Krugman: "What the centrists have wrought."

While I'm sure many will accuse me of overexaggerating the importance of this, much like DKos blogger Words in Action's diary tonight over at the Big Orange, "Krugman: What the Centrists Have Wrought," I truly feel that one of the most important comments ever posted on a blog appeared early this evening, written by Nobel Prize winning economist Paul Krugman: "What the Centrists Have Wrought."

Here it is:


Paul Krugman | New York Times Blog
February 7, 2009, 5:36 pm

What the centrists have wrought

I'm still working on the numbers, but I've gotten a fair number of requests for comment on the Senate version of the stimulus.

The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts.

According to the CBO's estimates, we're facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger.

Now the centrists have shaved off $86 billion in spending -- much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast -- because it prevents spending cuts rather than having to start up new projects -- and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.

The real question now is whether Obama will be able to come back for more once it's clear that the plan is way inadequate. My guess is no. This is really, really bad.

The most important points here, and with regard to the "other arm" of the bailout ("T.A.R.P. II") IMHO...

--This doesn't appear to be a situation where we'll be able to go back and just get more money; it was imperative that the American Recovery and Reinvestment Act of 2009 (a/k/a the Stimulus Bill) be large enough to do what's needed to be done. Krugman's (and my) conclusion: nowhere near enough.

--The Stimulus Bill is off the mark, watered down--not that it was substantial enough to begin with--to the point of being ruinous, it's more than likely that we won't be able to get any more major funding through Congress after this. That's all there is.

--And, also IMHO, the T.A.R.P. II bill, being introduced by Geithner on Monday, has enough loopholes in it to drive a Mack truck through it...never mind the fact that it's almost completely based upon doing anything possible to keep from nationalizing any of the major banks, no matter what commentary which may be made by Geithner to the contrary (this is a fact, despite the reality that we're seeing spin to the contrary coming out of both sides of everyone's mouths now, too). The T.A.R.P. II plan really is about taxpayers co-opting Wall Street's toxic debt, no matter how they'd like to tell us or package it otherwise.

Just as Krugman comments on the Stimulus Bill, I feel the same thing is about to happen with T.A.R.P. II, as well.

Collectively, this all means a very, very painful decade or more is ahead for us.

God help us.

Tags: 2009 Stimulus Bill, American Recovery and Reinvestment Act of 2009, bailout, Paul Krugman, President Barack Obama (all tags)

Comments

47 Comments

Tips: Because a centrist response to this...

...economic crisis is far too little...and it's going to be too late to do anything to correct that (for the most part) in another couple of days, too...and that's just the way it is...we won't be able to get much more money...period.

Apparently, we have not learned enough from history and past mistakes.

by bobswern 2009-02-07 09:34PM | 0 recs
If Krugman can come up with a plan

to get the House version of the bill through the Senate with 60 votes, that would be much more helpful than telling us something we already know.

by DTOzone 2009-02-07 10:42PM | 0 recs
Re: If Krugman can come up with a plan

Exactly.  I have a plan that grants everyone in the U.S. a Magic Pony.  Now if only I could figure out how to actually make it happen...

by Will Graham 2009-02-08 05:49AM | 0 recs
Much like the global warming issue...

...there are problems that we're either going to deal with effectively or ineffectively.

With global warming, it's going to get progressively worse, to the point where there's going to to be nothing we can do to resolve it, or we resolve it.

With the economy, pouring all of our nation's financial resources into a solution that doesn't do enough to fix the problem is almost as bad as doing nothing, too.

The analogy here is akin to having one bullet and shooting a charging animal between the eyes, dead in its tracks before it reaches you and kills you...or not.

Or, giving a $2 trillion aspirin to a cancer patient...

...pick your analogy.

A half-full glass isn't always enough to put out a fire...especially when there's no more water.

The end result is still the same.

In some situations, either a problem's solved effectively, or it's not solved at all. Everything else is...bloviating.

Either people speak up right now, or we all become victims...end of story.

by bobswern 2009-02-08 06:07AM | 0 recs
Re: Much like the global warming issue...

That's about right. It's funny how people say they are fiscal conservatives, and yet they are willing to waste hundreds of billions of scarce borrowing capacities on things we know will not work just to say we have done something.

by bruh3 2009-02-08 11:27AM | 0 recs
Re: If Krugman can come up with a plan

Krugman has a point and I commend him for actually what "some of us" already know. It better to say it and let other actually KNOW what you're thing than to keep it bottled up inside where no one can ponder about it.

