“Drug-Addled Wrong”: Mitt Romney Condemns The Auto-Industry Rescue
Looking back over the last three years, there’s arguably no better example of a policy Republicans got wrong than the rescue of the American auto industry.
When President Obama launched his ambitious policy in 2009, he was taking a major gamble — not only with the backbone of American manufacturing, but with his presidency and its ability to use the power of government to repair a private industry facing collapse. As First Read noted at the time, “As the GM bailout goes, so goes the Obama presidency.”
We now know the gamble paid off. Chrysler has posted its first profit in 15 years; GM is building new American facilities; and plants are operating at a capacity unseen in a long while. General Motors went from the brink of total failure to reclaiming its spot as the world’s top automaker, and as the Wall Street Journal reported earlier this month, “The auto industry hasn’t just turned the corner. It’s starting to accelerate.”
Had it not been for the Obama administration’s policy, these heartening headlines would have been impossible. And yet, Mitt Romney still isn’t happy.
In a new Detroit News op-ed, the former Massachusetts governor says he’s glad the industry still exists, but proceeds to complain anyway about the way in which Obama rescued GM and Chrysler from an imminent collapse.
Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry. The indisputable good news is that Chrysler and General Motors are still in business. The equally indisputable bad news is that all the defects in President Obama’s management of the American economy are evident in what he did.
Instead of doing the right thing and standing up to union bosses, Obama rewarded them…. By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.
It takes a fair amount of chutzpah to face a crisis, get it wrong, then whine about the way in which the other guy got it right.
This is a subject Romney would be better off ignoring. After all, in 2009, he famously urged policymakers to “let Detroit go bankrupt.” Romney was so certain Obama’s policy would fail, he said Americans could “kiss the American automotive industry goodbye” if Obama’s policy moved forward in 2009. Indeed, at the time, Romney called the administration’s plan “tragic” and “a very sad circumstance for this country.” He wrote an April 2009 piece in which he said Obama’s plan “would make GM the living dead.”
With the benefit of hindsight, we now know all of Romney’s warnings were wrong. For him to double down today on the virtues of letting Detroit go bankrupt is just bizarre.
I’m reminded of this clip, which Democrats gleefully put together last summer.
Of particular interest is the last quote in the clip, in which a Chrysler executive responded to a Romney quote by saying, “Whoever told you that is smoking illegal material. That market had become absolutely dysfunctional in 2008 and 2009. There were attempts made by a variety of people to find strategic alliances with other car makers on a global scale and the government stepped in, as the actor of last resort. It had to do it because the consequences would have been just too large to deal with.”
In other words, Romney wasn’t just wrong; he was drug-addled wrong.
To be sure, the former governor wasn’t the only Obama critic whose predictions now look foolish, but Romney is the one who still likes to pretend he was right.
Even the complaints themselves are strange. As Marcy Wheeler explained, Romney’s “basically complaining that the bailout preserved the healthcare a bunch of 55+ year old blue collar workers were promised. He’s pissed they got to keep their healthcare. He’s also complaining that banks took a haircut.”
I haven’t talked to the White House about this, but I suspect if 2012 comes down to a debate over who was right about the auto-industry rescue, Obama likes his chances.
By: Steve Benen, The Maddow Blog, February 14, 2012
The GOP’s Economic Sabotage
It was somewhere between hilarious and pathetic to watch Republicans respond to the positive jobs report last Friday. Some friends and I were counting the minutes until some Republican started casting aspersions on the Bureau of Labor Statistics (BLS), which compiles and releases the data. Sure enough, by early Friday afternoon, Tea Party Congressman Allen West was saying (on the basis of no evidence of course) that “Americans need truth, not these number games.” West’s comment suggests a desperation that will spread if future reports are as good as last week’s, which raises the question of what the Republicans will do next to try to wreck the economy.
I know, one isn’t supposed to talk like this. I know, it’s evil to suggest that politicians would put their electoral fate this fall ahead of the conditions of the people. And, I know, it’s just . . . ooooh, it’s so mean!
