15 Responses to “Mo’ Money, Mo’ Demand”
Readers are recommended to fasten their seat belts, for Gregory likely without knowing it had nicely placed the ball on the tee for Lowry, and the National Review editor was about to launch the longest nationally televised drive of his life straight down the middle of the fairway:DAVID GREGORY, HOST: E.J., the economy and taxes and where things stand.
E.J. DIONNE, WASHINGTON POST: Well, actually, I think the administration is in a position where it should pick a big fight with the Republicans. I, I at least half agree with what Rich just said. They're clearly down in this election. If the election were held now, they'd probably lose the House, though not the Senate. I think they can claw back enough to hold on to the House. I think they should pick a big fight on the renewal of the Bush tax cuts and say, "We want to renew them for everybody earning under $250,000 a year. Heck, maybe we can actually renew them for everybody earning under a million dollars a year." Draw a line and say, "We want to give them tax cuts now. They want to fight for millionaires." So you can have that fight. I think they can win it. But they need to shake up this race to salvage some of those seats. They need to hang on to 218 House seats.
MR. GREGORY: Right. I'm going to get to Charlie in a second.
But, Rich, back to the--you know, because I've, I've pressed Republicans on the point of, "Hey, you want to cut the deficit? Well, it's going to cost $3 trillion to extend all of these tax cuts. How do you pay for it?" And Republicans say to me, "You know, that's--that argument is off base here, that it's existing tax policy and that you shouldn't be making that argument." And respond to E.J.'s point.
RICH LOWRY, NATIONAL REVIEW: Well, there, there, there are a couple things. I think E.J.'s political advice is exactly wrong, although I appreciate him half agreeing with me. I'll take what--I'll take whatever I can get.
MR. GREGORY: Right. That may be all you get.
MR. DIONNE: That's great progress.
MR. GREGORY: That may be all you get.
MR. LOWRY: But, you know, before August, before they left--Congress left for the August recess, you had three Senate Democrats saying, "We need to extend all these things less temporarily." And that was before this awful last month the Democrats suffered. I think it only got harder, if not impossible, not to extend all of these. So I expect the Obama administration either to say, "Let's do it for one year," or to punt it to the lame duck session. But even if they extend it for one year, that will be an amazing sign. If you have these large Democratic majorities in the Senate and the House extending all the Bush tax cuts, huge sign of the way the worm has turned politically.
MR. GREGORY: Yes.
MR. DIONNE: One idea is to put on the table, one of the things you could do with the money you save from not giving the tax cut to people earning over $1 million, you could either redistribute the rest of that to people down below a million, or you could begin to create an infrastructure bank to try to build us for the long-term. You need to look like you're making a--you're drawing a clear line with the Republicans.
MR. LOWRY: But there, there, there you're sucking money out of the economy in the short-term in order for the long-term in a weak economy. That makes no sense. Raising taxes, there's no theory in which raises taxes in a slow economy makes sense.
MR. GREGORY: All right.
MR. LOWRY: Keynesians don't favor it, supply-siders don't favor it.
Round one clearly went to Lowry.
A bit later as promised, Gregory brought Charlie Cook into the discussion. As readers will notice, this also set Lowry up to demolish Dionne:
Absolutely outstanding analysis by Cook. With the table nicely set, Gregory invited Lowry and Dionne to continue the debate:MR. GREGORY: All right, but for everybody here, what is the bottom line? How did the president and Democrats get to this point? Is it a bad economy, case closed, Charlie, or is there a leadership question, a failure of leadership by the president that has got him to this point?
CHARLIE COOK, EDITOR THE COOK POLITICAL REPORT: Democrats desperately needed three things to happen this year. Number one, they needed unemployment to turn around. And when you look at the, the groups that were sort of the booster, that pushed them over the top, among African-Americans the unemployment rate is 16.3, you know, way more than it was when the president took office; Hispanics, 12; young people, 26, the job market for recent college graduates the worst in 35 years. He desperately needed unemployment to turn around. Number two, he needed attitudes toward healthcare reform to fundamentally change, with people saying, "OK...
MR. GREGORY: And that hasn't happened.