Krugman is only saying what many economists have been saying for some time, now. Everyone knows that the state's should be allowed more funding at this time. As a matter of suggestion, some economists even believe that Obama's urgency was brought about  by some economic event or trend that is happening in California.

by Check077 2009-02-08 06:28AM | 0 recs
Re: If Krugman can come up with a plan

It's a shame that the Republicans and the Chris Matthews Led Media has basically made the GOP a source of Wisdom again. This is why I've stopped watching Television news. It is actually ridiculous watching the Chris Matthews drones go off on a tangent time and time again instead of focusing on the real news--absolutely pitiful.

This is the first time in history that we have let the fake losers (the GOP) conjure up a bill that the real losers (the American People) will have to endure.

If the Republicans come back and beat the Democrats the way Democrats won in November 2008, I'll bet you $1 million (if I had it) that Republicans will act as if the Sky Gods had touched down and handed them the new gospel.

by Check077 2009-02-08 06:41AM | 0 recs
Re: That's great

You flood the media with your message while simultaneously get the net roots and college students to campaign in the those moderate Republican's districts. I love the house-party strategy that Obama is using. However, let the people know in a matter-of-factly kind of way. Also, I enjoyed how Obama went into campaign mode. We need to say that the Republicans are "speaking kindly but behaving badly." Tell the voters that the republicans want to continue to do the way we've been doing for the past eight years.

We compromised and gave them $250 billion tax cuts, reduced programs that would help the struggling Americans but that's still not enough. The republicans are satisfied with nothing. That's right--nothing will ever.

by Check077 2009-02-08 07:31PM | 0 recs
Krugman making himself seem overrated

The challenge will be one of narrative.

I believe the Obama administration did not win on the narrative this round (okay).

The challenge will be to create such a meme that the centrists will have zero choice but to go along with what is necessary.

But like Rome, memes aren't built in a day.

by iohs2008 2009-02-08 08:06AM | 0 recs
how about Barack's campaign plan?

He calls for best science, well social science is a science, and there is best social science, explained by not only Krugman, although he was pretty much the first (yikes!)

He calls for saying what we need to know, not what we want to hear. So, he can give a lecture to congress on best social science, and explain it to us at the same time.

He could dare them to shut down Washington, rather than try to get them on board by proposing a plan that will not work.

Paul is a social scientist, Barack is the politician, he's supposed to have already figured out what to do when the people need relief but congress is out of touch.  That's his job, to figure out how to get legislation passed that will actually work.  

by anna shane 2009-02-08 09:25AM | 0 recs
Re: Clinton's situation was different

yes, Clinton pulled it off with less of a disaster and less of a mandate.  So, this should make it easier for Barack, it's been shown to work, and the circumstances this time make it an even better shot.  

by anna shane 2009-02-09 07:42AM | 0 recs
To sign this bill without aid to states

is obscene. When the states get through cutting budgets and shedding jobs -- especially in education -- the devastation will be enormous, for schools, for communities, and for kids.

by Coral 2009-02-08 04:06AM | 0 recs
Re: Krugman: "centrists have wrought."

Yes, Nobel Laureate Krugman has called it correctly, and the United States is teetering on collapse.

Still, the so-called stimulus plan is seriously attempting to do something, as opposed to years of GOP plans to leave the country helpless, literally "fiddling while Rome burns."

I recollect now so keenly those early Clinton years, when the GOP became the great obstructionists.  They cost the nation national health care, and the Clinton budget package passed without a single Republican vote.

Their obstructionist tactics brought Newt Gingrich to power, and Ken Starr and his minions spent tens of millions investigating the Clintons.

All the while, the Clinton budget bill brought the longest sustained prosperity in peacetime in the whole of United States history.

The millennium concluded with America at peace, a meaningful pact in Northern Ireland, successful conclusion of the Kosovo war, environmental policies in the vanguard, Big Tobacco finally pummeled, the Brady Gun Law finally passed, and a golden surplus with the very brightest of prospects for this nation and the world.

But President George W and Vice Prtesident Cheney became the rightest of Right-wing zealots, and took Reaganomics (Reagan--still the honey of the MSM) to its ultimate extreme, and now the United States is close to the same collapse that left the Soviet Union in ruin a quarter century earlier.

President Obamas has proven himself a most intelligent and thoughtful Chief Executive.  I can only pray for my country, and for the larger world now.  In these times, the GOP attitude isn't just myopic; it is criminal, and should be treated as such.

by lambros 2009-02-08 04:17AM | 0 recs
Sadly too many on the left

have bought hook, line and sinker, that Bill Clinton was Satan and Ronald Reagan was a hero.  

