Bits & Pieces

(via The Big Picture)

So over on Fox, Trace Gallagher interviewed Michigan Senator Debbie Stabenow on the “cash-for-clunkers” program.  Needless to say, since the setting was Fox News, the interviewer was against it. As soon as Stabenow makes a valid point, the interview is over.

And as you can see, the breaking news wasn’t about Bill Clinton. It was footage from a Discovery Channel shark show. (h/t Daily Kos)

Paul Krugman makes the case for an additional jolt of stimulus from the Obama administration. I do agree with him that the fact that jobs continue to be lost at a very high rate does not mean that the original stimulus failed. It simply means that the original stimulus was insufficient. God knows how high unemployment would be today if the original stimulus had not been enacted.

Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole.

And the deeper the hole gets, the harder it will be to dig ourselves out. The job figures weren’t the only bad news in Thursday’s report, which also showed wages stalling and possibly on the verge of outright decline. That’s a recipe for a descent into Japanese-style deflation, which is very difficult to reverse. Lost decade, anyone?

More from Paul Krugman on the potential for wage deflation here.

When House Appropriations Committee chair David Obey sought $900 Million in funds for pandemic preparation to be included in the stimulus bill, he generated bitter opposition from Republicans. The GOP claimed that this was not economic stimulus. Well, with the prospect of the swine flu outbreak upon us, and its potential for damaging the already fragile economy, we now see the truth.

Obey and other advocates for the spending argued, correctly, that a pandemic hitting in the midst of an economic downturn could turn a recession into something far worse — with workers ordered to remain in their homes, workplaces shuttered to avoid the spread of disease, transportation systems grinding to a halt and demand for emergency services and public health interventions skyrocketing. Indeed, they suggested, pandemic preparation was essential to any responsible plan for renewing the U.S. economy.

But former White House political czar Karl Rove and key congressional Republicans — led by Maine Senator Susan Collins — aggressively attacked the notion that there was a connection between pandemic preparation and economic recovery.

Oh, and the markets are sharply down this morning, in part based on pandemic fears.

This reminds me of the Republicans and volcano monitoring.

Update: Video of Susan Collins’ opposition:

One of the best political humor websites on the interwebs is iowahawk.  A letter has gone up there indicating that it is now under new (federal) ownership. Here is an excerpt from the letter, which I recommend you real in full:

Dear Weblog Stakeholder:

On March 7, 2009, David Burge, Chief Blogging Officer of iowahawk.typepad.com (herein after denoted as “Iowahawk”) presented written testimony before the official review board of the TWRA citing the Iowahawk Corporation’s untenable business model and requesting “some of that sweet bailout cash” for debt service and other financial relief. In his documentation, he said that unless such assistance were forthcoming, he would be forced to layoff two part-time Iowahawk employees listed as “Kyle” and “Pedro.”

The legislative charter of the TWRA, established by Congress and the President, specifies its principle goal as the preservation of jobs in the critically important blogging sector of the American economy. Thus the board invited Mr. Burge to present a formal proposal on March 11. After a brief negotiation period, Mr. Burge’s initial request of $6.3 billion was lowered to a mutually agreeable $750 and cab fare to the Greyhound station. In exchange, Mr. Burge agreed to (1) regularly submit the financial records of Iowahawk to TWRA oversight regulators, (2) cease outsourcing joke production to foreign subcontractors, and (3) implement a rigorous program of personal hygiene.

Paul Krugman has been critical of the Obama administration’s bank bailout/stimulus/toxic asset programs.  I tend to agree with most of his positions. Now Evan Thomas writes a profile of Krugman as the cover story of the current issue of Newsweek.

If you are of the establishment persuasion (and I am), reading Krugman makes you uneasy. You hope he’s wrong, and you sense he’s being a little harsh (especially about Geithner), but you have a creeping feeling that he knows something that others cannot, or will not, see. By definition, establishments believe in propping up the existing order. Members of the ruling class have a vested interest in keeping things pretty much the way they are. Safeguarding the status quo, protecting traditional institutions, can be healthy and useful, stabilizing and reassuring. But sometimes, beneath the pleasant murmur and tinkle of cocktails, the old guard cannot hear the sound of ice cracking. The in crowd of any age can be deceived by self-confidence, as Liaquat Ahamed has shown in “Lords of Finance,” his new book about the folly of central bankers before the Great Depression, and David Halberstam revealed in his Vietnam War classic, “The Best and the Brightest.” Krugman may be exaggerating the decay of the financial system or the devotion of Obama’s team to preserving it. But what if he’s right, or part right? What if President Obama is squandering his only chance to step in and nationalize—well, maybe not nationalize, that loaded word—but restructure the banks before they collapse altogether?

