07 February 2009

Buying experiences, not possessions, leads to greater happiness

Can money make us happy if we spend it on the right purchases? A new psychology study suggests that buying life experiences rather than material possessions leads to greater happiness for both the consumer and those around them. The findings will be presented at the Society for Personality and Social Psychology annual meeting on Feb. 7.

The study demonstrates that experiential purchases, such as a meal out or theater tickets, result in increased well-being because they satisfy higher order needs, specifically the need for social connectedness and vitality -- a feeling of being alive.

Spending vs. Tax Cuts: Everything You Need to Know in One Chart

This is pretty excellent. It's a chart, created by Paul Rosenberg at Open Left, that combines data from Moody's Economy.com and Dean Baker's Center for Economic Policy and Research. It shows the return on investment for different stimulus options.

A Way To Revive Spending

By Dan Newman
Saturday, February 7, 2009; A13

Last weekend, I stood outside the shuttered doors of a favorite local restaurant. As a small-business owner myself, I can only imagine how hard it was for those people to hang that out-of-business sign. I can also imagine the owners of that business sharing my opinion on what America needs most, and that surely isn't tax cuts.

You wouldn't know that from disputes in the Senate this week, where debate hinged on further tax breaks, despite their bulk. At $275 billion, tax cuts from the House bill were already twice the size of any spending project, and now the Senate has suggested $104 billion more. To keep the package closer to the requested $800 billion, several eleventh-hour compromises required reduced infrastructure spending, but not one suggested scaling back tax cuts. Indeed, Sen. John McCain's alternative demanded still more breaks for business.

Fannie Mae’s Last Stand

Many believe the government-backed mortgage giants known as Fannie Mae and Freddie Mac were major culprits in the economic meltdown. But, for decades, Fannie Mae had been under siege from powerful enemies, who resented its privileged status, its hard-driving C.E.O.’s, and its huge profits. Surveying Fannie’s deeply dysfunctional relationships with Congress, the White House, and Wall Street, the author tells of the long, vicious war—involving most of Washington’s top players—that helped propel one of the world’s most successful companies off a cliff.

by Bethany McLean February 2009

The chairman of the universe.”

“Washington, D.C.’s Medici.”

“The face of the Washington national establishment.”

“One of the most powerful men in the United States.”

All those phrases were used to describe a man you may never have heard of: Jim Johnson, the C.E.O. of mortgage giant Fannie Mae in the 1990s. Fannie was then one of the largest, most profitable companies in the world, with a stock-market value of more than $70 billion and more earnings per employee than any other company in America. (By comparison, G.M. at its peak, in 2000, was worth only $56 billion.) On one level, Johnson, now 65 years old, was just another businessman with a lot of money and multi-million-dollar houses in desirable locations from D.C. to Sun Valley, Idaho, to Palm Desert, California. Chairman of D.C.’s premier arts venue, the Kennedy Center, and one of its top think tanks, the Brookings Institution, Johnson was out “wearing white-tie and black-tie every night,” says Bill Maloni, Fannie’s former chief lobbyist. “Everyone wanted a little bit of Jim.”

Plunder and Blunder; How the 'Financial Experts' Keep Screwing You

By Dean Baker, PoliPoint Press
Posted on February 7, 2009, Printed on February 7, 2009
http://www.alternet.org/story/125421/

Editor's Note: The following is an excerpt from Plunder and Blunder: The Rise and Fall of the Bubble Economy by Dean Baker, published by PoliPoint Press, 2009.

The stock market and housing bubbles were the central features of the U.S. economy over the last 15 years. The stock bubble propelled the strongest period of economic growth since the late 1960s. The housing bubble lifted the economy from the wreckage of the stock bubble and sustained a modest recovery, at least through 2007. However, financial bubbles by definition aren't sustainable, and when they collapse, they cause enormous social and economic damage.

The economy had no problem with financial bubbles during its period of strongest and most evenly shared growth, the years from 1945 to 1973. It only became susceptible to bubbles after the pattern of growth had broken down  -- when most workers no longer shared in the benefits of productivity growth, and businesses no longer routinely invested to meet increased demand based on growing consumption. We don't have enough evidence to say that bubbles are a direct outgrowth of inequality, but, again, we do know that bubbles weren't a problem when income was more evenly distributed.

Hawks gunning for more military money

By Jim Lobe

WASHINGTON - Despite a shrinking national economy and a record defense budget, United States neo-conservatives and other right-wing hawks are mounting a spirited - if misleading - campaign to persuade Congress that the military should get a bigger slice.

They are calling on Congress and President Barack Obama to boost military spending next year even beyond the projections made by the administration of former president George W Bush as to what would be needed.

06 February 2009

Katha Pollitt: The Kindness of Strangers

It's hard to believe, but there was a time not so long ago when charity was going to save the world. The right argued for a "compassionate conservatism" that would transfer the care and feeding of the poor from government to churches, while liberals, who saw government funds for good works shrinking, increasingly relied on the kindness of foundations and NGOs. Bill Gates, George Soros and other titans became masters of a burgeoning nonprofit universe, donating huge sums for healthcare, education, antipoverty programs and the bolstering--or creation--of "civil society" around the world. Bono was its troubadour and Slate, with its annual list of the sixty most munificent donors, was its scorekeeper. Bill Clinton, who famously proclaimed "the era of big government is over," was its impresario.