And the democratic party is seemingly the party of Ben Nelson, Claire McGaskil (teehee we cut the sill stuff out....since when is education, health silly?), who would rather pander to a bunch of pit vipers who would rather sell their soul's (or their mother's souls) to make a buck.

Krugman is right on and the centrists are screwing us all.....just so we can all sit around and sing kumbaya.

My only hope is the bill goes back to the "people's house" and they put those "silly" things back in.

by Jjc2008 2009-02-08 04:43AM | 0 recs
Re: Sadly too many on the left

have bought hook, line and sinker, that Bill Clinton was Satan and Ronald Reagan was a hero.

What the holy-f*ck are you jabbering about?

What the hell does Bill Clinton have to do with this?  

What, you are denying Bill Clinton was "a centerist?"

Jesus, ever hear of the DLC?

Remember THIS statement:

"The day of big government is over!"

I have no idea who is more adamant revisionists, the Republicans or the Clinton supporters...

What I see here in fact contradicts you? MOST of the PUMAs seem to lean right, including our legendary "farrightdemocrat"...

by WashStateBlue 2009-02-08 08:05AM | 0 recs
Re: Sadly too many on the left

he dared them to shut down Washington, and them show their stuff. Yes, Barack can learn from Bill, is that a terrible thing to notice?  

by anna shane 2009-02-08 09:27AM | 0 recs
Re: Sadly too many on the left

You probably should say some of Clinton supporters. That kind of statement can get others riled up when it's not necessary.

by Check077 2009-02-08 08:01PM | 0 recs
Gosh, forgot

how very sensitive some here at this blog are......
anyone who mentions that there was some Clinton hatred are PUMAs.....

and for others just the name Clinton sends them off the depend.  Maybe they should go to the MSNBC talking heads for consoling and comfort.

by Jjc2008 2009-02-09 04:52AM | 0 recs
Re: Gosh, forgot

No offense, but you were spouting gibberish.

by Jess81 2009-02-09 07:15AM | 0 recs
Krugman

I don't think Paul Krugman fully understands that the GOP doesn't care if the Stimulus Bill fails and the economy gets much much worse because they know that they will be the beneficiaries of such an outcome--since the voters will blame Obama and the Democrats.  Never mind the fact that it was GOP obstructionism that exacerbated an already bad situation.  I think Obama should probably take what he can get here and move on to the next battle.

The Republicans have absolutely nothing to lose and everything to gain by opposing Obama, no matter what his plans may be.

by Will Graham 2009-02-08 05:56AM | 0 recs
You are stating the obvious

Why don't the blue dogs and others on the left see this?  A simpleton can see through their game.  Why the hell are we pandering to the same people who declare FDR a failure with the New Deal and declare the man who started us down the road of the "the rich should get richer" and the "who gives a damn about poor people" a hero.  While FDR got people back to work, made sure we stood up to fascism, Ronald Reagan invaded a small island, aided and abetted despots like Pinochet who murdered thousands, the right still gets away with trashing FDR and putting Reagan on a pedestal.  What the hell is wrong with people?  Why are the democrats telling the American people the truth NOW?  WE WON DAMMIT.

by Jjc2008 2009-02-08 06:11AM | 0 recs
Properly framed, the GOP loses...

...everything, if they're effectively painted into a corner for being the blatant obstructionists that they are.

The ongoing understatement of the severity of the situation--very few Dems are calling this the Depression that it is--runs counter to the reality of the situation. Any more calls for bipartisanship, at this point, are pretty much a waste of time, too.

If the GOP could put the fear of god into the public--with the MSM's help of course as they followed them off of a cliff--when it came to out-and-out lies about the severity of the situation in Iraq, etc., etc., then the Democratic Party could/can do the same when it came/comes to the inevitable result of not resolving are nation's financial woes right now.

The concept that this is something that we may fix as we move forward--given the reality that this country no longer controls its own checkbook--is just wrong, on so many fronts.

When it comes to "the next battle," at some point very soon (we're talking weeks or months), as far as the economy's concerned, we're going to run out of ammunition. It is this reality which is lost in the politics of the matter right now...and it's a reality that is going to have devastating consequences...pretty soon, we won't be able to fight the next battle.

by bobswern 2009-02-08 06:19AM | 0 recs
Re: Properly framed, the GOP loses...

