The Nation’s Katrina vanden Huevel urges the new president to go bold: “This new President does not have to pull his punches, and Americans do not have to settle for less. As the first Community-Organizer-in-Chief, Obama understands the power of change from below. He has oxygenated the grassroots and got people believing and dreaming again. But he will only be as brave as ordinary citizens move him to be. That’s why independent small d-democratic movements, grassroots organizing, online and offline, will be vital to pushing the limit of Obama’s own politics and countering the forces of money and establishment power which remain obstacles to meaningful reform. A savvy inside-outside political strategy, engaging the new Administration and Congress constructively, even as progressives push for solutions on a scale necessary to deliver, will be critical if we are to fulfill the promise of relief, reform and reconstruction.”
Priority #1: American Recovery and Reinvestment Plan
Dean Baker chastises the W. Post for misrepresenting the impact of Obama’s economic recovery plan: “The Washington Post told readers that the Congressional Budget Office projected that most of the spending on the discretionary projects included in President Obama’s stimulus package “would come too late to lift the nation out of recession.” Actually, projections showing that spending will not occur until after October 1, 2010 (the cutoff referred to in the article) will still provide a much needed boost to the economy according to CBO. In its baseline scenario the unemployment rate is still projected to be close to 9 percent by the end of 2010. This would mean that any boost to the economy from a stimulus package could still have a useful impact in lowering unemployment.”
Matt Yglesias concurs, but also adds criticism on potential highway spending: “insofar as lawmakers are interested in sneaking some 2011 and 2012 transportation infrastructure spending into this bill they may as well forget about shovel readiness and identify useful transit and intercity rail projects.”
Grist’s Sean Casten praises the energy-efficiency components in the econ recovery plan: “[it] not only provides $10 per MWh to waste heat recovery and high-efficiency cogeneration projects, but it also provides a nice suite of carrots to induce the states to reform their paleolithic electricity regulatory laws. Often these laws have long been perhaps the biggest barrier to reducing the carbon footprint of U.S. electricity generation and distribution … This bill represents the beginnings of an economic policy that stimulates by reforming our energy sector.”
The Health Care Blog offers five “shovel-ready” health care reforms: “Two would change the way we pay for health care services, tying payments to documented results. Three are based on how we pull together and make use of the data that can drive clinical and financial decisions, and they overlap, though not perfectly, in their potential”
TNR’s Brad Plumer speculates on prospects for global warming legislation: “it may turn out that Congress puts pressure on Obama to act on climate change, rather than the reverse. Last week, Henry Waxman announced that he was gunning to pass a cap-and-trade bill out of his House committee by Memorial Day. Barbara Boxer, who chairs the relevant Senate committee, quickly fired off a press release praising Waxman and promising to “complete a set of principles for my new legislation in the coming weeks” — legislation that will presumably seek even deeper cuts than the Boxer-Lieberman-Warner bill, which got stalled by filibuster last year. That means it’ll soon be time to wrangle over the details.”
TNR’s Jonathan Cohn speculates that health care reform is up next: “this is just the latest sign that the new administration sees health care as next on the agenda once the debate over the economic stimulus debate is done. Of course, that doesn’t settle the question of how the administration plans to deal with health care. Will it seek legislation designed to achieve universal coverage (or something very close to it)? Or will it try to achieve universal coverage sequentially? (And if it’s the latter, what will the sequence be?)”
Wonk Room’s Igor Volsky strategizes on how to refute attacks on progressive health care proposals: “Progressives should answer these attacks by defending progressive proposals on their merits, rather than resorting to the comfortable/familiar rhetoric of “affordable health care for all” or “shared responsibility.” Such buzz language has doomed past reform efforts. As Haynes Johnson and David Broder argue in their analysis of President Clinton’s failed health care reform effort, by relying on hollow buzz words, rather than policy specifics, the Clintons allowed the opposition to ascribe meaning to reform rhetoric.”
Nationalize the Banks?
Shares of the biggest names in American banking plunged Tuesday as some investors feared that the government would need to nationalize the most deeply wounded financial institutions, wiping out stockholders.
The hours-old administration of President Barack Obama is expected to move swiftly to try to stabilize the financial system by pumping more capital into weakened banks and buying bad assets. Nationalization appears to be a last resort, but other options on the table move the U.S. in that direction. In one idea under consideration, the government could buy convertible securities from financial institutions, an approach that could ultimately leave the government owning large chunks of many firms’ common shares.
Obama administration officials are sorting through a menu of options as they prepare efforts to clean up bank balance sheets and put them in a better position to lend. Discussions have also advanced on creating a government-backed institution that would buy and hold banks’ bad assets, as well as a plan to provide government guarantees on bank holdings…
…government officials are weighing the option of buying securities that pay interest like bonds but can be converted into common stock. Such “convertible” securities, typically issued by companies struggling to raise capital, often leave the buyer owning a big chunk of the company. When the securities are converted to common shares, other common stockholders’ shares are diluted, cutting the value of the banks’ shares…
…Federal Reserve officials have proposed that the U.S. consider tying together public equity injections with private investments. That would ensure that the government doesn’t take the dominant stake in the financial institutions it supports. It would also provide a way to sort out healthy banks from unhealthy ones, because only healthy banks would be able to raise private capital…The challenge with this matching approach is that common shares of banks have fallen so far in value that the banks are not in a position to raise much money from private investors…
Ezra Klein crystallizes the nationalization debate: “the question does not seem to be whether we nationalize, but what we nationalize, and what the implications are. And it may well be that the implications of nationalizing a full bank are less radical than the implications of nationalizing a bank’s losses. But so long as we’re going to have banks that are “too big to fail” — and absent a whole different set of interventions, we will — the nationalization debate is settled: These banks are, on some level, already nationalized. The question really becomes whether we nationalize them to the benefit of taxpayers or shareholders.”
Workplace Prof Blog downplays Obama’s recent EFCA comments: “Whether Obama was sending a single about his willingness to compromise on EFCA or whether he was simply expressing his normal openness to others’ ideas remains to be seen. … it’s probably too early to read much into anything his says on the topic.”
Washington Monthly’s T.A. Frank floats his own EFCA compromise: “Under current law, months can go by between when NLRB announces the results of a card check vote and when a secret-ballot election is held. If, however, this campaign window were reduced to just a few days, employers would have less opportunity to intimidate union supporters into changing their minds.”
Defense Pork To Meet The Butcher?
OpenLeft’s Chris Bowers says: “White House Chief of Staff Rahm Emanuel is signaling that not only will there be defense spending cuts, but that those cuts will be deep.”