Its been a long time

Its been a long time since I wrote in this blog. To be honest I was a little burned out after the election. Now however I am feeling the need to write again. I am glad that the Obama administration won, but man can they be disappointing.

President Obama has completely dropped the ball when it comes to Gay rights.
His selection of his economic team has been pretty poor.
His handling of Executive Power has left many with a sour taste in their mouth.

Have A Question For the President

President Obama and the White House have created a space for the average citizen to ask a question of the President. They have created a place on WhiteHouse.gov called Open For Questions.
From the website, we're told Obama will be answering some of the questions himself:

We invite you to participate in our community-moderated online town hall. Submit your own question about the economy and vote on submissions from others. We also
encourage you to include a link to a video of yourself asking your question (ideally 30 seconds or less), but text submissions are all you need. Come back on Thursday to watch the President answer some of the most popular submissions live at WhiteHouse.gov.Submit your question or video -- or vote for the ones you want answered. You know these questions will be better and more pertinent than what the talking heads come up with. The past couple times I've gone to the White House press conferences, we got some great suggestions for questions. Send them directly to Obama.

Check the video at YouTube: http://www.youtube.com/watch?v=hjJm_Hzc6Yg&eurl=http%3A%2F%2Fmoderator%2Ewhitehouse%2Egov%2Fask%2F%3Fembed%2316%2Fe%3D55f8&feature=player_embedded

Update:

Obama's Online Townhall has begun

The White House is live streaming Obama's townhall from the East Room here. He'll be taking the questions, relating to the economy, that received the most votes in each category. According to the website, "92,920 people have submitted 104,116 questions and cast 3,606,819 votes." The President will also take questions from the audience.Jared Bernstein, V.P. Biden's chief economic adviser (and a blogger) did the intro, he just said, "The goal is to open up the White House to the American people."

President Obama Getting Tough With Congress

For the first two months of his administration President Obama tried to show due deference to Congress, but now President Obama is thankfully starting to play hardball with the Republicans and right-leaning Democrats who are threatening to sink his ambitious proposals for this country. He's both calling out his critics and raising the option of using a legislative shortcut that would eliminate the threat of a Senate filibuster. Here are what a few new's sources are saying.

According to the New York Times:

"During an appearance on Tuesday at the Eisenhower Executive Office Building, Mr. Obama took a swipe at Republican critics of his $3.6 trillion budget and its agenda for health care, energy, taxes and economic recovery.

"'If there are members of Congress who object to specific policies and proposals in this budget, then I ask them to be ready and willing to propose constructive, alternative solutions,' Mr. Obama said. '"Just say no" is the right advice to give your teenagers about drugs. It is not an acceptable response to whatever economic policy is proposed by the other party.'

"The strong words were the latest in a push that has come to resemble elements of the two-year-long presidential campaign. Mr. Obama may hold his second prime-time news conference as president, perhaps as early as next week, to talk up the budget."

In addition Walter Alarkon writes in The Hill that Obama's change in rhetorical strategy is his response to "substantial pushback from lawmakers in both parties who sharply attacked key elements in his $3.55 trillion proposal."

And the Associated Press writes:

"In a new Web video, President Barack Obama is asking Americans to help him pass his $3.6 trillion budget."

But Obama's big shot across Congress's bow is this from McClatchy Newspapers:

"A top White House official threatened Tuesday to use a congressional rule to force some controversial proposals through the Senate by eliminating the Republicans' power to block legislation.

"Peter Orszag, the director of the White House Office of Management and Budget, said the Obama administration would prefer not to use the budget 'reconciliation' process that allows measures to pass the Senate on simple majority votes.

"Orszag said he wouldn't rule it out, however. The legislative tactic is being considered to push through Obama's global warming and health care programs, and perhaps his proposals to raise taxes on the wealthy....

"Under normal Senate rules, it requires 60 votes in the 100-member Senate to shut off debate and force a final vote. Democrats currently have 58 Senate votes. Under reconciliation, 51 votes can force anything through.

"There is plenty of historical precedent of using it by both parties, including Republican Presidents Ronald Reagan and George W. Bush, who used it force through big tax cuts.

"'Pretty much every major piece of budget legislation going back to April 1981, April '82, April 1990, April 1993, the 1990 act, the 2001 tax legislation, they were all done through reconciliation. Yet somehow this is being presented as an unusual thing,' Orszag said.

"'The historical norm as opposed to the exception is for a major piece of budget legislation to move through reconciliation.'"

The Washington Post reports the predictable Republican response:

"Republicans are howling about the proposal to expand health coverage and tax greenhouse gas emissions without their input, warning that it could irrevocably damage relations with the new president....

"Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, has argued against reconciliation as well....

"'There are many more problems with using reconciliation than is commonly appreciated,' Conrad said yesterday, after he and House Budget Committee Chairman Rep. John M. Spratt Jr. (D-S.C.) met with Obama at the White House. The topic of reconciliation came up 'in passing,' Conrad said, but no decisions were made.

"One big problem, Conrad said, is that reconciliation was conceived as a way to force hard budget choices, such as tax increases or spending cuts, not as a means to advance substantive legislation."

Roll Call reports on the opposition from some within Obama's own party:

"A bloc of Senate Democratic moderates is quietly maneuvering to keep open the
option of vetoing two of President Barack Obama's most ambitious agenda items
this year — climate change and health care reform.

"Eight Democrats who want to water down new climate change legislation have already joined with Republicans and signed a letter opposing any attempt to use fast-track budget rules to prevent filibusters. Many of the same Democrats also oppose using those budget rules to prevent filibusters of health care legislation...

