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12.04.08 -- 4:09PM // link | RECOMMEND RECOMMEND (1)

Neo-Hooverite Republicans

I'm listening to one-time DC celeb Fred Thompson on Neil Cavuto's show on Fox talking about the virtues of economic retrenchment as opposed to fiscal stimulus as a way to deal with the faltering US economy. I'm hearing this here and there from a few Republicans. But I'm curious how much this is coalescing into an opposition position.

--Josh Marshall

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12.04.08 -- 3:48PM // link | RECOMMEND RECOMMEND (1)

India Update

As we just flagged in our breaking news section, there were initial BBC reports moments ago of up to six gunmen shot by Indian security forces at the airport in New Delhi. But the BBC now seems to be dialing that report back, now only saying there were shots fired, with no details about who they were shot at or whether anyone was injured. Meanwhile, there seemed to be no word on this in the English-language Indian press -- other than a few reports sourced back to the BBC. And they're now putting 'shootings' in quotes. We'll keep following this closely. But great caution seems warranted about those initial reports.

Late Update: Now it's been dialed back to a report of "sharp sounds" that the airport officials are now investigating. So, well ...

--Josh Marshall

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12.04.08 -- 2:35PM // link | RECOMMEND RECOMMEND (4)

TPMtv: STONE ZONE, Part II

We bring you more of our conversation with legendary political operative Roger Stone. In this installment Roger tells us what he sees as the current state and future of the Republican party ...

Full-size video at TPMtv.com.

--Ben Craw

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12.04.08 -- 2:00PM // link | RECOMMEND RECOMMEND (5)

Can't Spend Fast Enough

Let me follow up on what I just wrote below about Krugman's and Atrios's views on our difficulty in finding ways to spend on stimulus quickly enough to pull the economy out of its nosedive. We're not just looking for ways to spend -- capital projects like major infrastructure spending -- but also ways to prevent things that will force an even more rapid deterioration -- like big budget cuts by state and local governments (Atrios's point.)

I'd be very curious to hear from the real economists on this one. But if these assumptions are right (and I assume they are) I do not see how they do not become the major factor in the auto maker bailout discussion. Whatever we think of the long-term or even the medium-term fate of the US auto industry, it's hard to think of many other stiff accelerants to the downturn than one of more of the big automakers going bankrupt any time in the next year.

For all sorts of reasons, we couldn't broadcast the idea that we're just propping up these companies in the near term as a de facto stimulus effort or as a way to keep money flowing into people's pockets (nor am I proposing that approach, as opposed to a plan which keeps them spending and employing while also laying the groundwork for longterm health). But if Krugman's prognostications are right, it's not clear to me that such an effort would not justify itself in macro-economic terms.

--Josh Marshall

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12.04.08 -- 1:36PM // link | RECOMMEND RECOMMEND (1)

Parachute Won't Deploy

The best indicator of the severity of our economic crisis is the fact that there now appears to be a broad, party-transcending consensus in favor of levels of stimulus spending that would have been treated as preposterous only a couple months ago by all but the most left-leaning economists. But in this post this morning Paul Krugman suggests that we may not be able to spend the money quickly enough "to pull the economy out of its nosedive before unemployment goes into double digits."

The point here is that no matter how much money you're willing to spend, you need some level of planning and preparation before you can start hiring contractors and paying people to do anything.

Now, when it comes to unemployment, 'double-digits' covers quite a bit of territory. To provide some perspective, unemployment topped out at just over 10% in the 1982 recession and about 25% in the Great Depression. So I'd be curious to hear from Krugman and others which end of the spectrum we're talking about.

(ed.note: I'd add to this that Krugman's point is a good reminder of why it's nice to have some real economist as part of the conversation. I've been sort of disappointed to see the degree of emphasis on aid to states and local governments as opposed to major capital projects and green R&D in the initial round of spending. But as Krugman suggests and Atrios makes explicit, a lot of my concern in this regard is likely misguided when you take these realities into account ... Ed Kilgore expands on the point about spending by state and local governments.)

--Josh Marshall

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12.04.08 -- 1:15PM // link | RECOMMEND RECOMMEND (15)

Back at Wall Street?

TPM Reader AB's thoughts ...

I believe the "don't reward bad management" argument about the prospective Auto Industry bailout is a red herring, which I'll explain below.

First, to add to the irony of the Auto Industry treatment vis a vis the Financial Sector Bailout, remember that in large (if not whole) part, the Financial Sector is directly responsible for the Auto Industry's current situation.

Which brings me to the red herring issue. The Auto Makers just released their sales figures and sales across the board were down over 40%. No industry can absorb those kinds of losses. Now the problem isn't that in the last year more than 40% of buyers in the auto market had a revelation and decided they absolutely needed hybrids, or fully electric cars. These sales are off because of tight credit and uncertainty about the economy as a whole, including the housing market.

