Obama: Stimulus Designed To Work Over Two Years -- Not Four Months

[ProSense]

Obama: Stimulus Designed To Work Over Two Years -- Not Four Months

In this weekend's YouTube address, President Obama answered stimulus opponents who say that it has not restored the economy -- as well as those who say it didn't go far enough -- by saying that it has saved the economy from greater disaster, and calling for patience:

(Video: Weekly Address: Recovery and the Jobs of the Future)

"But, as I made clear at the time it was passed, the Recovery Act was not designed to work in four months - it was designed to work over two years," said Obama. "We also knew that it would take some time for the money to get out the door, because we are committed to spending it in a way that is effective and transparent. Crucially, this is a plan that will also accelerate greatly throughout the summer and the fall. We must let it work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity."

more - TPMDC Saturday Roundup

[rosesaylavee]

1. It's a good think he has the weekly address

because otherwise, this message would not be heard. Some states/municipalities are still applying for the money. It's just starting.

[CaliforniaPeggy]

2. It's about time he pointed this out...

I think many people have either forgotten this, or never realized it in the first place.

It won't hurt the Republicans to hear this again, either...

[Common Sense in USA]

39. forgotten?

Obama definitely promised quick change and reduced unemployment (that the stimulus would keep rates below 9 percent, among other things). He argued that we needed immediate action to prevent the economy from growing weaker (and suggested that the stimulus would stop the recession in its tracks). If necessary I can dig up paragraphs of quotes defending those remarks. Americans bought into it. It's no wonder most are shocked not to have immediate change--it's what was promised. Common sense dictates that any money spent by the government takes time to get out of the government and into the private sector. We'll never know if the stimulus helped, or hurt, because we don't have an alternate option with which to make a comparison. One thing is for certain, we would have recovered from the recession regardless of the actions of the government: conservative or liberal. The real question is, which would have resulted in a speedier recovery, smaller deficit, and lower peak unemployment rates?

Regardless of the answers to those questions (we'll never know), Americans who blindly believed the promises put forth when the stimulus was introduced are likely the same Americans who didn't understand their mortgages, and we shouldn't blame them for being upset with the politicians they elected who have made promises that they cannot deliver on (no one could have). I'm most disappointed with Obama's remark about being clear at the outset that the stimulus would take years to filter into the economy--while many of us realized that would be true, he never made such a remark, and certainly wasn't "clear" about it.

[ProSense]

46. "he never made such a remark, and certainly wasn't "clear" about it." Really?

Nov. 2008: Obama Pledges Two-Year Economic Stimulus Plan

Dec. 2008: Obama Economic Stimulus Could Be $850 Billion Over Two Years

Feb. 2009: Congress has passed my economic recovery plan – an ambitious plan at a time we badly need it. It will save or create more than 3.5 million jobs over the next two years, ignite spending by business and consumers alike, and lay a new foundation for our lasting economic growth and prosperity.

March 2009: President Obama: Highway spending will create or save 150,000 jobs by end of 2010

It was always a two-year plan.

[RayOfHope]

92. Come to Missouri where there are loads of stimulus projects (highway construction) well underway n/t

[lamp_shade]

3. And yet we continue to hear the whiner's chant.... "You call this change?"

:banghead:

[Cha]

16. They want Chavez for

their president.

[Common Sense in USA]

33. Just want to point out...

...that Hillary took the side of Castro, Ortega, & Chavez in many of her remarks about the democratic oust (err, sorry, "military coup") of the Honduran president. The US has aligned itself with Venezuela, Cuba, Nicaragua, etc. by voting with them in the OAS.

[PretzelWarrior]

36. hmmm.....they all agreed that nuclear annihalation is bad too

seems there are some things dictators, socialists, US leaders, et al can all agree on.

Some things like ousting a Democratically elected leader militarily are universally rejected.

[Common Sense in USA]

41. Huh?

Okay, let's try it this way. If our sitting president were to decide he wanted to run for a third term, there would be certain procedures he would have to follow in order to make that legal. He can't just say, "hey, I'm going to run for a third term." In our three party system, he would have to make a proposal in a timely fashion, the bill would be drafted, there would be discussion and voting, etc. Now, if he decided a month before the end of his term that he wanted to run for a third term, well, it just wouldn't be possible to do it legally. No, assume that the legislative branch says to the sitting president: "sorry, you can't run for a third term. Had you tried through legal channels to change the laws years ago, then we wouldn't be having this discussion. As it is, sorry, your term is up." Well, if that sitting president isn't happy with that response and has his friends in Brittan print up ballots and make ballot boxes and ship them to the US so that the people (who may want him for a third term, or who may not) can vote on whether he can run for a third term, it's likely that the judicial and legislative branches of our government would condemn the action, and declare it illegal. If the president ignores them and then attempts to have his those boxes distributed, then we would likely have only one option: to remove him from office. Okay, we'd impeach our President. He'd be locked up. The vice-president would take over. If his supporters were aggressive enough, then we may need the military to defend parts of Washington, etc.

