Krugman says it's going to take a long time to get a stimulus package implemented

Paul Krugman:

Infrastructure spending will take time to get going — a new Goldman Sachs report suggests that projects that are “shovel-ready” are probably only a few tens of billions worth, and that a larger effort would take much of a year to get going. Meanwhile, it’s very questionable how much effect tax rebates will have on consumer demand. So it may be hard for stimulus to get much traction until late 2009 — and that’s even if Congress goes along, which may be a problem given all the bad analysis and disinformation out there.

So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder.

My friend Matt thinks the stimulus package should be doled out to the public in gift cards. Give people gift cards to buy cars, to buy at Best Buy, to shop at Safeway, but it's money that HAS to be spent, it's not cash that you can just put in the bank. Read More......

Whither Stiglitz?

From Newsweek:

OK, enough with the Obamamania already. I have a major bone to pick with our all-praised president-elect. Where, Mr. Obama, is Joseph Stiglitz? Most pundits have pretty much gone ga-ga over your economic team: The brilliant Larry Summers as head of your National Economic Council. The judicious Tim Geithner as Treasury secretary. The august Paul Volcker as chair of the newly formed Economic Recovery Advisory Board. But lost amid the cascades of ticker tape is the fact that, astonishingly, you didn't hire the one expert who's been right about the financial crisis all along—and whose Nobel Prize-winning ideas will probably be most central to fixing the global economy.

This is not speculation. A source close to Stiglitz told me Thursday that the Columbia University economist has been left out in the cold, even though he was expecting at least an offer. (Stiglitz, traveling in Brazil, could not be reached.) Especially since Stiglitz supported Obama long before most of the others named to his cabinet (at a time when Summers was a key advisor to Hillary Clinton). "Who knows why? Obama has been choosing center-right people," said the source, an associate of Stiglitz's who would speak only on condition of anonymity. She went on to say that Stiglitz's long-time enmity with Summers—whose ideas, Obama said last week, "will be the foundation of all my economic policies"—may be a factor. "Larry's had it in for Joe for decades," she said.

No surprise there. Stiglitz, more than anyone on the Washington scene, was the biggest fly in the ointment of "free-market fundamentalism" pressed on the world in the '90s by Summers, Geithner and their mentor, former Treasury secretary Robert Rubin—advice that has now contributed to the worst financial crisis since the Great Depression. It's not just that Stiglitz's Nobel-winning work, building on John Maynard Keynes's insights, uncovered profound fallacies in the Reagan-era idea that markets, especially in finance, can always correct themselves (good call, Nobel committee). In his writings and speeches since serving as chairman of Bill Clinton's Council of Economic Advisors and then chief economist of the World Bank, Stiglitz has been the leading voice opposed to the mindless liberalization of capital flows that brought us to where we are today.

I had the pleasure of meeting, and interviewing, Stiglitz in Greece this summer. Amazing man. And amazingly correct. You guys would LOVE him. I talked to Stiglitz for about 20 minutes, about everything economic. You watch can watch the videos here, I highly recommend it:

Stiglitz interview Part 1, Part 2, and Part 3.

Here's the first part of the interview:

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G.O.P. Paid Almost $55,000 for Palin Fashion Stylist

Yes, please do run for president again, Ms. $55,000 Hair Stylist Regular Guy. You can run with Joe "I have a movie agent but I'm really a regular guy" Plumber. You deserve each other - both nasty, both phony.

A woman who appears from campaign finance records to have been Alaska Gov. Sarah Palin’s fashion stylist was paid $54,900 by the Republican National Committee, according to a new report filed with the Federal Election Commission....

The newest report appears to show about $23,000 in additional charges labeled as “campaign accessories” from a variety of stores, including Saks, Neiman’s, Nordstrom, Bloomingdales, Macy’s, Victoria’s Secret, Brooks Brothers, Ann Taylor and Target....

In addition, the McCain campaign paid Ms. Palin’s traveling hair stylist and makeup artist more than $110,000 for roughly two months of work, according to campaign finance records.

She's just like you and me, if we lived like Ivana Trump. Read More......

