Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.
Calls For Even Bigger Economic Plans
W. Post reports Obama is upping his jobs target to 3M, as advisers now fear unemployment could surpass 9%. "Congressional aides said they have talked with Obama's team about tacking on initiatives that could drive the overall price tag as high as $850 billion, a figure more in line with economists' recommendations. But with resistance expected from Senate Republicans and some fiscally conservative Democrats, an Obama adviser said the team has settled for now on $775 billion as the highest figure likely to win congressional approval and be ready for Obama's signature soon after he takes office Jan. 20."
Might Obama be expecting Congress to increase it above $775B? NYT: "It would be the largest stimulus package in memory and would most likely grow as it made its way through Congress, although Mr. Obama has secured Democratic leaders’ agreement to ban spending on pork-barrel projects."
Economists say more is necessary. NYT: "[Obama economic adviser Christine] Romer ... laid out recommendations from private sector analysts and liberal to conservative economists for a government stimulus that ranged from $800 billion to $1.3 trillion over two years."
Economic Populist: "Boehner desperate to find economists against stimulus"
Obama economic adviser Summers quoted by W. Post: "I don't think you can regard this simply as a numbers game. It's really going to depend upon the quality of the spending programs that we're able to identify. If we're able to identify spending programs and effective tax measures that really can do the job, I think there would be a lot of receptiveness."
In W. Post, congressional aides
...at least $100 billion going to the states, primarily to cover the rising cost of health care for the poor.
Roughly $350 billion would be invested to rebuild roads and bridges, modernize schools and help hospitals and doctors switch to computerized patient records. That category also would include projects aimed at improving energy efficiency, such as weatherizing buildings, as well as aid to the poor through expanded unemployment and food-stamp benefits.
Obama's team has also laid out a substantial tax-cutting agenda that will include a $1,000 tax credit for working families ... estimated to cost about $140 billion over two years. Other tax provisions could include tax breaks for businesses, an expansion of the earned-income tax credit for the poor and new credits for tuition and alternative energy...
Will Senate Finance Chair Max Baucus get in the way? McClatchy reports: "Baucus, however, thinks that any stimulus plan should be split evenly between taxes and spending, while other congressional leaders lean toward having twice as much spending as tax cuts."
Odd Sunday NYT piece warns of "A Trap in Obama’s Spending Plan," that because of the weak economy, public spending may not spark private investment. Yet, it cites no examples, while showing how FDR "was inventive ... and found a way around the problem by subsidizing ... purchases." Further, "in 1937, Roosevelt, thinking that the private sector could sustain itself, pulled back on public spending. Some historians say this was a big reason the economy sank again."
Dean Baker takes W. Post to task for asserting "The boldness of the economic rescue is already straining the government's finances." Baker retorts: "The piece never presents any evidence for the claim that the government's finances are being strained. Economists would usually look for high interest rates on government bonds as evidence for such strain, the argument being that excessive borrowing is causing lenders to view the U.S. government as a questionable credit risk ... [But] The short-term rates on Treasury debt are near zero. The 10-year Treasury rate is just over 2.0 percent, the lowest in more than fifty years."
DailyKos' devilstower calls for less roads, and less maintenance, in any infrastructure plan. While The Overhead Wire scolds the Boston Globe for assuming road v. transit advocate tensions: "Ahem. Advocates are not split Boston Globe. We want transit, walking, and biking projects. There is no dichotomy of we have to build roads because they will create jobs and the other projects won't. That is complete and utter bs."
Biden To Head Middle-Class Task Force
NYT: "[Obama] announced the creation of a task force to bolster the standard of living of middle-class and working families in America, tapping [VP Biden] to lead the effort with four members of the cabinet. 'Our charge is to look at existing and future policies across the board and use a yardstick to measure how they are impacting the working- and middle-class families,' Mr. Biden said in a statement on Sunday. 'Is the number of these families growing? Are they prospering?'"
Yglesias: "It’s good to see these questions getting asked. Over the past eight years to a remarkable degree the focus has been on trying to put as good a spin as possible on things rather than on trying to actually improving wages and living standards for the bottom 80 percent of Americans."
Note that Biden's chief economic aide is Jared Bernstein, formerly of EPI.
