Monday, December 29, 2008

Most Tranformative Issue to Watch - Task Force on the Middle Class

I think this is the issue to watch:
The Task force on the Middle Class.

The NY Times mentions the task force in its article on Secretary of Labor Hilda Solis

Think of the constituents on this task force: Biden, Solis, Jared Bernstein. WOW. I predict that this is the most likely to produce good ideas to transform the real causes of economic cycles, low wages!!!!!

Saturday, December 13, 2008

Barack Obama - Weekly Address 12-13-2008

This is Obama's HUD announcement. Very excellent for the first three minutes or so...BUT..
At about 3:30 notice how Pres Obama increases his pace and then at 3:45 he is blistering. He needs to go back and read his FDR books. FDR wouldn't mess up the pace. As a preacher, I notice this kinda stuff.

Thursday, December 11, 2008

How much will 2.5 million Jobs cost? – Republican Obstruction of the Auto Bailout

One news items requiring comment today is the Republican refusal to assist the auto industry. This ideological lunacy reveals how the Republicans simply do not understand economics in general, and this particular crisis in specific.

This is a demand crisis or, in other word, a crisis in consumer purchasing power. If we do not assist the auto industry with $14 billion, we will have to spend about a trillion dollars in stimulus to make up for the 2.5 million lost jobs. The republicans it appears don’t understand basic math either. Can you say Joe the Plumber?

If we lose another couple of million jobs in the next 6 months just in the auto industry alone, the ripple effect in other industries of further decreases in consumer purchasing power is just unfathomable. Can you say Herbert Hoover?

Government inaction at this time is absolutely unequivocally irresponsible!!!!

Friday, December 5, 2008

Krugman on Hardball - Unemployment

This is a good listen except for when Chris Mathews speaks. Does not this shock jock realize he is talking to a noble Laurette economist. Anyway, if you can handle Mathews interrupting Krugman, it is good. A great line is at the end when Krugman says that there is nothing that says making bombs is more stimulative than building bridges. It is just that a war has more political support than a huge stimulus package. The question is will Obama go big. Bada-Bing!!

Thursday, December 4, 2008

The Obama National Security Team

Two articles of note:
Kissinger on the Obama National Security Team
This review by Tim Fernholz of the American Prospect on the forthcoming book by Ivo Daalder and I.M. Destler called In the Shadow of the Oval Office

These articles analyze the possible drama between President, Secretary of State, National Security Advisor, and Secretary of Defense that might make for very interesting copy in the eight years ahead.

Tuesday, December 2, 2008

It's All About Demand, Stupid!!

Back in September, I wrote about what I understand to be at the root of the financial crisis and the need for policy to address this problem. The problem is relative wage deflation and the need to stimulate demand via some type of tax/incentive policy. I am feeling rather prescient.

Robert Reich has been writing on these themes for a few days. Check out these tasty quotes:

From one of FDR's fireside chats in 1938: "We suffer primarily from a failure of consumer demand because of a lack of buying power."

and again from the America's Employment Act of 1946 — the year Keynes died — [ the US government] codified the new wisdom [of Keynes], making it "the continuing policy and responsibility of the Federal Government promote maximum employment, production, and purchasing power."

Can you say stimulus package!!!!!

I am middle class, and I have an intimate knowledge of the problem of a lack of purchasing power. If all Americans are forced to spend (or not spend) like my family, then this downturn is going to be very, very, very steep indeed. No air travel, no clothing purchases, no new car, no new guitar for the kids. Burn down the credit. Go low risk all around.

Bottom line: It is about demand stupid. The death knell to supply side economics has been sounded loud and clear.

Monday, December 1, 2008

Hopemonger - Obama to Shift Foreign Policy Emphasis to Development and Diplomacy

The appointments to be announced today will be charged with executing a very new and different foreign policy strategy than that of President Bush.

This emphasis sure puts the exclamation point on Obama's "we can change the world" mantra. First, the president elect has this crazy idea to surround himself with competent pragmatists and now he has this crazy idea that the war on terror can be faught by eliminating the root causes of terror - extreme poverty and hopelessness.