Too clever by half (4.00 / 3)

I suspect that they're as smart as that, Chris, but pardon me if I doubt their benevolence of their intentions. If I were you, I'd hire a bodyguard. People with ideas this good generally look for a payoff in exchange for not mentioning them in public. You aren't playing by the rules.

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by: William Timberman @ Fri Nov 06, 2009 at 15:22:27 PM CST

Hey Chris ... (4.00 / 1)

Why do you hate unemployed people?!?

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by: Calvin Jones and the 13th Apostle @ Fri Nov 06, 2009 at 15:30:09 PM CST

TARP Payback (0.00 / 0)

Over the next few years, the TARP fund should grow by at least another $200 billion, as banks, automakers, homeowners and small businesses continue to pay back their loans.

I'm fairly certain that is not legal.  Provisions were put into TARP so the money couldn't be recycled over and over again.  This guaranteed that the bulk of the money used in TARP would be returned.  If the money continually recycled, all $700 billion would eventually be spent, just like some people in the blogosphere like to claim, anyway.

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by: Mark Matson @ Fri Nov 06, 2009 at 15:31:08 PM CST

What's legal depends on the wording of the bill. (4.00 / 1)

And if there is no provision in it stating that any returns have to be used for redcing the deficit, or something like that, the money can be "recycled" again. Only according to the provisions, of course. And I guess this means it's limited to support for the financial market. However, it may be possible to give it to the fed to fund a program to support state spending, for infrastructure projects, who knows?

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by: Gray @ Sat Nov 07, 2009 at 02:18:45 AM CST

[ Parent ]

For starters... (0.00 / 0)

How does this help the Establishment (Dems, Reps and Villagers)?

It doesn't (!) so just (according to CW) crawl back into your bedclothes (take your cheetos) and keep typing like a loon.  You know that it's going to require a tax break for the ubber-wealthy and another round of taxpayer money for the investment class for anything to stimulate jobs.

Why does every smart person on the internet NOT realize that you must follow the money to ever find out why somethng happens in DC?

I love you man; but, can you read how this plan would be read on CNN, FOX, ABC, NBC, CBS and every other corporate owned media outlett?  

Can you say Socialist?  Nazi?  BabyKiller?  Now imagine them saying something bad!

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by: ronbo @ Fri Nov 06, 2009 at 15:32:31 PM CST

Really... (0.00 / 0)

I do love it.  I just can't see the puppet-masters allowing it.  

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by: ronbo @ Fri Nov 06, 2009 at 15:36:59 PM CST

[ Parent ]

Banky (4.00 / 1)

I also think the money needs to used in a "banky" sort of way.  It can't actually be spent to just hire people or build things, I don't think.  It needs to be used to purchase something or loan with collateral to back it up.  So while it can be used to help ordinary people and Main Street, cleverness is needed to meet the letter of the law, I believe.

But perhaps building something new really would qualify as purchasing something with collateral.  For example, you could build high speed rail and collect payments from passengers in the future.  That might qualify.

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by: Mark Matson @ Fri Nov 06, 2009 at 15:41:36 PM CST

Agree with high-speed rail (4.00 / 1)

A recent panel discussion in Chicago included the head of the Midwest High-Speed Rail Association who thought some improvements may be funded with Recovery Act monies, but there are multiple applications from across the country with not enough funding to go around. The city of Chicago is funding some projects by matching state money, but much is unfunded. The US is woefully behind Japan, France and Spain in upgrading rail transportation.

Re RebelCapitalist below, Point (B), jobs and economic growth would be realized, because currently business is hampered by bottlenecks on our crowded highways. When service and infrastructure was upgraded in three West Coast states (CA, OR, WA), ridership increased from less than 100,000 per year in 1991 to nearly 900,000 per year in 2000. Illinois doubled service on three routes in 2006 and nearly doubled ridership in two years.  