The Mormon bigots now want to make it illegal for you to tell them to stop inflicting their religion on the rest of us

The latest news from the Mormon bigots - you remember them, the folks who killed love in California, who force-convert Jewish Holocaust victims to Mormonism against the wishes of their surviving families, and more generally the guys who plan to baptize and convert every single one you reading this to their faith without your permission the moment you die (seriously, they're going to baptize you against your will into their faith) - well, it seems now the Mormons and their bigoted un-American buddies in the extreme right think it's a crime akin to mafia violence for law-abiding red-blooded Americans to simply tell them that we don't want someone to force us to live as Mormons, thank you very much.

Their buddies - who include at least one individual known for his extreme anti-Semitic pronouncements (he went on a rant a while back about Hollywood Jews liking anal sex, seriously) - ran a full-page ad in the NYT today calling anyone who stands up the Mormons guilty of "mob violence." Wow, talk about making free speech illegal. Now you can't even tell a Mormon to back off, when he tries to forcibly convert you to his religion, without being accused of a violent crime. Talk about people who have an attitude problem.

It's amazing to me how much damage the Mormon bigots continue to do to their "brand." At first, most of us had only heard vaguely of them, and sure we knew that a lot of people consider them a cult, but generally speaking they do seem kind of clean cut and nice. Well now, each and every day, we're seeing an entire other side to Mormons. A side that's mean, vicious, angry, arrogant and bigoted, and seemingly hell-bent on jamming their religion down the throats of Christians, Jews, Muslims and everyone else in America, and the world, who doesn't choose to be a Mormon. And if you tell them to stop forcing you to live under their "religion," a religion that thinks Jesus and Satan are brothers, and a religion that thinks Jesus had 3 wives including his mother, they accuse you of committing a violent crime.

Not very Christian, if you ask me. Downright creepy in fact. Like I said, way to set the Mormon brand back a good few decades. The more we learn, the more we really don't like what we're finding out. Read More......

Caroline Kennedy is interested in Hillary's Senate seat

Wow. As a follow-up to Joe's earlier post about this, it seems that it was Kennedy who reached out to the NY Governor about the job.

She was considered a long shot because no one thought she'd be interested. Another Kennedy in the Senate. Or a new Kennedy, should Senator Kennedy step down due to his illness. (Ted Kennedy gave up his seat on Judiciary today, ostensibly to focus on Health Care Reform, but I suspect it's as much about his being ill, unfortunately.) Camelot is the new black. Read More......

1.35 million homes in foreclosure

As the unemployment numbers increase and go over 2 million for the year, it's only going to get worse. This means more families in trouble and even more houses on the market which will lead to an even worse real estate market. Bush is clearly out of his league so the idea of Obama stepping in now increasingly makes sense. The sooner the grownups get involved the better.

A record 1.35 million homes were in foreclosure in the third quarter, driving the foreclosure rate up to 2.97%, the Mortgage Bankers Association said Friday.

That's a 76% increase from a year ago, according to the group's National Delinquency Survey.

At the same time, the number of homeowners falling behind on their mortgages rose to a record 6.99%, up from 5.59% a year ago, the association said.

This means that one in 10 borrowers in America are either delinquent or in foreclosure.

Many of those troubled borrowers are in California and Florida, which have among the highest delinquency rates in the nation.

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Meet one of our favorite bloggers

Chris Johnson at the Human Rights Campaign. We like Chris, Joe works with him a lot, and I especially appreciate his candid feedback on race issues, and gay politics more generally. The Washingtonian just did a profile of Chris. Check it out. Read More......

Are lower mortgage rates the answer?

As a first-time home buyer, I love the idea of the government stepping in and lowering mortgage rates to 4.5% by fiat. But is it the solution to the housing crisis, is it a good plan to pump prime the economy? Or is it a prescription for another bubble? Some argue, correctly, that if you don't have good credit, lowering rates won't help (and if you don't have good credit, is making it easier for you to get a mortgage a good thing, or is it exactly what went wrong last time, at least partially?) Thoughts? Read More......

Should Obama get involved NOW in fixing the economy?

