The title of this post refers to a hilarious joke made by one of the miscreants I was watching Tuesday’s faux-State of the Union with. We were, like everyone else, discussing the fact the whole time, during the Republican response to Obama’s speech, Bobby Jindal sounded like he was hosting a children’s show. He wasn’t just talking silly, he was talking down to the American people.

My first reaction was, Oh, this is the GOP’s answer to Obama’s magnetism? A slow-talking hick who would be better selling blenders on TV at 4 am than explaining basic civics to me? But it occurred to me while watching, that for that wide swath of voting Americans who just got the internet last year — the demographic that goes to church regularly, memorizes football stats, and generally suffers the disdain of the East Coast liberal elite — Jindal’s speech probably WAS a brilliant piece of oratory.

He gave props to the “historic moment” of Obama’s presidency. He repeated the general conservative spending platform in really certain, easily understood terms. He appeared friendly at least, in the face of being incredibly patronizing. And because of this hunch of mine that Middle America conservatives secretly loved the Governor of Louisiana’s speech, I’m given hope that his party is still in shambles. I mean, if appointing Michael “Oreo” Steele as its head wasn’t hope enough.

- TF100D

It’s huge not only because it costs a lot of money, but also because it shows a political shift that was a long time coming in this country.  It is a democratic (as in the democratic party) bill, that’s undeniable.  Instead of investing in military increases and tax decreases like the Republicans may have, it invests in infrastructure and health care.  As Obama pointed out himself, “We have done more in 30 days to advance the cause of health care reform than this country has done in an entire decade and that’s something we should be proud of.”  Whether this will work more or less than the Republican plan would have in fixing Wall Street, I’m going to shrug in ambivalence.  But, with the risk of sounding like Pelosi, the fact that the democrats wrote a bill that reflects their politics isn’t surprising.  And as a liberal, with all the moaning about fixing up the national mall and fixing the alternative minimum tax, I’m happy to see where most of this stimulus package went.  I’m also happy that the republicans didn’t write it while I’m still hoping we elected a president who is able to hold the more pork-friendly congressional democrats’ feet to the fire a little more.

On Monday, the main tool to fight waste in the stimulus package, recovery.gov, went live.  The website, another attempt by the Obama administration to bring the US government into the 21st century, also promises more transparency on where our $787 billion go and how effective they are.

Right now, the graphic on the website that breaks down the stimulus bill has the biggest part of the package, $288 billion, going towards tax relief, with the smallest, $8 billion, going towards “other.”  These numbers are both vague and misleading.  The Wall Street Journal published a better breakdown.

Hopefully, by March 3rd when federal agencies begin reporting their use of funds from the stimulus bill, this breakdown will be more specific.  If not, recovery.gov will prove itself to be little more than presidential propaganda.  Will I see how much money the government gives to a particular state and how much that state gave to a local government and how much that government gave to a contracting company and a receipt of what that company did?  That might be stretching it, but here is to hoping.  But there is no doubt recovery.gov is Obama’s unique stamp on the stimulus package, and it is refreshing to see some change (not to steal the president’s word…) in Washington.

–AnitaProg

What better way to celebrate a warm-ish MidAtlantic morning than with emerging details about the Obama foreclosure prevention plan?

In a nutshell, we know that the plan will cost $75 billion initially, with $200 billion more to come in subsidies for Fannie Mae / Freddie Mac. It’s a four-pronged approach:

* 5 million homeowners who are still current on their loans, but unable to refinance because they don’t meet the necessary floor of their equity share, will be able to refinance through Fannie Mae or Freddie Mac.

* 4 million homeowners who are in peril of entering foreclosure will have their mortgage payments reduced to 31 percent of their household income, using a $75 billion fund. Essentially, the government is paying part of these people’s mortgages so that they don’t fall behind.

* The government will pay $200 billion into Fannie Mae and Freddie Mac to increase the available housing credit in general.

* Obama will try to convince Congress to give bankruptcy judges the power to renegotiate loans and reduce monthly mortgage payments.

If you believe the New York Times or the Washington Post, everyone in Washington, including John Boehner, J.P. Morgan Execs, and a few academic eggheads, is at this point so cowed by the gravity of the financial crisis that they can’t find it in themselves to criticize the plan, which in any other situation would be decried by conservatives as a step down the slippery slope to Socialism. Only the grassrootsy folks, like John Taylor of the National Community Reinvestment Coalition, are griping about the plan not being aggressive enough because it solicits voluntary participation from the banks, rather then forcing them to reneg loan terms.

