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Created by rnickel on Sep 18, 2009
Last updated: 12/15/09 at 01:58 PM
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By: David Sirota
The New York Times this weekend profiled my old boss Rep. David Obey (D-WI) and his efforts to force the Obama administration to change course in Afghanistan. You can -- and should -- read it here.
I worked closely with Obey on a daily basis during the darkest of the dark Bush years. And I grew to really love the guy. He is a lot of things -- prickly, intense, brilliant and loyal, all at the same time. And, to say the least, he doesn't suffer fools gladly. He's not perfect, by any stretch. But he's one of my heroes for his political stands, conviction and fearlessness, and for his humility. This is a guy who -- unlike most politicians -- does not see himself as any better than the average person, and, as you'll see in the Times piece, does not treat other politicians like they are royalty, either. And that's a good thing these days.
Despite perceptions to the contrary, evidence is mounting that the American Recovery and Reinvestment Act (ARRA), which the Obama administration and Congress enacted early this year, cushioned the recession and slowed job losses.
The nonpartisan Congressional Budget Office recently estimated that ARRA has preserved or created as many as 1.6 million jobs to date. As Mark Zandi, chief economist of Moody's economy.com, put it: "The stimulus is doing what it was supposed to do: short-circuit the recession and spur recovery."
Investments of $23 billion in renewable generation and advanced energy manufacturing included in the recovery plan will likely create 253,000 jobs and leverage more than $43 billion in additional investment that may support another 469,000 jobs, the Biden report said.
The administration is “solidly on track” to met its goal of saving or creating 3.5 million jobs under the stimulus plan, Bernstein said. The U.S. has lost about 7.2 million jobs since the recession began in December 2007.
The nonpartisan Congressional Budget Office said last month the stimulus package had generated between 600,000 and 1.6 million jobs so far.
When I first began writing for The Times, I was naïve about many things. But my biggest misconception was this: I actually believed that influential people could be moved by evidence, that they would change their views if events completely refuted their beliefs.
And to be fair, it does happen now and then. I’ve been highly critical of Alan Greenspan over the years (since long before it was fashionable), but give the former Fed chairman credit: he has admitted that he was wrong about the ability of financial markets to police themselves.
But he’s a rare case. Just how rare was demonstrated by what happened last Friday in the House of Representatives, when — with the meltdown caused by a runaway financial system still fresh in our minds, and the mass unemployment that meltdown caused still very much in evidence — every single Republican and 27 Democrats voted against a quite modest effort to rein in Wall Street excesses.
By: Steven R. Hurst
WASHINGTON — President Barack Obama's chief economic advisers said Sunday that putting Americans back to work is the first order of business in working the country out of the deepest economic downturn in six decades. Only then can they start tackling the soaring federal debt.
At the same time, Christina Romer, chairman of the White House Council of Economic Advisers, said she would not consider the recession truly at an end until employment returns to levels last seen at the end of 2007 when the recession began.
Her view was technically at odds with that of Lawrence Summers, director of the White House National Economic Council, who said third quarter growth of the gross domestic product — the measure of economic activity — marked a statistical end to the recession.
But the pair did agree with forecasts that the economy would begin producing more jobs in the spring, a trend that could lower the nation's jobless rate from 10 percent.
By: Sheryl Gay Stolberg
WASHINGTON — David R. Obey has served in Congress since Barack Obama was in grade school. He does not waste time with pleasantries, and he does not mince words. So when President Obama called Representative Obey recently to talk about Afghanistan, the congressman raised a topic sure to make the young commander in chief uncomfortable: Vietnam.
“I came here in ’69, and I determined that I would give Nixon a year to see what he could do, because he had inherited the war, so I bit my tongue for a year,” Mr. Obey said, recounting how he reminded the current president of the mistakes of that earlier war. “I said the same thing with Obama.”
By: By Naftali Bendavid and Elizabeth Williamson
...But the signs of life in the job market -- arguably the best economic news in a couple of years -- inject a new element to the debate. Congressional Democrats used the report to make the case for continued action. Many remain under acute political pressure to pass a big jobs-related bill, facing tough re-election battles next year with the economy and the still-high unemployment rate a top issue.
The White House, meanwhile, is equally concerned about the deficit, and is disinclined to spend big. Administration officials Friday cited the jobs report as they talked about a more moderate "targeted jobs program."
Democrats hope soon to pass legislation, estimated to cost about $100 billion, extending payments for those whose jobless insurance and related health benefits expire in 2010. That money would likely add to the deficit.
The House and Senate are also crafting jobs packages that will include investing in infrastructure, providing aid to state and city governments, and increasing loan guarantees for small business. Lawmakers are eager to pass the package by early next year, as soon as they complete the health overhaul.
Charles A. Stevenson.
Congress has raised taxes to fund most of our fighting, but since 9/11 the war bills have been piling up. The Share the Sacrifice Act would change that, bringing a way to pay for the Afghanistan war.