Fascinating article from AP, in which some Democrats are saying that Obama is being too nice to Bush, staying too far out of the limelight, and rather, that Obama should inject himself into the middle of the economic crisis debate NOW.

Democrats are growing impatient with President-elect Barack Obama's refusal to inject himself in the major economic crises confronting the country. Obama has sidestepped some policy questions by saying there is only one president at a time. But the dodge is wearing thin. "He's going to have to be more assertive than he's been," House Financial Services Committee Chairman Barney Frank, D-Mass., told consumer advocates Thursday.

Frank, who has been dealing with both the bailout of the financial industry and a proposed rescue of Detroit automakers, said Obama needs to play a more significant role on economic issues.

"At a time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time," Frank said. "I'm afraid that overstates the number of presidents we have. He's got to remedy that situation."

Obama has maintained one of the most public images of any president-elect. He has held half a dozen press conferences, where he has entertained question after question about the economy, the mortgage crisis, and the flailing auto industry. He called for passage of extended unemployment benefits — which has passed — and even a stimulus package if possible before Jan. 20. But he has stayed away from trying to dictate remedies for the toughest problems Congress is confronting: the auto industry's troubles and how to spend the $700 billion bailout.

At first I thought, give Obama a break. But then I read the article, and Barney Frank is right. We don't have two presidents. We don't have one. Bush is doing nothing, he's worse than a lame duck. When Bush and Bernanke and the rest of them talk, the markets plummet. We need a new president now. Is it appropriate for Obama to be even more outspoken about what he wants, even though he isn't yet president? Can we afford to wait 6 weeks until Obama is sworn in? Read More......

I want your input. Are drugs from Canada safe or not?

And I don't mean prescriptions you get at a regular Canadian pharmacy you walk into off the street. I mean prescriptions you get at an online Canadian pharmacy like CanadaDrugs.com. Safe or not? (Oh, and don't be fooled by some reports online that CanadaDrugs is a fraud, it was actually an online business of a similar name that was a fake prescription drug service.)

I ask because I spent another lovely day with my doctor yesterday discussing what we could do to work around the fact that Blue Cross Blue Shield cut me off for the rest of the year because I've had too many prescriptions this year (and I've hard even been sick). There is nothing as fun as having your doctor look at your chart and say "oh that's right, you don't have insurance," and then she leaves the room to get you a bag of free sample drugs, making you feel like a welfare queen. You see, the drug she wanted to prescribe - there is no generic, there is no alternative - costs $350 a month, and Blue Cross only lets me buy $1500 in prescriptions a year, so that means I could take care of lungs 4 months a year, and just choke the other 8.

I still need to call Blue Cross and find out exactly what happened. Why did this year, for the first time in 11 years, I suddenly hit my "cap" for how many prescriptions I can buy, when I don't think I was any sicker this year than before? I'd also like to know, when my Blue Cross premiums go up between 10% and 20% a year, does my "cap" go up 10% to 20% too?

But the reason I'm writing this post, in addition to making clear that we'd better address health care reform in the Obama administration, and we'd better focus on doing a lot more than just insuring the uninsured (cuz I got news for you, I don't think the newly-insured are going to have the money to pay for $350 prescriptions out of their own pockets), but no, I'm writing this post to find out if online Canadian pharmacies, where the drugs are a LOT cheaper than in US online pharmacies, are safe. Some examples in US dollars of US drugs and Canadian generics (I'm not necessarily taking any of these, these are just examples of popular drugs):

Vytorin 10/20, 30 pills
Drugstore.com (US): $108.62 (90 pills, $308.81)
CanadaDrugs.com: $67.34 (90 pills, $184.02)

Advair 60 500-50
Drugstore.com: $271.97
CanadaDrugs.com: $117.60

Lipitor, 20 mg, 30 pills
Drugstore.com: $119.99
CanadaDrugs.com: $47.08

Nexium, 40mg, 30 pills
Drugstore.com: $154.99
CanadaDrugs.com: $73.31

And US insurance does cover the Canadian purchase (depending on your insurance, of course).