That philanthropic agendas might be skewed by pet enthusiasms or whims or ego was but a detail. Indeed, Warren Buffett was regarded as a mystifyingly self-abnegating saint because he gave $31 billion to the Gates Foundation instead of starting his own. Another detail: the use of philanthropy to mute criticism. Philip Morris used big donations to the arts to prettify its tobacco-stained corporate image. Rick Warren won acceptance, even from some progressives, for his work in Africa, even though that work also includes heavy proselytizing and alliances with pastors who stage condom bonfires and preach that faith in Jesus will cure HIV.

Fear and Loathing in Davos

by Joseph E. Stiglitz

For 15 years, I have attended the World Economic Forum in Davos. Typically, the leaders gathered there share their optimism about how globalisation, technology and markets are transforming the world for the better. Even during the recession of 2001, those assembled in Davos believed that the downturn would be short-lived.

But this time, as business leaders shared their experiences, one could almost feel the clouds darkening. The spirit was captured by one speaker who suggested that we had gone from "boom and bust" to "boom and Armageddon". The emerging consensus was that the International Monetary Fund (IMF) forecast for 2009, issued as the meeting convened, of global stagnation - the lowest growth in the post-war period - was optimistic. The only upbeat note was struck by someone who remarked that Davos consensus forecasts are almost always wrong, so perhaps this time it would prove excessively pessimistic.

In Washington, Public Policy and Private Wealth Are Hopelessly Tangled

Posted on Feb 5, 2009

By William Pfaff

Barack Obama in Washington reminds one of Diogenes in Athens, with his lantern in search of an honest man. They seem harder to find than the candidate Obama thought when he promised a Cabinet unsullied by business lobbyists and other peddlers of sectarian interests. Surely he can’t have thought the lobbyists all Republicans—he’s been around Washington long enough to know better.

Among Democrats, he stumbles on liberals who don’t pay Social Security on their immigrant household help. What a surprise. Then on former Democratic Sen. Tom Daschle, who proved to have a rather bigger problem.

Financial Times Says Fair Traders Are Beginning to Win on Policy

Coming from the Financial Times - the paper of record for Big Money - this story [1] is really an incredible sign that the progressive fair trade movement is gaining real ground and winning the broader political debate:

The most striking thing about the debate within Washington is how long the measures took to get noticed – and how little they are perceived as a protectionist act...The dwindling band of free-trade Democrats on Capitol Hill has been almost completely silent...

Looking at the political environment and Mr Obama’s own journey to the White House, perhaps that is not surprising. Along with his well-known criticisms of the effect on jobs and wages of deals such as Nafta, Mr Obama’s campaign singled out Buy American as a symbol of economic patriotism.

TARP is Welfare; Control It

Summary:

A decade or so ago, some states gave welfare recipients food stamp debit cards that failed to function for excluded items, like cigarettes and alcohol. That’s what America needs for Wall Street.

A decade or so ago, some states gave welfare recipients food stamp debit cards. Welfare mothers could use them to buy groceries with plastic, just like virtually everybody else in the check out line. Plastic made accounting easier for clerks because the debit cards failed to function for excluded items like cigarettes and alcohol.

Obama warns lawmakers that 'catastrophe' looms

WASHINGTON — President Barack Obama warned lawmakers Thursday that the economic crisis could become a "catastrophe" unless they stop bickering and act, while the Senate's Democratic leader predicted that the president's economic-stimulus package will pass.

"Do we have the votes? We believe we do," said Senate Majority Leader Harry Reid of Nevada.

Paul Krugman: On the Edge

A not-so-funny thing happened on the way to economic recovery. Over the last two weeks, what should have been a deadly serious debate about how to save an economy in desperate straits turned, instead, into hackneyed political theater, with Republicans spouting all the old clichés about wasteful government spending and the wonders of tax cuts.

It’s as if the dismal economic failure of the last eight years never happened — yet Democrats have, incredibly, been on the defensive. Even if a major stimulus bill does pass the Senate, there’s a real risk that important parts of the original plan, especially aid to state and local governments, will have been emasculated.

Bush overpaid banks in bailout, watchdog says

WASHINGTON – The Bush administration overpaid tens of billions of dollars for stocks and other assets in its massive bailout last year of Wall Street banks and financial institutions, a new study by a government watchdog says.

The Congressional Oversight Panel, in a report released Friday, said last year's overpayments amounted to a taxpayer-financed $78 billion subsidy of the firms.

The findings added to the frustrations of lawmakers already wary of the $700 billion rescue plan, known as the Troubled Asset Relief Program. Congress approved the plan last fall, but members of both parties criticized spending decisions by the Bush administration and former Treasury Secretary Henry Paulson.

