The Ultimate Stimulus Pro and Con thread

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I agree with some of this but blaming Bush & Co. and ignoring ACORN, Chris Dodd, Barney Frank, Alan Greenspan, Bill Clinton, and Jimmy Carter won't fool me. Democrats laughed off Republican critcisms of Fannie Mae and Freddie Mac. They said nothing was wrong. Some got rewarded with reelection and feel that going into bigger deficits with no result is okay. Where is the outrage there?

People should also save money because taxes will rise to deal with the massive debt. Unless the bank feels they have enough assets to offset their hidden MASSIVE subprime debt in private equity firms they will lend at higher interest rates. Deleveraging is going to happen whether Keynesians want it or not. You can't force people to borrow.
 
Let the big banks fail. Then many of the smaller banks who were prudent enough to stay out of the feeding frenzy can grow.
 
Forbes Layoff Tracker: Layoff Tracker - Forbes.com ...doesn't seem to be comprehensive, nor does it seem to include firms that have shut down (circuit city, for instance). interesting scary nonetheless.

BUSINESS / ECONOMY
Layoffs Spread to More Sectors of the Economy
By CATHERINE RAMPELL
Published: January 27, 2009
Companies across the board are resorting to mass job cuts, suggesting that employers expect a long downturn.
http://www.nytimes.com/2009/01/27/business/economy/27layoffs.html?partner=permalink&exprod=permalink
On Wednesday, the tally of mass layoffs for December will be released by the Bureau of Labor Statistics. Already, the bureau says the United States economy has shed 2.55 million jobs since the recession began, pushing the unemployment rate up to 7.2 percent last month.
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Joe the Plumber is meeting with Republicans in DC to discuss the Obama stimulus plan. I'm not kidding.

Or maybe the media is joking. That has to be a joke.
 
AliEnvy said:
Let the big banks fail. Then many of the smaller banks who were prudent enough to stay out of the feeding frenzy can grow.
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Sounds good to me. :up: Only when the stimulus is shown to be like in Japan (ineffective) will people change. Until then it's all about constituents. Even the stimulus is laid out that way. Conservatives lack leadership. At least the GOP in the house didn't vote for the new bailout/stimulus but they have a long way to go before they get some real balls.

When the government doesn't record inflation properly (on purpose) they make the public eat some inflation. The public then doesn't like the safe investments because their return doesn't match inflation so they demand other products. Then the narcissists and psychopaths get together in banks and package higher rate/higher risk loans into fake "safe" investments to supply that demand. Some people were lead to believe that these investments were safer than GICs. :lol: If it's too good to be true then it must be.

As inflation rises people start using the cheap debt to speculate on what they think will rise in value. Before it was tech stocks then it was housing. Flippers always try and take advantage of inflation to essentially rob suckers who come late in the game when most people are at their debt limits. Buying low and selling high works in the beginning but the late comers have to have bigger and bigger debts to buy the assets and they eventually reach their limit. At this point the assets price value can't keep going up. The panic sets in and people sell and the value naturally goes down. Let the market adjust I say.

The other problem is accounting standards. I've read in some newspapers that these toxic assets are hidden in private equity firms that don't have to make public financial statements like public companies. There's approximately 4 trillion of bad assets in them if not more. If financial statements are that erroneous then banks that lend to each other and investors will still be skeptical that the losses have been recorded completely. It's going to take some time to work it through. Despite the "Paradox of thrift" theory, it is good that prices for things actually go down. When people feel their finances are improved they will be enticed to spend on goods that are at a reasonable price and confidence will return. This also means that workers will have to take a pay cut in order to adjust to the lower prices. That is often what increases the unemployment rate. Many workers will not tolerate lower wages or are not even offered that option and if the government keeps ignoring inflation workers will be demanding higher wages. I hope we don't end up in stagflation.
 
Japan’s Big-Works Stimulus Is Lesson for U.S.

by MARTIN FACKLER
New York Times, February 5


HAMADA, Japan — The Hamada Marine Bridge soars majestically over this small fishing harbor, so much larger than the squid boats anchored below that it seems out of place. And it is not just the bridge. Two decades of generous public works spending have showered this city of 61,000 mostly graying residents with a highway, a two-lane bypass, a university, a prison, a children’s art museum, the Sun Village Hamada sports center, a bright red welcome center, a ski resort and an aquarium featuring three ring-blowing Beluga whales.

Nor is this remote port in western Japan unusual. Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world—totaling 180% of its $5.5 trillion economy—while failing to generate a convincing recovery. Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging American economy, many economists are taking a fresh look at Japan’s troubled experience. While Japan is not exactly comparable to the United States—especially as a late developer with a history of heavy state investment in infrastructure—economists say it can still offer important lessons about the pitfalls, and chances for success, of a stimulus package in an advanced economy.

In a nutshell, Japan’s experience suggests that infrastructure spending, while a blunt instrument, can help revive a developed economy, say many economists and one very important American official: Treasury Secretary Timothy F. Geithner, who was a young financial attaché in Japan during the collapse and subsequent doldrums. One lesson Mr. Geithner has said he took away from that experience is that spending must come in quick, massive doses, and be continued until recovery takes firm root. Moreover, it matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than infrastructure spending. “It is not enough just to hire workers to dig holes and then fill them in again,” said Toshihiro Ihori, an economics professor at the University of Tokyo. “One lesson from Japan is that public works get the best results when they create something useful for the future.”

