Country now divided on Dems-vs-Reps

[Pangloss]

http://www.cnn.com/2009/POLITICS/12/10/gop.congress/

 

According to this CNN poll out today, the country is now equally divided on whether the country would be better off run by Democrats or Republicans.

 

"As the debate over health care continues, the Democrats may have lost the competitive advantage that they enjoyed earlier this year," CNN Polling Director Keating Holland said. "Since August, the number who support Democratic control of Congress has fallen farthest in the Northeast and the Pacific Rim -- two regions that have been Democratic strongholds for many years."

 

I think this is mainly a sign of public response to Democratic leadership's failure to respond to the sudden and dramatic presence of the center in its midst. The back-and-forth on the abortion rule in the health care debate is a good example of this -- lack of unity, lack of planning. The GOP had the same sorts of problems when it acquired the majority and started pandering to the far right. I don't think the Dems are pandering to the far left (yet), but the general lack of cohesion at what is perceived as a time of crisis (partly of their own promotional making) is pushing people away.

 

I don't think the GOP's efforts are the main reason for this change, though the rabble-rousing Fox/CTR crowd seems to be playing a prominent role, though exactly what role that is (other than perhaps 'spoiler') is unclear to me.

 

What do you all think?

[Dudde]

Personally I think the results should be read a little differently

 

According to this CNN poll out today, the country is now equally divided on whether the country would be better off not run by Democrats or Republicans.

 

I doubt 50% of the US wants either, it's just the only choices on the poll they were given, so those ~1000 people were voting against who they didn't want most.

[Phi for All]

Personally I think the results should be read a little differently

 

I doubt 50% of the US wants either, it's just the only choices on the poll they were given, so those ~1000 people were voting against who they didn't want most.

Great point.

 

We've been shot down, and the hunter is in the process of hacking off the choicest parts of the carcass. Do you want him to hold the knife in his right hand or his left hand?

[bascule]

I think this is mainly a sign of public response to Democratic leadership's failure to respond to the sudden and dramatic presence of the center in its midst.

 

I think this is mainly a sign that Democrats are actually in charge now, as opposed to being hypothetically in charge. The problems they are dealing with (many of which were created by Republicans) are still there and aren't going away. The Democrats are thus (likely rightfully) getting blamed now.

 

Why hasn't Obama fixed the economy yet?

[npts2020]

Exactly what is it that the Democrats are doing to "pander to the far left"? The only difference I can see is that with the Republicans in charge we would be getting even more of the same "good ol boys network" and "politics as usual".

[Pangloss]

Exactly what is it that the Democrats are doing to "pander to the far left"?

 

If you mean me, I don't think that they are, but there is a perception out there by a fair number of Americans that they are doing so with regard to health care reform and various other issues. The proposed re-allocation of TARP funds for stimulus purposes (when 95% of the stimulus funds haven't even been spent yet) might be another reason for this perception. I think that perception is incorrect because those are not far-left positions, they're just normal left-of-center positions typically referred to as progressive or liberal.

 

My personal measure of what would constitute actual "pandering to the far left" would be the immediate withdrawal of all foreign troops, an instant elimination of carbon emissions regardless of consequences, and an "Ed Begley, Jr. Edition" solar toaster-oven for every man, woman and child. Including illegal immigrants, of course.

 

Some of what's being deliberated before Congress at the moment I don't agree with, but that's life in a democracy, and I have a voter registration card and a keyboard same as anyone, and I'm not one of those people who feels that they're not being heard if their preference isn't immediately turned into law (and besides, if anything my opinion seems to matter even more now that the center is brokering power again). No need for all the panic and hair-tearing Fox News seems to call for. My two bits, anyway.

 

 

I think this is mainly a sign that Democrats are actually in charge now' date=' as opposed to being hypothetically in charge. The problems they are dealing with (many of which were created by Republicans) are still there and aren't going away. The Democrats are thus (likely rightfully) getting blamed now.

 

Why hasn't Obama fixed the economy yet? [/quote']

 

I think this is correct and a significant factor in lots of polling results at the moment. Political observers sometimes refer to this as "owning the problem". I don't think it's the "buyer's remorse" that some on the right are calling it, either -- perhaps there's a little of that with every change like this, but what it really is is the country telling those in charge that they need to act and that their "mandate" can be just as easily handed to another party.