Naomi Klein: Public Revolt Builds Against Rip-off Rescue Plans for the Economy

By Naomi Klein, The Nation. Posted February 6, 2009.

Governments that respond to a crisis created by free-market ideology with the same bad ideas will not survive to tell the tale.

Watching the crowds in Iceland banging pots and pans until their government fell reminded me of a chant popular in anti-capitalist circles in 2002: "You are Enron. We are Argentina."

Its message was simple enough. You--politicians and CEOs huddled at some trade summit--are like the reckless scamming execs at Enron (of course, we didn't know the half of it). We--the rabble outside--are like the people of Argentina, who, in the midst of an economic crisis eerily similar to our own, took to the street banging pots and pans. They shouted, "¡Que se vayan todos!" ("All of them must go!") and forced out a procession of four presidents in less than three weeks. What made Argentina's 2001-02 uprising unique was that it wasn't directed at a particular political party or even at corruption in the abstract. The target was the dominant economic model--this was the first national revolt against contemporary deregulated capitalism.


05 February 2009

David Corn: Obama Needs To Get Outside the Beltway

President Barack Obama needs to get outside the Beltway.

Not necessarily by hopping on Air Force One (which he has yet to use), but by reaching out to the millions of Americans who are rooting for him in order to obtain their active support for his economic stimulus plan. In the first fortnight of his presidency, Obama has mainly played an inside game, as he has tried to win congressional approval of an economic recovery package. When the nearly $900 billion measure was being considered in the House, Obama largely deferred to House Democrats, who shoved many long-yearned-for spending initiatives into the bill. Thus, a 647-page creature was born, which included provisions easy for Republicans and conservatives to deride and oppose.

A Guide to Panetta’s Confirmation Hearing

CIA Nominee Can Expect Tough Questions

By Spencer Ackerman
2/5/09 5:00 AM

It’s been a rough month for Leon Panetta. First, in early January, President Obama’s choice to become the next director of the CIA met swift opposition from Sen. Dianne Feinstein (D-Calif.), the chairwoman of the Senate Select Committee on Intelligence, owing to Panetta’s lack of experience with the intelligence community. That ended in part because Panetta vowed to keep Steve Kappes, the well-regarded deputy director of the CIA, in his position — which in turn sparked a round of speculation as to whether Kappes, and not Panetta, would be the real power at Langley. Then the lateness of his nomination announcement — Obama was probably going to appoint ex-CIA senior official John Brennan to the job originally, and then had trouble finding a nominee after Brennan dropped out under fire from the left — delayed his confirmation hearing before Feinstein’s panel for a week because he couldn’t finish the necessary pre-hearing paperwork in time. If that wasn’t enough, last week his mother-in-law passed away.

Still Trying to Clear Nixon’s Name

Posted on Feb 4, 2009

Two Truthdig contributors are under siege by an “independent historian” and The New York Times. If that sounds preposterous, just wait until you see what made it onto the front page. Last Sunday, the paper of record cited an unpublished article contending that historian Stanley Kutler deliberately altered transcripts of Nixon’s secret tapes in order to protect John Dean.

To what end? Kutler explains that it’s the latest salvo in a decades-long effort to create “Watergate Without Nixon.” As Dean puts it, “these Watergate revisionists elevated by The Times seek to create a false history.”

"We're Falling Without a Parachute"

Three economists have laid out in stark terms what the stakes are for the economy in the economic recovery debate now going on in the Senate—and brought home just how dangerous conservative obstructionist rhetoric really is.

"This cannot be allowed to fail," Alan Blinder, economist at Princeton University, said during a conference call organized by Americans United for Change. He later added, when describing the state of the economy, "We're falling without a parachute right now."

Sound The Alarm! Peterson Foundation Assault On "Entitlements"

By Roger Hickey

Created 02/05/2009 - 11:14am

At a press conference today by Wall Street mogul Peter Peterson, he and his invited speakers informed Americans who are losing their jobs and homes in record numbers that our nation’s biggest problem is the national deficit—and that the solution is to cut Social Security and Medicare.

We don't need this campaign [2]. What the nation needs right now is an increase in the federal deficit to stimulate economic recovery and to create and save jobs. Yes, President Obama inherited a large budget deficit and national debt due to George W. Bush’s reckless tax cuts for the very wealthiest Americans, like Peterson. Economist Dean Baker has pointed out that Peterson and his partners made a fortune running a Wall Street private equity fund, much of which he was able to shelter from normal taxation through the "fund managers" tax break.

Economic Know-Nothingism

The GOP's nutso claim that government spending doesn't create jobs.

There are three options government can pursue when the economy goes south. First, the Fed can cut interest rates, buy up assets, and extend credit, all of which the central bank has already done. Second, Congress can cut taxes on businesses and consumers in the hope they will spend more. The first effort—last year's tax rebates—didn't have the intended effect since consumers used much of the windfall to pay down debt or save. The substantial tax cuts that will be part of the Obama stimulus package would likely have a similarly muted effect. Businesses and consumers, facing a tough credit environment and needing to repair their balance sheets, will likely use proceeds from the tax cuts to tide themselves over. The third option is for the government to directly purchase goods and services, to substitute the demand that consumers and businesses aren't providing.