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by: Books Alive @ Fri Nov 06, 2009 at 16:26:12 PM CST

[ Parent ]

You must want to succeed. (4.00 / 1)

How novel.

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by: Paul Goodman @ Fri Nov 06, 2009 at 15:45:15 PM CST

Here is the purpose of the (4.00 / 1)

Emergency Economic Stabilization Act of 2008

SEC. 2. PURPOSES.
The purposes of this Act are-
(1) to immediately provide authority and facilities that
the Secretary of the Treasury can use to restore liquidity and
stability to the financial system of the United States; and
(2) to ensure that such authority and such facilities are
used in a manner that-
(A) protects home values, college funds, retirement
accounts, and life savings;
(B) preserves homeownership and promotes jobs and
economic growth;
(C) maximizes overall returns to the taxpayers of the
United States; and
(D) provides public accountability for the exercise of
such authority.

I would be a stretch.  A better question would be why wasn't this part of the American Recovery and Reinvestment Act of 2009.  Oh that's right we compromised jobs for bipartisanship and moderation.

RebelCapitalist - Financial Information for the Rest of Us.

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by: RebelCapitalist @ Fri Nov 06, 2009 at 15:45:45 PM CST

Home Values == Good Schools (4.00 / 2)

Perhaps the best way to increase home values is to improve local schools.  People always pay more to live in a good school district.

While spending the money to pay teachers and such might be a stretch, physically building new schools, purchasing computers and educational software, etc., might all fit in.

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by: Mark Matson @ Fri Nov 06, 2009 at 16:05:33 PM CST

[ Parent ]

Money for schools = "promote jobs" (0.00 / 0)

Regarding the broad language, this should be no problem. But while preserving the decutaton standard in the Us is important, and shortchanging this sector is counterproductive in the medium and long run, scholl jobs don't boost the economy much in the short run. There have to be construction and infrastructure projects, too (which won't only provide jobs for those employed, but also in all kinds of secondary sectors), in order to really give the economy an injection.

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by: Gray @ Sat Nov 07, 2009 at 02:26:45 AM CST

[ Parent ]

'Preserves homeownership and promotes jobs and economic growth' (0.00 / 0)

Something WPA style surely qualifies here. Those earning a wage are less vulnerable to foreclosure, jobs will be created and that will in itself promote economic growth. It can be argued. It's just a matter of political will.

Forgotten Countries - a foreign policy-focused blog

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by: Englishlefty @ Mon Nov 09, 2009 at 07:35:10 AM CST

[ Parent ]

There are two reasons that would be a bad idea (0.00 / 0)

even if legal.

First, I don't trust Tim Geithner as far as I can throw him with any decision-making authority on where to allocate stimulus funds.

Second, we shouldn't destroy our ability to analyze the TARP program. Lets say that we used all the TARP money for loans, etc., and purchased, or accepted as collateral, various assets.  At the end of the day, there should be some serious questions about any discrepancies between the initial funds and what is left over. I don't want Geithner, et al. to be able to weasel out of explaining the depletion of the account by pointing to stimulus spending.

But if Dems were smart, they would take the money back from TARP AND authorize it for stimulus spending in one bill.  It would be a lot easier to sell it as "stimulating average Americans instead of bankers" rather than trying to justify new stimulus spending out of thin air.  

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by: space @ Fri Nov 06, 2009 at 15:56:12 PM CST

The "ability to analyze the TARP program"? Is this more important... (0.00 / 0)

...than creating jobs now? Excuse me pls, but this looks to me like a typical beancounter mentality. No problem with ruining the intent of a program, as long as it's possible to show exactly why it failed! Sry, but imho putting accountablity over job creation is a very bad idea now.

This isn't do say there shozuld be no pressure to account for every dollar. But this isn't the most urgent problem now.