MR. COOK: And that--it just hasn't happened. And they had to get control of the agenda. And right now what they're doing is they're paying a price for having focused so thoroughly on health care for a solid year at a time when the economy was deteriorating. And, for a lot of voters, they just see the president and Democrats as having checked the box on stimulus and then gone to cap and trade and health care leaving the economy to deteriorate.
Indeed. New York Times columnist Tom Friedman made the same point on ABC's "This Week" Sunday about Obama over-reading his mandate. But I digress:MR. GREGORY: Have it out, you two. The question of the economy rules everything, or a question of leadership, E.J.?
MR. DIONNE: First of all, in that Donnelly ad, it's interesting that John Boehner, the Republican leader, was also in that picture.
MR. GREGORY: Yeah.
MR. DIONNE: And there are Republicans--the Republicans are unpopular, too. That's going to be something Democrats want to play. I think the biggest mistake Obama made was in not making a big argument from the beginning, "Here's where we started, here's where we're going. It's going to be rough getting there. But if you stick with me, this is going to get better." FDR did that, Ronald Reagan did that. He needed to do that.
MR. GREGORY: But trust in government was different when FDR did it.
MR. DIONNE: Right. But he needed to restore trust in government, and I think he was in a position to do that. He needed to emphasize the way they're actually reforming government, which they are, but nobody knows it.
MR. GREGORY: The flipside of that question, you can address this big one.
MR. LOWRY: Sure.
MR. GREGORY: But is also, have, have Republicans done anything to really regain trust about their leadership...
MR. LOWRY: No, it's most...
MR. GREGORY: ...to an oppositional strategy?
MR. LOWRY: ...it's mostly a free gift from Obama fundamentally fumbling this. And I disagree with E.J. again. I'm going to have to agree with you at some point, E.J. just to be a good colleague here on the set. But people know what Obama's about. They know what the program is. They know he's growing government because he thinks that's good for the economy and good for the country's future. They get it. The problem, I think, is threefold. One is ideological grandiosity. Democrats thought in '08 they had a mandate from heaven to do everything they ever wanted, when really they were just getting an opportunity because people were recoiling from the Republicans and the poor state of the economy.
LOWRY: Then there was the cynical opportunism that Charlie referred to, a crisis is--never let a crisis go to waste. Therefore do health care, try to cap and trade, things that have nothing to do with the economy or may actually be harmful to it. And then three, there's the fact that the program has not worked on its own terms. The stimulus has not worked. So you add all three of those things up and you have a very grim picture. And another huge problem, independents are much closer to the tea partiers on the big issues and even on the smaller hot-button ones--spending, debt, Arizona immigration law, Ground Zero mosque, all that--much closer to the tea partiers than they are to the Democrats.
Indeed.
Game, set, and match Lowry.
Bravo, Rich. Bravo.
—Noel Sheppard is the Associate Editor of NewsBusters. Follow him at Facebook and Twitter.
Coming soon: A brand-new NewsBusters design. But we need your help!
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15 Responses to “Mo’ Money, Mo’ Demand”
SON says:
September 9th, 2010 at 4:04 pm
DAD I AM HOMOSEX.
DAD says:
September 9th, 2010 at 4:04 pm
SON I AM DISAPPOINT.
Rob Mac says:
September 9th, 2010 at 4:53 pm
Or we could simply “print” money to retire some of our debt. This would reassure people who get freaked out at the size of the debt and would have the same inflationary effect of handing the money out to American citizens. The stimulative effect would likely be a bit less, but I’d take that tradeoff.
JR says:
September 9th, 2010 at 4:54 pm
Aren’t you missing the role of international trade. What you say makes sense if all goods and services are produced locally. Once you take intl. trade into account, more/printed money could simply go into buying more from other countries, who could theoretically hold that money for an indefinite time.
chris says:
September 9th, 2010 at 4:56 pm
It’s true that at some point the money-printing would spark high inflation.
Yes — specifically, after aggregate demand was boosted to the point that it exceeded aggregate supply. We’re nowhere near that point — I think literally trillions of dollars short of it — so there’s plenty of room to play around with helicopter drops. Please do, Mr. Bernanke.
timmie says:
September 9th, 2010 at 4:59 pm
Did that truly huge spike in Fed spending 2008-2009 lead to rapid economic growth? No. What evidence is there that things would be any different now? None.