Bailed-Out Firms Have Tax Havens, GAO Finds

By Carol D. Leonnig
Washington Post Staff Writer
Saturday, January 17, 2009; D01

Most of America's largest publicly traded corporations -- including several that are receiving billions of dollars from U.S. taxpayers to finance their recovery -- have set up offshore operations that could help them avoid paying U.S. taxes on their profits, a government study released yesterday found.

American International Group, Bank of America, Citigroup and Morgan Stanley are among the companies that are getting bailed out by U.S. taxpayers while having subsidiaries in locations where they can avoid paying U.S. taxes, according to the Government Accountability Office.

The Action Americans Need

By Barack Obama
Thursday, February 5, 2009; Page A17

By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression. Millions of jobs that Americans relied on just a year ago are gone; millions more of the nest eggs families worked so hard to build have vanished. People everywhere are worried about what tomorrow will bring.

04 February 2009

The Troubles With Bubbles

Economists Fear Stimulus Package Aims to Return to Housing Bubble Spending Levels

By Mike Lillis 2/4/09 9:25 AM

Last July, as the extent of the nation’s housing collapse was just being realized on Wall Street, The Onion ran the classic headline: “Recession-Plagued Nation Demands New Bubble to Invest In.”

The device, of course, was satire. But the clever message raises a question that some experts are encouraging lawmakers to consider as they haggle this month over legislation to buoy the sinking economy: How to measure the bill’s success in the wake of an economy propped up by an inflated housing market? Some economists fear the goal is an attempt to return to the same unsustainable levels of consumer spending the housing bubble allowed.

America’s ‘Strong Commitment to Error’

Posted on Feb 3, 2009

By William Pfaff

John Kenneth Galbraith, the distinguished and irreverent Canadian-born but U.S.-nationalized economist, observer of American national mores, preconceptions and faults, and a sometime U.S. government official, wrote the following of his government experience in Washington and New Delhi in the 1960s.

He was not the only one, he said, who fell afoul “of a major feature of our foreign policy. That is its institutional rigidity, which holds it on course even when it is visibly wrong. So it was on Vietnam, as is now accepted. So it was on ... military alliances with the poor lands. ... So it was [and continues to be] on such matters as the enlargement of NATO or the continuing trade and travel sanctions on Cuba, or, as this is written [in 1999], on a sensible response to the more liberal tendencies now evident in Iran. ... [It is] a rigidity with its strong commitment to error.”

Bank On It No More

What will the Obama administration do with the banks that are now on life support? Pump in more taxpayers' money to keep the zombies alive? Radical surgery? Pull the plug? The decision - with new announcements rumored for next week — is critical to any recovery plan.

We're not really invited to this discussion. This is the province of experts, of bankers and financiers. Even economists who opine about most everything don't understand finance. But, we better bust into it because literally trillions of taxpayer dollars are at stake. And we've all learned that a lot more gets stolen with a fountain pen than with a gun.

Privatize Social Security?!

Can we finally kill this terrible idea?

By Eliot Spitzer

"We told you so" is just about the most annoying sentence one can utter. But when it comes to the debate over Social Security, this is a moment for Democrats to say: We told you so. Use your time machine to travel back four years: In his 2005 State of the Union address, delivered during a period of economic and stock-market growth, President Bush made the privatization of Social Security the centerpiece of his domestic agenda for his second term.

The grand domestic project of the Bush administration was to repeal the two major components of New Deal ideology: the regulatory apparatus of the federal government and the social contract embodied by social welfare programs—Social Security, Medicare, Medicaid. The effort to roll back the regulatory agencies—the SEC, EPA, OSHA—and place all faith in an unregulated market has been well-chronicled, as have been the ensuing market collapse and suffering. The effort to repeal Social Security, which is what privatization amounts to, was to have been followed by private health savings accounts.

Gallery: Putting human consumption into perspective

What does the oil used in the US in two minutes actually look like? Or a million disposable plastic cups? Photographer Chris Jordan illustrates the staggering scale of human consumption

Thomas Frank: Wall Street Bonuses Are an Outrage

The public sees a self-serving system for what it is.

By THOMAS FRANK

Just a mere $18.4 billion in Wall Street bonuses, and suddenly the entire country is like Kansas in the 1890s, raising hell instead of corn, screaming for revenge on money power that has done us so wrong while rewarding itself so generously.

The outburst of populist rage is particularly alarming when we consider how easily such sentiments were managed just a short while ago. Americans have known about mounting inequality and king-sized Wall Street bonuses for years. But we also had an entire genre of journalism dedicated to brushing the problem off.

The Saga of the Golden Fleece: Why America Needs to Learn to Love Government Spending Once Again

Summary:

When every responsible expert agrees that a massive program of government spending is the only imaginable way to save America from ruin, the mere whisper of the word "pork" makes politicians cower. How did that happen? One reason is a Democrat named William Proxmire.

