Things look even worse in black-and-white
The photo above is the first recent photo published by a news media in the United States with an unmistakable Great Depression look and it’s very disturbing. It’s as if the boogieman has been kept at bay for 75 years and is now returning in what, more and more each day, appears to be a worst case scenario for the US economy along with the rest of the world. More here.
Murphy’s Law, the Peter Principle and Barack Obama
Kyle-Anne Shiver asks “What happens when everything that can go wrong in a person’s character formation does go wrong, and that person continues to be promoted to his level of incompetence? President Barack Obama happens. I’m well into my sixth decade of life and have yet to see a more perfect collision of Murphy’s Law with the Peter Principle in a single individual.” More here.
Murphy’s Law: Whatever can go wrong will go wrong.
Peter Principle: A person tends to rise to their level of incompetence.
US Congress Gives Final Approval to $787 Billion Stimulus
The US Congress gave final approval to President Barack Obama’s $787 billion economic stimulus package in hopes of wresting the economy out of recession through a mix of tax cuts and federal spending. The Senate approved the package 60 to 38 with three Republicans joining Democrats in voting “yes.” Earlier, the House passed the measure 246 to 183 with no Republicans in favor and seven Democrats opposed. The bill, Obama’s first major victory on Capitol Hill, now heads to his desk to be signed into law. More here.
US federal obligations exceed world GDP
The true deficit of the US federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world. More here.
David Harvey explains why the U.S. Stimulus Package is Bound To Fail. More here.
US Is Making Same Mistakes That Led To Japan’s Lost Decade, Say Analysts
Experts on the Japanese financial crisis, which culminated in 10 years of stagnation known as the “Lost Decade,” are fearful that the United States is making similar mistakes with its recent bailout efforts. More here.
The stimulus plan is a spending plan whose aim is to put money in people’s pockets so that they in turn will spend that money. That’s the vision. That’s why President Obama says that we cannot worry about deficits right now. We’ll deal with deficits later, he says. Right now we have to get people spending again. More here.
Download the Stimulus Bill at propublica.org.
The Stimulus Plan: A Detailed List of Spending. Link here.
The Stimulus Plan: The Tax Cuts. Link here.
The Great Crash of 2008 – A Geopolitical Setback for the West
Roger C. Altman, Chair and CEO of Evercore Partners and former US Deputy Treasury Secretary in 1993-94, forecasts in Foreign Affairs that “The financial and economic crash of 2008, the worst in over 75 years, is a major geopolitical setback for the United States and Europe. Over the medium term, Washington and European governments will have neither the resources nor the economic credibility to play the role in global affairs that they otherwise would have played. These weaknesses will eventually be repaired, but in the interim, they will accelerate trends that are shifting the world’s center of gravity away from the United States. More here.
How The World Almost Came To An End At 2PM On September 18 More here.
Failure to Rise
Paul Krugman says that by any normal political standards, this week’s Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne! Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams. More here.
How the Crash Will Reshape America
The crash of 2008 continues to reverberate loudly nationwide—destroying jobs, bankrupting businesses, and displacing homeowners. But already, it has damaged some places much more severely than others. On the other side of the crisis, America’s economic landscape will look very different than it does today. What fate will the coming years hold for New York, Charlotte, Detroit, Las Vegas? Will the suburbs be ineffably changed? Which cities and regions can come back strong? And which will never come back at all? More here.
Statesmanship, Failure of….
Zenpundit notes that President Obama’s biggest political headaches in the next four years will come not from Republicans or Rush Limbaugh but the cosmically egocentric and ideologically blinded Boomer cadre in the House Democrats. A global economic crisis and they seized an opportunity to pass an incoherent host of nickel and dime appropriations on their leftwing wish list along with huge giveaways to special interests that rival anything constructed by Bush-Paulson. They have managed to make an $ 800 billion dollar stimulus bill “non-stimulating”. That takes some doing to waste three quarters of a trillion dollars without anticipating any economic growth, even as spillover benefits, at a time of rising unemployment. More here.
More on the New Horizon
Americans know that Obama announced his candidacy on certain principles and positions on the issues that are now, well, “problematic” — 1) campaign financing reform, 2) coal burning, 3) nuclear power, 4) off-shore drilling, 4) NAFTA, 5) hand-gun control, 6) capital punishment, 7) the surge, 8 – withdrawal from Iraq, 9) FISA, 10) the Patriot Act, 11) renditions, 12) talking with Iran, 13) Jerusalem, 14) lobbyists and ethics and on and on. Most are silent about this metamorphosis, since the change from his initial positions was in many cases for the good. I agree that the newer Obama is far more realistic than the 2006-7 version. Some welcomed common sense I guess trumps the charge of hypocrisy. More here.
G-7 Says ‘Severe’ Downturn to Persist, Vows to Reverse Slump
Group of Seven finance chiefs vowed to tackle a “severe” economic downturn that will persist for most of 2009 without spelling out new steps to do so. More here.
Europe’s economic slump deeper than expected
Europe sank even deeper into recession than the United States in the closing months of last year, according to figures published Friday, as finance ministers of leading industrialized nations gathered in one of the worst-affected countries, Italy, for discussions on the crisis. In the fourth quarter, the economy of the countries sharing the euro declined by 1.5 percent, according to the European Union’s statistics office. That is even worse than the 1 percent decline in the US economy during that period, compared with the previous quarter. More here.
Dani Rodrik: Coming soon – Capitalism 3
Those who predict capitalism’s demise have to contend with one important historical fact: capitalism has an almost unlimited capacity to reinvent itself. The real question is not whether capitalism can survive — it can — but whether world leaders will demonstrate the leadership needed to take it to its next phase as we emerge from our current predicament. More here.
No ordinary recession
Axel Leijonhufvud at VoxEU says “This recession is different. Balance sheets of consumers, firms, and banks are under strain. The private sector is bent on reducing debt and this offsets Keynesian stimulus more than standard flow calculations would suggest. Bank deleveraging is by far the most dangerous. Fiscal stimulus will not have much effect as long as the financial system is deleveraging. This is not an ordinary recession that differs from other recent episodes simply by being somewhat more severe. It differs in kind.” More here.
Could this be the beginning of the end of nation-states?
Dani Rodrik is right in saying that the next phase in capitalism will entail a major change, and the change will mainly account for the increase of globalization. In my view, that change, more than anything else, will be labor mobility. Everything else in the world is mobile – capital, technology, products, entire businesses. But one crucial aspect of enterprise isn’t, and that’s people. This has resulted in a severely lopsided globalization process. More here.
The best stimulus plan: What country are you?
What is the best stimulus plan to get the economy going again? The answer to this may depend on what country you come from. Your government is likely picking the biggest focus of its stimulus package based on how it understands how your local economy works. More here.
Why Nurture Russia’s Illusions?
Excessive deference only strengthens Putin’s hand. More here.