The Great Reckoning that we are now experiencing was, as your cite points out, only postponed through half a decade of public and private debt increasing by 10% a year and when that became unsustainable our financial system cratered.
Does anyone think we can return to those levels of profligacy for five years or more? Does anyone doubt that even that level of new debt would prove inadequate to cure what ails us?
Our recent history has been one huge Keynesian experiment gone wrong. But to put out the fire in the dining room Matt wants to burn down the house.
chris says:
September 9th, 2010 at 5:29 pm
Did that truly huge spike in Fed spending 2008-2009 lead to rapid economic growth? No.
No, it only halted a once-in-a-century level of economic collapse in its tracks.
But I guess since the first gallon of water didn’t put the fire out, it’s time to abandon that plan and switch to gasoline.
Ape Man says:
September 9th, 2010 at 8:32 pm
“Or we could simply “print” money to retire some of our debt.”
This is incorrect. If you think it through, it will help you understand how money works on the macro scale.
A treasury note is an account at the Fed that bears interest. It has a fixed, often very short, term of maturity.
If you “print money” to “retire” that debt, all you are doing is changing those interest-bearing Fed accounts into non interest-bearing Fed accounts. The people who held those dollars want to hold them as Treasury notes. They will immediately reinvest them in… Treasury notes.
3
zyxw says:
September 9th, 2010 at 8:50 pm
Another structural problem now is income inequality. If income was spread out more fairly there would be a lot more money spent generating more jobs, etc. There’s only so much the super rich can spend–after awhile you really can’t buy that much more stuff, so instead they are hoarding it at the moment waiting for the economy to rebound so they can eventually invest in something and make even more money to hoard.
Shooter242 says:
September 9th, 2010 at 10:33 pm
* You can print all the money you want but if people don’t want to borrow, it doesn’t matter.
* As for throwing everybody a grand, it didn’t work with Bush’s $600 because you and everyone else knows it’s a one-off.
* Then there is the payroll credit for about the same amount of money, how did that work out?Do you think our problem could be related to Congress serving up legislative pigs in a poke? For all it’s wonderfulness, health insurance in Massachusetts has led to Mass Gen Hospital
to barring new primary care patients. Now imagine that over an entire country. Any chance that would lead to more saving and less spending?As for income inequality, Al Gore making millions has no effect on anyone that he doesn’t employ. Interestingly, the US is pretty far down on the property rights ladder globally. Apparently we are behind China, Gambia, and Jordan. Having yahoos here threaten to confiscate wealth by hook or crook, isn’t reassuring.
BB says:
September 9th, 2010 at 11:23 pm
So, why do we even keep track of the deficit? I accept the fact that we have a sovereign currency, not on a gold standard, etc., which means that we don’t have to go in debt (i.e. sell bonds) for every dollar we print/create. Thus taxation is merely an anti-inflationary measure. So…shouldn’t we just keep track of inflation and adjust our federal spending accordingly, since the deficit doesn’t actually mean anything?
urgs says:
September 10th, 2010 at 2:23 am
Defraud small savers (thats allright, since so many of them are foreigners nowadays – evil Chinese, many of them living from less than 1$ a day), shovel some windfall gains to big business ===> ?????????? =====> Jobs!
aelkejeellekeleljklejlelje
Evil Twin says:
September 10th, 2010 at 2:35 am
You can print all the money you want but if people don’t want to borrow, it doesn’t matter.
And here we see the return of the invisible bear riding phantom bond vigilantes. Yes, the modifiers are a bit unclear. That’s because Shooter is a fucking moron whose knowledge of financial matters is roughly the same as a four month old.
Hey, dumbfuck, do you know what you do when people don’t want to borrow money from you? You raise the stakes, you promise them more in return for loaning you the money. Do you know what interest rates look like right this moment you dimwitted clod?
Come back when you have something to say that isn’t discredited talking points.
Lewis says:
September 10th, 2010 at 7:45 pm
At the risk of confirming Matt’s views, I think Prof Keen explains it well : http://www.debtdeflation.com/blogs/2010/09/05/back-to-the-future/
Superior Excellence Better Flavor-Organic Kona Coffee | Toilet Safety Rail says:
September 11th, 2010 at 5:50 am
Matthew Yglesias » Mo’ Money, Mo’ Demand
Readers are recommended to fasten their seat belts, for Gregory likely without knowing it had nicely placed the ball on the tee for Lowry, and the National Review editor was about to launch the longest nationally televised drive of his life straight down the middle of the fairway:DAVID GREGORY, HOST: E.J., the economy and taxes and where things stand.