And, of course you're right, it would be best, and the most honest, democratic way, to create another stimulus bill. But you based this idea on a false assumption: Dems AREN'T smart. We already know that. And judging from the ridiculous anti-deficit arguments by the BlueDogs now, there is no cance to get such a bill passed. So, the weasel way is much easier, and prolly faster. And you don't need a lot fo justification. Just look at all those legally questionable decisions Bush simply pushed through! Who's going to stop the president if he uses his executive privilege? The rethuglicans???

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by: Gray @ Sat Nov 07, 2009 at 02:35:39 AM CST

[ Parent ]

This is genius. (4.00 / 3)

Oh, god, I can just picture the tea baggers freaking out in opposition to their government helping people like them with money earmarked for Wall Street.  It works on so many levels.

I think even making noises about this is as good a way as any to improve the currently 0 chances of passing more stimulus through congress.  At worst, it won't be legally feasible or Obama won't have the guts to try, but it's true, there's a big pile of money, and much need for it among hurting States and unemployed people.

It also might not affect the deficit, since I imagine most deficit projects assume the whole $700B goes kablooey anyway?

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by: Daniel De Groot @ Fri Nov 06, 2009 at 16:08:28 PM CST

Makes no sense (0.00 / 0)

"It also might not affect the deficit, since I imagine most deficit projects assume the whole $700B goes kablooey anyway?"

No, if the government gets money back, they can use it to lower the deficit, just like if you find twenty dollars on the street, you can use it pay down your debts (instead of spending it). Guessing you're of the borrow and spend mentality?

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by: Zugzugzug @ Fri Nov 06, 2009 at 16:44:14 PM CST

[ Parent ]

Building a payback narrative? (4.00 / 3)

Given the correlation between joblessness and approval numbers what you say makes perfect sense if it can be legally done. And in particular, anything that will positively affect the domestic auto industry would be a real plus. The looming iceberg of the 2010 elections is the status of GM, which Obama and the Dems own politically. If it's bad, needs additional funding or goes under we're going to be in real trouble.

However, w/r/t TARP I wonder if the administration might be targeting a payback strategy, whereby they'll seek to get as much as possible of the TARP funds repaid to the Treasury by next fall. People hate TARP and the idea that insiders got bailed out. Most people think that money is gone. An argument that Obama and the Dems stayed on top of them and got most of that money back would be pretty salable, particularly for the moderate, mushy middles/independents that Rahm and Co. usually focus on.

Of course, if unemployment's still above 10% nobody will care about TARP repayments...

Comrades! All Hail Pelosi and Obama!
Onward to a greater socialist utopia!

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by: Steve in Sacto @ Fri Nov 06, 2009 at 16:11:07 PM CST

Build a different payback narrative (0.00 / 0)

'Money that went on casino banks is coming back to create jobs and kickstart the economy.'

The optics on that aren't perfect - we have to acknowledge that the banks repaid the money - but it'd fly.

Forgotten Countries - a foreign policy-focused blog

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by: Englishlefty @ Mon Nov 09, 2009 at 07:37:37 AM CST

[ Parent ]

Non-Delegation Doctrine (0.00 / 0)

I would suggest that one of the largest obstacle, especially with the current Supreme Court, is the non-delegation doctrine, which although largely dead for the last 70 years (give or take a Rehnquist concurrence) was actually use to STRIKE DOWN one of FDR's early programs, the NIRA.

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by: the new @ Fri Nov 06, 2009 at 16:21:19 PM CST

More on the Non-Delegation Doctrine. (0.00 / 0)

http://en.wikipedia.org/wiki/N...

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by: the new @ Fri Nov 06, 2009 at 16:21:58 PM CST

[ Parent ]

I don't see any problem with this!? (0.00 / 0)

Just look at the example: "Although Congress has determined the amount of the tax to be assessed, it has delegated to the IRS the authority to determine how such taxes are to be collected."