I have no problem using the bailout to get "green" concessions from the companies who have been heretofor resistant. But using it for some sort of morality play while messing with real people's real jobs (people who can't just transition easily into other fields) is wrong.

--Josh Marshall

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12.04.08 -- 12:40PM // link | RECOMMEND RECOMMEND (12)

The Disconnect

I have no brief for the auto companies. Clearly, their plight is due to years, decades of mismanagement -- much more than the demands of their unions, and in many cases because they've spent years lobbying Washington to stop the kinds of regulatory changes that might have helped them on the way they're now going to have to go now. But there's no ignoring the massive disconnect between the controversy, attention, number of hearings and general controversy over the relatively small number of dollars it would cost to bailout the auto makers.

I want to be clear: what I'm saying here is not necessarily that we should go easier on the automakers or that we act carelessly about allowing the banking system to collapse because it's managers have acted like idiots. But I do think a big, not very good, and really underappreciated reason for the disjuncture is that the auto makers are structured in a way, are economic entities in a way, that most of us can have some basic understanding on how they operate, what they do. And to the extent that they've been habitually mismanaged we are, as a country, understandably reluctant to reward incompetent management. On the other hand, I think the financial services giants are getting some level of a free ride because a lot of us (and this would seem to include some of the people running the big financial services giants) just have a really hard time understanding what it is they even do or how their fundamental business model works.

--Josh Marshall

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12.04.08 -- 12:39PM // link | RECOMMEND RECOMMEND (19)

Another Perspective

TPM Reader MM sent this in a couple of days ago:

For years, the complaint was that the auto companies were full of insular 'car guys' who failed to appreciate how business was being done in the modern era. So Ford and Chrysler went out and grabbed successful CEOs from outside the auto industry to turn things around, and these CEOs are now supposed to agree to a wage of $1 a year to atone for mistakes made before they arrived to clean things up. I can't wait for the tsunami of business talent that will soon be pouring into America's most important manufacturing sector.

Citi sucked up $25 billion to no discernible effect, then got a check for $20 billion more and $300 billion + in loan guarantees. AIG has received over $100 billion. Where are the demands that their CEOs turn their corporate jets into tin cans, and reduce their salaries to $1 a year? Since when do banks and investment houses get a free pass for their short-sighted decisions and overpaid employees?

I agree that the auto execs could have done a better job of public relations. But let's remember that the CEOs of the financial companies did not have to do anything at all for their $700 billion. They were not dragged in front of Senate committees to endure Star Chamber treatment. Treasury officials fly to them, go to their offices and work the phones to find buyers and bridge financing to get them through this recession. Failing that, Treasury and the Fed open the money floodgates, and give them whatever they want. ...

Here's a dispatch from 'flyover' country: the millions of workers who depend on the auto companies and their suppliers, and the even more millions of workers who depend on the spin-off from them, have noticed the double standard. A couple of contracts ago, the UAW negotiated a national holiday on election day so its members could work phone banks and drive voters to the poles. The UAW and other industrial unions have donated millions of dollars and thousands of hours to Democratic causes and candidates over election cycles that go back before you or I were born.

It is easy to make fun of the car companies and their execs, especially for those whose prejudices and information about manufacturing in the US are 20 years out of date. But denying bridge loans to the auto companies would screw a social movement that has stood by Democratic candidates and causes since WW II.

This year, we won a huge victory in (large) part because the sons and daughters of Reagan Democrats became Obama Democrats. Those voters are watching, and waiting. They have a hell of a lot of skin in the game, and they will remember what the party does on this issue.

--David Kurtz

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12.04.08 -- 12:39PM // link | RECOMMEND RECOMMEND (4)

As Georgia Goes, So Goes the Nation

With the Republicans winning a senate seat in Georgia, can the collapse of the Democratic party be far behind?

--Josh Marshall

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12.04.08 -- 12:31PM // link | RECOMMEND RECOMMEND (16)

Jayhawk Bald Eagle Blogging

On the road today for a conference on the 2008 elections at the Dole Institute, which is affiliated with the University of Kansas. I'll be bringing you more from here later today and tomorrow, where there will be a series of panels featuring speakers who were directly involved in the campaigns, and others, like myself.

In the meantime, this bald eagle was perched right outside my hotel room window this morning on the banks of the Kansas River. Pardon the cell phone cam quality.

--David Kurtz

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12.04.08 -- 12:03PM // link | RECOMMEND RECOMMEND (25)

And We Think Our Politics is Fun?

I mentioned a couple days ago how Canada's Tory Prime Minister had managed to act with such hubris, economic stupidity and desire to castrate the political opposition that he'd manage to galvanize the three very disparate opposition parties into organizing what amounts to a constitutional coup against Harper's government.

