Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.
Economic Recovery Plan: The Consensus Grows
OurFuture.org’s Robert Borosage, over at HuffPost: puts the focus on what should be in the upcoming economic recovery plan: “A key question is whether the stimulus will be strategic — investing in areas vital to our future, rather than in simple one-off expenditures for temporary effect. On this Obama seems clear. The centerpiece of his plan is a down payment towards moving to energy independence and dealing with global warming. He’ll generate green jobs by investing in retrofitting buildings for energy efficiency, in modernizing the electric grid, in pushing renewable energy, mass transit, and retooling the auto industry. He could also sensibly use the crisis to make college more affordable again. The cost of college has doubled under President Bush … Students have had to take on more and more debt to pay the bill.”
The nation’s governors are pressing Obama to move fast on investing in infrastructure. W. Post reports: “With President-elect Barack Obama vowing to plow hundreds of billions of dollars into the nation’s infrastructure, some state officials are warning that public works projects will fail to effectively lift the country out of recession unless they are chosen carefully and implemented rapidly.”
(My own take at OurFuture.org: The gubernatorial call is a bipartisan one, according to incoming White House Chief of Staff Rahm Emanuel, indicating the robust public investment will only be opposed by fringe conservatives used to being on the wrong side of history.)
Big 3 Do Their Homework
Congress demanded plans from the struggling automakers, and they got them.
W. Post: “GM and its U.S. rivals Chrysler and Ford all pleaded for government loans, promising in return to use the opportunity to slash costs, jettison brands, restructure their finances and speed the introduction of fuel-efficient vehicles widely considered crucial to their future. Together the three auto giants sought at least $28 billion and as much as $38 billion in government assistance, more than the $25 billion they requested just two weeks ago.”
WSJ: “In his testimony this week, Chrysler CEO Robert Nardelli plans to call on the auto makers and federal government to create ‘an independent joint venture’ to develop improved energy technology, such as batteries for electric and hybrid vehicles, a Chrysler executive said.”
Marcy Wheeler of EmptyWheel is in the midst of reviewing the plans., and finds Ford is daring to challenge Speaker Pelosi on California’s fuel economy standards, yet is “almost sounding like Democrats” in criticizing the proposed trade agreement with Korea. “I imagine Hyundai represents a far greater challenge to Ford right now … It’d be nice if they said that specifically, if only because it would give me another reason to beat up Richard Shelby and his state’s Hyundai plants.”
Joseph Romm at Climate Progress reviews the plans from the green perspective: “…this time they have put on the table serious restructuring plans. At first glance, Ford’s (here) appears to me sounder than GM’s (here) … Ford does not use the word “hydrogen” or “fuel cell” at all — a huge shift from even a year ago … For Ford, the future now seems to be electrons … If Ford follows through with this vision, then they are likely to survive and thrive in the coming years, since electricity is the winning fuel … GM’s plan is not as sharp. First off, GM is still pushing its corn ethanol yellow-washing [and] continues to waste money on and brag about hydrogen cars … Still, GM will be first to market with a serious plug in hybrid, the Chevy Volt…”
Building Mo for Nationalizing GM?
Dan Neil’s LA Times column called to “Nationalize GM”, which landed him on MSNBC’s Hardball (see video about 11 minutes in) yesterday. Neil ably handled conservative questions about our government’s ability to temporarily nationalize critical companies, citing the recent history of Conrail and others.
The column argues: “GM is competing with companies that are quasi-national now … Putting Uncle Sam in charge would fundamentally enlarge the return-on-investment horizon … This country should be putting millions of plug-in hybrid and electric vehicles on the road. As far as I can tell, without big subsidies, there is no way in the near term to build these vehicles and make a reasonable profit, due to the stubbornly high cost of advanced batteries.”
(Beyond Green wonders about those batteries: “the NYT points out that one of the biggest obstacles for the success of the Chevy Volt is the $15,000 battery that runs the car. Which begs the question: why should you have to buy the battery? [Why not] own the car but rent the battery? … If we’re going to remake the auto industry, I say we remake it.”)
Michigan native and longtime GM antagonist Michael Moore joins the nationalization call: “What I’m proposing has worked before. The national rail system was in shambles in the ’70s. The government took it over. A decade later it was turning a profit, so the government returned it to private/public hands, and got a couple billion dollars put back in the treasury … These idiots don’t deserve a dime. Fire all of them, and take over the industry for the good of the workers, the country and the planet.”
Good Trade? Becerra Reportedly For USTR
OurFuture.org’s David Sirota has the early take: “…solid choice. No, it’s not perfect – Beccera voted for the landmark China PNTR deal in 2000 and for the Peru Free Trade Agreement. But perfect shouldn’t be the enemy of the damn good. Getting a U.S. Trade Representative who is on record against the NAFTA trade model and with votes against CAFTA and Oman is a huge change from both the Bush administration and the Clinton administration … The selection suggests Obama is serious about reforming our trade policies, and it should be applauded.”
MyDD’s Jonathan SInger looks at the politics: “This is clearly a tough decision for Becerra. When the President asks you to serve, it’s difficult to say “no.” What’s more, while USTR isn’t the most prominent position in an administration, it could be a stepping stone for bigger things to come. Rob Portman, the last USTR, later served as the head of the Office of Management and Budget. Robert Zoellick, Portman’s predecessor, is now the President of the World Bank. Mickey Kantor, Bill Clinton’s first USTR, was subsequently appointed to be Commerce Secretary … Yet on the other hand, Becerra could have a real shot at becoming the first ever Hispanic Speaker of the House.”
Can We Bail out the Bailout?
Two official overseers of the financial industry bailout are unimpressed.
NYT: “Elizabeth Warren, the chairwoman of the [congressional] oversight panel, said … the government instead seemed to be lurching from one tactic to the next without clarifying how each step fits into an overall plan. ‘You can’t just say, “Credit isn’t moving through the system” … You have to ask why.’ If the answer is that banks do not have money to lend, it would make sense to push capital into their hands, as the Treasury has been doing over the last two months, she continued. But if the answer is that their potential borrowers are getting less creditworthy with each passing day, ‘pouring money into banks isn’t going to fix that problem,’ she said.”
W. Post: “The Bush administration has failed to adequately oversee its $700 billion bailout program and must move rapidly to guarantee that banks are complying with the plan’s limits on conflicts of interest and lavish executive compensation, congressional investigators said yesterday. The new report by the Government Accountability Office, the nonpartisan investigative arm of Congress, said the Treasury Department has yet to impose necessary safeguards or decide how to determine whether the program is achieving its goals. The auditors said it was too soon for them to tell whether the bailout was working.”
Kos at DailyKos laments: “Government by Dow was a failure. And now Obama has less financial flexibility to stimulate the economy and pass signature tenets of his agenda. Mission accomplished, Bush Administration! We’re seeing Grover Norquist’s wet dream in action.”
But Watch For Fuzzy Math
The notion that the bailout is costing $8.5 trillion is gaining traction. But that’s a flimsy number, based on what our government is willing to commit, not what has been spent — or, more importantly, what the final price tag will be.
Mark Thoma of Economist’s View: “I don’t care what you call it, expenditure, investment, a repo, temporary custody of a volatile asset, whatever, what I care about is how much the bailout will cost once the government has disposed of all of the assets it has purchased. That’s not something we can know with certainty, but unless the value of the securities the government is holding falls much, much further than anyone expects, the amount of the current expenditure greatly overstates the long-run burden.”
The bailout may be a bad deal, but it does not deprive us of the ability to enact a major economic recovery plan centered on public investment.