I did a little digging, after reading the reader comments to my previous posts on this topic, and got a bit confused. Some folks recommended CanadaDrugs.com, for example. Well here's the problem. After doing a little digging, I found a number of suggestions that many online Canadian pharmacies aren't really "Canadian." They're businesses in developing countries that simply have an online Canadian footprint. What's worse, the drugs come from pretty much anywhere - e.g., Turkey, the Bahamas, India, and more.

I don't mean to be a snob, but this is stuff I'm swallowing, I want to know it's safe. I want to know it's effective.

In the past, I've been amazed at the intellectual firepower out there among our readers. We have literally experts in everything. So help me out folks, and help out everyone else who is reading this blog. Please weigh in in the comments and tell me about these online pharmacies. Are they safe? Are they selling real drugs? Does it matter if the drugs come from developing countries where you wouldn't even drink the water? I know there are some Canadian online pharmacy certification services, and sites like CanadaDrugs are "certified," but what exactly are they certifying? Do they know how the drugs are being made in Turkey? Are they certifying that the drugs in Turkey and the Bahamas and India are up to Canadian standards (and American standards)?

I have searched the Net up and down for answer. I can't find them. Our own FDA warns against using such sites, but then again, our FDA is in the hands of the American drug companies.

Some of you are experts on this. Please weigh in in the comments and tell us the truth. It's easy to comment now, just click the "comments" button under the title of this post, and it will bring you to a box where you can enter any pseudonym or real name you choose, and I think it asks for an email address (but we don't keep it, so don't worry), and then write your comment and publish it. It will appear underneath my post on that page. No registration required any longer to comment, it's easy, so please weigh in. I think this is a discussion that will benefit a LOT of people.

Thanks. JOHN Read More......

Caroline Kennedy for U.S. Senator from New York?

Earlier this week, when Barack Obama named Susan Rice as U.N. Ambassador, it got me thinking that Caroline Kennedy might actually be named the next Senator from New York. That is the buzz according to Jonathan Karl at ABC:

Another Senator Kennedy? The crazy speculation about Hillary Clinton's Senate seat may not be so crazy after all. A Democrat who would know tells ABC News that New York governor David Paterson has talked to Caroline Kennedy about taking the seat, which was once held by her uncle, Robert F. Kennedy. It’s not exactly shocking that Paterson would reach out to one of the most highly respected public figures in New York, but this is: Sources say Kennedy is considering it, and has not ruled out coming to Washington to replace Hillary Clinton in the Senate.

A few years ago, the famously private Caroline Kennedy would be the last Kennedy expected to serve in Congress, but of course, she took on a much more high-profile role during the presidential campaign and, if she does it, would be more than New York’s junior Senator; she’d have closer ties to the Obama White House than any of her colleagues, a direct line to the East Wing.

When Robert Kennedy, Jr. took himself out of the running for the seat earlier this week, he told Jonathan Hicks of the New York Times, “Caroline Kennedy would be the perfect choice if she would agree to it.” And one more thing: We hear that President-elect Obama has made it clear that he thinks Caroline Kennedy would be a great choice.

This seems real. It could be a good political move for Governor Paterson. Rep. Nita Lowey would have been an obvious choice to replace Senator Clinton, but she took her name out of contention. Picking any other N.Y. House member would just get all the other members of the delegation irritated at Governor Paterson. I keep hearing Andrew Cuomo eventually wants to be Governor so the Senate would be a detour (and I doubt he'll challenge Paterson in a primary. That last gubernatorial primary didn't go so well for him.)

The Obama endorsement, if it happened, sure doesn't hurt.

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Unemployment surges; hits 15 year high

New job numbers aren't good. Aren't good at all. Worse than expected. Highest in 15 years:

Skittish employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, dramatic proof the country is careening deeper into recession.

The new figures, released by the Labor Department Friday, showed the crucial employment market deteriorating at an alarmingly rapid clip, and handed Americans some more grim news right before the holidays.

As companies throttled back hiring, the unemployment rate bolted from 6.5 percent in October to 6.7 percent last month, a 15-year high.