Last summer, when the talk of the town was a foreclosure moratorium — which Hillary was pushing and Obama was not — I was vehemently opposed to such a measure. Creating a consequence-free environment for consumers, I argued, would only compound the detriments of the consequence-free environment in which financiers were operating, which brought down the nation’s biggest banks.

What Obama is doing here with allowing judges to renegotiate the terms of consumers’ home loans — if he’s able to do it — will most certainly dry up investment in mortgages like a slug in the sun. It’s difficult to imagine a better or more expedient way of destabilizing the housing industry as a place for safe or profitable investment.

Cleverly, Obama has hedged against this with the outsized cash injection into Fannie Mae and Freddie Mac, the mortgage investment giants. But what happens when those companies, which collapsed under the weight of mismanagement and a fudged vision of the role of profit in the once-government-backed corporations, falter or fail again?

The really scary thing for Obama, I should think, is that this plan — which is a serious and important counterweight to the skeletal stimulus bill, which I don’t think will have anywhere near the discernable effect it’s intended to have — is something that he owns entirely. The Times article notes that aside from the provisions for mortgage judges, nothing needs to be approved by Congress. It was Obama who chose the scale on which to attack foreclosure.

Beyond luring lenders with government money, the plan also calls on Congress to give bankruptcy judges the power to change the terms of mortgages and reduce the monthly payments.

- TF100D

Senior economic officials had several approaches in mind, according to officials involved in the discussions. One would be to create an “aggregator bank,” or bad bank, that would take government capital and use it to buy up the risky assets on banks’ books. Another approach would be to offer banks a government guarantee against extreme losses on their assets, an approach already used to bolster Citigroup and Bank of America.

However, Geithner and co. realized late in the game that this sort of government intervention would be too costly for the taxpayer, and perhaps that political will for putting trillions of dollars of taxpayer money at stake simply was not there.  The issue of how to properly value these toxic assets was also still a major concern which the Administration could not seem to get around.

This led Geithner to shift course in the first week of February to a new plan, the basic contours of which we are now familiar with:

By Wednesday, Feb. 4, Geithner was leaning toward a different approach that his former colleagues at the Federal Reserve had developed months earlier, the source said. This involved a joint public-private fund to buy up the assets. Private investors, likely hedge funds and private-equity funds, would put up capital, and the government would loan money to the fund. If the private investors made wise decisions about which assets they bought, they would be able to pay back the government and make money for themselves. For the policymakers, the chief appeal of the public-private partnership is that it solves the problem of how to price assets. The private money managers who provide capital for the fund would decide which assets to buy, and at what price, taking government bureaucrats out of that difficult task.  Moreover, the private contribution lowers the total amount of money the government would need to put at risk.

Ultimately, Geithner had to put forward a plan that was short on details therefore because he had just chosen this course of action only days earlier.  There was a deliberate choice to go with vague, rather than to set out details that might later be subject to change—a major criticism of how Paulson handled TARP I. As WaPo reports, “[i]n the end, Geithner and his colleagues decided that it would be better to take flak for being vague than publicly offer half-formed details that might later have to be revised.”

I think Geithner deserves kudos for intentionally choosing vague over misleading details, but I’m still concerned. This is the kind of thing that they have had months to think about, yet they were still debating the most basic elements of their approach deep into early February. This shows that this problem is complicated indeed, but also seems to indicate that not everyone on Obama’s economic team is necessarily on the same page.

But there is another problem at play here as well—insularity. Paul Krugman points out, rightfully, that Geithner & Summers need to avoid insular discussion and should consult with knowledgeable outsiders. If they had done so, perhaps they would have dealt w. these concerns earlier…considering that many top economists had thought of these very issues months ago:

In a way, that’s encouraging: we were spared Hankie Pankie II. But it’s a bit alarming that it took so long for the team to figure out the problems — and that they apparently spent a long time going down a route that led to a dead end. Many of these issues had been hashed out in public discussion last fall, when Paulson made his play. And I can’t believe that the discussions would have gone so off the rails if any of the high-visibility outsiders had been in the loop — Joe Stiglitz, Nouriel Roubini, Simon Johnson, etc. (No, I wasn’t in the loop either.)So what the WaPo report seems to suggest is a worrisome insularity. Geithner and Summers are smart guys — but they need to get out more.

Insularity can often be the kiss of death for an Administration. Let’s hope the Obama economic team starts consulting with people outside their inner sanctum, and soon.