But the record shows clearly that all the Republican Party can do is destroy. First, Republicans destroyed the economy. We don’t speak much these days of George W. Bush, which I’ve always felt, from January 2009, was a big tactical error on the Democrats’ part. They should have been doing with Bush all this time what the Republicans did with Jimmy Carter. He was as bad a president. Actually worse. In terms of job creation, far, far worse. Check it out—Carter’s job-creation record was in fact rather enviable. So they spent eight years taking the humming economy they inherited and asphyxiating it. Bush handed Obama three huge messes—the biggest meltdown in 80 years, plus Iraq and Afghanistan.
Then Obama tries to clean up mess number one, and they do everything they can to block every step he’s taken. It’s worked pretty well for them politically because the jobless rate has been high, and as long as that was the case, they could say no, choosing whatever weapon was handy and wagging their collective finger at the president.
But what do they do now? What if the economy keeps creating 200,000-plus jobs a month? Economists, a pessimistic lot by training and nature, are now rethinking their pessimism. Just two weeks before the jobs numbers came out, the Congressional Budget Office released a report (PDF) showing, under one scenario, that unemployment would be 8.9 percent this fall and still higher in the last quarter of 2013, at 9.2 percent. These numbers received a massive amount of attention, as they fed the trouble-for-Obama story line that will yield the close election that political reporters are desperate to have. The report sent every Democrat in Washington into a funk.
But for now anyway, it’s looking as if these CBO numbers, found in a chart on page 30 at the link above if you’re interested, might turn out to be the worst prediction of 2012. After the jobs numbers came out last Friday, James Bullard, head of the St. Louis Fed, said that the Fed’s own unemployment projections—lower than the CBO’s, but still between 8.2 percent and 8.5 percent at the end of this year—now seemed too high to him, and that “sub-8 percent is a reasonable prediction.”
If the February numbers come in resembling the January ones, the whole collective psyche will change for the better, and the story line will be one of definite rebound. What will the Republicans do then? Rhetorically, they’ll feed us more of what Mitt Romney dished out Saturday night in his Nevada victory speech: “This week [Obama is] trying to take a bow for 8.3 percent unemployment. Not so fast, Mr. President. We welcome any good news on the jobs front. But it is thanks to the innovation of the American people in the private sector and not to you, Mr. President.” So Obama gets the blame when the unemployment is north of 9 percent but not the credit when it drops. Sure, guys. Keep using that one.
And the Allen West line will gather steam. The talk-radio right will start to lay into the BLS and try to discredit it. They go out and interview 60,000 households every month (plus more—read about the methodology here). They do not cook numbers. But reality never made any difference to these people anyway.
What’s more worrisome is what the Republicans on Capitol Hill will do in policy terms to try to blunt the recovery. They’re doing little things as they can manage them. Last week, the House Budget Committee approved a bill that would inflate the cost of federal programs. But what about the big things? Let’s watch what happens on the payroll tax-decrease extension the White House wants. The current reduction expires February 29. It would not exactly shock me to see Republicans start throwing new poison pills into the final negotiations.
Why? On the same “the sky is green and the grass is blue” logic that dominates today’s GOP on virtually all matters. They say publicly, as Senator Jon Kyl does in this clip, that the reduction has not had a stimulative effect. They must know that that is preposterous. Putting $1,000 back in the pocket of your average $50,000 wage earner is, economists agree, money she is likely to spend, and spent dollars are by definition stimulative dollars. They know full well that the stimulative effect of the reduction creates jobs, too. Will they really be so blatant as to try to kill it?
There are decent and honorable individual Republicans. Probably many of them. I even know some. But as a collective entity—as a party and a movement that includes the media wing and the base that boos a gay soldier at a debate and cheers executions—they are toxic destroyers, their minds infected by the idea that any cooperation with the president for the sake of the country is the moral equivalent of Munich (yes, with all that analogy implies). They will do anything. Nothing could be more just than to see a surprisingly low unemployment rate come November, with Republicans still insisting that black is white and that governance equals capitulation, and the public rewarding them accordingly.
