President Obama's Weekly Address - 01/31/09

1/31/09: Your Weekly Address from White House on Vimeo.

Pro-Union

Today President Obama and Vice President Joe Biden held their strongest pro-union event thus far in their young administration. Earlier today they addressed a labor-heavy crowd at the White House as President Obama signed several pro-union executive orders.

Speaking to the crowd, President Obama announced that Vice-President Biden will be chairman of a task force charged with improving and strengthening the country's middle-class. He said "We have to reverse many of the policies toward organized labor."

Vice-President Biden was much more blunt as he addressed the assembled pro-union crowd:

"Welcome back to the White House!"

This drew a loud and sustained applause.

Vice-President Biden noted that he'll be leaning heavily on his economic adviser, Jared Bernstein who has worked for years as a senior official at the Economic Policy Institute, a labor-funded think tank which advocates for low and middle-income workers.

The Economy Shrinks Again

It was predicted that the numbers would be bad, and this morning it was confirmed that they were. During the fourth quarter of 2008 the U.S. economy shrank at its fastest pace in 26 years. The gross domestic product (GDP) -- a crucial measure of economic performance -- shrank at an annual rate of 3.8% in the fourth quarter of 2008 as the credit crisis deepened the recession.

Some will say that 3.8% was better than expected, but I would not take much comfort in this as it will undoubtedly be revised down, and MarketWatch is reporting that the number are much closer to 5.1% if inventory is included.

The bad thing is that the economy may not have yet hit bottom.

S-Chip Passes In The Senate

After being vetoed twice by former President Bush, the S-Chip Bill has passed the Senate. Nine Republicans joined the Democrats to pass the bill 66 to 32. Note that 32 of the Senate's 41 Republicans opposed the measure. After years of Bush's idocracy, we are finally poised to expand healthcare for low-income children. I could never understand Bush's obstinance to providing healthcare to low-income children.

The Democratic majority actually acted like a majority and brushed aside Republican objections. This debate showed the outlines of what promises to be a much larger political fight over universal coverage in the Senate. The House passed a nearly identical bill two weeks ago, by a vote of 289 to 139, with 40 Republicans joining nearly all Democrats in support of the measure. The House and Senate versions differ slightly, but the bill should be on Obama's desk by early next week.

To pay for the expansion, which is expected to cost about $32 billion over four and a half years, Congress is raising cigarette taxes to $1 a pack.

The final roll-call is online.

Blagojevich Goes Down

It's official by a 59-0 vote. Rod Blagojevich has been removed as Illinois governor. Lt. Gov. Pat Quinn becomes Gov. Pat Quinn.

Obama Has Signed First Bill Into Law

This morning in the first of what we hope will be many progressive pieces of legislation passed by the Democratic Congress, the President signed the Lily Ledbetter Fair Pay Restoration Act into law, with Lily Ledbetter at his side.

Here's an excerpt from the President Obama's remarks:

Because while this bill bears her name, Lilly knows this story isn’t just about her. It’s the story of women across this country still earning just 78 cents for every dollar men earn – women of color even less – which means that today, in the year 2009, countless women are still losing thousands of dollars in salary, income and retirement savings over the course of a lifetime.

But equal pay is by no means just a women’s issue – it’s a family issue. It’s about parents who find themselves with less money for tuition or child care; couples who wind up with less to retire on; households where, when one breadwinner is paid less than she deserves, that’s the difference between affording the mortgage – or not; between keeping the heat on, or paying the doctor’s bills – or not. And in this economy, when so many folks are already working harder for less and struggling to get by, the last thing they can afford is losing part of each month’s paycheck to simple discrimination.

So in signing this bill today, I intend to send a clear message: That making our economy work means making sure it works for everyone. That there are no second class citizens in our workplaces, and that it’s not just unfair and illegal – but bad for business – to pay someone less because of their gender, age, race, ethnicity, religion or disability. And that justice isn’t about some abstract legal theory, or footnote in a casebook – it’s about how our laws affect the daily realities of people’s lives: their ability to make a living and care for their families and achieve their goals.

Ultimately, though, equal pay isn’t just an economic issue for millions of Americans and their families, it’s a question of who we are – and whether we’re truly living up to our fundamental ideals. Whether we’ll do our part, as generations before us, to ensure those words put to paper more than 200 years ago really mean something –
to breathe new life into them with the more enlightened understandings of our time.

That is what Lilly Ledbetter challenged us to do. And today, I sign this
bill not just in her honor, but in honor of those who came before her. Women
like my grandmother who worked in a bank all her life, and even after she hit
that glass ceiling, kept getting up and giving her best every day, without
complaint, because she wanted something better for me and my sister.

And I sign this bill for my daughters, and all those who will come after us, because I want them to grow up in a nation that values their contributions, where there are no
limits to their dreams and they have opportunities their mothers and grandmothers never could have imagined.

In the end, that’s why Lilly stayed the course. She knew it was too late for her – that this bill wouldn’t undo the years of injustice she faced or restore the earnings she was denied. But this grandmother from Alabama kept on fighting, because she was thinking about the next generation. It’s what we’ve always done in America – set our sights high for ourselves, but even higher for our children and grandchildren.

Now it’s up to us to continue this work. This bill is an important step – a simple fix to ensure fundamental fairness to American workers – and I want to thank this remarkable and bi-partisan group of legislators who worked so hard to get it passed. And this is only the beginning. I know that if we stay focused, as Lilly did – and keep standing for what’s right, as Lilly did – we will close that pay gap and ensure that our daughters have the same rights, the same chances, and the same freedom to pursue their dreams as our sons.

Obama is right, "This is only the beginning." And, it's a very good start.

The Senate is Expected to Approve SCHIP Legislation

The Senate is expected to approve SCHIP legislation today. This paves the way for President Obama to claim another early legislative victory. This bill will make an additional 4 million children eligible for discounted care but it will still leave President Obama about 5 million children short of his promise to insure all kids.

The True State of Employment

Jobless rate

The other day I heard George Will pontificate that the unemployment rate of 8% is better than the 10% unemployment this nation faced during the recession of the early 80's. Yes it's true that today the United States is approaching an official uneployment rate of 8%, but we are not using the same methodology to determine the unemployment rate that was used in 1980. The methedology has been changed by both Reagan and Clinton. If the methodology used in 1980, before the Reagan Administration first changed it to hide the depth of that era's deep recession, were applied, it would be 17% today, or one in seven workers

Even still the number of jobless American workers receiving unemployment checks rose to the highest level since the government began keeping records in 1967. The Labor Department is reporting that the number of Americans drawing jobless benefits for a week or longer rose to 4,776,000 in the week ended Jan. 17, the latest data available.

This number eclipses the prior mark set in November 1982, when 4,713,000 million Americans drew benefits.

Americans who moved to collect their first unemployment checks rose for the third consecutive week, to 588,000, according to a government report released Thursday. The number of Americans filing for unemployment claims has surged by 61% from this time a year ago. The AP notes that the results “were worse than analysts expected.”

Roubini: US Banking System is Insolvent

Nouriel Roubini, of RGE Monitor, was one of the first people to predict the housing crisis, and now he has come out and said that "the US Banking System is Insolvent." While at Davos Nouriel Roubini said he believes this because expected losses for the US banking system will be about $2 trillion, which far exceeds bank capital of about $1.5 trillion. Roubini has also said that he believes total financial system losses could hit $3.6 trillion.

Because of this fact Roubini does not believe the government plan for buying the toxic assets of US banks may not work.

Instead Nouriel Roubini suggests that the Obama administration should look towards Sweden's plan of nationalizing all insolvent banks, cleaning them up and then selling off the good assets to the private sector.

I can just hear the Republicans howling now.

