY different from New Deal program spending is comical and an insult to Americans' intelligence. Of course, we now know that spending on any war is not necessarily the same - say, the latest "war" where our arsenal was already built, and the massive new spending went to contractors, service and logistics subcontractors, and lots of Iraqi pockets.

      Study the data and you will find that even the post WWII boom did not have the same steep upward curve as the New Deal programs had prior to '37. Moreover, I'd suggest using the past eight years, with a double dose of wars throughout, as all the evidence you'd ever need to recognize an inherent flaw in the flimsy argument that somehow starting a war does something to spark an economy that other types of targeted government infrastructure spending would not. Could it be any more apparent??

    •  Not true (3+ / 0-)
      Recommended by:
      tommymet, stillwaters, thethinveil

      GDP reached a post-crash peak in 1937, after rebounding for four consecutive years as a direct result of the New Deal's fiscal stimulus. There's a graph out there that shows this: (admittedly from krugman's own site, but it's out there if you don't trust him). GDP growth began to lag and unemployment rose again exactly when FDR pulled back on spending to balance the budget.

      "Life has become the ideology of its own absence." -- Adorno

      by destructiveanachronism on Thu Feb 12, 2009 at 10:16:30 PM PST

      [ Parent ]

    •  Your observation should make you MORE worried! (3+ / 0-)
      Recommended by:
      miriam, The Walrus, thethinveil

      The problem is, there is no evidence whatsoever, and we frankly don't even know whether this $789 stimulus is "enough to stop the slide into a real Depression."  A giant public works program is our best bet, and so far, we haven't enacted one.

      You are right: while the New Deal helped to stem the tide, it took a World War end the Depression--whose stimulative effect was indeed astronomical.

      This same observation makes the $789 billion figure in the current bill an even more meager number.  We need a nationally inspired effort that has a stimulative effect approaching that of war--of course, without it being war. This bill, sadly, isn't it.

      •  Go read what the point of my criticism of Krugy (5+ / 0-)
        Recommended by:
        citizen k, alba, kat68, soms, OnlyWords

        is about.  he acts as if his $1 trillion solution is enough.  It isn't.  Unless and until he is intellectually honest enough on that point, then the polticial kicks he wishes to administer should be ignored.  The reason being is if he was honest on how big the program should have been he would have to also face the hard questions people here are noting that there is no way in hell that Obama would have been able to get that kind of program through the Senate with the Reps determined for this country to go down the tubes.  If Krugman wants to spin his columns so it looks like the problem was Obama's inability to push just a little bit more for just a little bit more in cash for the bill, then I think he should be called because the reality is that was not what was going to change the day.

        •  Also a good read in a non-opinion piece over (5+ / 0-)
          Recommended by:
          slinkerwink, alba, condorcet, soms, Ilikepie

          at the NYTimes.  Looks like there may be a growing concensus developing (of course well behind the curve of the netroots) that the mega banks in this country (you know the ones Citi, BOA, etc.) are all insolvent (and very much so) leaving as the only real solution a gov't takeover (someone say stress test), recap, burn off of the bad assets on the banks books (prbly through workout, sales to third parties, and perhaps use of the vacant foreclosed properties for in-kind compensation to military famalies, teachers, etc., that is my idea), and then re-sale of the seized bank to private hands.

        •  True (0+ / 0-)

          I think Paul Krugman seems to be forgetting that it's still the very beginning of the Obama administration.  While Obama still needs a Commerce Secretary and Health & Human Services Secretary, he's still got even more work ahead of him.

          For starters, what about the green technology that's been developed nowadays?  If it becomes bigger and bigger overtime, wouldn't it create a boom that could stimulate the U.S. economy?

          Also, one thing to keep in mind that maybe Krugman doesn't realize...  This is a global recession, which means we're ALL in the same boat.  From what I understand, there are many countries around the world which are looking to work with each other so long as the U.S. is willing to lead.

    •  Regarding your recall of history (3+ / 0-)
      Recommended by:
      Jimdotz, stillwaters, pensivelady
      I yield the floor to Rachel Maddow:

      Bernie Sanders for Commerce Secretary. Change we can believe in!!

      by Sagebrush Bob on Thu Feb 12, 2009 at 10:51:49 PM PST

      [ Parent ]

      •  Look at the unemployment numbers (1+ / 0-)
        Recommended by:

        '29 to '37.  Again I did NOT say that FDR's programs did not stop the bleed and turn the economy around, but to continue to believe that the '33 to '35 works programs ended the Depression in and of itself is misleading (again a point even Krugman concedes, so I yield the floor to Krugman on that one).

    •  Uh Oh, not the FDR Failed Myth!?! (2+ / 0-)
      Recommended by:
      left turn, An Affirming Flame

      FDR's programs were VERY stimulative. It is seen immediately, looking at the GDP during the Great Depression (see link below for a graph). The notion that WWII got us out of the depression (and not the New Deal) is a wonderful story, actually more like a fable. A conservative tall-tale. The conservatives fought FDR then, just as they are still, just as they are fighting Obama on the present day stimulus package.

      Please click on the link below for more details on this myth.

      From The "FDR Failed" Myth by Charles McMillion:

      At such a moment, it is imperative to expose a dangerous popular myth regarding the efficacy of President Roosevelt’s actions: that it was not the programs of the New Deal, but only the placing of the nation on a wartime footing years later, that restored the health of the nation’s economy.

      This belief, though widely held, cannot stand up to even the most basic economic analysis. Yet the mainstream corporate media, which abound with anti-government ideology, seek to reinforce this myth.

      Conservatives hate active governments. They fight against active governments, even if it means destroying the government.

      •  this is ridiculous (0+ / 0-)

        I'm a moderate, and the Bush administration angered me as much as anyone here, but to say that "conservatives hate active governments" is hyperbole.  They hate wasteful, inefficient, and intrusive governments such as the one we currently have (and have had for a decade).

        The "WWII saved us" fable, as you call it, is really a widely accepted historical theory supported by thinkers on both sides of the political spectrum.

        •  Really? (1+ / 0-)
          Recommended by:

          They hate wasteful, inefficient, and intrusive governments such as the one we currently have (and have had for a decade).

          Then why are conservatives the only ones that still support Bush? His was the most wasteful (national debt), inefficient (Katrina), and intrusive (warrantless wiretapping) administration we have had in a long time, and the conservatives still love him. In fact, many of them say he didn't go far enough!

          Please, the only thing conservatives want from their government is protection. Protection of their property and their lifestyle. Anything else is referred to as 'big government'.

          •  Then tell me (0+ / 0-)

            What's wrong with wanting protection of one's property and lifestyle from your government?

            •  The government can be good ... (0+ / 0-)

              First of all, it isn't protection from your government. It's protection by your government. The government protects you. (I don't know if this is a conservative slip or not, but it is suspicious).

              Secondly, nothing is wrong in asking the government to protect you. I expect that as well. The problem is that this is all that the conservatives want the government to do. They want it so small that protection is the ONLY function of government.

              For myself, I'd like the government to also provide other functions, such as supporting social programs, regulating various food/water/drugs/etc., providing everyone with the freedom of choice and the opportunities to pursue their happiness with fairness and equality. These are all functions of an active government. All things that the conservatives generally fight against.

              Here's a great site that discusses how government is a good entity, if you have responsible people running it:

              Government is Good

  •  There is probably at least one other piece (8+ / 0-)

    that is important to bailing us out besides direct economic stimulus.  That piece is health care reform.  And it may be that Obama is keeping some of his powder dry for that fight.

    The economic crisis is going to have the effect of dramatically worsening the health care crisis.  Changing to a single payer system would have been difficult in normal times.  Paradoxically, if massive numbers of people start losing health insurance as a result of the economic crisis, it may become easier to argue for a single payer system.  It may also weaken the ability of the insurance companies to resist the change.  We will have to see how this plays out.

    I know that 3 years ago when I proposed that the small rural hospital that I serve as a trustee support a single payer system, I was laughed out of the room.  Tonight our board scheduled a meeting with our state representatives to instruct them that they must support a National Universal Single Payer plan.  Change sometimes happens in unpredictable ways.

    What is mind? No matter. What is matter? Never mind. - Thomas Hewitt Key

    by Imavehmontah on Thu Feb 12, 2009 at 09:56:26 PM PST

    •  What I forgot to add to this thought (0+ / 0-)

      is that real health care reform would be a profound economic stimulus in itself.  Health care has become such a large industry that a single payer plan would preserve/create many jobs, as well as helping to improve the health of the population.  And moving the burden for paying for much of health care off of corporations and individuals would have the effect of stimulating the economy by itself.

      Of course there are losers too.  But health insurance companies can't be considered drivers of the economy.

      What is mind? No matter. What is matter? Never mind. - Thomas Hewitt Key

      by Imavehmontah on Thu Feb 12, 2009 at 10:10:41 PM PST

      [ Parent ]

      •  it would also cost quite a few jobs (0+ / 0-)

        starting with some people in the insurance companies.  And in many health care facilities and doctors' offices.

        About two decade ago I made a semi-serious suggestion of how to cut health cost by 20%, which was to give every doctor a computer with the insurance software already loaded and require all the plans to use the same forms and coding.  I knew doctors even then who were limiting what plans they would take because of the cost of processing the paper.

        do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

        by teacherken on Thu Feb 12, 2009 at 10:13:10 PM PST

        [ Parent ]

        •  A single payer system would not cost jobs (1+ / 0-)
          Recommended by:
          In her own Voice

          but would move the people who do those jobs to useful work.  There is plenty of work to be done in a single payer system to make it efficient, quality driven, and to improve access.  Once people have access to care, demand will increase and keep everyone busy.  I cannot guarantee that no net jobs will be lost, but I can guarantee that the jobs that are created will be much more useful.

          Preserving jobs that are wasteful of resources is indefensible.

          What is mind? No matter. What is matter? Never mind. - Thomas Hewitt Key

          by Imavehmontah on Thu Feb 12, 2009 at 10:23:32 PM PST

          [ Parent ]

          •  right now no jobs for them to move to (2+ / 0-)
            Recommended by:
            In her own Voice, Rachel Q

            you presume the jobs are fungible.  In many case employment is not. And there are entire communities heavily dependent upon the payrolls of insurance company offices.  

            That is not necessarily a reason not to convert.  But it should be a concern for some kind of transition.  

            do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

            by teacherken on Thu Feb 12, 2009 at 10:35:29 PM PST

            [ Parent ]

            •  HR 676 makes an attempt to address this issue (1+ / 0-)
              Recommended by:
              In her own Voice

              right from the start.  You should read the bill, and see what you think.  I don't know that it addresses the problem in the best possible way, but it's certainly refreshing to see awareness of the problem and an attempt to deal with it up front.

              It's also worth noting that passage of the bill will only begin the process of implementation, and that no jobs will be lost until that implementation is well along.  So, many of the new jobs that HR 676 will require will begin long before existing jobs are lost.

              What is mind? No matter. What is matter? Never mind. - Thomas Hewitt Key

              by Imavehmontah on Fri Feb 13, 2009 at 05:14:24 AM PST

              [ Parent ]

    •  So do some dramatic cost cutting in healthcare? (0+ / 0-)

      Boatloads of fat to be cut, but it might be counter-stimulative...

      We must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

      by Minerva on Fri Feb 13, 2009 at 02:48:57 AM PST

      [ Parent ]

      •  No because that money goes back into (0+ / 0-)

        people's pockets who need it. I think the need based expense of healthcare - something that everybody pays - everybody who has a job but will probably save most of it, to the Federal government who might be able to spend it, to the States who will spend it, and to the poor and jobless who will spend it.

        Overall not the best stimulus but also not an anti-stimulus measure.

        "I can't read! I sign my name with an X! I once tried to make mashed potatoes with laundry detergent! I think I voted for Nader! NADER!" TJ

        by thethinveil on Fri Feb 13, 2009 at 03:47:41 AM PST

        [ Parent ]

  •  The thing about the fear motivator is this: (10+ / 0-)

    I Recently got a call from a guy who works for one of my competitors to have lunch.  I agreed.  He explained that his boss sat everyone down for 1.5 hours to "Talk about the economy."  The gist of what he said was "everyone has to work extra hard or we will be out of business by summer.  So what was the instinct of this employee?

    Taking me to lunch asking if I had any jobs!

    Fear sucks as a motivator, the guy's instincts were right -- don't be scared, be prepared (as much as possible).

    I say we dust off, nuke the site from orbit. It's the only way to be sure.

    by fearisthemindkiller on Thu Feb 12, 2009 at 09:56:32 PM PST

    •  rumor going around re my husband's employer (1+ / 0-)
      Recommended by:

      approx 38k employed ---- by May, 1 out of 4, maybe 3 being let go

      if that damn home insurance and property taxes weren't so damn high.

      and that internet and cable.

      oh yeah, that car insurance thing too

      oh hell, why was I not born to a rich daddy?  what the fuck do we do?

      •  We do what we can. (2+ / 0-)
        Recommended by:
        bobnbob, AmericanRiverCanyon

        We are highly adaptable, that is the strength of our species -- we find ways to adapt and then to thrive in inhospitable conditions.  

        I say we dust off, nuke the site from orbit. It's the only way to be sure.

        by fearisthemindkiller on Thu Feb 12, 2009 at 10:37:27 PM PST

        [ Parent ]

      •  Spouse and I (3+ / 0-)
        Recommended by:
        bobnbob, In her own Voice, Rachel Q

        My spouse and I are girding our loins for "the talk."

        We were supposed to be on the verge of retirement. Spouse owns a small business, we were ready to cash out of a now-too-large house in an area with rising property taxes.

        Now we'll be looking at the numbers and trying to figure out how bad it really is. First glance, it's bad.

        •  live in florida (0+ / 0-)

          talk to  me about property taxes and then homeowners insurance!  geez, our taxes - regular lot in a neighborhood, more than $4k (and we're original owners, bought in '97!) and insurance in florida - highest in the country - almost $6k/year (and that's without flood insurance - we're far enough from the coast)

          i really feel for those neighbors who've bought a house sold 2 or 3 times - their taxes are at about $10k/year and it's just a regular lot - in a neighborhood

          •  You have some kind of re-assess at sale? (0+ / 0-)

            Ours gets re-assessed every year, sale or no sale, and the rate goes up too, the double whammy. They've about quadrupled since we bought this place. Our taxes are (gulp) $15K a year and likely to go up even though values have gone down probably 20%.

            But honestly I never thought I'd be one of the old folks that the taxes are pushing out of our home.

            •  yeah, (0+ / 0-)

              here in Florida we have the Homestead Exemption - which in case of taxes, if you remain in the home, your taxes can only increase up to 3%/year on the value of your home.  that homestead exemption also started your sale price $50k less than what you bought it for.  

              from wiki:
              The amendment caps the increase of the assessed value of a home with a homestead exemption to the lesser of 3% or the rate of inflation. This means that if an owner had a homestead exemption on a home valued at $100,000 in 1995, and the exemption was still valid in 2005, the most the home could be assessed at is approximately $126,000 [2]. For comparison, records of the Florida Association of Realtors show the median price of a single family home during the same time increasing 175% from $89,900 in 1995, to $247,000 in 2005

              so I'm fortunate, but it did leave a lot of folks stuck in their homes as the housing boom went skyhigh!  Couldn't afford to sell and repurchase :)

  •  Here I am trying to sleep and then this appears (4+ / 0-)
    Recommended by:
    teacherken, SecondComing, soms, UTvoter

    Hell, I'll be up all night after reading this.

    I'm beginning to think it's time to cash in some shekels to buy gold.  

    I've noticed here in Florida that just about half the boats are up for sale.  You wanna boat?  We got one.

    Literally every marina has boats in and out of the water for sale.  

    But the prices have only fallen about 25% of what you'd pay last summer.   The motorboats have a lot further to fall.

  •  Enough with this already... (22+ / 0-)

    Anyone who thinks the whole problem was going to be solved in one financial package is unrealistic.

    We can't afford to wait the months it would've taken to lay out and pass a multi-trillion dollar bill, nor could we risk spooking the shit out of the millions of Americans who really haven't been personally impacted by the crisis yet. Many of them know things are bad, but they're still employed, have some savings, live in towns where life is still kind of moving along OK, etc. You start trying to pump through a multi-trillion bill on the first pass, and you run the risk of having the whole process implode in a quagmire, without the American people having the inner fortitude to stand behind it (especially after the TARP debacle).

    Now you have a good bill ready to go quickly. You have the impetus for states to resume functioning as if the whole world isn't falling in yet. Further, and more importantly, you have the room to manever going forward if mistakes are made, additional priorities are identified, and as things worsen. You can target new funds for specific things and get them managed more effectively. You can monitor progress more easily, and shift things more effectively. Most importantly, you didn't blow your whole political capital wad on the first go.

    Krugman is doing what he should do, and it is a great service. Remind of the scale and urgency. Do not relent and sit back with one "win". Continue to point out the economic realities in a way the MSM and lawmakers are unwilling to. That is all good. But to infer President Obama does not have the stones and/or recognition of the need for "bigness" on this, simply because the initial bill was "too small" is myopic and likely in error. I think this administration has a history of surprising us with its effectiveness, and being underestimated. That will be the case again here, I am certain.

    •  Americans and 2 republicans and half the senate (1+ / 0-)
      Recommended by:

      democrats and half the house democrats too would have agreed to a multi-trillion dollar package 10 days within Barack Obama's presidency.

