It was obvious that many righties are feeling jealous of President Obama. They bemoan the admiration he is receiving as 'worship'. A cute way of doing this is to say something along the lines of "I have a savior and his name is Jee-sus, not Obama".
I can remember feeling that way at the height of Reagan's popularity. I can vividly remember feeling that way about W Bush's popularity. The strange thing is I can't remember how very obnoxious I must have been about it. I felt VERY angry about the adulation they were receiving given the damage I knew they were doing to my country.
One thing I'm sure of is that I didn't invoke Jesus, the right wing owns that icon.
Wednesday, February 25, 2009
Tuesday, February 24, 2009
If...and only if...reasonable prospect that...
“If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability — and only if that is the case, in my view — there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.” Nice quote from Ben Bernanke today. Like a good chair should.
Saturday, February 21, 2009
Thursday, February 19, 2009
This stimulus ain't very stimulative
Heh heh. This is a great word for a punch line. Boy, how we love those. No matter how serious a problem, no matter how complex an issue, all of them can be reduced to a one-liner. The downward spiral of the international economy may be one of the best examples ever. This is an incredibly complicated set of circumstances that have created equally complicated government policy choices for our politicians. Fortunately, the mass of voters can reduce the whole thing down to a "stimulus" comment that hints at boners and orgasms.
Strictly speaking, this current bill is necessary but it is not very stimulative in the economic sense. The US economy is GDP or Gross Domestic Product, a measure of total spending. Stimulative policies are those that add to GDP or spending.
Conservatives like to say ('think' is not the right word here) that tax cuts are stimulative because they stimulate consumers to invest and spend. This is bullshit, especially in a deflationary spiral like we find ourselves in right now. In economic conditions such as we face now, most rational consumers (Conservatives are the opposite of rational) either put any extra cash in reserve or they use it to pay down debt. Very little of it is spent, creating very little stimulation to the economy. Also, precious little is invested in anything that might create spending or jobs.
In the real world, the best way to create spending (add to GDP) is to SPEND!!!! This would seem obvious to anyone who is thinking, but conservatives do not habitate the thinking side of the universe. Political reality being what it is, the moderate Democrats and Republicans who negotiated the 'stimulus' package had to dedicate a fair portion of the total dollar figure to tax breaks. Regardless of how good or bad the tax breaks are, they are not stimulative.
The spending that was included in the package is mostly dedicated to aid to unemployed (and other people directly impacted by the downward spiral) and cash paid out to the states to help make up their revenue losses. This spending is good, but not particularly stimulative. The purpose and result of this is mostly to prevent further erosion of spending rather than increase it. It should help stop the bleeding, but is unlikely to bring about healing.
I think the bill signed into law by Obama this week is good, but I think more will be needed. We have strengthened the floor so that the economy will (hopefully) not fall much further. To really get us up off the floor will require another infusion of government debt to be spent on job creation. I hope the Democratic leaders will forget this 'bi-partisan' nonsense and do what is wise. Republicans are wrong, their opinions should be completely ignored.
Strictly speaking, this current bill is necessary but it is not very stimulative in the economic sense. The US economy is GDP or Gross Domestic Product, a measure of total spending. Stimulative policies are those that add to GDP or spending.
Conservatives like to say ('think' is not the right word here) that tax cuts are stimulative because they stimulate consumers to invest and spend. This is bullshit, especially in a deflationary spiral like we find ourselves in right now. In economic conditions such as we face now, most rational consumers (Conservatives are the opposite of rational) either put any extra cash in reserve or they use it to pay down debt. Very little of it is spent, creating very little stimulation to the economy. Also, precious little is invested in anything that might create spending or jobs.
In the real world, the best way to create spending (add to GDP) is to SPEND!!!! This would seem obvious to anyone who is thinking, but conservatives do not habitate the thinking side of the universe. Political reality being what it is, the moderate Democrats and Republicans who negotiated the 'stimulus' package had to dedicate a fair portion of the total dollar figure to tax breaks. Regardless of how good or bad the tax breaks are, they are not stimulative.
The spending that was included in the package is mostly dedicated to aid to unemployed (and other people directly impacted by the downward spiral) and cash paid out to the states to help make up their revenue losses. This spending is good, but not particularly stimulative. The purpose and result of this is mostly to prevent further erosion of spending rather than increase it. It should help stop the bleeding, but is unlikely to bring about healing.