"No one shoots Santa Claus."

For generations of American politicians, that was as sturdy a truism as "what comes up must come down" and "'i' before 'e' except after 'c.'" For Democrats, and especially for liberals, the injunction was intoned with glee; for conservatives, with agonized pain; and for those somewhere in between, like Richard Nixon with matter-of-fact resignation (which was the spirit of his remark that we are all Keynesians now).

The GOP’s Anti-Stimulus Manifesto

How One Book Powers Republican Opposition to Dems' Economic Recovery Plan

By David Weigel 2/3/09 3:50 PM

For five years, classical liberal columnist and Council on Foreign Relations fellow Amity Shlaes delved deeply into the history of the Great Depression. She had been an op-ed editor at the Wall Street Journal, a WSJ columnist reuniting Germany, and a columnist for the Financial Times. She wrote two books, on German national identity and on America’s tax policy, critiqued from the right. Both sold well, but neither one foreshadowed the success she’d have with her research on the New Deal.

The Forgotten Man: A New History of the Great Depression, published in 2007, has become one of the most influential books of the decade. Republicans and conservative activists have read the book, absorbed its lessons, and deployed them in the current debate over how to tackle the greatest economic crisis since the 1930s. Newt Gingrich has read it. So has Rep. Paul Ryan (R-Wis.), the ranking Republican on the House Budget Committee. And so has Sen. John Ensign (R-Nev.), the head of the Senate Republican Policy Committee; according to his spokesman, the senator has also circulated the book among his colleagues.

David Cay Johnston: More Corporate Tax Breaks Will Not Stimulate the Economy

“Getting the economy back on its feet, giving taxpayers a break, saving your retirement fund and your kid’s college tuition? Done. And it won’t cost you a penny.” David Cay Johnston outlines his own “fiscal therapy” to end the economic crisis.
Guest:

David Cay Johnston, Pulitzer Prize-winning investigative journalist. He has the cover story in the latest issue of Mother Jones magazine, titled ‘Fiscal Therapy’ His most recent book is titled Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill). He is a former reporter at the New York Times.

Republicans Clearly Are Willing to Let This Country Collapse if They Think it Will Win Them Elections

By Doug Kreeger, AlterNet
Posted on February 4, 2009, Printed on February 4, 2009
http://www.alternet.org/story/125178/

Last week, we witnessed how the Republicans will help serve this country in the worst crisis since the Great Depression.

By standing together in opposition to the stimulus package, they showed the world that they haven't at all joined the momentum of the new administration, rather they are still playing politics and are focused on the 2010 elections. Their objections to the stimulus have nothing to do with trying to solve this crisis.

The bogus side of bonus culture

By Julian Delasantellis

In the 1987 movie Wall Street, union leader Carl Fox (Martin Sheen) sees through the nefarious machinations of evil corporate raider Gordon Gekko (Michael Douglas) in a way that even his own son Bud ( Charlie Sheen), starstruck by ambition and the wealth and luxury of Gekko's lifestyle, cannot. At a meeting where Gekko offers a corporate buyout that would supposedly save Carl Fox's floundering airline, all but Carl are taken in by Gekko's supposed beneficence.

"There came into Egypt a Pharaoh who did not know," Carl warns from the Book of Exodus. "The rich been doing it to the poor since the beginning of time. The only difference between the pyramids and the Empire State Building is the Egyptians didn't allow unions."

03 February 2009

Glenn Greenwald: The "defense cut" falsehood from The Washington Post and Robert Kagan

Even for the standard-less Washington Post Op-Ed page, which will publish any version of neocon claptrap regardless of how factually false it is, this is rather striking:

Barack Obama campaigned on a platform of increased defense spending. True to his word, Obama's 2010 fiscal year budget calls for $527 billion in defense spending (not including the costs of Iraq and Afghanistan). That is more than the U.S. allocated for defense in 2009 and equals what the Bush administration budgeted for 2010:

The Obama administration has given the Pentagon a $527 billion limit, excluding war costs, for its fiscal 2010 defense budget, an official with the White House’s Office of Management and Budget said Monday.

If enacted, that would be an 8 percent increase from the $487.7 billion allocated for fiscal 2009, and it would match what the Bush administration estimated last year for the Pentagon in fiscal 2010.

So Obama proposes that the U.S. spend $40 billion more this year than it spent last year.

The Benefits of Subprime Loans: Homeownership Back to 2000 Levels

By Mary Kane, 2/3/09 11:01 AM

Remember how Congress and former Federal Reserve Chairman Alan Greenspan refused to regulate subprime loans, and joined the mortgage industry in defending them as a way to extend the benefits of homeownership to all? Turns out it was all for nothing, really. New Census figures out today show home ownership rates returning to their levels of eight years ago, before the housing boom took off and anyone with a pulse qualified for a mortgage, Calculated Risk says:

So much for the homeownership gains of the last 8+ years. Gone.