Job losses were widespread, hitting factories, construction companies, financial firms, retailers, leisure and hospitality, and others industries. The few places where gains were logged included the government, education and health services.

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Friday Morning Open Thread

Good morning.

I keep reading articles about David Gregory becoming the host of "Meet the Press." I keep thinking that must be a joke. Then again, I don't know why I'd expect more from NBC. Gregory is hosting the TODAY Show this morning. He's very annoying -- and not that good. But, that's how I feel about most t.v. news types: very annoying and not that good.

It's a cold one in D.C. We might get a little snow this weekend. D.C. can't handle snow, even a little bit. Keep your fingers crossed for clear skies during the inauguration. The huge crowds will be enough of a challenge.

What's the news today? Read More......

Jobs data coming out this morning

Forecasts are all over the place with the consensus estimate being 340,000 lost jobs though one forecaster predicts the number to be closer to 425,000. As unpopular as the Big Auto bailout may be, this can get much worse quickly without something being done. The fallout from failure in the auto industry could impact millions at a time when the US is already struggling.

What disturbs me most about the "Big 3" is Chrysler being part of these talks. The Chrysler CEO Robert Nardelli sold himself as a big impact player during his tenure at Home Depot. He was paid enormous amounts of money and never did anything to deserve the pay. There's no way a bailout can go forward with him at the wheel. (The other CEOs ought to be shown the door as well along with the rest of the top management that led them to this moment.) Even worse than Nardelli's history of hype and failure is the money behind Chrysler.

After being pushed away from Daimler, Cerberus Capital Management became the lead investor. The capital management funds were at the forefront of many big money moves - based on ridiculous amounts of credit, of course - but this specific fund is supposed to be worth around $25 billion. Let them fund their own damned investments or go back to their shareholders and get loans from them. They wanted to the upside of highly leveraged deals so let them live with the downside. Read More......

Kenyan PM calls out Mugabe and South Africa

It's about time. Robert Mugabe has felt very little pressure over the years from fellow African political leaders, regardless of how brutal he has treated the people of Zimbabwe. All too often, leaders on the continent are reluctant to criticize fellow leaders for various reasons. The so-called liberation generation successfully defeated the colonial powers and that was understandably a reason to give a pass a few times. That period has long gone though and there's little difference between the old, brutal colonial powers and some of the current regimes such as Robert Mugabe. African leaders are slowly starting to criticize Mugabe and his critical support from South Africa may be ending next year. I don't see Mugabe accepting anything less than full control and that probably means a very bad ending. (h/t Cat)

"Power-sharing is dead in Zimbabwe and will not work with a dictator who does not really believe in power-sharing," Mr Odinga told the BBC.

The BBC's Karen Allen in Nairobi says the Kenyan prime minister had also held talks with Jacob Zuma, president of South Africa's governing African National Congress party.

Mr Zuma has declared a new alliance between his party and the Kenyan leader, designed to elevate the Zimbabwe issue, she says.

Mr Odinga said that if Mr Mugabe were isolated, he would have no choice but to quit.

"I do believe strongly that if the leadership in South Africa took a firm stand and told Mugabe to quit he will have no choice but to do so," the Kenyan PM said.

Mr Odinga was sure Mr Zuma, who is tipped to become president of South Africa next year, would have "no hesitation in taking that step".

He also said he had advised Mr Tsvangirai to boycott the stalled power-sharing talks with Mr Mugabe.

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British banks refuse to pass on full rate cuts to customers

Of course, it could be worse. Citi, for example, has actually raised its rates on credit cards despite the prime rate dropping from 8.25% to 4%. Americablog reader DM said that Citi explained that the rate increase was due to "market conditions" yet the market back on planet earth says those rates should be declining, not increasing. This is how Citi treats its good customers so one can imagine how the rest are treated.

In the UK, banks are lowering rates to customers for borrowing, though not by the full amount that's been passed on to the banks. British politicians - strange as it may seem to us - are bothering to make a fuss and demand the full amount to be passed on to borrowers. As in the US, banks in the UK have also been handed a lifeline courtesy of the taxpayers, so to hit clients both ways seems outrageous to the Brits. Funny people there.