E.J. DIONNE, WASHINGTON POST: Well, actually, I think the administration is in a position where it should pick a big fight with the Republicans. I, I at least half agree with what Rich just said. They're clearly down in this election. If the election were held now, they'd probably lose the House, though not the Senate. I think they can claw back enough to hold on to the House. I think they should pick a big fight on the renewal of the Bush tax cuts and say, "We want to renew them for everybody earning under $250,000 a year. Heck, maybe we can actually renew them for everybody earning under a million dollars a year." Draw a line and say, "We want to give them tax cuts now. They want to fight for millionaires." So you can have that fight. I think they can win it. But they need to shake up this race to salvage some of those seats. They need to hang on to 218 House seats.
MR. GREGORY: Right. I'm going to get to Charlie in a second.
But, Rich, back to the--you know, because I've, I've pressed Republicans on the point of, "Hey, you want to cut the deficit? Well, it's going to cost $3 trillion to extend all of these tax cuts. How do you pay for it?" And Republicans say to me, "You know, that's--that argument is off base here, that it's existing tax policy and that you shouldn't be making that argument." And respond to E.J.'s point.
RICH LOWRY, NATIONAL REVIEW: Well, there, there, there are a couple things. I think E.J.'s political advice is exactly wrong, although I appreciate him half agreeing with me. I'll take what--I'll take whatever I can get.
MR. GREGORY: Right. That may be all you get.
MR. DIONNE: That's great progress.
MR. GREGORY: That may be all you get.
MR. LOWRY: But, you know, before August, before they left--Congress left for the August recess, you had three Senate Democrats saying, "We need to extend all these things less temporarily." And that was before this awful last month the Democrats suffered. I think it only got harder, if not impossible, not to extend all of these. So I expect the Obama administration either to say, "Let's do it for one year," or to punt it to the lame duck session. But even if they extend it for one year, that will be an amazing sign. If you have these large Democratic majorities in the Senate and the House extending all the Bush tax cuts, huge sign of the way the worm has turned politically.
MR. GREGORY: Yes.
MR. DIONNE: One idea is to put on the table, one of the things you could do with the money you save from not giving the tax cut to people earning over $1 million, you could either redistribute the rest of that to people down below a million, or you could begin to create an infrastructure bank to try to build us for the long-term. You need to look like you're making a--you're drawing a clear line with the Republicans.
MR. LOWRY: But there, there, there you're sucking money out of the economy in the short-term in order for the long-term in a weak economy. That makes no sense. Raising taxes, there's no theory in which raises taxes in a slow economy makes sense.
MR. GREGORY: All right.
MR. LOWRY: Keynesians don't favor it, supply-siders don't favor it.
Round one clearly went to Lowry.
A bit later as promised, Gregory brought Charlie Cook into the discussion. As readers will notice, this also set Lowry up to demolish Dionne:
Absolutely outstanding analysis by Cook. With the table nicely set, Gregory invited Lowry and Dionne to continue the debate:MR. GREGORY: All right, but for everybody here, what is the bottom line? How did the president and Democrats get to this point? Is it a bad economy, case closed, Charlie, or is there a leadership question, a failure of leadership by the president that has got him to this point?
CHARLIE COOK, EDITOR THE COOK POLITICAL REPORT: Democrats desperately needed three things to happen this year. Number one, they needed unemployment to turn around. And when you look at the, the groups that were sort of the booster, that pushed them over the top, among African-Americans the unemployment rate is 16.3, you know, way more than it was when the president took office; Hispanics, 12; young people, 26, the job market for recent college graduates the worst in 35 years. He desperately needed unemployment to turn around. Number two, he needed attitudes toward healthcare reform to fundamentally change, with people saying, "OK...
MR. GREGORY: And that hasn't happened.
MR. COOK: And that--it just hasn't happened. And they had to get control of the agenda. And right now what they're doing is they're paying a price for having focused so thoroughly on health care for a solid year at a time when the economy was deteriorating. And, for a lot of voters, they just see the president and Democrats as having checked the box on stimulus and then gone to cap and trade and health care leaving the economy to deteriorate.
