No Linkage
The new Chief of Staff lays out some legislative strategy:
Emanuel rejected the idea of tying a pending economic stimulus plan to a proposed free-trade agreement with Colombia in order to win President George W. Bush’s support during a post-election lame duck session of Congress.
“You don’t link those essential needs to some other trade deal,” he said. “The lame duck is for immediate things — that’s what should be the focus right now.”
Krugman laid out the correct strategy for dealing with President Lame Duck yesterday. Congressional leaders should completely ignore Bush, and without seeking his input or approval write and pass a stimulus package that, among other things, includes a generous amount of aid to state and local governments to forestall the need for cutbacks on their end. Second, you hope enough members of congress vote for it to override a veto. If that does work, then third you hope the president signs it. If that doesn’t work, then the president-elect promises to sign a repassed version of the law with equivalent state and local aid as soon as he takes office. Since state and local officials will know the money is coming one way or another, they can start doing their budget planning as if Bush had signed the bill even if he vetoes it.
43 Responses to “No Linkage”
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November 9th, 2008 at 5:41 pm
From Krugman:
“..Well, we’ve got our own stupidity pact: state and local governments operate under fiscal rules that lead to booming spending and tax cuts when the economy is strong and the reverse when the economy is weak….”
Bullshit. “Fiscal rules” don’t create “booming spending and tax cuts”. Legislative votes do. State legislatures spend like drunken sailors during the boom times, then sit with their thumbs up their asses and plead poverty when things go sour. This isn’t the result of “fiscal rules”. It’s the eesult of short sighted political stupidity that corrupts this country at every level.
November 9th, 2008 at 5:52 pm
Go, Kafka.
November 9th, 2008 at 6:14 pm
HMM… interesting topic.
November 9th, 2008 at 6:57 pm
China just approved a huge (equal to $513BB) stim package. Guess Keynes is coming back into style now that neoliberalism has been completely discredited. :/
November 9th, 2008 at 7:25 pm
Guess Keynes is coming back into style.
(Alas!) It is too bad that Keynes was dead wrong. (Friedman was also wrong). We need to let the bad investments liquidate and get the bad debts repudiated through bankruptcy, etc., and then recapitalize once things are sounder. This is what we did in the 1920-1921 depressiion/recession, and it worked beautifully. Instead, we are headed toward Herbert Hoover/FDR-ish massive public works/stimulus/intervention that will simply drain more capital from the economy and cause the recession/depression to go on for the next 10 or 122 years.
November 9th, 2008 at 7:35 pm
By the way, Matt, it’s time for you to discuss how Obama even considering Larry Summers for Treasury is a big middle finger extended to white feminists and their anti-science hysterics.
November 9th, 2008 at 7:57 pm
Instead, we are headed toward Herbert Hoover/FDR-ish massive public works/stimulus/intervention that will simply drain more capital from the economy and cause the recession/depression to go on for the next 10 or 122 years.
Ummmm, yeah.
Have you noticed that when the shit hits the fan no one really believes that version of economic history? It will take about forty years for that brand of libertarian economic school to make it’s comeback after this.
November 9th, 2008 at 8:05 pm
This is what we did in the 1920-1921 depressiion/recession, and it worked beautifully.
Cool-i-o. By the way, how did they sort out the outstanding credit default swaps on those bankrupt companies in 1920-21?
What? There were no such things back then?
November 9th, 2008 at 8:33 pm
If Republicans want to try selling the idea that Hoover was a great economic president, then more power to them.
November 9th, 2008 at 8:37 pm
Don’t you mean Comrade Krugman?
November 9th, 2008 at 8:48 pm
But passing a Colombia free trade deal is the right thing to do! Colombia is surrounded by countries that are explicitly anti-American. The presidents of Venezuela, Ecuador and Bolivia have run for office on an anti-American platform.
Colombia, on the other hand, has worked closely with America, including in suppressing drug production across the country (much of which is not under government control so their ability to act is limited).
The problem is that for 8 years being pro-America has meant being pro-Bush. Democrats therefore see Colombia as a Republican deal. They’re blind to what’s really going on in the region. And the unions don’t want a trade deal. The pretenses the Democrats keep giving for denying Colombia a trade deal are based on a ridiculous attempt to find perfection in a government of a region where those standards simply cannot be met.
