Economic Stimulus Package on The Huffington Post

Obama Defends Himself Against Black Critics

2009-12-21T16:51:50Z

WASHINGTON — President Barack Obama on Monday rebutted critics who say he isn't showing enough compassion toward black America, citing his health care effort as one example he says "will be hugely important" for blacks.

Obama said another example is the billions of dollars in aid to states included in the economic stimulus bill, money that was used to save thousands of teachers, firefighters and police officers from losing their jobs. He said many of those workers are black.

Senator Tom Coburn Defends Obama Against GOP Attacks

2009-12-21T12:03:12Z

Senator Tom Coburn (R-Okla.) may not be that good a friend to health care reform, or Senator Robert Byrd, or Senate clerks, for that matter, but he's widely known to be some kind of super-Senate BFF with President Barack Obama. As Washington braced for this weekend's snowpocalypse, Coburn was reminding The Hill's Eric Zimmerman what great pals he and the President were:

"I try to write him about every week or two," Coburn said of Obama. "Write him a note, encourage him. No one has a tougher job than he does."

The two last spoke when Obama called Coburn last week to offer condolences on the passing of his mother.

"We came into the Senate together, and I just have a lot of admiration for him," Coburn said of Obama. "I'm 180 degrees from him on policy on most issues. But I think he's a wonderful man."

And that's all precious and whatnot, but one had to wonder: Is this special friendship ever going to materialize in some important way? Well, Media Matters' Chris Harris notes that Coburn did defend his friend this past Saturday against some of the criticism his party was laying at the President's feet:

COBURN: On January 1st, 2009, the national debt was $10.6 trillion. It now stands at $12.1 trillion. That's not President Obama's fault, so don't confuse this with a partisan attack. My attack is on the Senate, and on the Congress.

[...]

In January 2009, the unemployment rate was 7.6%, today it's 10%. That's not President Obama's fault either. That's our fault, it the members' of Congress fault.

[WATCH]

RELATED:
Dr. Coburn Immunizes Obama From GOP Attacks [MediaMatters]

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Joseph Stiglitz: 'Significant' Chance The Economy Will Contract In 2010

2009-12-21T09:01:07Z

(AP) -- Nobel Prize-winning economist Joseph Stiglitz warned there's a "significant" chance the U.S. economy will contract in the second half of next year, and urged the government to prepare a second stimulus package to spur job creation.

"The likelihood of this slowdown is very, very high," Stiglitz told reporters in Singapore. "There is a significant chance that the number will be in the negative range."

Stiglitz, a professor at Columbia University, called on Washington to make more funds available to state governments who face a drop in tax revenue.

The U.S. economy, the world's largest, must grow at least 3 percent to create enough jobs for new entrants into the labor force, he said.

The unemployment rate fell to 10 percent in November from 10.2 percent in October.

"If you don't prepare now, and the economy turns out to be as weak as I think it's likely to be, then you'll be in a very difficult position," he said.

The economy grew at a 2.8 percent rate in July through September, after a record four straight quarters of contraction.

Dr. Peter Breggin: Stimulus Packages and Prozac: The Unintended Consequences of Intervention

2009-12-18T15:53:28Z

A column written by David Wessel on December 17, 2009 was published in the Wall Street Journal with the title, "A Prozac Economy Has Its Costs." Wessel warns against the potentially stultifying effects of economic control. He makes some good points that can be sharpened by a more precise comparison between the impact of Prozac on the brain and the impact of government regulation and stimulation on the economy. Prozac is the prototype for what became a whole slew of newer antidepressants including Paxil, Zoloft, Luvox, Lexapro and Celexa.

Initially, these newer antidepressants have the potential to cause an artificial euphoria that makes an individual feel temporarily elated. But the sense of wellness is unrealistic and can lead to poor judgments. The brief sense of euphoria too often drives the individual to try one drug after another in the hope of repeating or prolonging that evanescent glimpse of happiness. Worse, the euphoria can escalate into outright mania, a bubble that is bound to burst with ruinous consequences for the individual, his or her family, and even society. In the long run, drugs like Prozac, Paxil and Zoloft impair brain function and tend to produce emotional apathy and indifference.

Now consider the similar impact of artificial interventions thrust onto the economy. Initially, government stimulus packages engender an unfounded sense of confidence. Inevitably, this is mistaken for genuine economic growth and improvement, and thus the stimulation is increased in a compulsive attempt to make it last. Once again, we risk creating a manic-like bubble that will eventually burst. In the long run, the economy will become mired down in varying degrees of inflation and stagnation. Growth will be suppressed by distortions that were caused by the initial stimulations and by the government regulation that come along with them.

But it gets worse for both chemical and financial interventions.

Prozac was tested in clinical trials lasting a mere 4-6 weeks before it was approved by the FDA and unleashed on the marketplace. Although I predicted many of them in my book Talking Back to Prozac (written with my wife Ginger in 1994), the untoward consequences were unforeseen and then denied by advocates of the drug. The FDA-approved labels for antidepressant drugs now recognize some of these harmful outcomes. For example, by over-stimulating the brain, Prozac and its chemical cousins can lead to disinhibition or loss of self-control with violence, suicide and aggression. In my latest book about psychiatric medications, Medication Madness: The Role of Psychiatric Drugs in Cases of Violence, Suicide, and Crime (2008), I describe how they can cause bizarre and horrendously destructive episodes of mania and disinhibition.

The equivalent to artificial interventions with the economy is apparent. In an effort to make housing available to the poor, the government encouraged and even forced banks to invest in subprime mortgages that created an enormous bubble in the housing market. The easy money policies of the Fed then enabled speculators and financial institutions to package these unsound mortgages into what would become "toxic assets."

As I mentioned earlier, there is a long-term antidepressant effect that is finding its way into the medical literature and that I am seeing on a regular basis in my psychiatric practice. Patients find themselves becoming apathetic on these drugs. They lose their interest and involvement in their own lives. It happens gradually with a diminishment of emotional investment in sex, in love, in relationships, in creativity, and in work. In the words of one of my patients, "All of life becomes blah." Time and again I hear, "I just wish I could get my life back."

The road to recovery from psychiatric drugs can be long and discouraging. And there is a tragic analogy to current politics in America. With the increasing loss of our liberties, many of us will end up "longing for the good old days."

Meanwhile, in a process I have identified as "medication spellbinding," patients' judgment and self-insight become so impaired that they rarely grasp what has befallen them until it is too late. The analogy to politicians spellbinding the public is striking. We must all wake up to the political dangers before it is too late.

In some ways worst of all, after enduring exposure lasting months if not years, people often find it difficult and sometimes impossible to stop taking antidepressant drugs. Withdrawal reactions are highly unpredictable, but include "crashing" into depression and suicidality, becoming over-stimulated into mania, and experiencing shock-like feelings in the head, a distressing sense of disorientation and imbalance, and various other neurological symptoms.

The analogy between pharmaceutical interventions into the brain and government interventions into the economy took on a new reality in the 1990s in regard to what Alan Greenspan called the "irrational exuberance" of Wall Street investors. Instead of an analogy, we had may have had a direct effect. I was not alone at the time in wondering if some of that investment euphoria was being driven by the widespread use of Prozac among these traders and speculators.

The withdrawal symptoms from economic stimulation are also a critical problem as the government struggles between the unpleasant choices of controlling inflation with higher interests or suppressing the economy with these same increased interest rates.

Why do we have so many unintended consequences from psychiatric drugs and from economic panacea?

The brain, like the economy, resists all artificial attempts to stimulate or control it. For example, newer antidepressants are intended to cause increased stimulation of the neurotransmitter system called serotonin. They are supposed to do this by blocking the removal of serotonin from its active sites in the brain, in effect flooding the serotonin engine with chemical fuel. But the brain immediately fights back by shutting down the production of serotonin, by increasing its rate of removal from these active sites, and ultimately by causing a die back of the receptors for serotonin. In manifold ways the brain resists the impact of any psychiatric drug. Animal studies show that distortions in the brain caused by psychiatric drugs can long outlast the exposure to the chemicals and may become permanent, including the development of grossly abnormal neurons or brain cells. The same risks are incurred with the use of all potent psychoactive substances, including recreational drugs.