Britain's bailed-out high street banks risked the wrath of the government last night after they refused to pass on to all their mortgage customers the full benefits of the Bank of England's decision to cut borrowing costs to the lowest level since 1951.

Despite joint pressure from Gordon Brown and the chancellor Alistair Darling to match the one percentage point reduction in the bank rate to 2%, both the Royal Bank of Scotland and the Halifax said their standard variable rates (SVR) would not be reduced by the full amount.

Halifax, Britain's biggest mortgage lender, said it would trim only a quarter point off its SVR home loan although customers on tracker mortgages would receive the cut in full, worth £82 a month on a £150,000 mortgage. RBS said it would "strike an appropriate balance" between the needs of borrowers and savers, but would pass on the cut in full to business customers.

The cuts in mortgage rates were triggered by the announcement from Threadneedle Street that it had cut the bank rate to its joint lowest in history in an attempt to prevent the economy sliding deeper into recession.

Darling said last night that borrowing costs had come down by a total of three percentage points in two months. "This will help people and businesses - and I want to see these cuts passed on."

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Citigroup execs graciously forego bonuses

Gee, how nice of them to debate the issue and come to this conclusion. Oh right, they still haven't had the decency to confirm this and are only "considering" this option. Never mind that Citi lost billions due to bad management decisions and needed a bailout to stay afloat while they led the way with dragging down the US and global economy. It's perhaps best that they still think about it even though other Wall Street failures - who lost much less - have already announced that they are not handing out bonuses. It remains a mystery why anyone at Citi is receiving a bonus, executive or not. When you fail this badly, you don't reward people. Period.

Citigroup Inc's top executives and Robert Rubin, a director and senior counselor at the firm, are ready to forgo their bonuses this year as the bank reels from the effects of the financial crisis, the Financial Times reported.

Rubin, a former U.S. treasury secretary in the Clinton administration, told the board he felt the funds that would have been used for his bonus could be better spent on other employees, according to a person close to Rubin, the paper reported.

The U.S. government's rescue of the bank made it almost impossible for the company's board to award cash bonuses to other senior executives, led by Chief Executive Vikram Pandit, people close to the situation told the paper.

Citigroup could not be immediately reached for comment.

No formal decision on bonuses would be taken until January, but Citigroup's executives had to make a significant gesture to defuse criticism from politicians and regulators, people familiar with the situation told the paper.

Rising dissent among employees, many of whom face redundancy or lower bonuses, has also weighed on the company's deliberations, the paper said.

Let them get mad and leave or try their luck elsewhere if they think they're so valuable. Too many Americans are getting by with less who had nothing to with creating this problem and they're not receiving a bailout or a bonus. Read More......

Berlin's star polar bear faces eviction

I join Andy Towle in having a bit of a thing for polar bears. Especially now that they're all drowning because we've gone and melted the ice caps.

Well there's kind of a sad new story out of Berlin about a much-loved polar bear named Knut (I'm only hoping it's not pronounced "Newt"). Seems Knut has been all the rage in Berlin for the past few years, but now he's full grown and has outgrown his pen at the zoo. So they need to move him to another zoo. And Berliners are besides themselves. Of course, some, like the Swedes, are besides themselves as well, at the prospect of Knut perhaps moving their way. This is my favorite part of the article:

Torbjorn Wallin, chief executive of Orsa Gronklitt AB, which runs the Orsa bear park 200 miles (320 kilometers) northwest of Stockholm, said his company has been in talks with Berlin Zoo about Knut's future for 18 months.

Wallin declined to discuss financial details, but said a suitable mate, rather than money, had been the focus of discussions.
Wallin said other zoos and parks had shown interest too.

"Of course there are others — it's the world's most famous animal," he said. "It's as if Madonna would move to Stockholm."

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Justice Dept. may indict Blackwater guards for Iraq massacre

See, that wasn't that hard now was it? Amazing what actually doing your job can accomplish, you "Justice" Department folks. Funny, they start practicing justice just as the Obama folks prepare to kick em out. Read More......