I think the bill signed into law by Obama this week is good, but I think more will be needed. We have strengthened the floor so that the economy will (hopefully) not fall much further. To really get us up off the floor will require another infusion of government debt to be spent on job creation. I hope the Democratic leaders will forget this 'bi-partisan' nonsense and do what is wise. Republicans are wrong, their opinions should be completely ignored.
Wednesday, February 18, 2009
Dramatic Financial Meltdown - Frontline
PBS is currently broadcasting a great dramatic one-hour summary of the financial events of 2008:
Frontline - Inside the Meltdown
This has been my obsession for the last six months, and it kept me awake last night worrying about the rest of this year for the world financial system. The events are edited down to a compelling hour, but it could have easily been two hours. Perhaps they will do a second part of this after the pragmatic Obama Administration has had an opportunity to put Humpty Dumpty back together again.
This series of market failures has radicalized me. My left-leaning philosophy has become clearer and even more leftward than it has ever been. The corporate financial structure of the United States is becoming more government controlled by osmosis and the course of events. This is not something that has happened because people wish it to be so, but because it must be so. The conversion of Henry Paulson from free market fundamentalist to interventionist has been astounding, and the Frontline presentation of this is stark and accurate.
A wise person I know recently compared the human mind to underwear, changing it is necessary from time to time. He also intimated that information and the application of logic should be catalysts for mind changing. In the case of Henry Paulson, events played a bigger part. Shit happened and the only rational, pragmatic response was socialistic. Paulson's first instinct was to let his philosophy of free market fundamentalism guide his actions. These actions failed and he learned from this.
I hope the thinking American voters will learn some of the lessons Paulson learned, but I doubt the 'independent' voters and Republican base can do this. That is what kept me from sleeping soundly last night
Frontline - Inside the Meltdown
This has been my obsession for the last six months, and it kept me awake last night worrying about the rest of this year for the world financial system. The events are edited down to a compelling hour, but it could have easily been two hours. Perhaps they will do a second part of this after the pragmatic Obama Administration has had an opportunity to put Humpty Dumpty back together again.
This series of market failures has radicalized me. My left-leaning philosophy has become clearer and even more leftward than it has ever been. The corporate financial structure of the United States is becoming more government controlled by osmosis and the course of events. This is not something that has happened because people wish it to be so, but because it must be so. The conversion of Henry Paulson from free market fundamentalist to interventionist has been astounding, and the Frontline presentation of this is stark and accurate.
A wise person I know recently compared the human mind to underwear, changing it is necessary from time to time. He also intimated that information and the application of logic should be catalysts for mind changing. In the case of Henry Paulson, events played a bigger part. Shit happened and the only rational, pragmatic response was socialistic. Paulson's first instinct was to let his philosophy of free market fundamentalism guide his actions. These actions failed and he learned from this.
I hope the thinking American voters will learn some of the lessons Paulson learned, but I doubt the 'independent' voters and Republican base can do this. That is what kept me from sleeping soundly last night
Thursday, February 12, 2009
The Fair Tax
A few senior members of my extended family have recently stated their support for this idea on Facebook. Since I'm always looking for a fight, here goes. Please feel free to shred my ideas or correct my misperceptions of the Fair Tax.
First, the good news. "Fair Tax" is a great name. Hard to argue with the word "fair", but really hard to define the concept of fairness especially in the context of the vast generalisations needed in terms of federal tax policy. Wiping away the current system is a very attractive idea because the current system was not designed, but evolved. People of all political stripes can find many things about the current tax code to hate, I'm no exception.
I'm basing my rebuttal on my ideally fair (but totally unworkable) federal tax system, and a brief review of the fairtax.org website. My ideally (but unworkable) fair federal tax system would be an annual tax bill, collected by the IRS, as a percentage of average personal wealth over the tax year. Taxes are fair when the are maximally progressive; from each according to means, to each according to needs. This framework of fairness puts my plan right on the same individual philosophical ground as the Fair Tax. Of course, measuring average average wealth over a year is impossible but a nice theoretical model. More generally, I think taxes should be more federal and less local, and more progressive based on wealth rather than income. It would essentially be a property taxed based on total holdings including real estate. Every tax payer would file a quarterly balance sheet and would be taxed an amount based on a graduated scale. Again, unworkable but a nice dream.