There is a basic principle that applies equally to interventions into the brain/mind system and into the economy: They always result in unintended harmful consequences. Whether we are talking about a psychiatric drug or a street drug like marijuana or LSD, there are always serious adverse effects, many of them unpredictable, from both acute exposure and from long-term use.

Why is this true of both the brain/mind system and the economic system? To begin with, both are far too complex to be "helped" by artificial interventions. The human brain is the most complex system that we know of in the entire universe. Because of the subtle and elaborate complexities created by life, each individual brain is more intricate and complicated than the entire physical universe. Produced by a combination of the brain, environmental factors and individual decisions, the mind is even more complicated than the brain. The probability of an artificially introduced chemical improving this system approaches zero; the likelihood of that same alien chemical causing disruption and harm is nearly 100%.

The economy is even more complicated than the brain and mind of individual human beings, because the economy is the product of the activity of billions of human beings with their busy brains and minds.

Regardless of the underlying physical structure of the brain or the economy, its real life is mental -- the product of individuals with free will who make their own subjective decisions about how to live. Our individual decisions direct our lives; put all together, these individual subjective decisions move society and the economy. As Ludwig von Mises described in great detail in his economic treatises, the subjective decision-making of untold numbers of people drives the economy. This aggregate of individual decision-making cannot be replaced by the top-down decision making of an elite or a dictatorship.

Put simply, the free will of individual people is the key to successful human life on both a personal and an economic level. Hence the importance of human liberty--providing the opportunity for people to exercise free will to the maximum of their ability. It is no coincidence that Adam Smith's The Wealth of Nations and the Declaration of Independence both made their entrance onto the human stage in the same year, 1776. Both were the product of a growing realization that liberty provides the best opportunity for human life on all levels -- personal, political, and economic.

Artificial interventions by know-it-all psychiatrists with their drugs, or know-it-all politicians with their economic bromides can never improve upon the activities of individual human beings pursuing their interests and their ideals in a free society.

Peter R. Breggin, MD is a psychiatrist in private practice in Ithaca, New York. His latest book is Wow, I'm an American! How to Live Like Our Heroic Founders. With straightforward language and dramatic examples, Dr. Breggin shows how the Founding principles of our nation apply both to good government and living the good life. All of Dr. Breggin's books can be obtained from his website, www.breggin.com or from Internet stores like Amazon.com. Dr. Breggin can be contacted at psychiatricdrugfacts@hotmail.com or at 607-272 5328.

California Stimulus Czar Falling Short Of Expectations

2009-12-18T14:13:27Z

SACRAMENTO, Calif. — As federal stimulus money began to pour in earlier this year, Gov. Arnold Schwarzenegger created the nation's first state-level inspector general to serve as a watchdog over California's windfall.

He had high expectations, saying the stimulus czar would root out waste, fraud and abuse as an estimated $50 billion was being spent throughout the state.

Shawn Healy: Swinging Senators to Be

2009-12-17T12:31:37Z

Seven more shopping days until Christmas, and a mere forty more until voters must make their Election Day decisions for who will represent the Democratic, Republican, and Green parties on the ballot next November in Illinois. Yesterday's attendees of the Union League Club's Democratic U.S. Senatorial Candidate Forum were treated to a delectable selection of candidates largely in agreement on the issues of the day, but whose words and actions show little evidence that they have been infected by the holiday spirit.

In their respective four corners, the four candidates vying for the Democratic senatorial nomination include State Treasurer Alexi Giannoulias, former Chicago Inspector General David Hoffman, Chicago Urban League President Cheryle Robinson Jackson and commercial litigator Jacob Meister. Giannoulias, a mere 33, has served as treasurer since 2007, and before that was vice president of family-owned Broadway Bank. Hoffman was inspector general the past four years and also boasts experience as an assistant U.S. attorney and Supreme Court clerk. Jackson has been with the Urban League since resigning as Governor Rod Blagojevich's press secretary after his first term in office. Meister worked previously as a congressional staffer.

Giannoulias struck early at probable Republican nominee U.S. Representative Mark Kirk by tying him to former President Bush's "failed" economic policies. As state treasurer, he boasts of a record of consumer advocacy and economic development. Giannoulias celebrated his refusal to accept campaign contributions from federal lobbyists and political action committees (PACs), then went on with a story about "Tim and Susan," a husband and wife he allegedly met on the campaign trail who have fallen on hard times and stand as a microcosm of what plagues the country and the rationale for his candidacy.

Hoffman suggests that this campaign is about who voters trust to be a strong and effective leader. In Illinois, he claims, the system works for those with political clout and hefty campaign war chests. Hoffman prods us to examine the character of those who we elect, and touted his credentials as a member of the Illinois Reform Commission, plus that fact that he has no ties to Blagojevich nor his financier Tony Rezko.

Jackson, in her position at the Urban League, is "on the front lines and in the trenches." She shifted the organizational focus from social services to economic development, and from this vantage point witnessed the first signs of the recent recession. She listed early childhood education, access to health care, and investment in women as the issues closest to her heart.

Meister has premised his campaign on "experience and purpose," and calls his 2020 jobs plan the "most comprehensive in the race."

What follows is an issue-by-issue synopsis of the candidate's answers to a laundry list of questions posed by Union League Club moderator Chris Robling and members of the audience.

Economic Development

* Giannoulias: Tax credits for businesses who hire new employees, a pay roll tax holiday for workers.
* Hoffman: Need to distribute stimulus funding immediately and encourage banks to lend to small businesses.
* Jackson: Help small businesses with cash flow, focus on job training.
* Meister: Develop green technologies and industries.

Financial Reform

* Giannoulias: Create a "living will" for failing institutions.
* Hoffman: Focus on consumer protection.
* Jackson: Oversight and regulation a must, would create a consumer protection financial oversight agency.
* Meister: House legislation a good start, but should also regulate derivatives and further separate banking and securities.

Health Care

* Giannoulias: Spent the bulk of this segment railing on Hoffman for investing in banks and later critiquing them.
* Hoffman: Countered with Giannoulias' association with Broadway Bank, one the "worst-performing institutions in the country."
* Jackson: The health care crisis must be addressed now, as current cost trends are simply unsustainable.
* Meister: Supports national health care which will help offset some of the legacy costs borne by the flailing auto industry.

Public Option

* Giannoulias: Supports, and predicts it would create competition and rid system of waste.
* Hoffman: Supports system of universal coverage, and critiques Kirk's vote against lowering prescription drug costs.
* Jackson: Yes, to drive down costs and compete with private providers, but also to emphasize outcome-based medicine.
* Meister: "Absolutely"--lack of competition locks people out of the current system.

Thomson Detention Center

* Giannoulias: Need to close Guantanamo, and Thomson is largely unused. Must address national security concerns, but we shouldn't engage in fear mongering (alluding to Kirk).
* Hoffman: Attacks Giannoulias for his youth, the fact that he's held only two jobs, one of them at his family's bank, and the fact that he couldn't protect the peoples' money while overseeing the Brightstar college savings program as treasurer.
* Jackson: The question is what's best for Illinois, and she responds with an unequivocal "yes."
* Meister: Touts the creation of 2,500-3,000 jobs, and therefore considers a "win-win" for Illinois and the nation.

Unemployment

* Giannoulias: Need to extend unemployment benefits.
* Hoffman: Banks must begin lending again, and the federal government should secure state safety nets.
* Jackson: Invest in emerging industries, better train our existing workforce, and improve our schools.

Afghanistan

* Giannoulias: Supports the policies of the Obama Administration; cites the need to also focus on Pakistan and pursue an integrated approach in the region that transcends mere military force; considers a timetable for withdrawal "necessary."
* Hoffman: Against the recent escalation, but admits that the US must remain in the region. Sees Obama's new strategy as an expansion of our mission, with no form commitment for withdrawal.
* Jackson: Opposed expansion, and considers our national priorities flawed. Invasion is the wrong approach.
* Meister: Supports our president and the troops, and reminds us not to forget about Pakistan. Withdrawal should protect our "vital interests."

Middle East Peace Process

* Giannoulias: First priority is the safety and security of the Israeli people; then, isolate Hamas and work to build a moderate alternative organization to represent the Palestinian people.
* Hoffman: A two-state solution is necessary, and the U.S. must play an active leadership role in this process, prodding both sides to make concessions.