Specifically, Census figures show home ownership rates in the fourth quarter of 2008 declining to 67.5 percent, about the same level as in late 2000.

Fannie Mae's Overpaid Board: Can President Obama Turn Words Into Action?

Monday 02 February 2009
by: Dean Baker, t r u t h o u t | Perspective

Last week, President Obama called it "shameful" that the bank executives, who took taxpayer money through the bailout last fall, paid themselves large bonuses. While the vast majority of the public agrees with this view, there is little that President Obama can directly do about these bonuses at this point.

However, with more bailout money on the way (probably much more), President Obama will be in a position to seriously constrain executive compensation in the future at the banks that are subsisting on government largess. However, before we even get to Round II of the bailout, there is some quick business that he should attend to right here in Washington.

The "FDR Failed" Myth

Summary:

Contrary to the anti-government myths and ideology-driven arguments of conservatives like Amity Shlaes, the facts show FDR’s New Deal quickly brought rapid growth to the nation's economy during the Great Depression.

The current recession will soon become the longest since the Great Depression. The U.S. is losing over 500,000 jobs each month, and a new president, elected overwhelmingly, is pleading for unity and urgent action on a scale not seen since the New Deal.

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.

Dozens of secret Bush surveillance, executive power memos found; Could be made public

Details about more than three dozen secret memoranda written by Bush Administration officials now sit atop a chart created by a public interest reporting group. The memos track new details about dozens of secret Bush Administration legal positions on torture, detention and warrantless wiretapping.

Meanwhile, Obama's freshly-confirmed Attorney General Eric Holder told senators that he was open to declassifying White House legal memos if no support for their original classification could be found, signaling a likely showdown with former President George W. Bush over executive privilege.

WSJ ignored effective tax rate in claiming U.S. corporate tax rate "is higher than in all of Europe"

Summary: The Wall Street Journal misleadingly claimed in an editorial that the U.S. corporate tax rate "is higher than in all of Europe." In fact, according to the Government Accountability Office, "Statutory tax rates do not provide a complete measure of the burden that a tax system imposes on business income." Additionally, World Bank and GAO data indicate that the U.S. effective corporate tax rate is lower than 35 percent and lower than several developed -- including some European -- economies.

Senate's stimulus bill is nothing like Roosevelt's New Deal

The last time the government came riding to the economy's rescue in a massive way, it paid for much more than building roads, sidewalks and bridges, although it certainly did plenty of that.

In the 1930s, an alphabet soup of federal agencies funded an array of programs to boost the economic well-being and psyche of the beleaguered U.S. population.

Electricity from straw

Researchers have developed the first-ever biogas plant to run purely on waste instead of edible raw materials – transforming waste into valuable material. The plant generates 30 percent more biogas than its predecessors. A fuel cell efficiently converts the gas into electricity.

$40 billion increase in proposed Pentagon budget spun as ‘defense cuts’ by right wing

The Obama administration is reportedly capping the Pentagon’s 2010 budget for non-war spending at $527 billion, a level previously recommended by Bush administration officials. Despite the fact that this will represent an 8 percent increase over 2009 funding levels, conservativecommentators are painting the cap as a budget cut. CQ’s Josh Rogin reports:

Some Pentagon officials and congressional conservatives are already trying to portray the OMB number as a cut by comparing it to a $584 billion draft fiscal 2010 budget request compiled last fall by the Joint Chiefs of Staff.

Stiglitz Criticizes Bad Bank Plan as Swapping ‘Cash for Trash’

Feb. 1 (Bloomberg) -- Nobel laureate Joseph Stiglitz said any decision by President Barack Obama to establish a so-called bad bank to rid financial companies of toxic assets risks swelling the national debt.

Obama’s administration is moving closer to buying the illiquid assets currently clogging bank’s balance sheets and preventing them from boosting lending, people familiar with the matter said this week.

Crisis looms at the Pentagon

By Chalmers Johnson

Like much of the rest of the world, Americans know that the United States automotive industry is in the grips of what may be a fatal decline. Unless it receives emergency financing and undergoes significant reform, it is undoubtedly headed for the graveyard in which many American industries are already buried, including those that made televisions and other consumer electronics, many types of scientific and medical equipment, machine tools, textiles and much earth-moving equipment - and that's to name only the most obvious candidates. They all lost their competitiveness to newly emerging economies that were able to outpace them in innovative design, price, quality, service and fuel economy, among other things.

02 February 2009

It’s Not Going to Be OK

by Chris Hedges

The daily bleeding of thousands of jobs will soon turn our economic crisis into a political crisis. The street protests, strikes and riots that have rattled France, Turkey, Greece, Ukraine, Russia, Latvia, Lithuania, Bulgaria and Iceland will descend on us. It is only a matter of time. And not much time. When things start to go sour, when Barack Obama is exposed as a mortal waving a sword at a tidal wave, the United States could plunge into a long period of precarious social instability.