My understanding is that the Fair Tax is essentially a national retail sales tax (as most states now have), administered by the states and paid to the federal government. This is progressive at the bottom of the wealth scale with a 'prebate' (cool word) to poor people that is intended to keep them from paying federal taxes. It is regressive at the high end of the wealth scale because rich people consume a smaller percentage of their wealth than everyone else, so they pay a smaller percentage of their wealth than those in the middle. This means that the bulk of the burden rests with the middle class, just where it is now. I would prefer to see the burden pushed up the wealth scale.
Philosophically this is federalist in the current usage of that word, meaning driven by the states. I'm opposed to that, as I prefer the federalist philosophy pushed by Alexander Hamilton which wanted a very strong central government both politically and financially.
First, the good news. "Fair Tax" is a great name. Hard to argue with the word "fair", but really hard to define the concept of fairness especially in the context of the vast generalisations needed in terms of federal tax policy. Wiping away the current system is a very attractive idea because the current system was not designed, but evolved. People of all political stripes can find many things about the current tax code to hate, I'm no exception.
I'm basing my rebuttal on my ideally fair (but totally unworkable) federal tax system, and a brief review of the fairtax.org website. My ideally (but unworkable) fair federal tax system would be an annual tax bill, collected by the IRS, as a percentage of average personal wealth over the tax year. Taxes are fair when the are maximally progressive; from each according to means, to each according to needs. This framework of fairness puts my plan right on the same individual philosophical ground as the Fair Tax. Of course, measuring average average wealth over a year is impossible but a nice theoretical model. More generally, I think taxes should be more federal and less local, and more progressive based on wealth rather than income. It would essentially be a property taxed based on total holdings including real estate. Every tax payer would file a quarterly balance sheet and would be taxed an amount based on a graduated scale. Again, unworkable but a nice dream.
My understanding is that the Fair Tax is essentially a national retail sales tax (as most states now have), administered by the states and paid to the federal government. This is progressive at the bottom of the wealth scale with a 'prebate' (cool word) to poor people that is intended to keep them from paying federal taxes. It is regressive at the high end of the wealth scale because rich people consume a smaller percentage of their wealth than everyone else, so they pay a smaller percentage of their wealth than those in the middle. This means that the bulk of the burden rests with the middle class, just where it is now. I would prefer to see the burden pushed up the wealth scale.
Philosophically this is federalist in the current usage of that word, meaning driven by the states. I'm opposed to that, as I prefer the federalist philosophy pushed by Alexander Hamilton which wanted a very strong central government both politically and financially.
Geithner's balls and brains, part 2
I really feel for this guy. He looked and sounded so very scared in his appearances this week. The text of his testimony and interviews sound tentative and afraid. That's with good reason. There is a massive multi-trillion dollar monkey on his back that is called 'toxic assets' in the current vernacular. Everyone from the President of the United States, through the leaders of both parties in both houses of Congress, to every economist with an opinion (which is all of them) is willing to let Timothy Geithner be the lone soul responsible for this nearly impossible problem. The burden is heavier than any in the world right now, and I greatly admire the balls it took for him to accept this challenge.
I don't blame him for looking tentative. The political reality is that the US is not willing or able to consider bank nationalization yet. The toxic assets are still little understood, little discussed in the general public, and are a far way from the 'transparency' the President talks about incessantly. I don't think he has a chance of succeeding, but am watching with very interested eyes and brain cells.
Geithner is trying to simultaneously reassure Congressional leaders, the street, the President, foreign investors and himself that these assets have value, that private buyers will want them, that taxpayers will get off without spending much more, and that FDIC examiners will confirm the health of the banks' balance sheets. I am sure that one or more of these items will not meet expectations. I'm not Limbaughian enough to wish him failure, but I'm not entirely optimistic. Godspeed to you, Secretary Geithner. We need this to work in some way.
I don't blame him for looking tentative. The political reality is that the US is not willing or able to consider bank nationalization yet. The toxic assets are still little understood, little discussed in the general public, and are a far way from the 'transparency' the President talks about incessantly. I don't think he has a chance of succeeding, but am watching with very interested eyes and brain cells.