That's what happened in Honduras. It was all very legal. What's troubling to you, it seems, is that the military removed him from the country. I agree. He should have been locked up and put on trial. But, the Hondurans were concerned that a trial would lead to bloodshed, so they removed him. The military is not in control, their version of a "vice president" is. They plan to have elections on time and elect a new president. He wasn't ousted by the military, though it was the military who arrested him: he was ousted by the judicial and legislative branches of his government. He was trying to pass a law (illegally) that would allow him to become a dictator. He was elected as a centrist, but has over time become a leftist dictator wannabe.

Have you ever spent any time in Central America? Do you understand the politics there? I travel to Nicaragua many times a year to help small business owners. I work with Hondurans and Costa Ricans. Please take the time to read carefully the details of the events in Honduras. If anything, what transpired there was the very definition of democracy in action.

[PretzelWarrior]

76. then that would explain why Obama also hasn't called it a coup and withdrawn aid.

thanks for amplifying. I have spent time in Dominican Republic and Mexico, but not Central America.

I think what they did was wrong, and Obama and team are working on a diplomatic reconciliation.

[Deja Q]

4. K&R number 5, anybody reversing it, they're outta their mind

:)

[Turbineguy]

5. That's good

Changes should be made slowly so as to control system oscillation.

[bertman]

6. Funny that I don't remember specific references to TWO YEARS during the runup to

the Stimulus bill. What I remember were lots of proclamations that the administration was going to fast track the stimulus funds and do everything it could to cut through the bureaucracy to get the economy going again.

Granted, he did say it would not turn around overnight, but I do remember statements to the effect of we should be seeing positive changes by the end of "09 and early 2010.

Judging from the reports coming out of Washington, there is a lot of systemic blockage of the funds going on (Republican stimulatory constipation??).

Whether the bill was intended as a two-year remedy or not, as more and more Americans lose their jobs, homes, and hopes, this is going to exact a heavy toll on President Obama's ability to govern. I'd like to see the Democratic leadership and the administration do some head-cracking to get these funds distributed. Headcracking in the form of directly informing citizens of states whose Republican governors or legislators are causing the funds to be stopped or slowed to a crawl, would be one good PR option.

[lindisfarne]

12. Anyone who followed this realized it was going to take time; anyone who tracks economic cycles knows

they take time. One reason for a mixture of things was that some would be implemented more quickly than others - it was clear the infrastructure-related stimulus was going to take much longer to be implemented than would things like payroll taxcuts. There were some who felt the stimulus package should be bigger (and still feel that way) but they, too, understood implementing parts of the first Obama package would take longer than implementing other parts.

The Minneapolis paper had an article on this and there are a few other relevant links here:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8522098

[bertman]

73. I agree with you, Lindisfarne. But understanding that these things take time is different

from thinking that the effects might be seen or felt in late '09 or early 2010.

My point is that the administration, in its eagerness to get the stimulus approved, was 1) unrealistic because they did not correctly analyze the gravity and scope of the problem , and 2) were pushing an overly optimistic assessment about how quickly it would work.

[lindisfarne]

89. We haven't reached late 2009. And unemployment figures, accordiing to many economists,

isn't a good indicator short-term success of economic recovery.
See #80.

I think a bigger stimulus would have been better - and Obama wanted that, but there were political reasons why that wasn't possible. He might have eked out another $100 million, but that was about it. Getting the package approved quickly was important. I don't feel ANYONE (including economists) could accurately measure the magnitude of the problem. It was big. I clearly understood that. But there are also psychological factors: having the president come out daily and say "Huge problems, economy is horrid" is likely counterproductive. But anyone paying attention knew that.

Right now, health care reform is also important for long-term health of economy. It doesn't surprise me that Obama said yesterday no additional stimulus package for now. He probably is convinced that is appropriate for now. He also likely doesn't want people focusing on funds for that & making healthcare reform more difficult. I don't think waiting & seeing what the economy does in the next few months is necessarily a bad approach right now, given the circumstances.

============
See also links from Krugman in #1 here:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8522098

The Romer-Bernstein report acknowledges that “a dollar of infrastructure spending is more effective in creating jobs than a dollar of tax cuts.” It argues, however, that “there is a limit on how much government investment can be carried out efficiently in a short time frame.” But why does the time frame have to be short?

As far as I can tell, Mr. Obama’s planners have focused on investment projects that will deliver their main jobs boost over the next two years. But since unemployment is likely to remain high well beyond that two-year window, the plan should also include longer-term investment projects.
====

The figure actually shows predictions by quarter. Roughly, the stimulus was supposed to reduce unemployment — again, relative to the baseline — by about 0.2 percentage points in the second quarter of this year; by about 0.7 percentage points in the third quarter.

The most recent unemployment data we have are for June, which was the end of the second quarter. So the prediction was that the stimulus would cause unemployment to be something like 0.3 or 0.4 percentage points lower in June than it would have been otherwise.

[lamp_shade]

7. Kick.

[Peacetrain]

8. Trade Gap closed 10% in May...

:)

[depakid]

10. Not exactly good news when you look at the reasons why...

[Peacetrain]

11. Oh I don't know about that

"The improvement in exports combined with stability in non-oil imports is a welcome sign that the headlong decline in world trade volumes has come to an end," said Nigel Gault, chief US economist at IHS Global Insight.