"Democratic moderates have been couching their opposition to reconciliation with terms like 'bipartisanship' and 'regular order,' but when pressed, some Senators acknowledged they want to ensure their voices are heard during upcoming debates on global warming and health care.

"Senators from energy-producing states like West Virginia and Louisiana are worried new carbon taxes could be slammed down their throats. And fiscal conservatives are concerned they could be left out of the room while liberal Democrats push for a series of tax hikes proposed by Obama....

"But other Democrats said they were concerned that Republicans will filibuster anything Obama pushes on energy and climate change, and the recent run of near-total Republican opposition to Democratic priorities doesn't give them cause for hope. They argue that reconciliation — and the simple majority it requires — would ensure Democrats can forward their top agenda items.

Despite the tougher tack with Congress and Republican's in particular, it's worth nothing that President Obama is still not taking anything like Bush's "imperial presidency" approach to dealing with the legislative branch. For instance, he's actually asking Congress to write major legislation itself.

Robert Pear reports in the New York Times on how's that going:

"Three powerful House committee chairmen have agreed to work together on legislation to overhaul the health care system, starting with the view that most
employers should help finance coverage and that the government should offer a public health insurance plan as an alternative to private insurance.

"The unified approach contrasts with the competition and rivalry among committee
chairmen that helped sink President Bill Clinton's plan for universal health insurance 15 years ago....

"In a letter to President Obama, the chairmen said, 'Our intention is to bring similar
legislation before our committees.'"

Obama Addresses Earmark Obsession

I'm glad that President Obama came out yesterday and expressed a sense of weariness over the media's obsession with earmarks while he also outlined his proposal to reduce and reform their use in the future. President Obama said this as he announced that he would sign the $410 billion omnibus spending bill that does include earmarks (they make up less than 2% of the bill) when it arrived his desk.

I want to remind people because the media seems to have forgotten that earmarks were not Obama's issue during the campaign -- they were Republican candidate John McCain's. Seriously people, there are those who are complaining that President Obama did not keep John McCain's campaign promise. President Obama never promised to veto them, just reduce their number and make their sponsors more accountable. Now he did not reduce them in this bill, which was written before he was elected, but he did make them more transparent. We now know who was the author and sponsor of every earmark.

Keith Olbermann pointed this out on Countdown last night. He showed President Obama speaking about this, and then spoke with Newsweek's Richard Wolfe.

Watch it here:

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

Here are President Obama's statement:

"Yesterday, Congress sent me the final part of last year's budget; a piece of legislation that rolls nine bills required to keep the government running into one – a piece of legislation that addresses the immediate concerns of the American people by making needed investments in line with our urgent national priorities."

"That is what nearly 99 percent of this legislation does – the nearly 99 percent you probably haven't heard much about."

In fact, President Obama came out and said quite clearly that earmarks have some value:

"Done right, earmarks give legislators the opportunity to direct federal money to worthy projects that benefit people in their district, and that's why I have opposed their outright elimination."

And he took a swipe at some of the bill's critics:

"I also find it ironic that some of those who railed the loudest against this bill because of earmarks actually inserted earmarks of their own – and will tout them in their own states and districts."

President Obama suggested new guidelines for earmarks that he said were consistent with his pledge to restore "responsibility, transparency, and accountability to the actions government takes." He said that earmarks should be announced and justified ahead of time, shouldn't go to private companies without competitive bidding and shouldn't be traded for political favors.

House Majority Leader Steny H. Hoyer wrote about the stupidity of the Republican's argument in a USA Today op-ed yesterday:

"Some politicians try to cultivate an image of fiscal discipline by railing against earmarks — and 'pork' also makes a great story for the news media. But as congressional scholar Thomas Mann recently noted, earmarks do not generally increase spending but simply allow members of Congress to direct a small part of a program's funding.

'Abolishing all earmarks would therefore have a trivial effect on the level of spending,' Mann explained, adding that 'hyperbolic attacks on earmarks are a disservice to the public, encouraging people to concentrate way too much attention and energy on a largely symbolic issue and ignore the critical decisions that we face.'"

Because They Can't Walk and Chew Gum

The weirdest argument coming from Repuglicans lately is that President Obama is overreaching, trying to do to much, and not keeping his eye on the ball. Just because the prior President could not deal with more than one thing at a time, does not mean Obama can't. Still this is what the Repuglicans are going with.

And of course a lot of the mainstream media is ready to run with this talking point. Here is ABC's Jake Tapper on Monday night during Nightline: "It's the media's new question. Is the president attempting to do too much?" The NBC's Brian Williams last night on the Nightly News: "Today marked President Obama's 50th day in office. Halfway through his first 100 days, the president's first seven weeks have been a whirlwind, with often dramatic movement in all directions, on all fronts: the economy, health care, two wars, and today education reform, which raises the question talked about on cable all day long: Is it all too much for any one administration?"

What?

Then you read Carl Cameron on Fox News and he confirms this is a Republican talking point: "Republicans across Capitol Hill today complained that President Obama and Democrats are taxing too much, spending too much, and borrowing too much. They say this is their mantra for the weeks and months ahead."

Along with ABC's George Stephanopoulous who on Monday night said: "The phrase is 'overloading the circuits'....It's coming from a lot of different corners, especially Republicans like John McCain, and the White House is pushing back very hard against this criticism."

