Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.
Feel That? It’s Your Economy Shrinking. The National Bureau of Economic Research declared we’ve been in recession since December 2007. Washington Monthly’s Steve Benen observes, “This is the eleventh recession in the post-World War II era, but it is already one of the longest [and] very likely to be the longest since the Great Depression.”
The LA Times headlines: “U.S. recession could last into 2010.” News agency Bloomberg warns of “Great Recession” and notes “The loss of 1.2 million jobs so far this year was the biggest factor in determining the starting point of the U.S. recession, the NBER said.”
FDL’s Stirling Newberry: “it is clear what a disaster last year’s attempt at stimulus was [primarily based on springtime rebate checks for singles earning less than $75K and couples less than $150K], it basically lurched the economy forward only into June. [The NBER] noted that manufacturing data shows that industrial output is ‘substantially’ below it’s peak – by almost 5%.”
New economic recovery proposals would be dramatically different than the last stimulus. The NYT: “House Democrats said Monday that they would try to pass an economic recovery bill costing $400 billion to $500 billion next month….” Reuters: “[A Democratic] aide, who asked not to be identified, said the legislation would include a middle-class tax cut, billions of dollars for road, bridge and mass transit construction, expanded aid to states and investments in renewable energy.”
Big Remaining Question: Is that $500B over one year or two? Remember, Joseph Stiglitz just declared we need “at least $600 billion to $1 trillion over two years.”
The W. Post: “…governors intend to request about $176 billion of that — $136 billion for infrastructure projects and $40 billion to bolster Medicaid health programs that serve the poor and disabled.”
One of those governors, NJ’s Jon Corzine, made the case for public investment in infrastructure last night, telling Rachel Maddow we need to be “investing in things that will both create jobs and provide long-run returns to society.”
Conservative denial of economic reality continues. National Review’s Kathryn Lopez alerts the die-hards “Fred Thompson has economic cheer to offer,” pointing to a new FredPAC video of the Hollywood Conservative sympathizing with the common man swiveling in a leather chair and holding a stogie.
After sarcastically dismissing the “gloom and doom” economic news from the media, as “more” irresponsible “spending” and “borrowing,” directly and disingenuously equating government action with reckless Wall Street behavior, deriding job creation as “digging” and “filling holes,” and repeating the right-wing lie that public investment didn’t help end the Great Depression. Of course, creating real jobs and investing in real infrastructure is a wee bit different than a Ponzi scheme built on mortgage instruments and credit swaps.
Having dismissed the recession as overhyped “gloom and doom,” Thompson exempts himself from offering any alternative ideas.
Meanwhile, Tim Duy of Economist’s View lambastes conservative columnist Peggy Noonan also for downplaying the recession. She assures, “Everyone is dressed the same. Everyone looks as comfortable as they did three years ago, at the height of prosperity.” Duy retorts, “It won’t be a real recession until we are all covered in nothing but rags,” and further skewers her logic when criticizing anti-poverty programs: “The safety net has so far prevented economic calamity but will cause an economic calamity if expanded.”
Ryan Avent takes down former Bush economist Greg Mankiw for claiming federal government should leave infrastructure investment to the states: “I can think of about ten different ways that this doesn’t stand up to scrutiny. First and most obviously, quality interstate transportation is economically important. Absent federal coordination of infrastructure spending, we would probably see sub-optimal investment in such transport. It doesn’t do a state much good to build a high-speed rail line or new freight capacity up to its border and no further.”
Dean Baker writes in the Guardian, “Deficit hawks are still circling,” and criticizes the new documentary “IOUSA:” “Economists from across the political spectrum agree that the only way to counteract this loss of consumption demand is through large increases in government spending. If IOUSA viewers manage to persuade their representatives in Congress to balance the budget, then they will be guaranteeing the country another Great Depression.”
FLASHBACK: The General Motors CEO Pension Scandal. As the Big 3 automakers prepare to return to Capitol Hill, union-bashing is in high gear. (Balloon Juice’s John Cole sizes up “The New Look of Union Busting.” And HuffPost’s Art Levine reports “New York Times Still Pushing $70-an-hour Autoworker Myth.”)
But as attacks on “gold-plated pensions” for workers renew, don’t forget what the Wall Street Journal reported two years ago:
GM worker pensions are set aside in an investment fund that earns billions and “offset[s] the pensions’ expense,” while CEO pensions are “Unfunded to the tune of $1.4 billion, [and] detracts from GM’s bottom line each year. Just how much is a mystery, because GM doesn’t break out the figure.”
Furthermore, WSJ reported: “GM has often said its U.S. pension plans added about $800 to the cost of each car made in the U.S. in 2004. It declines to say how much was due to executive pensions.”