Congress used to raise taxes to pay for America's wars. Isn't it time to return to that practice?
...In a recent report, the Congressional Budget Office took into account the impact of the entire stimulus package. According to its calculations, GDP was 1.2% to 3.2% higher in the third quarter than it would have been in the absence of stimulus. (According to the latest Commerce Department data, real GDP grew 2.8% in the third quarter vs. a decrease of 0.7% in the second and a decrease of 6.4% in the first.) The CBO estimates that between 600,000 and 1.6 million additional people were employed as a consequence.
The CBO also looked at the stimulative effect of various parts of the stimulus package. It found that purchases of goods and services by the federal government--such as for public works--had the largest bang for the buck, raising GDP by $2.50 for each $1 spent. Transfer payments had a lesser impact, but were still significantly more stimulative than tax cuts. Moreover, tax cuts of the sort favored by Republicans have the least impact. According to the CBO, tax cuts for low-income individuals raise GDP by as much as $1.70 for every $1 of revenue loss, while those for the rich and for corporations raised GDP by at most 50 cents for every $1 of revenue loss.
Lest one suspect the CBO of bias, private economists have also found that tax cuts are far less stimulative than spending under current economic conditions. Mark Zandi of Moody's Economy.com, an advisor to John McCain last year, recently testified before the Joint Economic Committee of Congress that the Republicans' favorite tax proposals--making all the Bush tax cuts permanent and cutting the corporate tax rate--would raise GDP by at most 37 cents for each $1 of revenue loss. By contrast, increased outlays for infrastructure, aid to state and local governments and extended unemployment benefits increase GDP by between $1.41 and $1.57 for every $1 spent...
By JAMES R. HAGERTY and JON HILSENRATH
The U.S. economy would have turned in a far worse performance in the third quarter without help from the federal government. Now the question is whether growth can continue without that support.
Congress and the White House aren't yet ready to put that issue to the test. On Thursday, the Obama administration endorsed lawmakers' efforts to extend tax credits for home buyers for another five months and to make them available to more people.
Even so, for the recovery to continue, "within two years at most, the private economy will have to wean itself off public stimulants and find its own internal sources of energy," said William Galston, a senior fellow at the Brookings Institution and former adviser to President Bill Clinton.
WASHINGTON - Fueled by government stimulus money, the U.S. economy grew during the summer for the first time in more than a year. The question now is, can the recovery last?
Federal support for consumers' spending on cars and homes drove the economy up 3.5 percent in the third quarter, the Commerce Department reported yesterday.
It marked the first increase in the nation's economic activity, as measured by the gross domestic product, after falling for four straight quarters - the longest stretch of declines since quarterly recordkeeping began in 1947.
Early reports show boost at schools
By Brad Heath and Matt Kelley
WASHINGTON — States have reported using stimulus money to create or save more than 388,000 jobs so far this year, buttressing the Obama administration's claim that the $787 billion program has had a significant impact on the economy.
That total, based on a USA TODAY review of reports from 33 states and Puerto Rico, includes teachers, construction workers and others whose jobs were funded by stimulus money awarded to states. The administration plans Friday to release reports from all 50 states, providing the broadest accounting yet of the stimulus program's impact.
Until now, the administration has relied on economic estimates to assess national job creation. The states' reports were meant to actually count the jobs, though that gauge has proved to be imprecise — particularly for jobs saved. "The numbers … should be taken with a grain of salt," said Ethan Pollack of the Economic Policy Institute.
Even so, Frank Lichtenberg of the Columbia Business School says the figures show a significant economic impact. Obama's Council of Economic Advisors estimated that the stimulus had saved or created 600,000 to 1.1 million jobs. Lichtenberg said the states' reports "make that sound like a reasonable estimate."
By MATT APUZZO / The Associated Press
WASHINGTON -- Businesses receiving federal contracts under President Barack Obama's economic stimulus program reported creating or saving more than 30,000 jobs in the first months of the program, according to data released Thursday by a government oversight board.
The numbers, based on jobs linked to less than $16 billion in federal contracts, represent just a sliver of the $787 billion stimulus package.
If President Obama can find a way to balance the precise number of troops that will stabilize Afghanistan and Pakistan, without tipping America into a Vietnam there, then he indeed deserves a Nobel Prize — for physics.
I have no problem with the president taking his time to figure this out. He and we are going to have to live with this decision for a long time. For my money, though, I wish there was less talk today about how many more troops to send and more focus on what kind of Afghan government we have as our partner.
Because when you are mounting a counterinsurgency campaign, the local government is the critical bridge between your troops and your goals. If that government is rotten, your whole enterprise is doomed.
Independent election monitors suggest that as many as one-third of votes cast in the Aug. 20 election are tainted and that President Hamid Karzai apparently engaged in massive fraud to come out on top. Yet, he is supposed to be the bridge between our troop surge and our goal of a stable Afghanistan. No way.
