What happens when rich elitists get to decide on a budget for all Americans? We get the Senate version of the stimulus bill. *sigh*

Well, this week, the political elites who live in the Senate decided that we didn’t need to help the states,. our schools, or our health. The Senate version of the stimulus plan, the one needed to keep this country from driving over a cliff, removed $86 billion dollars of spending that would’ve had an immediate effect in the country – money to the states and education. Yes, the bubble returns to Washington. Douchebags!

Some of the listed cuts in the Senate version include:

$40 billion State Fiscal Stabilization
$16 billion School Construction
$7.5 billion of State Incentive Grants
$5.8 billion Health Prevention Activity
$1 billion Head Start/Early Start
$2.25 billion Neighborhood Stabilization

What the Senate’s cut: Funds for states and schools

Or as Senator Claire McCaskill (D-Missouri) said on her Twitter: Proud we cut over 100 billion out of recov bill.Many Ds don’t like it, but needed to be done.The silly stuff Rs keep talking about is OUT.

Yes, funding the states and education is silly stuff….. classy!

Paul Krugman (remember – the guy who is actually an economist and who won a Nobel Prize) said in his New York Times column:

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.

What the centrists have wrought

And why did this happen? Krugman has an idea:

[C]entrism is a pose rather than a philosophy. And to support that pose, the centrists are demanding $100 billion in cuts in the economic stimulus plan — not because they have any coherent argument saying that the plan is $100 billion too big, not because they can identify $100 billion of stuff that should not be done, but in order to be able to say that they forced Obama to move to the center.

Appeasing the centrists

It is all about being bipartisan – you know where the minority party gets what it wants in full – even though they are in the minority. It’s the bizzaro Congress.

Meanwhile the Wall Street douchebags will be getting more money to spend on hookers and blow…. well does it really matter? They still don’t have any rules on the use of their bailout funds.


Why do Congressional Republicans hate America?

Well we know from their “leader” and gas bag Rush Limbaugh that he wants President Obama to fail. Now we find out that Congressional Republicans are being jackasses about the proposed stimulus bill. The question is why? It’s because the 2010 elections are coming up and Republicans think they can get elected again if the attempt to save America is defeated or damaged enough not to work. They want President Obama to fail too. I think it is nothing but petty bullshit from a party that has no idea how to help the struggling economy and were in fact responsible for screwing the hooch in the first place.

The Republican playbook is about standing in opposition, knowing full well that the Democratic Congress is going to pass a stimulus package. Their next step is to go home and sell to what’s left of their constituencies the notion that if we had listened to them, things would be far rosier. As a minority, a control group is unlikely to emerge that can disprove false numbers based on false rhetoric. They can go back and campaign in two years whether or not Obama’s plan creates anywhere close to the number he hopes and tell the world, and claim that their plan would have provided double the number.

The minority role in government should be about balancing the need of their constituencies with real ideas that create a stronger way of finding a solution. In the modern era of politics Rush Limbaugh style, it is all about spewing hate and misinformation in the guise of governing for the good of the people. The very people that the Obama plan will help most, are the very same people that are being preached to by the likes of Limbaugh and his puppets in Congress. 

Republicans Clearly Are Willing to Let This Country Collapse if They Think it Will Win Them Elections

And the media – also known as the Villagers – come along for the fire sale because…. well because they are so insulated in their little GOP controlled bubbles, they think spewing discredited GOP talking points is being objective.

The networks like to have the same tired debate format with the same hired analysts debating with “sound and fury” that usually “signifies nothing” to most of America. Last week the media chose to have Republicans like John Boehner, who helped create the situation we’re in, dominate the airwaves, which does nothing but muddy up the discussion on our rapidly failing economy. And which leads Villagers like Chuck Todd to proclaim that Republicans have won the spin wars. It’s a “spending bill” now.

Why is it called a “spending bill”? Because the Villagers have decided that the Republicans have won the PR war over the stimulus package. How does that tired argument help this country in a time of crisis? I know the spin wars play a role when messaging is concerned because Americans get a lot of their news through the TV and the elitists get aroused by all this nonsense, but it’s killing us. Please Stop It. C&L has often documented how the media tries to elect our politicians, (They chose Bush over Gore, How did that work out?) but now they are trying to decide how this very important stimulus package will be dealt with.