From a global perspective, this debate was clearly a standoff between Giannoulias and Hoffman. The latter's implied barbs drew direct fire from the former, which spawned repeated jabs throughout the balance of the debate that served to distract the candidates and audience from the issues before them. Jackson and Meister preferred to stay above the fray. The proverbial elephant in the room was Mark Kirk, who drew the ire of both Giannoulias and Hoffman.

Hoffman delivered the most compelling performance of the quartet, though he did come off an unnecessarily mean at times. Giannoulias nailed his talking points and did nothing to undermine his frontrunner status. Jackson, on the other hand, asked the moderator to repeat questions a handful of times, even after the other three candidates has responded, and then proceeded to stammer through her responses. Meister read directly from his briefing book, but showed sporadic flashes of brilliance, all the while invoking hand gestures off kilter with his words.

While voters may have visions of sugar plums currently dancing in their heads, the Senate primary will follow the holiday hangover. It's never too early to pick a horse in this after Christmas sale with well-stocked shelves.

Gary Shapiro: A Holiday Wish List That No One Should Fulfill

2009-12-17T11:46:03Z

'Tis the season for end-of-year lists, so as we bring 2009 to a close, I offer my own, slightly tongue-in-cheek, list of all the things government could do in 2010 to bring our economy to its knees. You heard me right: this is a list of things government could adopt to prevent, not promote economic recovery. My one true wish for the holidays is that Congress not do - or in some cases, not repeat - any of these things.

So on the eve of 2010, here is my list of the "top ten" things our government could do in 2010 to reverse our nascent economic recovery. Of course, government shouldn't do any of these things - but its track record from 2009 causes me grave concern. [Note to Santa: if our government actually does any of the things on this list, please withhold presents from them in 2010.]

First, spend taxpayer money on feel-good programs, stimulus programs, rebates, cash for clunkers and anything else which has a short-term good feeling and a long-term hangover the next generation will pay for. This is a long-term investment in giving our kids a debt they cannot possibly repay. It will destroy their future and our nation - but hey - we feel good today.

Second, bail out the states so they don't have to make tough decisions about bloated governments. Give about one-third of stimulus money to states so they don't have to confront out-of-control spending and the high cost of defined benefit programs for their government employees. When this payment runs out in 2011, states will be worse off and still unable to meet the commitments they promised to their large workforces. Many states will be back in 2011 asking for an even bigger handout. And we can count these government jobs as "saved" by government scorekeepers! States will be more reliant on Uncle Sam (and this won't stop Congress from imposing new costs on states!).

Third, reward poorly run and inefficient American companies. Bailing out money-losing companies like GM, Chrysler and AIG is a great way to waste American taxpayer money and hurt better-run and more-efficient competitors. This rewards our friends the unions that brought down GM and Chrysler. The new union and government owners cannot make competitive decisions (a fact proven repeatedly in the last year by GM) but instead will be guided by political decisions. Their competitive future is dismal and we are guaranteed further American weakness as they return and insist on further bailouts and special treatment. This virtuous circle will allow politicians to claim they are protecting American jobs. Americans may still choose to buy cars from companies like Ford, VW, Toyota and BMW, which are not getting bailouts, but are making cars in the United States.

Fourth, bring down American crown-jewel companies that are the big job creators, innovators and the future of America. Companies like Google, Microsoft, Apple, Intel and Qualcomm are the envy of the world, and as the world comes after them you would expect the United States to stand up and protect them. Instead, as foreign governments challenge them with vague "monopolization" claims, the U.S. government appears to be mute. Instead, the U.S. government appears to be piling on - witness the Federal Trade Commission lawsuit against Intel.

Using some vague "unfair competition" complaint, the FTC is using new theories and an unprecedented "sue first and discover later" approach to challenge one of America's best companies. Worse, the government is insisting that Intel can only create products that are open to its competitors. It also seeks to ban volume discounts - a simple fact of a competitive world. Intel is a crown jewel of America, invests heavily in R&D on US soil, employs tens of thousands of Americans in good jobs and by any account has not hurt competition. This American attack on Intel is unprecedented and harmful to the future of innovation.

Fifth, raise taxes on job creators and make secret unionization possible. We must do everything possible to discourage successful U.S. companies from feeling comfortable investing in new jobs. That means we cannot allow a stable tax environment, a cautious approach to unionization efforts, and a resistance to further burdens on employers. Card check, health-care reform and several proposals on the table to raise taxes will push new burdens and costs on U.S. employers heavily, so that it is difficult to see why a company would choose to create new jobs in the United States.

Sixth, attack one of the most successful areas of American leadership - health care - by creating a lowest common denominator system. Health care is 16 percent of GDP, so it is a juicy target for mischief. And when doing so, make sure to protect America's one million lawyers so they can continue to be employed. They will also make sure doctors waste plenty of money testing patients unnecessarily so they don't get sued.

Seventh, make sure Americans spend heavily on a complex cap-and-trade system and do not invest in nuclear energy or use their own fuel in Alaska. Keep fuel prices low with low taxes so people feel no need to buy smaller, energy-efficient cars.

Eighth, continue to commit our armed forces to unending conflicts that drain our budget and resources without making America demonstrably safer.

Ninth, keep and put up barriers to trade. Pass more "Buy American" provisions so other countries can retaliate and put up barriers to American exports. Congress should also simply sit on the three free trade agreements that would remove high tariffs on American exports. Do the union bidding and hold up pending trade agreements with Korea, Panama and Colombia as American companies pay hundreds of millions of dollars more in tariffs, hurting our exports and ability to compete. Meanwhile, these countries have focused away from the United States and are cutting deals with a gleeful Europe and Canada. The world is amazed at the unique American botoxic arrogance to bite off the nose of trade to appease the incessant priggishness of the myopic labor leaders who fund them.

Tenth, and finally, make it as difficult as possible for business to occur in the United States. Block foreign investors and businessmen from getting visas to come to the United States to view products or attend trade shows. Make sure that we have ethics rules and policies that block anyone in government from helping host international visitors who flock to trade shows like the International CES, our event in Las Vegas. German Prime Minister Angela Merkel hosts dinners for international guests at our competitive event in Germany. Our White House could, but doesn't, help our economy by welcoming the 25,000 business leaders from abroad that the International CES brings to our country each January.

Here's to a happy, healthy and prosperous 2010 - and to policymakers who know how to get us there.

Gary Shapiro is the president and CEO of the Consumer Electronics Association.

David Adkins: Green Jobs Arriving Slowly

2009-12-15T15:51:03Z

As President Obama departs for Copenhagen, the public debate over climate change appears to hinge as much on green jobs as on greenhouse gases. Far away from the negotiations, and the partisan divisions surrounding them, American states have been hard at work implementing an unprecedented series of investments in energy efficiency and environmental improvements made possible through the Recovery Act. The story of states' progress in creating green jobs offers both notes of caution and encouraging signals for the new green economy.

While there is no national consensus among state governments about climate change policy, there is wide agreement that clean energy and new environmental technologies offer huge opportunities for economic development. Long before the stimulus, many states invested their own scarce resources in clean energy technology grant programs, tax incentives, and other measures to spur job growth in the green economy. The Recovery Act has put these efforts on steroids with billions of dollars in new federal funding.

However, in the first six months following passage of the Recovery Act just over 13,000 green jobs were created or saved, hardly a silver bullet solution to a 10% unemployment rate. While Ohio leads the nation with over 2,500 jobs, some smaller states have also posted impressive figures. Idaho has created over 800 green jobs to date, a figure that represents nearly 40% of the state's total jobs created with Recovery Act funds. Only Rhode Island had reported no green jobs created or saved by the October 10 reporting deadline for the Recovery Act.

While results to date have been modest, a wave of clean energy projects will soon be coming online in states like Oregon and Maine through the production energy tax credit program of the Department of Energy. These projects, along with steady growth in state spending on weatherization, drinking water improvements, and other stimulus-funded projects will likely yield a much larger total of green jobs in the next quarter.

