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The Times is obviously trying to jump-start the political process that makes our elected representatives so reluctant to go back and ask for more badly-need stimulus spending from the federal government:

The unemployment rate includes only jobless people who have looked for work in the past four weeks. The underemployment rate — which also includes jobless workers who have not recently looked for work and part-timers who need full-time work — reached 17.5 percent in October. And the long-term unemployment rate — the share of the unemployed population out of work for more than six months — also continues to set records. It is now 35.6 percent.

The official job-loss data also fail to take note of 2.8 million additional jobs needed to absorb new workers who have joined the labor force during the recession. When those missing jobs are added to the official total, the economy comes up short by 10.1 million jobs.

Taken together, the numbers paint this stark picture: At no time in post-World War II America has it been more difficult to find a job, to plan for the future, or — for tens of millions of Americans — to merely get by.

At a recent meeting at the White House to discuss job creation, President Obama said that “bold, innovative action,” would be needed — from the administration, Congress and the private sector — to undo the devastation in the labor market. Americans are waiting for Mr. Obama to lead the way.

There were good ideas floated at the White House meeting, including bolstered federal support for efforts to retrofit and weatherize homes and public buildings. There was also talk of using government money to establishing a so-called infrastructure bank that would issue bonds to help finance big construction projects.

The country also needs a program that would create jobs for teenagers — ages 16 to 19 — whose unemployment rate is currently a record 27.6 percent. Deep and prolonged unemployment among the young is especially worrisome. It means they do not have a chance, and may never get the chance, to acquire needed skills, permanently hobbling their earnings potential.

We know that more stimulus spending and government programs are a fraught topic. But they are exactly what the country needs. It may be the only way to prevent a renewed downturn. And the only way to create the jobs needed to put Americans back to work. Those are the essential — and missing — ingredients of a sustained recovery.

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(Dr. Walter Heller - tried to save Reagan from himself - didn't work)

With word about the latest recession being "over", I was reminded about the last time we had a deep recession in the 1980s and how we all became familiar with the phrases "Reaganomics", Supply-Side and Voodoo-Economics.

Back in the 80s there was 10% unemployment (on paper) and it felt like it lasted forever. Former Kennedy and Johnson Economic adviser Dr. Walter Heller had a few observations to make when he was interviewed on Face The Nation in 1982.

Dr. Walter Heller: “Had the Carter program, and unfortunately it was rather forgettable, but had the Carter program been enacted, we would be in much better shape today. People seem to forget that Carter, in October of the last year of his presidency proposed a tax program that made just excellent sense. It was much smaller than the President’s program, and it concentrated more of its tax cuts, and this is what people forget, on the supply side, so to speak, on true stimulus of government investment. Instead of having enormous deficits that scare the public and Wall Street, we would have had much more moderate deficits, we’d be much better off today.”

Perhaps hindsight is 20/20 but it's interesting to speculate what might have happened had the Carter program been enacted.

But no, The Great Communicator had a better idea . . or so he said.

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October 26, 2009 C-SPAN

Kaptur: The New York Times today reported "As Wall Street has returned to business as usual, industry power has become even more concentrated among relatively few firms". A handful of mammoth banks have brought our nation, our credit system and our economy to its knees. Some call them too big to fail. One must ask why should a few big players have so much power. They can force tax payer bailouts for themselves, shut off credit and hold the reigns of our economy in their hands. A handful of firms are gobbling up our money, killing off smaller banks and institutions. Congress and this administration are just letting them do it.

My friends, such concentration of financial power is dangerous to our country. A few Wall Street firms are on the fast track to controlling all banking in this country. Rather than address this by breaking up these banks some in Washington say they just want to regulate them better. If you believe that, you haven't paid any attention over this last year. The biggest banks are getting bigger.

Fortune Magazine: Big banks take your money and run

A river of cash has flowed into the biggest banks over the past year. But for borrowers, it has been more of a meandering stream.

Deposits at the top five bank holding companies soared 29% in the year ended June 30, according to the Federal Deposit Insurance Corp.