[depakid]

15. If it were indicative of such a trend, that would be one thing

unfortunately, what it's also indicative of is that people don't have and/or aren't spending money on items that, but for the state of the economy they'd otherwise be purchasing.

Again, if this reflected some collective "philosophical" decision to be less consumption oriented- that would be welcome. I doubt that's what it reflects, though.

[scubadude]

9. Some people don't have 2 years for it to work.

As long as they are taken care of no problem!

Scuba

[vaberella]

82. Some people don't have one day for it to work.

But the O admin is working to get something done for everyone in the long run.

[jclincali]

13. Poor planning. At the rate we're going, everyone will be homeless in 2 years.

[bigwillq]

14. Hello.

Welcome to DU! :hi:

[Cha]

17. It took 8 years to fuck up..which some people

who want it NOW tend to forget.

[Political Heretic]

19. It's not about speed, its about direction.

[Cha]

20. That's right. n/t

[Fearless]

28. To be fair, BOTH is the goal, but rarely does it happen.

[Political Heretic]

18. This is true, it was said at the time it was passed. However I thought that was a mistake

Don't get me wrong, there were many things to like in the ARR act. Lots of spending that we need to government to do on very important programs for social and economic welfare. But not all of them were going to lead to rapid economic stimulus.

The administration seemed to underestimate the depth of the depression (still called a recession so people can avoid using the more accurate term) - for example, the never estimated unemployment would hit double digits at all this year, while we are about a tenth of a percent away from double digits this month. The housing market is still trashed and credit is still sluggish.

I felt that a stimulus approach that was more targeted at rapid stimulus would have been perferable - but the jury's still out. I'm skeptical that a second stimulus is the solution. I think given the nature of the way this stimulus was put together (to take effect over a longer period of time) we need to continue to wait it out... :shrug:

[Telly Savalas]

42. Is it that they underestimated the depth of the depression

or did they calculate that a package of the proper size would be too large to get through the Senate?

To be clear, I don't claim that every apparent mistake by the Obama administration is really an unfathomably clever chess move that we're not smart enough to understand. I'm just saying that if the price tag hit the $1 trillion mark, the Nelsons and Baucuses in the Senate would throw a shit fit. And I vaguely recall members of the Administration saying this, albeit in more diplomatic terms. So even if the administration were looking at the economy soberly, they are working within these constraints.

I'll concede that this doesn't really explain the overly optimistic unemployment projections.

[paulk]

21. since the current recession is already the longest and deepest

since the Great Depression, maybe the Obama admin. should have pushed for a stimulus that acted more quickly and was more effectively targeted at those being hurt the most by the downturn.

Or perhaps they could admit they got it wrong and work toward fixing it instead of making excuses. Excuses don't pay the mortgage.

[lindisfarne]

22. See link at #12. There were parts which could be implemented quickly, but they aren't

as effective long-term (payroll tax cuts, medicare increases). Others, like investing in infrastructure, get more bang per $ but take longer to implement

The StarTribune link in #12, discusses this, and the Robert Reich link shows the "bang" a number of different stimulus options get.

There's also a link there to this Paul Krugman statement:
The Romer-Bernstein report acknowledges that “a dollar of infrastructure spending is more effective in creating jobs than a dollar of tax cuts.” It argues, however, that “there is a limit on how much government investment can be carried out efficiently in a short time frame.” But why does the time frame have to be short?

As far as I can tell, Mr. Obama’s planners have focused on investment projects that will deliver their main jobs boost over the next two years. But since unemployment is likely to remain high well beyond that two-year window, the plan should also include longer-term investment projects.

[paulk]

27. I understood at the time the stimulus package

was being put together that it was aimed more at a recovery in 2010 than 2009. Or perhaps I should say - aimed at the 2010 election cycle.

call me a cynic...

[lindisfarne]

30. 2010 elections are what - 18 months post stimulus passage? That's about right then.n/t

[chill_wind]

26. Well said. n/t

[ProSense]

29. "maybe the Obama admin. should have pushed for a stimulus that acted more quickly "

Yeah, the recession should be nearly over by now. The stimulus should have worked faster.

That is the same ridiculous argument that Obama is addressing in his statement.

[paulk]

50. you throw out a strawman, as usual

it's not that the stimulus should have worked faster, it's that it wasn't enough and it was directed at the wrong things. The same arguments that a host of liberal economists have been making from the beginning.

It was poorly done and all the "addressing" in the world is not going to change that. Arguments that it wasn't designed to work quickly are not going to be persuasive to the people continuing to lose their jobs (already a larger number than the stimulus was designed for - oops), and/or their homes (still record numbers of foreclosures).

[alcibiades_mystery]

31. Maybe you should have rented.

[paulk]

64. maybe you should try to actually contribute something

to this discussion instead of your usual little kid snark.

[guruoo]

75. !

:rofl:

[paulk]

85. you think it's funny that people are losing their homes?