In total, Japan spent $6.3 trillion on construction-related public investment between 1991 and September of last year, according to the Cabinet Office. The spending peaked in 1995 and remained high until the early 2000s, when it was cut amid growing concerns about ballooning budget deficits. More recently, the governing Liberal Democratic Party has increased spending again to revive the economy and the party’s own flagging popularity. In the end, say economists, it was not public works but an expensive cleanup of the debt-ridden banking system, combined with growing exports to China and the United States, that brought a close to Japan’s Lost Decade. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations. In the United States, it has also led to calls in Congress, particularly by Republicans, not to repeat the errors of Japan’s failed economic stimulus. They argue that it makes more sense to cut taxes, and let people decide how to spend their own money, than for the government to decide how to invest public funds. Japan put more emphasis on increased spending than tax cuts during its slump, but ultimately did reduce consumption taxes to encourage consumer spending as well.

Economists tend to divide into two camps on the question of Japan’s infrastructure spending: those, many of them Americans like Mr. Geithner, who think it did not go far enough; and those, many of them Japanese, who think it was a colossal waste. Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. Much of the blame has fallen on the Liberal Democratic Party, which has long used government spending to grease rural vote-buying machines that help keep the party in power. But some Western economists who have studied Japan’s experience say the stimulus accomplished more than it is now given credit for. At a minimum, they argue, it saved the economy from an outright, 1930s-style collapse. Moreover, they say, any direct comparison of Japan and the United States is inevitably misleading, because Japan has spent so much more over the years on infrastructure. Having neglected its roads, bridges, water treatment plants and more over the years, the United States is bound to generate a greater payback for such spending than would Japan. Beyond that, proponents of Keynesian-style stimulus spending in the United States say that Japan’s approach failed to accomplish more not because of waste but because it was never tried wholeheartedly. They argue that instead of making one big push to pump up the economy with economic shock therapy, Japan spread its spending out over several years, diluting the effects. After years of heavy spending in the first half of the 1990s, economists say, Japan’s leaders grew concerned about growing budget deficits and cut back too soon, snuffing out the recovery in its infancy, much as Roosevelt did to the American economy in 1936. Growth that, by 1996, had reached 3% was suffocated by premature spending cuts and tax increases, they say. While spending remained high in the late 1990s, Japan never gave the economy another full-fledged push, these economists say. They also say that the size of Japan’s apparently successful stimulus in the early 1990s suggests that the United States will need to spend far more than the current $820 billion to get results. Between 1991 and 1995, Japan spent some $2.1 trillion on public works, in an economy roughly half as large as that of the United States, according to the Cabinet Office. “Stimulus worked in Japan when it was tried,” said David Weinstein, a professor of Japanese economics at Columbia University. “Japan’s lesson is that, if anything, the current U.S. stimulus will not be enough.”

Most Japanese economists have tended to take a bleaker view of their nation’s track record, saying that Japan spent more than enough money, but wasted too much of it on roads to nowhere and other unneeded projects. Dr. Ihori of the University of Tokyo did a survey of public works in the 1990s, concluding that the spending created almost no additional economic growth. Instead of spreading beneficial ripple effects across the economy, he found that the spending actually led to declines in business investment by driving out private investors. He also said job creation was too narrowly focused in the construction industry in rural areas to give much benefit to the overall economy. He agreed with other critics that the 1990s stimulus failed because too much of it went to roads and bridges, overbuilding this already heavily developed nation. Critics also said decisions on how to spend the money were made behind closed doors by bureaucrats, politicians and the construction industry, and often reflected political considerations more than economic. Dr. Ihori said the United States appeared to be striking a better balance by investing in new energy and information-technology infrastructure as well as replacing aging infrastructure.

Japan’s experience also seems to argue for spending heavily to promote social development. A 1998 report by the Japan Institute for Local Government, a nonprofit policy research group, found that every 1 trillion yen, or about $11.2 billion, spent on social services like care for the elderly and monthly pension payments added 1.64 trillion yen in growth. Financing for schools and education delivered an even bigger boost of 1.74 trillion yen, the report found. But every 1 trillion yen spent on infrastructure projects in the 1990s increased Japan’s gross domestic product, a measure of its overall economic size, by only 1.37 trillion yen, mainly by creating jobs and other improvements like reducing travel times. Economists said the finding suggested that while infrastructure spending may yield strong results for developing nations, creating jobs in higher-paying knowledge-based services like health care and education can bring larger benefits to advanced economies like Japan, with its aging population. “In hindsight, Japan should have built public works that address the problems it faces today, like aging, energy and food sources,” said Takehiko Hobo, a professor emeritus of public finance at Shimane University in Matsue, the main city of Shimane. “This obsession with building roads is a holdover from an earlier era.”

The fruits of that obsession are apparent across Shimane, a rural prefecture about the size of Delaware where Hamada is located. Each town seems to have its own art museum, domed athletic center and government-built tourist attraction like the Nima Sand Museum, a giant hourglass in a glass pyramid. The prefecture, with 740,000 residents, even has three commercial airports able to handle jets, including the $250 million Hagi-Iwami Airport, which sits eerily empty with just two flights per day. In Hamada, residents say the city’s most visible “hakomono,” the Japanese equivalent of “white elephant,” was its own bridge to nowhere, the $70 million Marine Bridge, whose 1,006-foot span sat almost completely devoid of traffic on a recent morning. Built in 1999, the bridge links the city to a small, sparsely populated island already connected by a shorter bridge. “The bridge? It’s a dud,” said Masahiro Shimada, 70, a retired city official who was fishing near the port. “Maybe we could use it for bungee jumping,” he joked.

Koichi Matsuoka, a retired professor of policy at the University of Shimane in Hamada, said useless projects like the Marine Bridge were the reason that years of huge spending had brought few long-term benefits here. While Shimane has had the highest per capita spending on public works in Japan for the last 18 years, thanks to powerful local politicians like the deceased former Prime Minister Noboru Takeshita, its per capita annual income of $26,000 ranked it 40th among Japan’s 47 prefectures, he said. He said the spending had left Shimane $11 billion in debt, twice the size of the prefectural government’s annual budget.