All Latin America is watching how this works out. If America spurns Colombia after Colombia has worked so hard to meet America’s demands, it will send a strong signal. Europe is already gaining more and more influence in Latin America — a natural shift given the shared languages in a world where transportation and communications are cheaper every year.
America should not let the best be the enemy of the good. We should support our allies, particularly when they are surrounded by our enemies.
November 9th, 2008 at 9:27 pm
The presidents of Venezuela, Ecuador and Bolivia have run for office on an anti-American platform.
Well, Chavez predates Bush and he didn’t run on an anti-American platform. As a matter of fact, he was sort of schizophrenic for awhile after 9/11 trying to decide how to react. Bush acted like a huge asshole and pushed the whole world into anti-American sentiment. Then Rice formented a bullshit coup d’etat against him and the rest of Latin America freaked out.
I don’t want anything to do with the nasty right-wing narco regime in Colombia.
November 9th, 2008 at 9:46 pm
Summers isn’t an F-U to feminists, his consideration is just a sign that Obama (rightly) isn’t going to quake in his boots about threats from various Democratic interest groups.
November 9th, 2008 at 10:17 pm
Under no stretch of the imagination are Venezuela, Ecuador, or Bolivia “enemies.”
It’s that kind of ‘with us or against us’ attitude that has gotten us into this mess.
November 9th, 2008 at 11:20 pm
Mike in SF,
If killing trade union leaders by the boatload and bombing neutral third countries is the definition of ‘pro-American’, then I’ll take a pass on that. Of course traditionally in the LA region, that’s precisely what it has meant.
Chavez, Morales and Correa are anti-capitalist, anti-imperialist and to some extent anti-liberal. None of that _necessarily_ means that they’re anti-American. If the United States let them run their countries the way they see fit, then I’m sure we could all come to some modus vivendi.
November 9th, 2008 at 11:27 pm
Ed Marshall,
With all due respect, the Bush Administration wasn’t with-it enough or competent enough to foment a Venezuelan coup d’etat. That coup was certainly _supported_ by Bush, but it was probably initiated by the Venezuelan elite themselves. As stupid, greedy and venal as Bush is, he’s not a patch on a lot of the right-wing Venezuelan creeps, who talk cheerfully about ’shooting [Chavez] like a mad dog.’
Since the coup, of course, the U.S. has been funneling lots of money to the opposition, which has allowed Chavez (quite justifiably) to paint his opponents as traitors and foreign agents.
November 9th, 2008 at 11:46 pm
This isn’t the result of “fiscal rules”. It’s the eesult of short sighted political stupidity that corrupts this country at every level.
Every country is politically stupidly short sighted.
November 10th, 2008 at 12:02 am
With all due respect, the Bush Administration wasn’t with-it enough or competent enough to foment a Venezuelan coup d’etat.
OK, it’s more like the idiocy where they encouraged Georgia to create an international crisis and got caught off guard when it happened.
November 10th, 2008 at 12:08 am
I guess a with-it Bush administration would have told them to murder Chavez and the rest of the top leadership. That’s the only way what they did would have worked. I guess I’m glad they weren’t with-it.
November 10th, 2008 at 1:03 am
Wow. Good Cop, Bad Cop episode 1 came out a LOT earlier than I thought it would.
I wish you would’ve posted what, if anything Obama said as well.
November 10th, 2008 at 1:14 am
IIRC, when Chavez gained the Presidency, bashing the US was a core of his program. It wasn’t until he moved to re-nationalize firms were only recently privatized that Bush opted to cut off military purchases and spare parts. Even today, Venezela’s armed forces use a *lot* of US hardware, such as 24 F-16s.
Way to go, pissing off people you didn’t have to, George.
November 10th, 2008 at 2:57 am
Obama even considering Larry Summers for Treasury is a big middle finger extended to white feminists and their anti-science hysterics.
Kind of like how the country’s choice of a black president is a big middle finger extended to the anti-science hysterics of white racists like you?
November 10th, 2008 at 8:46 am
Scott de B — We didn’t choose Venezuela, Bolivia and Ecuador as enemies — they chose us. I agree we can do more to narrow that rift, but the fact remains, right now their presidents make anti-American rhetoric a major part of their platforms.
