Job Losses and Recession; Auto Execs--From Tin Ear to Tin Cup; Mumbai Terror

*Update on Thurs. 12.11: I've added Matt's latest column, "Memo to Obama" below

*Update on Wed. 12.10 -- Adding the article Bob Scheer talked about  to links below (Toyota buys GM). PS: Tony's show yesterday was good!! Listen to it at link at the end of the post in red.

*UPDATE: Tuesday 12.9 at 2:30 Pacific 89.9 FM on air in SoCal/streaming live online, via podcast or on-demand: Tune in to hear Tony Blankley discuss "Whither Conservatism" on our show, The Politics of Culture -- with Al Regnery, publisher of American Spectator mag; Tony Perkins, Pres of the Family Research Council, and nay-sayer, David Frum, who's become a critic of the Sarah Palin wing of the party (former Right on LRC, his new blog launches Jan. 20 NewMajority.com). That's www.kcrw.com (click live tab) or online later at www.kcrw.com/etc/programs/pc.

530,000 jobs lost – in November alone – as the Auto company execs trade their tin ears and corporate jets for tin cups and a hybrid car ride to DC begging for a bailout…is it policy making or a morality play? Bob’s worried about Paul Krugman’s prediction for a double-digit drop in the economy. Arianna calls the economy a stalled plane that needs a jumpstart -- in mid-air. Tony – without being too Pollyanna-ish – says it may be the worst month for job losses but it’s ranked the 41^st worst month as a percentage of total jobs…he disagrees with Bob who says those trillion dollars have been wasted on the financial industry, and he calls for MASSIVE spending on the part of government (Bob calls that socialism!). The terror in Mumbai is treated briefly followed by some rather rushed rants.

LINKS:

Matt mentioned this blog: http://bigpicture.typepad.com/

Bob talked about this column:

Paul Krugman, The New York Times

Conscience of a Liberal

December 4, 2008, 9:07 am

Worries about next year

I’ve been ruminating over economic prospects for next year, and I’m getting scared.

Two points:

1. The economy is falling fast. We’ll see what tomorrow’s employment report says, but we could well be losing jobs at a rate of 450,000 or 500,000 a month.

2. Infrastructure spending will take time to get going — a new Goldman Sachs report suggests that projects that are “shovel-ready” are probably only a few tens of billions worth, and that a larger effort would take much of a year to get going……(read the rest at link above)

Bob also mentioned a provocative piece on TruthDig.com about why Toyota should buy GM:

A Toyota Takeover Could Save GM

By Michael D. Intriligator

Posted on Dec 5, 2008

http://www.truthdig.com/report/item/20081205_a_toyota_takeover_could_save_gm/

...I believe that considering only these two options for an imperiled GM —either bailout by the U.S. government or bankruptcy—omits an important alternative, which I see as the best option: a takeover of GM by Toyota Motor Corp....

Matt Miller's Latest Column from Politico -- December 8, 2008 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Here's a new column that ran in Politico on Tuesday.  Also, I've begun blogging frequently at my new website, and hope you'll check it out.  http://www.mattmilleronline.com/.  As my wife says, if this technology had been available 13 years ago, she could have had most of the pleasure of being married to me with none of the aggravation...:)

Memo to Obama: Don't narrow your options by Matt Miller    As President-elect Barack Obama crafts an economic plan for a country in crisis, he faces a risk that presidents often don't appreciate until it's too late: Options presented to presidents are narrowed before they ever reach their desks.  This happened to President-elect Bill Clinton in 1992 in a way that is instructive for Obama's new economic team and for Democrats who hope to fix the economy while advancing progressive goals.   While every presidential transition is hectic and prone to second-guessing, it seems clear in hindsight that internal debate over Clinton's original economic plan focused on options that weren't different enough to offer truly alternate paths. As Bob Woodward later reported, the transition discussion quickly became organized around several options for what the budget deficit would be four years later - ranging from $195 billion to $240 billion. In long meetings, Clinton's team debated which scenario was best in terms of the economy, Clinton's campaign pledges and the amount of new public investment that these constraints would accommodate.   Yet the fabled duels between the "deficit hawks" and the "progressives" on Clinton's team masked a deeper, surprising consensus. The difference between their options was about $45 billion in four years. That's an $11 billion or so difference per year - less than 1 percent of the federal budget at the time. This early narrowing of options - which then framed all subsequent discussion - arguably left the president with the worst of both worlds: He ended up shortchanging his planned investments in infrastructure, education, and research and development, even as he was forced to spend most of his presidency wrestling the deficit to the ground. It's hard to know if bolder options might have led to different choices, but such options weren't presented to him.   Today, the risk for Obama is similar. Obama has an ambitious progressive agenda, must manage the country through an economic crisis and inherits a tide of red ink much larger than the one Clinton inherited. Yet there are pluses, as well. A consensus has emerged on the need for a serious new stimulus for the economy, while economists of all stripes say we should put off near-term worries about the deficit until the storm has passed.   But this consensus still leaves an enormous range for potential action. The difference is vast between what an Obama administration can do while running deficits of $800 billion and $1.3 trillion, or even (hold your hat) $2 trillion, for a couple of years. The temptation may be for his incoming team to narrowly examine options within a deficit constraint that seems tolerable because markets already expect it - say, $1 trillion over the next year or two. I believe Obama should ask to see options that include deficits (meaning spending boosts and tax cuts) much bigger, and also much smaller, than this.   The guiding question should not be, "What deficit number do we think is politically tolerable?" - though the optics here will obviously come into play. The questions should concern (1) what level of new government-generated demand is needed, and for how long, to offset the coming contraction in private sector demand; (2) what other parts of his agenda Obama believes the country can accomplish in his first term, as well as what groundwork can be laid for accomplishment in a second; and (3) how might this be sustainably financed, even if the answers go beyond the boundaries of what has been deemed politically or economically possible.   Once meaningfully different packages are presented, Obama can decide how he will weigh the trade-offs, how he'll make the politics work and which size "sandbox" he really wants to be playing in. (He can also offer a framework for long-term fiscal sanity by proposing various "triggers." For example, once unemployment returned to below 6 percent, it might take a supermajority vote of Congress to run deficits above 2 percent or 3 percent of the gross domestic product.)   The silver lining of today's crisis is that it should free Obama and his team to think more broadly about these basic questions. The need to forestall a calamitous economic meltdown, and the ability to finance large deficits temporarily in ways not foreseeable 15 years ago, means Obama doesn't have to be trapped in the vise that left Clinton famously grumbling by the end of his first year that he had been reduced to an "Eisenhower Republican."   Because groupthink and extraordinary time pressures can lead even talented, well-intended advisers to push the discussion too narrowly, too soon, Obama should insist on a broader set of options today. That will assure the next president that he won't have Clinton's regrets in a few years.   ***      Matt Miller, a senior fellow at the Center for American Progress, served as a senior adviser at the Office of Management and Budget under President Bill Clinton. His new book "The Tyranny of Dead Ideas" will be published by Times Books in January.