-N.S.

Criticisms from moderates of the Stimulus Bill that Obama signed in Denver yesterday have ranged from measured to hysterial. Over at the New York Times’ “The Conversation” blog, David Brooks said the bill’s main problems were that it set a bad precedent for deficit spending with no way out, and that it included a lot of pork — but not only that, rushed pork, which he claims is half as effective as the type of programmatic support that comes in regular appropriations bill.

Meanwhile, on a certain urban planning newsgroup that I read, a former city planner said this:

Short-term economic stimulus is the enemy of thoughtful productive long-term infrastructure investment. The Federal government is looking like a bunch of crazed idiots right now.

Surely there’s some middle ground, here. Some of the healthcare measures in the stimulus, like the family planning education money, were simply not stimulus. They were good programs, that likely in the long run will work to lower health care spending and improve living standards, but they had no place in the AARP. Likewise, the COBRA funding that was cut out did, in my humble, have a place in the bill even if only as an accompaniment to job-creation measures. A lot of people are losing their jobs and their insurance right now — think of a boost to COBRA as a layer of padding that keeps a bad problem from getting drastically worse in a time of recession.

But overall, the form the stimulus has taken strikes me as a half-full glass. It will not create enough jobs to turn the economy around, and it cost Obama enough political capital that his supporters ought to be legitimately worried about 2012, I think. The hope now is that the three other extremely important economic bills: the Big Auto bailout, the bank nationalization, and the foreclosure bill, will work in tandem with the stimulus to get the economy back on the right track.

- TF100D

Obama and Co. have spent the past few days shopping around the idea that Republicans in Washington are out of touch and not pursuing the changes their constituents want, and it looks like the media is finally picking up the slack.

Republican governors across the country are supporting Obama in many of his efforts, but especially with the stimulus.  It’s funny, in the past few election cycles the big GOP talking point in the primaries and then again in the general election (except this most recent one) was that the governor in the race (Bush) was infinitely more qualified to serve as president than the senator in the race (pre-VP Gore, Kerry), because he had “executive” experience and wasn’t some rich DC-resident who barely flew back to the state that elected him.  Yet now that 22 (22!) Republican governors, the men and women who are on the ground watching their states collapse, support Obama, I have a feeling that line of thinking will be quickly cut down  by the likes of Cantor and Boehner.

It will be interesting to see what happens in the next few days and weeks both with Obama’s relationship with the GOP in DC and at large, and within the Republican party itself.  Now that Jim Douglas of Vermont, M. Jodi Rell of Connecticut and Charlie Crist of Florida, among others, are behind Obama, does he have more political capital?  Hell, Crist was nearly McCain’s running mate (he even had a sham marriage just in case) and he’s been out there barnstorming for Barack’s stimulus package!  Or does it really not matter what the rest of the country thinks, and the Republican members of Congress feel that they answer to no one but themselves?

The media has been seizing on the Republicans’ decision to vote “no” en masse as some sort of sign of party unity and realignment, painting Boehner and Cantor as the new Newts of the party, the guys who’ll be the thorns in Obama’s side for the next four years.  And maybe they’ll be those thorns, but it seems rather premature to be talking party unity when it’s so clearly in disarray.  But with the New York Times article and this piece on Politico, perhaps the media is finally getting past the need to prove that they’re not “in the tank” for Obama (Jon Stewart, wtf?), and starting to accurately reflect what’s going on in and outside the beltway.

- Water American

On a long drive yesterday, I had an argument with a friend who works in health policy for the federal government about whether or not Obama’s administration has so far demonstrated a lack of transparency.

His perspective was that Obama had made various promises during the election which were focused on ends (health care for all, reduced health spending, Medicaid and Medicare reform, etc) without clear means of achieving them. Because the president’s specific strategies are unclear, he argued, the president is therefore not being as forthcoming as he ought to be, which points to a lack of transparency in the administration.

My counterargument can be summed up by the “Today is Day…” tab at the top of this web page. Obama has been in office for less than a month. He doesn’t have a Health and Human Services secretary yet. He’s been dealing with a divided Congress over a stimulus package that is meant to save us from the nation’s worst-ever financial crisis. Isn’t a detailed plan of attack on health care reform a little bit too much to ask at this stage.