Well, Congress has determined the amount of money to be used, and the executive agency to which they delegated the job (the Treasury?) is responsible for the execution. And they have some leeway in how they do this. The amount of moneystays the same, and as long as there is no provision saying the returns have to be used for reducing the deficit immediately, there doesn't seem to be a limit on how often this money is injected into the cycle. Really, I am not a lawyer, of course, but I don't see any problem with the Non-Delegation Doctrine, as long as the same agency stays on the job.

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by: Gray @ Sat Nov 07, 2009 at 02:46:28 AM CST

[ Parent ]

Two things (0.00 / 0)

First, no member of the current Court has made even the slightest suggestion that they want to revive the non-delegation doctrine.

Second, it's not clear how what Chris is suggesting would be different than the kinds of delegations that have become routine over the last 60 years or so. And the Court has generally been unwilling to get involved in disputes with the other branches when it comes to how money is spent. That is, if the Court was going to revive the doctrine, there is little reasons to think this would be where they would start.

Support a Pennsylvania Progressive for Governor - Joe Hoeffel

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by: David Kaib @ Sat Nov 07, 2009 at 07:27:39 AM CST

[ Parent ]

There is precedent for your idea (4.00 / 1)

" Plus, the president's proposal to use the Troubled Asset Relief Program to provide cheap capital to community banks so they can increase lending to small businesses may be stymied by the restrictions Congress has imposed on TARP recipients."

This is a good article despite the pro-right wing business slant:

http://www.portfolio.com/views...

There does not appear to be a limitation as others are claiming regarding the legality of the idea you advocate for using the money as a second stimulus. It seems the administration is already headed that way. It seems to be a question of how to structure it.  

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by: bruhrabbit2 @ Fri Nov 06, 2009 at 16:52:01 PM CST

Well, while many reports say, small businesses HAVE problems.... (4.00 / 1)

...getting new credits from the increasingly cautious banks, the Government also has to provide orders for those businesses, or else the investments would be useless (I suspect most of the businesses need credits to stay afloat now, not for real investments). So, only providing credit for this sector is not goog enough. There must be state funded projects that will give the companies something ton do. So, a bvig part of the money has to be funneled to the states for infrastructure spending. Fueling only the supply side, without any boost for the demand, would be a horrible mistake now.

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by: Gray @ Sat Nov 07, 2009 at 02:53:02 AM CST

[ Parent ]

I mean, don't forget the deflationary tendencies! (0.00 / 0)

And the fact that there are already large unused capacities in the industry now. The problem isn't on the supply side, it's demand. And that is low because of the bad mood right now. In such uncertain times, spending goes down because people are cautious. In such a case, the government has to step in and create the necessary demand. Only encouranging investments is useless as long as nobody is interested in the goods that can be produced.

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by: Gray @ Sat Nov 07, 2009 at 02:57:40 AM CST

[ Parent ]

There may also be growing pressure for a more direct rather than hidden stimulus (4.00 / 3)

"That should be Obama's selling point to the Blue Dogs. He should tell them the economy needs a bigger stimulus in order to show improved job numbers by the mid-term elections. And he should make sure they understand that they're more politically endangered next November if the the job numbers aren't moving in the right direction by then than if they vote for a larger stimulus now."

http://robertreich.blogspot.co...

As Charlie Cook pointed out a couple a months ago, the Blue Dogs are the most likely people to fall if the economy and jobs market is bad this time next year in the election cycle.

Moreover, there appears to be an uptick in articles calling for a second stimulus after today's unemployment numbers:

http://news.google.com/news/se...

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by: bruhrabbit2 @ Fri Nov 06, 2009 at 16:59:10 PM CST

Whatever its limitations, (0.00 / 0)

Your idea sure beats the heck out of this:

A consortium of Chinese and American companies goes to Washington and announces plans to build a $1.5 billion windmill farm in West Texas using $450 million in U.S. Stimulus funds, which will create 2,330 jobs - 2,000 of them in China.

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by: bystander @ Fri Nov 06, 2009 at 20:06:54 PM CST

And GM wants to spend 3 billion dollars... (0.00 / 0)

...to preserve 40000 jobs in Europe, by keeping Opel/Vauxhall. Since all of GM's money come from the US taxpayer now, this would be more bucks vanishing overseas.