      Wake me up...we won..

      by soms on Thu Feb 12, 2009 at 10:09:20 PM PST

      [ Parent ]

      •  Says you (7+ / 0-)

        And I would again argue that going that route doesn't guarantee any more positive outcome. Im agine the difficulty of trying to "get it right" quickly on that type of scale. The potential pitfalls of trying to manage a bill of that size with appropriate transparency and speed, while all the while then turning around to seek more money for other priorities not included in this first round behemoth. Practical? Not really. Politically prudent - heck NO. And yes, while the situation demands thinking big and acting quickly, it also demands not driving the political "car" recklessly such that it inevitably ends up in a ditch, stuck and moving nowhere fast.

        You are naive if you think this got through easily and those same two Repubs would've stepped up nearly as easily with a price tag three times the size. I can think of at least two Dems, and three GOP'rs who were already balking at the size of the original bill. Where the hell do you think the impetus for a bill 300% the size would've come from?? I wasn't even confident three days ago that THIS ONE was getting done, and I think you are underselling the expert job that was done here in getting this thing, at its current size, where it is as fast as it got there. And after all, let us not forget that those unemployed folks, needy folks, delapidated schools, broke states and hungry Americans really need fast over perfectly sized right this moment - wouldn't you agree?

        No, I think we scored a big "win" here, especially in light of the more to come factor that is now very much in play due to how this was handled. If nothing more is odne 12 months from now, bitch away. But for now, I view this all as senseless bellyaching that is detached from the reality of how trillions of dollars of American money realistically gets spent in Congress - rightly or wrongly.

    •  Bravo... (1+ / 0-)
      Recommended by:

      Excellent comment!

      "What a wonderful life I've had! I only wish I'd realized it sooner." Colette

      by Lopez99 on Thu Feb 12, 2009 at 10:12:11 PM PST

      [ Parent ]

    •  not issue of solving with one round (3+ / 0-)
      Recommended by:
      ctsteve, tabbycat in tenn, Jimdotz

      is issue of making enough progress to stem the continued downward spiral, install sufficient international confidence and domestic confidence that the other hard steps necessary to correct the structural problems in the financial markets can be taken on, as well as the additional stimulative steps.

      I am well aware that Obama has made clear that this will not be quickly turned around.  But there is a limited time to stop the downward trend before the impact approaches catastrophic in the lives of too many people.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Thu Feb 12, 2009 at 10:17:28 PM PST

      [ Parent ]

      •  Um... (4+ / 0-)

        Can we all gut check for a moment and recognize that history has shown us that there are both "too little" approaches that cause catastrophe, but also "too much of the wrong things" that can and do too?? You speak as if it is certain exactly what and how much is needed where right now, and that we somehow missed an obvious mark.

        Notwithstanding the obvious issues with trying to get a bigger bill passed efficiently, I think we tend to overlook the potential ruinous impact of running up this kind of deficit erroneously. We can neither afford to not act largely enough, nor can we spend this kind of money foolishly. We've already seen with the TARP that it is both how much you throw at the problem, but also how you do it, that dictates where the outcome falls. I think most would agree that the contents of this bill, especially given where we were after Rush opened his piehole, are really quite good. Food stamps and education infrastructure. Roads, bridges and an electrical grid. Medicare and COBRA. Lots of state aid and discretion to steer it quickly where it makes the biggest impact. A 65/35% balance spedning to tax cuts, with the bulk of the tax cuts targeted in the right places (sort of). All in all, while we all know it's too small, it's right spot on in terms of a starting point and it's a hell of a lot faster than we'd ever have seen a multi-trillion dollar bill move through Congress. And I suspect storngly ANYTHING that size would've been laden and weighed down with bullshit tax cuts and corporate/wealthy giveaways with little or no reliable stimulative impact. Just to get to the "right number". Months too late. Thanks, but no thanks.

        Again, not disagreeing with Krugman's or your's assessment that much more is needed soon. But definitely disagree that you needed to go "all in" on round one to get it done right. In fact, I'd argue that IMHO, that is the surest recipe for delay and getting it "wrong". We've seen it all too often.

        •  please show me where I said to go all in (0+ / 0-)

          or where Krugman did.  My attitude, partially reinforced by people like Krugman, is that we are going far too small, with the wrong mix.  I am not arguing that we need to have a stimulus that is 100% spending equal to the drop in demand.  I am arguing that there is too much in misdirected tax cuts and not enough total.

          do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

          by teacherken on Fri Feb 13, 2009 at 04:00:59 AM PST

          [ Parent ]

          •  It IS what you are saying... (1+ / 0-)
            Recommended by:

            I am not trying to be argumentative with you, as I agree with your overall opinion. More needs to be done, and the mix is not perfect.

            What you ARE saying, though, is that he needed to go all in. Without question, an enormous amount of political capital was expended here, to get at this mix and this scale. Each incremental $100 billion, or 5% in shift towards spending, would be an exponentially harder journey through the political process. You know, Collins and Snowe are get lambasted on here as having "held this thing hostage". What a crock of cr&p. In reality, those three saved this thing, by at least acknowledging that this is vital, and that a House-like approach of "no, and that's final" is not going to serve the American people well. So, they worked on what room they could give to still serve their conservative constituents (who think this should be SMALLER mind you - much smaller) but compromise and get something done quickly. That comes at great cost. And to ask them to potentially slit their own throats and stand in support of a bill twice the size would've been that much more onerous and that much riskier on the parts of those being asked to "compromise".

            Right now, after $800 billion, you may have a fighting chance to get those three to jump back in on another spending bill later. At $1.2 trillion, it becomes far harder and less likely there is even one vote for a "round two". At $2 trillion, it is literally unthinkable you get anything else passed in a year, if not more. That, by definition, is ALL IN. And it's not smart. And yes, you ARE asking for it.

            Rethink this man. That's all I ask. This is not the end, and certainly not enough, but is a huge score against this kind of ideological opposition that still exists in 45% or more of America right now. That's all.

            Krugman isn't looking at these things this way, and shouldn't be. He is presenting a theoretical, ideological argument that SHOULD be relatively free of political implication. Your views, however, should balance the two.

      •  Yes and Obama has said this (0+ / 0-)

        You are right, teacherken, and Obama has said this exact thing, so they have to be aware of it. At the very least they have to get the credit markets flowing and pump some expectation of spending into the economy as a whole.

        Today in Peoria, the Caterpillar guy was supposedly hemming and hawing about whether he would be able to hire back some of his laid-off employees. That is exactly the fence we're balancing on.

  •  Something has to be said about Krugman: he has (2+ / 0-)
    Recommended by:
    shiobhan, soms

    been right in his forecasting so far. The only other person who predicted this mess about 2 years ago was Larry Summers.

    So far, these two guys have been the only people who smelled this rat a long time ago.  Roubini caught up with them, but he was a late comer.

    Don't give a damn a/t each & every politician currently alive in the US. Last time i voted for the top part of the ballot was 1972. Never missed SB election

    by Mutual Assured Destruction on Thu Feb 12, 2009 at 10:05:06 PM PST

  •  Krugman worried? (5+ / 0-)
    What are the odds?  This guy has predicted doom for 15 years and will be in 2024, I'm sure. Hey, he's obviously smart and all but for God's sake, man -- back it down a notch or ten.

    Wingnuts, asshats, losers: your time is OVER ...

    by Tuffie on Thu Feb 12, 2009 at 10:06:37 PM PST

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

      This calls for

      1. A Miller


      1. A high five

      Krugman sure has been yappy ever since he got his Nobel.

      I love Muskegon. Each season comes at exactly the right time.

      by Muskegon Critic on Thu Feb 12, 2009 at 10:19:41 PM PST

      [ Parent ]

    •  You're castigating him b/c it took 20 years... (1+ / 0-)
      Recommended by:
      Sagebrush Bob

      ...for policies based on batshit crazy Republican ideology to spectacularly blow up in our faces - as if he was wrong to be pointing out all this time that they inevitably would?

      Yeah, guess he should have just shut up...

      We must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

      by Minerva on Fri Feb 13, 2009 at 02:52:18 AM PST

      [ Parent ]

  •  We NEED the Krugman/Powell/Shinseki Doctrine (2+ / 0-)
    Recommended by:
    tommymet, pensivelady

    which amounts to a plan of overwhelming force.  Powell and Shinseki knew the large troops numbers necessary for decisive military wins.

    Now we need to translate that philosophy into an economic "shock and awe" doctrine: a massive stimulus quickly enacted.

    Sadly, however, the opportunity is slipping away...

    •  There is another way, although not one (1+ / 0-)
      Recommended by:

      I particularly relish:  Print large sums of cash and inject it into the system.  That would stimulate the economy but at the expense of perhaps out of control inflation, which would on its own eat away any net positive the extra cash has in terms of stopping the deflationary spiral (as it would be replaced with economic growth being outstripped by the spiral in costs for goods and services).

      •  NOO (1+ / 0-)
        Recommended by:

        Printing a lot of money would make our current debt unserviceable, as suddenly T-bill interest rates would rocket from 2% or whatever to some other number, making it impossible for us to service our debt. So, say Obama inflates by 10%. Oops, T-bills now pay 12%. So he prints the extra 2%. Now they yield 14%, as foreign investors increase their expected interest rates to take into account the inflation.

        That way lies a hyperinflationary spiral that really will destroy the economy and likely overthrow the government! Deflation sucks, don't get me wrong, but it's unlikely to cause a total meltdown and collapse of civil order, just "business as usual", except everything sucks and you can't get a job. With hyperinflation, the government falls and there is anarchy!

      •  Just tax the wealthy (0+ / 0-)

        For 30 years we've had a policy of "feed the rich, starve everyone and everything else".  That simply needs to be reversed.

        Wages haven't gone up in 35 years.  The GNP has more than doubled.  That's trillions and trillions to the top 2% year in and year out for decades.

        Then along comes Bush and he moves another $4 to $10 trillion dollars from the demand side of the economy over to the supply side.  

        All that needs to be done is to reverse this.

        Those Trillions that have been moved over to the supply side of the ledger simply need to be moved back over to the demand side.

        That's the short term solution.

        Long term we need new institutional arrangements to ensure that wage rates grow with GNP growth.  

        Those exist in other countries, just not here.  

        By the way, thanks for everything, Ronnie.  

  •  There is also the regular budget! (1+ / 0-)
    Recommended by:

    The long term capitol investment can be put into that. R&'D and Education. If I understood some of the commits on Congress Matters, the budget can not be filibustered.

    But we are going to have to prepare to spend a lot more time lobbying from the netroots than I would prefer.

    I was SOOO looking forward to letting my  democratic congressman and 60 Democratic senators look after things and obviate the necessity to call a Rep Every couple of days to stiffen their resolve to do the right and progressive thing.

    Damn we need another Demo senator.  

  •  I'm going to stand by my (5+ / 0-)

    notion that this isn't the last and only chance to spend money.  

    Keynes made the same alarms to Roosevelt "Not Enough!" and Roosevelt still carried us out of the Depression...unless you don't think so. Krugman plays an important role of the gadfly here. I hope he keeps it up. But we're not ruined.

    I love Muskegon. Each season comes at exactly the right time.

    by Muskegon Critic on Thu Feb 12, 2009 at 10:09:52 PM PST

  •  I just don't see many (4+ / 0-)
    Recommended by:
    askew, leevank, soms, Wolf Of Aquarius

    voting for a 2.2 trillion dollar jobs bill. It has to be done in pieces, I think.

    To err is human. To forgive, divine.

    by Highwind on Thu Feb 12, 2009 at 10:11:06 PM PST

  •  Krugman, for all his smarts.... (24+ / 0-)

    .....and he's plenty smart, and plenty progressive. Love the guy.  I really do.  

    Absolutely no political sense at all.  

    Just because his arguments make sense -- when was the last time we saw a Congressional Republicans accept facts and common sense?  

    These are the same yahoos who -- to a man and woman -- will not entertain the slightest notion that their policies have failed, and taken the world economy down with them.  Not one.  Not for one God damned instant.  If they can raise extra bucks from the knuckle-dragging wingnut 30% of America, that's all they care about.  As long as deregulation means Wall Street can rape the world economy, they're happy.  Just as long as they get enough campaign contributions and can whip up the Ignorant-and-Proud-Of-It crowd who ain't gonna let no Commies get away with nuthin'.  As their jobs evaporate to China, and now their buying power and world status as well.  

    The bill has to pass.  It's not going to be enough, but it will create jobs, it will infuse some transactions into the economy.  And the fight goes on for better bills, better infrastructure, better regulation and investment in America being great again.  Obama's speech tonight was his best speech ever.  Literally.  The best.  We're headed in that direction.  

    I wish to God we didn't have to take these God damned baby steps.  But it's political reality.  We don't have 60 Senate votes.  It's fucking politics.  

    Paul Krugman, for all his brilliance, doesn't have a political bone in his body.  

    •  Nicely put. nt. (6+ / 0-)
    •  Absolutely... (6+ / 0-)
      Recommended by:
      askew, fumie, leevank, shiobhan, soms, JoanMar

      Obama can only do so much when he needs 60 votes in the Senate. Even if some GOP Senator drop dead tomorrow and the Dems get 60 votes, there will still be Blue Dogs out there holding things up.

      I think everyone in the White House would love a $2 Trillion stimulus that ends up with Solar Panels on ever house, windmill farms all over the place, and health care for all.

      The reality is that it would take 60 votes and 60 votes isn't going to happen unless major concessions are made.

    •  Yep. Nuff said. (4+ / 0-)
      Recommended by:
      fumie, Hawkjt, soms, JoanMar

      And it's good he doesn't. It helps him formulate better and more intellectually honest economic opinions than if he were politically oriented. It's how it should work.

      He should keep applying the pressure as he is. It's just that we need to recognize the process and the realities, and resist the urge to go racing off screaming and blasting the naivete of the administration every time Krugman or others keep sounding the alarms.

      I honestly think you are underselling Obama's astuteness if you really believe that he isn't already driving the process for the next rounds and priorities forward now. Do you not believe he is sincere when he constantly reminds us all that this is far from a single solution problem and that we have much more work to do to get this turned around? I mean, this guy has painted a bleaker picture, and has called us to action around it, more than any President has in my lifetime - to the point where he has the old timers I know reminiscing about FDR and the last time we all needed big action taken. Cut this guy some slack, why dontcha? He's got it...

    •  Really 57? (1+ / 0-)
      Recommended by:

      If so, you should remember Reagan pushing through ridiculous budgets to try to pull out of the early 1980s recession.  

      Reagan's main ploy: put the Dems up against a wall, under a klieg light and ask them, "are you really going to prolong the misery by voting against me?"

      Then there are all the times Bush, DeLay and Frist pushed through outrageous crap without having 60 seats in the Senate.

      Of course those Dems were loathsome cowards, but even our current crop of Republican troglodytes would have capitulated if the pressure had been turned up high enough.

      We must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

      by Minerva on Fri Feb 13, 2009 at 03:00:02 AM PST

      [ Parent ]

      •  But there in, lies the rub..... (1+ / 0-)
        Recommended by:

        Of course those Dems were loathsome cowards, but even our current crop of Republican troglodytes would have capitulated if the pressure had been turned up high enough.

        Turning up the heat is not possible (though it should be). Reagan had near complete media backing to influence "the masses". The intertubular world of today helps blunt some of the Trad. Med. influence, but we still haven't reached critical mass in terms of saturation.

        IGTNT...Honor the Fallen...Respect Their Loved Ones.

        by geez53 on Fri Feb 13, 2009 at 03:13:16 AM PST

        [ Parent ]

    •  Political Reality is a poor excuse (0+ / 0-)

      Our economic situation is too dire to use "political reality" as an excuse for not making the right choices to get us out of this mess.

      We should not be hamstringing our efforts by trying to appease those who got us into this situation.

      Time to create our own political reality and turn the tables on these fools.  They've got the economic biggest crisis in recent history to use as incentive.  Obama and Dems need to focus on creating their own political reality.  

      There's an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they're doing. PK

      by Betty Pinson on Fri Feb 13, 2009 at 01:11:55 PM PST

      [ Parent ]

  •  I like Krugman (7+ / 0-)
    Recommended by:
    citizen k, askew, fumie, leevank, soms, lompe, JoanMar

    and the man is admittedly smarter then me on economics but still this is begining to sound a little like worship here.

    I also am begining to take issue with the idea that this is all or nothing. Either the stimulus should be done to X standards or not at all.

    Either way I'm definitely curious and anxious to see what the next couple months bring.

  •  What we must understand (4+ / 0-)
    Recommended by:
    askew, leevank, soms, JoanMar

    the Rethugs are stonewalling and there is little the Prez can do without at least 60 Democratic Senators.  Even if we had 60, the "blue dawgs" would have done something stoopid!  We had 11 "blue dawgs" in the House who would not vote for the bill.  Serveral Democratic Senators threatened to vote against the bill before Sen. Nelson put his "blue dawg paws" on the bill.

    What's a Progressive to do?  We need more Progressives in Congress/Senate!!

    To all my ancestors who have moved from "sense to soul", a mountain of gold could not repay you.

    by rubthorn on Thu Feb 12, 2009 at 10:12:58 PM PST

    •  50 (0+ / 0-)
      and the V-P.

      Nuclear option available.  In light of no "post partisanship," no reason not to use it.

      Especially if the crisis is truly the crisis were are told it is.  

      I survived the Bush Administration, 2000-2008

      by Publius2008 on Thu Feb 12, 2009 at 10:17:58 PM PST

      [ Parent ]

      •  What qualifies Obama to use the nuke option (2+ / 0-)
        Recommended by:
        JoanMar, Jon Says

        on a multi-trillion dollar bill and without the popular consensus and support behind him??
        That would be as good as one of Bush's signing statements and unconstitutional authorizations.