Toxic Assets; Auto Bailout? Clinton @ State? Prop 8

Sorry, Arianna had a medical appointment -- it's man-on-man only today. And it got mighty heated today in the battle over the economy. No one really has the answer. But a couple of questions include: Where has the money given out so far gone? Where does it come from? Who should really be getting it? All three end up agreeing we cannot afford to let the auto industry sink; but their reasoning in getting there differs. And the men weigh in on the rumor about Hillary Clinton as possible Secretary of State…plus a brief note about the hullabaloo over Prop. 8 anti-gay marriage constitutional amendment that just passed in the State of California.

Links mentioned in today's show:

Depression Economics Returns

The economic news, in case you haven’t noticed, keeps getting worse. Bad as it is, however, I don’t expect another Great Depression. In fact, we probably won’t see the unemployment rate match its post-Depression peak of 10.7 percent, reached in 1982 (although I wish I was sure about that).

We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly. (read rest at link above)

General Motors has come to Washington, begging for a $25 billion bailout to keep it and its ailing Detroit counterparts going next year. But nobody seems too thrilled about the prospect. Liberals dwell on the companies' gas-guzzling sport-utility vehicles. Conservatives obsess over all the well-paid union members with gold-plated benefits. And people of all ideological backgrounds remember how they used to buy domestic cars, years ago, but stopped because the cars were so damn lousy. "The downfall of the American auto industry is indeed a tragedy," the Washington Post editorial board sermonized recently, "but the automakers and the United Auto Workers have only themselves to blame for much of it." And, if they have only themselves to blame, the argument goes, why do they deserve taxpayer help? Let them fail and file for bankruptcy. In the long run, the economy will be stronger and the workers better off. It'd be worth?the short-term pain, which might not even be so severe.

In normal times, with another company, that might be correct. But these are not normal times...(read rest at link above)

The Defining Moment: FDR's Hundred Days and the Triumph of Hope by Jonathan Alter (Paperback - May 8, 2007)

And here's a link to Amity Shlaes, a conservative with expertise on The Great Depression -- she sat in twice on the right. http://www.amityshlaes.com/  Her Book, The Forgotten Man is about FDR.

Toxic Assets; Auto Bailout? Clinton @ State? Prop 8

Sorry, Arianna had a medical appointment -- it's man-on-man only today. And it got mighty heated today in the battle over the economy. No one really has the answer. But a couple of questions include: Where has the money given out so far gone? Where does it come from? Who should really be getting it? All three end up agreeing we cannot afford to let the auto industry sink; but their reasoning in getting there differs. And the men weigh in on the rumor about Hillary Clinton as possible Secretary of State…plus a brief note about the hullabaloo over Prop. 8 anti-gay marriage constitutional amendment that just passed in the State of California.

Links mentioned in today's show:

Depression Economics Returns

The economic news, in case you haven’t noticed, keeps getting worse. Bad as it is, however, I don’t expect another Great Depression. In fact, we probably won’t see the unemployment rate match its post-Depression peak of 10.7 percent, reached in 1982 (although I wish I was sure about that).

We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly. (read rest at link above)

General Motors has come to Washington, begging for a $25 billion bailout to keep it and its ailing Detroit counterparts going next year. But nobody seems too thrilled about the prospect. Liberals dwell on the companies' gas-guzzling sport-utility vehicles. Conservatives obsess over all the well-paid union members with gold-plated benefits. And people of all ideological backgrounds remember how they used to buy domestic cars, years ago, but stopped because the cars were so damn lousy. "The downfall of the American auto industry is indeed a tragedy," the Washington Post editorial board sermonized recently, "but the automakers and the United Auto Workers have only themselves to blame for much of it." And, if they have only themselves to blame, the argument goes, why do they deserve taxpayer help? Let them fail and file for bankruptcy. In the long run, the economy will be stronger and the workers better off. It'd be worth?the short-term pain, which might not even be so severe.

In normal times, with another company, that might be correct. But these are not normal times...(read rest at link above)

The Defining Moment: FDR's Hundred Days and the Triumph of Hope by Jonathan Alter (Paperback - May 8, 2007)

And here's a link to Amity Shlaes, a conservative with expertise on The Great Depression -- she sat in twice on the right. http://www.amityshlaes.com/  Her Book, The Forgotten Man is about FDR.