Luckily President Obama and his staff seemed ready for this critism and had some good responses to such charges. Here's what he had to say on the subject yesterday, as a preface to his speech on education:

"I know there's some who believe we can only handle one challenge at a time. And they forget that Lincoln helped lay down the transcontinental railroad and passed the Homestead Act and created the National Academy of Sciences in the midst of civil war. Likewise, President Roosevelt didn't have the luxury of choosing between ending a depression and fighting a war; he had to do both. President Kennedy didn't have the luxury of choosing between civil rights and sending us to the moon. And we don't have the luxury of choosing between getting our economy moving now and rebuilding it over the long term.

"America will not remain true to its highest ideals -- and America's place as a global economic leader will be put at risk -- unless we not only bring down the crushing cost of health care and transform the way we use energy, but also if we do -- if we don't do a far better job than we've been doing of educating our sons and daughters; unless we give them the knowledge and skills they need in this new and changing world."

This is just a really lame attack by the Repuglicans, and I hope the media stops giving it.

Congress Approves $410 Billion Spending Bill

Another victory for President Obama and the Democrats as the Senate approved the $410 billion funding measure to keep the government running for the rest of the year. The White House announced that President Obama will sign the measure on Wednesday, where he will also announce steps aimed at curbing lawmakers' penchant for pet projects.

Now personally I believe that earmarks are getting a bad name, and are not as evil as Republicans are making them out to be. Earmarks should be a tool that Representatives and Senators use, to specifically meet their states needs. Its just that earmarks should be above board, clear who has submitted the earmark, and not tied to any lobbyist. Earmarks should be done in conjunction with state and local government to ensure they meet the needs of the state.

The media has been too willing to confuse pork barrel projects and earmarks. A pork barrel project is usually an earmark, but not every earmark is pork barrel.

I don't understand why the media is trying to say this bill is an embarresment for President Obama. He argued against wasteful spending, not earmarks (that was McCain who has priven to be an idiot). In addition, what this economy needs is spending, and that is what this bill delivers. And the bill was written mostly over the course of last year, with support from key Republicans such as Minority Leader Mitch McConnell of Kentucky and Lamar Alexander of Tennessee, the Senate's No. 3 Republican, so the belly-aching by Republicans has been humorous. By the way even though McConnell was very active in writing the bill, he voted against it. Can you say covering his butt?

The spending measure chips away at several leftover Bush administration policies. It clears the way for the Obama administration to reverse a rule issued late in the Bush administration that says greenhouse gases may not be restricted to protect polar bears from global warming. Another Bush administration rule that reduced the input of federal scientists in endangered species decisions can also be quickly overturned without a lengthy rulemaking process.
The big increases — among them a 14 percent boost for a popular program that feeds infants and poor women and a 10 percent increase for housing vouchers for the poor — represent a clear win for Democrats who spent most of the past decade battling with Bush over money for domestic programs.

Generous above-inflation increases are spread throughout the bill for initiatives that the Bush Administration underfunded, including a $2.4 billion, 13 percent increase for the Agriculture Department and a 10 percent increase for Amtrak passenger rail system.

Dark Ages Of Science Nearing An End

President Barack Obama today took a couple of steps to reinstating science to it's rightful place in the decision making process as he signed an executive order that lifted the limits on federal funding for stem-cell research and a new memorandum addressing the role of scientific research in his administration, and throughout the government.

These were further steps in clarifying President Obama's broader vision of how government engages with science.

As David Neiwert of Crooks and Liars says the War on Science is finally over and Science won.

As President Obama signed the executive order that lifted the limits on federal funding for stem-cell research he said:

This Order is an important step in advancing the cause of science in America. But let’s be clear: promoting science isn’t just about providing resources – it is also about protecting free and open inquiry. It is about letting scientists like those here today do their jobs, free from manipulation or coercion, and listening to what they tell us, even when it’s inconvenient – especially when it’s inconvenient. It is about ensuring that scientific data is never distorted or concealed to serve a political agenda – and that we make scientific decisions based on facts, not ideology.

By doing this, we will ensure America’s continued global leadership in scientific discoveries and technological breakthroughs. That is essential not only for our economic prosperity, but for the progress of all humanity.

While hosting the White House ceremony to announce the change, the president also explained a new memorandum he has signed addressing scientific integrity itself. President Obama stipulated that his memorandum is meant to restore "scientific integrity to government decision-making." He noted that this is the beginning of a process of ensuring his administration bases its decision on sound science; appoints scientific advisers based on their credentials, not their politics; and is honest about the science behind its decisions.

"Promoting science isn't just about providing resources, it is also about protecting free and open inquiry," Obama said. "It is about letting scientists like those here today do their jobs, free from manipulation or coercion, and listening to what they tell us, even when it's inconvenient especially when it's inconvenient. It is about ensuring that scientific data is never distorted or concealed to serve a political agenda and that we make scientific decisions based on facts, not ideology."

Alex Koppelman notes that this memorandum carries with it an "unsubtle ... repudiation of the Bush administration and its attitude towards science."

These are just more examples of the change that President Obama promised. Back when he introduced a Nobel Prize-winning physicist as his choice for Energy Secretary, President Obama said:

"His appointment should send a signal to all that my administration will value science, we will make decisions based on the facts."

Soon after, he introduced a really impressive science team, and soon after that, the president devoted one of his weekly multimedia addresses to the issue:

"The truth is that promoting science isn't just about providing resources -- it's about protecting free and open inquiry. It's about ensuring that facts and evidence are never twisted or obscured by politics or ideology. It's about listening to what our scientists have to say, even when it's inconvenient -- especially when it's inconvenient. Because the highest purpose of science is the search for knowledge, truth and a greater understanding of the world around us."