Geithner is trying to simultaneously reassure Congressional leaders, the street, the President, foreign investors and himself that these assets have value, that private buyers will want them, that taxpayers will get off without spending much more, and that FDIC examiners will confirm the health of the banks' balance sheets. I am sure that one or more of these items will not meet expectations. I'm not Limbaughian enough to wish him failure, but I'm not entirely optimistic. Godspeed to you, Secretary Geithner. We need this to work in some way.
Wednesday, February 11, 2009
Bow just about tied
...on the 'stimulus' bill. Bits and pieces of information are leaking out. It looks like Obama gave a little bit on his 'signature' taxbreak to all workers. I didn't like the idea of it from the beginning, but understand that he was a big vote producer and his is obliged to follow through. It seems like some of the stupid tax breaks were cut back or eliminated. The ones allowing giving consumers a kickback for buying a car or a house seems nearly as foolish as the corporate tax refund provision. They kept the refund provision in for smaller businesses, that's good. They slashed the aid to states by a fair amount, which kinda sucks. I would have liked to have seen more cash for them and for education spending.
I still don't know what the hell Republicans are talking about with their standard line bitching about 'Washington spending'. Most of the cash spent is going into tax breaks that they love and to the states. You know the states, the ones that aren't in Washington. My guess is that they are simply posturing for the next round of complaints they will make regardless of the good or evil that is done by this bill. The bitching will be exactly the same regardless of the situation. "Big gubment", "spending as far as the eye can see", "typical Washington insider deals"...blah blah blah blah puke ralph.
In the end, I think this will do some good to the economy. The downward spiral caused by Republicans will be slowed considerably.
I still don't know what the hell Republicans are talking about with their standard line bitching about 'Washington spending'. Most of the cash spent is going into tax breaks that they love and to the states. You know the states, the ones that aren't in Washington. My guess is that they are simply posturing for the next round of complaints they will make regardless of the good or evil that is done by this bill. The bitching will be exactly the same regardless of the situation. "Big gubment", "spending as far as the eye can see", "typical Washington insider deals"...blah blah blah blah puke ralph.
In the end, I think this will do some good to the economy. The downward spiral caused by Republicans will be slowed considerably.
Tuesday, February 10, 2009
Geithner's big brain and balls
I'm seriously crushing on this guy. Barack Obama's task is simple in comparison to his. Tim Geithner made a long-promised brief speech this morning where he was asked to lay out a comprehensive plan to reform the US financial markets. That's a big, big gulp. This is a task that has more complicated constituencies and shifting sands than the big idea platitudes that President Obama deals in.
Tim Geithner has a vision of saving the guts of our private banking system, while pumping massive amounts of government cash into the machinery. His plan for removing 'toxic assets' from the books of the country's banks is breathtaking in its courage and optimism. He must cajole Congress and private financiers into believing in a very complicated, techincal idea that is absent of the types of philosophical ideals that leaders always rely upon to gain applause, win votes and sell product.
The 'bad bank' idea and the consumer lending pool are not exactly sexy, but getting these things up and running are the big big bet that we all need to pay off. There's no other horse in our race.
Tim Geithner has a vision of saving the guts of our private banking system, while pumping massive amounts of government cash into the machinery. His plan for removing 'toxic assets' from the books of the country's banks is breathtaking in its courage and optimism. He must cajole Congress and private financiers into believing in a very complicated, techincal idea that is absent of the types of philosophical ideals that leaders always rely upon to gain applause, win votes and sell product.
The 'bad bank' idea and the consumer lending pool are not exactly sexy, but getting these things up and running are the big big bet that we all need to pay off. There's no other horse in our race.
Monday, February 09, 2009
I might blow Obama
As I write this, the President is conducting a press conference to discuss the status of the stimulus package or 'reinvestment and recovery act' or whatever we are calling this huge spending bill. I am terribly impressed with this man. He understands what is going on in the economy. He has been listening and he's able to explain things simply and clearly. We could not have a better guy in charge at this point. Even bigger, he is a Democrat.
Democrats are the party of pragmatism now. Throw free market fundamentalist philosphic priciples out the window, roll up your sleeves, think, and take government action that will help the citizens of the country. This is fresh and I love it.
