Some Democrats Among Stimulus Skeptics - Why?

More at washingtonpost.com: “President Obama, who promoted the $825 billion package at the Capitol yesterday, says the proposal serves two functions -- creating jobs and stimulating the economy in the short term, and laying the groundwork for overhauls in energy, health care and infrastructure that would be felt for decades. But some administration supporters say that while they appreciate Obama's intent, the two goals are competing with each other, and that the package could end up missing both targets.

In testimony before the House Budget Committee yesterday, Alice M. Rivlin, who was President Bill Clinton's budget director, suggested splitting the plan, implementing its immediate stimulus components now and taking more time to plan the longer-term transformative spending to make sure it is done right.”

-- What I don't get is why some Dems are waisting time in doing something to solve this problem. It's almost as if some officials are afraid to 1) take action because it 2) may work, making Obama 3) even more popular. I don't think it's just the GOP who has jealously regarding President Obama. Meanwhile the economy continues to tank.

Toyota predicts first ever loss as sales drop - Dec. 22, 2008

More at CNN.com - Dec. 22, 2008: “NEW YORK (CNNMoney.com) -- Japanese auto giant Toyota said Monday that it would suffer an operating loss due to plummeting auto sales and a strong local currency.

About 30 minutes after the market closed in Tokyo, Toyota said it expected to lose approximately $1.5 billion to $1.7 billion this fiscal year. Toyota reports earnings on a fiscal calendar beginning in April.

This would be Toyota's first operating loss since 1950, Toyota spokesman Steve Curtis said.

Despite the likely operating loss, Toyota expects to post a $557 million net profit for the fiscal year. The profit stems, in large part, from joint ventures whose revenues are not included in the automakers' accounting for its operating profits.”

--- This should show others that it's not just American car companies that are hurt by this economy.

More At The Denver Post

Banks not saying where bailout money is going - The Denver Post: “WASHINGTON — It's something any bank would demand to know before handing out a loan: Where's the money going? But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it.
"We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,"' said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to." The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest? None of the banks provided specific answers.”

-- This is an outrage! One of President Obama's first axts as President should be to write an executive order forcing the banks to tell where the bailout money they've got is going!

Bailout’s critics? Republicans from states with foreign automakers | Muckety.com - See the news

Bailout’s toughest critics were Republicans from states with foreign automakers | Muckety.com - See the news: “Richard Shelby of Alabama, the senior Republican on the Senate Banking Committee, for instance, took a particularly harsh tone with auto executives, suggesting their restructuring bids “are not a serious set of plans.”

Since the 1990s, Alabama has won three assembly plants, from Honda, Mercedes-Benz and Hyundai, and an engine plant by Toyota.

Senate Minority Leader Mitch McConnell of Kentucky, who slammed the bailout plan Thursday, has a Toyota plant in Georgetown.

And Bob Corker of Tennessee, who played a starring role in efforts to broker a last-minute Senate compromise Thursday, has the American headquarters of Japan’s Nissan, several Nissan plants and a planned factory by Volkswagon in his state.

But Corker’s compromise effort collapsed after the United Auto Workers refused to accept Corker’s insistence of wage and benefit concessions in 2009 to create parity with workers at U.S. factories owned by Toyota, Nissan, Hyundai and other foreign companies.

“We offered any date in the year 2009 - any date - any date, just when will we actually get there,” Corker said on the Senate floor after his proposed deal collapsed.”

AIG MAY NOT PAY BACK $60 BILLION TO GOVERNMENT AS PROMISED IN BAILOUT PLAN - New York Post

AIG MAY NOT PAY BACK $60B TO GOV'T AS PROMISED IN BAILOUT PLAN - New York Post: “Uncle Sam may not get paid back as promised in its $150 billion bailout of American International Group, the giant insurer conceded.

AIG had agreed as a condition of its recent government lifeline to escape bankruptcy that it would repay at least $60 billion by selling valuable assets.