By: Michael Tomasky, The Daily Beast, February 6, 2012
“Trying To Make The Economy Worse”: Last Friday The GOP Had A Really Bad Day
Last Friday the GOP had a really bad day. It didn’t come in the form of new polling results — or some new political scandal. It was delivered to them by the economic statistics:
Private sector jobs up 243,000 — almost 100,000 more than expected.
Unemployment rate down to 8.3 percent.
Twenty-three straight months of private sector jobs growth.
But you say, this is not bad news — this is good news. Not for the GOP and its chances of ousting President Obama, seizing control of the Senate or maintaining its majority in the House.
As Senate Republican leader Mitch McConnell made ever so clear early last year, the Republican Leadership — and their backers on Wall Street — have one and only one goal: to defeat President Obama next fall. To do that, the GOP is betting against the American economy.
For the last two years they have done everything in their power to slow America’s recovery from the greatest economic meltdown since the Great Depression.
They have opposed virtually every element of the president’s American Jobs Act.
They brought the economy to the brink by threatening that they wouldn’t allow America to pay its bills during the debt ceiling standoff last year.
They tried their best to prevent extension of the payroll tax holiday and unemployment benefits that are so critical to maintaining buying power momentum as the economy begins to pick up speed.
And, of course, they advocate returning to the regulatory and fiscal policies that caused the Great Recession in the first place.
But the most significant thing they have done to stall the economic recovery has been their refusal to continue federal aid to state and local government.
In the last 23 months, the economy has created 3.7 million new private sector jobs. But during the same period, it has created only 3.165 net total jobs. That is because government — mainly state and local government — laid off a net of about 535,000 people.
If the Republicans in Congress had not refused to continue providing aid to state and local governments, it is likely that unemployment would be in the mid 7 percent range and the economy as a whole would have at least another half million jobs.
And we would also be more likely to have more private sector jobs as well, since the additional teachers and firefighters and policemen who the Republicans basically fired, would have had money to spend on the products and services produced by private businesses.
As much as they like to pretend they don’t agree with “Keynesian” economics, many Republicans completely understand that by refusing to provide aid to state and local government, they are hurting the economic recovery — and that is exactly what they are trying to do.
They have been perfectly willing to allow our kids to have fewer teachers and bigger class sizes, and to allow our cities to have fewer policemen and firefighters all to advance their political goal of slowing the economic recovery.
But despite their efforts to the contrary, the economy is beginning to gain traction. That is very important to the prospects of everyday Americans — and it is critically important politically.
Anyone who has ever tried to move a car that is stuck in the snow — or in the mud — knows what I mean. As long as the car just keeps spinning its wheels, there seems to be no hope. But after you’ve shaken and pushed, and put sand under the tires and the car finally begins to get the smallest amount of traction — everyone’s spirits change. Suddenly there is hope that you’re finally going to get the car moving again.
That’s what’s beginning to happen to the economy — and it will have an enormous effect on the attitudes of voters. It begins to give them hope that the president’s policies are, in fact, moving the economy in the right direction — that it actually is beginning to build up steam — that there is hope that middle class Americans are actually going to see their prospects begin to improve.
And it gives lie to the ridiculous statements of Mitt Romney, who continued to claim as late as last Friday that Barack Obama has made the economy “worse.”
The definition of “worse” is “not as good as it was before.” The economic disaster that was caused by the policies of the Bush administration — the same policies that Romney wants to bring back to the White House — caused the destruction of 8 million jobs. In fact, George Bush was the first president in modern American history to preside over net zero private sector job growth.
As soon as President Obama took office he put into place policies that reversed those jobs losses. Monthly private sector job losses declined continuously and finally turned positive — and the economy has added private sector jobs continuously for the last 23 months. In the last two months alone, the economy has added 446,000 new jobs. That is not worse. In fact, that is commonly known as better. And that is a huge problem for the GOP political narrative this fall.