Still, local officials in Hamada warn that their city’s economy will collapse without public works, though they recognize the spending cannot continue forever. They offered their own lesson to American communities in the Obama era: when you choose public works projects, be sure to get ones with lasting economic impact. Among Hamada’s many public works projects, the biggest benefits had come from the prison, the university and the Aquas aquarium, with its popular whales, they said. These had created hundreds of permanent jobs and attracted students and families with children to live in a city where nearly a third of residents were over 65. “Roads and bridges are attractive, but they create jobs only during construction,” said Shunji Nakamura, chief of the city’s industrial policy section. “You need projects with good jobs that will last through a bad economy.”
 
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yolland said:
Moreover, it matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than infrastructure spending. “It is not enough just to hire workers to dig holes and then fill them in again,” said Toshihiro Ihori, an economics professor at the University of Tokyo. “One lesson from Japan is that public works get the best results when they create something useful for the future.”

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“In hindsight, Japan should have built public works that address the problems it faces today, like aging, energy and food sources,” said Takehiko Hobo, a professor emeritus of public finance at Shimane University in Matsue, the main city of Shimane. “This obsession with building roads is a holdover from an earlier era.”
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This is a nice segway into a thread I posted a few weeks back. We may be indeed heading into a new era - from the agriculture age to the industrial age to the information age to an emerging creative age.

Acts of Creative Destruction: Rebuilding America for the 21st Century | OurFuture.org

Acts of Creative Destruction: Rebuilding America for the 21st Century

By Sara Robinson
August 20th, 2008

This blog has been covering the shameful collapse of America's infrastructure on almost a weekly basis, so it should come as no surprise to even our most casual readers that the physical structures and systems that support our entire way of life are in serious trouble. We all know the litany: the levees of New Orleans, the I-35 bridge in Minneapolis, overtaxed air traffic systems, construction cranes coming down all over, thousands of other structures quivering on their last legs. It's a slow-motion disaster-in-the-making.

And we all know the reason, too. All this stuff takes constant inspection and oversight, along with regular upgrades and maintenance. But for the last 30 years, conservative governments have resolutely cut budgets and driven out the experts whose job it was to keep the country's public works in good working order. They did it on purpose, to prove their ideological argument that putting infrastructure in the hands of government was always a bad idea. And they were also quietly licking their chops, waiting for the day that the people's capital—the stuff built up and bequeathed to us by so many generations of Americans before us—could be declared salvage, and sold off to their cronies for the price of scrap in one last privatizing fit.

Even so: we may actually look back in a decade and realize that the conservatives did us a huge favor. It's an article of Shock Doctrine thinking that every act of destruction makes way for an act of creation (or, at least, conservative perversion). In this case, the conservatives set the destruction process in motion long ago; but it seems pretty clear that they never expected there would be an Obama Moment—a moment of national renewal in which progressives would be able to seize the process and launch some bold, creative acts of our own.

It's not an overstatement to say that we may never have a creative opportunity like this one again. Even as our cities are crumbling around us, we're also finding ourselves in deep trouble on the energy front. Dwindling supplies and increasing demand are working their free-market magic, shrinking our household budgets and destabilizing our oil-based economy. Call it climate change or peak oil or simply the fall of the petrodollar, but there's a growing awareness that there's something deeply amiss -- and completely unsustainable -- about the entire system by which America extracts and consumes energy. And the more forward-thinking among us also realize now that solving this problem is going to require us to dramatically re-order our economy, invest in and invent new technologies, and completely re-think the way we build cities.

Much of our current failing infrastructure was built between the early 1930s and the mid-1960s—an era of vast public works projects that dammed rivers, raised skyscrapers, and laced the nation with interstate highways. The things our parents and grandparents built and the policy choices they made expressed the cultural values, economic and social priorities, and new technologies that dominated their era. Cheap energy allowed them to replace the streetcars and railroads—considered urban wonders by their own grandparents—with the speed and convenience of cars, trucks, and airplanes. It fueled the construction of big single-family houses and vast freeway networks, which in turn encouraged suburban sprawl. In an era when people believed that humans were put on earth to dominate and tame nature, and defined "quality of life" by the quantity of goods consumed, the suggestion that any of this might be permanently damaging the earth—or that it might cause problems down the road that would seriously threaten human existence—was simply absurd.

Fast forward 60 years, and we're now in a very different place. It's all too clear that our grandparents' technologies, economic priorities and ideas about what comprises a satisfying way of life are creating serious, planet-wide ecological trouble. These days, we realize that we live on a finite planet, and that we're finally bumping up against its limits. In particular, we don't have the vast reserves of cheap energy that will allow us to sustain the all the power-hungry systems our ancestors bequeathed to us. Those sprawling post-war cities made perfect sense in their time; but increasingly, they don't make sense in ours. But because all this stuff is already built—at a tremendous cost in money and material—it's also daunting to consider just how much of it will have to be rebuilt, refitted, or simply scrapped and replaced (or not) in order adapt to the new realities.

It would be much harder to justify a broad-scale rebuilding effort if everything was still working as it should. But since the conservatives have already done us the favor of letting it all fall apart, we've got a great opportunity to launch the same kind of national overhaul that we saw in the FDR years. This time, though, we have the opportunity to do rebuild the country our own way—a way that expresses 21st-century values, technologies, and economic priorities.

