Stimulating!

By Al Giordano

The US House has approved the final House-Senate conference committee agreement on the Stimulus Bill by a vote of 246 to 183 and the Senate is voting on it now (where it will pass with at least 60 votes later on tonight).

That means that more than half-a-trillion ($500 billion) dollars will go to job creation and social programs, much of that through state governments. That includes:

$127 billion to health care

$101 billion to education

$63 billion in aid to the poor

$61 billion to green energy ($30 billion for improving the electric grid, $20 million in loan guarantees for alternative energy development, $6 billion for weatherizing state and federal buildings, $5 billion for weatherizing homes...)

$53 billion to roads, bridges and other infrastructure

$22 billion to development of technology

$18 billion to environmental clean-up and protection

...and about $60 billion more for direct cash subsidies to people and other miscellaneous programs.

It also includes $285 billion in "tax cuts" but a different kind of tax cut than the term has meant over the past eight years (aimed at people, not for corporations, and not for the five percent of wealthiest Americans).

None of these expenditures existed before (and they won't exist until) the President signs the bill into law this weekend, opening the spigots to get the economy's blood moving from the bottom up. Unemployed workers will get jobs to do all this work. They'll then have money to spend, creating more jobs for workers who make products. The billions to modernize the health care system will bring the nation a step closer to national health care (and make that less expensive to create). The billions to education will create a better-trained and more competitive work force. The billions to green energy will decrease dependence on polluting and external sources of fuel. New technological advances will be spurred by this investment, and it will be faster and more economical for products to move from factory to consumer. Rural and poor Americans that do not have economical access to the Internet will have that.

For all the teeth-gnashing and whining of the past couple weeks about this bill, the process worked to create all those expenditures where none of them existed beforehand.

Were there versions of the bill that spent more on education and other vital needs? Yes. But there were also versions of the bill aimed at rescuing the failed nuclear industry, the coal industry, and other boondoggles that didn't make it into the final version.

All in all, I find it astounding that some still point the finger at the President's "bipartisan" tone as somehow having been a bad thing. To the contrary, it was key to bring along the few Republican votes necessary in the Senate to go for this massive public works program.

But there's a silver lining for those of us that appreciate irony: Now that White House Chief of Staff Rahm Emanuel has thrown a bone to the anti-bipartisanship factions, I wonder if any of the heads of those who portrayed him an enemy to progressives will now commence to explode. According to the Wall Street Journal, Emanuel said Obama "has an open hand... But he has a very firm handshake." And this has some of the very same corners that have been doing Chicken Little fire drills ever since Emanuel got tapped as White House enforcer - the same ones that had portrayed him as the source of all supposed evil in the new administration - now in the very ironic position finding him as their partisanship lobby's best friend at 1600 Pennsylvania Avenue. I wonder if they grasp the humor in that. (And I'm guessing that they won't, even as many of us do get a chuckle out of it.)

Less than three weeks into the Obama presidency that the CL's clucked had somehow already failed, the single largest public spending bill in history is about to become law: $787 billion dollars, $504 of it directly creating jobs and improving the lot of the many.

And to think, back in 1993 President Bill Clinton couldn't get a Democratic Congress to support a $16 billion Stimulus Bill. Today's is 49 times larger, and it passed.

Maybe the green energy and technology provisions will now find a way to bottle blogger poutrage on future panics and convert it into fuel. Otherwise, how much human energy was wasted on that over recent weeks?

Related: What BooMan said.

Comments

The Narrative

I find it absurd that so many pundits are doing their best to paint Obama as a rookie making rookie mistakes. Looks to me like he's done a masterful job getting his agenda through. This was not an easy sell. As George Will said, he was asking Republicans to not be Republicans. He was able to split their coalition in the Senate and make them look intransigent as a party at the same time.

The main thing is it's gotta work. If it does, Democrats will be in great shape in 2010 and beyond. If not, we're all screwed.

Al, isn't it true

that House Republicans just unanimously voted against the largest two year tax cut in US history?

yay!

I saw a comment somewhere that Obama got about 80% of what he wanted with this bill and since when do you get 80% of what you want in life or in politics?

Very well played.

A bad week? Hah!

Thanks for the sanity, Al. I was reading the package over today and kept agreeing with just about everything in it, including the way the tax cut is handled (by reducing the paycheck deductions, instead of the mailed-out lump-sum).

This is a huge win! Obama reached out, got rebuffed, continued to work with the grown-up Republicans, and got what he wanted. He looks big, and a big chunk of the Republican party look like giant partisan hypocrites.

I'm a little surprised at McCain and Gregg. They've both been around long enough to observe several sea-changes. I guess they want to be on the wrong side of this one.