These are the reasons why I say that the Dark Age of anti-intellectualism pushed by George W. Bush, Dick Cheney and the Republican party is coming to an end.

President Obama's Weekly Address - March 7 2009

President Barack Obama used his weekly address to detail his plans to fix our ailing economy, noting that reforming healthcare is necessary to ensure our long term fiscal health.

Watch It Here:

LibertyAir Blog

Just for Fun: What Happens when Obama Gets Mad

A great skit with Barack Obama turning into the Rock Obama.
I love the impersonation of Rahm Emanuel

Watch it here:

LibertyAir Blog

Paul Krugman: The Big Dither

Paul Krugman writes today in the New York Times about the need to fix America’s banks. Professor Krugman asks the question if President Obama is being bold enough, or is he and his administration dithering too much?

I do think that Obama has been slow in the steps that are necessary to fix the banking mess, but I do wonder if the President is constrained by politics, and the need to keep the markets some what calm. I think Krugman brings up great points, and as an academic and a pundit Professor Krugman provides a strong progressive argument. It is not his job to worry about the politics, but to suggest the best course from an economic sense.

The Big Dither
By PAUL KRUGMAN

Last month, in his big speech to Congress, President Obama argued for bold steps to fix America’s dysfunctional banks. “While the cost of action will be great,” he declared, “I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.”

Many analysts agree. But among people I talk to there’s a growing sense of frustration, even panic, over Mr. Obama’s failure to match his words with deeds. The reality is that when it comes to dealing with the banks, the Obama administration is dithering. Policy is stuck in a holding pattern.

Here’s how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators.

Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again.

Why do officials keep offering plans that nobody else finds credible? Because somehow, top officials in the Obama administration and at the Federal Reserve have convinced themselves that troubled assets, often referred to these days as “toxic waste,” are really worth much more than anyone is actually willing to pay for them — and that if these assets were properly priced, all our troubles would go away.
Thus, in a recent interview Tim Geithner, the Treasury secretary, tried to make a distinction between the “basic inherent economic value” of troubled assets and the “artificially depressed value” that those assets command right now. In recent transactions, even AAA-rated mortgage-backed securities have sold for less than 40 cents on the dollar, but Mr. Geithner seems to think they’re worth much, much more.
And the government’s job, he declared, is to “provide the financing to help get those markets working,” pushing the price of toxic waste up to where it ought to be.
What’s more, officials seem to believe that getting toxic waste properly priced would cure the ills of all our major financial institutions. Earlier this week, Ben Bernanke, the Federal Reserve chairman, was asked about the problem of “zombies” — financial institutions that are effectively bankrupt but are being kept alive by government aid. “I don’t know of any large zombie institutions in the U.S. financial system,” he declared, and went on to specifically deny that A.I.G. — A.I.G.! — is a zombie.
This is the same A.I.G. that, unable to honor its promises to pay off other financial institutions when bonds default, has already received $150 billion in aid and just got a commitment for $30 billion more.

The truth is that the Bernanke-Geithner plan — the plan the administration keeps floating, in slightly different versions — isn’t going to fly.

Take the plan’s latest incarnation: a proposal to make low-interest loans to private investors willing to buy up troubled assets. This would certainly drive up the price of toxic waste because it would offer a heads-you-win, tails-we-lose proposition. As described, the plan would let investors profit if asset prices went up but just walk away if prices fell substantially.

But would it be enough to make the banking system healthy? No.

Think of it this way: by using taxpayer funds to subsidize the prices of toxic waste, the administration would shower benefits on everyone who made the mistake of buying the stuff. Some of those benefits would trickle down to where they’re needed, shoring up the balance sheets of key financial institutions. But most of the benefit would go to people who don’t need or deserve to be rescued.

And this means that the government would have to lay out trillions of dollars to bring the financial system back to health, which would, in turn, both ensure a fierce public outcry and add to already serious concerns about the deficit. (Yes, even strong advocates of fiscal stimulus like yours truly worry about red ink.) Realistically, it’s just not going to happen.

So why has this zombie idea — it keeps being killed, but it keeps coming back — taken such a powerful grip? The answer, I fear, is that officials still aren’t willing to face the facts. They don’t want to face up to the dire state of major financial institutions because it’s very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable.

But this refusal to face the facts means, in practice, an absence of action. And I share the president’s fears: inaction could result in an economy that sputters along, not for months or years, but for a decade or more.

The truth is the Bernanke-Geithner plan will not work and I hope President Obama soon realizes this, and makes the changes that are necessary to fix this country.

White House Summit On Health Care

Today during the White House summit on health President Obama emphasized how health care is interconnected our economic problems and we can not fix one without fixing the other.

"We are here today to discuss one of the greatest threats not just to the well-being of our families and the prosperity of our businesses, but to the very foundation of our economy -- and that is the exploding cost of health care in America today.

"In the last eight years, premiums have grown four times faster than wages, and an additional nine million Americans have joined the ranks of the uninsured. The cost of health care now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. And even for folks who are weathering this economic storm, and have health care now, all it takes is one stroke of bad luck -- an accident or illness; a divorce or lost job -- to become one of the nearly 46 million uninsured or the millions who have health care, but can't afford it.

"We did not get here by accident. The problems we face today are a direct consequence of actions we failed to take yesterday.... [T]here are those who say we should defer health care reform once again -- that at a time of economic crisis, we simply cannot afford to fix our health care system as well.