How this works is that Harper got close to a majority in the recent election. But not quite. So he's running a minority government. So if the two parties of the center-left and left could team up with the Quebec secessionist party, they could boot Harper with a simple vote of no confidence in his government. And Harper had pushed things so far that that's precisely what was about to happen.

So now Harper has gone to Governor General Michaelle Jean (technically an appointee of Queen Elizabeth II, Canada's head of state) and received permission to suspend Parliament until January. In other words, he's just shut the legislature down so it can't do anything.

--Josh Marshall

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12.04.08 -- 11:52AM // link | RECOMMEND RECOMMEND (34)

Off Message

I'm very gung-ho on using as much of this stimulus money as possible to jumpstart a green economy. That's actually the major shortcoming I see in most of the proposals I've seen on how this 500 or so billion is going to be spent. But I'm not sure I get the response to Obama's apparent decision to shelve the windfall profits tax on the big oil companies. As the name implies, windfall profits taxes are intended to tax windfall profits. But the cost of oil has now dropped to something like a third of what it was when this idea was floated. So I'm really not getting how this is breaking a promise or currying favor with the oil companies. This seems like a pretty straightforward case of adjusting policy to take account of demonstrable and undeniable changes in the economic picture.

What am I missing?

--Josh Marshall

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12.04.08 -- 11:18AM // link | RECOMMEND RECOMMEND (7)

They Speak!

They're still not saying much specifically publicly on policy issues, but the transition team tells TPM Election Central that Obama remains committed to rolling back oil company subsidies.

--David Kurtz

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12.04.08 -- 9:29AM // link | RECOMMEND RECOMMEND (10)

Relapse!

Paulson: Give me one more hit of cheap credit, man, and then I promise to straighten out.

--David Kurtz

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12.04.08 -- 9:21AM // link | RECOMMEND RECOMMEND (1)

Election Central Morning Roundup

Is Chris Matthews really going to run for U.S. Senate? That and the day's other political news in the TPM Election Central Morning Roundup.

Late Update: Matthews trailing Senator Arlen Specter by only three in new poll. --gs

--David Kurtz

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12.03.08 -- 7:52PM // link | RECOMMEND RECOMMEND (35)

No Transition From Nonsense

Congressional Quarterly bemoans Obama's broken promise of a bipartisan cabinet since he's only appointed one Republican to one of the top three positions in government -- State, Defense and Treasury ...

Now that President-elect Barack Obama's Cabinet is, by his count, half picked, the odds are fading that he'll have more than one Republican on his team -- suggesting that his campaign promise to include Republicans may have meant nothing more than the usual token appointment from the other side.

Obama did attract a lot of attention by asking Robert Gates to stay on as Defense secretary, and liberals have debated whether he's the right man to oversee a withdrawal of troops from Iraq. But that debate overshadows the fact that Gates isn't likely to have much, or even any, company. Of the Cabinet jobs that are left at this point, virtually all are domestic policy positions that would be hard to give to a Republican without prompting vicious internal fights, and it's almost impossible to find Republicans who have been mentioned as candidates for any of them.

I guess maybe it's a slow news period and there's not much to write about. But this is about as nonsensical as it gets. In recent decades it hasn't been particularly common for presidents to have any appointees from the opposite party. And when they do it's usually like Bush appointing Norman Minetta to be Transportation Secretary, a secondary cabinet post of no real consequence to the president in question.

Obama's put not only a Republican but his predecessor's choice in charge of the Pentagon. He's also named as his National Security Advisor a retired general who appears also to be a Republican, albeit one who was advising Obama during the campaign and not a particularly ideological sort.

I don't have any problem with Obama's cabinet picks so far. But it's certainly true that Democrats with a high partisan profile haven't figured prominently among his major appointments, with the notable exception of Rahm Emanuel.

I guess the idea is that Obama could only have come through on his promise of governing in a bipartisan spirit by staffing a cabinet with half Democrats and half Republicans.

Go figure.

--Josh Marshall

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12.03.08 -- 5:11PM // link | RECOMMEND RECOMMEND (8)

TPMtv: The Day in 100 Seconds

--Ben Craw

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12.03.08 -- 4:18PM // link | RECOMMEND RECOMMEND (9)

Big Bail

Bob Reich explains why Wall Street beats out schools for the bailout bucks.

--Josh Marshall

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12.03.08 -- 4:00PM // link | RECOMMEND RECOMMEND (11)

Could Get Interesting ...

Seems that special prosecutor tasked with investigating various possible criminal acts in the US Attorney firing scandal has been in touch with our old pal Alberto Gonzales.

--Josh Marshall