Friday, June 24, 2011

Obama Proposes 1/2000 Trillion Dollar Manufacturing Plan

Haz manufacturing plan? When you unveil it, make sure you're not too far off Butler Street. Otherwise you risk losing Ferlo.

In the speech, he launched his new high-tech plan with six universities in what the administration is calling the Advanced Manufacturing Partnership.

The plan also features 11 manufacturing companies, including Ford Motor Co., Caterpillar Inc., Procter & Gamble Co. and Northrop Grumman Corp. Leading the effort will be Andrew Liveris, chairman, president and CEO of the Dow Chemical Co., and Susan Hockfield, president of the Massachusetts Institute of Technology. (P-G Early Returns, Daniel Malloy)

Assertively rebuilding our manufacturing capacity and spurring our technological sector sounds like a good strategy for America.

The only issue is, when we think about "real money" these days, we usually think of it in billions if not trillions. This knowledge was revealed to us all in having attentively watched a parade of certain bailouts, stimulus packages, weapons systems, quantitative easing, routine entitlement and occupation spending, and tax cuts.

$400 or $500 million is real money in terms of building a skyscraper -- albeit a fancy one -- but is it even close in terms of rebuilding an atrophied world-power economy? Hard to say. What about once we concede there is a significant public-private-and-academic partnership aspect to the plan? That itself can be a real hot potato.


Alright, I admit it. When it comes to economics, I just read Paul Krugman and believe whatever he says. He's the only one in the game with a Nobel Prize, and whose work passes the smell test on each and every occasion. No glaring omissions, no over-reliance on maxims and quotations, no flowery puffing up. It engenders confidence, this making of his real theses so easy to apprehend.

Let's see what he has to say right now:

But [Republicans are] willing to sacrifice that future [they say is at risk due to the deficit], not to mention risk the good faith and credit of the federal government, rather than accept so much as a single penny of tax increases as part of a deal.

Given all that, it seems almost redundant to mention that federal tax receipts as a percentage of GDP are near a historic low: (NYT Conscience of a Liberal, Paul Krugman)

Nothing on the President's manufacturing plan yet, but note where Krugman focuses. We agree. Forget the deficit*. Prioritize our present spending, raise revenues, and plow all those sweet proceeds into manufacturing, technology, education and infrastructure -- that is, with real money. Employ the country productively, then worry about the bondholders with a sufficiently productive and competitive country.

*- And forget the curveball, Ricky.


  1. Thank you for bringing up the paucity of this Presidential offering. How does anyone take this guy, the Prez, seriously when his party hasn't even proffered a budget in the last two years? When you fail to plan( a budget), you plan to fail.He's throwing nickels and dimes at a trillion dollar hole!!

  2. It's an interesting policy position for the country, the president and the robotics institute. we can't afford war and no one wants to buy it from us, our commander is charting an economic course homeward and war machines aren't a university's meal ticket anymore.

    as the word verification suggests, these are mulating times we live in.

  3. So wait, rich, Republicans are screaming about how the government is spending too much money, but when the President proposes a modest spending program that could produce jobs for people who need them, you slam him for not spending enough? If the President says the sky is blue, would you and/or all the Republicans scream about how it is green?

    Krugman had an interesting blog post where he pointed out that its not that deficits and debt don't matter. Rather it is that cutting government spending right now is a bad idea, when so many people are out of work and business is refusing to hire. We need more stimulus spending right now. When the economy is back on the upswing, then we can rein in spending and cut the debt.

    That is to say nothing about rescinding the Bush tax cut on at least the wealthy, or addressing our very low taxes on corporations in a time of record profits.

  4. Eduardo, I'm not a Republican and if Obama was making a gesture at creating jobs, then the UE numbers echo my belief that this $500 million heaped on the billions "of shovel ready jobs" has been an abysmal failure. Now you want to tax corporations more.Those are the job creators.The dynamic economic engine of this country comes from the private sector, not the gov't.

    If you want to massively stimulate the economy put more money into the hands of those who spend it (consumers) and use it to create jobs and wealth (entrepreneurs).In your view, corporations who are showing profits, but not necessarily hiring people, should be taxed more. That's a sure fire jobs program.

    To echo the belief that deficits and debt don't matter, then to shout for more taxation(gov't spending)on corporations is the same as saying stay the course.And as we all know, that hasn't worked

  5. I'm with you Bram, I only really listen to Krugman regarding economics. Thank god I had a French/Feminist/Jewish/Socialist Professor to point him out to me in my early 20's lol!!