"Well, let's be clear: the same soaring costs that are straining our families' budgets are sinking our businesses and eating up our government's budget too. Too many small businesses can't insure their employees. Major American corporations are struggling to compete with their foreign counterparts. And companies of all sizes are shipping their jobs overseas or shutting their doors for good.

"Medicare costs are consuming our federal budget. Medicaid is overwhelming our state budgets. And at the Fiscal Summit we held here last week, the one thing on which everyone agreed was that the greatest threat to America's fiscal health is not Social Security, though that is a significant challenge; and it is not the investments we've made to rescue our economy; it is the skyrocketing cost of health care.

"That is why we cannot delay this discussion any longer. And that is why today's forum is so important. Because health care reform is no longer just a moral imperative, it is a fiscal imperative. If we want to create jobs and rebuild our economy, then we must address the crushing cost of health care this year, in this Administration. Making investments in reform now, investments that will dramatically lower costs, won't add to our budget deficits in the long-term -- rather, it is one of the best ways to reduce them."

The government will spend $2.5 trillion on health care this year. In less than a decade, it will constitute 20% of GDP. If we're going to improve the economy and take fiscal sustainability seriously, this won't wait. The question isn't whether we can afford to tackle health-care reform; the question is whether we can afford not to.

Watch President Obama speak here:

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

Rachel Maddow was on "The Tonight Show" with Jay Leno the other night, and they discussed how President Obama is taking on the financial crisis, the economy in general, energy policy, and health care. Leno even asks, "Is he [Obama] biting off too much?"

Watch Rachel here:

Obama's Biggest Mistake

President Obama made a huge mistake during the transition period leading up to his assuming the presidencey of the United States, and it was naming Tim Geithner as the Treasurey Secretary. Geithner just is not the right man to be head of the US Treasurey as the world slips towards a second Great Depression.

Tim Geithner just does not seem to have the creativity to deal with the economic mess that this nation is facing. He seems committed to the view that banks should never be saved by the government, and no matter what they should stay private even if they’re bankrupt, because — well because. Geithner seems incapable of envisioning a government run solution, which is okay, except he is one of the men in charge of developing the government's solution. I believe that Geithner has tunnel vision which prevents him from trying to devise a policy which assumes that the many of the assets in the banking system are “bad,” and need to be removed from the system.

My question is how long does President Obama stick with Tim Geithner as the Treasurey Secretary? Can Geithner turn it around at Treasurey? How long can we wait to find out?

Paul Krugman Describes Obama's Budget As Real Change

Elections have consequences, that is how Professor Krugman starts his column in the New York Times this last Friday, and while many have heard this sentiment, I think few actually understand what that means. Back in 2000 many did not think there was really any substanstive difference between Gore and Bush. How wrong they were.

Elections do have consequences, and President Obama's budget as set-forth this week is another reminder of that.

Climate of Change
By PAUL KRUGMAN

Elections have consequences. President Obama’s new budget represents a huge break, not just with the policies of the past eight years, but with policy trends over the past 30 years. If he can get anything like the plan he announced on Thursday through Congress, he will set America on a fundamentally new course.

The budget will, among other things, come as a huge relief to Democrats who were starting to feel a bit of postpartisan depression. The stimulus bill that Congress passed may have been too weak and too focused on tax cuts. The administration’s refusal to get tough on the banks may be deeply disappointing. But fears that Mr. Obama would sacrifice progressive priorities in his budget plans, and satisfy himself with fiddling around the edges of the tax system, have now been banished.

For this budget allocates $634 billion over the next decade for health reform. That’s not enough to pay for universal coverage, but it’s an impressive start. And Mr. Obama plans to pay for health reform, not just with higher taxes on the affluent, but by putting a halt to the creeping privatization of Medicare, eliminating overpayments to insurance companies.

On another front, it’s also heartening to see that the budget projects $645 billion in revenues from the sale of emission allowances. After years of denial and delay by its predecessor, the Obama administration is signaling that it’s ready to take on climate change.

And these new priorities are laid out in a document whose clarity and plausibility seem almost incredible to those of us who grew accustomed to reading Bush-era budgets, which insulted our intelligence on every page. This is budgeting we can believe in.

Many will ask whether Mr. Obama can actually pull off the deficit reduction he promises. Can he actually reduce the red ink from $1.75 trillion this year to less than a third as much in 2013? Yes, he can.Right now the deficit is huge thanks to temporary factors (at least we hope they’re temporary): a severe economic slump is depressing revenues and large sums have to be allocated both to fiscal stimulus and to financial rescues.

But if and when the crisis passes, the budget picture should improve dramatically. Bear in mind that from 2005 to 2007, that is, in the three years before the crisis, the federal deficit averaged only $243 billion a year. Now, during those years, revenues were inflated, to some degree, by the housing bubble. But it’s also true that we were spending more than $100 billion a year in Iraq.

So if Mr. Obama gets us out of Iraq (without bogging us down in an equally expensive Afghan quagmire) and manages to engineer a solid economic recovery — two big ifs, to be sure — getting the deficit down to around $500 billion by 2013 shouldn’t be at all difficult.

But won’t the deficit be swollen by interest on the debt run-up over the next few years? Not as much as you might think. Interest rates on long-term government debt are less than 4 percent, so even a trillion dollars of additional debt adds less than $40 billion a year to future deficits. And those interest costs are fully reflected in the budget documents.

So we have good priorities and plausible projections. What’s not to like about this budget? Basically, the long run outlook remains worrying.