How will Obama respond?

Now that the Republicans have shown President Obama the back of their hand, and have proven to be a bunch of whiney children, what will he do? Will Obama continue to work for bipartisanship as an end in itself? Will he agree to more GOP modifications just to buy a few votes?

I really do not know.

I understand the want for bipartisanship, but at what cost? At what point should Obama push for a real progressive stimulus package, knowing that success will bring Republican support after the fact?

I just don't know.

The public overwhelmingly supports President Obama, so at what point does he have to stop waiting for Republicans to act in good faith, and instead move forward?

At the end of the day some sort of stimulus package will inevitably make it into law. But whether it passes with meaningful support from Republicans, or is a meaningful package, is the first test of Obama's administration.

Democrats Cave Again

House Democrats again proving that they will back down at the slightest whine by Republicans have removed a provision from their stimulus bill that would exempt states from the need to get waivers for covering family planning under Medicaid. The family-planning aid has been the subject of repeated Republican attacks over the past few days, and health care advocates were dismayed by the Democrats' decision to give in on its removal.

The Medicaid Family Planning State Option was a common-sense provision which would have expanded basic health care for millions of women, many of whom have lost their jobs in the current economic crisis, was a victim of misleading attacks and partisan politics by cry-baby Republicans.

White House spokesman Robert Gibbs addressed the removal of the Medicaid provision, which occurred at Obama's request, during today's press briefing:

The president called Chairman Henry Waxman yesterday and said that, while he believed the policy of increased funding for family planning was the right one, that he didn't believe this bill was the vehicle to make that happen.

The one bright spot is that the House's move doesn't necessarily mean that the family-planning aid is dead. There have been suggestions out of the White House that it could be added to a comprehensive Healthcare bill. Senator Debbie Stabenow has also stated publicly that she would focus on how to attach the family-planning aid to another Senate bill coming down the pike.

Tax Cuts: Been There, Tried That

The tax cut approach as stimulus has already been tried and failed as economic stimulus. The Bush administration often claimed as they tried to sell the Bush tax cuts of 2003, that they would generate 1.4 million jobs on top of the 4.1 million jobs that were expected to be generated over the eighteen months following June 2003. This did not happen. Not only did the promised 1.4 million additional jobs not appear, but the 4.1 million jobs expected with no action also failed to materialize. In all, only 2.4 million jobs were created—1.7 million short of the administration’s projection without their new policy.


You can check http://www.jobwatch.org/ to see what I am saying.


The Bush Administration called the tax cut package, its "Jobs and Growth Plan," and by it's own metrics the tax cut program fell short by a total of 3.1 million jobs. That would be called failure.


Republicans have but one answer to every problem, TAX CUTS.


This is wrong http://economistsview.typepad.com/economistsview/2009/01/the-2003-jobs-and-growth-plan-tax-cuts-didnt-work.html

What’s up with the Republicans?

New York Times columnist Bob Herbert asks the question, why is anyone even listening to the Repuglicans?

I would like to know too.

The Same Old Song
By Bob Herbert

What’s up with the Republicans? Have they no sense that their policies have sent the country hurtling down the road to ruin? Are they so divorced from reality that in their delusionary state they honestly believe we need more of their tax cuts for the rich and their other forms of plutocratic irresponsibility, the very things that got us to this deplorable state?

The G.O.P.’s latest campaign is aimed at undermining President Obama’s effort to cope with the national economic emergency by attacking the spending in his stimulus package and repeating ad nauseam the Republican mantra for ever more tax cuts.
“Right now, given the concerns that we have over the size of this package and all the spending in this package, we don’t think it’s going to work,” said Representative John Boehner, an Ohio Republican who is House minority leader. Speaking on NBC’s “Meet the Press,” Mr. Boehner said of the plan: “Put me down in the ‘no’ column.”

If anything, the stimulus package is not large enough. Less than 24 hours after Mr. Boehner’s televised exercise in obstructionism, the heavy-equipment company Caterpillar announced that it was cutting 20,000 jobs, Sprint Nextel said it was eliminating 8,000, and Home Depot 7,000.

Maybe the Republicans don’t think there is an emergency. After all, it was Phil Gramm, John McCain’s economic guru, who told us last summer that the pain was all in our heads, that this was a “mental recession.”

The truth, of course, is that the country is hemorrhaging jobs and Americans are heading to the poorhouse by the millions. The stock markets and the value of the family home have collapsed, and there is virtual across-the-board agreement that the country is caught up in the worst economic disaster since at least World War II.

The Republican answer to this turmoil?

Tax cuts.

They need to go into rehab.

The question that I would like answered is why anyone listens to this crowd anymore. G.O.P. policies have been an absolute backbreaker for the middle class. (Forget the poor. Nobody talks about them anymore, not even the Democrats.) The G.O.P. has successfully engineered a wholesale redistribution of wealth to those already at the top of the income ladder and then, in a remarkable display of chutzpah, dared anyone to talk about class warfare.

A stark example of this unholy collaboration between the G.O.P. and the very wealthy was on display in the pages of this newspaper on Jan. 18. The Times’s Mike McIntire wrote an article about the first wave of federal bailout money for the financial industry, which was handed over by the Bush administration with hardly any strings attached. (Congress, under the control of the Democrats, should never have allowed this to happen, but the Democrats are as committed to fecklessness as the Republicans are to tax cuts.)

The public was told that the money would be used to loosen the frozen credit markets and thus help revive the economy. But as the article pointed out, there were bankers with other ideas. John C. Hope III, the chairman of the Whitney National Bank in New Orleans, in an address to Wall Street fat cats gathered at the Palm Beach Ritz-Carlton, said:

“Make more loans? We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.”

How’s that for arrogance and contempt for the public interest? Mr. Hope’s bank received $300 million in taxpayer bailout money.

The same article quoted Walter M. Pressey, president of Boston Private Wealth Management, which Mr. McIntire described as a healthy bank with a mostly affluent clientele. It received $154 million in taxpayer money.

“With that capital in hand,” said Mr. Pressey, “not only do we feel comfortable that we can ride out the recession, but we also feel that we’ll be in a position to take advantage of opportunities that present themselves once this recession is sorted out.”
Take advantage, indeed. That, in a nutshell, is what the plutocracy is all about: taking unfair advantage.

When the G.O.P. talks, nobody should listen. Republicans have argued, with the collaboration of much of the media, that they could radically cut taxes while simultaneously balancing the federal budget, when, in fact, big income-tax cuts inevitably lead to big budget deficits. We listened to the G.O.P. and what do we have now? A trillion-dollar-plus deficit and an economy in shambles.

This is the party that preached fiscal discipline and then cut taxes in time of war. This is the party that still wants to put the torch to Social Security and Medicare. This is a party that, given a choice between Abraham Lincoln and Ronald Reagan, would choose Ronald Reagan in a heartbeat.

Why is anyone still listening?

Republicans have decided to "rule by hissy fit" as Atrios calls it. It is time to stop listening to them. After all the damage that John Boehner, Mitch McConnel, George W. Bush, Dick Chenney and all the GOP have done to our nation, they need to be relegated to the back of the closet. Democrats need to step up and take charge. Republicans are now lead by children who need to not be heard from.

Paul Krugman: Bad Faith Economics

Professor Paul Krugman argues today in his column that the House GOP isn't interested in acting in good faith, or helping the economy, and in fact they reject the very idea of an economic stimulus package. Professor Krugman points out that Republicans are lying to make their arguments. That they have a habit of "zeroing in on the least-defensible possible position," including opposition to state aid and Medicaid expansion.

