To do

...and not to do: for my Republican representatives in Congress.

Y'all can argue amongst yourselves finer points of economies and recoveries all you want. What you cannot do is alter facts to suit your ideology.

...[B]ecause once trapped inside a debt-deflationary spiral, it is very hard for an economy to emerge from it... confidence has to be restored; consumers have to be persuaded to spend and not hoard their precious savings; interest rates have to be very low; debts have to be written off. Getting all this done is really tough in the midst of a Depression - which is why no government should allow their economy to spin into a debt-deflationary spiral....[1]

That's from Ann Pettifor, one economist who predicted the economic events of today a long, long time ago when Greenspan et al were pumping the market bubble as best they could. But the Greenspan era was indeed a long, long time ago, in experience, if not in calendar years. Today:

“The American economy is facing serious challenges; families are hurting and businesses are struggling,” said Fortenberry. “I do not wish to see any American suffer unemployment or foreclosure, or see any business suffer a downturn. It is unfortunate that in the name of stimulus, the Washington process has resulted in a massive unrestrained and unsustainable spending bill that will be very difficult to reverse.

Let us parse that paragraph.

“The American economy is facing serious challenges; families are hurting and businesses are struggling,” said Fortenberry. “I do not wish to see any American suffer unemployment or foreclosure, or see any business suffer a downturn."

Yes, the economy is in trouble. Yet despite your wishes to the contrary, Americans are indeed suffering unemployment, foreclosure and business downturn. Even the mainstream media cannot avoid this reality. Right? You do realize that unemployment, foreclosures and business failures are all growing and expanding globally these days? Even in Nebraska. I could present a page full of charts and figures but surely that would be gilding the lily, so to speak. Any normal human, even our so-called enemies in the Axis of Evil wants jobs, housing and good health for their particular in-group.

Moving on to the second half...

"It is unfortunate that in the name of stimulus, the Washington process has resulted in a massive unrestrained and unsustainable spending bill that will be very difficult to reverse."

Working backwards from the end, what do you mean "difficult to reverse"? Nobody is going to reverse the American Recovery and Reinvestment Act, it's not remotely possible -- you guys just voted for and passed the ARRA in both houses and the President has signed the bill. It's the law. By the time you and the rest of the Republicans would have the remotest likelihood of "reversing" this act, it will be ancient history. What possible purpose could "reverse" serve unless, perhaps it's another dog whistle term, showing solidarity with CNBC’s Rick Santelli, perhaps? I dunno; on the face of it, "difficult to reverse" just doesn't make sense.

"[U]nsustainable spending bill" is a nice strawman argument. Nobody is calling for ARRA to be permanent; nobody ever claimed fiscal stimulus itself is sustainable. A stimulus, by definition, is a short-term measure designed to alleviate (or reverse) existing conditions that are -- wait for it -- unsustainable! It's not that the stimulus plan is unsustainable, it is the banks' leveraging their deposits 30, 40, 50 percent and more. That is unsustainable and, by the way, inherently un-self-regulatable if I may coin a phrase.

"[U]nrestrained spending bill" would mean what, exactly? That you weren't able to restrain it à la Grover Norquist? The bill hardly meets the defininition of unrestrained unless you choose to define the term as "more than what I'd prefer to spend", which is grammatically dishonest but does make the sentence fragment somewhat defensible. To be honestly unrestrained would indicate an ARRA with no dollar limitations at all; and that's just ridiculously false.

"[M]assive". Yes, by anyone's yardstick, $787 Billion is a lot of money. You go on to compare it with budgets from previous years and that's a sobering comparison. It's not quite so scary when compared with the U.S. Gross Domestic Product which, even in 2009, is predicted to be something North of $14 Trillion. Still, a trillion here, a trillion there....

But it is an exaggeration, at minimum, to say unrestrained spending. It is false, even dishonest to complain that the ARRA is unsustainable; you might as well criticise firearms because bullets fall to the ground.

"[T]he Washington process" is called voting. You, as a Representative, are in Congress to represent the people of Nebraska. If you so dislike the process, perhaps you should step aside and let someone else assume the mantle.

Finally, the central idea is all that remains: "It is unfortunate that in the name of stimulus". Are you seriously suggesting that economic stimulus is a bad idea? I have to ask because the weak presentation of your theme is plausibly deniable. (Reminds me of "what the definition of is is".) As a member of the opposition, I guess you're not actually required to stand for anything other than opposition, obstruction and delay but I want more.

I want to know if you have an economic recovery plan.

I'd like to see whether your recovery recipe differs significantly from "more of what got us into this mess": To wit. tax cuts and legal immunity for the wealthy while socializing the downside of pretty much any and all corporate activity.

I'd like to read your plan for fixing things. I'm especially interested in what you think needs fixing, even if you don't exactly have a cure for it.

I'd like to watch the development of a "Fort Report" so I could see how ideology and reality duke it out on paper, and how the result becomes a Reaganesque pastiche instead of, say, an actual policy statement.