It's not enough to merely restore what's already there. We need to take an entirely fresh look at our assumptions about how cities and towns should be built, and put sustainability at the core of all our planning decisions. We might decide to reclaim what our 19th century ancestors knew about building pedestrian-friendly cities, where families lived above shops on lively neighborhood streets; and cozy small towns where everyone lived just a few blocks from Main Street. We might follow the example of Europe, which has closed most of its historic old downtowns to traffic, increased density, and connected its cities with fast electric trains. (The average European maintains a comfortable middle-class lifestyle with an ecological footprint that's less than half that of the average North American.) And we might rewrite our building and planning codes to encourage the use of green technology, and to reflect the new understandings about sustainable living that our urban planners have been refining over the past 40 years.

(We might also consider the parable of Greenberg, Kan.—the 1,400-person prairie hamlet that was flattened by a tornado in May 2007. Rather than simply rebuild, they invited in the sustainability experts, and decided to use their insurance money to reconstruct Greenberg as "the greenest town in America." Now that's what I'm talking about.)

There's a lot of this already happening at the local and regional level, as cities invest in LEED-certified public buildings, carve out bike trails, contain sprawl and preserve valuable agricultural land, and expand electric rail networks as they upgrade existing streets and bridges. And, for the most part, it will continue to happen just this way—one bridge, one solar or wind farm, and one rail line at a time.

But there's also much a new Obama administration can do at the federal level to greatly accelerate this process—and some initiatives that are simply too big to happen unless the federal government steps in and sets the direction. For example, while we're making solid progress toward carbon-free cars, nobody at the moment has the slightest clue about making a carbon-free airplane. However, much of the world already runs on high-speed electric trains. The technology already exists. And the U.S. is already criss-crossed with enough old railroad right-of-ways that we could create an all-electric semi-high-speed (100-120 mph) national rail network by 2015—for a price tag that's less than we spend in three months in Iraq.

Ultimately, such a network could take most of the truck freight off the interstates, greatly reducing the amount of carbon generated by transportation. The system could also be a competitive option for many air passengers who now take shuttle flights under 1,500 miles, reducing congestion and carbon output in our air traffic system as well. And electric trains can be powered by many different kinds of carbon-free sources, including wind, solar, hydro, geothermal, or nuclear.

This idea was first proposed by Alan Bates at The Oil Drum. I heartily recommend his article, which explores the electric train idea in great economic and technical detail. But my larger point is this: There are plenty of good ideas like this out there. And right now, in the Obama Moment, we have an unprecedented opportunity to seek out the best of them, and start turning them into our children's reality.

Rick Perlstein notes that the Obama Moment will be a short one, and progressives will need to move quickly to get as much done as possible before it closes. But, as we saw in the FDR years, infrastructure renewal moves at a somewhat different pace—and has a sweet way of entrenching itself in a way that makes it very hard to stop the momentum once it gets started. Over the short term, the important goals are:

1. Restore public confidence in the government's ability to undertake large national infrastructure projects, and re-assert its right to set goals and policies to ensure those projects proceed smoothly.

2. Define the overarching standards for a reconstructed America. This will include federal review of the building and planning codes now in use, and probably the writing of new mandates that set out 21st-century standards and priorities for energy use, urban and transportation planning, and environmental design. Once these are put into law and accepted into general use, they'll be very hard to change.

3. Commit funding for a massive 10- or 20-year program that will upgrade or replace failing components of America's infrastructure. The country is broke (as it was in FDR's day); but this kind of spending needs to be seen as the long-term investment in our economic future that it is.

4. Restore a fair, honest, broad-based system of public contracting that will put large numbers of Americans to work on these new projects. (And write the new rules in a way that ensures that the firms doing the most innovative work don't have to compete with Halliburton and Lockheed for the lion's share of the funding.) Once you've got a healthy, competitive construction industry that knows how to build sustainable projects—and is relying on the government to keep it in business—you've got a political constituency that will fight to ensure that the rebuilding will continue for the next several decades, regardless of who's in power.

Once again, the Roosevelt years offer a guideline for what's possible, and how we might get this done. The conservatives, for their own reasons, have cleared the deck for us to start over. It's up to us to seize the moment, and get it done.
 
While this report was commissioned for Ontario, it's an interesting draft blueprint for North America.

globeandmail.com: Economic crisis: The shakeup Canadians need?

Economic crisis: The shakeup Canadians need?
Report on Ontario's prosperity urges a transition to a new creative economy from the dying industrial age

KAREN HOWLETT
Globe and Mail
February 5, 2009

TORONTO — The once-in-a-lifetime economic crisis should spur governments to look beyond stimulus schemes to save industrial jobs and toward ways to nurture the occupations that can build future prosperity, says urban thinker Richard Florida.

"These kind of crises - 1873, 1929, 2008 - they don't come around that often, and they force people to think in a new way," he said in an interview yesterday. "Now, you've got to say, 'what are we going to do?' "

In a report to be released today, Dr. Florida and co-author Roger Martin, dean of the University of Toronto's Rotman School of Management, have laid out their blueprint for the future, one in which virtually every worker, from dry cleaners to biomedical engineers, and every nook and cranny of Canada reaps the benefits of a creative economy.

The report focuses exclusively on Ontario; it was commissioned by Premier Dalton McGuinty. But its findings apply all across Canada as every province makes the transformation from an industrial society to a creative one.

The authors say the boundaries separating old industrial cities, Canada's North and rural regions from the burgeoning hotbeds of creative, knowledge-driven activity must be torn down. The creative economy must give rise to a new geographic structure consisting of a series of cities and suburbs linked together by rapid-transit systems and communications networks, the report says.

"In the past, you could have your own island economy," Dr. Florida said. "Now we have to connect mega-regions."