According to the Obama administration’s budget projections, the ratio of federal debt to G.D.P., a widely used measure of the government’s financial position, will soar over the next few years, then more or less stabilize. But this stability will be achieved at a debt-to-G.D.P. ratio of around 60 percent. That wouldn’t be an extremely high debt level by international standards, but it would be the deepest in debt America has been since the years immediately following World War II. And it would leave us with considerably reduced room for maneuver if another crisis comes along.

Furthermore, the Obama budget only tells us about the next 10 years. That’s an improvement on Bush-era budgets, which looked only 5 years ahead. But America’s really big fiscal problems lurk over that budget horizon: sooner or later we’re going to have to come to grips with the forces driving up long-run spending — above all, the ever-rising cost of health care.

And even if fundamental health care reform brings costs under control, I at least find it hard to see how the federal government can meet its long-term obligations without some tax increases on the middle class. Whatever politicians may say now, there’s probably a value-added tax in our future.

But I don’t blame Mr. Obama for leaving some big questions unanswered in this budget. There’s only so much long-run thinking the political system can handle in the midst of a severe crisis; he has probably taken on all he can, for now. And this budget looks very, very good.

Any one who honestly reads Paul Krugman knows that he is not an Obama apologist. Professor Krugman has been critical of Obama's bailout plans and did not think that the stimulus package Obama pushed for was bold enough. At the same time, I trust a lot of what Professor Krugman has to say about the economy. So when Professor Krugman says that this budget is a good progressive budget, than I am very hopeful.

Obama's Weekly Address

From The White House Blog:
Keeping Promises

In the Weekly Address this morning, President Obama explains how the budget he sent to Congress will fulfill the promises he made as a candidate. On fiscal responsibility, a fair tax code, a clean energy economy, real health care reform, and education, this budget sets out a new vision for our country.

But having put his priorities on paper and having stood behind them, the President recognizes that there are those who will fight against change every step of the way.

Two years ago, we set out on a journey to change the way that Washington works.

We sought a government that served not the interests of powerful lobbyists or the wealthiest few, but the middle-class Americans I met every day in every community along the campaign trail – responsible men and women who are working harder than ever, worrying about their jobs, and struggling to raise their families. In so many town halls and backyards, they spoke of their hopes for a government that finally confronts the challenges that their families face every day; a government that treats their tax dollars as responsibly as they treat their own hard-earned paychecks.

That is the change I promised as a candidate for president. It is the change the American people voted for in November. And it is the change represented by the budget I sent to Congress this week.

During the campaign, I promised a fair and balanced tax code that would cut taxes for 95% of working Americans, roll back the tax breaks for those making over $250,000 a year, and end the tax breaks for corporations that ship our jobs overseas. This budget does that.

I promised an economy run on clean, renewable energy that will create new American jobs, new American industries, and free us from the dangerous grip of foreign oil. This budget puts us on that path, through a market-based cap on carbon pollution that will make renewable energy the profitable kind of energy; through investments in wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient American cars and American trucks.

I promised to bring down the crushing cost of health care – a cost that bankrupts one American every thirty seconds, forces small businesses to close their doors, and saddles our government with more debt. This budget keeps that promise, with a historic commitment to reform that will lead to lower costs and quality, affordable health care for every American.

I promised an education system that will prepare every American to compete, so Americans can win in a global economy. This budget will help us meet that goal, with new incentives for teacher performance and pathways for advancement; new tax credits that will make college more affordable for all who want to go; and new support to ensure that those who do go finish their degree.

This budget also reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession. Given this reality, we’ll have to be more vigilant than ever in eliminating the programs we don’t need in order to make room for the investments we do need. I promised to do this by going through the federal budget page by page, and line by line. That is a process we have already begun, and I am pleased to say that we’ve already identified two trillion dollars worth of deficit-reductions over the next decade. We’ve also restored a sense of honesty and transparency to our budget, which is why this one accounts for spending that was hidden or left out under the old rules.

I realize that passing this budget won’t be easy. Because it represents real and dramatic change, it also represents a threat to the status quo in Washington. I know that the insurance industry won’t like the idea that they’ll have to bid competitively to continue offering Medicare coverage, but that’s how we’ll help preserve and protect Medicare and lower health care costs for American families. I know that banks and big student lenders won’t like the idea that we’re ending their huge taxpayer subsidies, but that’s how we’ll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won’t like us ending nearly $30 billion in tax breaks, but that’s how we’ll help fund a renewable energy economy that will create new jobs and new industries. In other words, I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight as we speak. My message to them is this:
So am I.

The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don’t. I work for the American people. I didn’t come here to do the same thing we’ve been doing or to take small steps forward, I came to provide the sweeping change that this country demanded when it went to the polls in November. That is the change this budget starts to make, and that is the change I’ll be fighting for in the weeks ahead – change that will grow our economy, expand our middle-class, and keep the American Dream alive for all those men and women who have believed in this journey from the day it began.
Thanks for listening.

Obama sets out firm deadlines on Iraq

Today President Obama traveled to Marine Corps base Camp Lejeune in North Carolina to announce his strategy for Iraq. President Obama said today that "This strategy is grounded in a clear and achievable goal shared by the Iraqi people and the American people: an Iraq that is sovereign, stable, and self-reliant."

President Obama's strategy is to remove all combat troops from Iraq in 18 months, while leaving as many as 50,000 troops there in non-combat roles until the end of 2011. Now I was a lowly non-com in the Marines, so I don't claim to be some great strategy, but I do not get the 50,000 troops being left behind. The missions that get described when people are defending leaving 50,000 soldiers and Marines in Iraq, do not require that many soldiers.

