Kevin Drum

Asia

| Tue Feb. 10, 2009 3:24 PM EST | Scheduled to publish Mon Feb. 9, 2009 9:38 PM EST

ASIA....You think our economy is in trouble? Things look even worse in Asia.

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The Size of the Stimulus

| Tue Feb. 10, 2009 3:22 PM EST | Scheduled to publish Mon Feb. 9, 2009 7:51 PM EST

THE SIZE OF THE STIMULUS....This is apropos of nothing in particular, but all the sound and fury surrounding the Nelson/Collins $100 billion cut in the stimulus bill makes me think that maybe it ought to be put into perspective. So here's some perspective.

The original bill totaled about $800 billion, and according to CBO estimates the amount of stimulus (spending + tax cuts) provided by the bill over the next two-and-a-half fiscal years would have been about $700 billion. This, we're told, would help create about 3 million jobs. The bigger Senate bill would have added $100 billion to that, and the current Nelson/Collins bill gets us roughly back to the original amount.

But stimulus isn't restricted to bills labeled "stimulus." Any deficit spending counts, and there's a ton of that already in the budget. Not counting TARP and bailout money (since it doesn't necessarily stimulate consumption), CBO estimates that the federal deficit this year will come to about $800 billion. If we assume the same next year and maybe half as much the year after, that's a total deficit-driven stimulus of about $2 trillion. Presumably this creates jobs at the same rate as spending in the stimulus bill, so that amounts to something in the neighborhood of 9 million jobs.

So: With the cut, total fiscal stimulus over the three years starting last October comes to $2.7 trillion and 12 million jobs. If we had kept spending at its higher level, it would have come to $2.8 trillion and perhaps 12.5 million jobs. That's a difference of about 3%.

Now, the nature of that 3% is hardly defensible. State aid and school construction are way better uses of the money than a lot of stuff that was left in the bill. Still, the fact remains that the total amount of stimulus over three years is $2.7 trillion, not the $800 billion number that dominates the discussion. That's a helluva lot of stimulus, and if it doesn't do the job it's doubtful that $2.8 trillion will do it either.

Chart of the Day - 2.09.2009

| Tue Feb. 10, 2009 3:12 PM EST | Scheduled to publish Mon Feb. 9, 2009 2:33 PM EST

CHART OF THE DAY....Justin Fox presents this chart showing the pace of unemployment during the past six recessions. Unlike a similar chart that's been making the rounds, which showed only the 1991 and 2001 recessions, this one shows employment decline in percentage terms, not as raw job losses. This is a better way of doing it since the population of the U.S. has grown substantially since 1974.

But it still looks plenty bad. Right now we can say that this is the worst recession since 1981, but by summer it's almost certain that we'll be saying it's the worst recession since World War II.

Healthcare Update

| Tue Feb. 10, 2009 2:55 PM EST | Scheduled to publish Mon Feb. 9, 2009 1:40 PM EST

HEALTHCARE UPDATE....Jon Cohn says that despite doubts in liberal circles that Obama will aggressively pursue healthcare reform this year, high-ranking Obamaites have confirmed that it will be a "central focus" of his upcoming budget:

In interviews over the past week, administration officials have said repeatedly that the dobuts about Obama’s commitment are unfounded. They say Obama himself has indicated health care is a top priority, to be pursued shortly after the debate over the economic stimulus package is over.

...."I've been in meetings with him and it's clear this guy is committed to getting health care and getting coverage to everybody," says one high-ranking member of the administration. "There's no question in my mind."

And while these advisers acknowledged that the question of whether to deal with health care in the next budget had been under discussion, another senior official on Sunday indicated a decision had already been made: “Health care reform will be included — and indeed a central focus — of the budget,” this official said, while declining to offer more details.

We should stop being surprised by stuff like this. If there's one thing we should all have figured out about Obama by now, it's the fact that his priorities and his political beliefs are not will-o-the-wisps. The big ticket items he talked about during the campaign are things he's thought hard about and believes deeply in. They weren't just dodges to win a few votes here and there.