If Obama accepts this slightly compromised Stimulus Bill the media will still depict it as a big victory for Obama, despite the fact that he didn't get everything he wanted.  Chuck Todd is already doing that.  This wave of good press will give Obama the fuel he needs for the next battle, whatever it may be.

And the best part of all would be this: Since the public will mostly credit or blame the Stimulus Bill for whatever happens in the economy from here on out the Democrats will be the political party rooting for success and the Republicans will be rooting for failure.  Wouldn't it be great to paint the Republicans into that corner?

by Will Graham 2009-02-08 06:30AM | 0 recs
If....

I used the word, "if," on purpose in that paragraph.

Personally, and professionally, I believe too much emphasis was placed on attempting to forge a bipartisan coalition for this "Bush-mess."

I've been a big proponent of everyone calling this a Depression since the beginning of January, at the very earliest (actually, much earlier than that, truth be told).  But, obviously, to call it that would have run counter to the "bipartisan-let's-overcome-past-differen ces-work-together-and-I-won't -start-saying-bad-things" meme that was chief among the talking points throughout January.

That didn't work, as is self-evident from the votes in the House and the Senate, for the most part.

For a lot of reasons, it's important to burnish into the public the reality that Obama took office at the outset of a Depression.

Depression is a powerful word, and we should be using it constantly, as a Party now.

We're not...yet, anyway.

(I've got a few diaries that go into the definition of the term...which, by the way, the NBER does not even reference as a matter of policy. It's all "recession" to them.)

Because, as we all know, three to six months from now, it'll be the Republican boldfaced, lying meme that "Bush might of brought us into a Recession, but Obama put us in a Depression."

And, there's no reason for us to put up with that shit down the road (and, you know we will).

Nip that in the bud with one powerful word, right now: DEPRESSION.

That's where we were when Obama took office...and it's all uphill from there...and it is Obama who's bringing us back up that hill, too!

But, that starts with the right framing of the discussion...and we've been shying away from using the word, which very much works against us, even now.

by bobswern 2009-02-08 05:13PM | 0 recs
There isn't a bottomless well of money...

...to resolve this problem.

We don't get much of a second chance here to come back to the table...without a market for our paper, internationally, printing too much (our only alternative) money will create (at some point) hyperinflation.

There is a great deal of concern in the international marketplace that there's going to be a bear market in T-bills. Bond offerings, to bail states out of this mess--since the currently proposed programs aren't doing this now--is pretty much off the table, too. There is little market for local-/state-issued bonds now, as well.

The reality--as Krugman notes it--is there may not be a second chance...there may not be a second battle...not one which our government is armed to fight, financially, in any event.

by bobswern 2009-02-08 06:38AM | 0 recs
Re: There isn't a bottomless well of money...

The problem is that we would have not seen this bill passed without revisions, given the reality in the Senate that requires 2 GOP cross-overs and ALL Blue Dogs to be on board.  Why have a $2 Trillion Dollar bill that has no realistic chance to pass the Senate, just to claim that we tried, so Republicans would be the owners of economic failure?  They already are.  I guess I read the outcome of the last 2 elections and the current mood of the populace completely different than you:  The people put the blame for the mess squarely on Republicans and their economic policies.  They realize that it will take a long time to come out of this Republican-generated mess and want action.  They are entirely pi$$ed off at Republicans for obstructing the Democrats and the administration, which means that support for Republicans falls even further. Legislation that the people see as attempts at helping them or the disadvantages will continue to be highly popular.  S-CHIP is one such example.  Obama and the Democrats will come out of this stimulus battle more popular than before with Republicans losing even more support, due to their severe obstructionism.  That should help tremendously for the upcoming health care reform bill, energy bill, and a number of other spending bills which will be ushered through because of the severity of the economic crisis, not derailed by it.  

I respect Krugman, but if he thinks that this is it, the well of money will have run dry after this bill is passed, he is most likely mistaken.  Of course, we shall see as we move forward.

by devilrays 2009-02-08 08:36AM | 0 recs
We cannot spend cash when we don't...

...control the checkbook...

...no, check that...we can continue to spend cash for awhile longer...as long as it's underwritten by our own government...

...but, first, the international market for our debt dries up...something that's already happening as I write this...which leaves us with no choice but to print money which we're buying...a recipe for even greater disaster...to which Krugman alludes in his comments...

...spending money on other programs becomes a non-issue when there's no money to spend...as many have stated--albeit in a variety of ways--we have one proverbial bullet to shoot here...and we either kill the beast in its tracks or it eats us alive...

