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I’ll be back later tonight with State of the Union coverage.
• I meant to do a longer piece on the Summers memo, and maybe I should. An impressive team of Summers defenders – Ezra Klein, Jared Bernstein, Brad DeLong – argue generally that the economic and political teams made some mistakes, but that they were working toward a maximal level of stimulus without fear of bond market vigilantes. Dean Baker disagrees. Personally, I think we need to pay more attention to this claim that there were only $225 billion in shovel-ready projects available in the first two years. I remember discussions with local LA officials at the time that really disagree with that.
• Meanwhile, to put the old Obama economic team in the past, the current one won’t get their 2013 budget out for another couple weeks.
• Newt Gingrich parried Mitt Romney’s attacks on his relationship with Freddie Mac by noting that Romney got rich off them too. But the revelation that Newt hired his own lobbyists to avoid lobbyist registration himself seems pretty damaging to me.
• Also, Gingrich’s accountant is just as good at tax dodging as Romney’s.
• Patrick Leahy has a dream that one day, all content will get the protection of the federal government, and the Internet will be orderly and censored for all.
• I haven’t totally dug into the FHFA analysis of why they refuse to offer principal reductions, but from what I hear from the experts it’s based on some flawed logic.
• We probably won’t see a dissolution of the Independent Payment Advisory Board, the panel tasked with making changes in Medicare for cost-effectiveness. But without actual members picked to sit on the board, its existence doesn’t exactly help matters.
• Eric Holder will soon make a major address defending the right to assassinate terrorist suspects without due process. It’s come to this.
• Good news on a possible breakthrough in embryonic stem cell research.
• The European Union agreed to an oil boycott of Iran, and this could really put the squeeze on Iran for negotiations over their nuclear program. Which would be a good idea if they ever actually had a weapons program or even agreed to build one.
• Syria extended the Arab League mission, but I don’t think that will stop the trajectory of this involving the West more and more.
• We should definitely ask more about how much of Mitt Romney’s “charitable” donations to the Mormon Church made its way into the coffers of the anti-gay Prop. 8 campaign.
• A pretty decent set of manufacturing reports. Though wage conditions in manufacturing have crumbled, so it’s not necessarily the path to a middle class lifestyle anymore.
• Rick Santorum’s “always look on the bright side of rape” statement is really shocking in its ignorance of the feelings of the victims.
• Judge Garzon in Spain faces trial for investigation into Franco-era crimes of the state. He also happens to be the judge investigating torture at Guantanamo.
• A big story in Congress this year will be how House Republicans mean to replace defense trigger cuts with other spending.
• Newt Gingrich is The Organizer and Orchestrator – not your average politician.
• Also, Gingrich must really hate sitcoms with no laugh tracks.
• Wikileaks, the TV show.
• Best of luck to Steve Benen, moving from the Washington Monthly to MSNBC and Rachel Maddow’s show.
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About FDL News Desk
About the Summers memo and its aftermath.
It’s not just the size of the stimulus that mattered, it was the composition.
Christina Romer was (is) an expert on multipliers, and knew that tax-cuts were highly inefficient.
Since Larry Summers is by definition the smartest guy in the room, he had to neutralize her.
Which he did, with his boss’ approval.
Hey, why not? After failing to defend all those rights that do exist, why shouldn’t Holder get to defend a few that don’t?
From the UK:
Executive pay to be linked to rank-and-file salaries
“Chief executives’ pay awards should be set partly according to how much they pay their rank-and-file staff under new government rules proposed yesterday.”
LINK.
Anti-Muslim Movie Shown On ‘Continuous Loop’ By NYPD
LINK.
Kids Count: Nearly half of Michigan students qualify for free or reduced-price lunches
LINK
U.S. ‘seriously concerned’ about Tibet violence
LINK.
“Sumatran elephants in the wild face extinction in less than 30 years unless there is an “immediate moratorium” on destruction of the animals’ habitat, environmental group WWF warned on Tuesday.”
LINK.
Treasury OK’d big [HAMP] bailed out firm CEO pay
“Top executives at seven companies that received large government bailout funds received millions in compensation even though a special office overseeing their pay had the authority to limit their pay packages, a report from the Special Inspector General for the Troubled Asset Relief Program said Tuesday. The institutions are American International Group Inc. AIG -0.85% , Bank of America Corp. BAC -0.69% , Citigroup Inc. C -1.96% , Chrystler financial Services, Chrysler, General Motors GM -0.50% , and Ally Financial (formerly GMAC).”
LINK.
“Personally, I think we need to pay more attention to this claim that there were only $225 billion in shovel-ready projects available in the first two years. I remember discussions with local LA officials at the time that really disagree with that.”