And this, despite most of the Opel workers not wanting to stay with GM anymore, because of their bad experiences in the last decade. There is another investor wanting to buy the European devision, and in seven months of negotiations a contract of more than 1000 pages has been created, ensuring in detail that GM will still profit from Opel technology and R&D. So, what is the point for wasting 3 billions in Europe, instead of finally getting the restructring of Detroit's horrible management done?

Just another case where stimulus money is being put to inefficient use, insgtead of being applied to directly create US jobs.

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by: Gray @ Sat Nov 07, 2009 at 03:04:01 AM CST

[ Parent ]

Not entirely accurate (0.00 / 0)

Firstly, Opel/Vauxhall has been promised financial support from European countries, most notably Germany but also Britain. Whilst the German stuff was contingent on Magna taking over (and also probably illegal under EU law) I'd expect to see some at least of that continue.

Secondly, you're oversimplifying the situation with the other bidder. Opel workers and Germany want that other bidder, because they've been promised no factories will be closed. British unions are leaning towards GM, as Ellesmere Port and Luton are already pretty efficient and it looks like Spanish, Belgian and German factories are more likely to face the chopping block, whereas Magna's plan would have left Luton's future in particular in doubt past 2014.

GM still sees value in Opel/Vauxhall, and now it can afford to keep hold of it. It may not be the most efficient use of stimulus from a US perspective, but I'd say that even with GM's terrible management structure I'd still rather have them than a private equity set-up designed to divide and rule Europe, extorting subsidies in return for minimisation of job losses.

Forgotten Countries - a foreign policy-focused blog

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by: Englishlefty @ Mon Nov 09, 2009 at 07:45:49 AM CST

[ Parent ]

Much disinformation here. (0.00 / 0)

"Firstly, Opel/Vauxhall has been promised financial support from European countries, most notably Germany but also Britain."
WRONG. Magna/Opel/Vauxhall has been promised money, NOT GM/Opel/Vauxhall. The mood is against GM here in Germany, and we're the biggest market and half of the production.

"also probably illegal under EU law"
WRONG. There was some brouhaha from EU bureaucrats that are anti-german, but fact is that half of the Opel jobs are in Germany, and half of the job cuts would have been there, too. Totally fair, nothing illegal about this.

"Opel workers and Germany want that other bidder, because they've been promised no factories will be closed."
WRONG. Opel workers don't want GM because they have suffered under Detroit for decades, Detroit brought them to the brink of bankruptcy (German taxpayers had to save the company) and they simply had enough of the horrible mismanagement.

"GM still sees value in Opel/Vauxhall, and now it can afford to keep hold of it."
WRONG. GM is not allowed to use US taxpayer credits for Europe, and GM is making no profits now. GM can't afford ANYTHING in Europe!

"even with GM's terrible management structure I'd still rather have them than a private equity set-up designed to divide and rule Europe, extorting subsidies in return for minimisation of job losses."
That's NUTS.

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by: Gray @ Mon Nov 09, 2009 at 17:02:13 PM CST

[ Parent ]

I'll accept some of that, but not all (0.00 / 0)

The German subsidies are certainly in trouble. But the British ones are still on the cards, and given that Magna planned to close Antwerp, I'd imagine Belgium would be prepared to part-fund the continued operation of that plant.

However, the rest of your points don't work. EU law is very neo-liberal - government subsidies that distort the market are banned. Granted, enforcement varies, but Nellie Kroes is not the pushover she was believed to be. The German subsidy was particularly large, and offered to a plan that minimised German job losses, that it definitely prejudices the market. It's not anti-German for EU bureaucrats to say that, although when you add in the fact that the Belgians, Swedes, Spaniards and British are all getting a worse deal, plenty of those EU bureaucrats could have been vindictively anti-German.