Bad Faith Economics
by Paul Krugman

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. Some of these arguments are obvious cheap shots. John Boehner, the House minority leader, has already made headlines with one such shot: looking at an $825 billion plan to rebuild infrastructure, sustain essential services and more, he derided a minor provision that would expand Medicaid family-planning services — and called it a plan to “spend hundreds of millions of dollars on contraceptives.”

But the obvious cheap shots don’t pose as much danger to the Obama administration’s efforts to get a plan through as arguments and assertions that are equally fraudulent but can seem superficially plausible to those who don’t know their way around economic concepts and numbers. So as a public service, let me try to debunk some of the major antistimulus arguments that have already surfaced. Any time you hear someone reciting one of these arguments, write him or her off as a dishonest flack.

First, there’s the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years.

It’s as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch. (The actual cost of a free school lunch, by the way, is $2.57.)

The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts.

Next, write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.

The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it’s clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created (see the previous fraudulent argument) — because a large fraction of any tax cut will simply be saved.

This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.

Finally, ignore anyone who tries to make something of the fact that the new administration’s chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.

It’s true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn’t, because we’re in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.

That’s why we’re talking about large-scale fiscal stimulus: it’s what’s left in the policy arsenal now that the Fed has shot its bolt. Anyone who cites old arguments against fiscal stimulus without mentioning that either doesn’t know much about the subject — and therefore has no business weighing in on the debate — or is being deliberately obtuse.

These are only some of the fundamentally fraudulent antistimulus arguments out there. Basically, conservatives are throwing any objection they can think of against the Obama plan, hoping that something will stick.

But here’s the thing: Most Americans aren’t listening. The most encouraging thing I’ve heard lately is Mr. Obama’s reported response to Republican objections to a spending-oriented economic plan: “I won.” Indeed he did — and he should disregard the huffing and puffing of those who lost.

President Obama deserves credit for trying to deal in good faith with the Republicans in Congress. He made a honest effort to earn the support of conservative Republican House members and Senators to create a comprehensive economic stimulus package. Obama negotiated with them, compromised with them, and even included a whole lot of tax cuts to win them over.

But it was all for not. Republicans will not compromise, and will not negotiate honestly. John Boehner has announced that the GOP should vote against stimulus, even as President Obama is going to the Capitol to speak directly with congressional Republicans.
I can appreciate the political dynamic here, and that the Obama White House wants to get at least some bipartisan support for an economic stimulus package. But since it is not there, Obama should instead push for the most liberal progressive bill he can. First I think the progressive plan will work, second Republicans have to be shown that there is no benifit to being obstinate. There's no point in Democrats offering unwelcome enticements to the Repuglicans who are bound and determined to remain obstinate. I believe there is great advantage to showing the Republicans that there will be a cost for not working in good faith. Pull the enticements and let the Democratic party do the right thing.

The Actual CBO Report

For about a week we have heard that the Congressional Budget Office (CBO) had released a report that purportedly showed that the Democrats' stimulus proposal would be ineffective. This was based on a flawed AP report which stated that a leaked CBO “report” showed that it would take years before an infrastructure spending program to boost the economy.

Even though the story was false and the CBO report did not actually exist, the AP story took off. Think Progress has found that since the story was posted, the non-existent CBO report had been cited at least 81 times on Fox News, CNN, MSNBC, CNBC, the Sunday shows and the network newscasts in order raise questions about Obama’s recovery plan.

Now the Congressional Budget Office has actually released their report which states that roughly two-thirds of the spending and tax cuts in the House stimulus plan would “flow into the economy by the end of fiscal 2010, producing a ‘noticeable impact on economic growth and employment.’”

Yesterday the Congressional Budget Office actually released the “first actual cost estimate” of the plan. The results of the actual report are far more encouraging than Repuglicans have been stating. Indeed, the CBO found that implementing the stimulus plan "would have a noticeable impact on economic growth and employment in the next few years." Specifically, the CBO estimates that in the spending portion of the bill, $477 billion out of $604 billion would be disbursed either this fiscal year which ends in October or in the next fiscal year, for a sum total of 79% of the whole stimulus package. At the asme time the portion of the bill that I hate, the tax cuts, nearly 100% of them are allocated during the next 18 months.

Citing this actual CBO report, Speaker Nancy Pelosi said the plan will help create jobs while making responsible investments for the future.

Will this actual CBO report get the same kind of attention?

The Wars Continue

While the number of U.S. Soldiers and Marines dying in Iraq have gone down, the deaths still continue, and the war drags on. Yesterdaty two military helicopters crashed in Iraq, killing four U.S. service members.

While in Afghanistan roadside bomb attacks hit a record in 2008, and increased 45% over the year before. The result was 161 fatalities among coalition troops -- double 2007.

Bad News on the Economy - Again

Brutal news on the job market yesterday, with six major corporations announcing combined layoffs of over 71,400 people. One of the companies was construction machinery manufacturer Caterpillar (CAT, Fortune 500) said Monday it will cut 20,000 jobs amid a "very challenging global business environment." Another company was Pfizer (PFE, Fortune 500) which said in an earnings report it would cut 10% of its staff of 81,900 and close five of its manufacturing plants. And a second round of cuts will shed about 15% of employees from the combined Pfizer/Wyeth staff of 120,000. That makes a total of 26,000 jobs lost. The company already cut 4,700 jobs in 2008.

Sprint Nextel Corp. (S, Fortune 500) will cut a total of about 8,000 jobs by March 31, the company said in a release. The telecommunications company's plan is to reduce internal and external labor costs by about $1.2 billion on an annual basis.

Home Depot (HD, Fortune 500), the world's largest home improvement retailer, announced Monday it will eliminate its EXPO design center business and cut 7,000 associates, or approximately 2% of the company's total workforce. The company blamed a lack of demand for big ticket design and decor projects.

Texas Instruments (TXN, Fortune 500) said it will slash its workforce by 3,400 employees to cope with weak demand and the slowing economy. More than half of those cuts will be layoffs while "voluntary retirements and departures" will make up the rest.

The cuts mark a horrific start to the week, and a brutal start to 2009. In the previous week, around 40,000 cuts were announced across multiple industries.

Glad that the Republicans have decided to be an obstacle to the stimulus plan.

Non-Existent CBO Report, Cornerstone of Conservative Arguments

Over the weekend you may have heard some right-wing blowhard, or Repuglican mouth-piece come out against the stimulus package, siting a report from the Congressional Budget Office. According to the conservatives this CBO report shows that the vast majority of the money in the stimulus package won't be spent until after 2010. This had the affect of putting Democrats on the defensive and the GOP calling for a pullback in wasteful spending. The trouble was that there was no such CBO report.

"We did not issue any report, any analysis or any study," a CBO aide told the Huffington Post.

On Sunday C-SPAN held a debate between Matthew Yglesias and a conservative mouth-piece about the stimulus package. The conservative naturally brought up the Congressional Budget Office report to dismiss the stimulus plan as too slow to be effective. This conservative of course had never read the report and was just pulling things from the air.

Today, the repugnant Wall Street Journal wrote an editorial based on this supposed report. And The Washington Times’s Donald Lambro wrote practically the same article. Of course David Brooks did the same on Friday.

It does not seem to bother any of these individuals that the report does not exist, and never existed. Ryan Grim of the Huffington Post has reported there is no such CBO report!

This is just another lie being pushed by the right-wing, which is now being endlessly repeated by people who haven’t read the report, but claim they have. You know they haven’t read the report because it doesn’t exist.

Still the press broadly picked up on the right-wing talking points and a simple narrative developed: the stimulus bill won't stimulate the economy.