The mission that gets described would only require 10,000 U.S. personnel with air support mostly coming from bases in neigboring countries.

During his speech, President Obama declared that:

"To achieve that goal [to remove combat troops from Iraq], we will work to promote an Iraqi government that is just, representative, and accountable, and that provides neither support nor safe-haven to terrorists. We will help Iraq build new ties of trade and commerce with the world. And we will forge a partnership with the people and government of Iraq that contributes to the peace and security of the region."

President Obama does seem to understand the quandaries that remain in Iraq. In today's speech he frankly described many of the challenges:

"Iraq is not yet secure, and there will be difficult days ahead. Violence will continue to be a part of life in Iraq. Too many fundamental political questions about Iraq’s future remain unresolved. Too many Iraqis are still displaced or destitute. Declining oil revenues will put an added strain on a government that has had difficulty delivering basic services. Not all of Iraq’s neighbors are contributing to its security. Some are working at times to undermine it. And even as Iraq’s government is on a surer footing, it is not yet a full partner – politically and economically – in the region, or with the international community."

President Obama also emphasized that the problems in Iraq will not be solved through military means. He stated that:

"critical recognition that the long-term solution in Iraq must be political – not military....The long-term success of the Iraqi nation will depend upon decisions made by Iraq’s leaders and the fortitude of the Iraqi people. Iraq is a sovereign country with legitimate institutions; America cannot – and should not – take their place."

Still he set an almost impossible goal when he declared that they will leave Iraq with Iraqi a "government that is just, representative, and accountable."

Watch President Obama speaking at Camp Lejeune:

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David Gregory had an initial take on MSNBC with retired General McCaffrey and retired Colonel Jacobs. The NBC reporter of course is a tool who has no idea what he is talking about when he speaks about the surge. Washington Post reporter Tom Ricks has a really good take on the situation. You can watch it here:

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Here is another take on the plan from NBC:

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$634 billion for health care in Obama's budget

In his speech Tuesday night, President Barack Obama said he was serious about fixing the health care crisis in this country. The budget that was released today show's that President Obama is very serious about health care. Very serious:

President Obama is proposing to begin a vast expansion of the U.S. health-care system by creating a $634 billion reserve fund over the next decade, launching an overhaul that most experts project will ultimately cost at least $1 trillion.The "reserve fund" in the budget proposal being released today is Obama's attempt to demonstrate how the country could extend health insurance to millions more Americans and at the same time begin to control escalating medical bills that threaten the solvency of families, businesses and the government.

Obama aims to make a "very substantial down payment" toward universal coverage by trimming tax breaks for the wealthy and squeezing payments to insurers, hospitals, doctors and drug manufacturers, a senior administration official said yesterday.

Embedded in the budget figures are key policy changes that the administration argues would improve the quality of care and bring much-needed efficiency to a health system that costs $2.3 trillion a year.

By first identifying a large pot of money to underwrite health-care reform -- before laying out a proposal on who would be covered or how -- Obama hopes to draw Congress to the bargaining table to tackle the details of a comprehensive plan. The strategy is largely intended to avoid the mistakes of the Clinton administration, which crafted an extensive proposal in secret for many months before delivering the finished product to lawmakers, who quickly rejected it.

I'm impressed by the strategy -- and the number.

Obama forecasts $1.75 trillion deficit this year

Today President Barack Obama and his administration have predicted a deficit of $1.75 trillion in a budget proposal for 2009. This is the legacy of President Bush, a $1,075,000,000 deficit. This gaping hole in the treasury is huge! This deficit represents 12.3% of U.S. GDP (gross domestic product), and is the largest percentage share of GDP since the end of World War II.

The President's budget sets some major goals such as overhauling the healthcare system and shoring up the U.S. economy.

Now senior Obama administration officials are suggesting that the President's expensive policy goals will be offset by cuts in spending on existing programs that are no longer necessary or have proven wasteful. The Obama administration is promising to put the country in better fiscal shape.

This is going to be difficult to near impossible as federal spending is skyrocketing as Obama officials try to jolt the faltering economy with public-works spending and tax cuts and continue to bail out the troubled financial industry. Still President Obama has made a bold pledge to halve the more-than $1 trillion deficit he inherited from former Republican President George W. Bush in four years.

To do this Obama is producing tax increases on wealthier Americans and reduce the cost of the Iraq war as a troop drawdown, to curb the deficit. Currently the budget projects costs of fighting in Iraq and Afghanistan as totaling just over $140 billion this year and $130 billion in the 2010 fiscal year. Obama's budget proposes that annual costs will drop after the drawdown to $50 billion annually. The proposed budget would also phase out government payments to crop producers making more than $500,000 -- saving $9.8 billion over 10 years -- and eliminate subsidies for cotton storage, saving an additional $570 million over the same period.

Obama's first "State of the Union Speech"

Last nights speech was awesome! Last night's speech was a reminder about why we as a nation elected Barack Obama to be President of the United States. We as a nation need a real president, and I believe President Obama again showed he is up to the challenge. I know this was not technically the State of the Union speech, but it was.

President Obama set the tone for what he intends to do, while listing the challenges ahead:

“Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down.”

This speech was well crafted and expertly delivered. The speech was not overly wonkish, but it was really well delivered. In fact the speech sounded better than it read. The President helped explain why huge resources must go into creating a baseline of solvency for the system and a commitment to renewed lending and down the road growth. The speech and how Obama delivered it really set the right tone. Instant public surveys on Barack Obama's speech showed that generally speaking the public was incredibly receptive to his speech, regardless of political party.