But what I didn’t really get at the time is that my friend’s gripes with Obama’s efficiency (a) have legal grounding, and (b) are intensely personal. Apparently, the president is required by law to submit a budget to Congress that presents his economic assumptions and year-to-come projections for a laundry list of ares of government spending. And there are a lot of people, like my friend, who depend day-to-day on being on the same page as various federal agencies. When your job is to crunch the numbers on something as massive and complex as health policy, all day long, in order to provide context and suggestions for where that policy ought to go in the future, it must be a huge headache to not know what the federal government’s plan is, what their assumptions are, what they expect to see coming over the horizon.

The denouement of this argument was that I don’t think Obama’s failure to present a budget is in any way not-transparent, but only because I think transparency has to do wtih not hiding information and providing it when pressed. So far, I haven’t heard anyone publicly demanding that Obama get his budget to the Capitol. Instead, expedient and thorough planning constitutes a different kind of transparency: one that goes above and beyond the basic duties of the presidency and if maintained, would lead to the sorts of perceptions of Obama — that he is a go-getter, a true reformer, and the type of effective leader he claimed to be back in October — that would really help keep up morale among federal employees and the millions of people who depend on their hard work.

- TF100D

I think Obama’s line about Iran “unclenching [its] fist,” from his Al-Arabiya interview was rather meaningless in what it indicated about his administration’s likely foreign policy approach to Iran. Two years ago, the same statement spoken by an American president would have said something about Iran opening up to inspections as a precondition for steps towards normalizing relations. Four years ago, it might have been an overture to the clerics to quell human rights violations and leave the student movement alone. But now? What exactly is the unclenching that Iran must do to merit a place at the table with American diplomats?

Time‘s Joe Klein thinks it includes, at least in part, a new president with at American approval stamp, and offers several other carrots that the U.S. could dangle — reaching out to Russia and Syria first, for example — to get the ball rolling. But Ilan Goldenberg makes the pertinent point that the U.S. should stay the hell out of Iranian elections, because we have a particularly bad track record of interfering inappropriately and supporting one Iranian leader over another.

I, for one, think it’s interesting that all concessions w/r/t nukes, improving relations with Israel, and other pro-democratic reforms that America has pushed for in the past, seem to have been left out of this discussion. And at the risk of sounding like a neocon, I find these things troubling.

The path I’d like to see Obama pursue is one that does not dance around the issues of nukes. Also, it’s important that some more successful containment efforts in recent memory — most notably North Korea and Libya — have dealt with rogue countries that were sliding towards economic inviability. Iran, which gets almost all of its treasure from oil exports, is vulnerable because of the low price of oil (see the New Yorker’s excellent profile of the Tehrani economist Tabibian from last week, if you have a subscription), and because it doesn’t trade with America or the E.U., is essentially being propped up entirely by Russian and Chinese currency. So Joe Klein is dead-on in another argument he makes:

We need to make a deal with Russians first–the obvious one is suspending any plans for an anti-missile system in return for verifiable Russian support for the UN’s efforts to prevent Iran from developing a bomb.

And once we’ve done that, I see this as a perfect opportunity for the U.S. to adopt a posture toward Iran that is a 360-degree change from what we’ve been doing for the last 30 years: take steps towards developing a mutually dependent relationship with Iran (i.e. moving towards establishing some sort of trade relationship). There’s no reason — especially because Shiite countries are typically more moderate than than their Sunni counterparts — why a nation as oil-rich as Iran couldn’t have a relationship to America that’s more akin to the Saudis’ or the Kuwaitis’. And such a gesture would be exactly the type of thing that would make good on Obama’s promises of foreign policy reform: a total turnaround from the polarizing, combative paranoia that fuels neocon international policy and has held back U.S.-Iranian relations for so long.

- TF100D

Frank Rich had a good piece in the NYTimes this weekend reminding people that the cable news/washington echo chamber is often inaccurate. If you listened to the talking heads, you’d think that Obama’s presidency was all but dead in the water.

Gallup recently released a poll that I find quite telling:

55% of people now have more confidence than they did on inauguration day that Obama has the ability to improve the economy.

51% of people now have more confidence than they did on inauguration day that Obama has the ability to manage the federal govt.

Only 17% have less confidence than they did on inauguration day that Obama has the ability to improve the economy.

Only 18% have less confidence than they did on inauguration day that Obama has the ability to manage the federal govt.

67% approve of Obama’s handling of the economic stimulus bill. 58% disapprove of the way the Republicans have handled the efforts to pass a  stimulus bill.

Overall, it sounds like the echo chamber is once again wrong about Obama.

-N.S.

Gregg said the stimulus plan was a main reason for his resignation!