Not Just Unemployment. Watch For Underemployment
Calculated Risk: "employees working part time (for economic reasons) is an important part of the weak employment picture." Naked Capitalism: "falling wages produces a nasty spiral. Not only do consumers have less to spend, but worse, even if they keep their jobs, they can be legitimately worried about even lower pay packages down the road ... the Times candy-coats this development, presenting it as a 'win-win' that saves jobs, as opposed to a further grinding down of workers who have had stagnant real wages since the mid-1970s." ...Good Thing Those Auto Workers Will Now Earn Less NYT: Uncertainty Grows Over Parent’s Role in Chrysler Responds Emptywheel: "[Private equity firm and Chrysler owner] Cerberus appears to be seeking to capitalize on the woes of the auto industry to do two things: first help its Republican buddies break the UAW, and after doing so, pawn off its unwanted "investment" in Chrysler onto the same union." OpenLeft's Paul Rosenberg: GOP vs. UAW The Back Forty's Miryam Ehrlich Williamson: "When corporate executives bargain for the best deal they can get, that’s business. When unions do it for their members, that’s greed." DailyKos' Trapper John: "the UAW made America work the way we want it to work. And while the union has undoubtedly also made mistakes throughout its history, you'd be hard-pressed as progressives to identify an institution that has done more for working Americans of all stripes. So I support an a auto industry bailout, because I'd like to see us help the UAW keep making things: making cars, making a decent and dignified living for its members, and making change for all of us. God knows the union's done a helluva lot more for us than Goldman Sachs." (More Union-bashers dream headline at W. Post: "UAW's Sacrifices Look to Some Like Surrender" Mother Jones' Stephanie Mencimer says shady auto dealer lending practices need fixing. EFCA Watch D-Day on re-framing the EFCA debate: Too often Democrats let Republicans define the debate, even during this era of epic conservative decline. In the traditional media, the debate over the Employee Free Choice Act has consistently been about whether or not unions want to "eliminate the right to a secret ballot election" for workers. Now of course, this isn't true. In fact, even under EFCA, if 30% of the workforce calls for a vote, they get a vote. But this is not the real problem in labor-management relations. That argument is about the implications of EFCA passing. In fact, the current circumstances of labor elections is the problem that needs to be solved by EFCA. I finally found the best and most coherent argument around that at the AFL-CIO site (h/t Ezra). The truth is that the system for labor elections, the vaunted "secret ballot," is broken... ...think of it as your "secret ballot" Presidential election marred by: mandatory pro-McCain training sessions held across the country, mandatory meetings where "Obama is a Muslim" propaganda is foregrounded, threats to take away your job if you vote for Obama, and threats to close your workplace entirely if Obama wins. Hold Fast: "The terms of the debate have been set against us. Redefining how we talk about the Employee Free Choice Act is critical." FiveThirtyEight looks at EFCA's Senate prospects: "Most likely, then, the Democrats will need to hold both [Senators] Lincoln and Specter, as well as win the seat in Minnesota. If any of these contingencies fall through, EFCA faces an uphill battle." As does Marc Ambinder: "maybe -- EFCA will have to wait until the summer of 2010, after the primaries, when Republicans in Ohio and Pennsylvania will be more vulnerable to pressure from unions. In the meantime, the unions have to figure out a way to be patient, and Obama's team has to figure out exactly how many votes in the Senate they have." Tapped's Tim Fernholz: "Did the VP just become labor czar? And if you were going to pick someone to find 60 votes for EFCA in the Senate, wouldn't you want that person to be Joe Biden?" TPMCafe's Nathan Newman finds some good ol' fashioned "redbaiting" directed at Obama's Labor Secretary nominee. Crooks and Liars spots Lou Dobbs attacking her as well. "Free" Traders Panic Dean Baker: "The Washington Post had a front page article decrying the growth of protectionism today, but somehow managed to overlook the huge subsidies to the U.S. financial industry recently given by Congress and the Fed. The $700 billion in below market loans are a huge subsidy to the U.S. financial industry in the same way that government loans at below market rates would be a subsidy to the U.S. auto or steel industry. In addition, the government is granting guarantees of bank and money market deposits at no cost to the financial institutions who are benefiting ... the article also used the term 'free trade' to describe the recent trade agenda of selective protectionism in which workers without college degrees are subjected to foreign competition, while the most highly educated professionals remain largely protected." Krugman: "A more plausible route to sustained recovery would be a drastic reduction in the U.S. trade deficit, which soared at the same time the housing bubble was inflating. By selling more to other countries and spending more of our own income on U.S.-produced goods, we could get to full employment without a boom in either consumption or investment spending. But it will probably be a long time before the trade deficit comes down enough to make up for the bursting of the housing bubble." For The "This Must Be Good For Republicans" File Politico interviews Republicans wishfully speculating that they'll be able to exploit intra-party tensions, yet does not explore political risks for Republicans acting as obstructionists in the midst of economic crisis.