:eyes:

[guruoo]

86. No, I might lose mine, too. But that wasn't the point.

[paulk]

87. what was the point?

[chill_wind]

23. Stimulus Arithmetic. Dean Baker:

There is considerable confusion over what impact we should expect from the stimulus and when. Much has been made of the fact that only a relatively small portion of the stimulus (@15 percent) has yet gone out the door. This is not a bad record in terms of spendout, but it also should not be excuse for waiting.

In terms of spendout, it takes time to spend money even for the most shovel ready projects. If we are repairing a bridge, even if everything moves quickly, the project itself might take several years. The government will not make the full payment for repairs in the first month.

On the tax side, the government has put in place a schedule of lower tax rates so that we are all paying lower tax rates. That will continue through 2010. So, we have already had 3 months of lower tax rates, with 18 more yet to come, that's about 15 percent of the total period. So, we've done reasonably well in getting the money out the door.

But, we should already be seeing most of the impact that we will see. The logic is simple. The tax cut put another $45 in our paychecks in April, in May, and in June. We will continue to see this extra $45 a month for the next year and a half, but that will not be a further boost. In other words, insofar as we will spend more each month because of this extra $45, we presumably are already seeing this effect. There will be no further uptick in consumption based on this money.

So, we have probably already experienced most of the boost that we will get from the stimulus. The economy would have been in worse shape without it. Consumption is higher than it would have otherwise been and state and local governments have been able to keep many programs funded that otherwise would have been cut. People have jobs (most obviously in state and local governments) who would have been unemployed in the absence of the stimulus.

However, the stimulus clearly was inadequate to get the economy back towards full employment. With the unemployment rate almost certain to cross 10 percent this summer, it should be clear that we badly need more stimulus.



--Dean Baker

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=07&year=2009&base_name=stimulus_arithmetic

[lindisfarne]

25. Interesting. And yesterday, some DUers insisted the payroll tax break did nothing. Seems they

know more than Dean. In fact, one told me my saying that it was contributing positively showed I know nothing; that person also must feel Dean knows nothing (nice to have confident folk on DU).
They should offer to provide advice to the president.

[depakid]

38. They may have been confused by the fact that tax cuts don't give the same bang for the buck

as direct spending or rebates.

[lindisfarne]

40. No- that was clearly discussed.More an issue of thinking they had access to TRUTH. :>) n/t

[Scarsdale Vibe]

56. Baker doesn't take into account the fact that direct federal spending

won't really accelerate until mid-late Q3 of 2009, which hasn't happened yet. To suggest that stimulus spending per month is already at anywhere near peak level is incorrect.

[Kdillard]

66. Thanks for that chart.

[chill_wind]

67. Thank "JP Morgan" for it.

I'll stick with guys like Baker and Krugman. No offense to Scarsdale.

[Scarsdale Vibe]

78. Krugman would disagree with Baker on this point

Krugman: And More on Bernstein-Romer

Clearly, the baseline was way too optimistic. But the question under discussion was how much effect relative to the baseline the stimulus was supposed to have had by now. The figure actually shows predictions by quarter. Roughly, the stimulus was supposed to reduce unemployment — again, relative to the baseline — by about 0.2 percentage points in the second quarter of this year; by about 0.7 percentage points in the third quarter.

The most recent unemployment data we have are for June, which was the end of the second quarter. So the prediction was that the stimulus would cause unemployment to be something like 0.3 or 0.4 percentage points lower in June than it would have been otherwise.

That’s not much. The stimulus wasn’t ever expected to be having a large effect this early.

http://krugman.blogs.nytimes.com/2009/07/06/and-more-on-bernstein-romer/

The big chunk of spending with the largest multiplier hasn't really kicked in to full effect yet. There should be enough data by the end of the third quarter to more definitively tell what effect the stimulus is having.

[fortyfeetunder]

24. Breaking down the statement for understanding

How many times does it take to tell the average American that a mess created over 8 years can't be cleaned up in months?

I am afraid if it were faster, the effects would be less than desirable!

[boppers]

32. A fourth month fix would have made things worse.

Sudden influxes of money into ailing sub-sectors of an economy tend to have less of an effect than broad-sector steady investment and production.

[depakid]

43. Except of course- that's how the Aussies have avoided recession

Of course, Rudd had more lead time and used it -providing timely (and sizable) checks to pensioners (which is most people on government support) at Christmastime to help retailers (and pensioners) then gave working folks a nice check a few months later.

Also aided several specific industries (like auto manufacturers and dealers, banks and commercial real estate) at key points.

Among other things.

Pretty impressive: http://www.smh.com.au/national/a-work-in-progress-20090710-dg2i.html?page=-1

[boppers]

45. Guaranteed bank savings, dropped prime from 7 to 3 points...

WOW. Thanks for the pointer, not sure how it would have scaled here, as it looks like a similar plan here would have been about the same amount as the US plan, (?loose conversions here, for population, AUD vs. USD, etc) when applied on a per-captia basis.

As long as they can get out of their deficit/debt, good on them!