And in the fine print

The Judd Gregg theater, first act in the take back New Hampshire play of John Sununu the elder, was supposed to drive a stake in the heart of bipartisanship. It's real purpose was to build up the resume of presidential candidate Judd Gregg.

I am not convinced that these partisan attacks against the stimulus bill will survive the passage of the bill. Any Republicans who try to undermine this stimulus plan are going to be playing a high stakes game with nothing more than a bluff hand.

pushing the deficit spending limit

I think people sometimes get to focused on one track or perspective. yes the spending is better to directly stimulate the economy the tax cuts are not. but this recession is different. it was caused by a credit contraction so the tax cuts actually help that. the tax cuts if not spent help repair the financial sphere. and that indirectly will help stimulate the economy. so it is really a win-win.

politically this takes away from the GOP plate the democratic boogie man to raise taxes. they lose that in upcoming elections. which of course is a big part of their bullshit campaign.

but lastly and the reason for the comment Al is that Obama may be the first President since Nixon took us off the gold standard to really push the deficit for social spending. I do not think people or economists realize how big a move that was. without gold there is only one restraint to deficit spending and that is inflation. and with the US being the reserve currency that is restrained. also in a recession the head winds against inflation are strong. so I think there is no real limit to what Obama can do if he decides to. as usual the GOP is completely on the wrong side of what is in play.

Timing

What a hysterical news weekend it's going to be!  Good thing I'm busy studying frantically for a thing tomorrow morning or I'd be chuckling my way around the blogs.

As it turns out, the Gregg mini-drama was well-timed--for Obama.  Withdrawing the day before the stimulus bill passed and four days before it's signed means that he’s already old news.  If he'd waited until next week, it would have been different.  Now he's just a dithering ding-dong who broke a promise of loyalty and then voted against the biggest initiative yet. With the housing initiative now in the pipeline, the MSM has more important things to talk about.

I'm loving this.  I believe even those who didn't vote for Obama when they say they're confident in him and know it's going to take a long time to turn this mess around.  As it becomes more and more obvious that Democrats have many more initiatives in the pipeline  (housing, financial system reform, health care), the Repugs are going to look more and more like a bunch of monkeys throwing their poop at each other.  Let the keep their 25% who'll never support Obama. We’ll just kill them with kindness and economic recovery.

My congressman voted against the biggest tax cut, evar

What  Allan Brauer said. (I woulda mentioned that link, if he hadn't).

But I think it makes a great letter to the editor in newspapers in areas with R congresspeople.

Also, for your amusement: GOP Problemsolver.com

 

 

Ignorance

A lot of people, including those who should know better, have accused Reid and Obama of caving in to the demands of 3 Republicans and tht they should have forced a filibuster.

The problem with that is that this bill had to have 60 votes to pass, not to invoke cloture.  If they hadn't caved a little, then the bill would have gone down to defeat.  Of ocurse the Republicans would have been blamed, but it still would not have looked good, even if, after another long battle it got passed.

 

I would have liked more, but this is a start.  If it looks like it is starting to have an effect, it will be a lot easier top come back for another $50-$75 billion to finesse it.

 

Regarding the tax cuts, this is actually more important than most people realize.  If I had just gotten the $800 for my wife and me, we would probably have taken the whole check and paid off a bill (nothing there to provide stimulation)  This way, it is actually much more likely to go into the general economy..  This is if veritas read it right.

 

Finally,  people forget something.  In fact this is something I have not seen anybody address.  A certain percentage of the money going out is going to come back in the form of income taxes paid by those whose jobs are being saved and those who are now goingto be able to go back to work.

House GOP

I know the stimulus passed the House, and will soon pass the Senate, but I still royally pissed by this Rep Cao fron NOLA, I know that he is just one of many, but I may live in Dallas, but MY HOME IS IN NEW ORLEANS!!! My family evacuated during Hurricane Katrina.  My grandmother died  from a heart attack thanks to Katrina.  My large extended family was displaced for almost 2 years because of katrina.  All except me, my mom, and 3 of my sisters are not living in NOLA.  All my family has since moved back to NOLA.  It's been over 3 years since Katrina, and guess what, in my aunts block alone, their a still houses that were abandonded, that still have the symbol letting the rescuers know how many bodies/living/dead are in the house.

In the area of the city where Cao and the Vietnamese population, their used to be at least 5 schools, they have either been demolished, or they are still boarded off and gated off. The schools that are still available are the private schools in the uptown area, where most of the white population of NOLA lived.  Pre-katrina, there was over 15 public schools open in the ninth ward alone, where most of the blacks lived (my family and I lived in the lower ninth ward as well), currently, there are <a href="http://www.nops.k12.la.us/">18 public schools open in all of New Orleans</a> .