From a lefty point of view, there's both upside and downside to this. The upside is obvious: he said he wanted to withdraw from Iraq, pass major healthcare legislation, and take serious action on global warming, and he will. At the same time, he also said he wanted to work cooperatively with the opposition, add troops to Aghanistan, and continue Predator raids into Pakistan. Liberals might not like those promises quite so much, but guess what? He's apparently pretty committed to all that stuff too.

In other words, he's doing what he said he would do. How about that?

Everybody Loves Barack

| Tue Feb. 10, 2009 2:52 PM EST | Scheduled to publish Mon Feb. 9, 2009 1:01 PM EST

EVERYBODY LOVES BARACK....According to Gallup, President Obama is handily winning the stimulus debate: 67% of Americans approve of the way he's handling the stimulus bill compared to only 31% who approve of the way congressional Republicans are handling it. And if anything, these numbers will probably diverge even more as Obama goes on the road this week to sell the bill.

And there's more good news for Obama in this poll. Over 50% of respondents have more confidence than they did two weeks ago in Obama's ability to improve the economy and manage the federal government. And 80% believe that passing the stimulus bill is either important or critically important.

That's some serious wind at his back. The question is: does this mean he never really needed to compromise on the bill in the first place? Or are these poll results partly a result of the fact that he was willing to compromise? I'm pretty skeptical of Obama's efforts to reach across the aisle on this stuff, but I have to admit that the latter seems pretty plausible to me. Compromise might have its benefits after all.

Single Page

| Tue Feb. 10, 2009 2:43 PM EST | Scheduled to publish Mon Feb. 9, 2009 12:42 PM EST

SINGLE PAGE....With a slowdown in advertising prompting online sites to cut back on their ad inventory, Felix Salmon suggests one easy way to do it:

In the early days of the web, in an attempt to goose pageviews, publishers started asking readers to click through two or three or sometimes even a dozen different pages to get through one story. It's annoying and self-defeating, and I devoutly wish that a move to reduce inventory will kill off this miserable habit.

....Every time I go to a website like the NYT or The Big Money, the need to hunt around for the "single page" button and click on it and wait for the page to reload makes me hate the site just a tiny bit. For really gruesome offenders like Time, I simply don't read a lot of their listicles, no matter how good they are, because the multiple-page format makes them all but unreadable. Now that the need to maximize inventory has disappeared, maybe this whole annoying thing will go away.

Sign me up! The multiple page format is both stupid and obsolete, and it's long past time to get rid of it. The worst offenders are sites that break stories up into three or four (or more) chunks and sites whose only option for single-page reading is a "printer format" that's clunkily formatted and annoying to read. I'm with Felix on this: time to knock it off, folks.

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Kindle 2.0

| Tue Feb. 10, 2009 2:29 PM EST | Scheduled to publish Mon Feb. 9, 2009 12:07 PM EST
KINDLE 2.0....Brad Stone is liveblogging the release of the Kindle 2.0 book reader:

10:21 a.m. | The Reveal: Mr. Bezos is showcasing the device: The Kindle2 has resdesigned page-turning buttons along its sides, a thinner profile, a metal back, and standard round keys — none of the angular weirdness of the original model. It has 16 shades of gray, crisper photos, clear text, 25 percent faster page turns and 25 percent more battery life. “You can read for 2 weeks on a single charge,” says Mr. Bezos.

....10:26 a.m. | Interface Updates: Mr. Bezos is demonstrating the new Kindle and the joystick-like controller. The old version of the Kindle had an awkward scroll wheel and a separate vertical screen that helped users maneuver a cursor up and down its screen. Kindle users can use the five-way controller to highlight a word and automatically look it up.

That certainly sounds nice. Does this mean I should go out and buy one? Or would it be yet another electronic gadget that I use a few times and then set aside to collect dust? Consider this an open thread to persuade me one way or the other.