Edited December 11, 2009 by Pangloss

[iNow]

The proposed re-allocation of TARP funds for stimulus purposes (when 95% of the stimulus funds haven't even been spent yet) might be another reason for this perception.

I'm not sure if you're mixing TARP and the Recovery Act, nor how you're defining "spent," but (for reference) I think the number of funds remaining to be spent is a bit lower... closer to 75%... at least as pertains to the Recovery Act (stimulus).

 

 

 

http://projects.propublica.org/tables/stimulus-spending-progress

TOTALS:

Spent (thousands): $145,076,265

In Process (thousands): $155,371,363

Left to Spend (thousands): $280,199,774

Total (thousands): $580,647,400

Spent (%): 24.99%

 

The above data is current as of three days ago.

[SH3RL0CK]

... The proposed re-allocation of TARP funds for stimulus purposes (when 95% of the stimulus funds haven't even been spent yet) might be another reason for this perception...

 

Well, if they had already spent it they couldn't re-allocate it. Why is it no one has thought about NOT spending it at all? Obviously it isn't needed for stimulus if it hasn't yet been spent.

 

This is one of the problems with government and with bureaucracy in general. They will spend all the money available, regardless of the actual need and regardless of what they have to do in order to spend it all. Every. Single. Penny.

[iNow]

But, as evidenced by the continually rising unemployment situation in the US, we actually DO still need it. To put things in perspective, to get back to where we were prior to the crash, we'd need to add (on average) more than 300,000 jobs... every single month for the next 5 years (if you wanted to get to previous levels within just 2 years, you'd have to add more than 580,000 jobs every single month). At present, we're not adding jobs at all (net). We are still losing on the order of 10-20,000 jobs every month.

 

How you go from that to, "the government is spending money when they really don't have to" or "the money really is no longer needed" confuses me a bit.

[SH3RL0CK]

Well perhaps it is still needed. But if the stimulus were creating jobs and since we have spent 25% of it which is a lot of money, why has the unemployment rate has greatly increased (from 7% to 10%, IIRC) at the same time? I suppose it could be said that the unemployment would be much worse had this not been done...

 

I'm just skeptical and wonder if we have been robbed by our congressmen...

 

How you go from that to, "the government is spending money when they really don't have to" or "the money really is no longer needed" confuses me a bit.

Both "we don't have it" and "we don't need to spend it" can be true statements. And if we don't have it, it becomes especially difficult to justify spending it on stuff we do not need.

Edited December 11, 2009 by SH3RL0CK

[Phi for All]

Well perhaps it is still needed. But if the stimulus were creating jobs and since we have spent 25% of it which is a lot of money, why has the unemployment rate has greatly increased (from 7% to 10%, IIRC) at the same time? I suppose it could be said that the unemployment would be much worse had this not been done...

 

I'm just skeptical and wonder if we have been robbed by our congressmen...

The typical scenario is to sink those funds into big business, since it's splashier in a PR sense to court them, and because it's probably owed from campaign financing promises. States often spend millions courting a large corporation to stimulate a few thousand jobs. If they were to spend half as much on small businesses, they could create tens of thousands of jobs, but the media rarely covers such cumulative efforts, preferring to concentrate on the big name big buck big deal.

[Pangloss]

But, as evidenced by the continually rising unemployment situation in the US, we actually DO still need it.

 

But why do TARP funds have to be spent for that purpose when, as you say, 75% of the other stimulus money hasn't even been spent?

 

I think the point is moot anyway, because I disagree with you that we need it. The recession is over and jobs are a lagging economic indicator. In fact the November figures suggest that the corner has already been turned on jobs, with a tiny loss and a decrease in the unemployment percentage. It could be a blip on the radar, but it may not be, and even before those numbers came out some were predicting that jobs would be back on a growth footing by the spring because of the spike in non-retail temporary workers and other signs.

 

In short, we probably don't need it.

[npts2020]

If you mean me, I don't think that they are, but there is a perception out there by a fair number of Americans that they are doing so with regard to health care reform and various other issues......

 

Fair enough, I just wonder where the perception comes from to begin with.

