Paul Krugman Analyses What "Centrist" Cuts in Stimulus Package Will Mean to the U.S. Economy. The News Is Not Good
In today's New YorkTimes, Krugman puts a job-loss number to cuts in the Obama Stimulus Package. He estimates that at least 600,000 American jobs will be lost over the next two years if the "centrists" are allowed to dictate terms of a "compromise" bill.
Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.
Jane Hamsher in the Washington Post discuss some background to the present attempt to make Nancy Pelosi and the Congressional Democrats who put together the original package, look bad. Rahm Throws Pelosi Under the Bus to Save Stimulus Bill.
Except that it's not true. The Obama transition team has been working on the substance of the bill from day one. Their first step was to go to the Association of Mayors, the National Governors' Associations and other non-congressional groups and say "give us all your shovel-ready projects." That and other provisions written by the Obama team became the spine of the bill. It went through only three committee markups, and moved through the House at lightening speed in a way that made many House chairs unhappy, with the notable exception of Dave Obey (now also under attack) who helped push it through quickly.
The House bill is notable not only for its size but also because it had no earmarks, which are the lifeblood of House members, the way they show their constituents what they're doing for them. As one person knowledgable about the writing of the bill says, "if you're in the House why would you write a bill without earmarks unless you didn't write the bill?"
Frank Rich also has a Op Ed in today's New York Times. He takes on the growing anger in the population and says that this was expressed in the groundswell that forced Tom Daschle to resign. Rich points out that the anger against Washington expressed by Obama supporters will be surfacing again and was manifest in the uproar about Daschle.
The tsunami of populist rage coursing through America is bigger than Daschle’s overdue tax bill, bigger than John Thain’s trash can, bigger than any bailed-out C.E.O.’s bonus. It’s even bigger than the Obama phenomenon itself. It could maim the president’s best-laid plans and what remains of our economy if he doesn’t get in front of the mounting public anger
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In reality, Daschle’s tax shortfall, an apparently honest mistake, was only a red flag for the larger syndrome that much of Washington still doesn’t get. It was the source, not the amount, of his unreported income that did him in. The car and driver advertised his post-Senate immersion in the greedy bipartisan culture of entitlement and crony capitalism that both helped create our economic meltdown (on Wall Street) and failed to police it (in Washington). Daschle might well have been the best choice to lead health-care reform. But his honorable public record was instantly vaporized by tales of his cozy, lucrative relationships with the very companies he’d have to adjudicate as health czar.
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As with Daschle, the political problems caused by Geithner’s tax infraction are secondary to the larger questions raised by his past interaction with the corporations now under his purview. To his credit, Geithner, like Obama, has devoted his career to public service, not buckraking. But he still has not satisfactorily explained why, as president of the New York Fed, he failed in his oversight of the teetering Wall Street institutions. Nor has he told us why, in his first major move in his new job, he secured a waiver from Obama to hire a Goldman Sachs lobbyist as his chief of staff.
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The neo-Hoover Republicans in Congress, who think government can put Americans back to work with corporate tax cuts but without any “spending,” are tone deaf to this rage. Obama is not. It’s a good thing he’s getting out of Washington this week to barnstorm the country about the crisis at hand. Once back home, he’s got to make certain that the insiders in his own White House know who’s the boss.