Reality Bites

Dammit. Paul Krugman has ruined my Valentine's Day!

[...] These aren't normal times, so normal political standards don't apply: Mr. Obama's victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama's postpartisan dreams.
...

But it's now clear that the party's commitment to deep voodoo - enforced, in part, by pressure groups that stand ready to run primary challengers against heretics - is as strong as ever. In both the House and the Senate, the vast majority of Republicans rallied behind the idea that the appropriate response to the abject failure of the Bush administration's tax cuts is more Bush-style tax cuts.

And the rhetorical response of conservatives to the stimulus plan - which will, it's worth bearing in mind, cost substantially less than either the Bush administration's $2 trillion in tax cuts or the $1 trillion and counting spent in Iraq - has bordered on the deranged.

...

For while Mr. Obama got more or less what he asked for, he almost certainly didn't ask for enough. We're probably facing the worst slump since the Great Depression. The Congressional Budget Office, not usually given to hyperbole, predicts that over the next three years there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce. And $800 billion, while it sounds like a lot of money, isn't nearly enough to bridge that chasm.

OK, no he hasn't. I still love him, and he's still 100% correct. The "post-partisan" illusion has been destroyed. We're starting to realize that $787 billion isn't nearly enough of a "stimulus" to bring our economy out of what may become another "great depression". Today's Valentine's Day, and all I can do is think about the massive hole we're in and what we can do to get out of it.

Dammit.

Whither "Bipartisanship"?

It seemed from the start that President Obama really wasn't interested in the kind of raw partisan warfare that defined the Bush Era. After all, hasn't Obama preached "the politics of unity"? But now, it seems like those happy dreams of "bipartisanship" have been dashed.

I mean, wasn't this stimulus bill supposed to get at least 80 votes in the Senate? Wasn't Republican Judd Gregg supposed to be our Commerce Secretary? Weren't we all supposed to get along?

Now don't get me wrong, I'm not blaming President Obama for the collapse of "bipartisanship". I just wonder if it was ever realistic for him to think the GOP would immediately cease fire and cooperate. After all, don't they stand to gain more if Obama fails than if this nation were to succeed with Democratic policies?

Am I wrong? Am I being too cynical? Or am I onto something? Will the President need to focus more on keeping Democrats together than bringing in all the Republicans? What are you thinking this weekend?

Let's chat about what "the end of bipartisanship" really means.

Tell President Clinton to Stop Supporting H8

This pains me. It really does. As much as I love President Clinton, I deplore that he's considering betraying his labor and LGBT supporters to speak at the "crown jewel" hotel owned by the notoriously anti-worker H8-monger Doug Manchester. We need to speak up NOW to tell him to reconsider!

If you have some free time this weekend, please consider writing your own letter to President Clinton and emailing it here. Otherwise, please sign this Courage Campaign petition. Thanks.

The President's Weekly Address

Sore Loser Norm Coleman Soldiers on Despite Setback after Setback

Norm Coleman really is one sore loser. He suffers one setback after another, but he refuses to be a sport and admit he's lost. The New York Times reports that the Sore Loser has lost yet another round in his endless attempt to erase Landslide Al's insuperable margin of 225 votes. Meanwhile, as Norm continues to throw monkey wrenches into the People's right to have representation, Landslide Al spent a couple of days this week in Washington to prepare to hit the ground running in serving the needs of the Great State of Minnesota.

A Readable Stimulus Summary

Thank goddess Open Left was able to fully interpret the press release from Speaker Pelosi's office to help us figure out what the economic recovery bill about to be passed by Congress (FINALLY!!) will actually do to help us.

Some Important B-days Today

Find out what we're celebrating today.

"Not a Time for Cigars"

TalkLeft & NYT remind us why the coming "stimulus solution" is by no means a panacea for our economic woes... And especially not for progressive policy. This is only the beginning of our struggles, not the end.

Stimulus Deal?

Maybe? Maybe not? I guess there may still be need for negotiation with Speaker Pelosi. Well, at least it's good that she isn't giving up on improving the bill.