[padren]

The recession is over and jobs are a lagging economic indicator. In fact the November figures suggest that the corner has already been turned on jobs, with a tiny loss and a decrease in the unemployment percentage. It could be a blip on the radar, but it may not be, and even before those numbers came out some were predicting that jobs would be back on a growth footing by the spring because of the spike in non-retail temporary workers and other signs.

 

Honestly I am not so sure. I've always had pretty "recession resistant" work and I've only just started to become worried. I'm with a small NY web development company, and I've seen a huge spike lately in people just not paying for work done - upwards of 90% trying to make deals and delay and flat out dodge. The prospect conversion rate has also taken a hit, which does happen this time of year. We mostly build websites for the jewelry industry and they say they are sitting on their hands waiting for the rush that normally starts right after Halloween.

 

This is all anecdotal of course, but it's got me worried that a lot of people have been running the "recession marathon" and are starting to really show signs of fatigue. I worry a lot of people are waiting for their next meal with the assumption of holiday spending and it won't be there.

 

To be honest I don't know what the official holiday spending indicators look like but I can say just personally the last month has made me go from rather smug to scared to death about the economy and it's effect on my ability to make ends meet.

[Saryctos]

But, as evidenced by the continually rising unemployment situation in the US, we actually DO still need it. To put things in perspective, to get back to where we were prior to the crash...

 

Is this last sentence referring to employment or unemployment numbers?

[iNow]

I think the point is moot anyway, because I disagree with you that we need it. The recession is over and jobs are a lagging economic indicator.

 

<...>

 

In short, we probably don't need it.

We do hold different opinions on this, and I'm not going to try to change your mind, but I will express why I feel the way I do.

 

As I mentioned above, we've lost over 7 million jobs which need to be replaced. To replace them, we'd need to create 127,000 every month for five years. Now, you might notice that above I quoted a number of 300,000 new jobs per month for five years. The reason I used 300,000 is because... besides just replacing lost jobs... we also need to create new jobs to keep pace with population growth. When you account for these factors, and realize that we must create 18 million new jobs over the next five years, then it becomes more self-evident that "cutting off the spigot" or refusing to pay out all approved funds for recovery is short-sighted (at best).

 

In further support of the idea that we need to (at the very least) finish spending the stimulus money (and potentially add more to it, but let's not argue that here since it's irrelevant to my point) is the fact that the stimulus has already had its maximum impact on the growth of GDP, and will (unfortunately) hit its maximum impact on the level of GDP in the middle of next year. After that, it's going to fade and lose impact. Many indicators support the fact that the boost we received from the stimulus is going to essentially extinguished by mid-2010 (which, when coupled with the fact that spikes in manufacturing are going to lead us to over-supplies of inventory and hence another downward dip by Q3 makes things look that much worse).

 

See images below... first one courtesy of Golman Sachs, second one from the Fed Board of Governors which reinforce my points.

 

 

.......................

 

 

It's disgusting, really. We're very incredibly likely to still be hovering around 9 or 10 percent unemployment at the end of 2010. It's scary, and the calls for a cessation of spending are naive and too simplistic (IMO).

 

The thing is... I also have history on my side to support the above points. All one needs to do is look at what happened in Japan when they (exactly as is being suggested here by you guys) prematurely withdrew from their zero interest rate policy (ZIRP) in 2000 (maybe you've heard of "Japan's Lost Decade?" Well, that's what caused it). Also, just look at the US in 1937... when they contracted both fiscal and monetary policies (just as you guys are suggesting) and it completely killed growth and upward momentum... It really did nothing but throw everyone immediately back into a recession (more here... worth the read).

 

Those of you who are advocating we don't spend the money (I think) are doing so based more on politics and on worldviews which seem primarily based on a sort of "deficit hysteria" which is being reinforced right now in the media and among the talking heads... and to be frank, it's not entirely aligned with reality... IMO it's just fear based nonsense not at all grounded in fact, and the numbers simply don't fit the scare tactics being used. It's okay that you hold those opinions... Please don't get me wrong... but I think what you are proposing is incredibly dangerous and likely to lead to a lot of elongated suffering which we really neither want nor need.