Indeed. New York Times columnist Tom Friedman made the same point on ABC's "This Week" Sunday about Obama over-reading his mandate. But I digress:MR. GREGORY: Have it out, you two. The question of the economy rules everything, or a question of leadership, E.J.?
MR. DIONNE: First of all, in that Donnelly ad, it's interesting that John Boehner, the Republican leader, was also in that picture.
MR. GREGORY: Yeah.
MR. DIONNE: And there are Republicans--the Republicans are unpopular, too. That's going to be something Democrats want to play. I think the biggest mistake Obama made was in not making a big argument from the beginning, "Here's where we started, here's where we're going. It's going to be rough getting there. But if you stick with me, this is going to get better." FDR did that, Ronald Reagan did that. He needed to do that.
MR. GREGORY: But trust in government was different when FDR did it.
MR. DIONNE: Right. But he needed to restore trust in government, and I think he was in a position to do that. He needed to emphasize the way they're actually reforming government, which they are, but nobody knows it.
MR. GREGORY: The flipside of that question, you can address this big one.
MR. LOWRY: Sure.
MR. GREGORY: But is also, have, have Republicans done anything to really regain trust about their leadership...
MR. LOWRY: No, it's most...
MR. GREGORY: ...to an oppositional strategy?
MR. LOWRY: ...it's mostly a free gift from Obama fundamentally fumbling this. And I disagree with E.J. again. I'm going to have to agree with you at some point, E.J. just to be a good colleague here on the set. But people know what Obama's about. They know what the program is. They know he's growing government because he thinks that's good for the economy and good for the country's future. They get it. The problem, I think, is threefold. One is ideological grandiosity. Democrats thought in '08 they had a mandate from heaven to do everything they ever wanted, when really they were just getting an opportunity because people were recoiling from the Republicans and the poor state of the economy.
LOWRY: Then there was the cynical opportunism that Charlie referred to, a crisis is--never let a crisis go to waste. Therefore do health care, try to cap and trade, things that have nothing to do with the economy or may actually be harmful to it. And then three, there's the fact that the program has not worked on its own terms. The stimulus has not worked. So you add all three of those things up and you have a very grim picture. And another huge problem, independents are much closer to the tea partiers on the big issues and even on the smaller hot-button ones--spending, debt, Arizona immigration law, Ground Zero mosque, all that--much closer to the tea partiers than they are to the Democrats.
Indeed.
Game, set, and match Lowry.
Bravo, Rich. Bravo.
—Noel Sheppard is the Associate Editor of NewsBusters. Follow him at Facebook and Twitter.
Coming soon: A brand-new NewsBusters design. But we need your help!
robert shumake
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David Helfenbein: The Facebook <b>News</b> Feed and Twitter Generation
The largest misconception about Generation Y is that technology is a replacement for interpersonal dialogue. Technology is becoming more ever-present, and Gen Y is still managing to talk to one another.
SON says:
September 9th, 2010 at 4:04 pm
DAD I AM HOMOSEX.
DAD says:
September 9th, 2010 at 4:04 pm
SON I AM DISAPPOINT.
Rob Mac says:
September 9th, 2010 at 4:53 pm
Or we could simply “print” money to retire some of our debt. This would reassure people who get freaked out at the size of the debt and would have the same inflationary effect of handing the money out to American citizens. The stimulative effect would likely be a bit less, but I’d take that tradeoff.
JR says:
September 9th, 2010 at 4:54 pm
Aren’t you missing the role of international trade. What you say makes sense if all goods and services are produced locally. Once you take intl. trade into account, more/printed money could simply go into buying more from other countries, who could theoretically hold that money for an indefinite time.
chris says:
September 9th, 2010 at 4:56 pm
It’s true that at some point the money-printing would spark high inflation.
Yes — specifically, after aggregate demand was boosted to the point that it exceeded aggregate supply. We’re nowhere near that point — I think literally trillions of dollars short of it — so there’s plenty of room to play around with helicopter drops. Please do, Mr. Bernanke.
timmie says:
September 9th, 2010 at 4:59 pm
Did that truly huge spike in Fed spending 2008-2009 lead to rapid economic growth? No. What evidence is there that things would be any different now? None.