[depakid]

48. Along with lead time- another key difference is that Australia built up a fat budget surplus

during times when the economy was strong- which left the nation with funds to draw on when times got tough.

With its bountiful resources, there's little doubt in my mind that as global economies begin to recover- the country's going to return to a balanced budget and a surplus, though considering the magnitude of the 2008 crash- it was wise not to worry about it, but rather to act decisively. And that's paid dividends.

[JimWis]

34. K&R

[PretzelWarrior]

35. EXACTLY!!!!

people who want instant gratification should go buy a lottery ticket. within minutes you can complain you lost or complain you didn't win enough or complain that now all the crazy relatives will come out of the woodwork to demand part of your millions.

[PretzelWarrior]

37. this seriously deserves kicks and recommends so all can see this

because people are just too GD impatient in our times.

[Prism]

44. The President answers only the weakest argument

Those asking why the economy has not been restored are fundamentally ignorant of how economies work. It's invalid criticism and the easiest to bat down. By answering that question, and only that one, the President is allowed to create the impression that all critics have irrational expectations or are similarly making erroneous analyses of the stimulus.

It's a neat political trick, but not the one we need at this point in time. It also simplifies an economic argument when the most dangerous parts of this recession are not the surface numbers.

To use a bad metaphor, the economy is like a complicated jenga tower. We've just spent ten years watching pieces of it ripped away. The stimulus was intended to gradually slow the taking away of economic pieces and begin their restoration. However, more pieces were being taken out than first surmised. Futhermore, many people look at the job loss numbers and believe that slowing down is indicative of overall progress.

They are not.

Pieces at the foundation are continuing to be pulled away. Underemployment, state budgets, the housing crash, the erosion of vulnerable industries. These are all pieces of the economic tower that are being pulled out of the bottom while everyone watches and comments on the middle section - including the President.

We need more pieces plugged into the system right now to shore things up. By waiting, we're taking an incalcuable risk. We're hoping that everything will hold up as we wait for the stimulus to take effect. But the numbers betray that too many parts may not hold up much longer.

A second stimulus is probably politically unworkable. The people won't go along with it, the politicians won't, and the debt load incurred could be disasterous if it brought our AAA rating down. Our only option left is to expedite current funds in smart, targeted ways rather than the President's seeming attitude of "Hey, let's see how this plays out!"

We're well past that point, Mr. President.

[ProSense]

47. The recession is going to end in six months

according to Roubini

So the slowdown must be progress.

[Prism]

49. How did you get that number from that article?

From the article you posted:

But at some point — Roubini’s guess is 2011 — the recession will end.

This well illustrates the problem. That is a very sound, very detailed piece about Roubini's views, but the version that appeared on DU and your use of it in the context of political argument twist and misrepresent what the economist is actually saying.

I don't know if that is intentional or if you simply misread or misunderstood what Roubini was laying out. I'm also very surprised that the article is being spun as good news when the underlying analysis is the slow erosion of America's economic base and the potentially disasterous consequences that face us if things are not done "just so". Roubini is being very conditionally cautiously optimistic. He's saying if we recognize the problems now, if we form the right policies in just the right way, we can find a way through this.

Unfortunately, he must know the American political system. Winning news cycles is far more important than buckling down, examining the problem, admitting mistakes, and taking the needed but painful measures to fix them.

[ProSense]

51. Did you miss the line above it

Roubini Sees Six More Months of Recession, ‘Shallow’ Recovery

[Prism]

54. I did

But that is an awfully thin article. I'd like to hear Roubini's full remarks in context. "Shallow recovery" is a very, very loaded term. (We cannot endure another "jobless recovery" under current conditions). Stalling of job losses and the potential for a minor uptick in GDP have been mentioned, if not expected, for some time, but are not the "good news" being touted. The major concern is what happens after that stall, and that is probably what Roubini is referencing by "not out of the woods".

In other words, I think Roubini's analyses are being used very simplistically and unhelpfully.

And they do nothing at all to refute my original response above.

[ProSense]

55. So why did you question the post? He said it.

Shrouded in any context, he still said "this recession will last for another six months until the end of this year, and then there will be a shallow recovery"

This is a big deal coming from Roubini.

Btw, the full video is also at the link.

[Prism]

58. Because you misuse Roubini's analysis

You used that six months quote to refute what I had posted in original response to your OP. But Roubini's comments do nothing to refute what I was saying. In fact, his fuller remarks bolster it.

Using that six months quote as a silver bullet answer to any criticism is deeply irresponsible.

[ProSense]

60. Nonsense.

You simply refuse to accept that he specifically said the recession will end in six months. Whatever else he said, that is key.

[Prism]

61. And that is exactly the problem

Pick out the one sentence, naked of all context and qualification, and push it forward for political purpose.

I'm sorry, I'm interested in getting to the underlying truth of American economic conditions and the policies needed to ameliorate the most suffering possible. I do not believe our current policies are adequate. Roubini does not think our current policies are adequate. His remarks in this program about the continued lack of transparency in finance are revealing.