Obama Returning West

I guess I'll need to be in Las Vegas some time this spring. It looks like President Obama hasn't forgotten The West.

The Skinny on the Proposed Stimulus Compromise

Here's the latest from Ambinder via Open Left:

The real (but technically fake) conference is almost finished, with House, Senate and White House negotiators -- (the three Republicans, Rahm Emanuel, Harry Reid and Nancy Pelosi) -- letting it be known that they've come to accord on at least $790 billion in spending. (ABC News has a precise figure of $789.5) The Republican Senators will pare back some of their preferred tax cuts, and the Democrats will get some of their education / state aid money restored, although both sides will have to sacrifice. The fake (but technically real) conference is slated to begin this afternoon, giving an illusion of broad bipartisan negotiation to the enterprise.

Puh-leese. Again, why are the MSM so obsessed over the "bipartisan" BS? Oh yeah, ratings! Whatever.

The important news here is that a deal seems near. And although the final package may end up costing less than the Senate bill (and maybe even the House bill), the good news is that some of the most egregious corporate fat cat tax breaks passed in the Senate bill will likely be excluded in the final conference bill in favor of more of the direct aid to working-class people included in the House bill. And if this is what emerges in the final bill, I can live with a smaller price tag if more of the aid goes directly to more of us working stiffs.

So let's keep up the pressure on President Obama & the Congrescritters to make it happen!

The Best Idea Yet

(Cross-posted at the Moose, TalkLeft and MyDD)

The word on the street is that the caps on executive compensation may end up getting removed from the final version of the economic stimulus package. Rather than abandon the idea altogether, James Kwak has a brilliant suggestion (h/t the Left Coaster):

Why not say that all bank compensation above a baseline amount - say, $150,000 in annual salary - has to be paid in toxic assets off the bank’s balance sheet? Instead of getting a check for $10,000, the employee would get $10,000 in toxic assets, at their current book value. A federal regulator can decide which assets to pay compensation in; if they were all fairly valued, then it wouldn’t matter which ones the regulator chose. That would get the assets off the bank’s balance sheet, and into the hands of the people responsible for putting them there - at the value that they insist they are worth. Of course, the average employee does not get to set the balance sheet value of the assets, and may not have been involved in creating or buying those particular assets. But think about the incentives: talented people will flow to the companies that are valuing their assets the most realistically (since inflated valuations translate directly into lower compensation), which will give companies the incentive to be realistic in their valuations. (Banks could inflate their nominal compensation amounts to compensate for their overvalued assets, but then they would have to take larger losses on their income statements.)

A brief digression. Years ago, I watched superstar attorney David Boies argue for federal court approval of a class-action settlement he had negotiated (for the curious, it was the Sotheby's/Christie's antitrust litigation). Normally, courts disfavor so-called "coupon settlements" because a coupon, as opposed to cash, tends to be useless to the average class member. Boies, however, believed that in this particular case, the coupons would have a significant cash value (in other words, there would be a secondary market for them) and thus the coupon settlement was in the best interests of class members.

How did Boies win the argument? Much like the idea I've quoted above, he told the judge that instead of taking his attorney's fee in cash, his law firm would accept COUPONS as part of the fee - in the same proportion that class members would be asked to accept coupons. So he was actually staking his own livelihood, not merely that of the class members, on the proposition that the coupons had value.

I cite this real-life example to illustrate that this is not just some lunatic idea off the Internet. In fact, it really does force senior management to stand behind the valuation they attach to the bank's assets, in a very real way. Maybe this will force a re-valuation of some of the assets, maybe not, who knows. But at the end of the day, this solution gets a lot of toxic assets off the books, and the marketplace will have more respect for the valuation of the assets that remain on the books - knowing that senior management is staking their own personal compensation on the proposition that the valuation is accurate.

I can say with no hesitation that this is a far better idea than anything I heard today from the folks who are actually running the Treasury.

When Even Johnny Mac's Economist...

Says the Senate "compromise" economic recovery bill isn't enough, we should realize that we need to do more to fix this broken economy.