Yet only one of those banks -- PNC (PNC, Fortune 500) of Pittsburgh -- boosted its lending by the same magnitude, according to midyear data from regulatory filings.

At Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500), loan growth trailed deposit growth by a wide margin.

And Citigroup (C, Fortune 500), the bank that has received the most federal aid since the market meltdown of September 2008, reported a decrease in lending despite an increasing pool of deposits.

All told, the five biggest deposit-taking banks added $852 billion in core deposits over the past year -- essentially checking and savings accounts of less than $100,000.

Over the same period, their loan portfolios rose by just $564 billion.

This is noteworthy because these five banks received more than $100 billion in direct taxpayer assistance via the Troubled Asset Relief Program (TARP) -- a program that was set up to replenish the depleted capital levels of banks and allow them to boost lending to consumers and small businesses.

Some fear the lending gap could hamper chances of an economic recovery.

You have to give him pundit props: Krugman said from the start (this video is from February) that Obama's stimulus package was too small, and he was right. As expected, the unemployment claims went up to record-breaking levels this week. Via Bloomberg:

The unemployment rate rose to 9.8 percent, the highest since 1983, from 9.7 percent in August, the Labor Department said today in Washington. Payrolls fell by 263,000, following a revised 201,000 decline the prior month that was less than previously reported.

As someone who's sent out 250+ resumes in the past year and gotten one face-to-face interview and one phone call in return, I can tell you first-hand it's not looking good on the job front.

Krugman says if we don't do something about this, not only will the human costs will be high but our economic growth will be depressed for a long, long time:

Wait. It gets worse. A new report from the International Monetary Fund shows that the kind of recession we’ve had, a recession caused by a financial crisis, often leads to long-term damage to a country’s growth prospects. “The path of output tends to be depressed substantially and persistently following banking crises.”

The same report, however, suggests that this isn’t inevitable: “We find that a stronger short-term fiscal policy response” — by which they mean a temporary increase in government spending — “is significantly associated with smaller medium-term output losses.”

So we should be doing much more than we are to promote economic recovery, not just because it would reduce our current pain, but also because it would improve our long-run prospects.

But can we afford to do more — to provide more aid to beleaguered state governments and the unemployed, to spend more on infrastructure, to provide tax credits to employers who create jobs? Yes, we can.

The conventional wisdom is that trying to help the economy now produces short-term gain at the expense of long-term pain. But as I’ve just pointed out, from the point of view of the nation as a whole, that’s not at all how it works. The slump is doing long-term damage to our economy and society, and mitigating that slump will lead to a better future.

What is true is that spending more on recovery and reconstruction would worsen the government’s own fiscal position. But even there, conventional wisdom greatly overstates the case. The true fiscal costs of supporting the economy are surprisingly small.

You see, spending money now means a stronger economy, both in the short run and in the long run. And a stronger economy means more revenues, which offset a large fraction of the upfront cost. Back-of-the-envelope calculations suggest that the offset falls short of 100 percent, so that fiscal stimulus isn’t a complete free lunch. But it costs far less than you’d think from listening to what passes for informed discussion.

Look, I know more stimulus is a hard sell politically. But it’s urgently needed. The question shouldn’t be whether we can afford to do more to promote recovery. It should be whether we can afford not to. And the answer is no.

Robert Reich agrees, saying this is certainly not the time to worry about the deficit, and predicts if we do, the politics are going to get much uglier:

Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some. This is the only way to put Americans back to work. We did it during the Depression. It was called the WPA.

Yes, I know. Our government is already deep in debt. But let me tell you something: When one out of six Americans is unemployed or underemployed, this is no time to worry about the debt.

[...] People who now obsess about government debt have it backwards. The problem isn’t the debt. The problem is just the opposite. It’s that at a time like this, when consumers and businesses and exports can’t do it, government has to spend more to get Americans back to work and recharge the economy. Then – after people are working and the economy is growing – we can pay down that debt.

But if government doesn’t spend more right now and get Americans back to work, we could be out of work for years. And the debt will be with us even longer. And politics could get much uglier.