At no period in American history has our democracy been in such peril or has the possibility of totalitarianism been as real. Our way of life is over. Our profligate consumption is finished. Our children will never have the standard of living we had. And poverty and despair will sweep across the landscape like a plague. This is the bleak future. There is nothing President Obama can do to stop it. It has been decades in the making. It cannot be undone with a trillion or two trillion dollars in bailout money. Our empire is dying. Our economy has collapsed.

Barney Frank: The largest spending bill in history is going to turn out to be the war in Iraq

On This Week with George Stephanopoulos today, Rep. Barney Frank points out the hypocrisy of Republicans carping about the stimulus package's costs while having unswervingly supported the Iraq War these past eight years, and how it has turned into the biggest black hole for government dollars ever seen:

Wash. Times echoes recovery bill falsehoods on undocumented immigrants, ACORN

Summary: The Washington Times falsely claimed that the House-passed economic recovery bill "allows payment of checks to undocumented immigrants," and repeated the falsehood that "much" of the $4.19 billion allocated for a Neighborhood Stabilization Program in the bill "might go to ACORN." In fact, under the bill, undocumented immigrants without Social Security numbers are not eligible for tax credits, and the bill does not mention ACORN or otherwise single it out for funding.

Renditions Buffoonery

By Scott Horton

In a breathless piece of reporting in the Sunday Los Angeles Times, we are told that Barack Obama “left intact” a “controversial counter-terrorism tool” called renditions. Moreover, the Times states, quoting unnamed “current and former U.S. intelligence figures,” Obama may actually be planning to expand the program. The report notes the existence of a European Parliament report condemning the practice, but states “the Obama Administration appears to have determined that the rendition program was one component of the Bush Administration’s war on terrorism that it could not afford to discard.”

NBC's David Gregory falsely claimed Social Security will "pay out more than it's taking in by 2010"

Summary: NBC's David Gregory falsely asserted that Social Security will "pay out more than it's taking in by 2010." In fact, according to the 2008 Social Security trustees' report, Social Security will not exceed the income rate before 2017 and will be able to pay full benefits until 2041, after which it will be able to cover between 78 and 75 percent of scheduled benefits through the end of the 75-year period the report's long-range projection covered.

34 GOP Senators Oppose the Recovery Plan: In Their Own Words

Sun Feb 01, 2009 at 08:26:45 AM PST

Originally posted at The Seminal. Thanks for all of the recs (and the front page link, McJoan).

Just as House Republicans did, GOP Senators are now pretending they'll vote for the economic recovery package if only those unreasonable Democrats would toss them a bone or two. For the most part, they are lying. They will kick and scream for every concession possible, creating a new faux outrage every few hours. Foolishly, Democrats will likely cave to some of these demands. Then, Republicans will vote against the bill overwhelmingly. It is difficult to imagine anything more sinister than this. They are essentially weakening the bill as much as possible, making it less likely to work. Then they'll bail at the last second, in case it does fail, so they can point their fingers and assign all of the blame to Democrats.

Obama's Recession Fix Fits Economists' Models

Sunday, February 1, 2009; Page F01

In the fight over the stimulus plan, Republicans are demanding more tax cuts as the best way of lifting the economy fast. "We can't borrow and spend our way to prosperity," said House Minority Leader John A. Boehner (R-Ohio).

Well, maybe we can -- or at least begin. In a crisis, government spending has to be the first responder, with tax cuts coming up behind.

Economic Policy Could Scuttle Obama’s Good Start

Posted on Jan 27, 2009

By Robert Scheer

Only a week into the new administration, and yet there is this nagging thought that Barack Obama’s legacy already hangs in the balance. Sounds absurd, I know, given the brief time, but his early response to the financial meltdown is just that important. Despite a terrific start in so many directions, Obama is up against an economic crisis that, although not of his making, will, if handled improperly, spell his—and the nation’s—undoing.

Obama is in these early weeks making trillion-dollar decisions that will cast the die for the rest of his promising agenda. Unfortunately, while the new president has already proved to be a brilliant and super-competent agent of change in so many ways, in matters of economic policy he has relied excessively on the financial “experts” who helped get America into this mess.

Winning strategy? GOP stakes its future on opposing Obama

WASHINGTON — Has the Republican Party, whose presidential candidate and dozens of congressional hopefuls were rejected by voters in November, already been reinvigorated by its opposition to President Barack Obama?

Party officials think so. They proudly point to the fact that all the GOP members of the House of Representatives stuck together last week and voted against the Democrats' $819 billion economic stimulus plan, and to how the Senate, which is due to begin debate on the plan Monday, is full of similarly skeptical Republicans.

Paul Krugman: Bailouts for Bunglers

Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government — but the president says some very harsh things about you before forking over the cash.

Am I being unfair? I hope so. But right now that’s what seems to be happening.

Just to be clear, I’m not talking about the Obama administration’s plan to support jobs and output with a large, temporary rise in federal spending, which is very much the right thing to do. I’m talking, instead, about the administration’s plans for a banking system rescue — plans that are shaping up as a classic exercise in “lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.

