Notes feb 11

February 13, 2009 § Leave a comment

This is a really terrific article.

Why Republicans Won’t Support the Stimulus

Why are Senate Republicans (all, that is, except the lonely moderates Collins, Snowe, and Specter) nixing the stimulus package, as House Republicans did? Not because Obama failed to compromise — he gave them the tax breaks they wanted, included a whopper for business. Not because Senate Democrats failed to bend — they agreed to trim more than $100 billion out of a previous version of the bill. Not because Senate Republicans are doctrinally opposed to deficit spending — many of them happily voted for Bush spending and tax cuts that doubled the federal debt.

For an alternative view.

“It just goes to show you,” writes Lew Rockwell in today’s Mises Institute feature article, “that the presidency is something like a drug. It makes people lose all connection to reality. Part of the reality that Obama needs to recognize is that the New Deal was a calamity far worse than the initial market downturn that began it. He needs to stop basing his policies on dumbed-down civics texts versions of events and consider the economic logic.

“With his rhetoric and policies, he has decided to demonize private enterprise, just as FDR did, as a way to present government as the great savior…

“You cannot make a country rich by looting taxpayers and paying people to pound nails into siding at public schools. These activities amount to capital consumption. They are not sources of investment. You can say that they are stupid tasks or wonderful tasks, but it is not a matter of ideology as to whether such public projects will make us all wealthier. They will not. They drain the sources of wealth from society. They represent a cost, not a blessing.

“That was also true of Bush’s dumb stimulus program. He was only bailing out his friends at our expense. The effect was to give a little longer life to institutions that were failing anyway. It’s pathetic that the Republicans ever went along with it. You will notice that the scheme didn’t actually work.

“Well, Obama is doing the same thing, though rewarding a different set of friends. This is not wealth production. This is wealth consumption. Do enough of this nonsense and you can destroy the livelihoods of an entire generation.”

Administration officials were greeted with sarcasm and laughter Monday night when they briefed lawmakers and congressional staff on Treasury Secretary Tim Geithner’s new financial-sector bailout project, according to people who were in the room.


The laughter was at its height when Obama officials explained that the White House planned to guarantee a wide swath of toxic assets — which they referred to as “legacy assets” — but wouldn’t be asking Congress for money. Rep. Brad Sherman (D-CA), a bailout opponent in the fall, asked the officials to give Congress the total dollar figure for which they were on the hook. The officials said that they couldn’t provide a number, a response met by chuckling that was bipartisan, but tilted toward the GOP side. By guaranteeing the assets, Geithner hopes he can persuade the private sector to purchase a portion of them.

Congress may be able to do little more than laugh. The Federal Reserve, in extreme situations, is allowed to intervene in the financial markets in dramatic ways. The Fed jumped into the markets long before the $700 billion bailout passed through Congress by guaranteeing toxic assets held by CitiGroup and Bank of America.

The White House still has roughly $350 billion in Congress-appropriated TARP funds to use, and the officials told the group Monday night that it planned to use $50 billion for foreclosure mitigation and further amounts to shore up bank balance sheets.

The officials also said that a review of the bank’s books would be undertaken to determine whether they could handle an even more severe economic downturn.

People briefed on the meeting also said that the White House proposed expanding the Temporary Asset Lending Facility (TALF) by up to one trillion dollars in order to shore up the market for credit card and auto loans. It would be a joint project of the Federal Deposit Insurance Corporation and the Treasury’s TARP funds

And, california

Three federal judges have ruled that overcrowding in California prisons means that “there are not enough clinical facilities or resources to accommodate inmates with medical or mental health needs at the level of care they require.” 

Based on this ruling, it’s likely that California’s prison population will be reduced by 36,000 to 57,000 inmates.  The Times’ Michael Rothfeld has the details:

If the state is ordered to reduce the prison population, it would likely be able to do so over two or three years, so it would not have to release large numbers of inmates at once. Some methods of cutting the population include limiting new admissions, changing policies so parole violators return to prison less frequently, and giving prisoners more time off of their sentences for good behavior and rehabilitation efforts.


And re Wealth of Nations

As Smith pointed out: “The government of an exclusive company of merchants, is, perhaps, the worst of all governments.” [570

And, very helpful

Financial Crisis for Beginners


Local links.

and the book is at

“Continuing the Conversation” began as a series of meetings in second half of 2008 between Linda Alepin (Global Women’s Leadership Network), Doug Carmichael (Stanford), Jeff Chow (Morgan Stanley), and Anne Firth Murray (Stanford, formerly Global Fund for Women).  It was clear that the impact of the economic crisis of 2008 was going to be dramatic and that we should take action. 

Our goal is to help people and our society cope with the rapid deterioration in our economic and social environments and manage the efforts to stimulate a recovery toward a healthier community.  

In times of uncertainty and confusion, we should evaluate and clarify our current situation, clarify our goals and develop a strategic plan with the tactics to support our strategies.   To help coordinate and streamline our efforts, “Continuing the Conversation” is hosting strategic conversations between concerned individuals from Nonprofit, For-profit and academic organizations where we can:

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