  6. Ricardo (ese?), you may not be a Republican, but you are certainly repeating Republican talking points (so my confusion is understandable). I believe the Congressional Budget Office determined that (I think it was) a million and a half more jobs would have been lost if the stimulus had not been passed. I guess you think those people should have lost their jobs, that we should have been plunged into a full fledged depression instead of just a bad recession. But I also will say that even at the time and consistently to this day Krugman said the stimulus was too small, and had too many tax cuts in it (although at least they were tax cuts for the bottom 80% instead of the top 20%).

    You say we shouldn't raise taxes on corporations because they are the job creators. Yet studies show our corporate and personal tax rates are among the lowest in the world, yet the damn corporations are not only not creating jobs, they are cutting them (e.g. Goldman Sachs shifting 1,000 jobs from the US to Singapore). Both the corporate tax rate and the marginal tax rate on people making over $250,000 ($500,000 for married couples) could be increased, in my opinion, before we start cutting services for the poor. Programs that, by the way, put money in the hands of people who have to spend it because they can't afford to invest it to make more money (which the wealthy do since the capital gains tax rate is so low).

    Staying the course has worked better than Republicans (and your?) suggestion - government do nothing. But I think we need to tack a new course, back to Keynesian economics, and government spending when the economy is in a recession. Added revenue from higher taxes on those profiting on the misfortune of the poor would just be a way of addressing our massive income inequality.

  7. Eddie, you and Paul are drinking too much Koolaid!! And marching down the road with more of JMKeynes isn't the solution either. Drink on!!

  8. Obama while sipping from the Kool Aid smiley pitcher suggests confiscating more money from the people to support shovel ready infrastructure jobs. Oh Eddie, don'tcha see the insanity of it all...doing the same thing time and time again..and still no shovel ready jobs!?!?! Put the cup down !!!

  9. Ah, rich, I thought you wanted to discuss the real world, but all you want to do is is talk about your fantasyland. Which is exactly the same fantasy land Republicans live in. But you aren't a mindless black and white world Tea Party racist.

  10. you know what Ed, if you wanna talk politics economics whatever and disagree with me that's fine....calling me a racist is out of line...I suggest you lighten up with the name calling...meanwhile a new report states stimulus cost 278,000 per job created and you and your guru want more stimulus

  11. Yeah rich and calling me a sex pervert was out of line too, but I guess you're allowed to say anything you want. But then Republicans are known for the double standard.

    As for that report, sure, repeat the Republican distortions. You want 3.6 million Americans out of work, how many hundreds of thousands more homes in foreclosure, a hundred million more poor and middle class Americans paying more in taxes, and the US plunged into a new depression. The only suggestion you Republicans have to address unemployment is to take more money from the poor and give it to the rich. Oh yeah, and take away everyone's health care, even (especially) grandma's.

  12. @ Rick Moody - I had a feminist / socialist professor back in the day, too! Syracuse University. Took the whole undergraduate class to Chuck's. Her husband was a labor organizer, hmm, what did I do right out of college... oh right...

    @ rich10e and Ed Heath - break it up. Rich, you got to do better than "Kool Aid Kool Aid". Ed, I think you may have mistook Rich's "Eduardo" salutation as something else, and something else as something else.

  13. Bram, you're the boss and i respect your rules...Ed i apologize for whatever i may have said that you believe called you a sex pervert....honestly, i don't recall and dont think i did...please point it for the Kool Aid...its just an acknowledgment of the talking point mentality in spite of reality ie: 9.1 unemployment & doubling the debt. The economy speaks for itself!!! And btw Ed we have a few common facebook friends, ask them if i'm a racist

  14. 9.1% unemployment we could argue pretty easily was brought about by the financial collapse, which was brought about by both parities (conservatives in both) who have a hypochondriac allergy to protective financial regulations. Another reason jobs are lagging is in part because consumer demand just is not there, the bigger corps are sitting on their cash. No one has money to shop at the factory store, so why hire more people to make cars and sandwiches?

  15. Well, rich, I may have overstated and if I did apologize for it (although given what you have said about Sharia and also the large percentage of the unemployed that are minorities and/or women ...). I assume you remember saying (from memory) "You are Anthony Weiner".

    You say I am repeating talking points. I can point to the Weekly Standard (or more conservative blog posts) that just happen to have your statement about the recent report word for word. But you are not just repeating talking points yourself.

    Do you read Krugman, rich, before you suggest you know better? Back in February-March of 2009, he said that he thought the stimulus is too small and that it would not push the economy hard enough to get it going and create more jobs. Which is pretty much what happened, right?