...as Krugman also states...underscoring what I'm saying here...going "back to the table" becomes a non-issue when there's no money on the table...

...the luxury of "jockeying" simply isn't there this time...and many don't understand this...but, they will when we attempt to buy our own state-/minicipal-issue bonds while the world simultaneously forces us to hyperinflate our own economy...something that we may very well witness in a few months as we move forward with the mentality that we just go out to the money tree and take a few more leaves off of it...

...unlike economic recessions and depressions of the past: a.) we've never had a national debt issue like we have now; b.) and when we've had debt issues in the past unlike today, we controlled the end result...we can't manufacture our way out of this...we don't have access to our own natural resources (they're mostly depleted)...we rely on everyone else for just about everything...including writing our own checks...at least without severe consequences this time around for doing same...

by bobswern 2009-02-08 08:51AM | 0 recs
Re: We cannot spend cash when we don't...

Perhaps you can explain your math here.  You claim that the bill SHOULD have been a $1.6 to $2 Trillion spending bill to really make a difference.  However, as the bill actually comes in at a price tag of $820 Billion after passage we no longer have the funds available to finance any other spending bill in the near future.   I just don't see the logic in that sentiment.  That extra desired $1.2 Trillion would have had to come from somewhere, after all.

I seriously think Krugman is overshooting here.  Nobody is talking about "going back to the table" on stimulus itself.  Next on tap is a health care overhaul bill and a comprehensive energy bill, both of which we could have kissed goodbye for a very long time if the price tag of the stimulus package would have reached $2 Trillion.  Most of the items that were cut will come up then again.  

by devilrays 2009-02-08 09:43AM | 0 recs
Re: We cannot spend cash when we don't...

because timing is a factor.

he more time that passes, the greater the damage done. The greater the damage done, the less that we can change the course. until at some point (many believe that point is now) we can't change course.

let me give you a singular example: lehman brothers.

before lehman brothers (I think that was the firm) went under krugman argued , as i remember, vigorously that the bush admin should not allow the bank to go under.

The bush admin wasted time ignoring the problem. the bank crashed. By the time the bush admin did anything to effectively address it the crash had spread throughout the entire system, and the options available were significantly reduced.

That was a timing factor.

by bruh3 2009-02-08 11:38AM | 0 recs
Re: We cannot spend cash when we don't...

Timing is always a factor.  That is why you get this through now, hopefully with some cuts restored in final conference, and then move right on to the next bills, such as health care reform by this summer and an energy bill:

http://www.boston.com/news/nation/washin gton/articles/2009/02/06/senators_affirm _healthcare_goals/

by devilrays 2009-02-08 02:55PM | 0 recs
Re: We cannot spend cash when we don't...

Not everythng works that way. This is one of my central criticism here.I think you really want a one size fit all approach, but there's not one. I am not against incrementalism, if the circumstance allowed it. The timing issue creates the risk that it does not.

That time is the critical factor.  When I gave the example of Lehman Brothers it was to provide for you why that is the case.

Let's rethink Bush's action. What if Bush had infused Lehman Brother and propp'ed up the banks as people were asking for most of 2008? Where would we be now? The answer is in a recession but not one that is a depression.  We lost a trillion dollars of value or more due to that mistake. One small mistake of ill placed timing. That's how the timing issue works in economics. It can make or break you. Ask bill gates.

We are right now at the same place  bush was where were certain pressures - like deflation for example- need to be addressed.  If these things get out, you can't let it back in. There is no "opps we got that deflation thing wrong now let's straighten it up." By the summer, it could be too late. We don't know. That's the whole point in an economic crisis is you don't know when the ticking bombs are going to go off.

This is why I keep asking where do many o fyou think we are economically because I really beelive that is the divide.

by bruh3 2009-02-08 03:07PM | 0 recs
Re: We cannot spend cash when we don't...

If timing is a factor you get this through now - the Republicans claim that we are rushing this gigantic program through as it is - and go onto the next item on the list.  The last thing you want is for a bill to wither away in controversy and have to start all over, perhaps with diminishing returns.  If this thing would have died because we insist on a $2 Trillion package as the only be-all, and it ends up collapsing on the altar of unbending purity, we could easily see diminished returns, with the next attempt at a stimulus package aimed at winning 10 Republicans over rather than the bare minimum of 2.

Of course, an investment of the proportions deemed necessary by some to "fix" this thing  would leave zero money left over for health care reform, a strong energy bill, which both would have to be shelved indefinitely.  Long-term we need both of those to be fixed right away.  I am all for a short-term stimulus expenditure to help the economy back on its feet, but not entirely at the expense of everything else we want to achieve.  

by devilrays 2009-02-08 04:49PM | 0 recs
Re: We cannot spend cash when we don't...