This panel is fascinating and should be required viewing for anyone who wants to truly understand the factors currently at play in the economic downturn, what policies are currently lacking but needed, and how the most dangerous thing we're facing in the political system is complacency and apologism rather than intervention and constant critical re-evaluation of our approach.

Interestingly, Schiller calls for either a second economic stimulus or more rapid implementation of our current one. Roubini agrees with the sentiment somewhat, but that the size of the second stimulus needed would carry a debt load that would probably kill us.

Precisely what I said in my original response to your OP.

Roubini further elaborates that at best we may have avoided a depression, but that avoidance is far different from saying there will be a significant recovery.

[ProSense]

62. No, this is the problem

Roubini further elaborates that at best we may have avoided a depression, but that avoidance is far different from saying there will be a significant recovery.

Who said anything about significant recovery? You are doing your best to avoid the reality that he said the recession will end. It's no secret that Roubini was predicting the stimulus would fail and that thing were going to get worse.

[Prism]

63. There is a lot of reality avoidance happening with the economy

Mainly by those who refuse to see the President's policies as inadequate and misdirected.

I have no problem with the fact Roubini said the recession would end. I said similar things in other posts about the pattern of job losses and GDP cycles. I was shocked to see that 2011 date. If I had to guess based on what I've read and based on what I know from work (I'm in finance), I figure the stall will occur around November, give or take.

My problem is what happens after the stall in recession and job losses. A GDP growth of 1% over two years does not clear the employment situation nor ease the pressures on factors like underemployment, state budget loss, housing, and the yet unrealized inflationary dangers.

Statements like "The recession will be over in six months" followed by sentiments saying President Obama's policies have been somehow vindicated or the "pessimists" have been disproved are simplistic, dishonest, wrong, and terribly head-in-the-sand when it comes to the situation we're in and the dangerous economic undertow that very few politicians and major media figures are paying any attention to.

Having now listened to nearly the entire Roubini panel, I find my views and instincts about the current path of the economy fortified. He's actually more pessimistic than I am, but then he's absolutely blistering about current U.S. policy and the irresponsibility and short-sightedness of Washington.

[ProSense]

65. Given

that so many were predicting doom and gloom and are now walking those predictions back to claim that the stimulus will achieve "shallow" progress, I prefer to stay informed and wait to see what happens.

Statements like "The recession will be over in six months" followed by sentiments saying President Obama's policies have been somehow vindicated or the "pessimists" have been disproved are simplistic, dishonest, wrong, and terribly head-in-the-sand when it comes to the situation we're in and the dangerous economic undertow that very few politicians and major media figures are paying any attention to.

Right, because the pessimists with their continued doom and gloom are the most logical, level-headed and honest people around? No one claimed vindication for Obama. I said Roubini's statement about the time frame for the end of the recession are in line with what Obama has said. Still, Obama wasn't the one claiming the extremes: that the stimulus would be an utter failure or a six-month panacea.





edited typos.

[Prism]

68. It's a constantly adjusted narrative

In the political discourse, it's honestly getting to the point where an entire fleet of trucks are needed to move all the goal posts involved in these arguments.

Pre-stimulus, many "doom and gloomers" were saying that job losses would slow of their own accord and the recession would ease towards a superficial recovery. The stimulus was sold as getting on top of unemployment numbers, cutting them off at the pass. It had to be legislated right away or unemployment would skyrocket and the entire system would endure greater, more corrosive strain. I actually agreed with that sentiment before we learned the bulk of the money would not go out until much of the damage was already done.

The stimulus passed, and what the President claimed the stimulus would prevent happened anyway. Only it was much worse than even the doom-and-gloomers were predicting. The unemployment graphs don't lie.

So, Doom-And-Gloomers 1, Obama administration 0.

I do understand the problems inherent in the discussion. The administration had to expend no minor amount of political capital to move the stimulus through. It was counted as a major victory. Admitting error (or god forbid, failure), and re-adjusting in the face of it would come at great political cost. It could very well derail health-care reform. So the administration must constantly put a positive gloss on the economy no matter what happens. And, no matter what happens, those with a greater interest in the administration's success than economic reality must reach deep into the President's rhetoric and pick out the choicest bits of intentional ambiguity to prove that this is What-The-President-Intended-All-Along. That, of course, is the point of intelligent rhetoric. If you word things just vaguely enough, then it can be claimed that everything is working out exactly as planned no matter what realities might emerge.

I'm not interested in playing that game. I'm interested in seeing policies retooled, suffering alleviated, and the problems facing the economy tackled in a timely, conscientious, courageous fashion.

It's interesting to see Roubini's analysis and words touted as favorable to the President, when the entirety of his comments are so devastating to U.S. government policy. Cherry-picking the best sentence while ignoring the full context and qualification is exactly the kind of thinking and attitude that got us into this whole mess.

For too long, too many people seized on the best news even as nearly every single alarm in the financial system was tripped and the sirens blared throughout the industry for years. We knew this was coming as far back as '05. My co-workers and I knew. Everyone knew. But the public and the politicians wanted to only hear the good news, the signs for optimism, the wonderful hope of it all. None of that doom and gloom nonsense.

