bluntlysaid

This on the WSJ:

The package, which would cost more than the entire Iraq War, would reverse the Bush administration’s approach to boosting the economy. That approach relied heavily on tax cuts that tended to put money in the pockets of middle-class and more affluent Americans. The $275 billion in tax relief offered in the stimulus package focuses more on lower-income families. It also includes business incentives to spur job creation and a $500 payroll tax holiday for workers.

The 244-188 vote was not what Mr. Obama had hoped for. A week of presidential wooing — including a visit to the Capitol, a return visit to the White House by moderate House Republicans and a bipartisan cocktail party Wednesday night — did not yield a single Republican vote. The president also lost 11 Democrats.

I had many reactions to these two paragarphs. I’ll break these reactions down.

• In less than 1 month in government, Obama will have authorized an expenditure that exceeds the cost of the Iraq war.That is insane. However, as someone who studied economics and has worked in finance I know that the capital markets are paralyzed right now, a condition that is trickling down to every person in this country.  Something must be done, and injecting enough cash in the system may stimulate liquidity again.  $800 billion is a lot of money, but nothing else seems to work.  We’ll judge this action by its results.  I can say that so far, the money spent in Iraq has been a total waste of money. Lets hope this stimulus package fares better—my sense is that it will. I approve, but only because I don’t see a better alternative.
• The relief concentrates on lower income individuals WHILE keeping the tax cuts for the upper-middle class and wealthy income brackets.  This makes sense. Ideally, we’d give tax cuts to everyone and try to stimulate spending that way. However, it seems like that has not worked in the past….a new approach is necessary.  The small business incentives and $500 payroll tax holiday is a new approach. I approve.
• Rebpublicans shunned the plan and 11 Democrats voted against the package. WTF is wrong with these people!!!!!  Are they really against stimulating the economy? Would they rather sit tight, bite their nails, and hope that this all goes away? Guess what, IT WILL NOT go away on its own.  Look at Japan in the 90s…really, look at Japan! They faced a similar crisis and instead of swallowing the bitter medicine, recognize losses, and move on they sat their chewing their nails waiting for it all to disappear. Japanese banks never realized any losses because their accounting system was “book value” and not “mark-to-market.” Then, the Japanese governments incentivized the banking system to keep giving loans to “zombie” companies—-give loans to businesses that didn’t deserve loans in order to keep these companies from defaulting on prior obligations.  The US has RECOGNIZED  its losses.  Banks HAVE failed. And the car industry received a loan with MAJOR stipulations.  There is no free ride going on here, failure is an option.  However, this alone has not fixed the problem which means that more must be done to stimulate demand.  That is where the new package comes in. WHY would these 11 Democrats and Republicans be against stimulating demand? Do they have a better alternative????? I REJECT ALL POLITICIANS THAT DID NOT SUPPORT THE PLAN (list of NAY votes below).
• NOTE: Remember the TARP and how it failed to pass the fist time around. Do you know why? Was it that the plan lacked enough stipulations, did have enough order? NO.  It didnt’ pass because there wasn’t enough pork included . It did pass one week later with $120billion more pork in it.  Thanks Republicans…thanks for looking out for the greater good. I REJECT that behavior .

Again, history will prove whether Obama’s plan was a good thing or a bad thing. Those that did not vote for it on on record below.  We will hold you accountable if you were wrong. Roll call vote info from www.clerk.house.gov:

—- NAYS    188 —

The sky rocket gas prices we saw last summer made things very difficult for many people.  $5/gallon glass implied eating out less, filling up just one car, car pooling, etc.  Public transportation saw increased usage and people started to see the bottom line value of turning green.

Setting more aggressive fuel efficiency standards for cars will help turn this country green, will save money in the long run, and will definitely reduce the risks of global warming.  Obama’s executive order allowing states to set their own fuel efficiency standard is a step in that direction.

States like that we are a federation, they like having control over things like this…on the other hand, fi each state mandates a different efficiency standard then this promising order will instead turn into a tangled pile of mush.

This is why California will likely play a key role in defining these standards—California pick a standard, and since its the largest state we have (36 million) then the sheer consumer demand will serve as an anchor. Other states will follow, and hopefully we’ll have only 2 efficiency standard for the whole country—old standard and new standard. I assume the new standsard will weed the old one out, eventually.

Problem: The car companies are in trouble right now and asking them to deal with multiple standards is going to create even more problems.  Rebuttals:

• Aren’t these companies supposed to be moving towards greener technology either way?
• Why are they fighting efficiency?
• I would assume that the standards do not have to be met immediately, there is time and the car companies can wait for the markets to improve.

Others say that Obama’s executive order is another example of “government knows best.”  BS. The whole point is that Obama has de-regulated the industry by allowing individual states to weigh in. He just made the Federal Government less relevant to this issue and left the power in the hands of more local government.  The big government argument falls flat on its face.

Overall, I think the executive order is a positive change but it must be structured appropriately so that the car companies do not fail as a result of the stricter standards (massive unemployment, etc).

The administration must (and will) strike a balance between our green aspirations and economic realities.