Is the Entire Bailout Strategy Flawed? Let's Rethink This Before It's Too Late

By Joseph Stiglitz, CNN
Posted on February 2, 2009, Printed on February 2, 2009
http://www.alternet.org/story/124166/

America's recession is moving into its second year, with the situation only worsening.

The hope that President Obama will be able to get us out of the mess is tempered by the reality that throwing hundreds of billions of dollars at the banks has failed to restore them to health, or even to resuscitate the flow of lending.

Every day brings further evidence that the losses are greater than had been expected and more and more money will be required.

01 February 2009

Conservatives' Profoundest Fear: What if Obama succeeds?

Memo to Conservatives: You failed and are now irrelevant.

OK, I expect you'll ignore this memo like our previous ones. Nate Silver is right: Republicans are caught in a death spiral, and it's going to be awhile yet before they hit bottom.

Nowhere is it more self-evident than in the broad acknowledgment this week that the GOP is being led by a bilious radio talk-show host, and the ongoing fact that its most popular politician is a wingnutty, malinformed Alaska governor.

Daily Kos: Why the Stimulus is Needed

Sat Jan 31, 2009 at 05:53:28 AM PST

One point becomes clear when looking at the current state of the US economy: without a stimulus we are in deep trouble. Consider the following points from the latest FOMC statement from the Federal Reserve:

Information received since the Committee met in December suggests that the economy has weakened further. Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending. Furthermore, global demand appears to be slowing significantly. Conditions in some financial markets have improved, in part reflecting government efforts to provide liquidity and strengthen financial institutions; nevertheless, credit conditions for households and firms remain extremely tight. The Committee anticipates that a gradual recovery in economic activity will begin later this year, but the downside risks to that outlook are significant.

Rising bond market tensions bode ill for Obama

Bond market tensions have been rising since the inauguration of President Barack Obama, highlighting worries about the new administration's plans for massive debt issuance and a tough stand on trade with China.

An unusual jump in bond yields could mean the US government will be forced to pay higher rates on the trillions of dollars in new bonds to finance economic rescue efforts, or worse, lead to a loss of confidence in the Treasury market, say analysts.

The Big Con Back to the Seventies (2): This One's for the True Blues Only

Anyone who follows my work closely knows that one of my obsessions is conservative zombie lies about Vietnam: stories made up, often at the highest levels, by right-wing moutebanks to spread the propaganda that VIetnam was a noble and successful venture until liberals in Congress came along and screwed it up. The granddaddy of the lies is the one about how South Vietnam could have survived as a free and independent country after the American withdrawal in 1973, but for a vote by Congressional liberals denying aid to Saigon in 1974. This decision to deny military aid to Vietnam has been blown up in the wingnut imagination as a world-historic stab in the back, an event on par in historic importance with D-Day, Agincourt, the signing of the Declaration of Independence, possibly all rolled into one. Actually, as the facts demonstrate, [1] that decision was bi-partisan, uncontroversial, overwhelmingly popular, led by Barry Goldwater and tacitly endorsed by Nixon and Kissinger, who understood that South Vietnam could never survive as an free and independent country no matter how much money we shoveled them.

Conservationist's gift logged for profit

(01-29) 04:00 PST TENSED, IDAHO -- It's been 62 years since conservationist Virgil McCroskey donated 400 acres of timberland near this village in Idaho's panhandle to the Boy Scouts, with big ideas for a big new camp.

But don't expect any pup tents or even the faintest whiff of smoke from Camp McCroskey these days. Falling trees extinguished the campfire years ago.

Rarely used for camping, the land instead has become a moneymaker for the Inland Northwest Council of Boy Scouts. Over the past 35 years, the council has clearcut and otherwise logged parts of the gift, collecting hundreds of thousands of dollars -- some going to pay off the mortgage on council headquarters in Spokane, according to a former member of the council's directors board.

Frank Rich: Herbert Hoover Lives

HERE’S a bottom line to keep you up at night: The economy is falling faster than Washington can get moving. President Obama says his stimulus plan will save or create four million jobs in two years. In the last four months of 2008 alone, employment fell by 1.9 million. Do the math.

The abyss is widening. Of the 30 companies in the Dow Jones industrial index, 22 have announced job cuts since October. Unemployment is up in all 50 states, with layoffs at both high-tech companies (Microsoft) and low (Caterpillar). The December job loss in retailing is the worst since at least 1939. The new-home sales rate has fallen to its all-time low since record-keeping began in 1963.

What are Americans still buying? Big Macs, Campbell’s soup, Hershey’s chocolate and Spam — the four food groups of the apocalypse.

AP Investigation: Banks sought foreign workers

SANTA CLARA, Calif. – Banks collecting billions of dollars in federal bailout money sought government permission to bring thousands of foreign workers to the U.S. for high-paying jobs, according to an Associated Press review of visa applications.

The dozen banks receiving the biggest rescue packages, totaling more than $150 billion, requested visas for more than 21,800 foreign workers over the past six years for positions that included senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists. The average annual salary for those jobs was $90,721, nearly twice the median income for all American households.