While having a cabinet that presents different view points may be attractive in theory, such a cabinet almost always fails. Cabinets with like minded people tend to work better because the members work as a team. Moreover, cabinet members tend to have big egos and such members become frustrated or quit in protest when they don't get their way. Obama needs to pick people who will enthusiastically carry out his policies. If he wants different viewpoints, he can always invite Republicans over for lunch.
I studied bubbles in my economics graduate school courses and there is no consensus to your question. Some economists say that we know when we see bubbles, but we play the bubble in hopes that we are smart enough to sell before the bubble bursts. Other economists say that bubbles are more likely when we haven't experienced a bubble for a long time and are caused because the majority of investors are too inexperienced to recognize a bubble. A large group of economists deny that true bubbles exists and that what we think are bubbles are just rational reactions to market information (I disagree with this view).
I have a theory that the baby boom generation is more prone to bubbles because ever since they were born, they have been prone to faddish behavior. Historically, baby booms have been drawn into more fads than most other generations. In a sense, bubbles are really just fads. Whether it be dolls, toys, fashion, rock stars, stocks and real estate, fads are part of the baby boomer personality trait.
First, Wall Street favors Republicans so they were always going to be skeptical about the plan no matter what. Second, when it was leaked that the "toxic assets" were going to be valued by the private sector, many financial analysts thought that Larry Summers and Timothy Geithner had come up with a brilliant mechanism that would allow the private sector to value the assets. Their hopes were dashed when Geithner said that the private sector was going to be used to value the assets, but they were not sure how that was going to be done. He tried to reassure the public that they were still working on the plan. The Wall Street take was that Geithner and Summers don't know what they are doing. I suspect that it isn't as bad as Wall Street thinks, but the plan is still too timid to get us out of the woods in the near future.
I don't see Paul Krugman, Joseph Stigliz, Robert Solow, and other real progressive economists on Obama's team. Jeffery Sachs could also be used as an advisor in developing a green economy.
Obama seems to have a combination of Republicans and moderate Democrats on his team. I don't mind having centrist economists on the team, but Obama should have more progressive than Republicans as advisors.
This is a very insightful diary. Notice that the Republicans are always partisan when they are in power and bipartisan when the Democrats are in power. The Democrats are always bipartisan.
I've been following the news for decades now. I've noticed that a Republican president can dominate politics when the GOP has about 40% of Congress, while a Democratic president needs about about 70% of Congress to be Democratic. For whatever reasons, Republicans are better bargainers than Democrats. This really breaks my heart.
George W. Bush could never be man enough to admit any mistake. As for my analogy that ordinary people can make mistakes on their tax returns, you just don't get it. Your belief that low income people can be excused for making mistakes on their tax returns is totally ridiculous.
For once we have a president who admits mistakes. It must have been since JFK admitted that he messed up on the Bays of Pigs invasion that we have a president who admits mistake. The last president never could admit that we screwed up so he kept up with the screwing up behavior. So I find it refreshing that Obama was able to admit that he screwed up on the Daschle nomination.
In defense of Daschle, not many people would have known that the value of free limousine service would constitute taxable income. Some might have thought that the limousine company might be liable for gift taxes. I know people who worked as poll workers on election days who did not pay social security taxes on their stipend. So, these types of mistakes occur very often.
If the value of free limosine service is taxable income, then the value of free rides as a hitchhiker is also taxable income. So has anyone ever hitchhiked before? Did you report the value of the free ride to the IRS? Given today's cab fares, a value of a ride from suburbia to downtown is about $40. Imagine that you hitchhike to and back from work everyday for 300 days per year (my uncle did). That means you have a taxable income of $24,000. Oh boy, my uncle is in trouble. (My uncle don't even make $24,000 per year - if you don't consider the rides).
It may be impossible to find people to work in government if we can't hire people who have tax problems. For example, I worked in political campaigns, and the campaigns withheld wages for state and federal income taxes but not for social security taxes. Not a single co-worker of mine that I talked to properly calculated and paid the social security tax that they owed. All of my co-workers would be disqualified from government employment (Unless you are a specialist on bailouts). This was true for all of the people who work with me as a poll worker on election day. Not a single co-worker believed that they had to report the income on their 1040 form, let alone pay a 14 percent social security tax on the income.
In Daschle's case, how many people knew that the value of limosine service provided for free is taxable income? I would have thought that this was subject to the gift tax and not the income tax. I bet many tax lawyers and accountants would have thought that, too. May be what's needed is a simpler tax code.