Canada's future prosperity hinges on its ability to nurture and develop the creative skills of its workers. Ontario is on the front lines of making the transition as its manufacturing heartland undergoes wrenching change.

The province is an interesting case study, because its economy consists of industrial auto plants and factories, remote rural regions and three distinct creative clusters in the Toronto, Ottawa and Kitchener-Waterloo areas, Dr. Florida said.

Ontario has lost thousands of manufacturing jobs in recent years. Many of these jobs have vanished forever as manufacturing plants shut down, reduce their work force or pull up stakes altogether. The province's road to prosperity hinges on making the transition from an economy based on physical labour to one based on the brainpower of its workers.

Ontario has a long way to go, the report says.

For starters, the province does not place a high enough premium on knowledge workers. This not only prevents the province from attracting the best and the brightest from around the world, it also likely accounts for the brain drain of talented professionals leaving Ontario for greener pastures, Dr. Florida said.

Wages for creative workers are lower in Ontario than in 14 other jurisdictions examined by the authors. These include British Columbia, Alberta and Quebec as well as Arizona, Illinois, Michigan, New York and Ohio.

The province values physical labour more than analytical and social skills, the report says. While that may have worked well in the industrial age, it will slow down its transition from an economy based on physical brawn to one based on human creativity, it adds.

"We have not rewarded our cognitive skills," Dr. Florida said, adding that this is not a function of the mix of jobs.

Much of the report has a utopian feel to it, because the authors' vision for the future is dramatically at odds with current reality. The authors acknowledge as much, by outlining a number of other steps the province must take.

Ontario should be viewed as the world's most talented jurisdiction, with enough highly skilled workers to fill the 70 per cent of new jobs that will call for a college or university education. Ontario should also have the social safety nets that would provide basic goods for those in need and greater opportunity for every person to fulfill his or her creative talents, including early childhood development programs.

"This is the highest payoff investment we can make in our long-run prosperity," the report says. "As we have seen, early childhood development is key to the full development of human capabilities and talent."

*****

How they get the job done

Workers - whether they are chief executives or waiters - draw on the three sets of skills to do their jobs. The talents required for more creativity-oriented occupations are more heavily weighted towards analytical and social intelligence skills. The opposite is true for occupations built on routines.

Ontario undervalues gains in analytical and social intelligence skills

IMPACT ON EARNINGS AS OCCUPATIONS MOVE FROM 25TH to 75TH PERCENTILE IN SKILL CONTENT

ANALYTICAL

Ontario: $18,700

14 U.S. peers: $24,800*

SOCIAL INTELLIGENCE

Ontario: $25,100

14 U.S. peers: $32,500*

PHYSICAL

Ontario: -$8,100

14 U.S. peers: -$18,300*

*Converted to Canadian dollars at purchasing power party
 
Thanks for the posts! Good stuff. Japan is a good area to look at for past economic lessons.

Students right now should look to what is considered a better profession to last in the coming decades. They should probe current job situations and which job categories are declining and which are increasing in demand. There are also opportunities for those who invent new ways of doing things.
 
I spent more time researching new tires for my car,

than the Dems have spent hammering out the $1.2 trillion spending bill (w/ interest). Special thanks go out to my Maine senators for making sure there's no serious discussion on the most expensive bill in world history.
 
from Paul Krugman's NYT blog, today
I’m still working on the numbers, but I’ve gotten a fair number of requests for comment on the Senate version of the stimulus.

The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts. According to the CBO’s estimates, we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger.

Now the centrists have shaved off $86 billion in spending—much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast—because it prevents spending cuts rather than having to start up new projects—and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out. My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.

The real question now is whether Obama will be able to come back for more once it’s clear that the plan is way inadequate. My guess is no. This is really, really bad.
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I just read this and enjoyed the perspective:

Two Kinds of Economic Recovery
by Brian McLaren 02-10-2009

I just watched President Obama’s Indiana speech and town hall meeting from my hotel room in San Diego. I was watching on MSNBC, with Chris Matthews hosting and Pat Buchanan commenting. Pat (predictably) panned the speech, saying that people in Elkhart make RVs, and Obama’s speech failed to explain how we’d get Americans to buy RVs again. His comment, it seems to me, perfectly epitomizes an adventure in missing the point, and perfectly articulates two kinds of economic recovery.

For many people, economic recovery means “getting back to where we were a few months or years ago.” That means recovering our consumptive, greedy, unrestrained, undisciplined, irresponsible, and ecologically and socially unsustainable way of life.

I’d like to suggest another kind of recovery … drawing from the world of addiction. When an addict gets into recovery, he doesn’t want to go back and recover the “high” he had before, or even to recover the conditions he had before he began using drugs and alcohol. Instead, he wants to move forward to a new way of life — a wiser way of life that takes into account his experience of addiction. He realizes that his addiction to drugs was a symptom of other deeper issues and diseases in his life … unresolved pain or anger, the need to anesthetize painful emotions, lack of creativity in finding ways to feel happy and alive, unaddressed relational and spiritual deficits, lack of self-awareness, and so on.

Similarly, I’d like to suggest whenever we hear the word “recovery,” we as a nation see it not as a call to get back our old addictive high, but rather as a call to face our corporate and personal addictions, including the following:

1. Our addiction to carbon. Fossil fuels are an addictive substance. They give us speed … quick energy … serving as a kind of cultural amphetamine. Meanwhile, they toxify our environment and throw the ecosystem in which we live into dangerous imbalance.

2. Our addiction to weapons. Weapons are one of the most addictive substances possible. They give us a feeling of well-being and security, removing our feeling of fear and anxiety, much like a barbiturate. But like a drug, they make us lazy and slow — lazy and slow in the much more important work of relationship-building, justice, and peace-making, lazy in seeking the common good. And they plunge us into an addictive cycle, because if everyone in the world is getting more and more weapons, we aren’t safer … especially when increasing numbers of those weapons are nuclear, biological, and chemical.