        Wake me up...we won..

        by soms on Thu Feb 12, 2009 at 10:21:05 PM PST

        [ Parent ]

      •  50 + VP in what scenario? (1+ / 0-)
        Recommended by:

        Are you suggesting the stimulus should have been "emergency" legislation or whatever the official title is for such things that would have removed the 60-vote requirement in the senate to pass?

        And what do you mean by "nuclear option"? What is that?

        •  one scenario would be to do as budget resolution (1+ / 0-)
          Recommended by:
          Words In Action

          which I believe cannot be filibustered.  Now, that would have required some creative legislating.

          One problem is that the Obama people did not, as far as I know, immediately after the election start working with the key legislators and staff on the Hill.  And that may have created some of the problems.  Can't prove that is a cause of some of the problems.  

          do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

          by teacherken on Thu Feb 12, 2009 at 10:37:51 PM PST

          [ Parent ]

          •  but isn't there timing to a budget resolution and (1+ / 0-)
            Recommended by:

            Like the money can't be used until the next fiscal year (which is what, summer? fall? at the earliest)

            And isn't there still a budget resolution to come that could be used for various purposes?

            Or ... what do you mean by budget resolution? Because I don't get it yet.

          •  here are some specifics from (2+ / 0-)
            Recommended by:
            condorcet, soms

            The President’s Budget: Although the Constitution does not require the President to submit an annual budget, in 1921 the Budget and Accounting Act laid the foundation for the modern budget process, including the President’s budget. More recently, the Budget Act of 1974 established a timetable for the annual budget process (table below), which is kicked off each year by the President’s budget submission. The Budget Act specifies that the President’s budget should be presented to Congress on or before the first Monday in February, which usually coincides with the President’s State of the Union Address.

            The President’s budget is generally viewed as a detailed outline of the Administration’s policy and funding priorities as well as a presentation of the economic outlook for the coming fiscal year. The President’s budget, which estimates spending, revenue and borrowing levels, is compiled from input by the various federal agencies, with funding broken down into twenty budget function categories.

            The Budget Resolution: While Congress is not bound by the President’s budget, it is often used as a starting point for the Congressional budget process. The Budget Committees of the House and Senate hold hearings on the budget, taking testimony from Administration officials, Members of Congress and expert witnesses in preparation of the annual budget resolution. Committees of the House and Senate are expected to submit their views on the budget no later than six weeks after the President’s submission. After testimony, the committees "markup" their respective budget resolutions. This process allows members of the Budget Committees to offer amendments and make changes to the starting text, which is usually presented as the Chairman’s mark. Under the Budget Act, the Senate Budget Committee must report its version of the budget resolution by April 1. While the House Budget Committee has no similar requirement, House action generally proceeds concurrently with that of the Senate.

            And then underneath is the timeline. It lists the start of the fiscal year as Oct 1. Are you saying that could be changed? How? Doesn't last year's budget make it so the only option before the start of the next FY (outside of some sort of emergency legislation) would be what they are doing?

    •  As I keep saying Krugman should stick (7+ / 0-)

      to economics and not the politics of things.
      Saying 'Obama isn't thinking big enough' without realizing the political reality and quagmire that is the senate and the house in a deficit era is senseless.

      Wake me up...we won..

      by soms on Thu Feb 12, 2009 at 10:18:27 PM PST

      [ Parent ]

  •  I'm so confuzzled at this point I can hardly (0+ / 0-)

    figure out which way is up.  Maybe I'm tired or stupid, or both.

    Whose marriage do we get to vote on next?

    by cany on Thu Feb 12, 2009 at 10:15:02 PM PST

  •  Republicans' (1+ / 0-)
    Recommended by:
    "commitment to deep voodoo."


    I survived the Bush Administration, 2000-2008

    by Publius2008 on Thu Feb 12, 2009 at 10:16:16 PM PST

  •  You said it in a nutshell teacherken: (0+ / 0-)

    right now much of the rest of the world is waiting for us to make the kind of major commitment necessary to right the floundering American economy.  Without that happening, the chances of the problems in the rest of the world remain doubtful, and that will feed back into our economy (we are all too interlinked) with effects that could wipe out whatever gains we attain from this limited bailout.

    Sure do hope others are listening, and absorbing the ramifications of what this means.

    •  Did you hear Senator Inouye? (1+ / 0-)
      Recommended by:

      Did you hear his voice?

      They know how precarious this is. They know what is at stake.

      The Republicans are just better at playing hard ball. It is still a game to them. It will remain a game until they start feeling some heat from home.

  •  The fix, ladies and gents, is in. (2+ / 0-)
    Recommended by:
    Sagebrush Bob, moira

    Anyone listen to Geithner today? This recovery plan is basically an extension of the Bush-Paulson plan. Good luck getting your country back. Let me know when it's time to hit the streets.

    "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." -- Groucho Marx

    by rolandzebub on Thu Feb 12, 2009 at 10:18:39 PM PST

  •  Krugman's worries are most definitely (6+ / 0-)

    NOT displaced.

    Bernie Sanders for Commerce Secretary. Change we can believe in!!

    by Sagebrush Bob on Thu Feb 12, 2009 at 10:22:16 PM PST

  •  I'm afraid that (4+ / 0-)

    people in charge (a) don't want to face reality and/or (b) are afraid to let us know how desperate things are.

    Louise posted a link to this interview of John Talbott that, I think, lays out the facts quite succinctly.

    Bernie Sanders for Commerce Secretary. Change we can believe in!!

    by Sagebrush Bob on Thu Feb 12, 2009 at 10:27:25 PM PST

  •  Ironically, the tax cuts, which McCain wants more (3+ / 0-)

    of, are the very things that are a "generational theft" in the bill (many of them, though not all).

    "Well, yeah, the Constitution is worth it if you can succeed." -Nancy Pelosi, 6/29/07.

    by nailbender on Thu Feb 12, 2009 at 10:31:52 PM PST

  •  Team Obama is going to have to step up. (5+ / 0-)

    But First and foremost they have to keep teh American public on THEIR side.

    The entrenched douchebag brigade (The GOP) is voting and screaming for failure.

    Mainly because it is their one and only hope to make themselves look like anything other than world class losers themselves, by going full court press for everything about the new administration to fail.

    The WORST part of it is, they would gladly let this country slide into chaos and a worse hell than the 1930's were, just so they can point and say "See the Democrats fucked up this country too".

    That being said, until Obama and his people have an eye to eye talk about reality with the bankers, everything else is just kicking the problem down the road.

    Right now, Obama and his economic advisors are being bullied by the big boys at the top ten or os banks, they are all puffed up saying  "We are too big to fail" and you have to help us, OUR WAY".

    All Obama has to do is knee cap just ONE of the big banks, let say Citi, take it over, write off the bad paper, recapitalize it, and sell off what's left.
    That alone will make a watershed moment, and cause the rest of the Wall Street millionaire morons to start begging for Government support without restrictions.

    A lot of talking heads all over the MSM have said there will be no nationalization of the banks, well bull-oney, that outcome is VERY MUCH still on the table, and the way things are going will end up being used sooner rather than later.

    "There's a bailout coming but it's not for you It's for all those creeps hiding what they do". - Neil Young

    by Nebraskablue on Thu Feb 12, 2009 at 10:32:39 PM PST

  •  So if John McCain had won (2+ / 0-)
    Recommended by:
    askew, OnlyWords

    we'd all be dead?

    Don't make the perfect the enemy of Obama.

    You don't need luck when you've got 71.4% of the population behind you.

    by Coss on Thu Feb 12, 2009 at 10:39:04 PM PST

  •  I am worried to (5+ / 0-)

    How this can be rectified is:

    1.  Nationalize the banks

    and or

    1.  In the budget put in what needed to be put in the stimulus plan in the final budget.  This budget is FILIBUSTER proof so who cares if absolutely NO Republicans vote for it.  Obama needs to have an emergency plan with House and Senate Democrats about the real fiscal problem that the U.S. is in.

    The administration’s next shot at advancing its economic aims will be Mr. Obama’s first budget. The new president should stop courting Republicans who have shown no interest in compromise or real economic fixes. The budget resolution is immune from filibustering. If every Republican wants to vote against it, Mr. Obama should leave them to explain that decision to voters who are in danger of losing their jobs or their houses or both.

    "Because we won...we have to win." Obama - 6/6/08. WELL WE DID IT!!! 11/4/08

    by Drdemocrat on Thu Feb 12, 2009 at 10:41:09 PM PST

  •  I hope Obama listens to Krugman more (2+ / 0-)
    Recommended by:
    alizard, Wolf Of Aquarius

    If not, if things get worse, I think there may be violence. Particularly if we bail out Wall Street again with no strings attached. I'm talking lynchings, here. Surely, Obama, as a student of history, realizes that FDR saved businesses from themselves, by regulating the hell out of them and bringing about the New Deal. Obama has moved in the right direction, but he must be bolder.

  •  Krugman has no idea about politics (8+ / 0-)

    He never understood what Obama was up to and doesn't seem to want to learn.

    •  What, pray tell, (0+ / 0-)

      is Krugman not understanding?  What's the big secret plan?

      "While there is a lower class I am in it; while there is a criminal element I am of it; while there is a soul in prison, I am not free" -Eugene V Debs

      by RevolutionRock on Thu Feb 12, 2009 at 11:11:23 PM PST

      [ Parent ]

      •  no secret (2+ / 0-)
        Recommended by:
        askew, Chicago Lulu

        The size package Krugman favors would have lost. Zero is a lot less than $800 billion. A president with a major legislative defeat under his belt is less able to make changes than one with a major victory and an increased approval margin. A president successfully painted into a partisan corner by the press/pukes is less able to implement his agenda than one who has Republican governors endorsing his legislative agenda.

        Obama is an organizer. Krugman is an Ivy League Economist.

        •  Krugman is talking about what's necessary (0+ / 0-)

          It's not an he'd like it cause his mom asked him kind of thing.  It's his professional opinion that the stimulus needed to be bigger.  

          I disagree that, too, that it would have lost.  Obama went out and proved that he could sell it to the American people.  He's a popular President, he has political capital, if there was a time to spend it it would be saving our asses.

          And a President who passes a stimulus bill that isn't strong enough to pull the economy all the way out of the ditch give Republicans their talking points for the next dozen election cycles.

          And what's wrong with Ivy League Economists, too 'elitist' for you?

          "While there is a lower class I am in it; while there is a criminal element I am of it; while there is a soul in prison, I am not free" -Eugene V Debs

          by RevolutionRock on Fri Feb 13, 2009 at 08:53:59 AM PST

          [ Parent ]

          •  matter of judgment (0+ / 0-)

            If you want to second guess a spectacularly successful politician like some black guy who became president at 46, beating out both Rove and an "inevitable" establishment candidate, you need to do more than wave your hands to have a credible argument - in my opinion.

            And Krugman has never understood what Obama was doing.
            He keeps asking why Columbo is being so modest and humble.

    •  Doesn't need to (0+ / 0-)

      Politics is Team Obama and Congressional Dems job and they need to get busy doing what Bush would do - reject their reality and substitute it for one of our own.

      The message shouldn't be about finding a "bipartisan" solution.  It should be about rejecting the failed ways of the past and substituting them with real solutions.

      There's an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they're doing. PK

      by Betty Pinson on Fri Feb 13, 2009 at 01:16:05 PM PST

      [ Parent ]

  •  The Goldilocks syndrome (7+ / 0-)

    We have folks on the right saying the stimulus is way too big. We have folks on the left saying it's way too small. Here's to hoping they're both wrong.

  •  Edit in first line (2+ / 0-)
    Recommended by:
    teacherken, soms
    much less one with the stature of a Nobel laureate
  •  Ok we have idiots like these demanding (4+ / 0-)

    their pound of flesh and getting recced on this website and Krugman is talking of a multi-trillion dollar stim package.

    Wake me up...we won..

    by soms on Thu Feb 12, 2009 at 10:49:49 PM PST

  •  I'm reminded of a quote from Thoreau (5+ / 0-)

    It was easy to see that they would not long be companions or cooperate, since one would not operate at all.

    The leaders on the right love to lecture the left on patriotism but don't seem to realize that love of country requires more than jingoistic phrases and military might. It also requires putting country before ideology when there is a crisis.  

    This isn't the first time that the left has had to clean up the mess left behind by the right and it probably won't be the last. But it should be. This is getting old.

    "When they ask how I died, tell them: still angry." Richard K. Morgan

    by sceptical observer on Thu Feb 12, 2009 at 10:50:49 PM PST

  •  Krugman must have pushed through a whole (5+ / 0-)
    Recommended by:
    askew, soms, PalGirl2008, stanjz, Escamillo

    bunch of Bills, he being such an expert and all.  I just can't seem to find them. I wonder exactly what  Krugman would have Obama do to get a bigger Bill through the Senate. BTW, did Krugman campaign for Obama? He is becoming such a bore. His language and tone is so more strident than Obama's that I know he would not have had one Republican voting for his Bill.  He has all the answers then why the heck didn't he run for office? Enough already with Krugman and his type of experts. Just as I am getting very, very tired of David Gergen. They have NOOOOOO idea what to do other than APPEAR to be SOOOO knowledgeable.

    It's a beautiful day!

    by JoanMar on Thu Feb 12, 2009 at 10:57:32 PM PST

  •  Obama must do a 180. (3+ / 0-)
    Recommended by:
    mimi, TomP, TNThorpe

    This post-partisan crap has to be dropped.  Krugman nailed that one.  The Republicans in Congress are truly "deranged".  Off the rails.  You can't work with nutcases.  That bill should have started off freaking huge and let the idiotz whiddle away at it.  He should have gone in setting American's expectations higher.  

    Yep, Obama's playing that ol' establishment game.  Reality does not play that game.  His political future rests on an economic turnaround, not on playing nice.

    I just think Krugman's right that if the banks don't pay a price, then we are screwed.  Either we seize them or they fail.  The Japan analogy is so apt.  Now with the executive pay restrictions lifted from the stimulus bill, the moral hazard has reached radioactive.  It's so perverse that we have a disintegrating middle class and an ever growing corporate welfare state.  The ultimate lazy welfare queens are on Wall Street and meanwhile the Republicans continue to vomit Reagan-era economic arguments.  Scary times.

    •  Ok, where does Obama get the 2 votes from?nt (3+ / 0-)
      Recommended by:
      askew, soms, Rachel Q
      •  The same place. (1+ / 0-)
        Recommended by:

        It's all politics.  He started that bill off with giant tax cuts.  He should have made the Republicans fight for every one.  I bet we would have had a better bill.

        •  Perhaps better but doubtful it would have been th (5+ / 0-)
          Recommended by:
          askew, Chicago Lulu, soms, Ilikepie, Rachel Q

          e size that even Krugman talks of (which again I believe even Krugman's bandied about amount is itself too small).  That is where the hard realities of a non-filibuster proof Senate come to serve as a brake on any immediate action that is needed.  It is that political reality that does not change and which is not fully acknowledged by the Krugman piece.

          •  Fair enough since we're talking numbers (0+ / 0-)

            on the order of $2 trillion.  Yes, the filibuster is a problem.  I nonetheless think that being "bi-partisan" puts you in a weak negotiating position when you're dealing with rabid partisans.  The Republicans smell blood, particularly on the polling on the bill.  Obama could have sold this to the public better and negotiated better, IMO.

            •  Play partisan, ok where are the _3_ votes. (0+ / 0-)

              come from?

              The rabid partisan folks are ..
              the same folks that wanted to kick joe lieberman out of the dem caucus.

              you think he'd of voted for the stimulus then?

          •  Let me add that the reason I'm criticizing (1+ / 0-)
            Recommended by:

            Obama here is not because of how I feel about him - it's because I think Krugman is right.  The only thing that's going to help is a truly giant infusion of spending.  Like he said, if this were normal times this bill would be a huge victory.  Do you really think that this bill is the best they could have done?  Obama started with that $800 billion figure.  No one has a clue what's correct - it's all perception and Obama has the pulpit to dominate what the perception is.  I mean if he had started at a trillion and worked down to 900 billion, wouldn't we be in the same place, but with a better bill (in terms of preventing economic collapse)?

          •  If DC insists on playing those games (0+ / 0-)

            then I guess it's up to us in the hinterlands to overthrow the whole mess.

      •  That's the rub...WE NEED 60 DEMS (2+ / 0-)
        Recommended by:
        askew, Ilikepie

        I have never heard Paul Krugman say anything positive about the Obama administration.  Everything Barack does is criticized by Krugman.  It's too small, it won't work, this is really really bad, run for the hills, we are doomed.

        Bottom line, how is Barack supposed to do everything exactly as Krugman wants.  WE DON'T HAVE 60 votes in the Senate.  Look how hard it has been to get three moderate Republicans to put their  country before their party.  

        It makes sense to me that this is the first bite of the apple as it relates to the jobs bill.  As Barack has said, there are other elements of the recovery plan that will work in concert with the jobs bill (foreclosure relief, banking regulations, extending credit, etc).

        I can't imagine that anyone can say exactly how this is going to play out. But it is obvious to me that we have to do something.    

    •  Obama (0+ / 0-)

      is a true believer of post-partisanship.