What was once a thriving tourism industry, is still not where it was.  The cost of living has gone up, but the pay rates have not (an extra $13 would come in handy I bet).  If you are not a skilled professional like I am (I'm a Medical Technologist/Microbiologist), then you have limited resources when it come to finding a job.  You could probably chose to live outside the city, and just drive in, but oh wait, that involves an extra expense for gas (another cold way to utilize $13).  The levees are not really up to code, and yes there were potholes before Katrina, but being underwater for almost 2 weeks will cause even more corrosion.  There is some highway construction being done, but only along the evacuation route. 

The city used to be able to rely on toursim dollars, but now it only the big ticket showcases that brings in funds and jobs, and even that is temporary.  Mardi Gras only happens about 2 weeks a year, The Jazz Fest i only 2 weeks, hell even Essence Festival is only 3 days long.

I know that the stimulus was not meant to solve all these issues, but if Rep Cao knows his district is hurting, and he let the national Republican party browbeat him to vote against it (particularly when he said he would), then he has written his obituary in term of being re-elected in NOLA., because ya know what why do you think Jefferson kept being elected, in the beginning he did good things for the city, so the people voted for him.  As long as he did what was right for our city, we voted for him.  Once his corruption came blatantly obvious, he was voted out, and Mr Cao was voted in.  NOLA is called the Big Easy, so yeah we are pretty laid back, but when you have our backs we have yours.  If Cao had at least stuck to his convictions to help the people of NOLA, then I actually think that he may have had a chance to be re-elected. 

Anywa, sorry for the rant Al.

There could be no better

There could be no better investment in America than to invest in America becoming energy independent! We need to utilize everything in out power to reduce our dependence on foreign oil including using our own natural resources. Create cheap clean energy, new badly needed green jobs, and reduce our dependence on foreign oil. OPEC will continue to cut production until they achieve their desired 80-100. per barrel. If all gasoline cars, trucks, and SUV's instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota.  There is a really good new book out by Jeff Wilson called The Manhattan Project of 2009 Energy Independence Now.

The Republicans made Sen.

The Republicans made Sen. Sherrod Brown and Sen. Ted Kennedy show up for the final stimulus vote.  Brown was attending his mother's funeral in Ohio, and Kennedy is struggling with brain cancer.  If ever there was an opportunity to show a little human decency and commit an act of bipartisanship, this was it.  A couple of GOP Senators could have cast their votes for the stimulus bill to spare their Democratic colleagues who were dealing with life-and-death issues, but no. Those Republican pigs couldn't even find it in their hearts to do the right thing in a case like this.

eBay

In honor of the stimulus bill being passed, and in advance of President Obama signing it into law, I'm putting Judd Gregg's balls up for auction on eBay.  Bidding starts at 35-cents.

Spot on as usual

Great work Al.

 

It is good to have a reality based view every now and again.

 

Cheers

thanks AL

Great article AL. Good to see you continue to give persepective.

 

Did you see Frank Rich's column?  

Let's look at the Geithner

Let's look at the Geithner dithering now, Al. For a very astute gentleman like yourself, it is time to face the music that the Administration is in bed with the bank agenda and not the common weal. It's necessary to nationalize the insolvent banks now and refuse to pony up any more public cash for them. This will be the activity that will be getting slipped past the public over the next few weeks. I hope readers here pay attention and come to grips with the Geithner plan and understand that it is not for their benefit. Stay tuned, and no napping!

On Nationalizing Banks

RC - Nationalizing the banks could be a very good move or a very bad one, it would all depend on how it was done.

Mexico nationalized its banks and things got worse. Then it privatized them again and things also got worse.

I also suspect that Geithner's proposed "stress test" for banks seeking public assistance is a stalking horse to set up nationalization as an option later on down the line. In order to build public support for such a bold move, some incremental steps would need to be taken first, steps that educate the public at each pass as to the need to do it.

I haven't seen polling data, but I would suspect that to propose this early in the term to nationalize the banks in the United States would create a firestorm and fuel a reaction that would stop Congress from going along with it. Much work needs to be done still to grow public opinion to solidly support such a move.

Al, so sweet to just see you over at 538

Pardon my absence. I moved and moved back. Ian in Cambridge says hi.

Obama is doing his usual zen. The Bankster mess is so vile and ugly that it may well be a very long time before all the toxic CDO paper is resolved. Right now the Admin is struggling to shore it up because admitting how bad it is will cause panic.

I don't think Geithner will last as he is too in bed with the mess. He was tossed in as a transition shill to massage Wall Street but Obama already builds his council on Volkerisms.

