Monday, February 22, 2010

Economists Predicting Healthy Growth

The growing consensus view is that the economic recovery will be healthy over the next couple of years.

Let me say something about job creation and unemployment. We are on the verge of monthly job creation and should generate about 200,000 new jobs per month by the middle of the year. When President Obama took office we were losing nearly 800,000 jobs per month. So that is a remarkable turnaround.

However, unemployment won't decrease dramatically for at least another year. We need to create 100,000-120,000 jobs per month just to keep up with the growing working population. In addition, as many of the discouraged workers who are not currently looking for a job start to actively look for jobs they will be counted as unemployed. The Bureau of Labor Statistics has always removed them from the unemployment rate because they are not active job seekers.

The Stimulus is working as it was designed to and there is growing evidence to support the benefits of the program.

Governator Slaps Down Republican Hypocrites

Nice to see Schwarzenegger telling it like it is about his fellow Republicans.

More on Republican Hypocrisy

The Stimulus is evil and horrible - the worst policy ever. Please give me some so I can create thousands of jobs in my state.

That is basically what many Republicans are saying. Ridiculous.

Friday, February 19, 2010

Inflation Tame

The consumer price index (CPI) came out today. It is a measure of how much prices are increasing from month to month. When it is growing rapidly then we have a problem with inflation. The CPI was up .2 percent for January, and the CPI excluding food and energy was actually down .1 percent. This has been largely the case for months, which means that inflation is not an issue right now.

With all of the debt, increased liquidity pumped in by the Fed, rising oil prices, and concerns about dollar deflation it is natural to be concerned about potential inflation. However, there is a worldwide crisis that has resulted in the same problems for everyone. If the U.S. was the only one in trouble we would see a rapidly rising CPI, but we don't.

The Fed has already signaled that it is going to raise rates in the latter part of the year. This will suck up some of the liquidity and should help strengthen the dollar. It will also work as a damper on possible future inflation. Again, it looks like things are being managed fairly well from an economic standpoint.

Thursday, February 18, 2010

Stimulus Discussion for the Day

The NY Times had a good piece about the Stimulus yesterday - it is clear that economists are overwhelmingly supportive of the benefits of the Stimulus - contrary to what ignorant folks who really do not understant economic data think (e.g., Republican idiots in Congress).

The WSJ has a piece today that talks about the fact that only about a third of the money that has been spent/budgeted to date has gone for tax cuts and to cover state spending shortfalls. This year, Stimulus money is going to increase toward infrastructure spending. This will allow the progress to continue and will bring the unemployment number down.

We aren't going to get rapid decrease in the unemployment figure, even as hundreds of thousands of jobs are created each month in coming months. The reason is that many discouraged workers who are not looking for work will start looking as the economy continues to improve. This will increase the numbers of official unemployed folks. In addition, the working population is increasing. In the end, we need about 100,000-120,000 jobs per month just to keep the unemployment rate flat over the longer period. I think we will see about 200,000 jobs per month created by about mid-year which will start to slowly trim the unemployment rate.

FYI, there is good transparency on the Stimulus bill. For anyone who is interested, you can see where the money is going and what the tax cuts are.

Wednesday, February 17, 2010

MSNBC's Rachel Maddow - guest DNC Chair Tim Kaine - GOP Hypocrisy on the march

This further explains how hypocritical Republicans are.

Stimulus is Working

The very conservative Wall Street Journal has had a couple of stories over the last few months about the effectiveness of the Stimulus Bill. These Republicans who are demonizing it and claiming that it has been a waste absolutely do not know what they are talking about - or they are willingly lying (take your pick).

Yesterday, the WSJ identified Republicans who have written letters to the Obama Administration asking for Stimulus money and pointing out the job creating benefits of the money. They put these requests in writing on their official letterhead and then they get in front of cameras and say the Stimulus doesn't work and is evil. Ridiculous.

Not satisfied with the WSJ? How about the conservative Washington Times story from last week?

Republican presidential hopeful, Minnesota Governor Tim Pawlenty bashes the Stimulus regularly, but fails to remind folks that one third of his state's budget is being paid for by the Stimulus.

Here is a summary of many of the Republican hypocrites who say one thing to the public about how evil they think Obama's Stimulus has been, but then beg for money and refer to the job creating benefits of the Stimulus in their requests to the Obama Administration.

Monday, February 15, 2010

Rachel Maddow Calls Out Republican Rep. Aaron Schock For His Stimulus Bill Hypocrisy

Schock is an complete idiot. He voted against the bill, but then shows up at an event crowing about how he secured money for his district. HYPOCRITE.

FYI, the Stimulus Bill was nowhere close to the largest spending bill in history. Nearly $300 billion of the bill is for tax cuts. The spending that he is complaining about comes to about $500 billion. The annual defense budget is over $600 billion so you have to be an idiot or a liar to try to claim that this was the largest spending bill in history.

On top of that, the Stimulus bill is working. GDP is now growing rapidly and we went from 750,000 job losses in January 2009 to 20,000 job losses in January 2010. We are now on the verge of sustained economic growth and significant job creation.

Economic Progress

There is no question that the markets and GDP are stablized and growing. We are on the verge of major job creation.

The Dems need to embrace the Stimulus and talk about how it has worked. Middle class Americans got almost $100 billion in tax relief, infrastructure projects are now starting to kick in, and the job losses have subsided. As 2010 rolls on, we will start to see the jobs numbers improve. I've said it for months and it is going exactly as I have expected.

