The size of the fiscal stimulus package should be as large as it takes to achieve an ecomnomic recovery---for everyone. Ah, but in a world where the wealthiest 1 percent of families owns roughly 35% of the nation's net worth, the top 10% of families owns over 70%, and the bottom 40% of the population owns way less than 1%, we can't have a realistic discussion about the economy until we are very clear about the relationship between business, lobbying and the revolving door between these folks and officials in the legislative and executive branch of government.

From The Nation 4/4/2007:

A mere 300,000 people had incomes equal to the total income of the bottom earning half of the entire population. That's 150 million people. Put another way, those 300,000 had incomes 440 times greater than the average income in the United States. Stated yet another way, the golden 300,000 sopped up more than 20 percent of all incomes.

Indeed, we have now found out this sort of thing is true even with respect to the judicial branch. All the way up to members of the Supreme Court.

From a January 27th 2007 editorial in the New York Times:

Last September, [Justice Antonin Scalia] skipped the swearing-in of Chief Justice John Roberts Jr. because of another ethically dubious trip, this time to the posh Ritz-Carlton at the Beaver Creek ski resort in Colorado.

He was there to teach a 10-hour seminar over a couple of days for a conservative group, the Federalist Society. "Nightline" recently reported that the gig had left Justice Scalia plenty of time for tennis, fly-fishing and socializing with seminar participants, some of whom may have business before the Supreme Court. One Federalist Society cocktail reception was sponsored in part by the lobbying and law firm that used to employ Jack Abramoff, Tom DeLay's convicted pal and benefactor for golf trips.

Justice Scalia's travel is part of a broader affliction on the federal bench. The Los Angeles Times reported in 2004, for example, that Justice Clarence Thomas had accepted thousands of dollars in gifts in recent years, including an $800 leather jacket, a $1,200 set of tires from Nascar and an extravagant vacation from a conservative activist. Federal judges below the Supreme Court level accept dozens of free vacations each year from well-heeled special interests under the guise of "judicial education."

George:

Will Barack Obama yank the leash on this psuedo democratic monopoly game? Will he tame the special interests that divvy up the pie behind our backs?

Personally, I am cynical enough to doubt it. But I am also realistic enough to accept  that crony capitalism is the worst of all political economies. Except for all the others.  

How will this great orator fare when it finally comes down to dollars and cents----in the White House, on K Street, on Wall Street and in chambers of Congress?

Where will he finally situate himself in America's rulling class?

george walton

Right on George!

Well, I'm going to respond to Chait rather than to George.

So, liberals Chait hangs out with have been fretting that Obama doesn't get it, that he doesn't fully grasp the magnitude of the crisis in which we find ourselves.  As JC suggests, this leaked stimulus proposal is good news on this front.  Obama DOES get it.  At least, he seems to.

But Congress is at least as important as Obama in getting this stimulus bill through, and from what I can see of the House, we have every reason to be afraid.  Chait says Congress SHOULD get behind the stimulus package because it's in their political interest to do so, but is this truly the case?  Is it in their political interest?  Sure, it's easy to see how getting such a program up and running favors Obama's reelection chances.  We may reasonably presume that if such a bill goes through the economy will no longer be in recession in 2012.  But can we be so confident that the recession will lift by 2010?  This is the killing myopia fostered by 2-year terms in the House.  Congressmen are going to be saying to themselves, 'How am I gonna defend myself 18 months from now when I've signed on to spend $700 billion of my constituents' tax money and the jobless rate is still north of 10%?'  If they do nothing, they can fairly readily absolve themselves of responsibility for the bum economy.  'Hey, look, I'm just a lowly Representative.  The whole world's in a rut do to forces beyond our control.'

And, the thing is, politically speaking, they might be right.  Just look at the 1982 midterm elections.  The Republicans lost 27 seats in the House that year, two years before Reagan won the biggest presidential landslide in modern history.  

So, Jon, tell your liberal friends to quit obsessing over whether or not Obama is truly the man of their dreams and tell them to write their Congresspeople early and often.

DUE to forces

uggh  

There goes my dyslexia again.

Wandreycerl writes:

Markets are the most emotional thing in public life, people don't realize that - like a bunch of 13 year old girls, the good and the bad. While he public applauds politely, the markets all cry and faint with relief. Let's hope the next thing is a teeny giggling euphoria, short lived is fine - I'm realistic. But we could all use it.

George:

This is a superb observation. Why? Because it reveals the irony embedded in analysis that often comes from zealous free market apologists.

Libertarians will tell us that free markets can be understood and then made to work axiomatically. And Objectivists go even further. They insist the nature of political, social and economic interactions can actually be known metaphysically. Indeed, Ayn Rand once insisted there was not a single psychological or emotional state she had ever experienced that she did not understand as precisely as physicists grasp the meaning of E=MC2.

In any event, once the government is completely out of the way, laissez-faire, with its invisible hand, presciently intertwines supply and demand transactions because they always depend on rational choices being made from both ends of the production/consumption continuum.

Right.

I am myself an advocate of capitalism. And that is because all of the other systems I have studied or learned about were [for a variety of reasons] much worse. On the other hand, capitalism in America has never even approached the theorethical jargon of, say, Milton Freidman's Chicago Boys. Or of the Cato Institute or the ARI..

Marx was right about political economy. He just had no idea how extraordinarily innovative, flexible and productive capitalism could be. He was yammering on about the proletariat in the middle of the industrial revolution that was brutally exploitative and oppressive of the laboring classes.

With the rise of a global economy, however, capitalists in the industrial West can more readily exploit labor in, say, sweatshops that are far beyond the reach of our hearts and minds. After all, how many people think about the conditions endured by those who manufacture the stuff they buy at Walmart?

Only now it's all starting to creep in closer and closer to home. Those derivative contracts have piled up to around 400 trillion dollars. At least nominally. And the entire economic output of the world is less than 50 trillion. Twenty years ago there were about 700 hedge funds, today there are nearly 10,000.

Rememer that scene from Oliver Stone's film Wall Street

BUD FOX

Hey Howard, I thought you were a gentleman. Sure it's gone down a little bit, but you got the tip from your printer, I didn't... Yeah you did. That's what you said. (heated) I didn't tell you to buy it, why would I tell you to sell it? (screaming) No, I can't give it back! Give it back to who? You own it! (beat) No, he's out right now. As he looks up and winks at Lynch [his boss], standing over him.

BUD (cupping the receiver) ... That's what you told us to say.

LYNCH Give me that phone. (takes receiver) Yes, sir, this is the manager. What seems to be the problem?  

Bud whispers, tensely. Lynch listens.

BUD He's lying.

LYNCH Okay, sir. I'll discuss this with the broker and I'll get back to you. You're welcome.

Lynch hangs up and glares at Bud.

LYNCH: I'm closing out this account. If he doesn't pay for it tomorrow, you pay for it.

BUD: Mr. Lynch, I swear to you, he's lying!..... I don't think you're being fair, sir. You assigned me this guy, and you know he's got a history...

LYNCH: Well, somebody has to pay for that error. And it's not going to be me.

George:

Folks today like Hank Paulson are the new Mr. Lynchs.

And we shall see soon enough what role Barack Obama plays in the sequel.

George Walton