White House Unwrapped

Monday, January 26, 2009

Richard Wolffe, MSNBC political analyst, discusses the economic stimulus.


Richard Wolffe

Comments [40]

hjs from 11211

Longstreet 34
i understand your point. i'll have to think about it to see if i can agree with u

Jan. 26 2009 05:34 PM
Edwina from Columbia University

Why do you keep calling him Mr. Obama, and refer to Bush as President Bush??

Jan. 26 2009 01:52 PM
J. Hayes from Brooklyn

where can one find the detailed report of exactly what the stimulus package spending priorities are (such as water slides, tax cuts, etc.)? i want to know more, because right now, the stimulation smells like bacon

Jan. 26 2009 11:48 AM
JB from Manhattan


I think there's a good possibility that another model explains some of the banks' ability to attract private capital better than her model. To recap, she holds that the banks are already insolvent and are zombies and thats why no private funds will flow to them.

Just to play devil's advocate, lets assume she's right but that somehow (perhaps through legislative fiat), the banks are able to access wholesale funding markets and stay liquid, EVEN THOUGH they are insolvent. As long as they continue to earn a few hundred bps of gross spread, they will recapitalize themselves in a few years, et voila, no long insolvent zombies. The private money recognizes this, IMHO.

I think the real issue here is the fear on the private side of not understanding under what criteria debt/equity holders get wiped out and what is the process. If the FDIC can come along and force shotgun weddings at equity->0 _where private buyers exist_ (cf. Citi/WAMU), why should private money come into the system? there's no clarity at all as to what circumstances protect private equity/debt.

Jan. 26 2009 11:25 AM
Steve from NY, NY

Economic populists, left and right might vote like new Senator Gillibrand and just 26 Dems left and right voted:

1. Voted against TARP in October.

2. Voted in favor of the auto bailout in December

3. Voted in favor of Barney Frank's oversight bill last Wednesday

4. Voted against the release of the second half of the funds last Thursday.

The 26 who voted that way are:

Davis (TN)
Green, Gene
Johnson (GA)
Sanchez, Loretta
Sánchez, Linda T.
Scott (VA)

I count 26 (of whom 5 are listed as Bush Dogs)

Jan. 26 2009 11:25 AM
Michael from Green Wood Heights, Brooklyn

TARP I failed for the same reasons the economy tanked: reliance on top down manipulation and a lack of oversight of financial institutions. A strong economy is always built from the bottom up (ie small business) and usually crashes are engendered by mismanagement at the top of the economic food chain.

Jan. 26 2009 11:15 AM
Longstreet from NYC area

hjs #25: I'd be delighted to tell you that you are wrong.
What government spends, it must first take from someone. Or, it can simply print new money and thereby dilute the purchasing power of the currency already extant.

Jan. 26 2009 10:51 AM
Samuel from NYC

In NYC you can see the gap between rich and poor everyday. If the 'Best and Brightest' of our nation would start to think more about the effects they have on our community indirectly when they lobby for less public spending.
Poor is not a state of being!!! it can be but not always!

Jan. 26 2009 10:46 AM
SuzanneNYC from Upper West Side

Barry (29) According to Krugman "when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts -- and therefore costs less per job created -- bacause a large fraction of any tax cut will simply be saved."

Jan. 26 2009 10:41 AM
Lance from Manhattan

I'd like the police get back to ticketing restaurant deliverymen who ride up the wrong side of the street and without lights or horns/bells on their bikes.
Remember when that elderly man was struck and killed by one of these bikes during the Giuliani administration?
I am frequently almost knocked down by them.

Jan. 26 2009 10:39 AM
Josh from Brooklyn


I have tons more where this came from. Citizens for Tax Reform have a study. So does the Indpendent Institute (a impartial economic think tank).

Explain, how hoover, Bush, Reagan, Calvin Coolidge all cut taxes and the economy collapse. or Britain in the 70's. After cutting the highest margin in half, they defaulted on an IMF loan.

Jan. 26 2009 10:36 AM
barry from Manhattan

Josh... Listen up. Cutting taxes raises tax revenue. Period
That is why JFK did it and why Obama will do it.
Whatever we should have a flat tax anyway.
Then no one gets away with hiding taxable income

Jan. 26 2009 10:30 AM
kon trst from new york

Obviously the Stimulus has to have things that are easy for the Republicans to oppose. They can look like heroes, and the bill can pass.

Jan. 26 2009 10:30 AM
Bobby G from East Village

The economic recovery program should think BIG. The shovel-ready, first in line criteria is not necessarily best.