The GOP tantrums were predictable and wonderful, jacklit deer who can't come to grips with their role in wrecking a fat happy America that may be gone forever. No one I know seems to grasp the scope of this disaster that I pegged along with Roubini and James H Kunstler back in 2007. "Numerian" at Agonist actually has the best breakdown I've seen about what a Collateral Debt Obligation is and how impossible it is to unravel.

But the Credit Default Swaps are even worse and should be illegal. Clinton ficked up by ever allowing them to exist as the leverage amounts to more than the entire planets GDP.

Check the Calculated Risk blog if/when you have a moment.

The stimulus rocks and I can tell you it is cool seed money and investor asurance for dozens of killer green tech manufacturers who were struggling. There will be a multiplier effect as our infrastructure is damaged crap on many levels.

You lived in Cambridge/Boston. You know how many dogshit old uninsulated inefficent buildings we have with no insulation and how you overpay moron slumlords for dogshit archaic housing..you know the drill.

The stimulus gives them fat tax breaks to stop being idiots and I've already advised the stingy idiots who own my building on how to work it. They are actually psyched as they have to replace 2 dogshit furnaces and several central ac units.

Obama has already half destroyed all those ugly irrelevant GOP oligarch shills in the Senate. They are jacklit deer clinging to a dysfunctional ideology. They whined about being left out but it was because their ideas suck..oh waah.

Oh and 'Nationalizing Zombie Banks.

Citi and Bank of America are insolvent walking dead. Their exposure to the CDO mess is huge. The paper they have on these CDO's is a shit sandwich that no one wants so their liabilities exceed their assets. There are two equally useful arguments.

1. Prop them up and hope for the best.

2. Let them die and be done with it.

Either way they will end up in recievership where they will be broken to little pieces and resold. Stockholders will be wiped out. Receivership is the proper term and "Nationalization" is a bullshit canard.

This same dichotomy applies to all the assholes who bought some assinine home they couldn't really afford so they could impress someone with their money status.

The mess is so bad that the banks no longer have any enthusiasm for foreclosure and the system makes it impossible to find the title documents. A judge can't very well initiate a foreclosure procedure if the bank can't cough up the goddamn title document. How weird is that. Abbie would love this, rest his soul. Talk about "Steal this book"
We're seeing  "Steal this Economy".

Oh and may it please you to know that Newscorp and Fox news is also living dead. Ruperts revenue stream is toast and their share price is dogshit too,

nationalization

I agree with Al about nationalizing the banks. I have yet to see any real discussions of how this course of action would be sold to Congress or to the public. And it is hard for me to take anybody seriously who proposes a course of action without explaining how they plan to sell it in a democratic system.

I am also somewhat unclear on the details of exactly what nationalization advocates call for. Are we talking about insolvent banks being seized and restructured? This is already happening (I should know; the FDIC seized my bank last fall after it failed). Or are we talking about trying to seize a bank like Citigroup that has not yet been found to be insolvent (though obviously it has received a lot of government aid to stave that off). If we are talking about the government seizing active banks, then I think Al is exactly right that this action would cause a firestorm that would doom the plan.

Also, I am not clear exactly how nationalization is supposed to resolve the problem of the toxic assets. What exactly is done with them? Nobody seems to know the answer to that. Geithner seems to be proposing a market where private buyers would be encouraged to buy these, with some government support or insurance. Whether or not this is a good idea, it is more detailed than anything I have seen from the nationalization advocates.

As Al said, the "stress test" will force the banks to come clean about their balance sheets (and I don't believe for one minute that they are happy about having to do this; in my opinion a lot of the negative reaction to Geithner's speech is in fact from the financial and business sector who are not happy about this). They will then be forced to take part in various programs to increase lending and reduce foreclosures. If they are solvent but do not have enough money to resume lending as much as is needed, they will receive capital assistance from the government, which comes with restrictions on executive pay and bonuses, limitations on paying dividends or trying to cash out to shareholders, and reporting requirements on what they are doing with the money they receive. I don't think they like that one bit either.

And if they are insolvent, they will be seized (which, as I said, has already been happening) and restructured or shut down.

Maybe I am stupid but I don't see how this is such a bad thing or even that different from nationalization. I don't see how it makes Geithner somehow a shill for Wall Street to have proposed it. If he was a shill for Wall Street he would have proposed more of what Paulson did, which is to give them the money with no questions asked and no strings attached.

There seems to be a school of thought that anybody who does not call for immediate nationalization is a shill for Wall Street but frankly the same people that are saying this are the usual Chicken Littles and "activists" who have been wrong on just about every political question recently including the stimulus and bipartisanship.

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About Al Giordano

Biography

Publisher, Narco News.

Reporting on the United States at The Field.

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