A CBS News poll of approximately 500 people saw approval of the president rise from 62% before the speech to 69% afterward. A CNN poll showed 68% of respondents viewed the speech positively, 24% somewhat positively, and only 8% not positively. 82% supported the president's economic plan as outlined in the speech, while 17% opposed it.

As with every President, Obama did try to rally the nation by extolling the extraordinary character of the American people.

“Even in the most trying times, amid the most difficult circumstances, there is a generosity, a resilience, a decency, and a determination that perseveres; a willingness to take responsibility for our future and for posterity.”

As to the speech, I believe President Obama's comments on the economy do foreshadow tough decisions in the near future. Many are going to be embedded in his budgetary request that will come out two days from now.

He layed out the tasks of cutting federal spending, resuscitating the nation’s banking system, reviving the moribund auto industry, improving this nation's energy plan, and improving education; all huge tasks un-to-themselves. While the President acknowledged that these would be daunting tasks, but that we as a nation could face them together and overcome.

I believe President Obama helped to frame the state of the nation and the debate when he said:

“Short-term gains were prized over long-term prosperity… we failed to look beyond the next payment, the next quarter, or the next election… difficult decisions were put off for some other time on some other day.”

Foreign policy was a sideshow in this speech, and I understand why, but we live in a world so interconnected, that I do not believe a discussion of our economy cannot include more about our foreign relations. A lot of the success that President Obama is hoping for is working with China, Japan, Germany, and Europe as a whole.

Still it was a great speech. One every other speech he gives will be compared to, and 20 years from now another President will be preparing for a speech, and the pundits will ask can their speech compare to President Obama's first address to the nation. And in the end President Obama's message was a simple one to the nation, ‘We will recover.’

Read the text of the full speech here.

You can watch it here:

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LibertyAir Blog

No More Accounting Slight of Hand

One of the most unreported aspects of the Bush Administration was the accounting gimmicks that they used to make deficit projections look smaller and the budget they were presenting look better. I remember a few voices like Paul Krugman and Dean Baker would raise their voices about these gimmicks, and how the deficit this nation was incurring was worse than being reported, but our media just let it slide by.

Now President Obama has written an executive order the bans four specific accounting tricks that Bush and his cronies when producing his budget which will be submitted to Congress next week. Bush and his people used these accounting trick to cover the true extent of the damage that Bush's policies were causing to the government's budget. According to Obama administration officials these gimmicks hid a budget that is $2.7 trillion deeper in the red over the next decade than had been reported by Bush officials. The new accounting involves including the spending on the wars in Iraq and Afghanistan, showing what Medicare reimbursements to physicians are expected to be, and the projecting actual costs of disaster responses. The Obama budget will also deal with revenues from the alternative minimum tax. All things that should have been in the budget in the first place. It was always one of my biggest pieces of evidence that the Bush Administration was corrupt, and at heart liars.

In discussing the changes that Obama has called for, OMB Director Peter Orszag explains:
"The president prefers to tell the truth, rather than make the numbers look better by pretending."

Noam Scheiber writes that it will be "kinda helpful to have a budget that actually means something when you're debating public policy," and added the political upside to using honest budget numbers for a change: "Why not make the long-term deficit look as large as possible at the beginning of your term? Not only can you fairly blame your predecessor at that point; the bigger the deficit looks, the easier it is to show progress, which Obama will need to do as he runs for re-election. To take one example, you can't claim savings from drawing down in Iraq if you don't put Iraq spending on the budget in the first place (which Bush mostly didn't)."

John Cole offers the administration some excellent advice:
The very first thing I would do if I were Peter Orszag and company, and this is one of the very few times I actually hope someone in government listens to me, is to go back and re-score the last decade or so of budgets using the new accounting system, so when they roll this out they can say "Here is what this year's budget would have looked like under the old system. Here is what it looks like under the new system. Here are the past ten years worth of budgets under the old system. Here they are under the new system." For political reasons, this simply has to be done.

Obama Announces Plan To Keep Millions From Losing Homes

In a very bold announcement President Barack Obama laid out his $75 billion plan to tackle
the housing crisis. Calling it "a crisis unlike any we've ever known" in home foreclosures, he said his plan is necessary to help save the economy.

"In the end, all of us are paying a price for this home mortgage crisis."

"And all of us will pay an even steeper price if we allow this crisis to deepen."

President Obama unveiled the plan while in Arizona, which has been particularly hard-hit by the housing crunch. The plan he outlined is much more expensive than many experts had expected. The goal of this plan aims to keep 9 million people from losing their homes. While discussing the plan as a broad strategy, and what it will mean for the economy, the President took great care not to miss the pain that the housing problems are causing for individual families.

"The American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. While this crisis is vast, it begins just one house and one family at a time."

One part will ease refinancing for people who owe more on their mortgages than their homes are currently worth. Another provides incentives for mortgage lenders to help those on the verge of foreclosure.

President Obama cautioned that the plan will not save every home but that he believes it will prevent "the worst consequences of this crisis from wreaking even greater havoc on the economy."

His final message:

"The plan I'm announcing focuses on rescuing families who have played by the
rules and acted responsibly. It will not rescue the unscrupulous or
irresponsible by throwing good taxpayer money after bad loans."

As a person with a mortgage teetering on the edge of going underwater, I really hope his plan works.