Did the CBO do anything? Is there some basis for this argument? Yes the CBO ran a small portion of an earlier version of the stimulus plan through a computer program that uses a standard formula to determine a score on how quickly the money of the stimulus package will be spent. This analysis only dealt with the part of the stimulus headed for the Appropriations Committee and left out the parts bound for the Ways and Means or Energy and Commerce Committee. Because it dealt with just a part of the stimulus, it estimated the spending rate for only about $300 billion of the $825 billion plan. Significant changes have been made to the part of the bill the CBO looked at.

The truth is that Congress cannot pass a bill without a CBO analysis. Therefore there will be a number of analysis's done and pulled into a full CBO report. This is what the media should focus on, and they should question any Repuglican who brings up the CBO report before it actually is released.

The White House has tried to push back with a set of talking points and a letter from Peter Orszag, new head of the Office of Management and Budget. He stated that the CBO "analysis, however, did not assess the overall package." "Our analysis indicates that at least 75 percent of the overall package (including its tax component and the other spending provisions that were not analyzed by the Congressional Budget Office) will be spent over the next year and a half."
A new CBO score is due out next week.

Why Israel Is Wrong

If you read this blog, you know I did not support Israel in their attack on Gaza. I thought that it was a despicable act, and was embarrassed by the U.S. Government support for this incursion. If there is one area where I will most disagree with President Obama is in regards to Israel. For while I fully support Israel has a right to exist, and should be protected, the actions towards Gaza had no basis in self-protection.

Now Henry Siegman has written a column for the London Review of Books that shows how the Israeli narrative of the lead-up to the Gaza War was just a pack of lies. These lies are ones that American media has largely bought, hook, line and sinker with little investigation or criticism. The U.S. was not alone as most western governments and most of the western media accepted the Israeli claims justifying the military assault on Gaza.

Read the Full Column below:

Israel’s Lies
Henry Siegman

Western governments and most of the Western media have accepted a number of Israeli claims justifying the military assault on Gaza: that Hamas consistently violated the six-month truce that Israel observed and then refused to extend it; that Israel therefore had no choice but to destroy Hamas’s capacity to launch missiles into Israeli towns; that Hamas is a terrorist organisation, part of a global jihadi network; and that Israel has acted not only in its own defence but on behalf of an international struggle by Western democracies against this network.

I am not aware of a single major American newspaper, radio station or TV channel whose coverage of the assault on Gaza questions this version of events. Criticism of Israel’s actions, if any (and there has been none from the Bush administration), has focused instead on whether the IDF’s carnage is proportional to the threat it sought to counter, and whether it is taking adequate measures to prevent civilian casualties.

Middle East peacemaking has been smothered in deceptive euphemisms, so let me state bluntly that each of these claims is a lie. Israel, not Hamas, violated the truce: Hamas undertook to stop firing rockets into Israel; in return, Israel was to ease its throttlehold on Gaza. In fact, during the truce, it tightened it further. This was confirmed not only by every neutral international observer and NGO on the scene but by Brigadier General (Res.) Shmuel Zakai, a former commander of the IDF’s Gaza Division. In an interview in Ha’aretz on 22 December, he accused Israel’s government of having made a ‘central error’ during the tahdiyeh, the six-month period of relative truce, by failing ‘to take advantage of the calm to improve, rather than markedly worsen, the economic plight of the Palestinians of the Strip . . . When you create a tahdiyeh, and the economic pressure on the Strip continues,’ General Zakai said, ‘it is obvious that Hamas will try to reach an improved tahdiyeh, and that their way to achieve this is resumed Qassam fire . . . You cannot just land blows, leave the Palestinians in Gaza in the economic distress they’re in, and expect that Hamas will just sit around and do nothing.’

The truce, which began in June last year and was due for renewal in December, required both parties to refrain from violent action against the other. Hamas had to cease its rocket assaults and prevent the firing of rockets by other groups such as Islamic Jihad (even Israel’s intelligence agencies acknowledged this had been implemented with surprising effectiveness), and Israel had to put a stop to its targeted assassinations and military incursions. This understanding was seriously violated on 4 November, when the IDF entered Gaza and killed six members of Hamas. Hamas responded by launching Qassam rockets and Grad missiles. Even so, it offered to extend the truce, but only on condition that Israel ended its blockade. Israel refused. It could have met its obligation to protect its citizens by agreeing to ease the blockade, but it didn’t even try. It cannot be said that Israel launched its assault to protect its citizens from rockets. It did so to protect its right to continue
the strangulation of Gaza’s population.

Everyone seems to have forgotten that Hamas declared an end to suicide bombings and rocket fire when it decided to join the Palestinian political process, and largely stuck to it for more than a year. Bush publicly welcomed that decision, citing it as an example of the success of his campaign for democracy in the Middle East. (He had no other success to point to.) When Hamas unexpectedly won the election, Israel and the US immediately sought to delegitimise the result and embraced Mahmoud Abbas, the head of Fatah, who until then had been dismissed by Israel’s leaders as a ‘plucked chicken’. They armed and trained his security forces to overthrow Hamas; and when Hamas – brutally, to be sure – pre-empted this violent attempt to reverse the result of the first honest democratic election in the modern Middle East, Israel and the Bush administration imposed the blockade.

Israel seeks to counter these indisputable facts by maintaining that in withdrawing
Israeli settlements from Gaza in 2005, Ariel Sharon gave Hamas the chance to set out on the path to statehood, a chance it refused to take; instead, it transformed Gaza into a launching-pad for firing missiles at Israel’s civilian population. The charge is a lie twice over. First, for all its failings, Hamas brought to Gaza a level of law and order unknown in recent years, and did so without the large sums of money that donors showered on the Fatah-led Palestinian Authority. It eliminated the violent gangs and warlords who terrorised Gaza under Fatah’s rule. Non-observant Muslims, Christians and other minorities have more religious freedom under Hamas rule than they would have in Saudi Arabia, for example, or under many other Arab regimes.

The greater lie is that Sharon’s withdrawal from Gaza was intended as a prelude to further withdrawals and a peace agreement. This is how Sharon’s senior adviser Dov
Weisglass, who was also his chief negotiator with the Americans, described the withdrawal from Gaza, in an interview with Ha’aretz in August 2004:

'What I effectively agreed to with the Americans was that part of the settlements [i.e. the major settlement blocks on the West Bank] would not be dealt with at all, and the rest will not be dealt with until the Palestinians turn into Finns. . . The significance [of the agreement with the US] is the freezing of the political process. And when you freeze that process, you prevent the establishment of a Palestinian state and you prevent a discussion about the refugees, the borders and Jerusalem. Effectively, this whole package that is called the Palestinian state, with all that it entails, has been removed from our agenda indefinitely. And all this with [President Bush’s] authority and permission . . . and the ratification of both houses of Congress.

Do the Israelis and Americans think that Palestinians don’t read the Israeli papers, or that when they saw what was happening on the West Bank they couldn’t figure out for themselves what Sharon was up to?

Israel’s government would like the world to believe that Hamas launched its Qassam
rockets because that is what terrorists do and Hamas is a generic terrorist group. In fact, Hamas is no more a ‘terror organisation’ (Israel’s preferred term) than the Zionist movement was during its struggle for a Jewish homeland. In the late 1930s and 1940s, parties within the Zionist movement resorted to terrorist activities for strategic reasons. According to Benny Morris, it was the Irgun that first targeted civilians. He writes in Righteous Victims that an upsurge of Arab terrorism in 1937 ‘triggered a wave of Irgun bombings against Arab crowds and buses, introducing a new dimension to the conflict’. He also documents atrocities committed during the 1948-49 war by the IDF, admitting in a 2004 interview, published in Ha’aretz, that material released by Israel’s Ministry of Defence showed that ‘there were far more Israeli acts of massacre than I had previously thought . . . In the months of April-May 1948, units of the Haganah were given operational orders that stated explicitly that
they were to uproot the villagers, expel them, and destroy the villages themselves.’ In a number of Palestinian villages and towns the IDF carried out organised executions of civilians. Asked by Ha’aretz whether he condemned the ethnic cleansing, Morris replied that he did not:

A Jewish state would not have come into being without the uprooting of 700,000 Palestinians. Therefore it was necessary to uproot them. There was no choice but to expel that population. It was necessary to cleanse the hinterland and cleanse the border areas and cleanse the main roads. It was necessary to cleanse the villages from which our convoys and our settlements were fired on.