If green jobs are going to play the role in America's economic recovery that many hope, there will need to be a concerted effort both at the state and federal levels to connect and catalyze the many disparate elements that feed into the emerging green economy. Short-term training dollars made available by the Department of Labor need to connect with long-term curriculum shifts in community colleges and universities. Similarly, short-term jobs weatherizing homes need to give way to long-term employment in competitive companies poised to provide clean energy technologies to markets both at home and abroad.

States are up to the challenge, but they will need to have a federal partner that is as concerned about building synergy among stimulus-funded programs as it is about counting dollars and jobs.

Green Job Creation -

For more information visit www.staterecovery.org

Diane Tucker: What's an Underemployed Gal to Do? Run For Office.

2009-12-15T12:45:58Z

Since the recession began, millions of women have found themselves underemployed, working in survival jobs for which they're overqualified. If you're in the process of making similar life changes, why not run for office? America needs more women in politics.

Because why?

"Governments with more women legislators are more productive," noted the World Economic Forum.

"National parliaments with the largest numbers of women have the lowest levels of corruption," reported the World Bank.

It's a shame more American women aren't thinking outside the box, by putting their names inside the ballot box. Men still dramatically outnumber women in the U.S. Senate, the House of Representatives, state legislatures, and city councils. The U.S. ranks a pathetic 71st out of 189 countries in the proportion of women in national legislatures. American women aren't even close to the magical 33% tipping point where we could begin to change the conversation.

No wonder the big stimulus winner in 2009 was Wall Street. The Old Boy's Club decided that if we bailed out Wall Street, the problems on Main Street would take care of themselves. "Nonsense!" said my gal pals, but few politicians heard them.

More women in politics -- that's change I can believe in.

I know, I know, it means we would have to knock on doors ... and we would have to raise money ... mean people might diss us ... and ... and ...

Ladies, it's time to stop eliminating ourselves from positions of power. Today I spoke with a woman who took the plunge, got elected, loves her new career, and is happy to share lessons learned. Anne Doyle was one of the first women in the U.S. to gain access to professional locker rooms as a sports reporter for CBS-TV in Detroit. Years later, she rose through the ranks of Ford Motor Company to become director of North America Communications. In 2009 she ran for a seat on the Auburn Hills City Council -- and won.

* * *

Politicians live in a fishbowl. Weren't you afraid of becoming so visible a target?

Anne Doyle: No, not at all, but I understand what you're saying. Fear is a huge barrier for women. I worked for three decades in sportscasting and the auto industry, places where people didn't always want me. I'm not afraid anymore.

But don't you think a lot of women are too thin-skinned for politics?

Women are better able than men to receive emotional messages. It's one of our strengths, but it also makes us more vulnerable. If we're going to put ourselves out there and become leaders, we simply have to accept that a certain number of people aren't going to like us. You grow thick skin like bark on a tree -- it takes time. The more you let the criticisms go, the better you get at it.

Is fundraising another huge barrier for women?

I had no problem raising money at all. In fact, and this is funny, I was so successful at raising money the other candidates started saying, "Hey, she's trying to buy the election!"

Well then, you're the right person to ask for advice on soliciting campaign contributions.

You start with people who believe in you. I wrote a personal letter outlining what I wanted to do, and asking for help. In response, several friends wrote sizable checks and it turbo-charged me. A California woman learned about me online and mailed a check. That was huge! We all have to write bigger checks for other women. It's in our best interest to get more women into politics.

Why is 33% considered the tipping point?

It's critical mass -- the point at which an environment changes in such a way, it can no longer go back to what it was. Take the Supreme Court, for example. One woman justice is newsworthy -- she's first. Two women are still the exception, not the rule. When you have three women on the bench, it stops being unusual.

Whether you're talking about the halls of Congress or a board of directors, until women achieve 33% we're just tokens. Our numbers are too small to influence men to see things in a completely different way. It's not that women are better, it's that balance among the two genders is better. Across the board in a variety of professions, the number of women in leadership positions today is only 18%. We have a long way to go. That's why it's all about numbers now.

How do we move the needle?

We can move the needle the fastest by getting more women elected to political office, because that's where female leaders are the most visible.

I was surprised to learn that women's progress into leadership positions has been stagnating for more than a decade.

We made tremendous progress in the 70s and 80s, but in the 90s and 2000s the numbers got bigger only in the middle. Today we have more women doctors, more women lawyers, more women with graduate degrees, but we are stalled in terms of progress into leadership positions that shape the culture. How many women CEOs are there today? That number has barely changed in 20 years, even though there is a perception that it has.

Let's say I want to throw my hat in the ring. What are the first three things I should do?

First, start talking about it. I guarantee you'll be amazed at the encouragement you get. Next, become very clear about why you want to run. One way to do this is by developing your candidate website. It doesn't have to be fancy, but the process will force you to put into concise words who you are and what you stand for. Finally, make a list of people you can ask for campaign contributions, because you'll need money for postage, a Web site, and campaign materials.

On the slim chance I raise more than $2 in campaign contributions, what's next?

I highly recommend the White House Project training. It's a national, non-partisan initiative focused on dramatically increasing the number of women running for office. They've already trained over 9,000 women candidates, and hope to train well over 36,000 by 2013. I enrolled in their Debate Boot Camp, where I learned how to refine my message and present it to a large group.

You took the risk and ran for office. What was the reward?

Knocking on doors, I met the incredible people who are my neighbors. It created a powerful sense of community. That was the richest reward for me. You can't imagine how it feels, seeing your yard sign on the front lawn of people you've never met. I would jump out of my car and introduce myself. After the election, I was keenly aware these people were counting on me.

How does being a politician compare to being a journalist or a corporate executive?

Journalists are independent operators -- they develop and write a story, it's their own work -- and corporate executives make many decisions unilaterally. Political leaders, however, can't get much done by themselves. You have to collaborate. You have to influence people. Somebody called politics the art of the possible. It's about getting people to evolve together. Where's our common ground?

Can women excel at this?

The experience of running convinced me that women have a tremendous natural ability for politics. We just have to get over our fear of it and go for the brass ring. The good news is that there's been a dramatic change in attitude about women in leadership positions. I want to say to women, "C'mon, let's go!"

Have you run for political office? Are you thinking about running in 2010? In 2012? What is the best advice you would give women thinking of running for a first time? Share your questions, concerns, and experiences with us and other women in the Comments thread below.

Eric Lotke: Federal Reserve: Are You Listening To Your Own Data?

2009-12-15T12:21:11Z

The Federal Reserve today releases industrial production data with good news. Will it draw the right conclusions?

First the good news. Industrial production increased 0.8 percent in November, and capacity utilization for total industry moved up 0.7 percentage points to 71.3 percent. Reuters used the data to describe the economy as "rebounding" It's more proof that the dramatic government interventions in recent months -- especially cash for clunkers and the "heavy dose of government stimulus" in the Recovery Act -- worked according to plan.

It's good news but it's a very small step. The hole is very deep. Even if utilization rose to 71.3 percent, more than a quarter of our nation's productive capacity is still lying idle. Our utilization rates in recent months are lower than any time since this data started to be collected in 1967. Moreover, the increased utilization rate might simply paper over decreased capacity. After all, killing a factory and increasing the workload at remaining factories would increase the utilization rate -- but it's not good news for all the factory workers who lost their jobs or the future of the industry that's closing those factories.

Our economy has been eroding for a long time. Manufacturing has declined as a percent of GDP from 25 percent in 1960 to 11 percent today. One in three factory workers has lost work since the elections of 2000. That's not a story of natural economic evolution from buggy whips to high end services. That's a story of economic decline, as other countries race ahead of us building cars and computers in the 1990s, and solar cells and wind turbines in the 2000s. There's a limit to how long we can live off past wealth generated by our ancestors and foreign borrowing against our remaining assets. We need to turn things around.

Source: Bureau of Labor Statistics

The question for the Federal Reserve now is which way it is going to push. The Open Market Committee is meeting today to discuss interest rates. Will it also discuss ways to support President Obama's push to get banks to lend money to businesses that want to hire? On Thursday, the Senate Banking Committee is scheduled to vote on the re-appointment of Ben Bernanke as Chairman. Part of his mandate is the creation of jobs. Will Bernanke support the dramatic government interventions that led to today's little uptick? Will the Senators voting for on his confirmation hold him accountable for his results? Hopefully, today's data will help push the Fed in the right direction.