Remember the Republican complaints about pork in the stimulus bill. Bobby Jindal highlight the money to spent on something called “volcano monitoring” as if this was silly.

Now this (courtesy of DailyKos):

According to Matt Taibbi, the current actions being taken to repair the economy amount to a giant and successful takeover of the country by Wall Street insiders. As usual, his essay speaks clearly about the causes and results of the scandalous behavior of AIG (as one example),  is required reading.

People are pissed off about this financial crisis, and about this bailout, but they’re not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d’état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — “our partners in the government,” as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

Jane Hamsher at firedoglake has more:

…underlying the public’s trust was the assumption that those in charge were doing this because there was no other choice, and they thought people like Timothy Geithner knew it was their job to keep the people who had looted their retirement funds and sacked their value of their homes from profiting from taxpayer largesse while they struggled. They most certainly did not share Timothy Geithner’s belief that everyone in the banking industry should continue to get rich.

It’s impossible to know when Geithner realized that the AIG bonuses were eminent, but one thing is clear — he did not anticipate the public rage, the critical breaking of trust that the bonuses symbolized. He thought he could stomp around a bit, shake his head and talk about “outrage” but it would eventually blow over. He, the administration and the anxiety pundits do not seem to realize that the AIG bonuses are not just a “drop in the bucket.”  They trigger a whole set of ugly conclusions.  As dday says, “the public knows intuitively that they’ve been getting a raw deal for decades, and the bonuses are only a small part of the story.”

What they telegraph to the American public, quite appropriately, is that the people in charge are perpetuating a broken system and enriching their friends at taxpayer expense, and it calls into question everything they have been told. It’s a signal that the whole thing is a crock, that it’s no more than a great and penultimate oligarchical looting.

Not Obama’s first 50 days. Rather, what about the first 50 days of the GOP under the new administration, by Craig Crawford?

Who got all of that bailout money the Feds gave to AIG? These are the firms that were counterparties to the risky AIG credit default swaps and other derivatives.  When the transaction when south, AIG owed billions to these counterparties. So far, the government refuses to identify them.

But the Wall Street Journal is building a list of names (subscription required).

Among those institutions are Goldman Sachs Group Inc. and Germany’s Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.

More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.

The names of all of AIG’s derivative counterparties and the money they have received from taxpayers still isn’t known, but The Wall Street Journal has identified some of them and is publishing others here for the first time.

Congress should specifically condition any further aid to AIG on a full disclosure of who actually benefited and will benefit from the funding. It is only fair that there be full transparency of those firms who placed bad bets with AIG and are now looking to the taxpayer to bail them out.

Rick Santelli was booked for the Daily Show. When he canceled, Jon Stewart was not happy.  Santelli (and CNBC) would have been far better off had he shown up.

ShovelWatch is a new site that pulls together the best info about the actual expenditures from the stimulus bill, pulled together from non-profit investigative outfit ProPublica, the NPR morning news program The Takeaway and WNYC, New York’s flagship public radio station.

One of their current stories is fascinating. Looking at transportation and infrastructure funds provided under the stimulus plan, the states with the highest unemployment rates get the lowest per capita aid dollars. For example, Michigan, which has the highest unemployment rate in the country, ranks 49th out the 50 states for this funding. Say what?

The Obama administration has announced that the following logo will appear on projects funded with the stimulus bill. I like the addition of green to the traditional red, white and blue.

Which political party’s Presidents presided over the most job creation? You know George Bush was awful, but check out this chart showing job creations in each presidency since World War II.

So the next time you hear a Republican spouting off about how tax cuts create the most jobs and are the best form of stimulus, point them to this chart.

The President’s proposed budget is a major change of direction for the country. But it is consistent with the themes of his election promises. And he may surprise folks in his strategic ability to move ahead. Check out this piece of today’s weekly address to the country:

I realize that passing this budget won’t be easy.  Because it represents real and dramatic change, it also represents a threat to the status quo in Washington.  I know that the insurance industry won’t like the idea that they’ll have to bid competitively to continue offering Medicare coverage, but that’s how we’ll help preserve and protect Medicare and lower health care costs for American families.  I know that banks and big student lenders won’t like the idea that we’re ending their huge taxpayer subsidies, but that’s how we’ll save taxpayers nearly $50 billion and make college more affordable.  I know that oil and gas companies won’t like us ending nearly $30 billion in tax breaks, but that’s how we’ll help fund a renewable energy economy that will create new jobs and new industries.   I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight as we speak.  My message to them is this:

So am I.

Video available here.