In other words, when Jews target and kill innocent civilians to advance their national struggle, they are patriots. When their adversaries do so, they are terrorists.

It is too easy to describe Hamas simply as a ‘terror organisation’. It is a religious nationalist movement that resorts to terrorism, as the Zionist movement did during its struggle for statehood, in the mistaken belief that it is the only way to end an oppressive occupation and bring about a Palestinian state. While Hamas’s ideology formally calls for that state to be established on the ruins of the state of Israel, this doesn’t determine Hamas’s actual policies today any more than the same declaration in the PLO charter determined Fatah’s actions.

These are not the conclusions of an apologist for Hamas but the opinions of the former head of Mossad and Sharon’s national security adviser, Ephraim Halevy. The Hamas leadership has undergone a change ‘right under our very noses’, Halevy wrote recently in Yedioth Ahronoth, by recognising that ‘its ideological goal is not attainable and will not be in the foreseeable future.’

It is now ready and willing to see the establishment of a Palestinian state within the temporary borders of 1967. Halevy noted that while Hamas has not said how ‘temporary’ those borders would be, ‘they know that the moment a Palestinian
state is established with their co-operation, they will be obligated to change the rules of the game: they will have to adopt a path that could lead them far from their original ideological goals.’ In an earlier article, Halevy also pointed out the absurdity of linking Hamas to al-Qaida.

In the eyes of al-Qaida, the members of Hamas are perceived as heretics due to their stated desire to participate, even indirectly, in processes of any understandings or
agreements with Israel. [The Hamas political bureau chief, Khaled] Mashal’s
declaration diametrically contradicts al-Qaida’s approach, and provides Israel
with an opportunity, perhaps a historic one, to leverage it for the better.

Why then are Israel’s leaders so determined to destroy Hamas? Because they believe that its leadership, unlike that of Fatah, cannot be intimidated into accepting a peace accord that establishes a Palestinian ‘state’ made up of territorially disconnected entities over which Israel would be able to retain permanent control. Control of the West Bank has been the unwavering objective of Israel’s military, intelligence and political elites since the end of the Six-Day War.

They believe that Hamas would not permit such a cantonisation of Palestinian territory, no matter how long the occupation continues. They may be wrong about Abbas and his superannuated cohorts, but they are entirely right about Hamas.
Middle East observers wonder whether Israel’s assault on Hamas will succeed in destroying the organisation or expelling it from Gaza. This is an irrelevant question. If Israel plans to keep control over any future Palestinian entity, it will never
find a Palestinian partner, and even if it succeeds in dismantling Hamas, the movement will in time be replaced by a far more radical Palestinian opposition.
If Barack Obama picks a seasoned Middle East envoy who clings to the idea that outsiders should not present their own proposals for a just and sustainable peace agreement, much less press the parties to accept it, but instead leave them to work out their differences, he will assure a future Palestinian resistance far more extreme than Hamas – one likely to be allied with al-Qaida. For the US, Europe and most of the rest of the world, this would be the worst possible outcome. Perhaps some Israelis, including the settler leadership, believe it would serve their purposes, since it would provide the government with a compelling pretext to hold on to all of Palestine. But this is a delusion that would bring about the end of Israel as a Jewish and democratic state.

Anthony Cordesman, one of the most reliable military analysts of the Middle East, and a friend of Israel, argued in a 9 January report for the Center for Strategic and International Studies that the tactical advantages of continuing the operation in Gaza were outweighed by the strategic cost – and were probably no greater than any gains Israel may have made early in the war in selective strikes on key Hamas facilities. ‘Has Israel somehow blundered into a steadily escalating war without a clear strategic goal, or at least one it can credibly achieve?’ he asks. ‘Will Israel end in empowering an enemy in political terms that it defeated in tactical terms? Will Israel’s actions seriously damage the US position in the region, any hope of peace, as well as moderate Arab regimes and voices in the process? To be blunt, the answer so far seems to be yes.’ Cordesman concludes that ‘any leader can take a tough stand and claim that tactical gains are a meaningful victory. If this is all that Olmert, Livni and
Barak have for an answer, then they have disgraced themselves and damaged their
country and their friends.’

Frank Rich: No Time For Poetry

One of my favorite activities on Sunday's is to sit down and read Frank Rich's column in the New York Times. The man has an eloquence with the written word that most could only aspire for.

This week he wrote a column about President Obama's Inaugural Address, and how it's lack of poetic flourish was the right tone to set. Not only that, Mr. Rich argues that there is a deeper meaning that calls on Americans, all Americans, have to take greater responsibility for our nation as a whole.


No Time for Poetry
By FRANK RICH

PRESIDENT Obama did not offer his patented poetry in his Inaugural Address. He did not add to his cache of quotations in Bartlett’s. He did not recreate J.F.K.’s inaugural, or Lincoln’s second, or F.D.R.’s first. The great orator was mainly at his best when taking shots at Bush and Cheney, who, in black hat and wheelchair, looked like the misbegotten spawn of the evil Mr. Potter in “It’s a Wonderful Life” and the Wicked Witch of the West.

Such was the judgment of many Washington drama critics. But there’s a reason that this speech was austere, not pretty. Form followed content. Obama wasn’t just rebuking the outgoing administration. He was delicately but unmistakably calling out the rest of us who went along for the ride as America swerved into the dangerous place we find ourselves now.

Feckless as it was for Bush to ask Americans to go shopping after 9/11, we all too enthusiastically followed his lead, whether we were wealthy, working-class or in between. We spent a decade feasting on easy money, don’t-pay-as-you-go consumerism and a metastasizing celebrity culture. We did so while a supposedly cost-free, off-the-books war, usually out of sight and out of mind, helped break the bank along with our nation’s spirit and reputation.

We can’t keep blaming 43 for everything, especially now that we don’t have him to kick around anymore. On Tuesday the new president pointedly widened his indictment beyond the sins of his predecessor. He spoke of those at the economic pinnacle who embraced greed and irresponsibility as well as the rest of us who collaborated in our “collective failure to make hard choices.” He branded as sub-American those who “prefer leisure over work or seek only the pleasures of riches and fame.” And he wasn’t just asking Paris Hilton “to set aside childish things.” As Linda Hirshman astutely pointed out on The New Republic’s Web site, even Obama’s opening salutation — “My fellow citizens,” not “fellow Americans” — invoked the civic responsibilities we’ve misplaced en masse.

These themes are not new for Obama. They were there back on Feb. 10, 2007, when, on another frigid day, he announced his presidential candidacy in Springfield, Ill. Citing “our mounting debts” and “hard choices,” he talked of how “each of us, in our own lives, will have to accept responsibility” and “some measure of sacrifice.” His
campaign, he said then, “has to be about reclaiming the meaning of citizenship.” But the press, convinced that Obama was a sideshow to the inevitable Clinton-Giuliani presidential standoff, didn’t parse his words all that carefully, and neither did a public still maxing out on its gluttonous holiday from economic history. However inadvertently, Time magazine had captured the self-indulgent tenor of the times when, weeks earlier, it slapped some reflective Mylar on its cover and declared
that the 2006 Person of the Year was “You.”