It will work. Not quickly, because the hole dug by the fundamentalists is deep. But it will work. I expect the downward spiral to bottom out by the end of the summer.
Democrats are the party of pragmatism now. Throw free market fundamentalist philosphic priciples out the window, roll up your sleeves, think, and take government action that will help the citizens of the country. This is fresh and I love it.
It will work. Not quickly, because the hole dug by the fundamentalists is deep. But it will work. I expect the downward spiral to bottom out by the end of the summer.
Friday, February 06, 2009
Bipartisan this
I've been watching the speeches from the Senate floor this evening. The deal has been cut for 2 or 3 Republicans to vote for the stimulus package. The Republican leaders who spoke in opposition to the bill are violently opposed. They believe the sky is falling. I am gratified that President Obama's words of bipartisan compromise have not come to fruition. Republicans are wrong about economics. They should be relegated to whining and complaining when matters are serious. Massive spending is needed because we are in a nasty downward spiral. This is not a normal cyclical slowdown or recession that will right itself.
This spending in this bill is small in relation to what is needed. But Congress will have a chance to increase it via the normal budgeting process in the late spring. I hope the Democrats realize that the Republicans as a whole are not going to cooperate in anything that is put forth. Bipartisanship is not how the US government works. It never was and with any luck, it never will be.
This spending in this bill is small in relation to what is needed. But Congress will have a chance to increase it via the normal budgeting process in the late spring. I hope the Democrats realize that the Republicans as a whole are not going to cooperate in anything that is put forth. Bipartisanship is not how the US government works. It never was and with any luck, it never will be.
Thursday, February 05, 2009
Stimulus debate continues with more stupid ideas
Part 2 from my previous entry. A very smart friend suggest that the government should just pay employers outright to hire people - $20,000 for each new hire. This is foolish, because employers are likely to react to this by hiring people to do little or nothing. For the government spending to get the economy going, it needs to be spent on something productive.
The same intelligent friend also said that all the stimulus spending would go 'straight to the Chinese' because we buy all our stuff from them. He was drunk, so I will cut some slack but still...this is just stupid.
Senate Republicans (supported by all Democrats) passed an amendment to the bill yesterday to 'fix housing first'. This would provide a $15,000 tax credit to anyone who purchases a home. It is estimated to cost $20 Billion. While this would certainly move some houses in the near term, it has little foresight. Homeowners whose jobs are in peril are not good risks. Too many homebuyers with too many incentives to buy is largely what caused the problems. This amendment came from the same Republican group who thought the House bill was too expensive, so they decided that adding $20 Billion more to it was just the right prescription. Afterall, tax credits are good spending is bad...or some such stupidity.
What's needed is just what the President proposed just after the election. Build up the safety net by extending and increasing Unemployment Insurance benefits. Prop up state budgets with free cash so they don't have to slash to the bone. Spend on infrastructure as soon as possible. I hope he sticks to his guns and the Congress goes along with it.
The same intelligent friend also said that all the stimulus spending would go 'straight to the Chinese' because we buy all our stuff from them. He was drunk, so I will cut some slack but still...this is just stupid.
Senate Republicans (supported by all Democrats) passed an amendment to the bill yesterday to 'fix housing first'. This would provide a $15,000 tax credit to anyone who purchases a home. It is estimated to cost $20 Billion. While this would certainly move some houses in the near term, it has little foresight. Homeowners whose jobs are in peril are not good risks. Too many homebuyers with too many incentives to buy is largely what caused the problems. This amendment came from the same Republican group who thought the House bill was too expensive, so they decided that adding $20 Billion more to it was just the right prescription. Afterall, tax credits are good spending is bad...or some such stupidity.
What's needed is just what the President proposed just after the election. Build up the safety net by extending and increasing Unemployment Insurance benefits. Prop up state budgets with free cash so they don't have to slash to the bone. Spend on infrastructure as soon as possible. I hope he sticks to his guns and the Congress goes along with it.
Sunday, February 01, 2009
'the end of capitalism?'
Last week I had two intelligent people engage me on the current economic/political stew. I didn't answer either one of them fully, because to do sound would surely make me seem pompous. Since this blog is the perfect outlet for pomposity, here goes...
