progressive involvement

Did we learn nothing from the Great Depression?

"It has become evident that the White House is not serious about ending the spending binge that is destroying jobs and endangering our children's future."

Speaker John Boehner to his House colleagues

We are not on a "spending binge"--would that we were!  What's more, spending does not "destroy jobs."  Spending creates jobs.

In a recession or depression, the government should spend precisely because other sectors do not or can not.  Banks and business don't.  The people can't.  Yet, when spending pulls back, that only makes the problem worse.  Somebody needs to spend something, and the government is the only entity that can.

Critics say, quite predictably, that it wasn't the New Deal that pulled the country out of depression, but rather World War II.

Set aside for the moment whether or not this is true, and recognize that this very point concedes the argument.  How did World War II help the economy?  By massive government spending.  This caused huge deficits, bigger than now, which was paid down after the war by having more people in more jobs.  Moreover, government spending on great national tasks, such as defense and the interstate highway system, helped.

To the previous point, with one exception, unemployment went down every year from 1933-1940 thanks to FDR's New Deal policies.  In 1937, FDR bowed to conservative pressure and cut back government spending.  Unemployment went up in 1938.

 

 

The New Deal lives!

In Sweden.  The Swedish economy is "growing rapidly, creating jobs and gaining a competitive edge. The banks are lending, the housing market booming. The budget is balanced."  Annual growth in the first quarter was 6.4%.

How did they do it?  First of all, they built up a surplus, which we would have had here if we had continued President Clinton's policies.  The surplus gave them additional fiscal resources and leverage.

They spent more when times were bad.  The Swedish social safety net kept money in the economy.  Sweden didn't need a stimulus because the safety net was the stimulus.

They kept interest rates low--near zero, even under zero in some cases.  They've recently begun raising interest rates, all the way up to 2%, because the economy has been so robust.  They also let their currency fluctuate in value which made some Swedish products more competitive in price.

The government also acted to back up the banking system.  The banking system itself had been more conservative in its policies because of Sweden's banking problems in the early 1990's.  

...the Swedish banking system seems to have held up okay because the pain of the early 1990s was severe enough as to scar both bank executives and regulators, leaving them with little temptation to go into risky real estate lending in the mid-2000s, even when the rest of the world was doing just that. 

Budgetary rules and bank supervision were strengthened, says the Economist.  As Cecilia Hermansson, chief economist of Swedbank, put it, "After the crisis in the ’90s, it was clear we needed to be more conservative and careful...burn your tongue once on hot milk and you will start blowing on yogurt.”

 

 

Chart of the Day

That little "blue blip"?  Those were the Clinton years, when the government ran a surplus.

The chart puts the lie to the assertion that federal revenues are increasing, as Sen. DeMint said just the other day.

Dirty trick costs Wisconsin citizens $400,000 and didn't even work

At least $428,000, according to the Milwaukee Journal, and that's a low-ball number.  It will probably wind up being at least triple that.

The Democratic primary was today, and all the "fake Democrats" lost.  The "fake Democrats" were candidates recruited to run in the Democratic primary by the Republican party.  

The main reason for this utterly craven endeavor was to draw out the process by an additional month.  Had there been no primary, the general election would have been today.  This gives the state senate, still in GOP hands, time to redistrict--time to cook the books, in other words, as they're being shown the door.  This subverts Wisconsin's historic process, though is probably legal, technically speaking.

They know they're in trouble in at least three or four of these races and thought they would benefit by having the month to campaign.  They could also use up Democratic resources, while money is not an issue on their side.  They blew through quite a bit of cash just trying to elect these "fake Democrats."

In their giddier moments, some probably hoped that they might have a chance of getting lucky and maybe upsetting one or two of the legitimate Democratic candidates, but twas not to be.    

In brighter news, Wisconsin Supreme Court Chief Justice William Prosser, Gov. Walker's buddy, hasn't strangled anyone yet today. 

Right-to-life group lying to Wisconsin voters

Today is primary election day in Wisconsin.  It would have been general election day for the several recalls in process, but the GOP ran some ringers in against the Democrats so now there has to be a primary, which is today.

Some right-to-life outfit, possibly Wisconsin Right-to-Life, has been actively trying to suppress the vote by calling Democrats and telling them that their absentee ballot has already been sent and they don't need to vote.

If they can suppress the regular Democratic vote, they're hoping that GOP crossovers might pull a few of these ringers across the finish line.  If that happens, the GOP senator facing recall is suddenly off the hook.  It's not likely to happen, but they appear to be pulling out as many stops as they can.

National Democrats should watch and learn

Gov. John Hickenlooper fires the entire Colorado Gaming Commission after they lowered taxes on casinos thereby increasing the tax burden on the already strapped middle class.

Told that the move might invite criticism, Gov. Hickenlooper reportedly said, "Bring it on."

“We don’t believe the Colorado gaming industry should be judged reasonably unprofitable or unhealthy at a time when some casinos are making major multimillion dollar investments in one of the worst economic periods in our nation’s history,” Hickenlooper said.

Speaker of the House Frank McNulty complained because he wasn't consulted.  Most likely, he wasn't consulted because Hick doesn't care what he thinks.

Conservatives rejoice!

Thirty-nine thousand public sector employees lost their jobs last month.  Conservatives say:  May their tribe increase!

What to do? Cut the deficit, of course

This chart shows jobs as a percentage of population.

Should the name of the United States be changed to Bizarro-world?

Sen. Orrin Hatch thinks it's all right not to ask anything of rich people, but, by golly, the poor and the middle class need to pony up!

In other words, the people who drove the car into the ditch can slink away from the wreck leaving the rest of us to pay for the repairs.

Heads they win, tails we lose

Atrios notes that the New York Times is better at truth-telling about European bankers than American bankers.  He noted this item in today's paper by Floyd Norris in which he states:

As the tear gas cleared in Athens this week — and the Greek Parliament agreed to a new round of austerity that will raise unemployment and prolong a debilitating recession that almost certainly will ensure that the latest fiscal targets are missed — the critical concern seemed to be making sure that no financial institution will ever have to admit making a bad loan...

As negotiations proceeded in Europe this spring over Greek Bailout II, Mr. Trichet laid down a line in the sand: Nothing must be done to force banks to take losses on the bad loans they have made to Greece.

Plutocrats win again.  The rest of the Greeks each pay $15,000 a year more.