Please, where’s the meat? Stop playing games with our lives. Put people on who can explain it coherently. Economics is complicated. Sound bites aren’t enough. Obama was elected to bring change to the economy, not to debate the merits of tax cuts all over again. We had that discussion for 18 months and Obama won. Tax cuts lost. Why is the media ignoring that fact? John McCain ran on tax cuts to save us and he lost. Now he’s telling his supporters that he’s going to vote NO on the stimulus plan and wants them to sign a petition. You lost the election badly. Democrats have solid majorities everywhere you look, but not when it comes to the media that is supposed to inform us and not play “spin wars’ with the country. 

Why aren’t there hundreds of economists on my TV explaining the stimulus package?

So how does that go again – the media has a liberal bias???? Excuse me while I laugh.

The fact is 1 or 2% of the proposed plan might be considered “pork” – that is not directly related to stimulus spending – yet that tiny portion of an 800 billion plus bill is getting 90% of the focus along with more talk about a worse plan like more tax cuts.

At least there is one Democrat with a spine to tell the truth and get airtime at the same time:

In the past few days, I’ve heard criticisms that this [stimulus] plan is somehow wanting, and these criticisms echo the very same failed economic theories that led us into this crisis in the first place, the notion that tax cuts alone will solve all our problems, that we can ignore fundamental challenges like energy independence and the high cost of health care, that we can somehow deal with this in a piecemeal fashion and still expect our economy and our country to thrive.

I reject those theories. And so did the American people when they went to the polls in November and voted resoundingly for change.

President Obama

I know we will have a stimulus bill passed but I fear it might be watered down too much because the Dems missed the PR boat.

Why do Wall Street Bonuses cause complaints? It is simple math and common sense

Everyone knows about the bail out of the nation financial institutions after they risked too much on junk assets that failed to deliver. Most people also should know that after getting the tax payer funded bail out some of these same banks, investment houses, and insurance agencies used that money to pay billions of dollars in “bonuses” to CEOs and employees. Even though such pay outs look stupid and in this case they are, it isn’t because the workers may not deserve it but it is simple math.

Some business experts have tried to cast bonuses as commissions earned for sales. But again if there are no sales how can you justify a bonus. It is still simple math. If you have red ink on the books then you shouldn’t have any money to pay for bonuses.

The bigger question might be why there will be bonuses at all.

After all, even if bonuses fall 50 percent, that hardly matches the drop in profits and revenues plaguing Wall Street. At Lehman Brothers, the employees still left are expected to receive $3.5 billion in bonuses from the firm’s new owners, Barclays Capital and Nomura.

In a system where huge profits bring huge rewards and huge losses bring, well, smaller rewards, can you blame Wall Streeters for taking big risks in hopes of getting the brass ring?

Take a look at what happened to banks in 2007: Citigroup, for example, reported a profit of $3.6 billion, down 83 percent from the previous year. Many other firms saw similar declines. Yet bonuses across Wall Street declined only 4.7 percent from the year before. The payout was $33.2 billion, according to DiNapoli.

Open season on the Wall Street bonus

That’s why I get upset about Wall Street people like John Thain and others who still pay out bonus out of whack from reality.

I’ve been taught that bonuses are tied to the performance of myself and the company I work for, and all the places I’ve worked have done that it that way.

At my current job, there are certain benchmarks I have to meet in order to qualify for a monthly bonus and the size is set based on how I did, above that initial bar. The current maximum is 12% of my base pay if I hit 100% of all the benchmarks.

Our managers, on the other hand, get a bonus based on how all of us do in reaching certain goals for the company for that month.

At another job I worked, which was a retail company, bonuses were tied to the “Earnings Before Taxes” of the company. The amount you got depended on the percentage your department contributed to the EBT. At that job, I worked long enough to get one bonus and it was $600 after taxes. I still have the TV I bought with it.

The common wisdom is if you have lost money there should be no bonuses paid out. That’s why people are pissed off about Wall Street bonuses.