In the next several weeks, Congress will rejoin the battle over the extension of the payroll tax holiday and unemployment benefits for those who are out of work for no fault of their own. Recall that this was the fight that involved the complete surrender of GOP opposition in the week leading to the Christmas holidays. Then, they agreed to a two month extension that guaranteed that the battle would be renewed — a fight that will once more highlight just how, when it comes to jobs, President Obama and the Democrats are doing battle with a “do nothing Republican Congress.”
There will likely be ups and downs in the jobs numbers over the next eight months. But as long as the economy continues to gain traction — and as long as Democrats continue to battle for jobs legislation in Congress — there will be many more bad days ahead for the GOP’s strategy of making themselves look better by trying to make the economy worse.
By: Robert Creamer, The Huffington Post, February 5, 2012
Why Wall Street Hates A Healthy Labor Market
It’s simple: When workers gain some leverage, it gets a little harder to generate totally obscene profits.
It’s always such a shame when the interests of labor don’t match up with the priorities of capital. The Bureau of Labor Statistics reported on Thursday that new claims for jobless benefits fell again last week. But in a Wall Street Journal roundup of reactions to the news, one economist found reason for concern.
Deutsche Bank’s Alan Ruskin observed that the rate at which productivity — the amount of goods and services produced per worker — is growing is beginning to slow down in the United States.
We are at the point in the cycle where squeezing any more output from the existing labor force, with the current capital stock, becomes more difficult and attempts to raise output, force an increase in employment or at least employee hours. The good news is that we are closer to the point where a virtuous cycle of increased demand, driving increased employment and income, generating more demand, is in place. The flip side is that the rise in wages relative to output pushes up unit labor costs and undermines productivity, and could chip into the record profit share of income with some negative implications for equities.
In other words, stock prices could slump because an increase in the demand for labor will put upward pressure on wages. For the vast majority of Americans, this is fantastic news. For the 1 percent, not so much.
The news inspires memories of the go-go days of the dot-com boom, when the stock market greeted every new monthly release of gangbuster job growth numbers with a sharp sell-off. Wall Street doesn’t like it when American workers are in demand. That’s either the most heartening news yet about the nascent economic recovery, or the most maddening.
By: Andrew Leonard, Salon, February 2, 2012
GOP Nightmare: Obama Fixes The Economy
President Obama’s bold decision to ignore GOP obstructionism and make recess appointments at the Consumer Financial Protection Bureau and the National Labor Relations Board started off 2012 with a bang, inspiring long-deferred jubilation among liberals and paroxysms of outrage from conservatives. There’s an enormous irony here: After three ridiculous years in which conservatives unfairly and absurdly attacked Obama for impersonating a socialist tyrant, the president is suddenly acting like an actual leader — and now the right is really freaking out.
Here’s the nightmare scenario: What if Obama runs totally wild and uses his executive powers to fix the economy? He might, gasp, win reelection!
Sounds crazy, I know. But that’s exactly the sense of panic that emerges from American Enterprise Institute blogger James Pethokoukis’ excited-to-the-point-of-stark-terror post “January Surprise: Is Obama preparing a trillion-dollar, mass refinancing of mortgages?”
Citing speculation from Jaret Seiberg, an analyst at Guggenheim Securities, Pethokoukis paints a picture in which Obama recess appoints a replacement for the current acting director of the Federal Housing Finance Agency (FHFA), Bush appointee Edward DeMarco. DeMarco’s job is to oversee the giant mortgage finance agencies Fannie Mae and Freddie Mac. DeMarco has long made it clear that he believes his primary job is to improve the financial bottom line of Freddie and Fannie, rather than employ the huge power the two government-sponsored enterprises (GSEs) exert over the residential mortgage market to make it easier for homeowners to refinance their mortgages and escape the threat of foreclosure. With DeMarco out of the way, so the theory goes, the Obama administration would have a free hand to push through a much more aggressive plan to help struggling homeowners.