 

What we want and what we need are at least 300,000 new jobs every single month for five years, and spending that stimulus and TARP money based on sound economics (instead of not spending it based on idealistic worldviews and soundbites) just makes the most sense... at least, to me.

 

Thanks for listening.

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Is this last sentence referring to employment or unemployment numbers?

 

I was referring to pre-crisis unemployment.

Edited December 12, 2009 by iNow
Consecutive posts merged.

[Pangloss]

As I mentioned above, we've lost over 7 million jobs which need to be replaced.

 

That's a good point -- it is going to take a while to bring unemployment back down to where it was.

 

But why is "where it was" the correct measure for a federally-funded jobs program? And wasn't the left already complaining about underemployment when it was at that point? So when we get to that mark aren't they just going to calmly explain to us that emergency federal intervention is still necessary?

 

I guess if there were some sort of rubric or formula for determining that this kind of intervention is necessary, or at least a specific, stated goal and an "exit strategy" for the program I might go along with it.

[iNow]

But why is "where it was" the correct measure for a federally-funded jobs program?

You're right. That's a good point. I think we should actually be working to bring unemployment even lower than it was pre-crisis. Unfortunately, ceasing stimulus spending (as per the suggestion of you and countless others) simply won't assist us in achieving that stated goal.

 

 

And wasn't the left already complaining about underemployment when it was at that point? So when we get to that mark aren't they just going to calmly explain to us that emergency federal intervention is still necessary?

I'm not sure. It seems my crystal ball is broken. However, that's certainly not a very solid argument for ending stimulus spending NOW... in the present... while we're still losing on the order of 10-20,000 jobs per month during a time when we need to be adding more than an order of magnitude more.

[npts2020]

If we were to begin spending the recovery money on automating our transit system and powering it with wind and solar energy, it would directly create hundreds of thousands of jobs and many times that number in related employment. Also, they would presumably be well paying and not easily farmed out to third world countries. Best of all we would actually have something to show for all of the spending.

 

Soapbox now open for the next person.

[bascule]

I'm not sure if you're mixing TARP and the Recovery Act

 

This drives me nuts, but it's a systemic problem throughout journalists in general. TARP and the Recovery Act are referred to as "the bailouts" everywhere, even though that makes about as much sense as "the Internets"

[Pangloss]

You're right. That's a good point. I think we should actually be working to bring unemployment even lower than it was pre-crisis. Unfortunately, ceasing stimulus spending (as per the suggestion of you and countless others) simply won't assist us in achieving that stated goal.

 

Oh I'm not calling for a stop to spending stimulus money, just that we not reallocate TARP and add it to the pile. I agree that halting stimulus spending would be a bad idea at this point, even if we are coming out of recession. I'd like to see them get more creative and responsive to the changing situation with the remaining stimulus funds, but we might as well spend it. In for a penny, in for a pound.

 

I might support re-allocating TARP if there were a full debate in Congress over it. I'm a big believer in hashing things out and then accepting a democratically-arrived-at decision, whatever it is.

[iNow]

Oh I'm not calling for a stop to spending stimulus money,

Thank you for clarifying. I was definitely not getting that sense from your posts, but it appears that was my mistake.

 

 

just that we not reallocate TARP and add it to the pile.

But, I'm confused. They are still suggesting that TARP be used to help with troubled assets, and to help ensure banks are lending to small business and consumers, which is part of what we need to encourage growth and employment, and it all fits within the original umbrella of relieving troubled assets. What part of that specifically are you finding problematic, and what are your reasons for opposition?

 

 

http://money.cnn.com/2009/12/09/markets/markets_newyork/

The federal bailout plan will be extended until Oct. 3, 2010, Treasury Secretary Timothy Geithner said Wednesday in a letter to Congress.

 

However, the Troubled Asset Relief Program, originally enacted in October 2008 at the height of the credit crisis, will be scaled back and refocused on newer programs designed to stop foreclosures and make loans to small businesses.

 

Separately, the Congressional Oversight Panel said that while TARP did help stabilize the banking system, it failed to boost spending or help stop foreclosures.

 

On Tuesday, President Obama proposed reallocating money not used for TARP to help create jobs and provide other help to consumers. The president is reportedly meeting with the chief executives of a number of big banks next week to try to finesse more lending to consumers.