  •  Rest of world "waiting around" for us? (4+ / 0-)

    I don't know about that.  Consider the massive stimulus that is being undertaken by China, the third-largest economy in the world.  China is already implementing a nearly $600 billion stimulus, with huge projects already having been started as early as December:

    "China looks set to be the first major economy to recover from the current global meltdown," said Lu Ting, an economist with Merrill Lynch & Co. in Hong Kong. "China is the only economy in the world to see significant growth in credit to corporate and household sectors after September 2008, when the financial crisis worsened to a near collapse."

    The government’s stimulus plan, announced in November, is beginning to gather momentum. Projects such as the building of 3.5 billion yuan of public houses in Shaanxi province and Shanghai began in December, while Shandong province started work on three new railway lines the same month.
    Bloomberg, Feb 12th.

    If China's economy begins to recover this year-- especially to the extent that their recovery is driven by internal demand and not just exports-- it could help lead us and the rest of the world out of recession in 2010.  In particular, certain US industries that export to China, such as aerospace and medical equipment makers, would benefit if internal Chinese demand grows.  

    •  Here's a thought that I have not seen in any (2+ / 0-)
      Recommended by:
      skymutt, soms

      economists read on what the right size the jobs bill should have been --- everyone talks about the multiplier effect of tax cuts vs US govt spending, but could there not be an external multiplier to demand in this country, namely the stimulus provided in foreign countries like China?  Perhaps the size of such an external stimulus in foreign demand is not significant, but I would really like to see something on this point.

      •  I've got nothin for ya ;-) (1+ / 0-)
        Recommended by:

        I think it's clear that the direct stimulative effects on the U.S. economy of a modest recovery in China are fairly small-- for example, China's total imports of US products is only in the neighborhood of $60 billion/year.  But the China stimulus, should it work as intended, helps our other trading partners such as the UK as well.

  •  the economy.... (4+ / 0-)
    Recommended by:
    Dave925, yann, TomP, soms

    This playing out pretty much as I expected.  Obama is trying a few things, none of which are strong enough medicine.  The economy will get dramatically worse in the coming months, and by June we will have people rioting in the streets.  At that point in time it will become clear that much more radical government intervention is necessary.  The insolvent banks will be liquidated, management at many large institutions will be thrown out of their jobs, and we will see a re-run of Roosevelt's depression-era remedies.  All the while, Republicans will be screaming bloody murder and encouraging their fascist followers to take up arms.  This is not going to be pretty, but if we survive it we have a chance to overhaul this nation for the better.

    Regulate banks, not bedrooms

    by Eagleye on Thu Feb 12, 2009 at 11:05:33 PM PST

  •  I'm sorry (4+ / 0-)
    Recommended by:
    askew, Chicago Lulu, soms, Escamillo

    Be scared.  BE VERY SCARED

    I'm sorry, but this diary sounds like hysteria to me. Being smart and winning a prominent award does not make you infallible. As much as I enjoy reading Krugman's articles, I would wish that he would offer more practical advice like how can he realistically do what he is suggesting?

    •  hardly panic (1+ / 0-)
      Recommended by:

      to have full awareness of the consequences of not going big enough, and not properly addressing the connecting issues.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Fri Feb 13, 2009 at 04:07:36 AM PST

      [ Parent ]

    •  Denial is not a river in egypt (0+ / 0-)

      open the eyes

      TK is not even close to being alarmist in this diary

      •  Krugman is smart enough to understand (1+ / 0-)
        Recommended by:

        the politics of what's going on and to fault Obama for compromising is ridiculous. Would he rather have Repulbicans filibuster till no end and do nothing?

        He's sounding the alarm, but to bring out the fear is retarded and is counterproductive to do what he wants.

        Of course Obama knows how bad it is out there. He can't say the sky is falling without causing panic.

      •  And cliche is not a road to truth (0+ / 0-)

        It is interesting how many stock phrases we are seeing here "Denial is not a river in egypt", "Every action results in an equal and opposite reaction" (from Newtonian physics no less).

        I would surely hope that readers of this blog are such that they are more prone to persuasion than paucity and cliche.

        Here is my point, slightly more expanded, and in random order. We are currently in an environment where Republican rule has decimated this country for the past 8 years. Bush did this by taking the "either you are with us or get the hell out" approach, an approach by the way that on either side (left or right) I find repugnant.

        There are several things of note about Obama:

        1. he is different
        1. he came to WA to try a different approach, I would be less happy with him if he were to become a left-wing bush.
        1. he is trying to be bipartisan (and of course the republicans are ruining it, but still I commend him for his efforts).
        1. panic and fear is what bush has sold and has gotten him re-selected in 2004. I do not want to see my democratic brethren sell panic and fear to sell me a stimulus plan. "Be afraid, be very afraid" is an argument I find profane and lacking any thought (not to mention it is emotionally exploitative and, quite frankly, a banal and overly-used cliche). What are we, a Hollywood movie?
        1. Krugman wants to sell newspapers and articles, so he is as prone as the rest of us to hyper-exaggerate.
        1. recommended diary writers also sometimes get recommended by a the-sky-is-falling argument (yes, maybe I'm a hypocrite since I'm using a cliche too).
        1. The big problem: Obama was elected with only a 52% majority. The country is still got 48% of people who still would have preferred bush (they voted for Palin for gods sake, think about it!!). If Krugmann is so bloody smart, let him tell us how the hell are we going to get over this near 50/50 split in the countries voting preferences, and do so now (not an easy task).

        Therefore, I think that for the most part, this article, and especially this diary, are not particularly helpful (but then why am I here responding to it??? I don't know).

        Now of course you could say that you are a cynic and the only way to win is to sell fear, but do it on the left side of the issues. Well, if that's the case then I really think that there is not much hope for this country indeed ...

        •  not new here (0+ / 0-)

          I didnt just fall off the cabbage truck and I am not new to DK, I DO have some sense of perspective.

          Nor am I new to politics (having run for office myself and been involved with it for quite a long time).

          I am not the type to follow leaders for party reasons even tho I have served on our state dem committee.

          I am not a hysterical female nor am I susceptible to the wiles of newspaper journalists/nobel laureates/gadflies.

          I do not get off on fear nor did I enjoy the 8 years of terror we just lived through.

          I see it as a sign of respect to demand ONLY the very best of Obama and his people because its going to take that and more to bring us through this time of collapse and transition - something we need to do for my children and everyone's children.

          If we take our eyes off the ball and allow delusion, we cheat and disrespect the lives of future generations, its as simple as that.

    •  Every action results in an equal and opposite (0+ / 0-)


      No one was scared when they mortgaged themselves to the hilt, and charged twice their annual income on credit cards. Bankers weren't scared when they manipulated worthless mortgages and sold them off as "investments." Corporations weren't scared when they kept increasing the speed of the conveyor belt sending jobs "offshore." Media owners/mouthpieces weren't scared when they were told to only repeat the company line, which was basically Rove's list of daily talking points. Those who sent our troops into Iraq for political gain weren't scared.

      You combine all of that bravado/stupidity and the result will be a force that is equal and opposite. In other words, a dramatic change in our country's stability and future.

      People with hatred in their hearts never live up to their full potential. It's very sad.

      by Nelsons on Fri Feb 13, 2009 at 06:22:57 AM PST

      [ Parent ]

  •  There is no fixing the banking problem (7+ / 0-)

    Until the banks come clean (and they're all insolvent) we're going to keep pissing money away trying to pretend it's still the good ol' days. It ain't and due to peak oil they're never coming back.

     This is going to be a wrenching dislocation and I'm all for blaming the Republicans because they're most culpable, but not Gore in 2000, not Kerry in 2004, and not Obama in 2008 will be able to stop it. We need to recognize our operational (oil, water, fertilizer, sunshine, etc) constraints, be realistic about our finances (bankrupted empire), and move accordingly. Stimulus dollars for building roads to fantasized future subdivisions? That's ... deranged, too.

    I'm an Emersonian Transcendentalist. What's your excuse?

    by Stranded Wind on Thu Feb 12, 2009 at 11:27:58 PM PST

    •  The crisis presents opportunities (3+ / 0-)

      to change

      but that change requires serious political muscle and a bold vision of the public good. The country has literally and symbolically to be remade.

      I see inklings, but I agree with Krugman that that is not nearly enough.

      Men make their own history, but they do not make it as they please: Marx

      by TNThorpe on Fri Feb 13, 2009 at 12:21:03 AM PST

      [ Parent ]

    •  not all - (1+ / 0-)
      Recommended by:
      In her own Voice

      we bank at a local bank that chose to forgo the easy profits of go-go banking, and thus is not in any jeopardy.  It helps that their mortgage holdings are in the DC metro area, where prices have not deteriorated as much as in some places, and they have maintained conservative LTVs in their lending.

      They are not alone.

      Big money center banks are quite different.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Fri Feb 13, 2009 at 04:09:05 AM PST

      [ Parent ]

  •  I'm worried, too. (0+ / 0-)

    "They had fangs. They were biting people. They had this look in their eyes,totally cold, animal. I think they were young Republicans."

    by slouching on Thu Feb 12, 2009 at 11:48:38 PM PST

  •  Nouriel rubini and Nasim Taleb said the same (5+ / 0-)

    thing the day Geithner unveiled his financial stimulus plan.

    Prof Roubini also predicted that it was possible another large bank could fail, saying: “In many countries the banks may be too big to fail but also too big to save, as the fiscal/financial resources of the sovereign may not be large enough to rescue such large insolvencies in the financial system”.

    He also criticised the US and UK approach to bank bail-outs, comparing it with attempts by Japan in the 1990s to solve its banking crisis. “The current US and UK approach may end up looking like the zombie banks of Japan that were never properly restructured and ended up perpetuating the credit crunch and credit freeze,” he said.

    Here's an interview they did with CNBC that day.

    The Shape Of Things "Beware the terrible simplifiers" Jacob Burckhardt, Historian

    by notquitedelilah on Thu Feb 12, 2009 at 11:48:51 PM PST

  •  Paul Krugman, May 5th 2008: (4+ / 0-)
    Recommended by:
    nika7k, Don Enrique, soms, Ilikepie

    it’s possible, though by no means certain, that the worst of the financial crisis is over.

    Krugman is smart, but he is not clairvoyant.  

    •  May 2005 (2+ / 0-)
      Recommended by:
      teacherken, Don Enrique

      No, not calirvoyent or perfect, nor does he claim to be.  But damn good.

      And a Nobel Prize in economics.

      Paul Krugman, Running Out of Bubbles

      That's why it's so ominous to see signs that America's housing market, like the stock market at the end of the last decade, is approaching the final, feverish stages of a speculative bubble.

      Some analysts still insist that housing prices aren't out of line. But someone will always come up with reasons why seemingly absurd asset prices make sense. Remember "Dow 36,000"? Robert Shiller, who argued against such rationalizations and correctly called the stock bubble in his book "Irrational Exuberance," has added an ominous analysis of the housing market to the new edition, and says the housing bubble "may be the biggest bubble in U.S. history."

      In parts of the country there's a speculative fever among people who shouldn't be speculators that seems all too familiar from past bubbles - the shoeshine boys with stock tips in the 1920's, the beer-and-pizza joints showing CNBC, not ESPN, on their TV sets in the 1990's.


      The important point to remember is that the bursting of the stock market bubble hurt lots of people - not just those who bought stocks near their peak. By the summer of 2003, private-sector employment was three million below its 2001 peak. And the job losses would have been much worse if the stock bubble hadn't been quickly replaced with a housing bubble.

      So what happens if the housing bubble bursts? It will be the same thing all over again, unless the Fed can find something to take its place. And it's hard to imagine what that might be. After all, the Fed's ability to manage the economy mainly comes from its ability to create booms and busts in the housing market. If housing enters a post-bubble slump, what's left?

      Mr. Roach believes that the Fed's apparent success after 2001 was an illusion, that it simply piled up trouble for the future. I hope he's wrong. But the Fed does seem to be running out of bubbles.

      Originally published in The New York Times, 5.27.05

      "What we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed." -- Barack Obama

      by TomP on Fri Feb 13, 2009 at 05:22:24 AM PST

      [ Parent ]

  •  Listening to Republicans across the country (9+ / 0-)

    it's quite clear that they're willing to let the country burn, as long as what remains is a feudal corporate state in which democracy isn't actual but nominal.

    From Steele's "work isn't jobs" inanity to Gregg's stunt to Rove's preening over the Republicans' obstructionist response to the stimulus bill to Cantor's anti-union "joke" video, their contempt for the public is palpable.

    I can only hope the electorate continues to turn against them.

    Men make their own history, but they do not make it as they please: Marx

    by TNThorpe on Fri Feb 13, 2009 at 12:04:50 AM PST

  •  I wonder...just to be self serving for a moment.. (0+ / 0-)

    why aren't loan terms adjusted to sell houses to those with less than stellar credit?  If an abandoned house is at risk from looting, squatting and/or other devaluation activities, why don't lenders adjust terms to get people in the homes?

    People like me...rebuilding credit.  I would not qualify, credit-wise, for a home loan currently.  Would it not be better to get someone in a home with a good (not the best, I do think there should be reward for well handled finances) rate and perhaps extend the payback period to 35-40 years?  I am only 36.

    It would help with the housing glut.  And if the ARM's and other holy-shit-my-payment-just-doubled programs were not used, wouldn't that drastically reduce the level of default?  

    I would especially like to see rates and payments lowered for those who are currently threatened by foreclosure.

    ~Connect the dots, la la la la la~

    by CWalter on Fri Feb 13, 2009 at 12:09:27 AM PST

    •  In the past (5+ / 0-)

      Look, the myth that everyone needs to own a home is just that, a myth. When I was growing up, many many people always rented and never bought and it worked just fine. When I was looking for my first home to purchase, few people could buy until their mid 30s. Part of why we are in this mess is too many people who had lousy credit and lousy finances were lured into buying homes they could not afford.

      Having good credit is something that people should be able to learn how to do, even if they might need help to figure out how. Buying a home is not a minor thing: it is a huge, financial obligation. No one should be doing it until they do have good proven credit, unless they are in a supportive program like Habitat.

      People used to have to save until they had a full 20% to put down. Then it was 10%, then 5% then 0%. That was NOT a good trend. It fueled speculation, it got people in over their heads, it made them jump in before they had the resources. The "payment just jumped" loans were part of the speculative bubble. They started out in California, and every time they popped up, you could tell it was a bubble brewing and getting ready to burst.

      •  yeah I suppose my children don't need a yard (4+ / 0-)

        to play in, a better neighborhood to live in where they can walk to school, nor do I need a garden.

        We are just working poor, I suppose renting is good enough for us.

        ~Connect the dots, la la la la la~

        by CWalter on Fri Feb 13, 2009 at 01:23:30 AM PST

        [ Parent ]

        •  Not to mention (3+ / 0-)
          Recommended by:
          CWalter, In her own Voice, Randtntx

          that the rent is always more than what a mortgage payment would be. So if we can't afford a house payment , how are we supposed to afford rent payments?

          •  Not necessarily true (0+ / 0-)

            Every time I've looked at the numbers, it has always been immediately cheaper for me to keep renting than to buy.

            That is based on renting in a part of town I'm comfortable living in, in a decent well-maintained complex. In a safe part of town. With dishwasher and w/d. With a den & fireplace. And a separate space for a dining room. I can get all that and 900 sq ft. for ~$900-$1100. I could spend just a bit more and get just a bit better. I could spend less though don't like the options.

            And yes, I know not every city has rent levels like that. Sorry for you.

            My options to buy and have an equivalent mortgage payment would all put me in an unsafe part of town, too far away from good public transportation (which I use), and with a house or condo that would need major renovating.

            My options to buy the sort of property I'd really want to buy are out of my comfort zone for a monthly payment. So I keep renting and saving.

          •  Mortgage is only part of it (0+ / 0-)

            There is also taxes, insurance, and upkeep.

            Landlord pays those.

        •  You can have all those things (0+ / 0-)

          You can have all those things without owning a home. I did. I had all that for years in a rented house.

          In fact, when I first bought a home, I bought and moved into a house that was smaller than, in worse shape than, and in a worse neighborhood than the one I had been renting.

  •  State of Emergency (0+ / 0-)

    As I read a NYT article about some of the major banks sinking into the abyss, I wonder:

    At what point could the President declare a state of emergency and act, without Congress?

    I don't like the smell of this idea, but some part of me says, what's there to lose?

    And in the unlikely story that is America, there has never been anything false - about HOPE. Barack Obama

    by thesunshinestateisdark on Fri Feb 13, 2009 at 12:14:46 AM PST

  •  this bill is the camel's nose in the tent (2+ / 0-)
    Recommended by:
    soms, BoxNDox

    I'm not as worried as Krugman here, because the GOP looks like fools every time they open their mouths.

    They can't really stop Obama and he gave plenty of hints that there would be things that need to be fixed in the future.

    It's probably wise to see the effect of the current stimulus before drawing up additional legislation. You can't spec out a large project of any kind very accurately - the farther out you look the less certain the outcome. So one way to budget for that is to set milestones and estimate how much it will cost to get to the next milestone. If the administration takes this approach there is good opportunity to place better restricitons on the next draw of funds so they are used wisely. Then Obama will hit the road and repeat the selling points of the next part of the plan relentlessly.

    In a democracy, everyone is a politician. ~ Ehren Watada

    by Lefty Mama on Fri Feb 13, 2009 at 12:18:54 AM PST

  •  My perspective from across the sea: (9+ / 0-)

    The effects of the downturn have begun to make themselves felt primarily in urban areas in France and Germany. (This is not to say that rural areas are unaffected, nor do I mean to ignore the catastrophic downturns in Ireland and elsewhere... some of which have given rise to social unrest: witness the recent rioting in Riga, Latvia, and ongoing turmoil in Greece. I am focusing on France, where I live, and on Germany, where one of my two major clients is located.)