The Great Reckoning that we are now experiencing was, as your cite points out, only postponed through half a decade of public and private debt increasing by 10% a year and when that became unsustainable our financial system cratered.
Does anyone think we can return to those levels of profligacy for five years or more? Does anyone doubt that even that level of new debt would prove inadequate to cure what ails us?
Our recent history has been one huge Keynesian experiment gone wrong. But to put out the fire in the dining room Matt wants to burn down the house.
chris says:
September 9th, 2010 at 5:29 pm
Did that truly huge spike in Fed spending 2008-2009 lead to rapid economic growth? No.
No, it only halted a once-in-a-century level of economic collapse in its tracks.
But I guess since the first gallon of water didn’t put the fire out, it’s time to abandon that plan and switch to gasoline.
Ape Man says:
September 9th, 2010 at 8:32 pm
“Or we could simply “print” money to retire some of our debt.”
This is incorrect. If you think it through, it will help you understand how money works on the macro scale.
A treasury note is an account at the Fed that bears interest. It has a fixed, often very short, term of maturity.
If you “print money” to “retire” that debt, all you are doing is changing those interest-bearing Fed accounts into non interest-bearing Fed accounts. The people who held those dollars want to hold them as Treasury notes. They will immediately reinvest them in… Treasury notes.
3
zyxw says:
September 9th, 2010 at 8:50 pm
Another structural problem now is income inequality. If income was spread out more fairly there would be a lot more money spent generating more jobs, etc. There’s only so much the super rich can spend–after awhile you really can’t buy that much more stuff, so instead they are hoarding it at the moment waiting for the economy to rebound so they can eventually invest in something and make even more money to hoard.
Shooter242 says:
September 9th, 2010 at 10:33 pm
* You can print all the money you want but if people don’t want to borrow, it doesn’t matter.
* As for throwing everybody a grand, it didn’t work with Bush’s $600 because you and everyone else knows it’s a one-off.
* Then there is the payroll credit for about the same amount of money, how did that work out?
Do you think our problem could be related to Congress serving up legislative pigs in a poke? For all it’s wonderfulness, health insurance in Massachusetts has led to Mass Gen Hospital
to barring new primary care patients. Now imagine that over an entire country. Any chance that would lead to more saving and less spending?
As for income inequality, Al Gore making millions has no effect on anyone that he doesn’t employ. Interestingly, the US is pretty far down on the property rights ladder globally. Apparently we are behind China, Gambia, and Jordan. Having yahoos here threaten to confiscate wealth by hook or crook, isn’t reassuring.
BB says:
September 9th, 2010 at 11:23 pm
So, why do we even keep track of the deficit? I accept the fact that we have a sovereign currency, not on a gold standard, etc., which means that we don’t have to go in debt (i.e. sell bonds) for every dollar we print/create. Thus taxation is merely an anti-inflationary measure. So…shouldn’t we just keep track of inflation and adjust our federal spending accordingly, since the deficit doesn’t actually mean anything?
urgs says:
September 10th, 2010 at 2:23 am
Defraud small savers (thats allright, since so many of them are foreigners nowadays – evil Chinese, many of them living from less than 1$ a day), shovel some windfall gains to big business ===> ?????????? =====> Jobs!
aelkejeellekeleljklejlelje
Evil Twin says:
September 10th, 2010 at 2:35 am
You can print all the money you want but if people don’t want to borrow, it doesn’t matter.
And here we see the return of the invisible bear riding phantom bond vigilantes. Yes, the modifiers are a bit unclear. That’s because Shooter is a fucking moron whose knowledge of financial matters is roughly the same as a four month old.
Hey, dumbfuck, do you know what you do when people don’t want to borrow money from you? You raise the stakes, you promise them more in return for loaning you the money. Do you know what interest rates look like right this moment you dimwitted clod?
Come back when you have something to say that isn’t discredited talking points.
Lewis says:
September 10th, 2010 at 7:45 pm
At the risk of confirming Matt’s views, I think Prof Keen explains it well : http://www.debtdeflation.com/blogs/2010/09/05/back-to-the-future/
Superior Excellence Better Flavor-Organic Kona Coffee | Toilet Safety Rail says:
September 11th, 2010 at 5:50 am
Matthew Yglesias » Mo’ Money, Mo’ Demand