However, CEO Ed Liddy admitted yesterday that it may not be that easy to raise the cash.”

Outside Pressure Grows for GM to Oust Wagoner - WSJ.com

Outside Pressure Grows for GM to Oust Wagoner - WSJ.com: “DETROIT -- General Motors Corp. Chairman and Chief Executive Rick Wagoner is coming under increasing pressure from outside the company to resign as part of any broad bailout of the auto maker by the federal government.

On Sunday, Sen. Christopher Dodd (D., Conn.), a supporter of emergency loans for Detroit, suggested Mr. Wagoner should go if the government follows through and provides billions of dollars to help the auto giant restructure and return to profitability.”

Mortgage Delinquencies, Foreclosures Rise to Record

Bloomberg.com: Worldwide: “Mortgage Delinquencies, Foreclosures Rise to Record ”

Berkeley's Robert Reich Blog Seems To Point To Bailout Of The American Taxpayer

Berkeley Professor of Public Policy Robert Reich became famous for a book called "The Next American Frontier" where he favored a kind of American Industrial Policy while at the Kennedy School of Government at Harvard. That book, and "American Industry in International Competition" and "The New Industrial State" by John Kenneth Galbraith, plus a healthy practice of system dynamics modeling, helped to form my current economic view.


Currently, Reich serves as what he describes as an "informal advisor" to President-Elect Barack Obama.  In his blog, which I'd wish he'd break up into subject portions for linking, Reich points to the big "C" - Consumers -- as being at the heart of the economic problem. He writes:

The real problem is on the demand side of the economy.


Consumers won't or can't borrow because they're at the end of their ropes. Their incomes are dropping (one of the most sobering statistics in Friday's jobs report was the continued erosion of real median earnings), they're deeply in debt, and they're afraid of losing their jobs.


Introductory economic courses explain that aggregate demand is made up of four things, expressed as C+I+G+exports. C is consumers. Consumers are cutting back on everything other than necessities. Because their spending accounts for 70 percent of the nation's economic activity and is the flywheel for the rest of the economy, the precipitous drop in consumer spending is causing the rest of the economy to shut down.


I is investment. Absent consumer spending, businesses are not going to invest.


Exports won't help much because the of the rest of the world is sliding into deep recession, too. (And as foreigners -- as well as Americans -- put their savings in dollars for safe keeping, the value of the dollar will likely continue to rise relative to other currencies. That, in turn, makes everything we might sell to the rest of the world more expensive.)


That leaves G, which, of course, is government. Government is the spender of last resort. Government spending lifted America out of the Great Depression. It may be the only instrument we have for lifting America out of the Mini Depression. Even Fed Chair Ben Bernanke is now calling for a sizable government stimulus. He knows that monetary policy won't work if there's inadequate demand.


So the crucial questions become (1) how much will the government have to spend to get the economy back on track? and (2) what sort of spending will have the biggest impact on jobs and incomes?


The answer to the first question is "a lot." Given the magnitude of the mess and the amount of underutilized capacity in the economy-- people who are or will soon be unemployed, those who are underemployed, factories shuttered, offices empty, trucks and containers idled -- government may have to spend $600 or $700 billion next year to reverse the downward cycle we're in.

The solution, in my view, is to give the American Taxpayer a $4,200 per-person check, each. Then form a plan to subsidize labor costs in selected export industries and rather than pick the firms, let them fill out an online application for assistance and make it so everyone knows who's applying for it and who got it. Finally, the massive infrastruture reinvestment program is part of this, too. But the idea is that the check will help American workers during this time of economic adjustment and even reach those -- like Joe The Plumber -- who can't file for unemployment insurance.

Bailout The American Auto Industry - The Blog Report

 

If the American Auto Industry is allowed to collapse, the US will lose 7.8 million jobs, an economic impact of $349 billion and, increase an already high unemployment rate by another six percent. We can't let that happen. In this video I explain why.