Not "The Primary Wars" Again!

Ugh. David Sirota just took himself to a new low. He got some ugly hate mail from a few "PUMA" McTrolls... So now he must attack Hillary Clinton and all of us who supported her during the primaries?

Whatever. BTD just made him look like a complete fool. Yay. Oh yes, and I just couldn't keep my piehole shut:

Sometimes, I feel the same way. And before anyone here calls me a "PUMA", let me remind you all that I didn't just vote for Obama last November, but I also donated whatever $$$ I could, called states like Colorado and Florida, and canvassed in Nevada for Obama. I knew he'd make a good President, and even though I ultimately favored Hillary Clinton in the primary, I had no doubt in moving to Obama in the general.
Now with that said, I need to say this. It's a HUGE mistake for us to center a movement around a personality over a cause. Sure, it's nice to look at the Obama Administration and say "change has come". But really, when will we start seeing more change? When will we see universal health care? Real climate solutions? The Employee Free Choice Act? An end to DOMA & DADT?

Honestly, I see President Obama as I saw President Clinton. Like Clinton, I do think Obama has good intentions and I do understand his sympathies mostly lie with us. However, he seems quite susceptible to the same DLC/corporatist influences (like Summers or Geithner) that Clinton was 15 years ago. And if we don't keep up the pressure and encourage Obama to shift left, he'll follow the DLC rightward... Just like President Clinton.

That's what we should be discussing now. How do we avoid the same mistakes we made 15 years ago in not being prepared to fight the radical right when they attacked "Hillarycare" and "tax and spend lib'rulzm"?

Is This the "Stimulus Bill" or "Bipartisan Bill"?

Really. President Obama needs to make a choice, and we need to push him to make the right choice. I've had enough of the "bipartisan" BS and the corporate media idiots chattering on about how success will be mesaured by whether or not John McCain likes the bill. Shouldn't we mesaure success on how many people are saved from financial catastrophe?

Paul Krugman hit the nail on the head today in diagnosing the disease in DC that's causing the stimulus bill to gradually weaken and worsen into nothingness.

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.

First off, the bill in its present shape is far too little to be very effective. How the hell can an $820 billion package with 40% of it consisting of near-worthless tax cuts be enough spending to fill that $2.9 trillion gap? And secondly, why were the most effective parts of the bill either trimmed down or completely eliminated? Studies have shown that direct aid, like food stamps and state & local government assistance, are the best ways to prevent an economy from failing. So why is President Obama so open to allowing a "stimulus bill" to pass that excludes what's really needed to stimulate this economy?

The problem, as Jane Hamsher pointed out this morning, is that effective provisions of the bill are being forsaken for the sake of "bipartisanship". Why? So Susan Collins and Ben Nelson and Joe Lieberman can feel good about themselves? So Mitch McConnell and John Boehner can really have their way despite being in the minority? So "El Rushbo" Limbaugh can be "vindicated"?

Bipartisanship should be the means to an end, not some religious cult. There's no reason why aid for the working poor should be sacrificed for "bipartisanship". There's no reason why aid for states like California, states about to literally go bankrupt, should be sacrificed for "bipartisanship". There's no reason why kids should be deprived of a college education for the sake of "bipartisanship". There's no reason why people should be deprived of needed health care for the sake of "bipartisanship". And no, there's no reason why we shouldn't start investing in better energy choices for the sake of "bipartisanship".

President Obama made a serious mistake in elevating the process over the substance, and we need to correct that. Tell the President not to sacrifice his values for the sake of placating cruel and bloodthirsty Rethuglicans. If you have GOP members of Congress, tell them to stop holding needy people hostage for the sake of "bipartisanship". And if you have Democratic members of Congress, tell them to stand firm in supporting good provisions in the stimulus that actually help all of us in need.

We need real help, not empty rhetoric. We need a bill that puts people back to work, not a bill George W. Bush would be proud of. We need to remind our elected officials in Washington that they work for us, so they need to stop bending over backwards for stupid Beltway Pundits and start doing something for us.