    For the moment, I am relatively insulated here in my tiny French village in the middle of nowhere. I work mostly via the internet; most of my neighbors are retirees who have guaranteed fixed incomes.—Most, but not all: two of our town's younger families (with kids still in school) are packing it in and leaving to try to find work.

    Massive layoffs are just starting to be announced in various industries. My German client announced its first-ever cutback: some 3000 permanent employees are being phased out by attrition, "voluntary" early retirement, "voluntary" separation... and then, if there aren't enough volunteers, the ax will fall. For the moment, I don't have any work from them (and haven't had since October). It seems fairly normal (based on ~two years' experience) for this client not to have work for me in the first quarter (because upper management is pathetically incapable of dealing with budget issues quicker).

    (I do end-user and in-house product documentation, mostly fixing non-standard English; some QA as well.)

    My job broker tells me that this client will probably start hiring contractors (me) at some point in the second quarter to deal with the backlog. I do know from my friends on-site that they are completely overwhelmed even before the cutbacks take effect, so my getting hired is not out of the question. But this assumes that the demand for this company's product will remain at or about current levels, and it is not at all obvious to me that (a) companies around the world who use the product will still be in existence a few months from now; and (b) companies still in existence will continue opting to pay for the product; and (c) companies still in existence will likely trim their own workforces and thus will not pay for as many licenses for the German product in any event.

    In short, my German client may choose to put off the roll-outs of enhancements to its product to save money, and that would mean greatly reducing the odds of my getting hired for any length of time. (I am good enough and know their odd home-grown documentation programs well enough that I would be one of the first consultants to be hired, so I'm told, but that will be cold comfort if I'm not. Plus every month I'm locked out of the company servers means that I cannot "keep my hand in" and stay up with the in-house bizarre programs I'm required to use.)

    I currently am getting a few days of work a month from my other client. However, this client's product is high-end, and quite honestly, I think the odds are good that demand will start falling off before the end of the calendar year, and quite possibly sooner. I have already heard rumors that some of their customers are in arrears already. Not good.

    Mr Mo has a contract through the end of the calendar year, and will be able to work more from home shortly. However, this contract can be cancelled with a month's notice... and once it's over, well.

    We don't have any idea at present how we're going to manage to send youngest to college. (She's already attending a pricey private school because she had some learning problems that the French public system isn't equipped to deal with.) We already cancelled re-doing the roof on our Wretched Little House... we have to hope that the ancient, currently leak-free roof will hold up for a few more years. Simply too expensive. Retirement is not going to happen "in my lifetime," as it were. (I pretty much like what I do, but still.)

    I have other salable skills, but the bottom line is— if no one has money to spend, people are not going to buy my artwork or my services.

    I've been stocking up a little bit and cutting back on all kinds of expenses... but somehow we are going to want to see our Stateside kids from time to time (they prefer coming here, but we both should visit our parents at some point, and Mr Mo's don't travel, ever).

    Sorry to be long-winded, but I've been a student of the Great Depression ever since I, as a pre-teen, picked up a copy of James Horan's The Desperate Years (a pictorial history of the 30s). I am very alarmed at the parallels, and much more alarmed at the unique characteristics of this current downturn that have the potential send our world even further downwards: there are far more of us, our economies are far more interconnected than they were "back then," and we are facing enormous difficulties wrt food & water shortages, environmental issues, etc.

    I have to hope that it's not too late for President Obama and other world leaders to act boldly and stop the slide downward. It's coming faster and faster, and it may reach "terminal velocity" quicker than they—or we—could have imagined possible.

    Book excerpts: nonlynnear; other writings: mofembot.

    by mofembot on Fri Feb 13, 2009 at 12:29:32 AM PST

  •  The shoe that hasn't dropped (5+ / 0-)

    given how much debt is leveraged on to the value of the financial instruments based on our residential housing stock - and remember, that leverage is now world-wide.

    The whole derivatives bubble hasn't even started to unwind yet, at least in any meaningful terms.  The largest accomplishment of the literally trillions that cenral banks and governments have shoveled into bailouts and stabilization funds has been to put off the day of reckoning, of derivative deflation and deleveraging.  But when you consider that the notional value of the global derivatives market today is something like $700-750 Trillion, up from "only" $100 Trillion in six years, and then compare that with an aggregate global annual GDP of roughly $50 trillion, the potential destructive force thre is obvious.  Even a 10% deflation of the derivative bubble would wipe out more notional wealth than the entire world econmy produces in an entire year.  Unfortunately, these things aren't just floating out there in a vacuum either, a lot of these instruments have been used as collateral for the purchase and financing of real assets, real wealth.  What happens to all those real assets so leveraged when the derivatives bubble inevitably begins to contract (not to say implode) and the derivatives market equivalent of margin calls begin?  Given everything else that has taken place, this is inevitable, and we haven't even seen the first of it yet.

    •  "notional wealth" (3+ / 0-)
      Recommended by:
      Dave925, ActivistGuy, dark daze

      Now, there's a term that's descriptive!  While I consider money a figment of the imagination, there's a reality it represents.  The balloon economy that's floating over Wall Street is a pure invention.  There's no there there.

      How do you tell a predator from a protector? The predator will eat you sooner rather than later.

      by hannah on Fri Feb 13, 2009 at 03:30:16 AM PST

      [ Parent ]

  •  "Nut here's the rub" (misspelling in diary) - (1+ / 0-)
    Recommended by:


    Caught the flu on Sunday night and I'm so hopped up on cold medicine(s) that I've been giggling like a schoolgirl at that dirty sounding typo for the past 10 minutes.

    HEROES: President of the United States of America, Barack Hussein Obama. - Captain Chesley Sullenberger, US Airways Flight 1546 - Stephen P. Jobs, Apple Inc.

    by VT ConQuest on Fri Feb 13, 2009 at 01:09:31 AM PST

  •  Mr. Teacher: What if... (0+ / 0-)

    Hopefully you have now read the entire column.  If not, shame on you.

    What if some of us don't need to read much about what's going on?  Could be.  'Specially if some of us saw it coming years ago, and now here it is.  "It" being specifically the US BrandTM of CapitalismSM because it was pegged in unicorns.  Imaginary creatures.  Humans not allowed in calculations.  Numbers only.  Trust the Wizards of Oz.  Just because most people are surprised and confused doesn't mean everyone is.

    Some mood music.

    I didn't read the Krugman piece, to be clear.  I'm not ashamed that I didn't.

    Peace. It's cheaper, and more fun. We've already tried everything else.

    by USexpat Ukraine on Fri Feb 13, 2009 at 01:14:24 AM PST

  •  Krugman (1+ / 0-)
    Recommended by:
    cultural worker

    Didn't want Obama.

    Krugman sucks.

    I'll never get over it.

  •  Too many comments already, but I'm not worried. (1+ / 0-)
    Recommended by:
    In her own Voice

    I think the bailout was part hush puppy economics and part priming the pump.  The problem on Wall Street and in the banks isn't economic; it's the consequence of crime.  The TARP is a short-term fix to give them time to figure out where, besides Madoff's pockets, the money has gone.  Sending the bean counters in is a good start.

    Also, I have finally figured out the problem the leisure class has with taxes.  When taxes are collected and spent, not only do we realize economies of scale, but the leisurely bankers don't get their cut in the form of coupons and fees.

    How do you tell a predator from a protector? The predator will eat you sooner rather than later.

    by hannah on Fri Feb 13, 2009 at 02:32:39 AM PST

    •  the money never existed (1+ / 0-)
      Recommended by:
      In her own Voice

      its like a losing lottery ticket, Its not worth a million dollars, its worth NOTHING.

      Banks and investors bet that housing would never drop in price, it has , so they are holding trillions of dollars in losing lottery tickets ( bad debt mortgages)

      Here is the problem, a big bank worth 400 billion has -600 BILLION in bad debt.  These banks are WORTHLESS but for some reason the governemnt wont let them simply fail.  SO they thow money at them becasue they dont know what else to do.

      The situation is WORSE than most americans can even imagine.

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Fri Feb 13, 2009 at 06:40:02 AM PST

      [ Parent ]

  •  Krugman (5+ / 0-)

    What krugman fails to realize is that President Obama has to gauge the public appetite for such a large sized stimulus package - i.e. deftly manage the public's sticker shock -- so as not to cause wholesale panic.

    A too large amount of money in one fell swoop would have spooked the public into hording their money even more that ever before. There was a psychological benefit to the president that the cost of the final package came in below the size of either house's draft figure.

    As a new, yes popular, president Obama realized he could not take for granted that the public's high regard of him necessarily translates into ABSOLUTE TRUST on untangling the gnarly economy. This bill enables him to prove his real time bona fides to a skeptical public already brainwashed by repug conventional wisdom. This week, by taking the stimulus on the road, he single-handedly changed public support in his favor, inching up from 52% to 59% in the USA/Gallup Poll.

    So if Pres. Obama is SEEN to be managing this first bill prudently, he will have earned the total trust of the public to take even bolder action.

    Krugman needs to understand that if the politics is not played right, then even the best intentioned programs will be non-starters. Notice how Pres. Obama is simultaneously pushing the repugs further and further to the fringes in ways that the public can see for themselves. The more he succeeds in doing this the more he'll have the public eating out of his hand, as we've seen this work. After that momentum of public sentiment will take down the repugs

    "What the cynics fail to understand is that the ground has shifted beneath them." -- Pres. Obama (1/20/2009)

    by zizi on Fri Feb 13, 2009 at 02:56:56 AM PST

  •  OK, I'm Scared. (0+ / 0-)

    If the sky is falling and it's all going to end, why should I give a fuck about anything? We beg our elected officials for help and the stand there staring at us like we're in steerage daring to ask to get into the lifeboats.

    If it's all over then I might as well do whatever I want to do, whenever I want to do it starting right now. If it's all over, who'll stop me?

    The Road to 2010: More Democrats. Better Democrats.

    by Splicer on Fri Feb 13, 2009 at 03:38:33 AM PST

    •  because the end (0+ / 0-)

      because the end isn't the end.  Did people in the soviet union suddenly all die and disappear when the soviet union failed and split apart?

      That is what we are talking about here.  A MASSIVE failing of a former super power.  Things could get ugly, but you'll kept living.

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Fri Feb 13, 2009 at 06:42:08 AM PST

      [ Parent ]

  •  Obama's bold rhetoric not matched by action (1+ / 0-)
    Recommended by:

    I've always felt that the boldness he's been demanding from the American people in these extraordinary times has not been matched by the boldness in his own actions to deal with this economic crisis.  First he ladens an economic stimulus bill with far too many tax cuts, which is due to a political misstep.  He never should have started out with such a huge amount of tax cuts to appease the useless Repugs.  And the second half of TARP doesn't appear to do anything to ensure that the banks use the money to go directly to new consumer loans, mortgages, etc.  It appears like it will be just another bank bailout, so that the banking execs. can continue their big bonuses, luxury retreats, etc. and not have to make any sacrifices themselves.  I've been pretty disgusted by what I've seen in Congress and on Wall Street lately.  Obama has clearly not been able to get the powerbrokers to change their destructive ways one iota. This is going to be a long, drawn economic crisis I fear.

    •  The boldness Obama expects of us (2+ / 0-)
      Recommended by:
      musicsleuth, TomP

      Leaning hard on the Republicans in Congress and counteracting the misinformation held by our neighbors, friends, family, and co-workers.

      It's back to FDR's words: "Make me do it."

      The public pressure for him to be bold has to be there.  And it must overcome the artificially created party unity of the Republicans in Congress.  More Republicans and Blue Dog Democrats need to feel the heat.

  •  I like Arianna Huffington's article from today (1+ / 0-)
    Recommended by:

    as well and I suggest one reads it after reading Krugman's article. It brings it down to people my level of economic reading comprehension, which I appreciate.

    My sick feeling in the pit of my stomach is that I should fill my coffers with gold, buy some small orchard/farm and open up a grocery store around the corner on top of which I should live.

    I don't understand anything, but what about the gold standard? Or something like creating a new currency and back that one up with assets that actually exist in reality?

    •  I'd love to buy a small orchard/farm (0+ / 0-)

      but somehow, I missed out on the memo that says Americans are well off.  At the rate the econ is going i doubt I'll ever have money for a small house let alone acreage for a farm.

      Sunshine on my shoulders...

      by pkbarbiedoll on Fri Feb 13, 2009 at 04:57:52 AM PST

      [ Parent ]

  •  And so was I, until I took half a valium. :-) (1+ / 0-)
    Recommended by:
  •  I'm not that scared and I like Krugman (2+ / 0-)
    Recommended by:
    askew, BoxNDox

    But he's a shitty politician and would probably be a bad poker player.

    The stimulus package will get the recovery underway and once that's started you'll see (more) smart political moves by Obama's team in their effort to "out" the Republican's scandals, bring back the Fairness Doctrine, and in general, "play politics" so that subsequent bills can be easily passed that will enhance and continue the economic recovery.

    The problem is that if Obama is seen as "playing politics" with the stimulus bill (as the Repubs are so obviously doing themselves), he'll be rendered less effective in the future.

    I'm not ready to be a chicken little's been interesting to watch the Repubs' little traps get sprung while the roadrunner beep beeps by them.

    •  Beware of "anything authorities" (2+ / 0-)
      Recommended by:
      eltee, littlebird33

      That was Herzog's term for people who are undeniably experts in a particular field but then proceed to dispense advice in other areas they know little if anything about. Herzog's observation was that sooner or later they end up making fools of themselves.

      I'm primarily a mathematician by training and I've read a couple of Krugman's serious technical papers, including his note about the Japanese liquidity trap that seems especially relevant now. And I stand in awe of his economic acumen. He is almost certainly correct in his assessment that the current stimulus package is much too small and won't go far enough.

      But when it comes to politics... Had Obama played the game the way Krugman has advocated my guess is we'd be sitting here watching the ongoing filibuster of the initial vote for the package in the Senate. And the TARP business would be in even more of a mess than it already is.

      This is not to say that Obama hasn't made mistakes. He certainly has. I am in complete agreement with
      Rahm Emmanuel's assessment that they lost control of the message on this thing for a while, and it cost us. Nevertheless, in politics it is essential not to let the best be the enemy of the good, which it seems pretty clear is what Krugman would have done.

      Krugman himself has stated that if he had been offered a cabinet post he would have declined because he doesn't have the right temperament for the job. He's sure right about that.

      So: Pay close attention to Krugman when he talks about about economics, because he's one of the most savvy economists around. But when he goes on politics, take that with a big grain of salt.

  •  My worry is that "yes we can!" (1+ / 0-)
    Recommended by:

    Has been replaced with "No we can't!"
    Can't punish bushco for clear war crimes and constitutional violations.
    Can't nationalize the banks because 100,000 people would lose money, as opposed to 300,000,000 Americans who will lose otherwise.
    We are getting the "rope a dope" people.

    St. Ronnie was an asshole.

    by manwithnoname on Fri Feb 13, 2009 at 04:47:44 AM PST

  •  Krugman is hyperventilating. (2+ / 0-)
    Recommended by:
    Dissento, askew

    Yes, I know the economy's bad. The country, however, is not going to collapse in a matter of days. We have time to campaign more, and the truth about this economy is going to grind the Republicans harder.

    I think there's a cushion built into the economy right for the lower/middle class right now that we might not be thinking of; namely, tax returns. I'm a furniture salesman. I've been hearing  "I'll spend that $800 on a new couch when our returns come" a lot lately. Anecdotal, I know, but we may well see a gentle rise in consumer spending for a few months. That might give us a touch more breathing room.

    Please come visit me at Moon Night Kitchen. It's a guy thing.

    by Mal Carne on Fri Feb 13, 2009 at 04:48:08 AM PST

    •  Tax returns are chump change. (2+ / 0-)
      Recommended by:
      dennisk, dark daze

      For most people, the $$ will go to pay existing bills they're behind on . . . not to buy new couches.

      "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" Dwight D. Eisenhower

      by bobdevo on Fri Feb 13, 2009 at 04:59:37 AM PST

      [ Parent ]

      •  Maybe, maybe not. (0+ / 0-)

        The EIC isn't "chump change" for low-income working families; it's a decent chunk of money, possibly as much as a few thousand dollars. Not huge, but enough to buy a new couch. As I said, it's anecdotal and I'm in a good position to see that sort of activity (and profit from it, yay me). And, not to be unkind, you're in no better place to support your opinion than I am mine. But I suspect we'll see a little leavening on the consumer spending in the next month or two. Thank TurboTax if I'm right.

        Please come visit me at Moon Night Kitchen. It's a guy thing.

        by Mal Carne on Fri Feb 13, 2009 at 05:46:04 AM PST

        [ Parent ]

        •  $800 tax refund. 100 million refunds = (0+ / 0-)

          $800,000,000.00.  Like I said, it's chump change in the context of a stimulus.  It's not chump change for working people.

          "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" Dwight D. Eisenhower

          by bobdevo on Fri Feb 13, 2009 at 05:59:41 AM PST

          [ Parent ]

    •  you are dreaming (0+ / 0-)

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Fri Feb 13, 2009 at 06:46:51 AM PST

      [ Parent ]

  •  Deeply concerned not scared. We do need (2+ / 0-)
    Recommended by:
    slinkerwink, TomP

    think bigger.  Geithner's plan preserves the status quo for banks.  It bets that the market will recover within a short period of time.