3. Our addiction to fear. Religious leaders, media leaders, and political leaders have all discovered that you can raise quick votes, dollars, and members through the hallucinogenic stimulant of fear. By making straights afraid of gays, conservatives afraid of progressives, Christians and Jews afraid of Muslims, citizens afraid of immigrants, and vice versa, these leaders get a quick organizational high — crack for their unity and morale. But the more fear you pump into your system, the more fear you have, and pretty soon, you go from being stimulated to paranoid, seeing things that aren’t there and missing things that are. And soon after that, you move from paranoia to paralysis, leaving you in greater danger than ever.

4. Our addiction to stuff. Jesus said that a person’s life doesn’t consist in the abundance of her possessions. An economy that measures growth by the number of durable goods (resources) extracted from the environment and turned into non-durable goods that are bought, used, and then thrown away into a landfill … that economy “succeeds” by turning goods into trash, and calling it success. That’s not success. We need to imagine moving beyond an extractive, consumptive economy to a sustainable economy, and beyond a sustainable economy to a regenerative economy. I believe that in God’s world, if billions can be made destroying the planet and exploiting people addictively, trillions can be made caring for the planet wisely and caring for people justly.

5. Our addiction to a single bottom line. During the president’s town hall meeting, a man from Indiana told how he started a solar-powered attic fan company, and how he chose not to ship manufacturing overseas, but instead, to provide good employment for his neighbors. That meant, he said, that he had a little less cash in his pocket … but wouldn’t you agree that being a good neighbor has a value that can’t be measured in dollars? The single bottom line of financial profit is addictive, and like an addiction, it destroys families and communities. We need to rediscover a triple bottom line — financial sustainability, social sustainability, and economic sustainability. So we need a recovery of family values, and we also need a recovery of community values, and neighborly values, and ethical business values.

6. Our addiction to easy answers. “Government is the problem.” “Just throw money at the problem.” We can’t afford our addiction to these kinds of easy ideological slogans and facile reactive fantasies in a complex, real world. Ideology is, in many ways, a drug that substitutes the quick high of unthinking reaction for the hard work of acquiring wisdom.

So … maybe we can sabotage our addictive tendencies by letting the word “recovery” have a meaning that wakes us up rather than drugs us into the comfortable, dreamy, half-awareness in which we have lived for too long. That’s my hope and prayer.

God's Politics: A Blog by Jim Wallis & Friends
 
I really enjoyed it too. Although now all this talk of addiction and recovery has the withdrawl scenes from Trainspotting stuck in my head. :crazy::lol::|
 
The atheists are out in force to rule America with their jackbooted liberalism
President Obama's proposed economic stimulus plan makes a deliberate – and unconstitutional – attempt to censor religious speech and worship on school campuses across the nation, according to a lawyer who argued related cases before the U.S. Supreme Court 20 years ago and won them all.

"This isn't like a convenient oversight. This is intentional. This legislation pokes its finger in the eyes of people who hold religious beliefs," Jay Sekulow, chief of the American Center for Law and Justice, told WND today.

His was the organization that decades ago argued on behalf of speech freedom on school campuses, winning repeatedly at the U.S. Supreme Court. Since then, the 2001 Good News Club v. Milford Central School District decision was added, clarifying that restricting religious speech within the context of public shared-use facilities is unconstitutional.

The problem in the proposed stimulus bill comes from a provision that states: "PROHIBITED USES OF FUNDS. - No funds awarded under this section may be used for - (C) modernization, renovation, or repair of facilities - (i) used for sectarian instruction, religious worship, or a school or department of divinity; or (ii) in which a substantial portion of the functions of the facilities are subsumed in a religious mission."

The wording that specifically targets religious speech already has been approved by the majority Democrats in the U.S. House – all GOP members opposed it. In the Senate, Jim DeMint, R-S.C., proposed an amendment to eliminate it, but again majority Democrats decided to keep the provision targeting religious instruction and activities.

Critics argued schools would accept any money offered, then impose a ban on religious events.

DeMint warned organizations such as the Fellowship of Christian Athletes, Campus Crusade for Christ, Catholic Student Ministries, Hillel and other religious groups would face new bans on access to public facilities that would not apply to other organizations.

"This is a direct attack on students of faith, and I'm outraged Democrats are using an economic stimulus bill to promote discrimination," DeMint said. "Democrats should be ashamed of themselves for siding with the ACLU over millions of students of faith."
Click to expand...
Stimulus to ban religious worship
 
** moment of levity **


So Eric Cantor, the House minority whip, found himself in a bit of hot water today when an aide with severely impaired judgment decided to respond to a current ad campaign (which criticizes Cantor for leading GOP opposition to the economic recovery package, and is underwritten by the public-workers' union AFSCME) by emailing to journalists a heavily profanity-spiked, parody-by-overdub of an old AFSCME ad from the 1970s. Oops! What makes this even funnier is that Cantor was a forceful campaigner for the 2005 Broadcast Decency Enforcement Act, pontificating from the floor of the House at the time that "[t]he use of obscenity…should not and cannot be tolerated. As a parent, I share the concerns of many regarding the level of offensive television and radio programs that are transmitted into our homes. The recent violations that have occurred disgusted not only me, but damage our society...we will not be satisfied until those responsible...have been reprimanded."

Cantor's office issued a formal apology after their nonplussed recipients circulated the email online, drawing a highly indignant response from AFSCME and a rash of unflattering blogosphere "publicity." I'd be willing to bet this aide's head is gonna roll--as the National Review's Jim Geraghty wryly commented, "Yeah...probably shouldn't have done that."