Tax Cuts equals “Bad Faith Economics”

Back in my college days, I had a friend who I would debate various topics with on those late night study sessions in the study lounge. He use to drive me crazy because he would always take the opposite position and would never yield, compromise, or even acknowledge any of my points. No matter what evidence I provided he would refuse to accept it. These debates wouldn’t go anywhere because of his stubbornness but he enjoyed them. He would walk around for a few days with a smugness believing he bested me. That’s how it seems Congressional Republicans are acting over the proposed stimulus plan.

The GOP has always been factually challenged but is always a good read when someone points it out in a high profile publication like the New York Times.

Paul Krugman, professor of economics and international affairs at Princeton University and who won the 2008 Nobel Memorial Prize in Economic Sciences, demolishes the current GOP talking points against the proposed stimulus plan. Let me stress. Paul Krugman is an expert in economics. It his job.

In his January 26th column he states:

As the debate over President Obama’s economic stimulus plan gets under way, one thing is certain: many of the plan’s opponents aren’t arguing in good faith. Conservatives really, really don’t want to see a second New Deal, and they certainly don’t want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.

Bad Faith Economics

He then went through the talking points and shreds them:

John Boehner, the House minority leader, calling the plan to “spend hundreds of millions of dollars on contraceptives” is simply a cheap shot and easily dismissed. The fact is the proposal is an expansion in the number of states that can use Medicaid money, with a federal match, to help low-income women prevent unwanted pregnancies, which would save the states $400 million.

The Obama plan will cost $275,000 per job created? Nope. Closer to $100,000 and lower if you take into account the tax income from those new jobs.

It’s always better to cut taxes than to increase government spending because taxpayers should decide how to spend their money? Krugman notes that a large percentage of any tax cut would be saved so spending on things like infrastructure will get more bang for the bucks. Increased tax revenue and increased spending in the private sector by the people with those created jobs will amplify the results. As an aside, the last tax cut Bush gave, when all of us got $600 or more in a check only created an infinitesimal ripple in the economy.

We should favor monetary policy over fiscal policy? Nope. Because interest rates are effectively zero right now. There are no more monetary tricks to pull out.

Krugman closes with a even more true fact facing the GOP. Obama won the election. The public has spoken.

We need better roads, bridges that don’t fall down, and school buildings that don’t make students sick. The LAST thing we need is a tax cut.

Public works IS a national interest

On Saturday, President-elect Barack Obama announced the largest public works program since the Eisenhower adminstration in the 1950’s.

Today, I am announcing a few key parts of my plan. First, we will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won’t just save you, the American taxpayer, billions of dollars each year. It will put people back to work.

Second, we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways, and we’ll set a simple rule – use it or lose it. If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money.

Third, my economic recovery plan will launch the most sweeping effort to modernize and upgrade school buildings that this country has ever seen. We will repair broken schools, make them energy-efficient, and put new computers in our classrooms. Because to help our children compete in a 21st century economy, we need to send them to 21st century schools.

As we renew our schools and highways, we’ll also renew our information superhighway. It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the internet, every child should have the chance to get online, and they’ll get that chance when I’m President – because that’s how we’ll strengthen America’s competitiveness in the world.

In addition to connecting our libraries and schools to the internet, we must also ensure that our hospitals are connected to each other through the internet. That is why the economic recovery plan I’m proposing will help modernize our health care system – and that won’t just save jobs, it will save lives. We will make sure that every doctor’s office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year.

Weekly Address

Not only will this try and jump start our crashing economy but would fix some serious problems we have with our infrastructure. The prime example of the teetering collapse was the literal collapse of the I-35 bridge in Minneapolis in 2007.

Of course some people will complain about the spending of large sums of tax payer dollars but like the Interstate Highway System, our infrastructure should be of a national interest. Good roads, safe bridges, and school buildings are foundations for a strong society.

Only the federal government can marshal the money and vision to make these things happen on a scale to help the country on the whole. The Interstate system not only helped to support the military if needed, it transformed the economics of this country and allowed for more national businesses rather than local or regional ones. With that scale came lower prices and new products and services spreading from coast to coast. Would McDonald’s be an American icon today if there had not been interstate highways?