Stimulus Bill Worked

David Leonhardt of The New York Times writes today:

Imagine if, one year ago, Congress had passed a stimulus bill that really worked.

Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now.

If that had happened, what would the economy look like today?

Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill.

Deficit Hysteria Reminiscent of Pre-Iraq-War Groupthink

Paul Krugman notes in his current NY Times column: media reports that the deficit threatens economic stability "aren't facts."

Many economists take a much calmer view of budget deficits than anything you’ll see on TV. Nor do investors seem unduly concerned: U.S. government bonds continue to find ready buyers, even at historically low interest rates.... Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment.

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

Read the whole column here.

The Republican Mortgage Crisis

To the many Americans who don't follow the business news in their local paper, when the current crisis in the financial markets made its way into nightly television news broadcasts, it seemed like it came out of nowhere. Yet for those who looked for them, there were signs that a crisis in the mortgage industry and related markets was looming for at least a year, and the irresponsible economic policies that helped facilitate it date back to the early days of the Bush administration.

The Republican Oil Crisis

As the summer driving season begins many Americans will come face-to-face with one of the Bush administration's crowning achievements — the $4 gallon of gas. Like the subprime mortgage crisis, high gas prices and the related high prices of crude oil have made their way from the business pages to front pages of major newspapers. Yet, earlier this year CBS's Peter Maer asked Bush if he had any advice for the average American facing the prospect of $4/gallon gasoline. Bush, the former unsuccessful oil man, had not heard the prediction. "Oh yeah? That's interesting. I hadn't heard that," Bush said.

The Bush administration has presided over at least a 4-fold increase in the price of oil, from approximately $30/barrel on the day of Bush's inauguration to $134/barrel as of this writing. The man who headed Vice President Cheney's task force, Andrew Lundquist, is now a lobbyist representing several of the firms that that task force interviewed, including BP, Duke Energy, and the American Petroleum Institute. Citing "executive privilege" the administration has refused to release the task force's 170-page report to the press or the public. The Bush family has had an unusually close relationship with the Saudi royal family dating back at least to 1986 when "Poppy" Bush convinced the Saudis to limit oil production. In the current administration former Saudi ambassador Prince Bandar had such privileged access to "Junior" that he was given the nickname "Bandar Bush."

Strangers In a Strange Land

Updated May 21, 2006

The US has always been a nation of immigrants. Native Americans were themselves migrants. In the 1700s the English settlers feared that the wave of Scots-Irish immigrants would hurt the economy and bring crime and immorality. Actually the Scots-Irish solved a national security problem by increasing the US population enough that it could expand westward. The Irish immigration in the 1840s and arrivals from southern and eastern Europe in the 1880s followed similar patterns. Those already living in the US feared economic and social distress, but the influx of humanity populated the continent, and provided the industrial workers and soldiers needed to establish the US as a global power. The nation is once again caught up in a contentious debate over immigration. The issue has divided the Republican party, threatens to influence the coming congressional election, and exposed racial and ethnic tension.


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