    RebelCapitalist - Financial Information for the Rest of Us.

    by dennisk on Fri Feb 13, 2009 at 04:48:50 AM PST

  •  Coming back for more (4+ / 0-)
    Recommended by:
    slinkerwink, musicsleuth, TomP, dennisk

    The American Recovery and Reinvestment Act of 2009 has been framed as a downpayment to jumpstart the economy, reassure the financial markets, and start dealing with rapidly rising unemployment.  A "downpayment".  And no Democrat should talk about it without using those words.

    The first chance to come back for more will be the final passage of the 2009 budget (no, it's operating on continuing resolution right now).  This will contain whatever additional Obama needs for Afghanistan and Iraq (even moving people out takes money) and offers the chance to make up the difference and more on some of the items that Republicans argued were good things but should be passed in a process of "regular order".  Health information technology, increases in education and HeadStart, and substantial funds for infrastructure projects can go here.  This is where you add the ones that are necessary but not shovel-ready.  Funds for planning the transformation of the infrastructure of the American economy.

    The second chance is the 2010 budget, which the House and Senate Majority Leadership should try to get out on time (before September 30, 2009).  This will be where the bulk of what's needed to fund the programs Obama promised in the campaign will go, with extensions through the 2012 budget year.  This is also where there should be some adjustments in the defense budget that reflect changed priorities and the commitment to get the acquisition process under control.

    Those are the fights to win this year on funding.

    The other fight will be the Employee Free Choice Act.

    Health care will wait until the 2010 session in part because of Daschle's bowing out.

    The main problem with the debate in this country is the economic ignorance of the press, the Congress, and the business community.  The priorities in operating a household or a business are not the same as operating a national (or global) economy.  For example, saving makes sense only if someone is willing to invest by buying real things to create workplaces.  If everyone is saving in an economy and no one is investing, the economy comes to a halt.  The kitchen table finance discussion as a metaphor for government fiscal policy is misleading.  The Republican pretense that tax cuts are not spending has also corrupted the debate.

    People are making bad choices in part because the media is giving them misleading and outright false information.

    Coming back for more requires dealing with that problem.  Someone within the administration needs to give a little economics presentation to the public with charts and graphs and homey anecdotes that illustrate the points without creating false metaphors.

  •  Activate the nuclear option in the Senate. (4+ / 0-)
    Recommended by:
    sockpuppet, TomP, Don Enrique, jtown

    Change the rules to make the filibuster obsolete.  Then use the simple majorities available in the House AND Senate to pass the goddam bill we need.

    Stop pussyfooting around, step up and take charge. Obama needs to be willing to stake his political future on a bailout big enough to actually do the job.

    This is no time for being timid.

    "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex" Dwight D. Eisenhower

    by bobdevo on Fri Feb 13, 2009 at 04:55:58 AM PST

  •  Yes, be very scared -- but not of (5+ / 0-)
    Recommended by:
    bink, taonow, sockpuppet, jtown, skigrl84

    President Obama's actions or lack of them.

    Be very scared that the wingnuts in the Republican party, who engineered this crisis of such historic proportions, are even now too stupid and too ideological to be willing to work to fix it.

    I am scared of that.  Republican wingnuts -- who increasingly form the representation of that party -- have scared me ever since Ronnie Ray-gun first articulated his "Kill The Poor" policies.  Today, they simply terrify me.

    "It's not getting any smarter out there. You have to come to terms with stupidity, and make it work for you." (Frank Zappa)

    by cinnamondog on Fri Feb 13, 2009 at 04:58:41 AM PST

  •  Krugman is losing credibility, he complains (0+ / 0-)

    about FUCKING EVERTHING, but yet to offer any real SOLUTIONS either.  I'm done with him.

    •  Do you even read him? (5+ / 0-)

      He offers many solutions.  You can start learning here:

      What Obama Must Do, A Letter to the New President

      Unless you just want to play make believe and act is if everything is fine.  

      "What we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed." -- Barack Obama

      by TomP on Fri Feb 13, 2009 at 05:14:41 AM PST

      [ Parent ]

      •  I read that too (3+ / 0-)
        Recommended by:
        askew, DeeDee001, BoxNDox

        But I fail to see how he could have gotten a stimulus package that is 100% adequate to the shortfalls Krugman talks about through this Senate. I share all of Krugman's concerns, but I think this is the best outcome that Obama could have had. Try this exercise: name one president who could have gotten a better bill than Obama did.

        What I think is a more likely outcome is described here. Obama can get more stimulus later in a variety of ways - through a reconciliation bill in the budget process, 2010 appropriations acts, and maybe even through a new and improved TARP II that actually works. And don't forget that we still have bills like EFCA and health care on the docket for the near future - getting those things implemented will necessary require stimulus spending to get going (hiring people to implement the acts, equipment, technology, etc.)

        "We must all hang together, or most assuredly we shall all hang separately." - Benjamin Franklin

        by CaptUnderpants on Fri Feb 13, 2009 at 05:35:14 AM PST

        [ Parent ]

    •  kill the messenger (0+ / 0-)

      KIll the messenger,  now thats a real strategy  pfft

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Fri Feb 13, 2009 at 06:48:34 AM PST

      [ Parent ]

  •  we're still finghting two wars (4+ / 0-)
    Recommended by:
    taonow, sockpuppet, rolandzebub, dark daze

    Japan didn't have that problem in the 90s. We are spending so much money protecting 'freedom' that big bold measures on the economy are at least delayed. Personally, I think a lot of the stimulus issues (like our infrastructure) can be relabeled essential to our national security and be fought on those grounds. I worry more about what this means for fixing our medieval health care system.

    If it's too big to fail, it's too big to exist.

    by musicsleuth on Fri Feb 13, 2009 at 05:01:03 AM PST

  •  I get it and I agree, BUT (2+ / 0-)
    Recommended by:
    askew, BoxNDox

    what's the point?  That Obama should have come to Congress with a 2-3 TRILLION dollar stimulis plan?  We all know that would be a political impossibility.  Think about how much trouble he's had with this "small" 800 billion plan.

    While Krugman may be right, he's not the one in public office with a wide array of constituents to whom he must answer.  That is the reality of the situation and this plan is politics, people!

    •  right (0+ / 0-)

      so he is saying, dont be surprised when this doesnt work.  I agree, this aint gonna work.  There is simply not enough stimulus in there. Tax cuts are worthless, so that leaves us with 350+ Billion of stimulus when we need 2 trillion.  17% of cure doesnt cut it.

      I am not blaming Obama, our whole fucking society is to blame.

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Fri Feb 13, 2009 at 06:51:06 AM PST

      [ Parent ]

  •  Great post, teacherken. (3+ / 0-)
    Recommended by:
    slinkerwink, sockpuppet, dennisk

    I also worry.  People are losing jobs and homes.

    I hope the administrations' and Congress' actions are enough, but I have real doubts.

    It appears that the stimulus will keep unemployment under 10%, but not really reduce it.  It will turn a depression into a severe recession (the worse in our life time), if we are lucky.

    Krugman's analysis is right.  We need to do all we can to support Obama and Dems in Congress as events force them to take actions.

    It's not over.

    "What we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed." -- Barack Obama

    by TomP on Fri Feb 13, 2009 at 05:11:50 AM PST

    •  here's the thing (2+ / 0-)
      Recommended by:
      sockpuppet, TomP

      it may get much worse.  As more people lose the jobs and start having troble paying mortgages, the crisis on wallstreet just gets worse.

      We are in a death spiral.

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Fri Feb 13, 2009 at 06:52:35 AM PST

      [ Parent ]

  •  Trying to Figure Out (1+ / 0-)
    Recommended by:

    How to re-engineer my personal response to this crisis.

    I can't continue to be scared about "what might happen," because it has already happened to me.

    Something must be done.

    For me on a personal level ... and for everyone else on a societal level.

    I think we're all in the process of figuring it out.

    The GOP response to the crisis demonstrates to me that government will not be able to make an adequate response to problems.  The GOP will not let Obama do everything it takes to fix this.

    Their plan?

    Mitt Romney in 2012.

    It works like this:

    First, flunk out Obama's initial crisis response.

    Second, when he comes back for me, use their media proxies to scream that "the first stimulus was a failure."

    Third, try to remove vulnerable Dems in 2010.

    Get rid of Obama in 2012 by showing the nation what a "miserable failure" he was.

    By that time, they will trot out Romney as our new Eternal Leader ...  And he'll "solve" the problem with martial law, work camps, prisons and a war with Iran.

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

    by bink on Fri Feb 13, 2009 at 05:22:50 AM PST

  •  two trillion for the bankers, hideous in compari- (1+ / 0-)
    Recommended by:

    son to one for their murderous war (1 million dead, 4 million in exile). And $890 billion for 'the people' (ahem, that's THE COUNTRY AND ITS NEEDS). And still these criminals complain.

    Thank God for a progressive president. And thank God for a progressive website that proves that people can be homers for this dog's dinner as they could for Bush. . .

    ---------------- Cockroach don't trouble in cockfight; let's let the politicians sell out n' you and I keep fighting for what's right!

    by Matthew Detroit on Fri Feb 13, 2009 at 05:25:52 AM PST

  •  Americans don't get what happened (1+ / 0-)
    Recommended by:
    dark daze

    and telling them that drastic measures like nationalization of banks are needed AND they might have to change their lifestyles, permanently, will never work.

    Kunstler says that people need to be told that life has to change drastically. No one will get elected telling people THAT.

  •  God didn't put me on this Earth to live in fear (3+ / 0-)
    Recommended by:
    Dissento, sockpuppet, goldenbird

    OK, it sounds a little grandiose saying that God put me on the Earth.  In fact, He probably has people that handle that for Him.

    Anyway.  No, I'm not going to be VERY SCARED or even just scared.  Fear is the enemy of good decision making.  Fear is how we ended up in Iraq after 9/11.

    The other thing that I think we're losing sight of is that there is a gradient of "goodness" to solutions.  At one end are just plain bad ideas (like invading Iraq) and at some never-reached other end are perfect ideas.  Most ideas fall somewhere in the middle.

    I've seen this in a long career in the software industry.  Everyone has heard how much bad software gets written and these days, offshore teams of inexperienced programmers churn out wretched programming by the gigabyte.  And yet, business still pays for this. Why?  Because they don't care how elegant or efficient it is, just as long as it does what they want it to do and doesn't break anything.

    What is going to frustrate people like Krugman — people who know how best to fix the economy — is that this flawed stimulus is going to fix it somewhat, and in the end, most people will be satisfied with that, even thought they could have had so much more.  This is the pain of being a perfectionist.

    Case in point, I got a call from finance about a problem with a report that our internal web application generates.  The problem?  It got bigger and now takes two pages to print.  This is a problem because they'd print out the page and give it to someone who would type in all the numbers in to a spreadsheet, and now it was confusing to follow the numbers on the second page.  I said, "Um, I could change the report so that it produces a file you can load into Excel directly."

    For years, they'd been happy typing in numbers from a printout, blissfully unaware that this busywork could be avoided.  My instinct is to bury my head in my hands, but I'm a technologist and I have detailed knowledge of these things.  When you occupy a position like that, as Krugman does, the world is frustratingly stupid.

    Everybody have fun tonight. Everybody watch news tonight. — Wang & Connie Chung

    by The Red Pen on Fri Feb 13, 2009 at 05:40:33 AM PST

    •  umm (1+ / 0-)
      Recommended by:

      And yet, business still pays for this. Why?  Because they don't care how elegant or efficient it is, just as long as it does what they want it to do and doesn't break anything.

      no it comes back and bites them on the ass, and some businesses get in real trouble.

      I dont think you grasp how dire these situation is.  This isn't " well the world isnt perfect" stuff, this is, ummm your nation and society may fail.   Happens all the time.  Grab a world map form 1700, from 1800, from 1900, see all the changes?  yeah nations do fail/divide/split all the time.

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Fri Feb 13, 2009 at 06:56:38 AM PST

      [ Parent ]

      •  Flawed plans don't fail often enough (1+ / 0-)
        Recommended by:

        The point isn't that flawed plans don't backfire, but that they don't backfire nearly enough to compel people to avoid them.

        Yes, our country may collapse and fail, but let's say we follow Krugman's advice and the economy doesn't recover enough.  We'll have taken on enough debt to be in danger of being insolvent.  There are many paths to success and also many to failure.

        What is probably at stake is the length of the depression and the scope of the reform we can achieve.  What is more likely than the USA disappearing off the map is for it to enter a new age.  We are in a third age now, and the previous transitions happened around hotly contested near-Constitutional-crisis elections like the one in 2000.  Are we going to become a crumbling former empire like Russia or a modern country like Germany?  How painful will this be?

        My grandparents survived the Great Depression and my wife's survived the Nazis.  Those who endured did not do so by curling up in a fetal position muttering, "ohmygodohmygodohmygod" until it was over.

        Everybody have fun tonight. Everybody watch news tonight. — Wang & Connie Chung

        by The Red Pen on Fri Feb 13, 2009 at 07:55:35 AM PST

        [ Parent ]

  •  I did my assignment, teacherken (1+ / 0-)
    Recommended by:

    Krugman's point is well taken. I have the following from WikiAnswers in regards to the cost of WWII:

    In today's money, the cost to the U.S. would be over five trillion dollars (at 288 billion 1945 dollars)

    That's what it took to get the US economy really humming. This may be an unfair comparison as the US had a healthy manufacturing sector by that time with a GDP that passed the 1929 peak GDP. It also was rich in natural resources. The US was a net oil exporter. It was also financially sound in trade. It was a net creditor nation. It had a very sound income distribution with a tiny number of millionaires. There were 13,000 millionaires (in 2002 dollars) in 1944. There are over 3 million millionaires in the US today.

    I would say that Krugman is right but I would go even further. We will need to fix some major structural problems in the US economy before we can even begin to recover. This will be painful and will last a long time. The good news is that we have better technology, communications and an educated class. If I look into my crystal ball, Obama will have to say that the stimulus and bail out are not doing the trick and he will have to go deeper. The American public will accept this if he is honest and aggressive about fighting this economic crisis. I believe that he is up to the task, and where Krugman finds fault, Obama is a fast learner.

    •  real unemployment about 2x as high (0+ / 0-)

      as is U6 right now.  And there was a total worldwide collapse fairly quickly (not yet) -  and the handling of banks was very different.

      I don't think we would have needed 5 trillion in today's dollars, but like many I think it is insufficient to the current crisis.  I HOPE I am wrong.  I fear I might not be.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Fri Feb 13, 2009 at 06:02:57 AM PST

      [ Parent ]

    •  But average citizens were able to buy war bonds (0+ / 0-)

      Millions and millions of dollars were raised from war bonds. Which means citizens had a financial stake in the situation, and could get their money back at the end of the crisis. That's a huge difference between then and now.

      People with hatred in their hearts never live up to their full potential. It's very sad.

      by Nelsons on Fri Feb 13, 2009 at 06:32:55 AM PST

      [ Parent ]

  •  Obama doesn't yet have the political firepower (2+ / 0-)
    Recommended by:
    askew, goldenbird
    to do what Krugman wants.

    To aim high and fail to pass a bill weakens Obama politically. To pass a bill now strengthens Obama politically.

    "Seeing our planet as a whole, enables one to see our planet as a whole" - Tad Daley

    by Bill White on Fri Feb 13, 2009 at 05:42:05 AM PST

  •  Krugman Is Right Again (2+ / 0-)
    Recommended by:
    slinkerwink, DeeDee001

    a reluctance to force banks to face up to their losses

    imho, that's exactly why Japanese recovery efforts were not very effective.

    This is the second time a US national "banking" system has gone rotten under a Bush regime. One of the Bushes was even personally involved in the first, S&L collapse.

    Many in the banking world see a solution this time as the US govt. taking over all the banks' worthless assets on which loans were based, and letting the big bankers sail away free on their yachts.

    But this time the assets have been so artfully (read deceitfully) "packaged" and merchandised that it's hard even to figure out exactly what they are or what they're worth.

    If you heard the House Banking hearing earlier this week, you may have noticed the arrogance of most of the big bankers, and their rudeness to Representatives who asked hardball questions.

    It's hard to understand why the people who presided over these massive bank failures, who are massive failures themselves, are still in charge.

    The Banking Princes should get the same Federal scrutiny as the Peanut King, and be treated the same way.

    What you see is what you get, but what you don't see is what ends up getting you.

    by Existentialist on Fri Feb 13, 2009 at 05:42:51 AM PST

  •  Krugman's Yeats reference (1+ / 0-)
    Recommended by:

    Wanna be more scared? Read the complete poem by Yeats referenced by Krugman in his next to last paragraph ("lack all conviction/passionate intensity"). That will communicate his real sense of doom.
    William Butler Yeats (1865-1939)

                  THE SECOND COMING

       Turning and turning in the widening gyre
       The falcon cannot hear the falconer;
       Things fall apart; the centre cannot hold;
       Mere anarchy is loosed upon the world,
       The blood-dimmed tide is loosed, and everywhere
       The ceremony of innocence is drowned;
       The best lack all conviction, while the worst
       Are full of passionate intensity.

       Surely some revelation is at hand;
       Surely the Second Coming is at hand.
       The Second Coming! Hardly are those words out
       When a vast image out of Spiritus Mundi
       Troubles my sight: a waste of desert sand;
       A shape with lion body and the head of a man,
       A gaze blank and pitiless as the sun,
       Is moving its slow thighs, while all about it
       Wind shadows of the indignant desert birds.
       The darkness drops again but now I know
       That twenty centuries of stony sleep
       Were vexed to nightmare by a rocking cradle,
       And what rough beast, its hour come round at last,
       Slouches towards Bethlehem to be born?