And now here we are. And all the people who were right and who are giving future warnings are yet again being told to shut up and keep quiet because it's harshing on some peoples' presidential mellow.

Screw. That.

[ChimpersMcSmirkers]

71. More context!

I can't tell if you think Roubini is correct or not correct.

[Prism]

57. Listening to the full program now. It's as I suspected.

I'm paraphasing but the remarks being referenced:

"The recession will continue another six months followed by a shallow recovery . . . anemic recovery . . . maybe 1% growth over two years . . . not green shoots, more like yellow weeds . . ."

That six months quote happened within the first three sentences of Roubini's remarks out of a full hour of context and gloomy qualifications of what form the recovery will take.

That Bloomberg article is irresponsible, as is the use of it to placate people and make them think everything's going along swimmingly and according to plan. Crazy irresponsible and deeply dishonest.

[ProSense]

59. Wow, clever

"The recession will continue another six months followed by a shallow recovery . . . anemic recovery . . . maybe 1% growth over two years . . . not green shoots, more like yellow weeds . . ."

Nice edit and elipses, gives the impression that the last part is related to the recovery when he is describing what he has been seeing currently compared to those who say "green shoots."

He still said exactly what I posted: "this recession will last for another six months until the end of this year, and then there will be a shallow recovery"

He continues by defining shallow as 1% growth.

Again, the fact that he states that the recession will end in six months is a big deal coming from Roubini, and it's in line with what Obama has said.

[Name removed]

69. Deleted message

Message removed by moderator. Click here to review the message board rules.

[ChimpersMcSmirkers]

72. In a month or two he'll probably be whining about the deficit.

[Aramchek]

52. all along Obama has proven to be a Strategist, not a Tactician

Time and again he has proven his critics wrong because he plans based on a bigger picture than 24 hr News can frame.
It called thinking ahead.

[and-justice-for-all]

53. some folks think that solutions should be instantanious...

and pulled out of a magic hat.

Do they even realize the damage that shrubCo caused over their 8 year disaster spree?! Fixing all their broken shit will take time.

[FrenchieCat]

70. They want it pulled out of the magic Hat by the Magic Negro

or else they imply....he's just a fuck up.

Seems like Obama can't just be an imperfect mortal who's simply smarter than a lot of people give him credit.....cause at the end of the day, that's the reality. :shrug:

[guruoo]

74. K&R...

for truth! :headbang:

[jeanpalmer]

77. So far, it hasn't seemed to have any impact

According to reports, only $39 billion of the $787 billion has been spent so far. The idea of a stimulus, as used in past recessions, is to get money out there rather quickly to stem the decline. So far, the decline has continued unabated, particularly with respect to job losses. If the purpose of Obama's stimulus was to stop or slow down the decline, it hasn't worked. That's the risk you run if you provide stimulus that takes a long time to get in the system.

I don't think people will give Obama a year or two for this economy to reach bottom. If the decline continues at the current pace, or even at a lesser but still negative pace, his support will erode. The deeper the hole gets, the harder it is to get out. There seems to be no sense of urgency. I think that's a mistake.

Obama is correct that "unemployment tends to recover more slowly than other measures of economic activity." But the implication that we're in a recovery is false. We're still in a free fall. His statement would be accurate if the economy had hit bottom and had stabalized, and job losses were at zero. But we're getting 600,000 job losses a month.

[lindisfarne]

80. Link in #39:unemployment rates aren't the best way to measure the short-term success of economic pol

Of course it's taking time for appropriated funds to trickle down into the economy. (You can follow the progress at Recovery.gov, or at my colleague Chadwick Matlin's new "Recessionary Road" blog.) But even if the administration had infused hundreds of billions of dollars into the economy instantaneously in February and March, it might not have made a significant dent in the unemployment rate. After all, as some of the same folks who have declared the stimulus a failure have told us, unemployment rates aren't the best way to measure the short-term success of economic policies. Bush economists thought the combination of fiscal and monetary policies in 2001 and '02 were highly successful in pulling the economy out of recession—even though the number of payroll jobs continued to decline for nearly two years after the economy started expanding in November 2001.

[jeanpalmer]

81. All I'm saying is

we're losing ~600,000 jobs a month. That is a huge number of jobs to lose. And that level of job loss is indicative of a sharply declining economy. Stimulus typically has been used to get money into people's hands rather quickly, to increase aggregate spending and stop the decline. That has not happened so far with respect to Obama's stimulus. In fact, it seems nothing has happened. Which isn't surprising if only $39 billion of the $787 billion stimulus has been spent so far.

I understand the theory that unemployment, in a recovery, tends to lag the recovery because businesses don't hire people back until they have to -- they put off hiring. And in that instance -- where the economy has ceased to contract, and is starting to expand -- renewed hiring may not be the best measure of the economic improvement or progress. But that situation is entirely different from the one we now face where the economy is contracting sharply and job losses are huge. In this case, job losses are a clear indication of a srongly deteriorating economy and of the fact that whatever stimulus has been applied is not working. And perhaps the stimulus should be changed to act more quickly.