'Some people say this is the end of capitalism'. Yeah, I've heard some people say this as well. This is the same idea from the right wing that says that Obama is a socialist/communist. I'm a liberal leaning toward socialist, and not entirely comfortable with the newly fashionable label of progressive. This is an accusation that is tossed out as if one-word name-calling is really worth the Scott's tissue it is printed on. You cannot boil down complex historical events, sociological and economic philosophy, and government policy into one-word accusations. Well, actually you can but it is an oversimplification. In the not-too-distant past when Democrats resisted Republican efforts to pass legislation they were accused of being 'obstructionist', 'partisan' and other such simplistic words. Again, this is an oversimplification. The late Spiro Agnew coined the cute phrase 'nattering nabobs of negativism' to throw at those who opposed Nixon, and it largely worked.
Now we have the Congressional Democrats and President Obama trying to put some policies in place to repair the damage done by the 'free market' philosophy of the Republican Party. This philosophy has led to nearly unfettered speculation in the financial markets over the last 15 years plus. Yes, Clinton was partly at fault as was Carter. They were both 'free market' guys who strongly believed in deregulation of financial markets. This deregulation led to all kinds of loose loans that blew up in our collective face in 2008. The GW Bush Administration had plenty of warning about this, but as it was the most hardcore right wing 'free market' fundamentalist group in the White House since Reagan they could or would not do anything to regulate the markets.
When things blew up on them, they were forced by the reality of the situation to ask Congress for the $750 Billion TARP "bailout" in the fall. This was against their ideology, but they held their nose because reality trumped ideology. Congress approved the cash and the Bushies stuck to part of the ideological guns by giving the 1st half of the cash to financially strapped corporations with no strings attached. Collapse was averted, but the money is mostly unaccounted for. The Bushies stuck to their ideological roots in that they think oversight of the institutions who receive the taxpayer cash would be too 'big gubment' or just 'free market' enough for their blood.
Now the Obama Administration is suggesting that the 2nd half of the cash should have some strings attached to it when the corporations receive taxpayer money. This idea is more socialist than the Bush actions because it means that the 'big gubment' would have a say in what the corporations do with the money.
On the Stimulus Bill (currently being debated), the Democratic ideas are also more socialist and less capitalist than the Republican ideas. The Dems prefer to spend taxpayer money on improving schools, roads, transportation, etc. while Repubs prefer to eliminate all taxes that they can get away with. Socialism implies that the society work together to solve common problems, while capitalism implies that society is useless and that only individual hard work and greed can solve anything. I'm exaggerating, but not much.
Remembering that I'm a leftie, the Democratic ideas are far more practical in this case. What the Stimulus Bill should do is provide a floor or saftey net so people don't fall into deeper personal financial problems, and pump some cash into the economy to get people spending again. The credit and capital (Wall Street) problems should be addressed by the TARP money via the Federal Reserve and the Treasury.
The reason that tax cuts alone are not practical is because the way the Repubs want this to happen is that companies would get tax breaks to hire people and buy equipment, and individuals who have income from their work or riches would pay less in taxes. The business tax breaks would get companies to hire and buy, but they would likely do so in a way that would not be terribly productive. Kickbacks for hiring people (if they are too large) would lead to jobs being created where people do little work or 'busy work'. Kickbacks for purchases would lead companies to buy stuff they really don't need. Tax cuts to individuals who are making a decent living already would generate a little consumer spending, but much of it would go into savings - that's not very helpful for getting things moving.
The Dem options are better not because of capitalism vs socialism ideology, but because they are more practical. Adding to the saftey net for people out of work and otherwise hurting at the bottom of the income scale does have a feel good element, but this cash is more likely to get spent than the Republican tax cuts. It would also help prevent further problems like foreclosures and evictions which ripple through the economy in a very nasty way.
The spending of infrastructure is practical because it creates jobs that make the entire economy work better. Schools, roads, more efficient energy production just makes obvious sense. The tricky part here is getting the projects going quickly, and unfortunately this will lead to some waste. You know, haste being what it is.
There are also some big differences between Dems and Repubs on how they want to help the states. The Dems want to simply give money to them, while Repubs want to loan states the money. That's not so much a capitalism vs socialism thing, and my fingers are cramping up. So I'll stop here.