Seiberg:
That could lead to a mass refinancing program for agency-backed mortgages that would go well beyond the existing HARP program. That could hurt agency [mortgage-backed security] pricing and result in higher financing costs going forward. Yet it also could be a big boost for the economy and housing going into the election.
Pethokoukis:
…[S]ome $3.7 trillion of mortgages would be refinanced. That’s right, this would be the Mother of All Mortgage Refinancing Plans. It would help roughly 30 million borrowers save $75 billion to $80 billion a year. As Mayer puts it: “This plan would function like a long-lasting tax cut for these 25 or 30 million American families.” … Talk about a political and economic game changer in this presidential election year. Obama could offer a trillion-dollar stimulus — as measured over a decade — that would directly and immediately impact tens of millions of Americans suffering from the housing depression. Cash in their pockets. Imagine the electoral impact on key states, such as Florida, suffering from both high unemployment and devastated housing markets.
If only. As a Federal Reserve white paper analyzing problems in the housing sector and reviewing potential solutions noted on Wednesday, 12 million U.S. homeowners are currently underwater on their mortgages. The steady flood of newly foreclosed properties hitting the market — expected to be a million per year in both 2012 and 2013 — exerts a relentless downward pressure on home prices. There are few things the Obama administration could do that would have a bigger positive effect on the overall economy than a really large-scale program of homeowner relief.
So how realistic is the January surprise scenario? As with all good conspiracy theories, there are some grains of truth. DeMarco has definitely been obstructing the Obama administration’s efforts at housing reform. Even the usually mild-mannered Federal Reserve hints at this reality in its white paper. Sure, there would be a cost to a large-scale refinancing program, but the benefits might well outweigh the downside:
“Nonetheless, some actions that cause greater losses to be sustained by the GSEs in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery.
Protecting Fannie and Freddie’s balance sheet at the expense of the nation’s is penny-wise and pound-foolish, in other words. Why go to all the trouble and expense of bailing out the GSEs if not to use them to good effect?
However, that still doesn’t quite connect the dots between the appointment of Richard Cordray to run the CFPB and a possible recess appointment that would replace Edward DeMarco. First of all, the Obama administration’s efforts to reboot housing have been, at best, halfhearted, and their failure more properly should be blamed on the White House than a single agency administrator. (And late Thursday afternoon, Bloomberg News reported that the White House was denying it had any new refinancing plan in the works.) Secondly, the legal basis for shoving out DeMarco and replacing him with a recess appointment seems especially iffy. Cordray is considered an independent regulator — so, theoretically, he can’t simply be fired at will by the White House, (although his “acting” status does inject some fuzziness into the equation). According to reporting by Ezra Klein and Brad Plumer, Treasury Secretary Timothy Geithner explored the possibility of firing DeMarco, but ultimately found it unfeasible. Republicans are already threatening to sue the administration for the current batch of recess appointments; axing the existing director for the FHFA in pursuit of an election-year housing reform agenda could easily precipitate a constitutional crisis.
But then again, Republicans would only have themselves to blame for the chaos that would ensue if Obama did take the unlikely step of all-out war. In 2010, the Obama administration proposed North Carolina banking commissioner Joseph Smith as its nominee for FHFA director. But as with so many of Obama’s economic-policy-related nominations, Smith’s appointment by the Senate Finance Committee’s ranking Republican, Richard Shelby, was scuttled on the grounds that Smith was unlikely to resist Obama’s housing reform agenda.
So there is after all a direct connection between the Cordray recess appointment and the FHFA. Senate Republicans have routinely blocked Obama’s executive branch appointments, not because they have any particular problem with the quality of the people being proposed for the jobs, but because they want to block Obama’s reform agenda. It’s a travesty of government — and a made-to-order campaign platform. Want to know why the economy sucks? Because Republicans won’t let Obama appoint the people necessary to take direct action — whether that be at the Federal Reserve, or the FHFA, or anywhere else.
By: Andrew Leonard, Salon, January 5, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 