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 41st 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
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:
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
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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...:)
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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.
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