 

Again, it's still about lending and relieving issues with troubled assets, so IMO is perfectly inline with TARPs charter/mission.

[Pangloss]

(Should I start a separate thread on TARP reallocation? Opinions?)

 

Again, it's still about lending and relieving issues with troubled assets, so IMO is perfectly inline with TARPs charter/mission.

 

No, it's not. TARP was not that loosely defined -- it was a very specific piece of legislation aimed at guaranteeing assets, NOT funding new businesses and creating jobs. TARP was borrowed money, and part of how the idea was sold to the American public was the basis that it would be repaid. This has been successful. Why undermine that success just to top off a tank that hasn't even come close to the halfway point yet? (There hasn't even been any suggestion that the rate of stimulus spending could be improved, but by golly we need that tank to return to 100%. Why?)

 

This weekend Congress is passing a $1.1 trillion "spending bill". Under your reasoning, after it is signed by the President Congress could then change its mind and spend that money on green energy startups and housing projects for the poor. It's still "spending", right? Isn't that the purpose of the "spending" bill, to spend money? And what better way to spend money than on these things which create more jobs and thus stimulate the economy! Win-win! Of course every government agency would immediately become unable to pay its employees, but that's okay, we'll just pass another $1.1 trillion "spending bill", and then I guess we'll cross our fingers and hope that it doesn't get redirected for some other ideological purpose.

 

At some point you gotta wonder if there's any point in having a budget at all. Why bother if any spending is subject to political whim of current leadership after it is approved by the democratic process of government?

 

Also, changing the meaning of legislation after it is passed just to avoid political difficulties further undermines the people's faith in government, and for good reason. We do not put people in office for the purpose of lying to 50% of the country and winking to the other 50% as they do so. This is not an ideological game, and it's not about tricking half the country into a better tomorrow. A democratic government should do exactly what it says it's going to do. No less, and no more. This is a key principle in all democratic governments, and it should not be thrown out by half of the country when their favored party comes to power.

Edited December 13, 2009 by Pangloss

[iNow]

TARP was not that loosely defined -- it was a very specific piece of legislation aimed at guaranteeing assets, NOT funding new businesses and creating jobs.

Here is where your argument confuses me a bit. I need to ask you to be specific and share some details about who is talking about funding new business and creating jobs directly with TARP funds? I do not see it, sense that you may be working from a spun version of the facts, and would welcome a resource or two to read more about why you are deeming this proposal to be a direct funding of new jobs and business.

 

As I described above in one of my previous posts, and as I shared a link in support, the discussion taking place right now in the context of TARP funds is still (AFAICT) a discussion about encouraging lending from banks to small business and consumers... Precisely as it was intended to do. If you have read details which suggest that TARP will be used beyond working with the banks to deconstrict credit and ensure their lending confidence, then again I request that you please be specific and share details here.... but until then, I need to flatly reject your assertions as based on a misunderstanding/misrepresentation of the proposal currently being put forth.

 

 

Finally, contrary to your suggestion above, TARP was not tightly defined, and it instead put forth pretty broad and sweeping powers (that is, in fact, one of the problems which I had with it... it's loose definitions and encouragement of wide and varying interpretations and sweeping language). That language in which it is written, however, fully allows and authorizes action on the suggestions being made now to encourage more lending... which essentially renders moot the rest of your rant about government changing legislation after the fact or us having no need for a budget and for shifting political powers in future elections.

 

 

http://www.uiowa.edu/ifdebook/issues/bailouts/eesa.shtml

The TARP is the largest part of the so-called “$700 billion bailout plan.” It allows the government to purchase “troubled” or “toxic” assets—for example, securities based on subprime mortgages—from struggling financial institutions. This allows the participating institutions to clean up their balance sheets. In other words, this program allows financial institutions to sell the assets to decrease their debt to capital ratios, which will help improve their financial situation and increase investor confidence in the institutions and, hopefully, the markets.

Another important goal of TARP is to create incentives for banks to begin lending again, both to each other and to consumers and businesses.

The hope is that once the toxic assets are removed from the banks’ balance sheets, they will resume their lending.