Turning to Sarah Palin to explain the international economy and the role of government is like asking a dog why it likes to lick its rear end. But as an audience of investors and fund managers learned today in Hong Kong, Palin's cartoon-quality conservative platitudes don't merely fly in the face of the consensus of economic analysts. As a flashback to her catastrophic interview with Katie Couric reveals, Sarah Palin doesn't even agree with herself.

Palin's rewriting of history begins with the causes of the global economic meltdown. While the villains behind the calamity are many (see, for example, Time and the New York Times' excellent series, "The Reckoning"), for Sarah Palin there is only one. As the Wall Street Journal summed up her closed-door remarks:

"We got into this mess because of government interference in the first place," the former Republican U.S. vice presidential candidate said Wednesday at a conference sponsored by investment firm CLSA Asia-Pacific Markets. "We're not interested in government fixes, we're interested in freedom," she added.

Of course, those "government fixes" were not only badly need to stem the financial crisis, they've already paid huge dividends in reversing the slide of American gross domestic product (GDP), refilling empty state coffers and preserving up to a million jobs. As the reliably Republican Wall Street Journal put it three weeks ago:

"Many forecasters say stimulus spending is adding two to three percentage points to economic growth in the second and third quarters, when measured at an annual rate. The impact in the second quarter, calculated by analyzing how the extra funds flowing into the economy boost consumption, investment and spending, helped slow the rate of decline and will lay the groundwork for positive growth in the third quarter -- something that seemed almost implausible just a few months ago. Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus."

And during the 2008 campaign, then Governor Palin agreed about the need for government intervention. In her own confused and incoherent way, Palin defended to Katie Couric one year ago this week the kind of government bailouts she now decries. The benefits from $700 billion plan she and running John McCain endorsed, she insisted, all fall "under the umbrella of job creation."

"Ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up the economy- Helping the -- Oh, it's got to be about job creation too. Shoring up our economy and putting it back on the right track. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans."

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Remember during the stimulus debate, when the Republicans told us birth control funds didn't have a damned thing to do with the economy - and the Democrats, as usual, knuckled under to them?

The Guttmacher Institute has just released a report on the impact of the recession on family planning, and the results are predictable - at least, if you're a normal (i.e. non-wingnut) person. Via Salon:

This summer, researchers surveyed 947 women between the ages of 18 and 34 with household incomes of less than $75,000. They found that women are preoccupied by worry about money, medical costs and childcare. Most of the women hope to get pregnant later on or have decided against having kids because of these tough times -- and that's even more common among women who are less well-off than they were a year ago. A total of 64 percent agreed with the statement, "With the economy the way it is, I can’t afford to have a baby right now."

These findings are all rather intuitive, but what this actually means for pregnancy prevention is less straightforward. A total of 29 percent say they are "more careful" than before about using contraception every time they have sex. There is a flip-side to that, though: Eight percent of women are using birth control less regularly as a means of saving money and, among women in financial decline, that number rises to 12 percent. Things are even sketchier among women on the pill: 18% are popping hormones irregularly to save some cash -- either by missing pills, filling their prescription late, taking at least one month off or picking up fewer packs at a time. That number balloons to 25 percent when it comes to the category of worse-off women.

Overall, 23 percent are having a tougher time than a year ago covering the cost of birth control and -- again, say it with me now -- that number is higher among women whose finances have dwindled. The upshot: Those who are least capable of affording the cost of a child are putting themselves at the greatest risk for an unplanned pregnancy. Women also report avoiding appointments with their gynecologists in the last year -- especially those who have recently lost their health insurance.

The manufacturing sector lost 63K, the financial sector 28K and Construction lost 65. Health care added 47.4 thousand jobs.

One of the more interesting findings is that up till April government jobs were increasing, since April they have declined. The decline isn’t huge, but it exists at all levels of government. For some reason the postal service in particular seems to be shedding jobs.

Though the job loss is less than we’ve seen in the past it’s surprisingly uniform: except for health care and social assistance everything else is either down, or just barely increasing. Fundamentally, every industry without pricing power is taking it on the chin, but if you’re sick, you’re sick, so the medical industry retains the ability to hire. I suspect that the manufacturing numbers would be much worse if defense related manufacturing was removed.