---------------
This article originally appeared at the Campaign for America's Future.

Stimulus Funds Rejection By Local Officials Causing Controversy

2009-12-14T10:19:07Z

The American Recovery and Reinvestment Act was supposed to create jobs by the millions, but Debra Morgan of North Platte, Neb., says it got her fired.

Morgan, a 17-year employee and former executive director of North Platte's housing authority, contends she's a victim of small-town politics. She says that against her advice the authority's commissioners rejected $588,000 in stimulus funds because of their anti-government principles, then threw her under the bus when they got caught in the glare of national publicity.

Alan Greenspan: Fed Can't Do Anything Else To Combat Unemployment, Should Focus On Inflation

2009-12-14T09:06:31Z

WASHINGTON (Reuters) - The Federal Reserve has done all it can do to reduce unemployment and needs to worry more about the risk of inflation from the stimulus it poured into the economy, former Fed Chairman Alan Greenspan said on Sunday.

Lincoln Mitchell: Making Job Creation a Priority

2009-12-10T15:24:02Z

The White House job summit came and went, and seemed somewhat overshadowed by the Afghanistan speech, the climate change conference in Copenhagen, President Obama's Nobel Peace Prize acceptance speech and even the White House party crashers. The result of the summit was a proposal for a battery of necessary and unsurprising, but probably not sufficient, recommendations. These recommendations were then followed by news reports that the latest job numbers are worse than expected.

Putting the more than fifteen million unemployed Americans back to work in the midst of an ongoing recession is not an easy task, so faulting the administration for not coming up with a brilliant and politically achievable plan for doing this is a little unfair. Nonetheless, the administration's position on jobs has at times suggested an unexpectedly poor understanding of the impact of the economic downturn on ordinary Americans.

The timing of the jobs summit itself reflected this as well. It is not clear why Obama waited ten months into his term to address this issue in a high profile way. The unemployment rate when Obama took office in January was, while not as high as the current 10%, still quite high at 7.2%; and more layoffs and business closings were not exactly unforeseen at that time.

The Obama administration, however, did seek to address unemployment early in their term through the stimulus bill which was passed in February. Interestingly, although the bill allocated resources for projects that would have, and almost certainly did, create some jobs, the administration allowed the legislation to be spun and described as primarily aimed at the financial crisis, not the unemployment crisis. Thus, Obama was perceived as having not made job creation as high a priority as bailing out the financial sector. Obama did little between February and November to change that perception. By late summer it was not uncommon to hear talk about the economic recovery, but this occurred as unemployment numbers continued to get worse. Some economists spoke of a "jobless recovery", which soon became the consensus interpretation of economic trends.

A jobless recovery is, of course, not a recovery at all. For most ordinary people losing a job is a devastating financial blow that for which a recovering stock market is very cold comfort. Linking the two words jobless and recovery suggests an understanding of the economy in which as long as the markets are coming back, massive, and rising, unemployment is not a big problem. If you commissioned an advertising firm to come up with a two word description of the economy that would provoke great feelings of anger and resentment, they would have a tough time coming up with something better than "jobless recovery," yet this is the phrase which became relatively broadly used a description of Obama's economy.

For most Americans, the job security issues have been central to their experience of the recession. Millions have indeed lost their jobs, but most of those who have not lost their jobs have either been worried about losing their jobs or been working extra hard, often without additional compensation, to increase their chances of keeping their jobs. Declining investment and retirement portfolios as well as home foreclosures have been the other two parts to what Obama's predecessor might have called the economic trifecta, but jobs have been a front and center concern.

Putting Americans back to work was indeed one of the early promises made by the Obama administration, but as the first months went by this seemed to become less of a priority. This was partially due to the rancorous debate over health care that has dominated domestic politics for several months, but the lack of perceived emphasis on jobs by the administration cannot be explained away quite so easily. Allowing the term jobless recovery to be used so frequently, speaking of a recovery when unemployment was only getting worse and sandwiching a jobs summit between other events in December also helped send this message.

There is very little in Obama's background to suggest that he does not care about jobs. From his work as a community organizer to his work as a legislator and his public statements as a candidate president, it is clear that Obama understands how serious the problem of unemployment is. Moreover, the economic stimulus bill and the current proposals on job growth will create some, but not enough, jobs. Even the proposed health care reform bill, which would help small businesses control health care costs, will help reduce unemployment.

Obama can combat this perception but only if he visibly and concretely makes jobs a clear priority. The jobs summit must not be a one off event so that a box can be checked but should be part of very public and sincere effort by the White House to refocus their energy on job creation. Obama may not be successful in creating jobs right away as his ability to influence the economy is often not that significant, but if he is not seen as sufficiently concerned about jobs, his support will inevitably and sharply decline and his presidency will ultimately become less relevant.

Eric Lotke: The President Asks for Help -- From Us

2009-12-08T16:39:06Z

At his Brookings speech today the president outlined his economic plan. It has all the right pieces and it points in the right direction. But something is missing.

Start with the good news. The president understands how bad the situation is. The greatest crisis since the Great Depression, one in four homes underwater, losing 700,000 jobs a month before the Recovery Act passed, etc., etc. The president tries to call attention to good news (job loss down to 11,000 last month) but he isn't fooling himself. This isn't John McCain telling us "the fundamentals are strong." It's bad, and he knows it.

The Recovery Act was a step in the right direction. The plans announced today keep it going. The basics are relief to states and localities to so they don't have to layoff police and school teachers, and emergency assistance for individuals like COBRA and unemployment benefits. Moving beyond the basics, Obama proposes an important new round of infrastructure spending on roads, bridges and water systems. He outlined incentives to homeowners to improve home energy efficiency (bizarrely nicknamed "Cash for Caulkers," to recall a program widely (if wrongly) considered a failure). Other elements, like the elimination of some capital gains taxes, are more puzzling, but at least he's trying. Some of the money will even come from the TARP fund, so it looks like money moving from Wall Street to Main Street.

It's all good. But here's the problem. It's not enough. Paul Krugman calls it "too little of a good thing." Robert Reich says it "doesn't measure up." "We need a federal government that moves boldly and swiftly to counter-balance the huge recessionary forces still at large."

That's where we come in. Worries about the deficit tend to shrink the plans. The hundreds of billions of dollars needed to solve our problems -- putting people to work fixing schools and laying high speed rail -- would add to our already intimidating deficit.

It's fair to be concerned about deficits in the long run, but the long range worries shouldn't constrain short range thinking. The best way to reduce the deficit is to grow the economy. That might cost money at the outset. In the words of our commander in chief:

"There are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. But this is a false choice. Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment so that our deficits will start coming down."

He said the same at last week's Jobs Summit. Spending money to put people to work is not a deficit problem. It's a necessary step for economic growth.

"Now, if we can't grow our economy, then it is going to be that much harder for us to reduce the deficit. The single most important thing we could do right now for deficit reduction is to spark strong economic growth, which means that people who've got jobs are paying taxes and businesses that are making profits have taxes -- are paying taxes. That's the most important thing we can do."

I've written in the past that some people are hysterical about deficits. People who matter like Krugman and Reich say it louder and more effectively. Obama asked for everyone's help:

"That's not always the dialogue that's going on out there in public and we're going to have to do a better job of educating the public on that."

Educating the public is partly our job. We need to talk about budgeting responsibly in the long run AND kick starting the economy right away. We need to move past the "false choice" between jobs now and growth later. We can do both. Put people to work building the bridges that we need. We get good jobs now ...and we get to keep the bridge.

Our problems are big. The solution needs to measure up.

This piece originally appeared at the Campaign for America's Future.

Gavin Newsom: A Local Stimulus Program that Works

2009-12-04T13:26:05Z

Nearly two years after America entered into a recession, joblessness continues to plague our working families. California, the largest economy in the United States, reported an unemployment rate of 12.5 percent last month.

Yesterday, in our nation's capitol President Obama convened a job summit with business leaders to find new ways to get Americans back to work. In San Francisco, we're already delivering solutions with a public-private partnership that is showing immediate, demonstrable results. More than 1,000 San Franciscans are now employed, thanks to JobsNowSF, a citywide program that provides federal stimulus dollars to businesses that hire local residents.