    I agree wholeheartedly with Bram's comment, there is money to hire people (corporations are making record profits), but even Krugman has commented on his blog about lagging demand and a liquidity trap. The thing is, profits would likely fall while demand caught up, so hiring new workers would be bad in the short run, which is all most US corporations seem to pay attention to. Besides, corporations know that Obama looks bad right now. They are willing to accept record profits and hold off on hiring until perhaps a Republican (like Bachmann or Romney) goes into the White House. That is the "uncertainty" that the media keeps mindlessly repeating, not how the economy is doing but whether the few remaining financial and health and safety regulations will be dismantled in January 2013 or not.

  16. yeah Ed i do read Krugman and yes I do know he stated early and often that the stimulus was lacking....and i apologize for the "weiner" was meant ideologically not personally...that was wrong!!

    bottom line stimulus failed....more stimulus will not do much better...taking money from people to encourage more gov't spending is foolhardy....the Pgh Housing boondoggle, spending 4 million on 15 homes is not so much a reflection on Pgh as it is on free spending ways of HUD/URA's everywhere..its Fed money let's blow it...we, working people rich and poor, should not have to make our $$$ available for squandering and feeding the coffers of the well connected...that happens at all levels.Fed, state, local... Ive worked for the county and local municipal gov't...these people see tax dollars are theirs to spend capriciously....don't see that stopping without pulling the plug on the flow of $$$$$'s ...btw the weekly standard article was derived from the gov't spending report,,it wasn't an editorial...

  17. Well, rich, thank you for the apology, although I don't want you to think I am a fool. "ideologically"? Nah, don't buy it.

    So the stimulus failed because it was "foolhardy"? Nothing more complicated than that? Gotta wonder why the Nobel prize winning PhD who teaches at Princeton can't see that. Unless Krugman is simply evil, trying to profit off his plan to create a socialist government (or some damn thing).

    By the way, how did it work in the Great Depression?


  19. In that article, Krugman is called a lot of names ("liberal" being the worst among them) and all sorts of things are said about him, but no assertions of his are refuted or parts of his theories debated. It's just, "My word, he's a liberal!"

    Modern American conservatism, he has written, “is, in large part, a movement shaped by billionaires and their bank accounts, and assured paycheques for the ideologically loyal are an important part of the system. Scientists willing to deny the existence of man-made climate change, economists willing to declare that tax cuts for the rich are essential to growth, strategic thinkers willing to provide rationales for wars of choice, lawyers willing to provide defences of torture, all can count on support from a network of organizations that may seem independent on the surface but are largely financed by a handful of ultra-wealthy families.”

    Sounds more than plausible to me. I'd be suspicious if something like this weren't the case, because why not?

  20. The stimulus has been a failure. There are no shovel ready jobs that the President mockingly laughed about last week. Corporations are sitting on zillions of dollars.Two quick fixes to create jobs would be to rescind the health care bill,and promote a more relaxed regulatory atmosphere (boeing). Or the President can go on be and surprised every week when there are no jobs created and blmae Bush. The people with the money to create jobs are on the sidelines and Obama is playing a game of which he knows nothing.

  21. "The stimulus has been a failure." You simply ignored my question about the Great Depression. Totally. Intellectually. Dishonest.

    "Corporations are sitting on zillions of dollars." Why? Republicans/Tea Party types/conservatives (a group- you apparently belong to) say it is because of an uncertain environment (presumably an uncertain regulatory environment). Except that for that to be the case, Republicans in the House would have to vote for new regulation, which we both/all know simply isn't going to happen. So in fact corporations are sitting on the their money for .... what? Waiting for the Republicans to force the government to enact your two "common sense" measures.

    You do realize that the US had, before healthcare/insurance reform, the worst cost per patient and worst public health outcomes, and the largest healthcare cost to our GNP, among industrial nations. Actually, after healthcare/insurance reform, we might well still have the worst statistics, because people like you screamed about "death panels" and "new taxes for businesses" and cause healthcare/insurance to be considerably weakened. But you want to put us back on the road to disaster, because we both know that Republicans will not propose anything to replace healtcare/insurance reform. After all, Republicans had Congress and the White House from 2003 to 2007, and did nothing for healthcare (except transfer some money from senior citizens and the rest of us to drug companies). All Republicans did during the Bush years is get us into two wars (one by lying to the American people about nuclear (sorry, nuculer) weapons) and weaken government regulations. And cause almost another depression, certainly the biggest recession we have had.

    Which brings us to your second suggestion. You want to hurt the poor even more than Republicans have hurt the poor to date.

    How do you justify making the rich richer?