We Don't Take Sh*t from NOBODY! You Got That, A**hole?
 
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Back to the unfunny stuff...
Victory for Obama, but in a New Political Climate

by RICHARD W. STEVENSON
New York Times, February 11, 2009


WASHINGTON — It is a quick, sweet victory for the new president, and potentially a historic one. The question now is whether the $789 billion economic stimulus plan agreed to by Congressional leaders on Wednesday is the opening act for a more ambitious domestic agenda from President Obama or a harbinger of reduced expectations.

Both the substance of his first big legislative accomplishment and the way he achieved it underscored the scale of the challenges facing the nation and how different a political climate this is from the early stages of recent administrations. While it hammered home the reality of bigger, more activist government, the economic package was not the culmination of a hard-fought ideological drive, like Lyndon B. Johnson’s civil rights and Great Society programs, or Ronald Reagan’s tax cuts, but rather a necessary and hastily patched-together response to an immediate and increasingly dire situation. On the domestic issues Mr. Obama ran and won on—health care, education, climate change, rebalancing the distribution of wealth—the legislation does little more than promise there will be more to come.

In cobbling together a plan that could get through both the House and the Senate, Mr. Obama prevailed, but not in the way he had hoped. His inability to win over more than a handful of Republicans amounted to a loss of innocence, a reminder that his high-minded calls for change in the practice of governance had been ground up in a matter of weeks by entrenched forces of partisanship and deep, principled differences between left and right. In the end, Congress did not come together to address what Mr. Obama has regularly suggested is a crisis that could rival the Great Depression. What consensus has been forged so far is likely to be tested in the months to come as he faces scrutiny over the effectiveness of the stimulus package and the likelihood that he will have to ask Congress for substantially more money to heal the fractures in the financial system.

So this was hardly a moment for cigars.

If this is the 21st-century version of Franklin D. Roosevelt’s 100 Days, Mr. Obama seems to be pursuing it more as an urgent but imposed necessity than as a self-selected mission. While he has deployed his political capital freely to win approval of the package and to begin pushing his version of a financial-system rescue, he has left little doubt that he is eager to move on to the rest of his domestic agenda. At his news conference on Monday night, Mr. Obama said with a hint of exasperation that a costly economic rescue package “wasn’t how I envisioned my presidency beginning.” Regardless of the government’s budgetary straits, Mr. Obama has signaled that he sees his other signature initiatives not just as salvageable but as more urgent than ever. Yet since Election Night, when he warned of “setbacks and false starts” and called for “a new spirit of sacrifice,” he has assiduously managed the politics of the moment with an eye toward tempering expectations and limiting the risk to himself and his party.

In his own telling, the legislation Congress is about to send him is imperfect and may not work. His political standing, he suggested to an audience in Florida on Tuesday, could tumble if voters do not see results in the next two years. It is a sharp and calculated shift from the expansive promises, explicit and implied, that carried him to the White House. “He has been very consistent, really since the night of his election victory, that it took a long time to get into this and it will take a long time to get out of it,” said William Galston, a domestic policy aide in the Clinton White House who is now a senior fellow at the Brookings Institution, the liberal-leaning research organization. “And there’s some evidence that the American people are prepared to be patient.” But Mr. Galston said Mr. Obama may not yet have fully absorbed the difficulties he faces in pressing for expensive policy initiatives to make health care more affordable and accessible, address global warming, provide more money for education and promote research into alternative energy sources. “The president hasn’t done as good a job of preparing the nation for the tradeoffs necessary to reconcile the hope agenda with the fear agenda,” Mr. Galston said. “I’d be surprised if a Congress still reeling from sticker shock in terms of the stimulus and the financial rescue are willing to pony up for a full-bore reform of the health system.”

David Winston, a Republican pollster, said that whatever big goals Mr. Obama and the base of the Democratic Party remain eager to achieve, voters for the most part are going to be focused on one thing: whether the economic measures sponsored by the new administration prove effective in halting and reversing job losses. “He’s going to have to fit other issues into the larger narrative of the economy,” Mr. Winston said.

Mr. Obama has long since begun trying to do just that. He has been framing rising health care costs not just as a social issue, but as one affecting the viability of American industry. Cleaning up the environment and weaning the economy from its dependence on oil are opportunities to create new, well-compensated jobs. Education is an investment in the economy’s long-term competitiveness. But those assertions will run up against a variety of countervailing forces: a rapidly rising national debt, a strain of populist anger, a smaller but energized Republican minority and divisions among Democrats about priorities, to name a few. Getting past them promises to be as tricky for Mr. Obama as was this first victory.
Click to expand...
 
The part of the plan to assist some people in foreclosure is very problematic.


It is not possible to pick "deserving" borrowers while passing over others.



If Obama is lucky,
Congress will kill this portion of the bill.

If it moves on, there will be big consequences for Obama.
 
The Fed�s Dilemma by David Gitlitz on National Review Online

The Fed’s Dilemma
Will the central bank withdraw inflationary liquidity too soon, too late, or just in time?

By David Gitlitz


During the credit crisis, the Federal Reserve has gone to unprecedented lengths to provide the financial system with abundant supplies of liquidity. There are two purposes behind these actions: to guard against the risk of systemic failure and to root out the deflationary forces that appeared in conjunction with the risk-abhorrence of last fall. Up to this point, these efforts have mostly worked.

It is likely, however, that this extraordinary exercise in monetary ease will at some point have significant inflationary consequences. And the Fed will face a big dilemma if this happens before the market is restored to stability and the economy has emerged from recession. In this scenario, the Fed would have to either tolerate significantly higher inflation for a period, or tighten its policy in the face of still-significant weakness in the economy and markets.