Ed Marshall — some of those presidents may predate Bush, but all of them have run in elections since Bush. Look up the rhetoric they used. They have run on anti-America platforms. There’s no way to phrase it in any more limited a way. As for Colombia’s “narco-regime,” it’d be hard to find any government that has worked harder to eliminate drugs. Any criminal syndicate that powerful is going to warp some of the government of the country it’s in (you think Italy when the Mafia was ascendant was any better?) but in the last 10 years the national police has become far less corrupt and far more able to fight the drug war. We should encourage this, not punish it.
Hector — the trade union leaders story has been way overblown by the U.S. press. It’s a non-issue. And as for “bombing third countries,” Colombia’s in a shooting war with an internationally recognized terrorist organization called the FARC. Some FARC members crossed the jungle border into Ecuador, and Colombia’s military followed. Exactly what the U.S. has done in Pakistan this year with Al Qaida. By the way, the FARC was a major source of drug trafficking into America, and now it is essentially destroyed. Hugo Chavez supported it — Colombia eradicated it. Isn’t that the kind of thing we ought to support?
Final note — Colombia has the most mature democracy in northern South America. In 10 years, Uribe will no longer be president. Can we say the same for the presidents of Venezuela, Bolivia or Ecuador? Shouldn’t we be supporting that?
November 10th, 2008 at 12:38 pm
Re: Can we say the same for the presidents of Venezuela, Bolivia or Ecuador? Shouldn’t we be supporting that?
I don’t see why. Chavez, Morales, and Correa are the best thing to happen to their countries in a long time. I would be delighted if they are all still in power in 10 years, or for that matter in 40 years- whatever it takes to revolutionize their countries. Uribe, on the other hand, the sooner he falls the better. As they say, ‘democracy’ is a means, not an end.
The reason that those presidents make anti-US rhetoric part of that platforms is pretty obvious. For the last century, the US has promoted dependent oligarchic capitalism all over Latin America, and has done its best to eliminate leaders who challenged those structures. In Cuba, in Venezuela, in Nicaragua, in Chile, in El Salvador. U.S. policy in Latin America has been pretty uniformly evil, and I don’t see how you can resent someone for pointing that out.
November 10th, 2008 at 4:25 pm
Considering that nearly every graph of an economic indicator from 1929-1937 shows a very visible hinge at 1933 where whatever indicator it is changed or reversed direction, ISTM that lumping Hoover and FDR together is not a particularly useful approach.
November 10th, 2008 at 7:47 pm
Kafka, what Krugman is talking about is balancing the budget. Because of increased economic activity, revenues increase during boom times ceteris paribis, and decrease during recessions. Thus, in order to balance the budget, fiscal policy merely magnifies the trend in the rest of the economy.
November 10th, 2008 at 8:27 pm
When somebody says:
“We should support our allies, particularly when they are surrounded by our enemies.”
they mean:
“YOU should support MY allies, particulary ehen they are surrounded by MY enemies”
November 10th, 2008 at 9:23 pm
Care to elaborate? Their rhetoric, from what I know, seems to be more anti-Bush than anti-American. Correa of Ecuador has criticized the trade agreement with the U.S., has said that Bush is worse than the devil (which I think we should take as deliberate hyperbole), and wants to close down the U.S. base at Manta. Our government may disagree with him on those issues, but those positions don’t make him anti-American, unless not being pro-American is sufficient for that label, let alone an enemy.
The sum total of Morales’ ‘anti-American’ policy, as far as I can see, is friendship with Chavez and opposition to the United States’ anti-coca policy.
As for Chavez, he has severed ties between the US and Venezuelan militaries, and has had bad words for Bush and Condoleeza Rice. He opposed US intervention in Kosovo. Those clearly qualify him as not ‘pro-American’, but none qualify in my book as hostile acts.
In general, I think we should follow Washington’s dictum that “In the execution of such a plan nothing is more essential than that permanent, inveterate antipathies against particular nations and passionate attachments for others should be excluded, and that in place of them just and amicable feelings toward all should be cultivated. “
November 12th, 2008 at 4:39 am
http://www.latimes.com/news/opinion/editorials/la-ed-colombia12-2008nov12,0,1648910.story
Don’t take my word for it…
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