I understand the huge stakes in stabilizing Afghanistan and Pakistan. Gen. Stanley McChrystal, our top commander there who is asking for thousands more troops, is not wrong when he says a lot of bad things would flow from losing Afghanistan to the Taliban. But I keep asking myself: How do we succeed with such a tainted government as our partner?
COLUMBUS, Ohio -- The federal economic stimulus package has saved or created more than 13,000 jobs in Ohio, according to a state report released Tuesday.
The preliminary data are part of a national effort by states to calculate the real effect of the stimulus program championed by President Barack Obama, a $787 billion effort meant to jump-start the economy.
Ohio, which is scheduled to get about $8.5 billion in stimulus money over the next several years, has spent $1.6 billion so far - and just $335.6 million of that fell within this week's reporting deadline, state budget director Pari Sabety said.
Ohio schools and colleges got more than half the jobs added or saved so far by federal stimulus dollars flowing through state government, preliminary reports filed yesterday show.
State officials said they created or retained the equivalent of 13,144 full-time jobs through Sept. 30 using $335.6 million in stimulus money going to state agencies. About 7,200 of the jobs were tied to funding for the state's primary and secondary schools and higher education, the reports said.
The reports offer an early indication that the stimulus program is working, the administration of Gov. Ted Strickland said.
"These numbers are preliminary and not final, but even at this early stage, they show that federal stimulus assistance has had a positive impact on Ohio's economy," Budget Director J. Pari Sabety said in a statement.
By Deborah Solomon
WASHINGTON -- Government efforts to funnel hundreds of billions of dollars into the U.S. economy appear to be helping the U.S. climb out of the worst recession in decades.
But there's little agreement about which programs are having the biggest impact. Some economists argue that efforts such as the Federal Reserve's aggressive buying of Treasury debt and mortgage-backed securities, as well as government efforts to shore up banks, are providing a bigger boost than the administration's $787 billion stimulus package.
The U.S. economy is beginning to show signs of improvement, with many economists asserting the worst is past and data pointing to stronger-than-expected growth. On Tuesday, data showed manufacturing grew in August for the first time in more than a year. "There's a method to the madness. We're getting out of this," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
Much of the stimulus spending is just beginning to trickle through the economy, with spending expected to peak sometime later this year or in early 2010. The government has funneled about $60 billion of the $288 billion in promised tax cuts to U.S. households, while about $84 billion of the $499 billion in spending has been paid. About $200 billion has been promised to certain projects, such as infrastructure and energy projects.
Economists say the money out the door -- combined with the expectation of additional funds flowing soon -- is fueling growth above where it would have been without any government action.
It’s flawed. It’s expensive. But that’s much better than the alternative.
No question about it, Republicans are in a defiant mood when it comes to President Obama's fiscal stimulus.
When the $787 billion in tax cuts and spending initiatives was up for a vote last winter, Republicans took pride that only three of their senators, and none of their House members, joined in. Never mind that the overwhelming consensus among business leaders and economists was that dramatic action was needed to avert a possible depression.
Now with the economy showing some signs of life, many Republicans are calling for cancelling the stimulus' unspent parts. It is, they say, not effective. Or it's too slow take effect. Or it's just not affordable. For a party seeking to rally its base and rediscover its fiscally conservative roots, the position makes some political sense. But as public policy, it's a uniquely bad idea.
The hardest slogan to sell in politics is: "Things could have been a whole lot worse." No wonder President Obama is having trouble defending his stimulus plan.
If governments around the world, including our own, had not acted aggressively -- and had not spent piles of money -- a very bad economic situation would have become cataclysmic.
But because the cataclysm was avoided, this is an invisible achievement. Many whose bacon was saved, particularly in the banking and corporate sectors, do not want to admit how important the actions of government were. Antigovernment ideologues try to pretend that no serious intervention was required.
So everyone goes back to complaining about high deficits and the shortcomings of government as if nothing had happened. This is now creating problems for Obama on health care...
As soon as the Obama administration-in-waiting announced its stimulus plan — this was before Inauguration Day — some of us worried that the plan would prove inadequate. And we also worried that it might be hard, as a political matter, to come back for another round.
Unfortunately, those worries have proved justified. The bad employment report for June made it clear that the stimulus was, indeed, too small. But it also damaged the credibility of the administration’s economic stewardship. There’s now a real risk that President Obama will find himself caught in a political-economic trap.
I’ll talk about that trap, and how he can escape it, in a moment. First, however, let me step back and ask how concerned citizens should be reacting to the disappointing economic news. Should we be patient and give the Obama plan time to work? Should we call for bigger, bolder actions? Or should we declare the plan a failure and demand that the administration call the whole thing off?
Before you answer, consider what happens in normal times.