Tax Cuts

| Sun Feb. 8, 2009 1:59 AM EST | Scheduled to publish Sat Feb. 7, 2009 6:54 PM EST

TAX CUTS....Matt Yglesias on the stimulus bill:

It strikes me as indefensible that a stimulus package featuring hundreds of billions of dollars of tax cuts doesn’t include any FICA provisions. Payroll tax cuts wouldn’t be my first choice of stimulus measures, but there’s a strong case for including some tax-side measures in the package and they’d probably be my first choice of tax cuts to include.

Agreed, but isn't the $500/$1000 refundable tax credit in the current package essentially the same thing? Technically it's a credit against income tax, but in practice, since it's refundable, it's a flat tax rebate for everyone who's employed, which makes it roughly the same as a temporary payroll tax cut. The only real difference is that a flat tax credit is relatively more generous to the working poor than a payroll tax cut — which is a good thing — and internally it gets charged to the general fund rather than the Social Security trust fund — which doesn't matter one way or the other. What's not to like?

Bush USA Watch

| Sun Feb. 8, 2009 1:56 AM EST | Scheduled to publish Sat Feb. 7, 2009 5:28 PM EST

BUSH USA WATCH....From a Washington Post story today about campaign finance allegations lodged against Michael Steele:

The claim about the payment, one of several allegations by Alan B. Fabian, is outlined in a confidential court document....The U.S. attorney's office inadvertently sent the confidential document, a defense sentencing memorandum filed under seal, to The Washington Post after the newspaper requested the prosecution's sentencing memorandum.

Over at The Corner, Steve Hayward snarks:

Inadvertently sent what was supposed to be a sealed document to the Post? Yeah, sure, and the Post will sell you the Brooklyn Bridge real cheap, too.

Is anyone in the U.S. Attorney's office going to lose their job over this? Will the Obama DOJ launch an investigation to make sure this wasn't politically motivated? What would the Post and others have said if this had happened to, say, Howard Dean, during the Bush administration?

Well, considering that U.S. Attorney Rod J. Rosenstein was appointed by George Bush, my guess is that he will indeed lose his job pretty soon. Just like all the rest of Bush's USAs. As for an investigation, that seems like it would be a petty and vindictive partisan attack on a Bush appointee who's going to be out of office soon anyway, but I guess it's OK with me if conservatives insist.

Mindless Cuts

| Sun Feb. 8, 2009 1:53 AM EST | Scheduled to publish Sat Feb. 7, 2009 12:30 PM EST

MINDLESS CUTS....The nickel version of what's happened to the stimulus bill so far is that it started out at around $800 billion, a bunch of stuff got added that increased the tab to $900 billion, and then a centrist group of senators took out a machete and pared it back to around $800 billion. Assuming it passes the Senate on Tuesday, it will then go to conference, where there will probably be some more horsetrading before it reaches its final form.

In other words, this is lawmaking as usual, and I can't say that I'm especially outraged by it. Yes, the cuts were fairly random, but then, the original bill was a pretty scattershot collection of programs too. That's inevitable in legislation this size. Besides, some of this stuff will probably get a second life later in the year — and in any case, I have just enough residual doubt about the wisdom of stimulating consumption when we all know that eventually consumption needs to fall that I'm not especially unhappy about keeping the price tag to $800 billion.

That said, the primary target of the cuts is pretty hard to defend:

The biggest cut, roughly $40 billion in aid to states, was likely to spur a fierce fight in negotiations with the House over the final bill....In addition to the large cut in state aid, the Senate agreement would cut nearly $20 billion proposed for school construction; $8 billion to refurbish federal buildings and make them more energy efficient; $1 billion for the early childhood program Head Start; and $2 billion from a plan to expand broadband data networks in rural and underserved areas.

State aid was cut? That's crazy. Even many of the conservatives I read agree that preventing huge state cutbacks is one of the quickest and most efficient forms of fiscal stimulus. And most of the rest of the spending on this list is infrastructure spending, exactly the thing that conservatives were complaining there was too little of.

Granted, neither laws nor sausages bear close scrutiny, but trading this stuff for a bunch of idiotic car and homebuying subsidies strikes me as unusually mindless, even by U.S. Senate standards. This is not exactly centrism's finest hour.