JobsNowSF pays the full wages of employees for a specified time period, often up to one year. Unemployed or under-employed heads of households who support at least one child under age 18 are eligible to participate in the program. Married couples with one "breadwinner" who have one or more child, and single parents who support at least one child also may qualify for JobsNowSF.

For San Francisco businesses like Internet Archive (a technology company creating a digital library) or non-profits like the YWCA, or a large retailer like Macy's, participating in JobsNowSF is a no brainer - it allows them to grow with very little risk.

Local companies access the program's pool of qualified trade and skilled workers. Workers complete JobsNowSF with a more stable employment history, leaving them better positioned to secure an unsubsidized job after September 30, 2010, when the stimulus funding expires.

Our early success suggests that this is a model that others should consider. It is, in every respect, a literal "stimulus" to recovery. We're helping employers by offsetting the direct cost of hiring new workers. And it is working. At the current wages and job placement trends, we project that JobsNowSF will pump more than $40 million of wages into the local economy.

As jobless numbers continue to climb, we need real solutions to alleviate the nation's economic woes. JobsNowSF focuses our resources on a single, core priority: job creation. And it does so in a uniquely entrepreneurial way.

In 2010 we are going to double the JobsNow program upping its participation to 2,000 workers--an achievement that will impact not just workers and their families, but our communities and our economy.

Public-private partnerships like JobsNowSF are models worthy of study by cities looking to get their citizens back on a path to self-suffiency. In San Francisco, we are demonstrating that aggressive, local action using federal stimulus funds can bring relief.

While it is clear that we cannot rely on these types of programs to solve our long-term economic problems, we should direct stimulus dollars in a way that will reach our hard working families. That's why I am calling on Congress to re-authorize funding for JobsNowSF and urging other cities to implement similar programs.

For more information visit the JobsNowSF web site or you can follow JobsNowSF on Twitter or Facebook.

Alexia Parks: Boss America: Creating a Million New Jobs

2009-12-03T11:43:01Z

While some of the best and brightest CEOs, small business owners, and financial experts are attending a Forum on Jobs and Economic Growth at the White House, the folks who can really jump start the economy are not at the table.

They're the micro entrepreneurs, and those who have lost their jobs, who are disconnecting from the corporate model of civilization. Instead, they are following their passion into the marketplace. Boss America is a term for what happens when the corporate model is turned on its head and everyone at the bottom of the pyramid then takes charge of their own lives and livelihood.

Welcome to the age of Self-Reliance. Right now, as the world economy changes at lightning speed, new opportunities are opening up and they're going to those who have both a passion to express and skills to share.

Right now, the micro entrepreneur needs our nation's support. Why? It is well know that in the past, the U.S. has been a nation of consumers, of spenders, of people both blessed and spoiled. We have never had to look over our shoulder because we are always looking outward, westward, eastward, or skyward, toward the next frontier to conquer.

By contrast, the Western Nations of Europe have made different choices. They endured two World Wars. Many of the older generation of Europeans survived long days in bomb shelters and emerged from them to find their entire family and livelihood smashed into dust. They had to rebuild everything because everything they valued was either lost, broken, or destroyed.

The World Wars in Europe affected everyone at the same time. Everyone was displaced. What Europeans gained from this hardship were the traits of the new emerging economy: self-reliance, self-responsibility, and self-care.

They learned how to do without; and how to use and reuse wisely. They also learned about community. They learned how to help each other and how to share everything. At a time of breakdown, they leaned that good health and family came first. Everything else was second, third, or off the list.

They learned how to take one step and one task at a time, and complete it. They learned how to make each step lead them forward. In the process, they created systems of universal health care, and free vocational and academic education for all.

More recently Europeans have led the way in supporting green industries and solar infrastructure. They know that nations will go to war for scarce resources like oil. They are finished with war. In the absence of war, the creative energy of all individuals can be unleashed.

In seeking to put unemployed Americans back to work, President Obama needs start first with the micro entrepreneur. Economic stimulus money should be given to the millions of Americans who have the skills, passion and desire to serve the needs of others.

In one day, THIS day, Obama can put a million people back to work by offering microloans with generous payback terms. Economic recovery starts first with the individual. The surplus moves into the local community, to Main Street, and to those among us most in need.

Obama's Jobs Summit: Focus Turns To Putting People Back To Work

2009-12-03T08:24:58Z

WASHINGTON — President Barack Obama promised at a White House jobs forum on Thursday to take "every responsible step to accelerate job creation," including some ideas he said could be put into action quickly. He cited an expanded program to help make more U.S. homes energy-efficient as an example.

He also mentioned trade measures and possible new tax incentives among ways to stop job losses that are the worst since the 1930s.

Robert Reich: The Economic Reality That No One Wants to Talk About

2009-12-02T13:38:00Z

Most ideas for creating more jobs assume jobs will return when the economy recovers. So the immediate goal is to accelerate the process. A second stimulus would be helpful, especially directed at state governments that are now mounting an anti-stimulus package (tax increases, job cuts, service cuts) of over $200 billion this year and next. If the deficit hawks threaten to take flight, the administration should use the remaining TARP funds.

Other less expensive ideas include a new jobs tax credit for any firm creating net new jobs. Lending directed at small businesses, which are having a hard time getting credit but are responsible for most new jobs. A one-year payroll tax holiday on the first, say, $20,000 of income - which would quickly put money into peoples' pockets and simultaneously make it cheaper for businesses to hire because they pay half the payroll tax. And a WPA style program that hires jobless workers directly to, say, insulate homes.

Most of this would be helpful. Together, they might take the official unemployment rate down a notch or two.

But here's the real worry. The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that's been going on for years but which the Great Recession has dramatically accelerated.

Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They've discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

This means many Americans won't be rehired unless they're willing to settle for much lower wages and benefits. Today's official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they've lost higher-paying jobs and are now in a new ones that pays less.

Yet reducing unemployment by cutting wages merely exchanges one problem for another. We'll get jobs back but have more people working for pay they consider inadequate, more working families at or near poverty, and widening inequality. The nation will also have a harder time restarting the economy because so many more Americans lack the money they need to buy all the goods and services the economy can produce.

So let's be clear: The goal isn't just more jobs. It's more jobs with good wages. Which means the fix isn't just temporary measures to accelerate a jobs recovery, but permanent new investments in the productivity of Americans.

What sort of investments? Big ones that span many years: early childhood education for every young child, excellent K-12, fully-funded public higher education, more generous aid for kids from middle-class and poor families to attend college, good health care, more basic R&D that's done here in the U.S., better and more efficient public transit like light rail, a power grid that's up to the task, and so on.

Without these sorts of productivity-enhancing investments, a steadily increasing number of Americans will be priced out of competition in world economy. More and more Americans will face a Hobson's choice of no job or a job with lousy wages. It's already happening.

Cross-posted from Robert Reich's Blog

CBO: Three-Quarters Of Stimulus Unspent

2009-11-30T21:12:48Z

Only $100 billion of the $787 billion stimulus package passed nine months ago has actually been spent by the federal government so far, with another $90 billion of stimulus coming in the form of tax reductions, the nonpartisan Congressional Budget Office reported Monday evening. That leaves three quarters of the package -- and its stimulative effects -- yet to come.

Slow as that pace may seem, it's in line with initial CBO estimates.

But much of the spending hasn't had the full impact it could, the report says, because "it appears that stimulus funds substituted for some spending from regular appropriations."

Despite the limitations, the CBO estimates that between 600,000 and 1.6 million people were employed in the third quarter of 2009 who otherwise would not have been. The spending and tax cuts raised the Gross Domestic Product by somewhere between 1.2 and 3.2 percent, it found, and reduced unemployment by 0.3 to 0.9 percent.

In Washington, the stimulus is often discussed as if the entire $787 billion was all spent on the first night -- with some pundits expressing shock and dismay that the economy hasn't already bounced back as a result. That three quarters of the stimulus has yet to be felt undermines their positions.