Actually, if timing were the factor you would not have been focused on bipartisan cover, and would have focused on bring pressure to the Congress by first presenting the deal to the American people using your popularity versus that of Congress. This again is a point of how one frames this. I am not looking to avoid Obama's role as President in underestanding how legislation gets passed.

by bruh3 2009-02-08 05:57PM | 0 recs
Re: We cannot spend cash when we don't...

Obama has been front and center on this.  He has been all over the airwaves and has ripped Republicans on the failures of the last 8 years. He has also talked about the dire state of the economy and predicted disastrous results if no stimulus package is passed.  Yet, you bash him incessantly, apparently ignoring every speech, every acerbic statement, every plea.  "How one frames this" is not as important as looking at FREAKING REALITY.  Some will never, and we get the typical results.  

by devilrays 2009-02-08 11:16PM | 0 recs
question for you, bobswern

I found this interesting:

The Stimulus Bill is off the mark, watered down--not that it was substantial enough to begin with--to the point of being ruinous, it's more than likely that we won't be able to get any more major funding through Congress after this. That's all there is.

A few weeks ago weren't you crowing about Obama's brilliant "price is right" strategy (he started with a low number, knowing Congressional Democrats would add a lot to bring the stimulus over $1 trillion)?

If that was not you, I apologize.

But if it was you, then do you now acknowledge that Obama erred by starting the bidding at $800 billion, thereby ensuring that any bill more expensive than that would be deemed "too expensive"?

I agree with you that $800 billion is insufficient in any case, but $800 billion in targeted spending would be a lot more useful than $800 billion that's half tax cuts.

by desmoinesdem 2009-02-08 02:40PM | 0 recs
A lot has happened in the past month...

First of all, only a portion of the "Stimulus" is actually being used to fund jobs, etc. Far too much of it is being directed towards tax cuts.

Secondly, the pundits (the ones whose opinions I respect as being spot-on, anyway), have shifted their numbers upward during this time, as well.

In late December, Roubini, Stiglitz, et al, were all  talking in the $600- to $800-billion range. All of the numbers and forecasts (from the Neo-Keynesian group, anyhow) have gone up, substantially, since then.

So, while the numbers being promoted are in the $800+ billion range, only a portion of that is focused upon addressing the actual matters which need to be addressed, to insure that this money is used effectively, in any event.

The matters relating to compromising on the Stimulus' content were not factored into much of the CW, even a few weeks ago. That's changed.

Making the matter more costly, with everyone pushing their numbers upward, just further indicates that much more money is needed to address this problem now...again, if it's going to be addressed effectively.

by bobswern 2009-02-08 04:29PM | 0 recs
As far as the actual amounts are concerned...

...I think you may have my comments a bit conflated with others' comments, however.

The precise amount was never as important to me as was the need to hit whatever amounts folks like Roubini and Stiglitz were focused upon.

All this time, I was "crowing" when I thought I was blogging...thanks for straightening me out on that one, though...

by bobswern 2009-02-08 04:34PM | 0 recs
ok, "crowing" is a loaded word

Sorry about that, I did not mean to be snide.

Here is the diary I was remembering:

http://www.mydd.com/story/2009/1/12/1275 1/1424

You linked approvingly to Nate Silver's "price is right" theory:

http://www.fivethirtyeight.com/2009/01/o bamas-price-is-right-negotiating.html

He took the position that Obama was smart to start bidding at $800 billion, and that the number had nowhere to go but up. I think it's clear now that Obama's $800 billion "bid" is turning out to be the ceiling, not the floor for the stimulus bill. (And of course, Obama quickly agreed to way too many tax cuts as part of that $800 billion price tag.)

In the comment thread, you replied to me as follows:

Apparently, I'm being told that it's all... (2.00 / 1)

...a dance, with Obama expecting and coordinating matters with friends in the Senate to make it appear like they're "pulling" him from the center, etc., etc.

Do you stand by this position?

I stand by my view that Obama should have come out in favor of much more stimulus spending and should not have signaled in every way possible that he was desperate for Republican cooperation.

by desmoinesdem 2009-02-08 05:03PM | 0 recs
5 or 6 weeks ago, Roubini was...

...calling for a $500- to $600-billion jobs/infrastructure program. Stiglitz et al were right along side, maybe pusing it to $700 in one or two comments/papers, etc.

