Jane Hamsher writes on Ryan Lizza's New Yorker piece on WH Chief of Staff Rahm Emanuel, where Emanuel defends himself from criticism of how the stimulus package was handled. Lizza quotes Emanuel:

“They have never worked the legislative process,” Emanuel said of critics like the Times columnist Paul Krugman, who argued that Obama’s concessions to Senate Republicans—in particular, the tax cuts, which will do little to stimulate the economy—produced a package that wasn’t large enough to respond to the magnitude of the recession. “How many bills has he passed?”

To me the obvious question is how many difficult bills did Emanuel pass before this one? I think the answer is none. Besides, I thought Emanuel had already admitted mistakes in the handling of the stimulus bill:

Via Digby, apparently George Soros does not think so:

Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis. Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union. . . . "We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."

It is a little late to be talking about institutions being "too big to fail." They already failed. Oh by the way, apparently Paul Volcker was equally gloomy:

A clownish CNBC "on-air personality" (I take the phrase from a Chicago Tribune article), Rick Santelli, acted a fool the other day, ranting against help to homeowners in distress (WH spokesman Robert Gibbs rightly dismssed Santelli as someone "who does not know what he is talking about." But today, the NYTimes has an editorial that touches the actual issue with a needle. The editorial asks:

If Chrysler is really on track for a turnaround and all it needs is some financing to get over a bad patch in sales and debt markets, why doesn’t Cerberus Capital Management, which owns 80 percent of the company, put up the money itself? Why should taxpayers have to take the risk? That’s what private equity funds like Cerberus are supposed to do. . . . It seems the secretive private-equity fund is willing to gamble on Chrysler’s survival with the taxpayer’s dime, but not its own.

(Emphasis supplied.) [More...]

The big news coming down the pike is President Obama's intention to halve the deficit by the end of his first term:

After a string of costly bailout and stimulus measures, President Obama will set a goal this week to cut the annual deficit at least in half by the end of his term, administration officials said. The reduction would come in large part through Iraq troop withdrawals and higher taxes on the wealthy.

This is pretty obvious framing I think. Obama will allow Bush's irresponsible and ineffective tax cuts for the wealthy lapse and, preempting GOP charges of "tax and spend" - Obama seeks to label it deficit reduction. Of course the GOP will NOT go along, but that's not the point. Obama is trying to make opposition to allowing the lapse of the Bush tax cuts on the wealthy be seen as irresponsible. We'll see what the Pete Peterson brigade has to say about it. I expect silence from the "cut entitlements" cabal, whose only concern is when government tries to help the non-wealthy.

Speaking for me only

What's changed since the Stimulus bill came along? Stocks have sunk even lower. The Dow Jones Industrial Average today sank to a level not seen since October, 2002.

Worst of all, analysts say today's drop means it's going to go even lower. [More...]

The fact that California passed a budget is good news. That a Republican state senator refused to vote for the budget and sent California into the abyss unless he got these changes is a disgrace to the GOP state senator:

[I]n the witching hours of Thursday morning, lawmakers caved to some of the demands of State Senator Abel Maldonado of Santa Maria, a Republican who wanted state constitutional amendments establishing an open primary system and banning legislative pay increases during deficit years, and the elimination of a 12-cent increase in gasoline taxes from the plan.

What a pathetic man.

Speaking for me only

As Paul Krugman noted yesterday, in the wake of Hank Paulson's disastrous TARP Part I last fall a consensus emerged among economists like Krugman, Dean Baker, Nouriel Roubini, that the stimulus had to be huge, somewhere in the $1-$2 trillion range. [More...]

The NYTimes reports:

The administration’s initiative, called the Homeowner Affordability and Stability Plan, is an effort to slow the decline in the housing market. As the economy drops deeper into a recession, home values are falling faster and faster, and more Americans are losing their houses to foreclosures or distressed sales.

The plan would allow four million to five million homeowners refinance mortgages guaranteed by the government-controlled housing giants Freddie Mac and Fannie Mae. The administration said allowing people to refinance at lower mortgage rates would reduce monthly payments and save families thousands of dollars every year.

[More . . .]

This is catastrophic, not just for California, but for the entire US economy:

After a frustrating holiday weekend that failed to yield the one vote needed to end California's budget stalemate, the state is poised to begin layoff proceedings Tuesday for 20,000 government workers. In addition to the layoffs, the state also plans to halt all remaining public works projects, potentially putting thousands of construction workers out of jobs.

"We are dealing with a catastrophe of unbelievable proportions," said state Sen. Alan Lowenthal, a Democrat from Long Beach and chairman of the Senate transportation committee. Senate leader Darrell Steinberg announced late Monday that lawmakers had failed to find the final vote in his chamber as Republicans refused to support tax increases. He called a session for Tuesday and said he would put the tax provisions of the budget proposal up for a vote, even if they would not pass.

This is criminal irresponsibility by California Republicans. This is truly an economic catastrophe.

Speaking for me only

In 2006, Malcolm Gladwell wrote:

Under the circumstances, one of the great mysteries of contemporary American politics is why [GM CEO Rick] Wagoner isn't the nation's leading proponent of universal health care and expanded social welfare. That's the only way out of G.M.'s dilemma. But, from Wagoner's reticence on the issue, you'd think that it was still 1950, or that Wagoner believes he's the Prime Minister of Ireland. "One thing I've learned is that corporate America has got much more class solidarity than we do—meaning union people," the U.S.W.'s Ron Bloom says. "They really are afraid of getting thrown out of their country clubs, even though their objective ought to be maximizing value for their shareholders."

Gladwell's point has truly become obvious now as GM's fate today now seems to completely depend on dealing with its health care costs:

Booman argues that President Obama's language opposing the stricter Buy American provisions in the stimulus bill does not matter because Obama did not actually do anything to weaken these provisions. Now, as folks should know by now, I am a free trader, so Buy American provisions are not something I favor generally (I also think existing Buy American provisions provide sufficient advantages for domestic vendors.) But I am curious if Booman is correct that in fact Obama did not act or lobby for weakening the Buy American provisions in the stimulus bill. My understanding, based on this Reuters fact sheet, is that he did indeed weaken the Buy American provisions in the stimulus bill:

Las Vegas and Miami are feeling the economic downturn. That's really too bad as both cities are a lot of fun to visit. Maybe instead of grants for law enforcement, the next stimulus bill could include some incentives for the rest of us to vacation so workers in the tourism industry won't lose their jobs.

The Miami article begins with a nod to a new book by author Steven Gaines, “Fool’s Paradise: Players, Poseurs, and the Culture of Excess in South Beach.”

The gossip-larded social history of Miami Beach spans the decades-long transformation of what the author calls “the little sand bar across the bay” into a fast-and-louche Eden, where corruption, street crime and profligate spending were as integral to the landscape as sand and swaying palms.