'Some people say this is the end of capitalism'. Yeah, I've heard some people say this as well. This is the same idea from the right wing that says that Obama is a socialist/communist. I'm a liberal leaning toward socialist, and not entirely comfortable with the newly fashionable label of progressive. This is an accusation that is tossed out as if one-word name-calling is really worth the Scott's tissue it is printed on. You cannot boil down complex historical events, sociological and economic philosophy, and government policy into one-word accusations. Well, actually you can but it is an oversimplification. In the not-too-distant past when Democrats resisted Republican efforts to pass legislation they were accused of being 'obstructionist', 'partisan' and other such simplistic words. Again, this is an oversimplification. The late Spiro Agnew coined the cute phrase 'nattering nabobs of negativism' to throw at those who opposed Nixon, and it largely worked.
Now we have the Congressional Democrats and President Obama trying to put some policies in place to repair the damage done by the 'free market' philosophy of the Republican Party. This philosophy has led to nearly unfettered speculation in the financial markets over the last 15 years plus. Yes, Clinton was partly at fault as was Carter. They were both 'free market' guys who strongly believed in deregulation of financial markets. This deregulation led to all kinds of loose loans that blew up in our collective face in 2008. The GW Bush Administration had plenty of warning about this, but as it was the most hardcore right wing 'free market' fundamentalist group in the White House since Reagan they could or would not do anything to regulate the markets.
When things blew up on them, they were forced by the reality of the situation to ask Congress for the $750 Billion TARP "bailout" in the fall. This was against their ideology, but they held their nose because reality trumped ideology. Congress approved the cash and the Bushies stuck to part of the ideological guns by giving the 1st half of the cash to financially strapped corporations with no strings attached. Collapse was averted, but the money is mostly unaccounted for. The Bushies stuck to their ideological roots in that they think oversight of the institutions who receive the taxpayer cash would be too 'big gubment' or just 'free market' enough for their blood.
Now the Obama Administration is suggesting that the 2nd half of the cash should have some strings attached to it when the corporations receive taxpayer money. This idea is more socialist than the Bush actions because it means that the 'big gubment' would have a say in what the corporations do with the money.
On the Stimulus Bill (currently being debated), the Democratic ideas are also more socialist and less capitalist than the Republican ideas. The Dems prefer to spend taxpayer money on improving schools, roads, transportation, etc. while Repubs prefer to eliminate all taxes that they can get away with. Socialism implies that the society work together to solve common problems, while capitalism implies that society is useless and that only individual hard work and greed can solve anything. I'm exaggerating, but not much.
Remembering that I'm a leftie, the Democratic ideas are far more practical in this case. What the Stimulus Bill should do is provide a floor or saftey net so people don't fall into deeper personal financial problems, and pump some cash into the economy to get people spending again. The credit and capital (Wall Street) problems should be addressed by the TARP money via the Federal Reserve and the Treasury.
The reason that tax cuts alone are not practical is because the way the Repubs want this to happen is that companies would get tax breaks to hire people and buy equipment, and individuals who have income from their work or riches would pay less in taxes. The business tax breaks would get companies to hire and buy, but they would likely do so in a way that would not be terribly productive. Kickbacks for hiring people (if they are too large) would lead to jobs being created where people do little work or 'busy work'. Kickbacks for purchases would lead companies to buy stuff they really don't need. Tax cuts to individuals who are making a decent living already would generate a little consumer spending, but much of it would go into savings - that's not very helpful for getting things moving.
The Dem options are better not because of capitalism vs socialism ideology, but because they are more practical. Adding to the saftey net for people out of work and otherwise hurting at the bottom of the income scale does have a feel good element, but this cash is more likely to get spent than the Republican tax cuts. It would also help prevent further problems like foreclosures and evictions which ripple through the economy in a very nasty way.
The spending of infrastructure is practical because it creates jobs that make the entire economy work better. Schools, roads, more efficient energy production just makes obvious sense. The tricky part here is getting the projects going quickly, and unfortunately this will lead to some waste. You know, haste being what it is.
There are also some big differences between Dems and Repubs on how they want to help the states. The Dems want to simply give money to them, while Repubs want to loan states the money. That's not so much a capitalism vs socialism thing, and my fingers are cramping up. So I'll stop here.
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