Everyone's been pushing their numbers up since.

But, at the time, asking for $800 billion seemed in line with allowing for some negotiating room.

Now, with the tax cuts included in the bill, and with projections on the downside of this mess getting worse by the day, it's not enough...even if all $800 million was approved strictly for social programs, jobs and infrastructure-related projects.

But, as we all know, $800 billion is far, far more than what's actually going to be allocated for the originally-intended purposes of all this.

Additionally, the reality that there's a state aid component to this entire mess that's just getting downright profound in scope (we all knew it was there, but it's just become much more pronounced in the past 30-45 days) is making the need all the greater.

by bobswern 2009-02-08 05:23PM | 0 recs
Re: 5 or 6 weeks ago, Roubini was...

She's not asking you about what people's numbers were. She's talking about whether Obama's strategy as described by Nate Silver was in fact the right strategy for negotiation.

I kept ardiously saying no at the time precisely because this outcome, numerically, that we are seeing was predictable from Obama's openning negotiating bid.

Indeed, I made the comment that it was the wrong strategy. Take whatever magic number you want. Let's say it is 5. You don't get to five  as your final negotiation point by starting with 5.  You get something lesser. As we are seeing now with the numbers. These outcomes are wholly predictable by Obama's negotiation choices.

When negotiating with someone who wants zero (as the GOP does, you start at a higher number than the final price point because the intial number (as we are seeing now) defines the debate of what is high and low.  It changes everyone's expectation in the narrative. Again, as we are seeing.

by bruh3 2009-02-08 06:04PM | 0 recs
Well, in that case...

...I wouldn't have delivered an "outline" of the Stimulus bill to the House...I would have delivered a fully-written, specific piece of legislation.

As opposed to pinning this down to numbers, my suggestion would have been to send a full bill over to the House from the get-go...much like Presidents have done in the past.

By sending over an outline, which I'm assuming included numbers, perhaps (albeit vague ones), the very basic components of the bill (forgetting about specific numbers, altogether) were up for discussion.

So, before we get into the numbers, let's look at overall methodology.

From a methodology standpoint, I'd be willing to guess that from now on, the Obama White House will send over fully-written bills to congress, complete with specific numbers, line item requests, overall and specific language, etc.

"Numbers" were just a part of the problem in this exercise, looking at it from that perspective.

by bobswern 2009-02-08 06:20PM | 0 recs
BTW, If you actually read the diary to...

...which you're linking, as far as my reference to Nate Silver's "Price Is Right" comment's concerned, you'll see I was referencing that more in terms of explaining what had happened, actually.

As far as my general comments were concerned, this was a story about some breaking news, moreso than anything else.

The fact that I thought the breaking news was, indeed, good news, was specifically what I was referencing.

The Nate Silver stuff was very tangential to the topic of the diary, and merely used as a slight reference. (Read the diary.)

So, I think much more is being made out of this than my actual words stated at the time.

That being said, I don't make these numbers up out of thin air (I refer to others for guidance and perspective), and I don't proclaim to know what the right numbers are, other than having some historical knowledge here as to what FDR did wrong when he first took office in late '32/early '33.

Reiterating, at the time I made these comments, the folks whom I rely upon  for guidance on the numbers (in terms of how much stimulus is/was "enough") were all talking about +/- $600 billion. And, again, those numbers have gone up over the past month.

by bobswern 2009-02-08 06:35PM | 0 recs
Re: BTW, If you actually read the diary to...

The problem is you do seem to agree with Obama no matter what. Obama was wrong here. that's why you are seeing the results you are seeing. From his telling people he wanted 80 Senators aboard, to offering concessions before negotiations began to ramping up the cuts with his surrogate of Rahm. I don't have a problem with president's making mistakes. I just don't get thus far why all the need to wald around the issue. If others are to blame in the process, then obama has his burden for his own approach. In fact, his is the bigger burden because he defind the narrative.

by bruh3 2009-02-08 06:49PM | 0 recs
Well, you just crossed a line, then...

...because, nothing could be farther from the truth then:


The problem is you do seem to agree with Obama no matter what.

I disagree with quite a bit that's going on in the Obama administration; but, it's very early, for starters, so the benefit of the doubt is in play.

Specifically, with regard to how he's being outflanked by the GOP in the press on this, it's really quite pissing me off.

In fact, I'm having a major problem with this whole failure to benchmark the Depression as being something he stepped into, from a chronological standpoint. (It's going to bite him and every Dem in the ass if we don't do something about that, immediately!)

