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Small dreams

By Owen Paine on Tuesday May 31, 2011 02:48 PM

Now this is exactly what makes my turbid Yankee blood boil like Dunkin's midafternoon tarpit coffee.

It's a bit of retrospective Merlinizing by pro-union striver and former VP econ-con advisor Jared Bumstead, shown at left looking as if Herman Munster had stolen Steve McQueen's hair. Jared asks: if we had it in our power to do it over, what's our fantasy '09 stimulus package?

I think I would have... de-emphasized some of the tax cuts,... This isn't the FDR New Deal era any more.... But I would have tried to get closer to ideas that more directly create jobs."
Jared, you prunehead, we needed -- for countless reasons -- not WPA II but a gout of good old job class puchasing power, paid for by a transfer system of Biblical proportions. But that of course is where the tires touch the road. Such a system would have extracted much less from and injected much more into 180 million little pockets, and would have included:
  • A total payroll tax holiday till further nootice
  • A significant increase in SSI payments (by some casuistical justification like "you got smoked by the Clinton era index fiddle; here's a makeup")
  • A pickup of some fixed dollar part of payroll-deducted employee-side health premium costs
  • Oh and an emergency freeze on health premiums too.
  • Of course a Fed-funded sales tax holiday, and a similar property tax arrangement -- including a passthrough to tenants, naturally.
Anything less, anything more corrective, civilized, green and enlightening googoo would not only not suffice, it would be bad class politics.

But hey, these goo-goo go-go pwogs, even the union-funded ones, never seem to learn a damn thing. Take this fuckwit. He's still trying to create Bacon Act construction jobs and prolly save teachers' jobs too. Okay, fine. But get the system recovered first. Get the average job bums back in high gear, before you replace the post-bubble long-term construction job losses or blow away the education blight, etc. etc. Get the job class masses behind you first. Then and only then, after the electorate thinks you really are FDR returned and updated -- only then can you start to brighten up the nation's dark spots.

Lift up the job markets first, lift 'em all the way to raging payroll surges before you try to up lift the jobsters' souls, way of life, environment, chances for heaven on earth and so on.

Comments (9)

That is a positively made-of-awesome plan, Paine, except for one thing: you forgot the summary executions of CEOs, stockbrokers, mortgage bankers and hedge-fund managers.

Other than that, suh-weet.

Lift up the job markets first, lift 'em all the way to raging payroll surges before you try to up lift the jobsters' souls, way of life, environment, chances for heaven on earth and so on.

Seriously, Paine... uplift their balls, and their hearts and minds will follow -- or something like that, I forget exactly.


Now comes the rebound of the current wave of "progressives" who signed up, closed their ivory tower offices and goo-goo think tank corner chairs, and went off to join the great Obama Change-machine.
They they went, John Holdren and Steven Chu and Lisa Jackson and Austin Goolsbee and Van Jones and a raft of lib-Dem-former rads, just like the Clintonian era prog-surge of Robert Reich and Sidney Blumenthal and Harold Ickes, who now can issue think papers and books about "what needs to be done now to correct such-and-such," not "boy did I ever do jackshit once in the halls o' power."
Or, "boy, did I ever contort my once-pristine principles once in that great vote-buying machine."
These were the kids who read Gordon Goes on a Plane, and were deeply impressed for life, despite their bout of bad-people progressivism. They were all out to save the world, and ended up serial liars and cocktail-party refusenikes. And listening to Bernstein's oatmeal-mush of "Eventually, that kind of conversation needs to occur," is exactly what makes me glad I stepped no foot in any office that ever contained a modicum of influence.

"That is a positively made-of-awesome plan, Paine, except for one thing: you forgot the summary executions of CEOs, stockbrokers, mortgage bankers and hedge-fund managers."

I'll second that motion.

Damn' straight, Paine. I'm not kidding.

Yeah, sure, it'd be fun to perp walk 'em all right out in front of God and everybody, and give 'em a good long stretch in the can... but, then, in twenty or thirty years they'd all be walking free again. Fuck that shit. Line 'em all up in front of the big bull sculpture and give 'em a gift in the back of the head, on TV, like they did with Ceaucescu.

mjosef sez on 05.31.11 @17:07:
Now comes the rebound of the current wave of "progressives" who signed up, closed their ivory tower offices and goo-goo think tank corner chairs, and went off to join the great Obama Change-machine...

Ahh, yeah, The Great Obama Change Machine -- the one where you put your dollar bill into the slot, but it doesn't give you any quarters back.


"no, this is the PAINE caucus. the people you're looking for are over there behind the bloody wood chipper."



jarediculous doing the the big back stroke

" I was struck by this ‘graf:

“For example, we could have W.P.A.-type programs putting the unemployed to work doing useful things like repairing roads — which would also, by raising incomes, make it easier for households to pay down debt. We could have a serious program of mortgage modification, reducing the debts of troubled homeowners.”

Especially re the WPA-idea, this got me thinking about the relative value of important voices like Paul’s promoting what we should do right now as opposed to what, given political constraints, we could do.

And I think now is a good time to emphasize the latter.