Shortly after the stimulus was passed, the GOP began declaring it a failure, a conclusion the party has stuck to since - even if some officials take credit for what it's accomplishing when they're back at home

Democrats in Congress have been stung by the criticism and even while pushing for more stimulus spending have worked hard to avoid calling it a stimulus, dubbing it a "jobs" bill instead.

Michael Steel, a spokesman for Minority Leader John Boehner (R-Ohio), told HuffPost Monday night that he's not buying the CBO estimate.

"The White House claimed that if we passed the trillion-dollar 'stimulus' unemployment would stay below 8 percent and jobs would be created 'immediately.' Instead, unemployment is over 10 percent, more than three million more Americans are out of work, and folks are asking 'where are the jobs?'" he wrote in an e-mail.

The White House had been mocked for its flawed reporting of how many jobs the stimulus created - which included jobs in congressional districts that don't actually exist. But the CBO said it used a different model than relying on the word of bureaucrats.

"Estimating the law's overall effects on employment requires a more comprehensive analysis than the recipients' reports provide," the CBO said. "Therefore, looking at the actual amounts spent so far (where identifiable) and estimates of the other effects of ARRA on spending and revenues, CBO has estimated the law's impact on employment and economic output using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy. On that basis, CBO estimates that in the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States."

That could be a tremendous underestimate, as the CBO's thinking doesn't take into account the possibility that the economy might have fallen off a cliff if the stimulus hadn't been passed, with world markets panicking and employers continuing to eliminate jobs at an eye-popping pace.

Similarly, the reason the CBO failed to predict the rise in unemployment that has taken place since February is that the model it uses doesn't take into account the fact that the banking system collapsed.

Denise Dennis: Obama-nation: From Hope to Cynicism

2009-11-30T17:28:05Z

"Is it not time to awaken from the deceitful dream of a golden age, and to adopt as a practical maxim for our political conduct that we, as well as other inhabitants of the globe, are yet remote from the happy empire of perfect wisdom and perfect virtue?" --Alexander Hamilton, Federalist Papers, No. 6

In the past two months, I have spoken with Obama supporters across the spectrum of gender, race, class, geography and age who supported, worked for and still believe in President Obama. While they applaud his courage in pushing for health care legislation, all are, if not disappointed, puzzled by some of his decisions and choices.

The President of the United States is neither a dictator nor Santa Claus; he cannot dictate what he wants and have Congress automatically fall in line, nor can he open a bag and miraculously grant our wishes. The President is our leader, though, and we count on him to lead and fight for what he believes in.

As Hamilton pointed out, we are not a nation of perfect wisdom and virtue. Our government operates on a system of checks and balances. Even that system, however, does not always work. For example, George W. Bush had eight long years to embroil the United States in two wars and wreck the economy; and Congress--Republicans and Democrats alike with a few exceptions--did nothing to stop him. It will require more than eleven months or even eight years to undo the damage inflicted on the United States by Bush/Cheney.

Americans who voted for Obama to clean up the mess left by Mr. Bush, believed he could work wonders in his first year--and since he has not--are now turning from hope to cynicism. Even his most ardent supporters are now asking themselves whether, instead of following in the footsteps of such transformative Presidents as Lincoln and FDR, President Obama is following Buchanan and Hoover, the timid men who preceded them.

Some of the people I spoke with blame the President's staff, particularly Rahm Emmanuel, for giving him bad advice; some blame the media for their predilection for controversy and their dismal failure to question the absurdities spread by those who would like to see Obama fail; still others believe the President is relying too heavily on the recommendations of his economic and military advisors who are unwilling to think out of the box; and one sixty-two year old woman wondered whether the President she worked so hard to elect is simply another calculating politician who said what he had to say in order to get elected.

The areas of concern to the President's supporters I spoke with are the economy: specifically, his selection of Timothy Geither, former head of the Federal Reserve Bank of New York, to be his Treasury Secretary; and his selection of advisor Larry Summers, a holdover from the Clinton Administration, who with Robert Rubin shares responsibility for repealing the Glass-Steagall Act.

The fact that irresponsible financial institutions like Goldman Sachs received bailout money--without conditions--but failed to extend loans to needy mid-and small businesses that support jobs, as they were supposed to have done, is particularly disappointing. Geithner might have saved the country from complete financial collapse, but he is also the regulator who for years failed to regulate Wall Street, thereby contributing to its near-collapse.

The perception in Middle America is that by relying on Mr. Geithner, the President is not acting on behalf of Americans who've lost their pensions and savings, their homes and businesses. With so many people suffering, Geithner's argument that, if the so-called wizards of finance were not allowed to keep their obscene bonuses, they would leave their jobs--is lame. Imposing conditions on the bailout money would have called their bluff and, if they threatened to leave--the President and Congress should have let them go. Standing up to Wall Street would have spoken volumes.

The people I spoke with supported the stimulus because they thought it would benefit Main Street by stimulating the economy. They blame Geithner for protecting his peers on Wall Street rather than helping Americans who are victims of their in-your-face excesses. From the perspective of average Americans, the distribution of stimulus money appears to be a variation on the GOP's "trickle-down" economics--taking care of the wealthiest Americans, in the hope that crumbs will trickle down to the middle and lower classes.

FDR understood that putting Americans back to work was an economic--and psychological--necessity. He knew that working--even with meager pay--has a positive psychological effect on human beings. It isn't enough to extend unemployment benefits--Americans want to work! The New Deal didn't end the Depression, but through creative programs like the CCC, WPA, and TVA, Americans were on the move again; they were earning wages, there was activity afoot and with it the sense that all would turn out well. Also, when one program didn't work, Mr. Roosevelt discarded it and tried another--he kept trying.

Job creation--not bailouts for billionaires--will get the country rolling again.
Another major area of concern and dismay are the costly wars in Iraq and Afghanistan. Candidate Obama never promised to end the war in Afghanistan. During the primary and general elections, he repeatedly stated that while he would end the war in Iraq, he believed the real war was in Afghanistan and that he would prosecute it.

Now, however, Afghanistan is morphing into a monstrous Vietnam look-alike, where we sacrifice thousands of American lives and vast resources to a losing cause. Our military is already stretched beyond its limits, men and women are being deployed over and over again without regard to their physical and mental health, and we cannot afford the financial cost of the war--one million dollars per soldier.

The Afghan government has proven to be corrupt and unreliable, their election was questionable, and we have no guarantees that their military will be able to assume control after we leave. Americans are losing confidence.

Rather than being remembered for his historic achievements like passing the Voting Rights Act and Medicare, President Lyndon Johnson is remembered more for the disaster that was Vietnam. President Obama's supporters fear he is headed in the same direction as LBJ and that Afghanistan, not health care reform, will be his Waterloo.

Everyone I listened to still believes--or wants to believe--in President Obama, but is concerned that if he doesn't act and invest stimulus money in jobs for middle class Americans (after having saved Wall Street); if health care reform does not include low-cost, government-run insurance and legislation to regulate the insurance industry; and if Americans keep returning from Afghanistan in flag-draped coffins--the change they voted for will be merely a "deceitful dream," as Hamilton wrote. Hope is turning to doubt and cynicism--and it could easily turn to despair.

Neither Lincoln nor FDR resolved the enormous challenges that faced the United States during their first months or even years of their administrations, yet they went on to become two of our greatest Presidents. The whole story of Obama's Presidency has yet to be written.

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Les Leopold: Stimulus versus Deficit Reduction? Wrong Debate

2009-11-30T09:37:42Z

"With food stamp use at record highs and climbing every month, a program once scorned as a failed welfare scheme now helps feed one in eight Americans and one in four children."

New York Times November 29, 2009

Hunger is returning to a nation that has been blessed with everything. Shame on us.

The Wall Street bailout combined with the stimulus package was supposed to put our people back to work. Instead, these policies created another record year for Wall Street profits and bonuses while the jobless rate is the highest since the Great Depression. Even the Federal Reserve is forecasting an unemployment rate that will stay above 9 percent through 2010 and above 8 percent through 2012. It could be a decade or more before we see full-employment again. This is an unmitigated disaster for real people trying to hold their lives together.