[1] Ann Pettifor, Debtonation debtonation.org/2009/02/a-debt-deflationary-spiral/

FAC

There's a new EIB in town

President Obama and senior administration officials have begun receiving a daily CIA report on the global economic crisis in addition to briefings on terrorist threats and other national security issues, CIA Director Leon E. Panetta said Wednesday.

The CIA's role in producing the report underscores the level of anxiety within the administration over how rapidly the economic downturn is spreading, as well as its potential to hobble foreign governments and trigger instability overseas.

The report, called the Economic Intelligence Brief, was launched at the request of the White House and delivered for the first time Wednesday.

Panetta said the document would survey major economic developments internationally and focus on how plunging markets and credit pressures are driving the decisions in nations including Russia and China.

Taking back the country-- and the language, one abbreviation at a time. From L.A. Times via Energy Bulletin

Johanns befuddled by big numbers, going broke

“doesn’t make any sense,” Sen. Mike Johanns said Thursday

“doesn’t make any sense”

Don Walton's column in Thursday's Lincoln newspaper, parlays Johanns' tale of the neglected millionaire Nebraska farmers "going broke" into a solid trouncing of -- Johanns -- in the comments section. Srsly, one would think one is reading the SF Chronicle to hear the hammering from the peanut gallery:

• " Before bailing out, as Secretary of Agriculture, he had the opportunity fix this but apparently did not. Now he votes against one billion dollars of federal stimulus dollars while joblessness increases in Nebraska. His former lieutenant governor, now Governor, says Nebraska will take the money. Johann's once decried publicity mongering. Now he can't get enough."
• " Well Mike, maybe this is your opportunity to reach across the aisle, work with them, and create some improvement to the bill. OR.... you could continue the path that you're on, but using phrases like "non-sensical", anger, and disappointment to up the partisan bickering. Which path are you going to choose? ..."
• " Of course Mike's gonna support Big Ag, just like he and his GOP buddies support Big Pharma, Bil Oil, Big Everything Else. He will give the big guys the advantage over the family farmer every time. Why does this state keep voting for these Republicans? Can't you see they DO NOT represent the average voter in the state? Farmers who have adjusted gross income of $250,000 after writing off everything except the blue sky overhead are, to be sure, Big. Wake up, Nebraska voters!!!"
• " Conservatives whining about the government waste and handouts in the stimulus package, yet, whining again when someone wants to cut their welfare handout. This is a microcosm of what has got us to this place with our economy. Everybody wanting something from the government, when, the government can't do one thing without waste, fraud, greed, or on budget. GOD -- please help us to become self-reliant again and less reliant on the government handout."
• " Johanns has a point about gross vs. adjusted gross sales. Cost of production is pretty high and many times what a farmer gets in gross income isn't close to what he/she earns otherwise. Of course, if Congress hadn't let corporate farming run wild, farmers wouldn't have to farm over 1,000 acres just to earn a living."
• " Well Senator, you had your chance to do something as Ag. Sec, but you were too busy sucking up to the giant multi-national conglomerates that own agriculture today. The American people have for years seen the absurdity of government welfare money going to companies that make millions, but you and your Bush cohorts blocked every reform."

Just to share a few. Twenty-two comments in the first four hours and all of them, every pea-picking paragraph, giving Johanns a good drubbing. I'm no longer sure I'm living in Nebraska.

If this keeps up Mike's tradition of never finishing a job could repeat itself again! Do Senators have understudies? Vice-Senators? Not even a Lieutenant Senator? Ah, that's too bad. Being understudy to Mike Johanns can be a good thing.


Update: 31 comments and still no sign of support for Johann's plea for bailing out corporate farms.

Vocabulary builder

Dan Gardner gets it from Captain Obvious who quotes M.J. Akbar:

“Terrorism has no place in Islamic doctrine. The Koranic term for the killing of innocents is ‘fasad.’ Terrorists are fasadis, not jihadis.

American Hero

More links

Food Stamp Stimulus

USDA Economic Research Service
Kenneth Hanson and Elise Golan
Food Assistance and Nutrition Research Report No. (FANRR26-6) 4 pp, August 2002
The Food Stamp Program (FSP) provides assistance to more households during recessions and to fewer households during times of economic expansion. These changes in FSP expenditures can have stabilizing effects on the economy, stimulating economic activity during recessions and slowing demand during expansions. This issues brief shows that the FSP provides an economic stimulus during recessions only if the Government funds the increase in program expenditures through emergency financing, rather than through increased taxes or other budget-neutral means.


Mark Zandi of Moody's Economy.com on Stimulus:
The boost to GDP from every dollar spent on public infrastructure is large - an estimated $1.59 - and there is little doubt that the nation has underinvested in infrastructure for some time, to the increasing detriment of the nation's long-term growth prospects.

Fiscal stimulus does carry substantial costs. The federal budget deficit, which topped $450 billion in fiscal year 2008, could reach $2 trillion in fiscal 2009 and remain as high in 2010. Borrowing by the Treasury will top $2 trillion this year. There will also be substantial long-term costs to extricate the government from the financial system. Unintended consequences of all the actions taken in such a short period will be considerable. These are problems for another day, however. The financial system is in disarray, and the economy's struggles are intensifying. Policymakers are working hard to quell the panic and shore up the economy; but considering the magnitude of the crisis and the continuing risks, policymakers must be aggressive. Whether from a natural disaster, a terrorist attack, or a financial calamity, crises end only with overwhelming government action.