It was in keeping with the unhinged spirit of the boom that three days after Obama’s Springfield declaration, a Wall Street baron, Steven Schwarzman of the Blackstone Group, a private equity and hedge fund, celebrated his 60th birthday with some 350 guests in the vast Seventh Regiment Armory on Manhattan’s East Side. To appreciate the degree of ostentation and taste, you need only know that Rod Stewart was the headliner, at an estimated cost of $1 million.

That same week the National Association of Realtors told less well-heeled Americans not to fret about its report that median home prices had fallen in 73 metro areas during the final quarter of 2006. “The bottom appears to have already occurred,” said one of the N.A.R. economists. Another predicted: “When we get the figures for this spring, I expect to see a discernible improvement in both sales and prices.”
We have discerned what happened to those sales and prices ever since. As for the Blackstone Group, it went public four months after its leader’s 60th birthday revels. Its shares have since lost 85 percent of their value, and Schwarzman’s bash has become a well-worn symbol of our deflated Gilded Age.

Yet the values of the bubble remain entrenched even as Obama takes office. In the upper echelons, we can find fresh examples of greed and irresponsibility daily even without dipping into the growing pool of those money “managers” who spirited victims to Bernie Madoff.

Last week’s object lesson was John Thain, the chief executive of Merrill Lynch. He was lionized as a rare Wall Street savior as recently as September, when he helped seal the deal that sped his teetering firm into the safe embrace of Bank of America on the same weekend Lehman Brothers died. Since then we’ve learned that even as he was laying off Merrill employees by the thousands, he was lobbying (unsuccessfully) for a personal bonus as high as $30 million and spending $1.22 million of company cash on refurbishing his office, an instantly notorious $1,405 trashcan included.

Thain resigned on Thursday. Only then did we learn that he doled out billions in secret, last-minute bonuses to his staff last month, just before Bank of America took over and just before the government ponied up a second bailout to cover Merrill’s unexpected $15 billion fourth-quarter loss. So far American taxpayers have spent $45 billion on this mess, and that’s only our down payment.

In less lofty precincts of the American economic spectrum, the numbers may be
different but the ethos has often been similar. As Wall Street titans grabbed bonuses based on illusory, short-term paper profits, so regular Americans took on all kinds of debt wildly disproportionate to their assets and income. The nearly $1 trillion in unpaid credit-card balances is now on deck to be the next big crash.

This debt-ridden national binge of greed and irresponsibility washed over our culture not just through the Marie Antoinette antics of a Schwarzman and a Thain but in mass forms of conspicuous consumption and entertainment. Cable networks like Bravo, A&E, TLC and HGTV produced an avalanche of creepy programming catering to the decade’s housing bubble alone — an orgiastic genre that might be called Subprime Pornography. Some of the series — “Flip This House,” “Flip That House,” “Sell This House,” “My House Is Worth What?” — still play on even as more and more house owners are being flipped into destitute homelessness.

The austerity of Obama’s Inaugural Address seemed a tonal corrective to the glitz and the glut. The speech was, as my friend Jack Viertel, a theater producer, put it, “stoic, stern, crafted in slabs of granite, a slimmed-down sinewy thing entirely evolved away from the kind of Pre-Raphaelite style of his earlier oration.” Some of the same critics who once accused Obama of sounding too much like a wimpy purveyor of Kumbaya now faulted him for not rebooting those golden oldies of the campaign trail as he took his oath. But he is no longer campaigning, and the moment for stadium cheers has passed.

If we’ve learned anything since the election, it is this: We have not remotely seen the bottom of this economy, and no one has a silver bullet to arrest the plunge, the hyped brains in the new White House included.

Most economists failed to anticipate the disaster, after all, and our tax-challenged incoming Treasury Secretary may prove as evanescent as past saviors du jour. As we applauded Thain in September, we were also desperately trying to convince ourselves that Warren Buffett’s $5 billion investment in Goldman Sachs would turn the tide, and that Hank Paulson, as Newsweek wrote in a cover story titled “King Henry,” would be the “right man at the right time.”

Obama couldn’t give us F.D.R.’s first inaugural address because we are not yet where America was in 1933 — in its fourth year of downturn after the crash of ’29, with an unemployment rate of 25 percent. But no one knows for sure that we cannot end up there.

On Tuesday, our new president did offer one subtle whiff of the Great Depression. His injunction that “we must pick ourselves up, dust ourselves off” was a paraphrase of the great songwriter Dorothy Fields, who wrote that lyric for “Swing Time” (1936), arguably the best of the escapist musicals Hollywood churned out to lift the nation’s spirits in hard times. But Obama yoked that light-hearted evocation of Astaire and Rogers to a call for sacrifice that was deliberately somber, not radiantly Kennedyesque.

That call included the obligatory salutes to those who serve by parenting, firefighting or helping strangers when natural disaster strikes. But he also cited one less generic example: “workers who would rather cut their hours than see a friend lose their job.” There will be — there must be — far larger sacrifices in that vein yet to come. No one truly listening to the Inaugural Address could doubt that this former community organizer intends to demand plenty from us as we face down what he calls “raging storms.”

Last weekend, Bob Woodward wrote an article for The Washington Post listing all the lessons the new president can learn from his predecessor’s many blunders. But what have we learned from our huge mistakes during the Bush years? While it’s become a Beltway cliché that America’s new young president has yet to be tested, it is past time for us to realize that our own test is also about to begin.

Rep. Kirsten Gillibrand is the new Senator-designate from New York

I have to say this story never interested me. I really did not care if Caroline Kennedy was the next Senator of New York, or if it was someone else. The only reason I would have cared about Kennedy is that she is a true liberal progressive, and the Senate can really use more liberal progressives. However it was not to be.

Now Governor Patterson has named Representative Kirsten Gillibrand to be the new Senator-designate from New York to fill the seat vacated this week by Hillary Rodham Clinton.

I don't know much about Kirsten Gillibrand other than that she is a two-term Democratic congresswoman who is described as a relentless politician with a centrist brand of politics. This concerns me a little as I think we have too many centrists in the Democratic party.

Now the good thing is she is a Democrat who won in a very conservative district. She is also a Democrat from New York who is not from New York City. Her district extends from the flatlands of the Hudson Valley to the mountainous North Country.

Her politics are across the board. One red flag for me is she earned a high rating from the National Rifle Association, because that organization has become a cesspool for loons and she opposed efforts to extend state drivers’ licenses to illegal immigrants, though I have to admit I never understood what people were trying to do with that bill. At the same time, Ms. Gillibrand favors abortion rights, voted to begin withdrawing troops from Iraq and to extend middle-class tax cuts, and she has opposed privatizing Social Security.

Her history is that she raises large sums of money from Wall Street, but voted against the first bailout bill last fall; that vote angered some Democratic leaders in Congress. Her ability to raise money, and get votes in upstate New York are the reasons she was chosen in my opinion.

Spending Is Stimulative

Last week, House Democrats released an $825 billion economic recovery package, which consists of $550 billion in government spending and $275 billion in tax cuts. Personally I hate this package, because while I believe a stimulus package is necessary, I do not believe the tax cuts should be such a large percentage of the package. Traditionally government spending results in more significant value for the dollars spent than tax cuts do. Still the provisions of the plan were put forward and have been examined and marked up by various congressional committees. The goal of House Democrats was to pass a full stimulus package sometime in mid-February.

Though Republicans at first voiced some support for the stimulus package when President Obama initially laid it out, now they are beginning to snipe and stab.

Conservatives are claiming that they are balking at seeing the size of the bill that emerged from the House. Cry baby, I mean Minority Leader John Boehner made his opposition known by simply saying "Oh. My. God."