It's just the nature of current Republicans. They have a rigid ideology and to them the ends justify the means in achieving their ideological goals. Thus, they will not commpromise and any show of good will Obama shows toward the Republicans will in their view be a sign of weakness and they will be further enboldened.
To the Republicans, loyalty is probably the greatest virue one can have. Thus, getting two Republican senators to vote for the stimulus plan will probably be harder than conventional wisdom would believe. Unless Obama uses more sticks (versus carrots) in getting a few Republicans to vote for his stimulus plan, the economic recovery plan will go down in defeat. Moreover, you can count on some Democrats voting with the Republicans. So it may be that the legislation in the stimulus bill will have to be put in the appropriation bills that cannot be filibustered.
Scenerio two can work to a certain extent. However, if Obama goes too far, we could end up with a Republican stimulus plan rather than a Democratic stimulus plan. Furthermore, Obama can end up like Congress and the Clinton in 1994, and get labeled as the do-nothing congress and president. In that case, the Republican game would work beautifully as they gain control of congress in 2010.
Republicans are a religious based party. Even the non-religious Republicans are religious in the sense that they have faith in free markets. Their rigid "My way or the highway" ideology is compounded by the fact that the bulk of Republican politicians belong to the Baby Boom generation, a generation that is attracted to rigid ideology.
The nation is tired of the Republicans trying to ram down their rigid ideology down their throats. their leadership has failed and they respond by becoming even more rigid.
If not a single Republican can agree to vote for the stimulus bill even after Obama's good-will concessions, then its time to take back the concessions, twist a few arms to get the 60 votes needed in the senate, and ram the bill down their throats.
The problem with Democrats is that they don't understand the Republican thought process. They assume that if they show them good will by giving in on some issues in the stimulus bill, that the Republicans will return the favor by offering compromises themselves.
Republicans don't think like Democrats. First, to the Republicans, the good will gestures are a sign of Democratic weakness. At the very least, they will hold out to get more concessions from Obama until the bill is a Republican bill rather than a Democratic bill.
Second, Republicans are an ideological based party on the issues, but pragmatic when it comes to bargaining. Conversely, Democrats are pragmatic when solving economic and social problems but are ideological when it comes to bargaining. That is, Republicans follow the axiom start high and give in only very slowly, if at all. The object of bargaining is to win. Democrats believe that the goodness in people will cause the opposition to give in when they are shown kindness. To the Democrats, the purpose of bargaining is to make everyone happy. The Republicans are pragmatic when it comes to bargaining because they believe that they must gain power at all costs to implement their ideology.
Third, because Republicans are ideologically based when it becomes to the issues, most Republicans believe that it is immoral to compromise with the Democrats. In other words, "It's my way or the highway." Yes, its obvious that they are against abortion and conservative on social issues because of their fundamentalist religious belief. But their faith in "free capitalism" is also grounded in religion. For example, giving welfare to lazy bums is immoral, and that's why Republicans oppose providing social safety nets for the poor.
I would not be surprised that no matter how much compromising and good will Obama shows to the Republicans, the result will be the same as in 1993, not a single Republican will vote for the stimulus and budget plans. I would not be surprised if Obama will be forced to put the economic stimulus plan as part of the budget plan as a way to get around the Republican fillibuster (You can't fillibuster appropriation bills).
What Obama should do is to shutdown the negotiation process when the Republicans still refuse to give in one inch. He should tell the American people that at least he tried. Then he needs to twist some arms to get the sixty votes needed to ram his original stimulus plan down the throats of the Republicans. He needs to do this quickly, because history suggests that the window of opportunity to make significant legislative change is in the first six months of the first term of a presidency.
Crush, Kill, Destroy, is what I taught my six year old nephew. We played one on one basketball on his driveway and I had to show him what it is like to be a man.
Men are strong and are the boss of the family. They are in charge because the rest are weak, and in this world, you must not show any weakness.
So I played with honor and played my heart out. I did this to show him to always play your best. But my nephew showed no heart. After the score was 300-0 he began to whine and complain, about me stepping on his feet, or about my knee accidently going into his gut. I did him good when I told him to "shut up and stop complaining." This was good medicine for him because it will teach him not to be a loser and a failer. Sure I'm almost six feet tall, and he not even four feet tall, but men overcome their obsticles. If they do not, then they deserve to become homeless when they grow up.