As for the issue of why German workers want Magna, you're not giving the whole picture. Sure, they may not like Opel, but you aren't acknowledging that Magna gave them a fairly sweet deal. Compare it to RJH's proposed business plan and you see how much the plan was sweetened to obtain German support.

The next point is for the company's accountants, so I'll skate over it, but I will say that if they're acting like they can hold on to Opel, they must have reason to believe they can make it work. And it's not just standard GM delusion (although it may be partly so) - something must have changed in the past six months.

Finally, I still think private equity is worse than bad management, because they fire just as many workers but also avoid tax on an industrial scale and make asset-stripping into a principle. That said, it turns out that Magna wasn't the private equity-backed bid. It was the one backed by a Russian oligarch, which is very slightly better.

Forgotten Countries - a foreign policy-focused blog

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by: Englishlefty @ Wed Nov 11, 2009 at 12:48:32 PM CST

[ Parent ]

Some logical flaws, and other problems (0.00 / 0)

"But the British ones are still on the cards"
What about the news that UK debt/GDP ration has reached a new record level? Only irresponsible rumours, I understand?

"I'd imagine Belgium would be prepared to part-fund the continued operation of that plant"
Well, the UK reacted to the Magna plan by throwing a spanner into the EU gear, but you predict small Belgium will react by paying subsidies? Wait a moment, Belgium, Belgium, hmm, isn't that where all EU institutions are actually located?

"government subsidies that distort the market are banned"
So, if the UK would be the only nation that pays subsidies, and no UK works become closed, this would be illegal under EU rules? But, of course, you expect us to play nice and not make a big stink at the EU? Yeah, sure.

"a plan that minimised German job losses"
As I already wrote before, about HALF of all Opel/Vauxhall jobs are in Germany, And under the Magna plan about HALF of all job losses would be there. Where is the effing prejudice in this?

"Magna gave them a fairly sweet deal"
WHAT sweet deal? Half of all job losses, and 265 millions of reductions in wages and pensions, negotiated in hard negotiations during several months? That's sweet???

"if they're acting like they can hold on to Opel, they must have reason to believe they can make it work"
Nobody has ever said the accountants support the deal, it's supposed to be largely Whitacre's decision. Nobody says the numbers add up, it's much more likely GM expects EU governments to pay for this. And nobody has ever said in the past 20 years or so that plans made by GM make any sense at all.

"private equity is worse than bad management"
Then why do you think Russia, the GDR, and all other Warzaw Pact states ever went bankrupt??? Under your logic, they must have been economical heavens! No private equity there at all!

Really, Lefty, there may be some pro GM arguments somewhere, but what you presented so far is totally unconvincing.  

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by: Gray @ Wed Nov 11, 2009 at 22:07:09 PM CST

[ Parent ]

If it was legal (4.00 / 2)

I'd suggest that a (well-regulated) bank be set up, with joint public-private capital and management, for the sole purpose of investing in major public infrastucture projects, like HSR and green energy, that themselves would be owned and run by a (well-regulated) joint public-private venture. Public money could come from TARP, private money from (well-regulated) traditional instruments like stocks and bonds. Doing it this way would allow TARP funds to be used smartly AND lawfully, avoid the otherwise inevitable phony and debilitating debates over "soshulizm" and deficits, yield twice the investment capital, and spread half the risk (and opportunity) within the private sector.

Our economy is a mixed public-private one, and has historically worked best when run as such. The "free market" is something that only fools believe in and liars promote.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

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by: kovie @ Sat Nov 07, 2009 at 09:38:29 AM CST

Obama did say (4.00 / 1)

yesterday this they're looking into setting up more infrastructure programs, so they may just be thinking about doing this. Although knowing this administration, they'll appropriate about 10 billion towards this. They're the kings of half-measures and tinkering around the edges, they never do anything substantial.  

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by: ai002h @ Sat Nov 07, 2009 at 10:28:06 AM CST