Now conservatives are coalescing around "alternative" stimulus proposals like one crafted by the Republican Study Committee (RSC). But as usual in voicing their opposition, conservatives have started to push several lies and myths about the stimulus and its potential effect on the economy.

First and foremost the conservatives on the House Budget Committee released a report stating that the proposal "pours taxpayers' money" into projects, "many of which may be worthy in themselves, but have little to do with 'stimulating' the economy."

Harvard professor Robert Barro derided the plan as "voodoo economics," which is odd since it is actually the exact opposite of the original voodoo economics. Moon bat right-wing pundit Michelle Malkin is claiming that the stimulus will "at most be useless." Why anyone listens to that shrill harpy, I have no idea.

The truth is that an analysis by Moody’s Economy.com found that government spending results in more significant "bang for the buck." For every dollar invested in specific types of spending, the boost in real GDP is more than $1.30.

According to the analysis the most benefit comes from extending unemployment benefits ($1.64) and increasing food stamps ($1.73), but strong returns result from infrastructure investment ($1.59) and aid to state and local governments ($1.36), as well.

Furthermore, Moody's analysis also notes, "A well-timed, targeted, and temporary stimulus could in fact cost the Treasury less in the long run, since a debilitating recession would severely undermine tax revenues and prompt more government spending for longer."

Mark Zandi, chief economist at Moody's and former adviser to Sen. John McCain's presidential campaign, released his analysis of the House plan on Wednesday, and concluded that it would "provide a vital boost to the flagging economy," without which full employment would not return until 2014.

Minority Leader Boehner is also trying to come out and claim, "When it comes to slow-moving government spending programs, it's clear that it doesn't create the jobs or preserve the jobs that need to happen." Former Massachusetts governor Mitt Romney has said that "even if consumption were to bump up, it would not lead businesses to expand and to add jobs."

Former Secretary of Labor Robert Reich shoots down these talking points. Earlier this week Reich argued that, "The stimulus plan will create jobs repairing and upgrading the nation's roads, bridges, ports, levees, water and sewage system, public-transit systems, electricity grid, and schools."

It stands to reason that investing in infrastructure is going to lead to job creation, as someone needs to be hired to actually complete the various projects. By investing $100 billion in clean energy infrastructure alone, the Center for American Progress has estimated that 2 million jobs can be created in the next two years. Aid to states through bolstering Medicaid also "generates business and gets people into jobs," as a recent report by Families USA showed: "The new dollars pass from one person to another in successive rounds of spending, generating additional business activity, jobs, and wages that would not otherwise be produced."

Council of Economic Advisers Chairman Christina Romer and Vice President Biden aide Jared Bernstein, meanwhile -- by using the "1% of GDP equals 1 million jobs rule of thumb" -- estimated that a stimulus plan will create or save three million jobs. According to their calculations, "30% of the jobs created will be in construction and manufacturing," while "the other two significant sectors that are disproportionately represented in job creation are retail trade and leisure and hospitality."

Republicans and conservatives are again arguing that the answer is tax cuts. The Heritage Foundation, meanwhile, proposed an "alternative" to the House stimulus: "permanent tax reductions such as the ones Congress passed in 2003."

History shows that the tax cuts that conservatives are arguing for as a stimulus for economic growth is "weak at best." An analysis by the Center for American Progress Action Fund shows that every $10 billion spent on this kind of cut would create or save just 10,000 jobs, "versus nearly 60,000 jobs which could be created or saved by extending unemployment benefits and food stamps or investing directly in energy, transportation and education infrastructure." Furthermore, permanent measures will exacerbate the long-term debt much more than temporary measures will.

On a side note the National Republican Congressional Committee has an "issues" page on their website. This website issue page includes, as expected, a page on the "Economy." (Just so you note it's the seventh issue, behind Social Security and Border Security) Why I bring this up is that the web page tells it's readers, "Thanks to Republican economic policies, the U.S. economy is robust and job creation is strong."

Yes you read that right, it actually states that "Thanks to Republican economic policies, the U.S. economy is robust and job creation is strong."

After clicking "read more," we learn all about the NRCC's message on the economy.

According to the NRCC we have Republican economic policies to thank for the state of the economy, which actually I agree with, but they think that the U.S. economy is robust and job creation is strong. According to them the Republican tax cuts are creating jobs and continuing to strengthen the economy. The NRCC's site also explains that if we stray from Republican economic ideas, we will "set back our economy."

Republicans are in another reality.

Lets hope that Democrats wake up and realize that conservatives have no real answers and push forward with a more progressive stimulus package.

Paul Krugman: Stuck in the Muddle

Proving that he is no water-carrier for the Democratic President, Paul Krugman throws cold water on President Obama's inaugrual speech. The professor's take is that the economic aspect of the speech could have been brilliant. Instead, it was way too conventional, and it just might have sucked.

Like anyone who pays attention to business and financial news, I am in a state of high economic anxiety. Like everyone of good will, I hoped that President Obama’s Inaugural Address would offer some reassurance, that it would suggest that the new administration has this thing covered.

But it was not to be. I ended Tuesday less confident about the direction of economic policy than I was in the morning.

Just to be clear, there wasn’t anything glaringly wrong with the address — although for those still hoping that Mr. Obama will lead the way to universal health care, it was disappointing that he spoke only of health care’s excessive cost, never once mentioning the plight of the uninsured and underinsured.

Also, one wishes that the speechwriters had come up with something more inspiring than a call for an “era of responsibility” — which, not to put too fine a point on it, was the same thing former President George W. Bush called for eight years ago.

But my real problem with the speech, on matters economic, was its conventionality. In response to an unprecedented economic crisis — or, more accurately, a crisis whose only real precedent is the Great Depression — Mr. Obama did what people in Washington do when they want to sound serious:

he spoke, more or less in the abstract, of the need to make hard choices and stand
up to special interests.

That’s not enough. In fact, it’s not even right.

Thus, in his speech Mr. Obama attributed the economic crisis in part to “our collective failure to make hard choices and prepare the nation for a new age” — but I have no idea what he meant. This is, first and foremost, a crisis brought on by a runaway financial industry. And if we failed to rein in that industry, it wasn’t because Americans “collectively” refused to make hard choices; the American public had no idea what was going on, and the people who did know what was going on mostly thought deregulation was a great idea.

Or consider this statement from Mr. Obama: “Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions — that time has surely passed.”

The first part of this passage was almost surely intended as a paraphrase of words that John Maynard Keynes wrote as the world was plunging into the Great Depression — and it was a great relief, after decades of knee-jerk denunciations of government, to hear a new president giving a shout-out to Keynes. “The resources of nature and men’s devices,” Keynes wrote, “are just as fertile and productive as they were. The rate of our progress towards solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a high standard of life. ...

But today we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand.”

But something was lost in translation. Mr. Obama and Keynes both assert that we’re failing to make use of our economic capacity. But Keynes’s insight — that we’re in a “muddle” that needs to be fixed — somehow was replaced with standard we’re-all-at-fault, let’s-get-tough-on-ourselves boilerplate.

Remember, Herbert Hoover didn’t have a problem making unpleasant decisions: he had the courage and toughness to slash spending and raise taxes in the face of the Great Depression. Unfortunately, that just made things worse.

Still, a speech is just a speech. The members of Mr. Obama’s economic team certainly understand the extraordinary nature of the mess we’re in. So the tone of Tuesday’s address may signify nothing about the Obama administration’s future policy.

On the other hand, Mr. Obama is, as his predecessor put it, the decider. And he’s going to have to make some big decisions very soon. In particular, he’s going to have to decide how bold to be in his moves to sustain the financial system, where the outlook has deteriorated so drastically that a surprising number of economists, not all of them especially liberal, now argue that resolving the crisis will require the temporary nationalization of some major banks.