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While the Wall Street Journal editorial page can always be counted on to cheerlead the flat-earth economics of the Republican Party, on occasion the paper's reporters contradict GOP orthodoxy. And so it is today on the subject of the Obama stimulus package. Just one day after Eric Cantor (R-VA) followed the lead of John Boehner and Newt Gingrich in calling the recovery program a "failure," the Journal's Deborah Solomon reported otherwise in a piece simply titled, "U.S. Economy Gets Lift From Stimulus."

As I noted last month, the $787 billion American Recovery and Reinvestment Act (ARRA) opposed by every House Republican and other Obama administration measures are already paying huge dividends for the economy:

After steep declines of 5.4% and 6.4% in the previous two quarters, gross domestic product fell only 1% in the last three months. And while the ARRA overall added "up to 3 full percentage points of annualized growth in the quarter," President Obama's stimulus helped precisely where it was needed most - rescuing devastated state budgets.

On Wednesday, the Wall Street Journal agreed, concluding "government efforts to funnel hundreds of billions of dollars into the U.S. economy appear to be helping the U.S. climb out of the worst recession in decades." While Cantor is urging the program's cancellation, the investments thus far ($84 billion of $499 billion in spending and $60 billion of the $288 billion in tax cuts) are already helping stop the bleeding from the Bush Recession:

Many forecasters say stimulus spending is adding two to three percentage points to economic growth in the second and third quarters, when measured at an annual rate. The impact in the second quarter, calculated by analyzing how the extra funds flowing into the economy boost consumption, investment and spending, helped slow the rate of decline and will lay the groundwork for positive growth in the third quarter -- something that seemed almost implausible just a few months ago. Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus.

For the third quarter, economists at Goldman Sachs & Co. predict the U.S. economy will grow by 3.3%. "Without that extra stimulus, we would be somewhere around zero," said Jan Hatzius, chief U.S. economist for Goldman.

Of course, as their cornucopia of lies on taxes, health care reform, President Obama's birth, grandma's government-mandated death and so much more shows, the comical untruth of a statement is no barrier to a Republican repeating it. Contrary to the dishonest claims of Cantor, Boehner, Gingrich and their echo chamber, the stimulus program is not a "dismal failure."

Regardless, that conservative drumbeat will doubtless continue, especially in the Wall Street Journal editorial pages.

(This piece also appears at Perrspectives.)

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Mad Kane’s Political Madness: Ode to Senator Judd "Majority Rules, Except When It Doesn't" Gregg

Donklephant: Economy sees lift from stimulus

Southern Poverty Law Center: Climate of Fear: Latino immigrants in Suffolk County, NY

Welp, I've arrived! Some folks are threatening to sue me over this link from Tuesday. Read all the way down...

As always, Thom Hartmann makes a lot of sense:

One of the most powerful forms of stimulus we could apply to our economy right now would be to lower the current Social Security retirement age from the current 65-67 to 55, and increase the benefits back to where they were in inflation-adjusted 1960s dollars by raising them between 10 to 20 percent (so people could actually live, albeit modestly, on Social Security).

The right-wing reaction to this, of course, will be to say that with fewer people working and more people drawing benefits, it would bankrupt Social Security and destroy the economy. But history shows the exact reverse.

Instead, it would eliminate the problem of unemployment in the United States. All those Boomers retiring would make room in the labor market for all the recent high-school and college graduates who are now finding it so hard to find a job.

Hartmann goes on in the article to discuss in detail about how lowering the retirement age would open up thousands of jobs nationwide, and how wages for working class Americans have been devastated since the days of Ronald Reagan and our old pal Alan Greenspan started gutting unions and trying to lower our standard of living:

In September of 2007, in an interview on C-SPAN for Book TV, Greenspan said: “We pay the highest skilled labor wages in the world. If we would open up our borders to skilled labor far more than we do, we would attract a very substantial quantity of skilled labor which would suppress the wage levels of the skilled, because the skilled are essentially being subsidized by the government, meaning our competition is being kept outside the country.”