Some economists argue that the initial stimulus package was too small to make up for the gaping hole the financial crisis tore out of the economy. But that analysis overlooks the incredible inefficiency of the stimulus itself. How could a $787 billion stimulus package only produce about 650,000 jobs, even if only half has been spent so far? At that rate the program is costing about $600,000 per job. That amount should be producing more like 10 jobs, not one job.

It seems as if the Congress and the Administration did everything possible not to create jobs directly. Instead, overall spending increases were supposed to make up for lost consumer demand and reboot the economy. All would be well as demand increased and bank lending resumed, especially to small businesses. But the lending is still stalled, in part that's because we no longer live in a unified economy. The wealthy and the large Wall Street banks seem to live in a world of their own.

Spending more money to increase overall demand no longer guarantees that new jobs will be created. For example, a careful accounting would show that a good deal of the stimulus money ended up as profits for contractors of all kinds rather than in new jobs. Also, we know that much of the renewable energy money has leaked abroad to purchase wind generators and other equipment. (See "Gone With the Wind: Blowing U.S. Tax Dollars Off Shore")

The answer is not more stimulus in general. The answer is direct hiring by federal, state and local governments. If we want more teachers, then we should create a national teachers' corps. If we want to insulate homes and businesses then we should build national caulkers corps modeled after New Deal programs like the Works Progress Administration.

The job/cost equation changes dramatically when government does the hiring. By the time the $787 billion runs out, the Obama Administration will be lucky to create 2 million new jobs. However, had that money gone directly into job creation at about $75,000 a job including administration and benefits, we're talking 10.5 million new jobs --- jobs we can believe in.... and count.

We do in fact need a new round of stimulus spending. But only if it funds direct job creation. We tried the indirect route and it doesn't put enough people to work.

And what about the deficit hawks? They sense the debate is drifting their way: "We all are living beyond our means"..."We have to get our fiscal house in order"..."The government is wasteful, always." Borrowing more, we are told, will lead to disaster. Not only will it put us more at the mercy of China which holds so much of our debt, but government borrowing will crowd out corporate borrowing and therefore kill jobs. You know the song and the hypocrisy--after all, it's those who claim to worry about the deficit who do the most to prevent the government from spending its money efficiently by demanding useless (and budget busting) tax cuts in place of effective, direct spending on job creation.

The New York Times recently joined the choir. In a lead article it argued that rising debt payments will dwarf the Pentagon budget in the next decade. But the New York Times, like the screeching deficit hawks are silent on the true underlying cause: The wealthy in America haven't been paying their fair share for more than 30 years.

We lead the world in billionaires. We also have the developed world's most skewed distribution of income. And our financial sector is much too large compared to the real economy it is supposed to serve. If we could see past our ideological blinders, we'd notice that there's plenty of money in this country tucked away in private hands. The super-wealthy never had it so good. If they ever paid anything like their fair share, as they do in Europe, our budget deficits would soon evaporate.

The Forbes 400 alone collectively holds about $1.5 trillion in net worth. You want deficit reduction? Then how about a wealth tax of 5 percent a year until the unemployment rate drops below 5 percent? That small tax on just 400 fortunate souls would reduce the deficit by about $75 billion a year. If we broadened the tax to include all those with a net worth of $500 million or more, we might generate more than $200 billion a year in public funds for debt reduction, or better yet, for real job creation.

A Tobin Tax on all Wall Street financial transactions also would move money from the financial sector to the real economy. A small fee would have almost no impact on 99 percent of Americans who invest long term for retirement or to pay for college. But the fee would dramatically impact the largest speculators who make billions of dollars worth of trades each day without creating one iota of value for the real economy. A Tobin tax could easily generate $50 billion a year for deficit reduction or job creation.

To put our people back to work we need to escape from the old debates. In our new billionaire bailout economy, jobs will be created when we directly create them and not before. Banks won't create them, nor will businesses until after the economy is humming again.

If we want to reduce our national debt, we need the super-rich and Wall Street to pay their fair share. If the fiscal hawks don't have the guts to correct our obscene distribution of wealth and income through progressive taxation and a Tobin tax, then they really have nothing useful to add.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.

Patrick Takahashi: How Serious Is Our National Debt?

2009-11-23T11:37:35Z

Maybe not as serious as you might think. Let me tell you why, looking at three sources, beginning with the October 24, 2009 issue of The Economist. The issue shows a projected American government debt as a percentage of our Gross Domestic Product (GDP) of about 100% in 2010. However, Japan will go to 230%!

Interestingly enough, the CIA Factbook has a table of essentially the same international comparison, but for 2008, with Zimbabwe at the top with a debt percentage of 266%. Japan is listed #2 at 172%. However, I couldn't find the USA until I reached #61 at 38%.

So what's going on? Let's do a simple calculation. Our national debt is just over $12 trillion. Our GDP is $14.4 trillion, which results in a figure of 83%. What is the CIA trying to do? Certainly, I would tend to believe The Economist, as confirmed by Wikipedia, which gives the 2008 national debt at about $10 trillion and % of GDP at 70%, with a 2010 estimate of $16.6 trillion and 98.1%.

Thus, yes, the American debt as a percentage of GDP is at around 100%, which is expected to edge up to 101% in 2011, then begin to drop. The expected continued low interest rates can only help a debtor, our government.

Expect, though, a policy uptick, for the health care measure will initially add more debt (just plain old common sense as 35 million or so more people will now need to be covered), but within the decade, when the public option finally kicks in to truly compete, the unacceptable growth rate of our national medical bill should be checked. If you're rich, you'll be hit twice: you'll subsidize much of this, and, so that you can cut in line for service, you will buy supplemental insurance.

Oh, by the way, also from Wikipedia:

The debt limit was most recently raised to $12.104 trillion by the American Recovery and Reinvestment Act of 2009 (H.R.1), which was signed into law on February 17, 2009 (P.L. 111-5).[11]

Is there a check and balance system in place or can our national debt keep going up forever? The answer is yes, for Congress needs to approve it, and yes, again, because it always does when asked by the President.

To go on, a look at a historical graph (from zFacts) shows that the all-time national high of 120% was attained at the end of the Second World War, but the current exponential slope looks damning. However, 83% or 100% is still nowhere close to Japan, which appears to be surviving at double our rate. I should mention without going into details that the Gross Domestic Product is about 10% lower than the Gross National Product, and the reason why we don't have exact agreement among sources is because of this discrepancy and the year being cited. Not sure about the CIA, though.

This same graph shows that the Reagan-Bush (Senior) reign showed a doubling of our national debt/GDP percentage, while the Bush (Younger) years initiated the jump when Congress passed the initial bailout package in December of 2008 before Obama came into office. While we're at this, you should know that President Reagan, when he came into office in 1982 faced exactly the same predicament as Obama, for the second energy crisis in 1979 had discombobulated the economy. In 2009 dollars, Reagan got a $1.8 trillion recovery package, double that of Obama.

Finally, what about China? That same Economist article reports that China does own 24% of our foreign debt, but that Japan, a country with a 200% or so debt/GDP percentage, is at 20%. Actually, China recently dropped to 23% and Japan rose to 21%, and in 2007 this was not as bad as you might think, as foreigners only then accounted for about 25% of our national debt. 75% was owned by us. Thus, China's hold on on our economy was actually less than 6%. But foreign ownership of our national debt has doubled, so China's grip is now at 11%.

But let them them bolt and invest in Zimbabwe (remember, their debt/GDP percentage is 266% -- and China has a platinum problem with this country today) instead. Yup, it is appearing that China is contemplating moving money from the U.S. into African, South American and Indonesian resources. It's a risk, but, think about it, would you rather trust the U.S. economy or gain sure access to world resources, which will only jump in prices over the next decade?

So, be mildly concerned about our escalating national debt, but there is no need to anguish. Consider Japan. Also, mostly ignore those editorials that regularly pop up throwing fear at you about China pulling out their money, causing an American depression. They probably will reduce their trust in our economy, but could run into greater difficulty dealing with many of those developing countries that now and then tend to nationalize their industries.

New Consensus Sees Stimulus Package As Worthy Step: NYT

2009-11-20T23:30:10Z

Now that unemployment has topped 10 percent, some liberal-leaning economists see confirmation of their warnings that the $787 billion stimulus package President Obama signed into law last February was way too small. The economy needs a second big infusion, they say.