The Fed’s task was made no easier when Treasury Secretary Tim Geithner unveiled the details of his bank-rescue plan — the Public Private Investment Program — which makes the Fed a major supplier of financing to support purchases of toxic assets that are now clogging the banking system. Excluding this program, the Fed’s own rescue plans could force its balance sheet to balloon to near $4 trillion over the next several months, up from less than $1 trillion last September. Including the Treasury program, another $2 trillion could be added to the total.

Some of this liquidity could be offset through a program whereby the Treasury issues debt and deposits the proceeds with the Fed. That would serve to drain funds from the system, partly sterilizing the Fed’s asset acquisitions. But the Treasury’s capacity to issue debt to fund this program may be limited. The first sign of resistance to the massive borrowing requirements being borne by the federal government came at a recent auction of five-year notes: Demand for the debt was less than expected. So it’s questionable whether the Treasury will essentially want to compete against itself by floating a large amount of additional debt to fund the Fed.

And even if that Treasury assistance goes through, it would account for a relatively small part of the total liquidity that has been added to the system through the Fed’s acquisition of assets.

The Fed is now proceeding on the explicit assumption that once the crisis fades and the economy enters recovery, it can unwind its balance sheet quickly enough to avoid a significant breakout of inflation. But that assumption may rely on faulty premises.

For one thing, the Fed is aggressively expanding a program that provides loans with three-year terms. Unless there is some way of sterilizing the impact of those loans, it will be impossible for the Fed to withdraw that liquidity until the loans come due. At the same time, the Fed is acquiring mortgage-backed securities, assets that may prove difficult to unload at a later date.

There’s also a larger issue at stake: Will the Fed actually know when it’s the right time to unwind its balance sheet? And since it has gone to unprecedented lengths in carrying out its extraordinary monetary ease, how easily and quickly will it be able to shift from an anti-deflationary to an anti-inflationary mindset? When that choice arrives, the Fed may opt for what it considers the least risky solution: tolerating a higher-inflation environment in the interest of market and economic stability.

On that score, a surprisingly honest acknowledgement of the potential quandary facing the central bank came last month from Jeffrey Lacker, president of the Richmond Fed. Lacker told a group at the College of Charleston that the potential inflationary impact of the Fed’s actions “depends on our skill at the Federal Reserve in withdrawing the stimulus in a timely way. That is a very delicate, very hard policy.”

Lacker referred to the “spotty” nature of an economy in recovery, and asked, “Do we keep policy easy and stimulative because of the sectors that are lagging behind . . . or do we get ahead of the curve? It’s going to be a tough call.”

Lacker has strong anti-inflation credentials. So to hear him describe the Fed’s looming choice as a “tough call” seems to raise the probability that the Fed will accede to an inflationary — and unnerving — outcome.
Click to expand...
 
Yonkers Tribune : Gerald Celente Trends Alert - The "Bailout Bubble" - The Bubble to End All Bubbles

The biggest financial bubble in history is being inflated in plain sight, said Gerald Celente, Director of The Trends Research Institute. "This is the Mother of All Bubbles, and when it explodes," Celente warns, "it will signal the end to the boom/bust cycle that has characterized economic activity throughout the developed world."

Either unwilling or unable to call the bubble by its proper name, the media, Washington and Wall Street describe the stupendous government expenditures on rescue packages, stimulus plans, buyouts and takeovers as emergency measures needed to salvage the severely damaged economy.

"All of this terminology is econo-jargon," said Celente. "It's like calling torture 'enhanced interrogation techniques.'

Washington is inflating the biggest bubble ever: the 'Bailout Bubble.' "This is much bigger than the Dot-com and Real Estate bubbles which hit speculators, investors and financiers the hardest. However destructive the effects of these busts on employment, savings and productivity, the Free Market Capitalist framework was left intact. But when the 'Bailout Bubble' explodes, the system goes with it."

The economic framework of the United States has been restructured. Federal interventionist policies have given the government equity stakes, executive powers and management control of what was once private enterprise. To finance these buyouts, rescue and stimulus packages -- instead of letting failed businesses fail and bankrupt banks and bandit brokerages go bankrupt -- trillions of dollars are being injected into the stricken economy.

Phantom dollars, printed out of thin air, backed by nothing ... and producing next to nothing ... defines the "Bailout Bubble." Just as with the other bubbles, so too will this one burst. But unlike Dot-com and Real Estate, when the "Bailout Bubble" pops, neither the President nor the Federal Reserve will have the fiscal fixes or monetary policies available to inflate another.

With no more massive economic bubbles left to blow up, they'll set their sights on bigger targets. "Given the pattern of governments to parlay egregious failures into mega-failures, the classic trend they follow, when all else fails, is to take their nation to war," observed Celente.

Since the "Bailout Bubble" is neither called nor recognized as a bubble, its sudden and spectacular explosion will create chaos. A panicked public will readily accept any Washington/Wall Street/Main Stream Media alibi that shifts the blame for the catastrophe away from the policy makers and onto some scapegoat.

"At this time we are not forecasting a war. However, the trends in play are ominous," Celente concluded. "While we cannot pinpoint precisely when the 'Bailout Bubble' will burst, we are certain it will. When it does, it should be understood that a major war could follow."
Click to expand...

Um, wtf. The figures thrown around these days are so outrageous that they seem meaningless...

Moneynews - Video: Federal Reserve Cannot Account for $9 Trillion
 
I'm so glad Canada didn't go as far into debt, though I would have been happier if some social spending had been trimmed to balance the budget. Everyone is a Neo-Keynesian in the foxhole.
 
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