So is Mr. Obama ready for that? Or were the platitudes in his Inaugural Address a sign that he’ll wait for the conventional wisdom to catch up with events? If so, his administration will find itself dangerously behind the curve.

And that’s not a place that we want the new team to be. The economic crisis grows worse, and harder to resolve, with each passing week. If we don’t get drastic action soon, we may find ourselves stuck in the muddle for a very long time.

Senate passes wage discrimination bill

We now know what will be the first bill that President Obama will sign into law. The Lilly Ledbetter Fair Pay Act passed through the Senate yesterday. The Senate voted 61-36 — with all 16 female senators voting “yea” for the measure. The Lilly Ledbetter Fair Pay Act is a wage discrimination bill that heralds the pro-labor policies of the Democratic-controlled Congress and White House. The House passed the bill earlier this month.

This legislation reverses a terrible 2007 Supreme Court rightwing ruling that narrowly defined the time period during which a worker can file a claim of wage discrimination, even if the worker is unaware for months or years that he or she is getting less than colleagues doing the same job. It has been a priority for women's groups seeking to narrow the wage gap between men and women.

The Ledbetter bill would clarify that every paycheck resulting from discrimination would constitute a new violation, extending the 180-day statute of limitations for filing a claim. The Supreme Court, in a 5-4 decision denying Ledbetter's complaint, ruled that a worker must file a claim within 180 days of the initial decision to pay a worker less, even if the worker did not discover the pay disparity until years later.

UN Secretary-General Ban ki-Moon Absolutely Appalled

UN Secretary-General Ban ki-Moon visited Gaza and was reported absolutely appalled at the scenes of human destruction he witnessed there.

In very forceful language he demanded that nothing like the Gaza campaign ever be undertaken again. The Secretary-General said he would do what he could to establish accountability.

Aljazeera English reports on the aftermath of the Israeli assault on Gaza, including questions about the use of white phosphorous on densely populated civilian areas, producing burns and destroying food warehouses in the midst of a famine. Many Gaza civilians are camped on the rubble of their former homes, searching frantically for loved ones who may no longer be among the living.

Watch it here:

Whistleblower exposes spying on Americans

Former analyst at the National Security Agency, Russell Tice, went on MSNBC's Countdown, and revealed exclusively to Keith Olbermann that American journalists were specifically targeted by the Bush administration for surveillance.

Keith Interviewed Tice over two days.
Here is Part 1

Visit msnbc.com for Breaking News, World News, and News about the Economy

Part 2

Visit msnbc.com for Breaking News, World News, and News about the Economy

Then Keith Olbermann interviewed a journalist James Risen who knows for sure he was spied upon.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Hillary Takes The Reigns at Foggy Bottom

To say the diplomats at the State Department are happy with their new leadership would seem to be an understatement. The normally reserved professionals at Foggy Bottom came out in force and showed great enthusiasm for their new Secretary.

You have to watch this video. I personally thought Condoleezza Rice was a terrible Secretary of State, but I would not have thought that Hillary Clinton would get such an exuberant reception.

Unemployment claims "surged last week"

The final week of the Bush Administration was a bad one for the U.S. Economy as the number of workers lining up for jobless benefits surged. In addition the number of new housing starts and permits hit record lows for the month of December. This is all evidence of an acceleration of the economy's sinking deeper into recession.

First time applications for state unemployment insurance benefits increased to a seasonally adjusted 589,000 in the week ended January 17 from a revised 527,000 the prior week, the Labor Department said on Thursday.

This was the highest level of initial claims since a matching reading in the week of December 20 and beat analysts' forecasts for a rise to 540,000 new claims versus a previously reported count of 524,000 the week before.

The last time claims were higher was in 1982, when they notched a weekly rise of 612,000.

Mitchell Tapped for Mideast

President Barack Obama today announced that he had asked George Mitchell, the former Senate Democratic leader, to serve as special Mideast envoy. This is a big step towards making good on his campaign pledge to be more robustly involved in efforts to help with peace efforts in the volatile region.

George Mitchell returns to a similar role to the one he pursued during President Bill Clinton's presidency when the former senator took on several difficult diplomatic assignments, including chairing peace talks on Northern Ireland.

Mitchell also led an international commission to investigate violence in the Middle East. His report, issued in spring 2001, after Clinton had left office, called for a freeze on Israeli settlements on the West Bank and a Palestinian crackdown on terrorism.

Obama signs the orders closing Guantanamo

Barack Obama has moved quickly to reverse Bush's toxic policies on the treatment of terror suspects. Today President Barack Obama signed an executive order to shut down Guantanamo Bay's prison within a year.

He signed an executive order to require that all U.S. interrogations of terror suspects must now conform to the U.S. Army Field Manual, a move meant to restrict what the CIA can do. The president created an inter-agency task force to advise him on detainee policy.

In addition, the man tapped to oversee U.S. intelligence is promising Congress there will be no torture, harsh interrogations and warrantless wiretapping on his watch.

The direct quote from Obama:

Any interrogations taking place are going to have to abide by the Army Field Manual. We feel that the Army Field Manual reflects the best judgment of our military -- that we can abide by a rule that says we don't torture. But that we can still effectively obtain the intelligence that we need.

This is me following through on not just a commitment I made during the campaign, I think, but an understanding that dates to our founding fathers. That we are willing to observe core standards of conduct, not just when it's easy but when it's hard.

President Obama also harkend back to the Founding Fathers.

"This is following through not just on a commitment I made during the campaign but an understanding that dates back to our Founding Fathers, that we are willing to observe core standards of conduct — not just when it's easy but also when it's hard."

In related actions, Obama:

• Created a task force that would have 30 days to recommend policies on handling terror suspects who are detained in the future. Specifically, the group would look at what do do with the 245 Guantanamo detainees.
• Required all U.S. personnel to follow the U.S. Army Field Manual while interrogating detainees. The manual explicitly prohibits threats, coercion, physical abuse and waterboarding, a technique that creates the sensation of drowning and has been termed a form of torture by critics. However, a Capitol Hill aide says that the administration also is planning a study of more aggressive interrogation methods that could be added to the Army manual — which would create a significant loophole to Obama's action Thursday.
• Directed the Justice Department to review the case of Qatar native Ali al-Marri, who is the only enemy combatant currently being held on U.S. soil. The directive will ask the high court for a stay in al-Marri’s appeals case while the review is ongoing. The government says al-Marri is an al-Qaida sleeper agent.

Watch Keith Olbermann discuss this with Retired General Paul Eaton:

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The New White House Website

Check out the new White House website.

It is an amazing country we live in.

President Barack Obama's Inauguration Address

President Barack Obama gave a great Inauguration Address. It will be interesting where it falls in the history of great speeches, but it was a really great speech. It was less the stirring speech, and the rhetorical flourish was different from other speeches. Still I found it to be a great speech.

Watch it here:
Part 1


Part 2


Read President Obama’s full Inauguration Address below:

My fellow citizens:

I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America’s decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public’s dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience’s sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society’s ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world’s resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter’s courage to storm a stairway filled with smoke, but also a parent’s willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America’s birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

“Let it be told to the future world…that in the depth of winter, when nothing but hope and virtue could survive…that the city and the country, alarmed at one common danger, came forth to meet [it].”

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children’s children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God’s grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

Note: On a funny note Chief Justice John Roberts asked Barack Obama to recite the oath of office incorrectly. Roberts said “execute the office of President of the United States faithfully,” rather than “faithfully executive.”

The oath actually reads: “I do solemnly swear that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”

Obama paused and allowed Roberts to correct himself.
Watch it here:


UPDATE: President Obama and Chief Justice Roberts redid the Oath of Office a day later.