We're seeing none of that happening from a tactical standpoint.

And, from a professional standpoint (and you'll just have to take my word on this because I am qualified to speak to this matter, professionally, and on many levels and I'm not going to brag about it other than to say only that), the reality is he hasn't gotten ahead of the narrative on this crap from Day 1.

Also, professionally, the guy's being overexposed at the moment. He'd probably much better serve his objectives to give half as many sound/video bites as he has over the past couple of months. And, I am very appreciative of the fact that we've seen very little of him over the weekend, so when he makes his primetime appearance on Monday, we'll have at least had a 48-hour respite to have some contextual basis to view this as "new info," when we do hear from him tomorrow.

The public's perception is--regardless of whether there's statistical evidence to back this up or not--he's been in office since Thanksgiving, comments about there "only being one President at a time," (being made throughout November and December and the first 20 days of January) aside.

There are ways to recapture the narrative on this, but we're not seeing them being implemented at the moment.

And, for starters, WTF is going on when Dems refuse to use the word, "Depression," in terms of it being a reality (WITHOUT QUALIFIERS) in their day-to-day statements now?

I'm nothing less than blown away with regard to how it's seemed that folks in our party, from the top down, have been doing everything in their power to NOT call it that, on a straightforward basis, to the point where it's ingrained in our minds just how bad things really are!

IMHO, this is a huge tactical mistake...and it's already been made. And, I've been ranting about this simple little shift in spin for...months!

So, trust me, you really don't want to "go there," when you make a statement like you did in the past comment.

by bobswern 2009-02-08 07:13PM | 0 recs
Re: Well, you just crossed a line, then...

I appologize for misreading your views. Thanks for the clarification. I was make my statement solely based on this diary, and the question mark it left, at least for me.

Incidentally, I am not coming from a totally insane place with regards to these concerns. I have seen people blame everyone from Pelosi to Rahm, but somehow avoid Obama. Thus, I made the mistaken assumption here.

As for the thrust of your post- this is what I have been fruitlessly (it felt like) being saying for some time- specifically Obama as President had not tried to control the narrative.

I do know why he was not out there from Day 1 on the stomp? I don't know why the following week he did not hold a prime time speech in which he laid out the fact that the price of doing noting is a Great Depression.

Instead, he choose the argument that works best for politics as usual. This is why the whole "we need 60" argument pisses me off. It's a lie. Not because we are clear about the rule. That is also unclear. No, what makes it a real lie for me is that we are compromised not because we need to compromise but because he did not use the role of his office and his political capital to do what was necessary when it counted.

he and some of his supporters (I support him but not on  this) want to pretend we live in a pre Fall 2008 world in which our world did not turn upside down. Calm is great once you have defined the urgency. What I am getting from him is a bit of indifference. That bothers me.

And as for the use of the word "depression" it's because of  same stupid mentality you see here with some of the posters. they refuse to address reality. To them "reality" is DC.  they can rationalize anything. Hell, read half the comments at Daily Kos.

Reality is not that one day things may get so bad that DC and the way things have been done for the last 40 years may not be relevant anymore.

Here's the problem as i see it- he got nominated as one thing. He ran an okay compaign in the GE against a real nutball in the middle of a total economic collapse. He's still acting as that guy who wrote some books that folks like. He's not stepping up to the plate yet.

I agree there are things we can do to turn it around. I am not convinced these are the people - his staff to do it. To do that you need people who are willing to tell obama that his natural precaution is not only a "mistake" but potentially fatal to the country.

by bruh3 2009-02-08 08:01PM | 0 recs
Re: Well, you just crossed a line, then...

follow up

I forgot to mention. The we need 60 lie is based on the fact he did not get the American people involved enough to give him what he claimed he needed. Why choose compromise for an emergency of you have a better set of tools available called teh American voters, your activist base and high polling numbers? Why- because you are too cautious and afraid to take risk that will expend political capital. That's why 60 is a lie. It's used as a hammer to claim we needed to compromise rather than as a way for use to hammer the GOP through public sentiment into getting what we wanted.

by bruh3 2009-02-08 08:05PM | 0 recs
Re: You're either stupid or ignorant

The lie is pretending that this defines how you get those votes. You continue to lie even now by pretending a) that the rules which are Senatoral rules (not laws) are certain and b) that it defines what strategy Obama had to take. It's the last part that's the real life. That's why  you only ever mention number. You have nothing else to rationalize what you are saying.

by bruh3 2009-02-08 09:56PM | 0 recs

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