  •  Amazing (1+ / 0-)
    Recommended by:

    Whats amazing to me is people complaining that $800 billion is realistic people, this is the biggest stimulus package ever in the history of the country.  There is no way Obama could have passed something in the trillion dollar range.  This is a major victory.  

  •  Snowe, Collins, Specter, Nelson, Lieberman et al. (2+ / 0-)
    Recommended by:
    Nelsons, DeeDee001

    Giving this crowd the final say on economic policy means we are totally screwed.  We'd be better off with a plan crafted by Newt Gingrich.  At least someone would have full ownership.  These "centrists" don't believe in anything other than their political futures.

    All we've done is create a plan than everyone can either run behind if it works or run against if it failed.  If the economy is still contracting, we'll all say that the GOP watered it down so much it was doomed from the start.

    What did you do with the cash Joe?

    by roguetrader2000 on Fri Feb 13, 2009 at 05:52:19 AM PST

  •  Love Krugman, however... (2+ / 0-)
    Recommended by:
    Yoshimi, DeeDee001

    we are just getting started here.

    No package in the universe is going to solve this problem overnight.

    I view this initiative (stimulus/bailout) in terms of the Jimmy Doolittle raid on Tokyo.

    Yes, it's significantly flawed, but it can have a powerful symbolic effect that godddammit, were doing as damn much as we can.

    Of course the package could have been much better, but unfortunately there are ugly political realities (republicans) that make it impossible to do what needs to be done.

    Short of attaining a senate supermajority, we will never get all of what we want. IMNSHO, Harry Reid has failed miserably as the senate leader. I think he's shown himself to be incompetent over and over, and needs to be replaced.

    A stronger leader might have been able to wring more out of this bill than we ended up getting.

    "Pay no attention to the man behind the curtain!"

    by jkay on Fri Feb 13, 2009 at 05:56:58 AM PST

  •  Excellent article in the NYTimes on Japan (0+ / 0-)

    Titled "In Japan’s Stagnant Decade, Cautionary Tales for America" it argues against doing too little for/to the banks.  

    Those favoring nationalization will take heart.

  •  Good diary spoiled by dumb conclusion (2+ / 0-)
    Recommended by:
    Nelsons, goldenbird

    "Be scared??"   I hardly think so.

    Instead, I will prepare for the worst and do what little I can to help.

    "We've done the impossible and that makes us mighty."

    by Dissento on Fri Feb 13, 2009 at 06:03:03 AM PST

  •  Krugman is right that we aren't rising to the (2+ / 0-)
    Recommended by:
    DeeDee001, left turn

    challenge, simply because we aren't seriously considering nationalizing the banks.  The is analogous to saying you will stand up to Bush, but impeachment is off the table.

    We need a banking system.  We don't need the one we have.  We want it because it is private and we want to think private is the best way.  In ordinary times with honourable people running the show, I'd say yes.  But we don't have honourable people running the show.  We don't need the Wall Street tycoons to spec out most consumer or business loans.  Almost any idiot can do it.  Wall Street has sold us on their 'magical' ability to creaet wealth through financial manipulations.  All that has turned out to be is a side-show.  Lets clean house, get rid of the "Work doesn't matter because I'll get rich off my investments" mentality, and put things back on track.

    But - we're not ready for that.

  •  Krugman has this really bad habit... (1+ / 0-)
    Recommended by:

    ...of being right about stuff.  All kinds of stuff.  

    I have a friend who drives up from Orange County every six months or so to talk to people who aren't raging rabid Republicans.  He thinks I'm some kind of genius.  "Everything happened just like you said it would," he'll tell me.  "I thought you were just being paranoid."  And every time I tell him all I did was pass along what I'd read in Paul Krugman's columns.

    So if Krugman is worried, be afraid.  

    Be very afraid.

    "I'm not negative - I'm ANGRY!" -- Howard the Duck

    by Roddy McCorley on Fri Feb 13, 2009 at 06:07:03 AM PST

  •  the answer is really quite simple (5+ / 0-)
    Recommended by:
    DeeDee001, moira, audiored, Randtntx, eXtina

    Raise. Taxes. On. Rich. People.

    How freakin' hard is that to comprehend?  And by rich, I mean RICH - household incomes above $250,000/year.  And raise cap gains taxes on those same people.

    Yes, I realize almost no one bringing home that $250K a year will admit to being rich, but THEY ARE.  Hell, my family brings home a little less than half that and by a reasonable definition from any other era we could be described as rich.  And yes, I could afford a higher tax rate - do I WANT to pay higher taxes?  No, but it's necessary.

    Time to face reality and make those with more pay more - a LOT more.

    I am my brother's keeper, I am my sister's keeper. - President Barack Obama

    by ThirstyGator on Fri Feb 13, 2009 at 06:07:15 AM PST

    •  I couldn't agree with you more, the rich aren't (2+ / 0-)
      Recommended by:
      ThirstyGator, DeeDee001

      paying their fair share of taxes.  They have there companies listed in the Caymen Islands, tax shelters, they don't pay taxes period.

      While merchandise is on boat from China, then goes through customs in L.A., the companies shipping the product into American are packaging their paper work in the Caymen Islands.  This is a fact and the American People are being ripped off, while I am penalized over $2000.00 of owed taxes.

      Bush/Cheney gave Exon Mobil and Shell so many tax breaks, and the deregulation of the markets, Exon and Shell are reporting record profits while the American Consumer was paying $4.00 a gallon for gas.

      The middle class and the poor pay for everything and get nothing, while the people making $250,000 and more get everything.  Its not fair, but this going on for years.  Since Reagan, since Nixon. However, not for one minute do I think the Democrats are getting money either.

      I'm sick of America and I am an American, but our self destruction will make us a better people, and that is where we are headed.

      •  I recognize ... (1+ / 0-)
        Recommended by:

        that raising taxes on that economic class is the steepest of political hills, it's THE ONLY solution.  Time for somebody - and I don't care if they're Democrats or no (although certainly an R wouldn't dream of it) - to stand up and not sit down until this gets done.

        I am my brother's keeper, I am my sister's keeper. - President Barack Obama

        by ThirstyGator on Fri Feb 13, 2009 at 06:33:59 AM PST

        [ Parent ]

  •  Settle Down (4+ / 0-)
    Recommended by:
    DeeDee001, leighkidd, eXtina, goldenbird

    Seriously, how do so many of you go about your lives hyperventilating constantly.  I mean, the constant doom and gloom has got to wear you are people supposed to rise up and get to work fixing the country and building a new economy when they are being fed constant fear and loathing?  Seriously.  

  •  I feel the same way about Obama's first plan. (1+ / 0-)
    Recommended by:

    Quite frankly, he's too hung up on bipartisanship.

    That's not going to put bread on the table and that's NOT what people are going to remember about these first few weeks.

    He was better off putting together a plan that would work well, having it ready on Jan. 21st, and then pushing it until he got the 60 votes he needed.

    That was the better plan.

    Let the country decide between an obstructionist GOP and the plan to save the world's economy.

    Who wins that fight?

    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 Fri Feb 13, 2009 at 06:13:55 AM PST

  •  Not enough Stimulus = (1+ / 0-)
    Recommended by:

    Failure to Rise.

    I hear this can be treated by certain pharmaceuticals.

    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 Fri Feb 13, 2009 at 06:19:00 AM PST

  •  13 month recession and you are only worried now? (1+ / 0-)
    Recommended by:

    talk about a johnny come lately.

    •  where do you draw that conclusion?? (0+ / 0-)

      with the Bush administration, there was never any hope of honestly addressing what needed to be done.  Once the election was over, the planning could have been done so that the point at which we currently are could have been reached several weeks ago, perhaps even with a better package.

      The question is not revisiting what could have been, but what we need to do right now.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Fri Feb 13, 2009 at 06:51:08 AM PST

      [ Parent ]

  •  All for the sake of "bipartisanship" n/t (0+ / 0-)

    This ain't no party. This ain't no disco. This ain't no foolin' around!

    by Snud on Fri Feb 13, 2009 at 06:20:29 AM PST

  •  Why put it all on Obama? (1+ / 0-)
    Recommended by:

    That's the part that pisses me off.  I am not happy with the tax cuts either.  I don't think AMT tax reduction belonged in the bill for instance.  The Republicans forced Obama to put it there.  What the hell are we going do if we can't reverse the stupid 60 votes to stop a filibuster rule?  Can we just declare that the cloture rule will no longer be invoked?  Doesn't it take 67 votes to get a rules change?  No way the GOP will ever go along with that.

  •  Here's the Q: what is the best thing We as D's & (2+ / 0-)
    Recommended by:
    DeeDee001, In her own Voice

    Americans can do to make the stimulus and Obama successful in terms of the economy?

    As small businesspeople, we can restructure services, expenses and debt to avoid laying people off. We can also reach out to provide free or inexpensive charitable goods and services to reduce the expenses of those scraping by.

    As executives we can lobby for similar approaches to lean-time solutions within our organizations. I know I did just that during the 91-92 recession and managed to get my fellow executives to accept a pay freeze (but, sigh, no reduction in car allowances or other perks) in exchange for fewer layoffs. Of course, I'll never really know whether the CEO adn CFO fully honored this agreement.

    As staff we can do the same in perhaps safer ways by encouraging AND/OR supporting non-payroll related expense reductions.

    Supporting local and micro-economy goods and services would also help. Perhaps trade some dollars at WalMart at the local consignment shop or swap meet. These actions also reduce energy, but reusing products rather than expending the energy to make new ones.

    Other, better ideas? I'm looking. Got any?

    We have no time but the time to change.

    by Words In Action on Fri Feb 13, 2009 at 06:26:26 AM PST

  •  I'm not worried that things will get worse. (5+ / 0-)

    In the same sense I'm not worried that some day, I'm going to die.  I am completely certain that I'm going to die, and therefore a mindset that dying is something I should fret about avoiding is not productive.  Better to concentrate on living as long, and as well as I can.

    The same thing applies to the economic situation getting worse.  It's going to happen.

    This situation reminds me of the theological "Problem of Evil".   How can a benevolent God be reconciled with the existence of evil in the world?  The orthodox answer could be phrased this way: human freedom is inconsistent with a world in which people can escape the consequences of their choices.   The interesting thing about phrasing it that was is that the idea isn't just a theological argument; it serves as well as a political argument.

    The subtext I discern in the public discussions of the crisis is that we can escape the consequences of our past choices, that the goalpost for the new administration is to make all the troubles go away by the next election.  If in two years Obama fails to undo the effect of almost thirty years in which Reaganomics was the dominant philosophy of the Federal Government, he will be a failiure.    This is obviously inane, or worse, it is denial.  During the ascendancy of Reaganomics,  the policy was to shift the fruits of increased worker productivity up the income scale, while maintaining middle class material progress through rising home prices.  So when the bubble burst, it set back the material prosperity of the greatest part of the American people by years.    "Making things right" would mean finding a way to make years of illusory growth real.

    The only possible way to conjure the feeling of wealth and security Americans had back in 2004 or so would be to  raise the bubble from the dead.  Unless you believe that possible, the inevitable conclusion is that the crisis will not end any time soon.  Not, at least, until Americans have drained the bitter cup of realization. We are simply not as prosperous as we imagined ourselves to be.

    By the numbers: according to the US BEA, we ended 2008 with a GDP of 14.3 trillion dollars, roughly speaking.    We had a 3.8% decline in the last quarter.  What would a decline like that look like extended of a year?  Well, something like 550 billion dollars.  The stimulus package at around 790 billion is somewhat larger, but remember that in order for things to feel "normal", the GDP needs to grow at 3% or so.  So, in a sense that kind of contraction means there is about a trillion dollar hole that needs filling.   That makes the stimulus a bit on the small side.

    But I'm guessing this isn't the right way to look at it.  The stimulus package has to do more than inject money into the economy, it has to inject confidence.   Since the confidence of most Americans was rooted in the equity they had in their homes, even if you replace, dollar for dollar, every bit of spending that has gone away, it couldn't do anything like restoring the status quo ante.  The confidence won't return until real American middle class prosperity begins to approach what the illusion made it seem.  Until we have fully worked through the consequences of our infatuation with the pandering thieves that run the Republican party, no government stimulus could be the dollar for dollar equivalent of spending done by the American middle class out of confidence in its future.   In a confident economy, dollars that go into pockets come out of them quickly.    In a fearful economy, they go into pockets and stay there.  That's why we can't tax cut our way to growth: tax breaks don't make people feel flush when they fear the future loss of perhaps their entire income.

    The argument that the stimulus should be made up entirely of quick acting, "shovel ready" spending is misguided.  If it were just getting more money into the economy the Fed would have fixed this already.    People need more than a dollar in their pocket today, they need the confidence that future dollars are heading their way.

    If you put this all together, it means that the cards probably hold another one of these things in the future.  Mark my words, the debate will go like this: "we did this already and it didn't work."   Then the stimulus package will be altered so that it is smaller and shorter acting.   Since confidence in the future is the problem, if you want a smaller stimulus package it has to be longer acting.

    Sic transit gloria mundi.

    Still, I am not a pessimist; pessimism and optimism have in fact very little to do with realism and self-delusion.  If I might return to theology for a moment, it is often said the three supreme theological virtues are faith (pistis), hope (elpis) and love (agape).  We may think of them in this context as steadfastness,  rejection of despair, and charity.  The care and maintenance of self-delusion is a terrible burden to the individual; in politics it thrives by promoting callousness,  vanity and belligerence.  

    The real world we can build is so much better than the one we imagined we had to live in.

    I've lost my faith in nihilism

    by grumpynerd on Fri Feb 13, 2009 at 06:34:05 AM PST

  •  We should stop listening to Republicans (0+ / 0-)

    They are going to bleat about this no matter how much we try to placate them.  Do what needs to be done -- strongarm Collins and Snowe if need be, but ignore the rest of them.

  •  Political Reality is difficult. (0+ / 0-)

    The political reality is that we have a long way to go to recover from the Bush years. I;m surprised that Obama has been able to be so effective already. Even though there was an overwhelming election with a demand for change, it's not like that change was going to come magically. This is going to take some time, and Obama is still building momentum. I still trust that he's going to be able to get this country turned around, if we all do out part and help the change actually happen.

    Joe Lieberman is a Chode.

    by dnamj on Fri Feb 13, 2009 at 06:47:06 AM PST

  •  It's not so funny.. (1+ / 0-)
    Recommended by:

    ..that, with our entire planets financial architecture crumbling, a single nation believes it can unilatterally fix it, and that the ideology of a few wealthy and privilaged Americans can skewer the whole shit show over petty politics. Krugman included.

    How bad will it get before everybody strips off their plastic politics and pulls together?

    Whats killing the effort for 7 billion people is the small minded wrangling to be "right" in the US, for the privilage of winning an election somewhere down the road in a contest that won't matter a bit.


    I'm not sayin' . . . I'm just sayin'

    by AetiusRomulous on Fri Feb 13, 2009 at 06:47:58 AM PST

  •  Unfortunately (4+ / 0-)

    At the risk of sounding like the GOP hate machine, I'm afraid Republicans won't begin to see the light until they start getting hanged from lamp posts.

    And no, that's not a call to action, just an observation about how bad things will have to get before the dead enders finally get relegated to the trash heaps of history. If it does get to that point, well it'll probably be too late.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Fri Feb 13, 2009 at 06:51:58 AM PST

  •  The thing that has me the most concerned... (3+ / 0-)
    Recommended by:
    sockpuppet, DeeDee001, moira

    isn't so much the size of the stimulus bill, but the fact that nobody is willing to admit that the big banks are effectively bankrupt.  The plan seems to be to hobble along and hope that they recover - this is the approach that Japan took, and it didn't really work very well.

    A number of people are saying that we need to come clean about the bank situation, and address it head on instead of trying to wish it away.   Recovery really won't begin until we have a healthy banking system.

  •  FDR passed "first" New Deal in '33; "2nd" '35-'38 (5+ / 0-)

    By the way, it’s not unprecedented that the first attempt at recovery proves to be insufficient:

    The "First New Deal" of 1933 was aimed at short-term recovery programs for all groups. The Roosevelt administration promoted or implemented banking reform laws, emergency relief programs, work relief programs, agricultural programs, and industrial reform (the National Recovery Administration, NRA), and the end of the gold standard and Prohibition.

    A "Second New Deal" (1935–1938) included labor union support, the Works Progress Administration (WPA) relief program, the Social Security Act, and programs to aid farmers, including tenant farmers and migrant workers. The Supreme Court ruled several programs unconstitutional; however, most were soon replaced, with the exception of the NRA. The Fair Labor Standards Act of 1938 was the last major program launched, which set maximum hours and minimum wages for most categories of workers.

    Therefore, in 1933 it may have been the case that the "First" New Deal programs were both maximally politically feasible AND insufficient.

    Thus, if you want Obama to be FDR, then you’ve just now gotten your First New New Deal, and WE HAVE TO MAKE THE POLITICAL SPACE THROUGH GRASSROOTS EFFORT AND HELL-RAISING TO ENABLE ANY NEEDED "SECOND" NEW NEW DEAL.

    If we don’t do it, we shouldn't just blame Obama and the ‘centrist’ Dem’s.

  •  Keeping the Titaninc from sinking by.. (1+ / 0-)
    Recommended by:

    ...running a pump in the focastle.