The next phase of the economic policies should be to control inflation and start to address the budget deficit. The Fed has signaled that rates will be rising in the next 4-8 months. That is appropriate if we continue to see GDP growth. The deficit will get trimmed as the economy grows and more tax revenue flows in from increased economic activity - but that is not enough to address the enormous deficit. President Obama has to address entitlement programs like Social Security and Medicare. It won't be popular, but health care reform is critical. It is the major driver of government deficits. We'll see what happens.

Tuesday, February 02, 2010

Civilian Trials for Terror Suspects

The Republicans are bitching and moaning about holding civilian trials for terror suspects. You have Lindsay Graham and John McCain threatening to withhold funding for civilian trials. This is absolute nonsense.

Civilian trials worked for the 1993 WTC bombers, for "20th hijacker" Zacarias Moussaoui, Richard "the shoe bomber" Reid, and Jose Padilla. The latter three were all done under Bush.

Not one single military trial has been held because of the hopelessly poor rules that Bush created for military tribunals and the violations of civil rights that have tainted much of the evidence. But that isn't stopping Republicans from again leading an attack on President Obama's policies.

In the end, if we are to be an example of what it is to be a nation of laws and fundamental liberties and justice, then holding fair trials in civilian court is the only sensible option. It is clear that terror suspects - some of whom have been locked up for years without formal charges - need some process and that military tribunals haven't been effective.

Monday, February 01, 2010

Mike Martz is the Bears OC

I like the choice. Martz is a smart guy and he comes up with creative game plans. He is known as a pass happy guy, but when he was at his best and the Rams were in the Super Bowl they did it with a very effective rushing game with Marshall Faulk. Hopefully he will go back to getting that kind of mix together.

I didn't mind the time the Bears took, but I am not too happy with making Jay Cutler such and integral part of the selection process. That said, it is is what it is, and I'll hope that Jay will reward the team with good play.

One thing is for sure, there will be a lot of interest in seeing how Martz and Cutler come together this year.

WTF is Wrong with the Republican Party?

Jeez, what do Republicans stand for anymore? In the last week, they voted against re-instituting PAY-GO rules in Congress. PAY-GO was simply a requirement that if Congress created a new program to spend on, the money would come from some other source (i.e., cut some other program). They voted against the creation of a bi-partisan commission to hammer out deficit reduction solutions. The even refused to applaud President Obama during the State of the Union when he listed the tax cuts from the stimulus bill that millions of Americans have gotten THIS YEAR.

In the Senate, the Republicans are filibustering EVERY single thing. It is the first time in history that the minority Party is being so ridiculous.

In the end, these idiots are going against their own previously held beliefs and refusing to cooperate like a bunch of elementary school kids throwing a tantrum. All because they hate Obama and just refuse to work with him.

UVA Basketball Rising

The Cavs took a tough loss against Virginia Tech after losing to Wake Forest. They were up 10 against Tech with just under 3 minutes to go and ended up losing in OT.

After those two losses, they had to travel to North Carolina last night. I'm sure Carolina was thinking they would win that game - instead the Cavs tore apart Carolina. They went on an 18-0 run in the second half and cruised to an easy win.

I like Tony Bennett and think he has a great demeanor. It is clear the Cavs know how to play team D and have a chance at making the NCAA tournament.

President Obama's Approval Numbers

President Obama finds himself with approval numbers hovering at about 50 percent. They are down about 15-16 percent from where they were when he took office, but given how bad the economy is, I think he should feel pretty good.

When he took office only 23 percent of the country thought we were on the right track. Today it is 36 percent, although in the summer it had gotten into the mid-40s.

With GDP clearly rising - as opposed to cratering for most of the last year of Bush's term - and jobs figures showing a clear improvement from the steady decline we saw under President Bush, President Obama is set up to see his numbers improve as the fortunes of the country continue to improve under his leadership.

Republicans are crowing about elections in Massachusetts and Virginia, but as the year unfolds and it becomes more and more clear that the Dems stimulus package worked and that Republicans were flat out wrong, they won't have any momentum in the mid-terms.

At this point, what the Obama administration needs to do is continue to push for the agenda it has set. Middle class tax cuts, allow the Bush tax cuts on those making $250,000 or more to expire, education tax credits, etc. make sense on the tax side. Health care needs to be broken up so that we get reform. It is coming and can pass if the Dems just stop trying to package one mega-bill and break it up. Addressing portability, the horrible Medicare Part D (drug coverage) Bush totally messed up, pre-existing conditions, and taking away the anti-trust exemption health care firms have would all pass. We would get better, more expansive, and cheaper coverage right away - and ultimately that is the goal.

Obama's Proposed 2011 Budget

President Obama has sent his proposed budget to Congress. It sets government spending at $3.83 trillion and projects a $1.56 trillion deficit.

To put this into perspective, the 2009 FY spending came to $3.52 trillion and we saw a deficit of $1.41 trillion. President Bush was largely responsible for those figures. At most - and this is very aggressive accounting - you could attribute about $100 billion in spending and $200 billion of the 2009 deficit to President Obama. There was an additional $100 billion in new spending that went into effect for cash for clunkers and stimulus spending, and there were about $100 billion in tax cuts that shrank government revenues.

In any event, spending is up 8 percent over a two year period - which is very reasonable government growth considering that two thirds of federal spending is non-discretionary (it is pre-set by law; think Social Security and Medicare). In addition, I can virtually assure anyone out there that the deficit will be far less than $1.56 trillion. The economy is improving and the way government budgeting is done, you always overestimate so that you can take credit for beating your numbers at the end of the year.

I am expecting to see a realized deficit of about $1 trillion in 2011. Enormous, but it will be much better than what Obama was left with.