How about five or six gigantic solar electricity-generating arrays across the American Southwest providing huge amounts of electricity to major metropolitan areas -- all of Southern California, Las Vegas, Salt Lake City, Santa Fe, Denver, San Antonio, Austin, Houston, Dallas and Oklahoma City. The transmission infrastructure would be equal to the largest ever built. The number of jobs would be immense.

Jan. 26 2009 10:28 AM
Josh from Brooklyn

My other problem, is why are all the tax cuts going to the "middle class". What about the poor. The ones who don't have food, shelter or clothing. Obama has completely ignored them. Oh, yeah, they don't have lobbyists.

Jan. 26 2009 10:27 AM
hjs from 11211

I don't recall the GOP caring about deficits when bush was in office, if fact didn't Cheney say deficits don't matter?

please tell me if I'm wrong but any money the government spends (unless we throw money into the ocean or ship it to china) will stimulate the economy?

Jan. 26 2009 10:27 AM
Jay F. from manhattan

Where is this money coming from?

Jan. 26 2009 10:24 AM
Hugh from Crown Heights

FDR's Works Progress Administration paid for murals by Diego Rivera and any number of other artists; paid for people to rake up leaves; paid for non-"shovel-ready" projects like the Tennessee Valley Authority.

Some things return value instantly, others take years. The Democrats and Republicans, and Obama, seem to have little awareness of history, despite all the claimed reading and the "team of rivals".

Jan. 26 2009 10:24 AM
Leo in Staten Island from Staten Island

I think the problem with the bill is that it is so diffuse. If Obama had announced that he wanted to spend the $825 billion dollars on green projects, alternative energy, subsidies to buy Hybrid cars and projects like that, than we'd come out the other end $825 billion poorer but at least we'd have something to show for it. We'd have made a dent in one of our biggest problems, global warming. As it is, we're going to end up deep in debt, possibly curtailing a lot of Obama's other ambitious programs later on. And yet even if the stimulus is successful America won;t loot any different when this is all over. Let's at least get some bang for a our buck and solve a problem with our $825 billion

Jan. 26 2009 10:24 AM
SuzanneNYC from Upper West Side

Read Paul Krugman in today's NY Times -- "Bad Faith Economics" -- push back on the conservative's so-called arguments against the stimulus package:

Also Pelosi said that spending on contraceptives was in truth aid to state medicare programs -- helping states in fiscally hard times.

Jan. 26 2009 10:24 AM
Ralph from The Bowery

Inflation is clearly not our problem right now. Don't borrow from China. Why not print the money and be done with it?

The percentage of tax breaks to new spending should be proportionate to the ratio of Dem-Repub' senators.

Jan. 26 2009 10:23 AM
Josh from Brooklyn

There's something I don't get. As far as stimunlating the economy, infrastruture is key. First, its stable job creation, and its something we desperately. It takes time but its also long term substance, and steady tax revenue. More tax cuts are ridiculous for me. First, it is mathematically proven, that ta cuts do not increase revenue. Reagan proved that one. he had 10% unemployment. We already have unheard of deficits. The Social Security trust fund runs empty in 2019, when payouts exceed tax revenues and it runs in the red. In order to keep running usuing existing taxes, it would pay 75% of current benefits. Now Obama wants to cut your payroll taxes for SS. How are we going to pay for it. I am a proponent for spending during times like these, but the money has to come from somewhere. Even FDR raised taxes 300% over Hoover. Yes, taxes were higher under FDR then Hoover. In fact Hoover lowered taxes for the rich 3 times. yeah, tax cuts work at lot.

Jan. 26 2009 10:22 AM
Linda from CT

What no one talks about when proposing Tax Cuts as a solution, is that unless money goes directly to jobs programs, 16 months from now there will be a sharp drop in IRS revenues. As millions of unemployed don't pay income taxes in 2009, and all the bankrupt business and mergers and write-offs will provide sharply less business income tax for 2009 either.

Jan. 26 2009 10:20 AM
Matthew Schmidt from Forest Hills

Please stop getting this wrong: More than 20-25% is going to infrastructure spending, if not directly by the federal government. Almost 50% of the package is going to "aid to the states".

What does this mean? States are facing massive deficits and most are required to have a balanced budget. In order to ensure they don't have draconian cuts in education and Medicaid spending, they may have to delay or cancel capital projects.

Jan. 26 2009 10:19 AM

"filling budget holes is not very sexy" --

that's what the banks did w their share -- the result is that of course it raised their share prices.

Jan. 26 2009 10:19 AM
ceolaf from brooklyn

Money for states (e.g. money to support existing aid programs) does not JUST help people in need. It is, in fact, an important form of stimulus.

Most states are required to have balanced budgets, and a decline in the economy both reduces the amount of money they collect through taxes and increases the amount of money they need to spend on aid programs.