Extending unemployment insurance and expanding food stamps are the most effective ways to prime the economy's pump. A $1 increase in UI benefits generates an estimated $1.64 in near-term GDP; increasing food stamp payments by $1 boosts GDP by $1.73 (see table). People who receive these benefits are very hard-pressed and will spend any financial aid they receive within a few weeks. These programs are also already operating, and a benefit increase can be quickly delivered to recipients.

Increasing food stamp benefits also has the added benefit of helping many low-income households ineligible for UI, such as part-time workers. It also helps those who do not pay income tax and thus will not receive a rebate.

Fiscal Economic Bang for the Buck
One year $ change in real GDP for a given $ increase in spending
$1.73 - Temporary Increase in Food Stamps
$1.64 - Extending Unemployment Insurance Benefits
$1.59 - Increased Infrastructure Spending
$1.36 - General Aid to State Governments

See FRAC's real stimulus page, also

We know it's the end of the world as we know

I want to emphasize that I generally do not read dailykos - I have standards. I was led to the following quote by a link that I have since lost so I'm left, here, holding a faded mimeograph from the A-list blogosphere. Sigh.

According to Rep. Paul Kanjorski (D) (PA-11), in mid-September of 2008, the United States of America came just three hours away from the collapse of the entire economy. In a span of 2 hours, $550 billion was drawn out of money market accounts in an electronic run on the banks.
Rep. Kanjorski: "It would have been the end of our economic system and our political system as we know it."

That's a bit dramatic. Is this guy for real? Where might one hear confirmation? Well, one could in fact watch the original at C-Span. The Leader of the GOP seemed to enjoy it, while the elite liberal media has totally ignored the Kanjorski meme. Did Paulson and Bernanke go to Congress to scare the bejezus out of - say, what committee was that, anyway?

Capital Markets, Insurance, and Government Sponsored Enterprises
Led by Chairman Paul E. Kanjorski (PA), the subcommittee reviews laws and programs related to the U.S. capital markets, the securities industry, the insurance industry generally (except for health care), and government-sponsored enterprises, such as Fannie Mae and Freddie Mac. It also oversees the Securities and Exchange Commission and self-regulatory organizations, such as the New York Stock Exchange and the NASD, that police the securities markets.

Kanjorski sounds like the go-to guy when there's a run on the capital markets. Do we have a nutbar in charge of that subcommittee or is he telling a mostly straight story, lightly embellished for TeeVee, that's pretty much getting ignored? What's the third option?

My Fortran Fail

I just got a call from the Representative's representative, gently chiding me for forgetting that the Fort has only been in Foggy Bottom since the 109th Congress - hence he was not there to vote for the Patriot Act.

Sheesh, what a cock-up! Color me red.

I resolve to do more research (actually any research would qualify as "more") before the next rant.

Statue of Limitations

Here are the concluding paragraphs from Hardin's Lifeboat Ethics: the Case Against Helping the Poor:

We Americans of non-Indian ancestry can look upon ourselves as the descendants of thieves who are guilty morally, if not legally, of stealing this land from its Indian owners. Should we then give back the land to the now living American descendants of those Indians? However morally or logically sound this proposal may be, I, for one, am unwilling to live by it and I know no one else who is. Besides, the logical consequence would be absurd. Suppose that, intoxicated with a sense of pure justice, we should decide to turn our land over to the Indians. Since all our other wealth has also been derived from the land, wouldn't we be morally obliged to give that back to the Indians too?

Clearly, the concept of pure justice produces an infinite regression to absurdity. Centuries ago, wise men invented statutes of limitations to justify the rejection of such pure justice, in the interest of preventing continual disorder. The law zealously defends property rights, but only relatively recent property rights. Drawing a line after an arbitrary time has elapsed may be unjust, but the alternatives are worse.

I heard some newsreader on BBC World Service state how many Gazans there are (~1.2 million) and in the very next sentence he quoted some percentage (I was too agitated to remember the number) of Gazans who "are" refugees from the original Israeli occupation.

The deceptive sleight-of-hand is using a percentage of the 1948 population just after stating the 2009 population, to imply that most of the Gazans have a legitimate home in Israel. (And despite this thumb-on-the-balance behaviour, BBC et al have a reputation for favoring Israel.)

Although I ain't no lawyer, it seems to me that the statute of limitations for right of return has reached and exceeded its limit. Even if it hasn't, though, it applies only to a fraction of today's residents of Gaza.


hat tip: The Oil Drum
photo: xinhuanet.com

Fortranberry

You said, "...yet there was less than 15 hours to actually read it. This is no way to legislate, and no way to run our country."

Funny, I don't remember you complaining about this method when you voted on the Patriot Act*. Maybe you did and I just missed it? Or is it the case that now you're in the minority, this is suddenly not The Way To Get Things Done In DC?

Seriously, though, do you actually have a proposal for fixing this broken economy? Some of us would like to read something with more substance than opposition posturing.

*Update: see My Fortran Fail