Let me be clear. I totally agree that we mustn’t let “political realism” shut down our thinking on the best way out of this mess. And while that kind of writing sometimes feels academic to me, if done well (as Paul does it), it can slowly but persistently set the stage for actually doing the right thing when the political landscape shifts. Shift it will, and at that time, Paul will be among those who built the “new” paradigm from which economic policy will flow (“” around ‘new’ because most of this is known since Keynes).

I know—sounds like wishful thinking (well, for some…for others, sounds like their worst nightmare)…but I bet I’m right.

But then there’s this: There will be no WPA-type programs in our near future. There was no appetite for them in the Obama admin in the midst of the worst recession since the Great Depression and there’s a lot less now. The reasons for that are interesting and I’ll speak to them another day. But it ain’t happening.

And please don’t accuse me of “negotiating with myself” here. I stressed above the importance of making those arguments, and I frequently made them myself as a member of the President’s economics team.

It’s also congenitally hard for politicians to get behind “a serious program of mortgage modification.” Those who advocate for this (the NYT editorial page, e.g.) are right, but they’re also downplaying a very binding constraint. The politics of this idea are deeply wound up in moral hazard. People forget, but it was precisely this action—giving mortgage relief to someone at risk of default and not to someone who was struggling to keep up their payments—that birthed the Tea Party.

Yes, it’s true that leaders must stand up to such views and do what’s right for the economy…damn the torpedoes and all that. But those of us espousing such actions must respect, or at least acknowledge, that those torpedoes are not pointed at us. They’re pointed at politicians who take them seriously and thus we need also need to espouse plans b, c, d and so on. (In this space, for example, there are ways outside of federal legislation to encourage principal write-downs—more to come on this in later posts.)

You might say that with the likes of Cantor and Ryan is ascendance, there’s no point in even contemplating “coulds.” I think that’s too easy and the stakes are far too high for it.

This is not a critique of Paul. As I said in my initial post, there’s no more important voice in the debate I’m trying to amplify than that of Paul Krugman. He’s one of the few writers I miss when he goes on vacation.

[Don’t you get a little bummed out when you open the paper on a Krugman day and he’s not there, or when he says he won’t be adding to his blog for a few days because of travel? What’s more, I could be wrong, but seems to me that when Paul is away, the Very Serious People he worries about say crazier stuff. It’s as if up on Capitol Hill, they’re going, “Krugman’s on vacation! It’s the perfect time to launch our bill to do away with social insurance once and for all!! Mwahahaha!!!”]

But here’s a challenge for Paul. I know he’ll keep writing “should” columns and that’s crucial for a better future. But for a better “now,” I’d like to see a column—maybe a few columns—called “What We Could Do.” He’s done a lot of this before—I don’t want to imply he’s divorced from the “now”—but this would be a good time for him, along with the rest of us interested in trying to make some desperately needed lemonade from some terribly sour lemons, to turn aggressively from should to could. "


btw here are some "coulds "
neanderthal boy
here likes
"From the department of stuff that could really help and doesn’t have budget costs.."

Paul and Brad DeLong mentioned recess appointments to the Fed.

Over to Brad:

“…the most obvious thing to do would be to recess-appoint Ken “6% inflation” Rogoff and Peter “I have a Nobel Prize in understanding structural unemployment” Diamond to the Board of Governors of the Federal Reserve.

…Of the twelve bank presidents, I trust Rosengren, Dudley, Pianalto, and Williams to understand both the Fed’s dual mandate and have a reality-based view of monetary policy. That’s not very many.

And two powerful, smart, eloquent, reality-based voices to the Board of Governors and to the FOMC, and we would have a Federal Reserve much more likely to do the right thing.”

Brad and Rortybomb also had some ideas to get Fannie and Freddie doing more to get this housing market anvil off the neck of the rest of the economy. These two institutions are financing the vast majority of mortgage originations right now, and their reluctance to get deeper into the modification biz is not helping. The ideas Brad and Mike espouse look good and bold to me—they’re worth pursuing (and even if ideas like these don’t get you all the way there, I think they would nudge banks holding private-label mortgages to do less extending-and-pretending, i.e., mark down non-performing home loans).

A few other coulds worthy of mention:

Currency Management: this would be a very bad time to let up on countries who subsidize their exports by suppressing their currency values in foreign exchange markets, most notably China. I’d push the Levin bill on this. And it’s bipartisan: the darn thing got 99 R votes in the last Congress! (Paul agrees, btw.)

Don’t Create Airpockets: We need fiscal impulse, i.e., another boost from fiscal policy, but absent that, it’s important not to take away fiscal boosters that are currently active, like the payroll tax holiday and, with long-term unemployment still a big problem, extended unemployment benefits. The latter in particular has a big multiplier—unemployed people tend to spend their checks—which we can’t afford to lose right now (oh, and it’s also the right thing to do when unemployment’s 9%)."

then this loving self castration:

".. I get that there’s a budget deal to be made and totally support getting the budget on a sustainable path. "

butnik off set:

" But

a) revenues have to be part of the deal or the spending cuts will have to be far too draconian–there’s neither reason nor excuse for a budget deal to increase poverty,
and b)
don’t start with any of this until the economic recovery has a lot more momentum. Please, let’s not make a 1937 mistake "

no lets just live with the 2009 mistake



homo neanderthalensis jaredicus

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