If the federal government helps states and localities, then they can avoid cutting other programs as deeply -- or perhaps even at all. This is important because such cuts have a dampening effect on the economy (i.e. anti-stimulus), which is the last thing we need.

So, money for state health programs is a form a stimulus, relative to what would happen otherwise. Your guest is comparing to last year, rather than than to what will happen. And we are talking about the future.

Jan. 26 2009 10:19 AM
robert from park slope

infrastructure projects should be those projects which the private sector are either uninterested in or incapable of producing (i.e., highways, bridges, mass transit, schools)

Jan. 26 2009 10:17 AM
KC from NYC

We're paying tax dollars for theme park infrastructures? Does that mean Baudrillard's theories are now reality? The "real" of our fantasy worlds is now more real than, say, our need for drinkable water. At least on a metaphorical level, this sounds like the dead opposite of where our heads (and money) should be right now.

But it's so ridiculous, it's hard not to enjoy it, in a "collapse of western society" sort of way.

Jan. 26 2009 10:17 AM
Hugh from Crown Heights

How about railroads? That would be a green means of linking the whole country.

How about education?

Health care?

Obama shows every indication of going beyond compromise with Republicans to outright capitulation (with the ready help of a large segment of the Clintonoid democratic contingent). And the starting premise of Republicans for almost 30 years is that _any and all_ public spending (except military and police) is bad.

Jan. 26 2009 10:16 AM
Darius from Prospect Heights

We need to fix healthcare and we need to get over the obsession with tax cuts. We have expenses, especially states, and giving tax cuts is no guarantee that any businesses will actually spend any of their tax cut money.

Jan. 26 2009 10:16 AM

If there was any time in our generation to rationalize/justify/afford a national healthcare system -- it is now. if there is money for banks' banks, for bailout bailouts -- there can be no argument at this particular moment against constructing a health care system that is efficient and available to all americans. the money is sitting there in a pot waiting for someone powerful to say something!

if all the health care system gets out of this money pot is free rubbers -- it will turn lemonade into lemons and be a symbol that shames us all.

Jan. 26 2009 10:15 AM
RLewis from The Bowery

When republicans cry for more tax breaks instead of spending, why aren't democrats asking how well Bush's tax cuts worked - the ones that took us from surplus to deficit and down the tank from there???

And Brian, please don't call it the "Stim'" again, or I'm gonna have to run out and jump the shark right now.

Jan. 26 2009 10:15 AM
barry from Manhattan

Ben, not in this Bill.
By all means reduce unwanted pregnancies, but it does not take a GED to figure out that that this is BS as usual from DC.
Focus the Bill already

Jan. 26 2009 10:15 AM
Joe Corrao from Brooklyn

Every elected official looks at the recession as an opportunity to get there own agenda front and center. We don't have money to spend yet we spend it on the liberal leanings of a totally innefectual speaker. The bailout is a total bait and switch thing...scare us with unless we do this we will all die and then give the money to banks so they can tighten the control on the money. End the Fed 1st off....

Jan. 26 2009 10:14 AM
Gary from UWS

What Pelosi is dancing around--as well as your guest--is that the “reduction in costs” related to “family planning” is to make sure welfare babies aren’t born and put on the dole. Just call a spade a spade and stop dancing around the issue.

Jan. 26 2009 10:14 AM
barry from Manhattan

We should build a water slide but just not in this bill

Jan. 26 2009 10:12 AM
barry from Manhattan

It is full of pork I mean please.
Can't we have even one clean bill?

Jan. 26 2009 10:12 AM
barry from Manhattan

So how does that stimulate the economy?
Reducing costs = Stimulating the economy
well what about the other things that was listed by the GOP
Sure of course we should encourage thoughtful family planning always, but this is a bait and switch.
Why not spend 200 million on condoms for the military to reduce costs?

Jan. 26 2009 10:11 AM
Ben from Brooklyn

Someone who doesn't understand how contraception can serve as an economic stimulus really shouldn't have graduated from high school, let alone been elected to congress.

As we celebrate the Chinese New Year, it is worth a reminder that China's decades long one-child policy is basically an extreme form of contraception. And whatever you feel about this, it is absolutely the consensus of economists that keeping births down encouraged Chinese saving instead of consumption and is the single largest factor responsible for China's current economic boom.

Perhaps we need a "job retraining" program for such naive congresspeople.


Jan. 26 2009 10:08 AM
Daniel from manhattan

Boehner's claim that spending on contraceptives doesn't help they economy shows a disturbing lack in long term thinking. Preventing abortions and unwanted pregnancies should be supported by all, and not just for the money it would save.

Jan. 26 2009 10:06 AM

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