 

 

http://www.usatoday.com/money/economy/2008-10-03-treasury-toxic-debt_N.htm

"The language in this bill is vague enough that it could be implemented as a well-conceived stabilization plan or a huge transfer from taxpayers to Wall Street," says Stephen Shore, assistant professor of economics at Johns Hopkins University.

 

 

http://www.nytimes.com/2008/11/19/business/economy/19bailout.html

“The bill is replete with authorization to you [the Treasury Secretary], not simply to buy up mortgages, but in effect to do some spending,” said Representative Barney Frank, citing a four-page list of provisions.

 

<...>

 

Mr. Paulson acknowledged that he had the authority

 

 

So, the fact remains... Based on what you've presented here, they are (in fact) spending the money to ease credit restrictions and open up lending to small businesses and consumers. That spending will ultimately have the effect of creating jobs, but will do so (AFAICT) via bank lending and the ease of credit restrictions, which is perfectly inline with the (already broad) authorities granted to the Treasury by TARP.

 

If you have something specific and detailed about some part of the current proposal which is NOT inline with the provisions of TARP, I would suggest that now is the time to share it with us here. Again, all I've seen thus far are bald assertions and potential misrepresentations, and I want the chance to better understand why you have taken the position you have... but I do request details, or at least something a little more evidence-based than just hearsay.

 

 

 

 

 

 

 

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More support of the arguments I've put forward above can be found here:

 

 

http://blogs.abcnews.com/politicalpunch/2009/12/obama-says-tarp-funds-can-go-toward-cutting-deficit-creating-jobs.html

The Obama administration anticipates that the Troubled Asset Relief Program (TARP) will cost taxpayers $200 billion less than the $341 billion estimate that it projected in August.

 

Obama [said] today that some of the repaid money and cost savings from the $700 bill TARP funds could be “devoted to deficit reduction” or put toward small businesses to stimulate job growth.

 

“It means that some of that money devoted, can be devoted to deficit reduction and the question is, are there selective approaches that are consistent with the original goals of TARP,” Obama said after a meeting with Turkish Prime Minister Recep Tayyip Erdogan.

 

<...>

 

“The fact that having gotten the financial crisis under control, having finally moved in the positive territory when it comes to economic growth, our biggest challenge now is making sure that job growth matches up with economic growth,” Obama said.

 

Obama said he will address the issue of making sure small businesses are still lending, in order to accelerate job growth.

 

“Although we stabilized the financial system one of the problems that we’re still seeing all the time, and I heard about it when I was in Allentown just this past week, is the fact that small businesses and some medium sized businesses are still feeling the huge credit crunch,” the president said. “They cannot get the loans they need to make capital adjustments that would allow them to expand employment. And so that’s a particular area where we might be able to make a difference.”

Edited December 13, 2009 by iNow
Consecutive posts merged.

[Pangloss]

the discussion taking place right now in the context of TARP funds is still (AFAICT) a discussion about encouraging lending from banks to small business and consumers.

 

It's certainly possible I've read too much into it' date=' and it sounds like we largely agree. I don't have a problem with using TARP funds for TARP purposes. I only have a problem with it being reallocated and distributed into new spending programs that serve different purposes. In answer to your question, here's an article in the LA Times from less than a week ago that, although similar to the ABC piece, seems to interpret the jobs angle differently:

 

http://latimesblogs.latimes.com/dcnow/2009/12/obama-weighs-use-of-tarp-funds-for-deficit-jobs.html

 

President Obama said today that unspent funds from the federal bailout program could be used to cut the federal deficit, to lend to small businesses or to help pay to create more jobs.

 

Obama said the $700-billion Troubled Asset Relief Program had funds that could be directed elsewhere.

 

But I do understand that jobs are often a secondary effect of different kinds of programs. That's the problem with politicians -- you're damned if you read too much into what they say, and you're damned if you don't.

 

This morning on "This Week" Larry Summers was pushing a new administration's line that the recovery (and jobs) will be in full recovery by spring. At the very least, they're no longer lowering expectations and talking about a long-term recovery. It seems unlikely that they'll be able to talk that way and still go after the TARP money for a direct jobs bill, so perhaps this is moot, or will strictly stay in the banking realm you discuss above.