The question is long since irrelevant. It takes about one year to bring a project to shovel level status. If they had hired me and the other 70% of architects out of work in year one, I could have had projects ready by year two. At the end of year three, it is all just bullshit! And still we sit at home with no work.
I heard somewhere that “shovel ready” was code word for business with big money already.
Hardly any money went to Small Business Loans and they refused to close the loop holes that allow vampire LLC’s.
The Republicans are collapsing.
Mitt is the establishment candidate, Newt has a mouth and they both have huge negatives.
The establishment and it’s base is at war with each other.
They’re starting to cry over Huntsman and curse Erick the Red at RedState.
Knowing that the economy hasn’t been healthy since 12/07 makes the “lack of shovel ready projects” argument a red herring. No one doubts the decrepit state of the country’s infrastructure and complete lack of national high speed rail network. So Obama aimed to low because he is a Chicago school free market lover not because he feared bond vigilantes. Same with the “he got what he could” argument. He didn’t even try to get more public investment in the stimulus, he prefers tax cuts. the allocative efficiency of the market mechanism is going to get us out of these doldrums. If you don’t believe me, just wait another thirty years as the economies of the world stagnate, great power conflict increases and the Planet’s eco systems collapse.
Re: SOTU — the president seemed to say that attacking Iran is our default course.
The issue of shovel ready projects is a joke. The Southwest Div of the US Navy (SoCal, parts of AZ and NEV) had almost 800 million dollars of projects funded by the stimulus package. Unfortunately the Navy did not have the contract administrators to draw up the paper work necessary to begin the work. Although lot of work was started, it was no where near the total amount funded.
On one base, my company submitted no less than 100 submittals on forty projects. We scored the highest on the Navy’s rating system of all of the submittals. To date, we have performed work on two minor projects (a gymnasium upgrade and a barracks modernization). We are the only ones doing any work at that base. It is sad.
He mentioned it when he turned to the Sect of Def just before he gave the SOTU and said, “great job tonight.”
Why are they cursing Erick the Red at RedState?
This conflation is something that we need to have a more detailed conversation about. The logic of this assertion is based on the past; when we lost manufacturing we lost employers of large numbers of people who were skilled enough to contribute a large value added (for which they were compensated) and who did not necessarily need a lot of textbook education. There are a lot of hidden assumptions in that logic that need to be unpacked with respect to the global economic environment, federal wage and hour law, the power of unions, and the market demand for stuff.
But mostly, it is a symbol of the depopulation and impoverishment of small towns and cities across the country that massive amounts of government subsidies for companies to locate facilities and jobs has not deal with. Which raises another set of issues related to the “making things easier for business” tax and infrastructure bribe system that has evolved over the last 60 years.
“Rick Santorum’s “always look on the bright side of rape” statement is really shocking in its ignorance of the feelings of the victims.”
As far as I know, he hasn’t said anything to indicate that he cares.
You are correct, that number is complete bull.
Go read my Infrastructure bank posts. Marcy and I both covered this as well in our auto bailout posts.
The error/faulty logic is the idea that going interest only will allow the 9% of the loans underwater to recover over time so the gov loses less money – ignoring the destruction in the mobility of the work force that hurts the economy. They do note that the small number of loans not publicly owned have 35% of such loans underwater and the likelyhood of recovery via just paying interest for a few years is much less.
“As to statutory requirements, FHFA serves as conservator and regulator of the Enterprises under three principal mandates set forth by Congress that direct FHFA’s activities and decisions. First, FHFA has a statutory responsibility as conservator to preserve and conserve the assets and property of the regulated entities. Second, the Enterprises have the same mission and obligations as they did prior to the conservatorship. Therefore, FHFA must ensure that Fannie Mae and Freddie Mac maintain liquidity in the housing market during this time of economic turbulence. Third, under the Emergency Economic Stabilization Act of 2008 (EESA), FHFA has a statutory responsibility to maximize assistance for homeowners to minimize foreclosures. Under EESA, FHFA must consider the net present value (NPV) of any action undertaken to prevent foreclosures.
These mandates guide every FHFA policy decision, including the decision not to allow Fannie Mae and Freddie Mac to engage in principal forgiveness at this time. FHFA did not conclude that “principal reduction never serves the long-term interest of the taxpayer when compared to foreclosure.” In considering principal forgiveness, FHFA compared taxpayer losses from principal forgiveness versus principal forbearance, which is an alternate approach that the Enterprises currently undertake to fulfill their mission at a lower cost to the taxpayer. FHFA based its conclusion that principal forgiveness results in a lower net present value than principal forbearance on an analysis initially prepared in December 2010, which is attached, along with updated analyses produced in June and December 2011, which are also attached”