It’s shocking that ideologues like Greenspan, Reagan, and Clinton believe this, but they do. And the only way to reverse the past 29 years of Reaganomics/Clintonomics is to tighten up the labor market again. While a great start would be to pull out of our insane trade treaties and begin again protecting American manufacturers, that will take a decade for the impact to be truly felt even if we were to go back to our 1980 tariff levels today. Read on...

Thom finishes by stating that his plan would ultimately "take us to nearly zero unemployment and dramatically stimulate the economy." I happen to think it's a good idea. What say you?

Apple Eating Notes: Organizations and government bodies endorsing HR 676/Single Payer

The Edge of the American West: Justice too long delayed is justice denied

Balkinization: An appalling number of executive branch positions remain unfilled because of the Senate's failure to confirm nominations that have been made or, in some cases, because the Administration has failed to nominate anyone at all.

Economist's View: "Don't Let the Stimulus Lose its Spark"

American Street: My Two Dollar Newspaper Sucks

AverageBro: Erry'body Hates Michelle-O...

Robert Reich: How tough is our president?

Emptywheel: Pay2Play Connolly's sources are "mystified"

Newshoggers: The election broke their brains. 39% of Americans are certified imbeciles...

The Grey Matter: Not perfect, but far from a 'bust'

Wall St. Cheat Sheet: Is Nouriel Roubini a false prophet?

EconoSpeak: What "Academic Standards"?

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Rep. Mike Pence disagrees with the stimulus and voted against it but wants more of it for his state. "The Democrats in Congress and the administration said we were going to have to borrow nearly a trillion dollars from future generations and spend it on this -- this long laundry list of liberal spending priorities we called stimulus and that unless we did that, unemployment would reach 8% nationally. It's 9.5% nationally today," Pence told Fox News' Chris Wallace.

But Pence charges that Indiana isn't getting enough money from the very program that he doesn't support. "You check the Indiana Star, you'll see stories about the stimulus. One is that four out of ten major projects in the stimulus for Indiana had been allotted to companies outside the state of Indiana," complained Pence.

Transcript below the fold.

Continue reading »

GOP 12: Sanford cheated on his wife and taxpayers

Alan Colmes’ Liberaland: Here's another jiveass "conservative."  Texas secession-promoter, Rick Perry, turned down stimulus $, now wants a loan

Stinque: Leader of GOP womanizers' Jesunazi sex cult is spiritual guru to Hillary Clinton

Nixon's Ghosts: Documents from the Archives: Pat Buchanan was for Affirmative Action before he was against it

Mondoweiss: Olmert tries to resuscitate one of the all-time great lies in the Oslo peace process

Mock, Paper, Scissors: Anatomy of a column

Kansas Republican Todd Tiahrt isn't known for being very bright, or brave. This past spring, Tiahrt was one of many Republicans who feebly attempted to stand up to their party's leader, Rush Limbaugh, only to come crawling back days later apologizing and kissing his ring.

Now, Tiahrt has decided to stand up to the evil Socialists, President Obama and Nancy Pelosi by proposing a plan that would repeal federal stimulus funds for his state -- which would be a total disaster and force the state to make massive cuts to their budget which is already hurting with the stimulus money:

U.S. Rep. Todd Tiahrt, R-Goddard, has a bill to repeal funding under the federal stimulus.

Of Kansas’ six-member congressional delegation, only U.S. Rep. Dennis Moore, D-Lenexa, whose district includes east Lawrence, voted for the $787 billion American Recovery and Reinvestment Act. All five Republicans voted against it.

But Tiahrt, who is running for U.S. Senate, has ratcheted up the rhetoric, producing a campaign ad against the stimulus program that asks viewers to help him stop President Obama and House Speaker Nancy Pelosi.

State officials said without the stimulus funds, Kansas would be hurting worse. Read on...

Apparently, Tiahrt learned nothing from Republican Governor Mark Sanford's abysmal failure in South Carolina when he tried to do the same thing. Sanford got hammered from both Republicans and Democrats in his very red state and chances are, Tiahrt would meet the same fate.