Almost every stimulus plan has had a component which gets money into people's hands quickly. This one didn't. But I'm guessing the second stimulus plan the Democrats are now talking about will correct that shortcoming.

It would cost the goverment roughly $1.2 trillion to send out a $5000 check to every taxpayer now, and three more $2500 checks at 6 month intervals. That' not too much to spend in the overall scheme of things. And it definitely would give a boost to the economy.

[lindisfarne]

88. There were things designed to get money out faster.See the Robert Reich link in following

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8522098
Payroll tax reduction, medicare, social security increases.

Simply mailing big checks has almost no stimulus effect per the information in Reich's link; also, the Zandi link (in message #1 expands on this), as does everything in that thread.

[lindisfarne]

79. From an article in Slate (originally posted in Editorials)

http://www.slate.com/id/2222563/

Perhaps the biggest mistake stimulus proponents made was to suggest that this recession would (and could) end quickly. Modern America is not equipped—financially, socially, or psychologically—to deal with long recessions. We don't have the safety net or the savings to cope with a protracted downturn. And fortunately, we haven't had to. The last two recessions, which ended in 2001 and 1992, respectively, lasted only eight months each. But recessions brought on by financial crises are always deeper and more long-lasting than other recessions, as economists Ken Rogoff and Carmen Reinhardt show in this paper. By February 2009, when the stimulus package was passed, the recession was already the longest in 28 years; now it's the longest contraction since the Great Depression.

What's more, in the spring of 2009, the chore of restoring the economy to growth was a huge task. The economy was in a death spiral. Between the end of 2007 and the first quarter of 2009, Americans' net worth fell by more than $12 trillion, nearly 20 percent. More than 6 million payroll jobs had been lost. The financial sector was essentially bankrupt. In the fourth quarter of 2008, the economy shrank at a 6.3 percent annual rate, and in the first quarter it shrank at a 5.5 percent rate. In a highly leveraged economy with an expanding population and work force, a few quarters of contraction at 6 percent are nigh cataclysmic.

Sure, Obama & Co. could have been more aggressive in January and February in talking about how bad things were (although the stock and bond markets were doing a pretty good job of communicating the misery). But the truth is that, due either to a misreading of the situation (Biden) or a desire to build confidence (Gross), the stimulus efforts were mislabeled. The Obama team spoke of the patient as if it were merely wounded, when it had flatlined. The big package was dubbed the "American Recovery and Reinvestment Act of 2009" when it should have been called the "American Systemic Failure Aversion Act of 2009."
============
I tend to agree with the last paragraph but still support Obama's decisions. It's really easy to arm-chair quarterback with far less information than his advisors & he have. Also, he was walking a political fine-line, combined with economic crystal ball gazing and political biases in that profession as well.
While I also would like to see another stimulus package, I would like to see health care reform first. Health care reform will help the economy long-term, and in the shorter term, provide much needed health care to many. Once health care reform gets passed, if the economy isn't perking up, it will be time to push for a stimulus package. (Yes, people will argue we need another stimulus package now. If one ignores health care reform, yes, they're right. Unfortunately, one cannot, and I view it as more important, and that it will be less likely if serious talk of more stimulus spending overlaps.)

[vaberella]

83. You lost me on the first sentence.

There has been no one who suggested the recession would end quickly. At least from the Obama Administration who are the only ones I really pay attention to in regards to this and they obviously planned a more long term structure. So for this thing about people promoting it short term success is preposterous----especially if we take in the magnitude of the economic problem we face.

[lindisfarne]

90. Obviously, it's an excerpt from an article. Perhaps reading the whole article would help(perhaps not

But if your heuristic is "stop reading as soon as I find a sentence I disagree with", that's ok, too! It greatly lessens time spent reading, I'm sure.

[glowing]

84. Yes, but we needed a real jobs push 8yrs ago.. 2 years ago it was getting

rather desperate trying to find a job that paid a living wage, and now, there's not even enough crappy pay jobs to go around. This is why people want it now. People are desperate, and unlike other countries, we don't take care of our poor, and last I looked.. squatting isn't possible in many places. We live in a place where homelessness in vilainized and made illegal thru many local ordinances, yet we don't provide housing for those who cannot afford to live. Where do you go? Up is down in America.. Land of the free, NOT.

[Zavulon]

91. Which is why so little of it has been spent? Under ten percent?

Gee, I wonder what percentage will be spent next year, which is an election year. :eyes:

It hasn't saved the economy from greater disaster at all - the unemployment rate right now is even higher than the dire prediction of 8% we got from the administration should this so-called "stimulus" not get passed. Biden admitted that they misjudged the whole thing, so honestly I don't want to hear the administration's excuses.

The economy historically goes up and down in cycles. It could recover without the stimulus and credit will still be taken. All this is is a bunch of new debt for no good reason.

If the government were capable of stimulating the economy effectively, maybe they would have actually made some real progress in the so-called "war on poverty."

"Designed to work over two years" - reminds me of a Soviet five-year plan in terms of effectiveness. What a fucking crock of shit. Sorry, Mister President, I'm on your side in a lot of things, but don't expect me to believe a fucking word on this so-called "stimulus."