    If Jesus saves, He'd better save himself From the gory glory seekers who use His name in death.... -Ian Anderson, Hymn 43

    by high bitrate on Fri Feb 13, 2009 at 07:03:54 AM PST

  •  I feel if economic stimulas fails,as Repupblicans (1+ / 0-)
    Recommended by:

    cheer, there won't be a second chance. China or  other world economic leaders will take over our economy.  The Republicans are being very short sighted in not understanding failure isn't an option.

  •  Harry Reid will be remembered in infamy; (1+ / 0-)
    Recommended by:

    as a symptom of a corrupt Senate that simply did not care at all.

    "The military industrial complex not only controls our government, lock, stock and barrel, but they control our culture." - Mike Gravel

    by Wilberforce on Fri Feb 13, 2009 at 07:12:19 AM PST

  •  Glenn Greewald agrees with you and Krugman... (0+ / 0-)

    and so do I. Check his column in today's salon. Basically, he argues what, while Republican grass roots groups demand action or threaten to run their own "purer" candidates, we just basically put our heads down and mumble "What're we gonna do?  That's Washington." We're getting a bill with 40% tax cuts not because Republicans demand it, but because we CAVED. Again.  

    Who knows, maybe we're wrong. Maybe this watered down bill will perform a miracle. Maybe Harry Reid will grow a spine. Maybe the 2009 Cubs will take it in 4.

  •  I'm just glad that people are finally realizing (1+ / 0-)
    Recommended by:

    how bad this situation could be. I wrote almost a year ago now that this economy coupled with the adventures in foreign policy could lead to a crisis similiar to the Great Depression. Back then, nobody wanted to listen. This ridiculous dog and pony show with the bank CEO's only exacerbates tensions without positing a solution. Is everyone in Congress angry that the CEO's and other banking members are getting huge payouts? Yes. Did the majority vote to take out any mention of scaling back their pay in the stimulus package? Hmm, actually, yes. How odd.

    Where will this madness end? In the 20's and 30's economic crisis created social upheaval which led to a world war in which millions died. I fear history is repeating itself.

  •  Krugman is now fear-mongering (0+ / 0-)

    as the diarists here who are wringing their hands and prophesying doom.

    Krugman's column is all about the theory he has that the stimulus package is not nearly enough. That is probably true, and the government will undoubtedly need to come back, like Oliver Twist, several times for more and probably even more.

    The new administration are well aware of the difficulty of getting over this first hurdle and trying to get the recalcitrant Republicans to sign off on this first bill and at least get the blood flowing again.

    I  am going to trust that they know what they are doing ebcause the alternative is total collapse. I will not contribute to this panic and hysteria.  The best any of us can do in these difficult times is to be optimistic and try and be part of the solution instead of contributing every day to the fear that is exacerbating the situation.

    i am really surprised at some of the diaries posted here. I thought the writers had more maturity.

  •  I agree with Krugman, but here is the problem... (2+ / 0-)
    Recommended by:
    Rachel Q, skigrl84

    It's not just the Republicans we have to worry about in terms of the stimulus being so low, we also have to worry about those congress people and Senators who are fiscally conservative in the Democratic Party and aren't loyal enough to back a trillion dollar stimulus.

    The hidden story here is that Obama was not just trying to get Republicans on board, he was also trying to get those blue dogs Democrats as well.  To put it plainly I think that Obama was more worried about people in his own party destroying the bill than Republicans joining on to it.  If Obama put it out there it was going to be a trillion you would have seen a bipartsian spirit, but unfortunately it would have been against the stimulus with Blue dogs and Republicans joining together to cut it down.

    We can't pretend that every Democrat is for this stiumulus and want it to be bigger.  The reality is Obama struggled to get support on this from some in his own party.  It's not just the Republicans we have to worry about when it comes to spending.

  •  Read Brooks too, on opposite side of page. (0+ / 0-)

    He's usually such a strange straddler on big issues (here too, positing only a scenario,not a prediction), but I think he's got the psychology right. He and Krugman pain the same picture for once.

  •  The reality is that Obama might have the (0+ / 0-)

    political capital, but he doesn't have the actual votes to get a 2 or 3 trillion dollar stimulus passed. Maybe if he was able to brainwash Blue Dogs temporarily, he could, but that's not happening. I don't know where this economic crisis is going to lead, Krugman is largely right, but what does that mean? I don't want to be afraid, fear is what got us into this mess. I want to trust that our President understands the enormous challenges that he's facing and that he's priming the American people for the possibility that this 800 billion dollar stimulus bill may not work or may only result in modest gains.

    I don't know what the magic formula is for fixing our economy. Let's hope someone who has the ear of the President does...

    When Republicans win, everyone else loses.

    by skigrl84 on Fri Feb 13, 2009 at 07:43:59 AM PST

  •  We're in a game of Who You Gonna Trust, Me (0+ / 0-)

    or your lying eyes? We don't want to face our disappointment too squarely this early on, but we should hear loud and clear that despite who put Obama in the White House (us!)he has surrounded himself or been surrounded by the handmaidens of the Oligarchy and they are more interested in bailing out banks than people. Under Obama's current direction, we will waste another eight years and countless wasted lives while the "system' desperately seeks to maintain itself. For example, do we really need to move the Iraq debacle to Afghanistan? Obama seems to think so!

  •  I've stopped worrying a long time ago. (1+ / 0-)
    Recommended by:

    The ship has already sailed. The Economy is at the point where I doubt there is much that can be done to mitigate the disaster that is to come.

    die welt ist shizer

    by Unbozo on Fri Feb 13, 2009 at 07:48:48 AM PST

    •  Do you not worry about inflation (0+ / 0-)

      eating into your savings, making it worthless?

      I can accept a lot, but if there is a way to stop the worse from happening, we need to do it.

      Obama only got $730,000,000,000 in the stimulus bill. $70,000,000,000 in the bill is the AMT suspension which always passes. It would have passed as a separate bill.  It probably will stimulate the economy, because that will save most of us from paying a lot of taxes, but they would have gotten that bill passed anyway.

      What Obama got for a stimulus was not "almost $800 billion" but just over $700 billion.

      •  Why worry over stuff you have no control over? (0+ / 0-)

        What I meant about "not worrying" is in the Kurber-Ross sense. There comes a time you just have accept what fate, life, whatever you want to call it has dealt you. You can drive yourself nuts worrying about this shit. Why bother?

        What does the stimulus bill have to do with the insolvent banks? It could have been a gazillion dollar stimulus package and still not address the fundamental problem of insolvent banks.

        die welt ist shizer

        by Unbozo on Fri Feb 13, 2009 at 08:10:56 AM PST

        [ Parent ]

  •  I'll Tell You What's Clear (0+ / 0-)

    It is not clear that housing prices will stabilize, that the so-called "toxic" assets will have been properly handled, that we will have functioning credit markets.

    Housing prices WILL NOT STABILIZE. They are going down.

    Millions more foreclosures will hit the market this year alone.

    Guess what that does to the banks' "toxic" assets?   IT MAKES THEM MORE TOXIC.

    Guess what that does to the credit markets?  It makes them MORE DYSFUNCTIONAL!

    And what does Professor K propose to do about falling house prices?  Does he propose a tax incentive to buyers to get sales increasing and prices rising?

    HELL NO! He's got nothing at all to get the market back on track.  

  •  Heck, The republicans still cannot (1+ / 0-)
    Recommended by:

    Comprehend that all of the income the very rich obtained from Bush tax cuts has been lost because of the evisceration of the regulatory apparatus and the resulting collapse of the world financial order.  Greed will never be able to be self regulated and a prosperous society will never materialize unless and until society is willing to raise the revenues necessary to educate those that are supposed to support it.

  •  I am worried and I don't need a Nobel prize (0+ / 0-)

    winner to convinced me.

    It don't take no genius!

    O-44: An so it begins.
    (-7.25, -6.72)

    by gougef on Fri Feb 13, 2009 at 08:07:42 AM PST

  •  I may be naîve, but every single penny, whe (1+ / 0-)
    Recommended by:

    tax cuts or spending, is stimulus.  It is all borrowed and goes into the economy where it is spent and ripples out.  Every penny.

    My beef is that with our trade deficit, most of the stimulus is going to other countries.  It will have almost no net effect here, in this country.  Oil at $35/bbl is helpful, but our non-energy trade deficit is in the $600B range.  You can't build a recovery, or sustain an economy with that ongoing economic anchor.  Recoveries are getting shallower and recessions longer because of this fact.  At some point in the near future we may not be able to borrow enough to propel ourselves out of a recession, let alone a depression.

    Add to this the $2.9T production gap that Krugman mentions and we have real problems.


    "Peace be the journey. Cool Runnings!"

    by Terra Mystica on Fri Feb 13, 2009 at 08:13:31 AM PST

  •  And the Nobel Prize for whining (0+ / 0-)

    goes to... Paul Krugman!

  •  I'm late to the party (1+ / 0-)
    Recommended by:

    but its way past the point of being scared.  Being scared a year ago might have helped.

    Now its accepting the milk's spilt, the worst has happened, and you slog through cleaning up as best you can.

    Obama is willing to take pieces, give the state governments three months to approach collapse and the political will for the federal government to move will be available to him.  More pain than rational, but as much pain as necessary to break the backs of the Blue Dogs and the rethuglicans.

  •  UK Lloyds In Big New Trouble Today (2+ / 0-)
    Recommended by:
    Terra Mystica, synductive99

    Lloyds bought the HBOS bank, as part of a supposed "cleanup." Now it turns out that HBOS had billions in hidden liabilities. These are NOT the HBS mortgages, which may bring more bad news later.

    This is today's news in the UK

    Lloyds unveils £8.5 billion HBOS loss

    February 13 2009

    LONDON (Reuters) - Lloyds said its HBOS unit made a hefty loss last year due to bigger-than-expected bad loans, wiping nearly a third off the group's stock market value.

    HBOS had a pretax loss of 8.5 billion pounds for 2008, Lloyds said in a statement on Friday, driven by 7 billion pounds in bad corporate loans and a further 4 billion pounds in asset write-downs.

    In November, HBOS had estimated its corporate impairments at just 3.3 billion pounds.

    By 2:52 p.m., Lloyds Banking Group shares were down 29 percent at 64.8 pence, having earlier fallen as low as 54.9 pence.

    A BBC financial commentator pointed out sarcastically that this is "okay," because the bank recently got 15 billion pounds in a UK govt. bailout, so that govt. handout can cover this newly disclosed loss, with 6.5 billion pounds left as change.

    Is it at all unrealistic to suppose that things like this will be disclosed here in the US in coming days and weeks as well?

    Note that the British establishment, like ours in the US, tries to roll out the rotten news Friday afternoon or Sat or Sun, in hopes that folks will be so busy recreating that they just won't notice.

    What you see is what you get, but what you don't see is what ends up getting you.

    by Existentialist on Fri Feb 13, 2009 at 09:09:17 AM PST

  •  We are all F'd (1+ / 0-)
    Recommended by:

    What we need to start worrying about is what will carry our economy into the next decade. What innovation or new technology will arise?

    If you look back at the 90's it was all about Y2K. Businesses knew they had to upgrade their antiquated systems and when they did the entire economy benefited. Businesses used this as the rationalization to build new facilities and to expand businesses as their business software opened new doors. Along with the boom of the internet it was great.

    What is the next Y2K or boom that will carry us. I don't see it.

    Even if the stimulus was double what it is now it is the equivalent of jump starting a car with a dead battery. Yeah the car will run but when the stimulus is done the car won’t start up again.

  •  This picture for me sums up the sophistication.. (0+ / 0-)
    being used to deal with the sophisticated bankers:

  •  Yes, this is just what we need (0+ / 0-)

    Massive government spending, some of which is justified but a lot of which is just ridiculous.  Please stop making FDR comparisons...any competent historian will prove beyond objection that it was not the New Deal that saved us, but our entry into the war.  Roosevelt was as great a wartime leader as the world has ever known, but his economic policies are overly lionized.  Let's not make the same mistake with Obama.  I'm willing to give him the benefit of the doubt, but there is a reason the Republicans (and yes, some Democrats) are reacting so negatively to the stimulus.  It's not because they're fascists, as some posters here allege.  It's that they don't want the President to pull the same pork-laden bullshit that Bush did ever so recently.

    •  sorry Biran, but I thought you learned better (1+ / 0-)
      Recommended by:

      during the two times you were my student.  I realize you came to supporting Obama from a conservative point of view.  The war may have ended the depression, but there would have been no economy to save, and quite probably no democracy, had the New Deal not begun to turn things around.

      do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

      by teacherken on Fri Feb 13, 2009 at 10:24:47 AM PST

      [ Parent ]

      •  I don't argue that (0+ / 0-)

        I know that FDR's policies did a great deal of good.  I grew up in Greenbelt, a direct product of New Deal collective action.  All I'm saying is that HAD the war NOT happened, I sincerely doubt that FDR's programs alone would have saved the economy.

        •  and you attended school in Greenbelt (0+ / 0-)

          util you moved.  And again you are wrong.  The economy was saved, but not thriving, until the war. There is a difference.  We had recovered from the worst of what Hoover had bequeathed.  We avoided communism, the Vanderbilt funded plot for a fascist seizure of power (whicb Smedley Butler rejected), and total chaos.  That mens the economy, and the polity, were saved.

          do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

          by teacherken on Fri Feb 13, 2009 at 04:31:52 PM PST

          [ Parent ]

          •  So you're saying (0+ / 0-)

            that the New Deal is responsible not only for the salvation of our economy, but also for the preservation of democracy in America?  It just seems a little far-fetched to me, bordering on revisionist.

            •  far from it (0+ / 0-)

              absent the New Deal, the possibility of a conflict between Facism - which came to power in Germany under similar severe economic distress - and communism, whose appeal to some feeling economic distress is historically indisputable, might well have arisen.  

              We avoided that.  Just as we avoided the the attempted coup organized by among others Vanderbilt, although that was more due to the forthrightness of Smedley Butler.

              It is fair to say that we did not reach full employment and come totally out of the depression until the outbreak of WWII, and by that I mean when we began to become a principal provider to combatants, particularly Britain under Lend-Lease.

              But you can look at the increases in employment beginning in 1933, and going steadily up with the exception of 1937 when Roosevelt made the mistake of listening to the budget hawks who insisted he could not continue to run up deficits.  

              And many of the changes made under the New Deal had PERMANENT impact, whether it is things like Skyline Drive and the Blue Ridge Parkway, or the electrification and flood control of much of the South under the TVA, which finally began to overcome the devastating poverty of the region.

              And since you lived in Greenbelt until abandoning us for Howard County, surely you have seen the examples of public art as exemplified by the murals, right?

              It is right-wing revisionism to argue that Roosevelt's New Deal was not effective, that it prolonged the Depression.

              do we still have a Republic and a Constitution if our elected officials will not stand up for them on our behalf?

              by teacherken on Thu Feb 19, 2009 at 06:51:56 PM PST

              [ Parent ]

    •  Learn some history (1+ / 0-)
      Recommended by:

      During FDR's first term, unemployment fell by 10%.

      Also GDP rose by over $200 billion.

      •  And yet somehow (0+ / 0-)

        Unemployment remained above 20%, far from a miraculous recovery.  Again, I know you all jump on anyone you disagree with here, but don't unnecessarily exaggerate to prove someone else wrong.

        •  To be fair... (0+ / 0-)

          ...that number counted WPA workers as unemployed, measured unemployment by a more expansive definition than today, and had to deal with the double dip recession that Roosevelt's efforts to balance the budget caused in 1937.

          "An army of principles can penetrate where an army of soldiers cannot." - Thomas Paine

          by Mister Gloom on Fri Feb 13, 2009 at 02:57:09 PM PST

          [ Parent ]

  •  Nice diary (2+ / 0-)
    Recommended by:
    betson08, leighkidd

    But I'm gonna go ahead and choose not to scared and have a wonderful day.

    Take care.

    The heart is on the left.

    by goldenbird on Fri Feb 13, 2009 at 09:43:31 AM PST

  •  Unemployment was 9% 1982 and 1983. (0+ / 0-)

    We will likely see similar numbers for 2009 and 2010.  

    Obama stimulus bill may lessen the rate going into 2010 since most economists do rate its programs as likely to produce 3 million jobs over two year period.

    Combined with the extended unemployment benefits (increasing the amount, increasing the time of coverage and adding coverage for part time workers) which will help keep a "bottom" on unemployment as it gives people money for necessities which keeps other people working.

  •  I like his use of the Yeats quotes (0+ / 0-)

    Some of the rest of the poem is pretty scary too:

    "The centre can not hold; mere anarchy is loosed upon the world"

    I hope it will not come to that.

    Democrats give you the Bill of Rights; Republicans sell you a bill of goods!

    by barbwires on Fri Feb 13, 2009 at 10:37:46 AM PST

  •  I'm wondering how much the bond market (0+ / 0-)
    can bear. The money has to come from somewhere, and will an additional selling of $500 billion in gov't bonds in the short term be workable? In this kind of market will we potentially see a true 'crowding-out' effect?

    I think this stimulus is a good first step, but if not followed immediately with increased regulation on financial and commodity markets, we're bound to let the markets run free again at the first uptick in economic conditions.

    "No his mind is not for rent, to any god or government. Always hopeful yet discontent, he knows changes aren't permanent. But change is." -Neil Peart

    by Boisepoet on Fri Feb 13, 2009 at 10:42:47 AM PST

  •  krugman cannot increase (1+ / 0-)
    Recommended by: