A Shallower Recovery

by Eric Martin

Since Von has been trespassing on my Af-Pak turf, allow me to hijack one of his sturdiest hobby horses:

When the Obama administration announced that the American Recovery and Reinvestment Act (i.e. the stimulus) had saved or created 640,000 jobs, Republicans quickly launched into a tirade...

Well, last night, the Congressional Budget Office (CBO) released its latest estimates of the stimulus’ impact, and as it turns out, the 640,000 number was pretty spot-on:

CBO estimates that in the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States, and real (inflation-adjusted) gross domestic product (GDP) was 1.2 percent to 3.2 percent higher, than would have been the case in the absence of ARRA.

CBO noted that, to date, the stimulus has increased federal outlays by about $100 billion and reduced taxes by $90 billion, adding that “economic output and employment in the spring and summer of 2009 were lower than CBO had projected at the beginning of the year. But in CBO’s judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects of ARRA.”

As people like Krugman were warning at the time, the stimulus package was too small.  On top of that, the soi disant "moderate" gang of six swooped in and lopped off vital state aid from an already undersized bill for no reason beyond pure posturing.  Regardless, we'll likely need a second stimulus to finish off the job.  Unfortunately, getting a second bite of the apple might be harder to pull off than a larger first bite would have been.

Comments

[Point]

Yeah, if the HCD is any indication, people opposing the stimulus will likely just shrug off this report saying the CBO is overrated as an authority on anything but accounting.

Only to take their analysis as God's word on just about anything else, so long as it supports their argument.

[Marty]

When the CBO decides to have the OPINION that the initial problem was bigger, not that the stimulus was inadequate, it loses credibility in the numbers it is putting forth.

The jobs saved numbers are just opinions, the markets would have done different things without the stimulus money being injected. Some of those jobs would have been saved by other means, etc.

I am not clear how the CBO is the proper authority to do this analysis in any event.

All that said, if you drop a pebble in the ocean it causes a ripple, I am sure the stimulus had a similar magnitude of effect.

[cleek]

props for title.
it's my fav SL song.

[Sebastian]

Von didn't argue that the stimulus package was too large in an abstract sense, he said that it was packed with lots of non-stimulus things and thus wasn't large enough in *stimulus* while too large in *non-stimulus*.

[Sapient]

"I am not clear how the CBO is the proper authority to do this analysis in any event."

Who would be the proper authority, then, Marty? The AEI?

[Eric Martin]

When the CBO decides to have the OPINION that the initial problem was bigger, not that the stimulus was inadequate, it loses credibility in the numbers it is putting forth.

They provide evidence to support their assertion. As such, it is not an OPINION

Some of those jobs would have been saved by other means

What does this mean? Teachers, cops, firefighters and other state/municipal workers would have been...hired by private industry had they been terminated/not hired? But because they were retained/hired, private industry didn't make any hires?

Construction jobs for federally funded projects would have...materialized despite the lack of federally funded projects?

What are these "other means"?

All that said, if you drop a pebble in the ocean it causes a ripple, I am sure the stimulus had a similar magnitude of effect.

I think if you compare the size of the stimulus to GDP, your analogy is revealed as wildly off the mark.

[Eric Martin]

Von didn't argue that the stimulus package was too large in an abstract sense, he said that it was packed with lots of non-stimulus things and thus wasn't large enough in *stimulus* while too large in *non-stimulus*.

And, in turn, I didn't posit that Von argued that the stimulus package was too large in an abstract sense.

[Point]

Wow, Marty proved my point in less than 10 minutes; I'm impressed with myself :)

[hairshirthedonist]

It's true that no one can know for sure how many jobs there would have been in the alternate universe where there was no stimulus package. But the best estimates are, wait for it...THE BEST ESTIMATES! Too bad if you don't like them. Cognitive dissonance sucks. Deal with it.

[Carleton Wu]

I am not clear how the CBO is the proper authority to do this analysis in any event.
All that said, if you drop a pebble in the ocean it causes a ripple, I am sure the stimulus had a similar magnitude of effect.

So, the CBO, you don't even know why they bother having an opinion, but you feel comfortable forming one of your own.

But hey, if your comfortable setting yourself up as an authority, maybe you could dig into their analysis and tell us all why they're wrong. That would be more convincing that the whole pebble-ocean analysis, which is a little undersized on the quantitative side for my taste.

[John Thullen]

Via Steve Benen, there are reports Goldman Sachs investment banking partners are arming themselves in case of a populist uprising.

I wonder if they would feel better or worse about their safety without the stimulus package and its estimated benefits.

Or maybe they're gunning for Federal regulators trying to cap their bonuses.

Without the stimulus, think how many more crazed, armed, howling teabaggers would be unemployed, without insurance, and goddamned angry at the Rothchilds (you know who always gets the ultimate blame during populist revolts among the teabagger types) and the Obamas (them, too) for screwing them over and doing nothing to help them.

Probably as many as are angry, armed and howling right now at the fact that the stimulus might have ameliorated some of their pain.

Republicans are armed. The Republican tea baggers are armed. Now investment bankers are armed.

That's setting up for a whole lot of shooting.

Who are they going to shoot at? Probably not the Taliban. Sarah Death Palin, Glenn Dreck, Crush Flambeaux, and Error Erogeson, and Low Inane have an idea who should be shot.

Liberals and Democrats need to get armed, too.

Why miss out on the fun?

[Jay Jerome]

"CBO estimates that in the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States, and real (inflation-adjusted) gross domestic product (GDP) was 1.2 percent to 3.2 percent higher, than would have been the case in the absence of ARRA."

Well it good that there's been some progress, but, really -- as Marty indicated -- isn't it a tepid improvement over all?

Since the start of the recession in December 2007, the number of people unemployed in the U.S. rose by 8.2 million, which equates to a 5.3 percentage point increase in the unemployment rate.

And according to the report released earlier this month by the Bureau of Labor statistics, "in October the number of unemployed persons increased by 558,000 to 15.7 million." That 558,000 monthly job loss is about the same as the low CBO estimate of 600,000 jobs saved for a full quarter.

And wasn't most of the stimulus money a short term fix? Won't most of those teachers and municipal workers be out of work soon, when the stimulus money for them is exhausted? And isn't the same true for all those stimulus construction jobs, which were funded for specific projects, and once completed, aren't the majority of those construction workers unemployed again?

It's a very very modest stop-gap stimulus at best, a thumb in the leaky dam, which hasn't done much to stimulate the job market or to keep people working long term (the number of unemployed out of work for 27 weeks and over didn't change at all in the third quarter and is still at about 5.6 million).

Really, those 'stimulus' numbers don't seem that stimulating.

[Jay Jerome]

"Liberals and Democrats need to get armed, too."

With what? Tofu and touchy-feely platitudes?

[Carleton Wu]

And according to the report released earlier this month by the Bureau of Labor statistics

Noting that it is always important to use whichever of the two BLS surveys gives you the numbers you want, and to ignore the other one as if it didn't exist. You can maximize your misleading by just quoting the BLS as if only one survey exists and that this was their only data point for October.
[nb Jay's data is from the Household survey. The often-preferred Establishment survey showed a less-sexy drop of 190k jobs for October].

And wasn't most of the stimulus money a short term fix?

Guess we'll be selling tickets to the Jay-von cagematch. von thinks the stimulus was too backloaded, and Jay apparently thinks it wasn't backloaded *enough*.

Really, those 'stimulus' numbers don't seem that stimulating.

Odd, I dont recall you agitating for a larger stimulus at the time. But maybe I missed it.

[Carleton Wu]

"Liberals and Democrats need to get armed, too."

With what? Tofu and touchy-feely platitudes?

Man, you are so badly confused about so many things... I would recommend being armed with guns. Your self-defense suggestions show subpar thinking skills even when graded on a curve.

[Jay Jerome]

Carleton Wu: "You can maximize your misleading by just quoting the BLS as if only one survey exists and that this was their only data point for October.
[nb Jay's data is from the Household survey. The often-preferred Establishment survey showed a less-sexy drop of 190k jobs for October."

Do you even know what the Establishment survey reports? Or are you perenially dazed and confused? (Bolds mine)

"The Current Employment Statistics (CES) program, also known as the payroll survey or the establishment survey, is a monthly sample of nearly 400,000 business establishments nationwide. From the sample, CES produces and publishes employment, hours, and earnings estimatesfor the nation, states, and metropolitan areas at detailed industry levels.... The CES employment series are estimates of nonfarm wage and salary jobs, not an estimate of employed persons; an individual with two jobs is counted twice by the payroll survey. The CES employment series excludes workers in agriculture and private households and the self-employed"

[russell]

isn't it a tepid improvement over all?

Not if you still have a f'ing job, it's not.

It's a very very modest stop-gap stimulus at best, a thumb in the leaky dam, which hasn't done much to stimulate the job market or to keep people working long term

Too bad a more vigorous package was a political impossibility.

With what? Tofu and touchy-feely platitudes?

That's right. Marshmallows, too, only made with stevia, not corn syrup.

We're gonna give you such a pinch, you won't be able to sit for a week.

there are reports Goldman Sachs investment banking partners are arming themselves in case of a populist uprising.

Why don't they just stop sucking billions of dollars out of the productive economy? Then they wouldn't have anything to worry about.

They're gonna be stupid rich and afraid of their own shadows.

Seriously, I hope they crap their pants. @ssholes.

[Gromit]

Jay Jerome: Do you even know what the Establishment survey reports?

I realize this wasn't directed at me, but, um, it reports jobs figures? Which is what we are talking about, right? Jobs?

Or are you perenially dazed and confused?

Given that you just managed to conflate unemployment figures with job losses ("That 558,000 monthly job loss..."), you might want to adopt a slightly humbler tone.

[Gromit]

russell: That's right. Marshmallows, too, only made with stevia, not corn syrup.

We're gonna give you such a pinch, you won't be able to sit for a week.

I say we arm ourselves with gay marriage. It's apparently capable of destroying entire civilizations, and even if not, it at least scares conservatives sh*tless.

[urban legend]

When are liberals going to bite the bullet, stop running scared, and start consistently accusing deficit hawks of being economic illiterates? We have had bigger deficits before and have wiped them out quickly when the economy started growing. It's time for a new narrative: the people who constantly wring their hands about deficits -- now only, not when their boy Bush was in office -- ARE COSTING YOU YOUR (OR YOUR KID'S) JOB.

The formula for attack now is a simple one, like the one surfaced by Nancy Pelosi: We aren't going to succeed in reducing the deficit until we get people back to work again.

[Carleton Wu]

Do you even know what the Establishment survey reports? Or are you perenially dazed and confused? (Bolds mine)

I don't know why you think anyone is confused about what the two surveys report (other than perhaps you've just learned yourself). The Establishment survey is the typically-reported number. Sometimes folks will use both and compare, or use the Household survey for a specific reason. But a doubt if there's a competent economist alive who thinks that the Household survey is the only good measure of changes in employment.
But there is a typical gag for people with an axe to grind- each month, they point at the number that favors their case. I recall a period during the 2001-02 recession when some conservatives bounced from survey to survey trying to claim that jobs weren't really disappearing...

Anyway- I suppose that, having failed in your misrepresentation, you feel that you're forced into the suboptimal move of attacking the Establishment survey itself. Weird choice, and not exactly the way to impress anyone with even a passing familiarity with economics- but II guess you realized that you go to comment with the brain you have, not the brain you wish you had.

It's kind of cute how you're pretending to be an expert on something that you apparently googled five minutes before btw.

[Sebastian]

"When are liberals going to bite the bullet, stop running scared, and start consistently accusing deficit hawks of being economic illiterates? We have had bigger deficits before and have wiped them out quickly when the economy started growing."

You're kind of vague on this, but it sounds like you are confusing structural deficits and short-term deficits. We ran huge short-term deficits in for example WWII, but no one expected WWII to last forever. And indeed it did not. Medicare deficits on the other hand are structural. They don't have an obvious end date without some sort of pretty major change in how they operate.

Worrying about structural deficits makes a lot of sense. Worrying about short-term deficits when you are trying to create government stimulus isn't.

But that isn't an interchangeable complaint. In recent example, deficit hawks complained about too much stimulus spending. That, unless very nuanced, is stupid. They also recently complained about some of the structural flaws in some of the earlier iterations of health care bills. That made a lot more sense because it was setting up a structural deficit.

[Jacob Davies]

The big problem for opponents of the stimulus here is that nobody except crackpots actually disagrees with the idea that spending money can increase demand and prevent job losses. They have to rely on a bunch of handwaving about crowding out even though the only mechanisms for crowding out can't possibly be in effect (high interest rates or low unemployment).

Their opposition is really based on the idea that we shouldn't spend the money, not that it won't work. The first difficulty with that argument is that the people disagree. You know, the ones who elected all those Democrats. Which is why they keep trying to come up with ideas about how it can't possibly work. The second difficulty with the argument based on "we can't afford it" is that they're the exact same idiots who pushed two rounds of ridiculously antiprogressive tax cuts and two monstrously expensive wars.

This remains the problem. Only crackpots think that increasing government spending doesn't stimulate demand and employment. And despite all the talk about all the new spending going to China, while that is a problem a certain number of transactions down the line - China being the Bates Motel of Keynesian demand multipliers - it shouldn't be overstated; the stuff the government spends big money on tends to involve lots of concrete, construction workers, bureaucrats, and other strictly domestic activity.

The real real problem is that the teabag crowd likes to pretend that we live in a meritocratic society in which the hard work and creativity of ordinary decent people are rewarded in proportion to their strivings, and without which strong connection between individual productivity and reward there would be no economy. Well that is, to put it kindly, a load of crap. What we live in - and note I am not saying this is a bad thing - more closely resembles a mass-scale welfare-state in which the government and corporations provide jobs for most people most of the time and provide sufficient wages in exchange that most people can buy a reasonable set of goods. Most of the fierce Darwinian competition happens not at the individual level but between corporations. And much of the decision-making about what products and services to produce and provide does not come from a pure individual-market economy but from the democratically-determined priorities of the government. The resulting system divides up work with reasonable fairness much of the time and does a reasonable job dividing up the rewards - a job it has done progressively less-well over the past 30 years or so as the reward mechanism came to resemble a rigged lottery.

But the basic system is a reasonably good one. Most people have reasonably useful jobs and there exists a whole system for figuring out what is reasonably useful, so individuals mostly don't have to figure it out for themselves, which is good because most people are terrible at that - you don't exactly see a flowering of individual enterprise in the wake of mass unemployment, do you? - and there exists a decent method for sharing out what is produced.

The system isn't perfect, it produces unemployment at a low level at all times and sometimes at a higher level like right now. It doesn't find jobs for whole classes of people very well at any time - especially the poorly-educated, in recent decades - and it doesn't always share out the results very fairly. Much of what the government does is intended to fix that - the largest chunk being Social Security, which addresses the biggest and most obvious problem with it, which is how you get the necessary spending power to people who can't work anymore without giving it away to people who just don't want to work.

Like I say, this system is not a bad thing. We probably could use a bit more collective decision-making (that's the government) and a bit less individual decision-making especially when it comes to the spending priorities of rich people (because they like to spend their money on mansions and yachts and jets and such). A bit more but not a huge amount more - I think that the right mix of production is helped by the predominant factor being individual spending decisions. But there is "predominant" and there is "consisting of nothing but".

Anyway, the point is - this system does not really resemble the pure Darwinian free market that we are told it is. It's a welfare state. And right now it's broken, as a consequence of the wreckers who think it ought to be more Darwinian having had their sway for far too long. The unsurprising consequence of putting people in charge who deliberately or through delusion fail to understand how the economy actually works is that they break the damn thing. Well they broke it. We're trying to fix it. Their opinions on fixing it are not really very interesting to people who actually understand how it works.

I do wish that it was more clearly and regularly stated exactly what the end goal of the current left-wing backlash against the conservative reshaping of society is: while individual opinions vary, from what I can tell the goal is mainly to improve those compensating mechanisms of government that fill the holes that the free-market part of the system can't, and to bend the compensation curve down at the upper end so that the distribution of goods becomes somewhat less uneven, and to ensure that corporations are sufficiently regulated that they don't wreck the planet or the economy. The endgoal is not a socialist worker's paradise. The people who are worried about that are worrying about something that virtually nobody wants, and certainly no major part of the Democratic coalition wants. I wish they'd acknowledge that, but they either don't know, or more likely just don't care that it isn't true.

[russell]

from what I can tell the goal is mainly to improve those compensating mechanisms of government that fill the holes that the free-market part of the system can't, and to bend the compensation curve down at the upper end so that the distribution of goods becomes somewhat less uneven, and to ensure that corporations are sufficiently regulated that they don't wreck the planet or the economy.

Game, set, and match.

I'd also like to say that construing employment by large corporations to be a form of welfare is a pretty interesting way to slice it. I'd like to ponder that a while.

[John Thullen]

Sebastian, one quibble.

"but no one expected World War II to last forever."

I'm pretty sure there was a good chunk of World War II (early on, after initial losses in the Pacific theater) in which the American people were frightened that not only could the war last a good long time, but that we might lose altogether.

Deficits didn't matter because they were part of a future that might cease to exist.

[Jacob Davies]

"construing employment by large corporations to be a form of welfare"

By that I don't mean that the work isn't useful. I mostly mean that the prevailing wage level for private-sector workers is set by a combination of social norms, collective bargaining, laws (in the case of minimum wage workers) and competition with the public sector, all designed to ensure that a reasonable share of goods can be purchased by the workers. It is not a pure-Darwinian negotiation with the employer - nor would most people want it to be that way, because the relative bargaining power of the employer and the employee are very different.

There are numerous levels of wages which in aggregate serve to keep the supply & demand for workers of various skillsets in balance. As a few minutes browsing salary.com or any experience in business at all will tell you, individual pay levels are not really meritocratic because it's not practical to make them so. Among numerous other problems, "meritocratic" systems are prone to cronyism, corruption, and every form of sexism, racism & ageism you can imagine. There is a reason "equal pay for equal work" is a rallying cry.

[hairshirthedonist]

I nominate Jacob Davies for a front-page posting position.

[Eric Martin]

I do wish that it was more clearly and regularly stated exactly what the end goal of the current left-wing backlash against the conservative reshaping of society is: while individual opinions vary, from what I can tell the goal is mainly to improve those compensating mechanisms of government that fill the holes that the free-market part of the system can't, and to bend the compensation curve down at the upper end so that the distribution of goods becomes somewhat less uneven, and to ensure that corporations are sufficiently regulated that they don't wreck the planet or the economy. The endgoal is not a socialist worker's paradise. The people who are worried about that are worrying about something that virtually nobody wants, and certainly no major part of the Democratic coalition wants. I wish they'd acknowledge that, but they either don't know, or more likely just don't care that it isn't true.

Jacob, that was one of the better comments I've read in a long time. Particularly the above excerpt.

Bravo.

[Eric Martin]

Sebastian,

Only because I usually only respond to you when we have a disagreement, I just wanted to note that I agree with your comment re: structural deficits/short term deficits.

I would only add that defense spending has become so entrenched and sacrosanct, that it approaches a structural phenomenon and should be thrust into the fray when discussing this issue.

[Michael Cain]

The endgoal is not a socialist worker's paradise. The people who are worried about that are worrying about something that virtually nobody wants, and certainly no major part of the Democratic coalition wants. I wish they'd acknowledge that...

But one can make a case that some of "the people who are worried" have as their own end goal a capitalists' paradise. Towards that end, they fight to eliminate effective regulation of business activities, to reduce taxes on capital and capital gains, and in particular to reduce labor's power to bargain. They oppose social safety nets because those increase labor's power, as the net allows an unemployed worker to be less desperate to take the first opportunity that comes along.

[Jay Jerome]

"Given that you just managed to conflate unemployment figures with job losses"

Oh, I get it now: I lost my job, but I'm not unemployed. Um, thanks for that clarification.

[Eric Martin]

Oh, I get it now: I lost my job, but I'm not unemployed. Um, thanks for that clarification.

Yes, this happens when you get a different job after losing your prior job. Or if you lose your job but decide to leave the workforce (retirement, etc.).

So, in those (and other) scenarios, you lost your job but are not unemployed.

[Jay Jerome]

russell: Not if you still have a f'ing job, it's not.

But if you don't have your f'ing job, it's not an improvement, is it. There are nearly 12 million people unemployed in the US. Using the CBO report best case number of 1.6 million jobs created by the Stop Gap Stimulus (mostly temporary jobs btw) that's six times more people who haven't benefited from it. By definition to stimulate means to 'incite to action' -- so where's the action? Where are the new jobs, the ones that will last? In manufacturing, for instance, where we've lost 1 million jobs since the non-stimulation bill was passed? For job creation, it's not a stimulus bill, it's a triage bill.

[Marty]

The endgoal is not a socialist worker's paradise. The people who are worried about that are worrying about something that virtually nobody wants, and certainly no major part of the Democratic coalition wants. I wish they'd acknowledge that...

You assert this and I assert that it is absolutely false. There are large portions
of the Democratic coalition that certainly want to create the socialist worker's paradise. The current President has taken no step that would, in action, be at odds with those desires.

Wishing that that "they" would admit this would certainly reduce the rhetoric required to hide it, but I have access to the same facts you have and come to the exact opposite conclusion.

As for the stimulus, it's largest impact will be as a part of the debt we will be servicing, costing considerably more in total for the "jobs created or saved" than the 850B thrown around. So the question is how many jobs will the debt cost in the recovery over a much longer period of time, and was it worth it to create the ripple in the ocean?

[Marty]

"you don't exactly see a flowering of individual enterprise in the wake of mass unemployment, do you? -"

yes, yes I think I do. Not a measurable trend yet but, as a person who follows such things, all of the anecdotal data says there is an upsurge in individual enterprise in response to the high unemployment.

[hairshirthedonist]

There are large portions of the Democratic coalition that certainly want to create the socialist worker's paradise.

Marty (I always think of Back to the Future when I type that), might you have an example of a proposed policy supported by one of those "large portions of the Democratic coalition" that (certainly)furthers the creation of the socialist worker's paradise?

The current President has taken no step that would, in action, be at odds with those desires.

Well, okay. He probably hasn't taken any steps that would, in action, prevent Oscar the Grouch from returning to his original color of orange, either. And I don't think he's done much to be at odd with my putting beans up my nose. Man, that Obama's got some weird objectives.

[Eric Martin]

There are large portions
of the Democratic coalition that certainly want to create the socialist worker's paradise.

Which portions?

The current President has taken no step that would, in action, be at odds with those desires

Um, massive giveaways to Wall St? Passage of corporate tax cuts?

Also: Which action has he taken that would be in furtherance of that agenda? Not that there aren't any that could be, but I'm interested in what you think they are.

[Eric Martin]

all of the anecdotal data says there is an upsurge in individual enterprise in response to the high unemployment

Marty, you realize that anecdotal evidence is not data at all, right? By definition.

[hairshirthedonist]

Marty, you realize that anecdotal evidence is not data at all, right? By definition.

I'd say it's highly incomplete as data, like a datum or a few data not forming a useful set.

[Marty]

I know I am responding to this in pieces, but it wasn't cogent as a single stream of thought.

Most of the fierce Darwinian competition happens not at the individual level but between corporations. And much of the decision-making about what products and services to produce and provide does not come from a pure individual-market economy but from the democratically-determined priorities of the government

Much of this is true, but oddly not for the reasons implied. The lack of Darwinian struggle between individuals is because, not withstanding current unemployment, there are just too few people to fill the skill positions now; and this shortage accelerates in the near future. So at full employment there is little place for the competition. In fact, the new competition is between workers and employers which escalates cost of goods even at stable employment.

The democratically decided market selection is less clear (would love to see a longer explanation because I might agree, intuitively), unless it refers to the portion of GDP that is government spending.

[Marty]

"Marty (I always think of Back to the Future when I type that), might you have an example of a proposed policy supported by one of those "large portions of the Democratic coalition" that (certainly)furthers the creation of the socialist worker's paradise?"

Taking over GM

The Health Care Bill

Limiting pay for not only executives of TARP companies but having a czar weigh in on all executive compensation

TARP execution (as opposed to intent)

etc.

Which one isn't fundamentally the government taking control of the means of production?

[Marty]

"There are large portions
of the Democratic coalition that certainly want to create the socialist worker's paradise.

Which portions?"

The question is which parts aren't? Examples?

[Eric Martin]

Taking over GM

Did large portions of the Dem Party, in fact, favor taking over GM? Of course, Obama never actually did. It was a garden variety government bailout, not unlike some seen even in the era of Ronald Reagan - another known communist.

The Health Care Bill

So, a bill with a modest and extremely limited public insurance option is a push for socialism? Jeez, you need to bone up on your definition of socialism.

Limiting pay for not only executives of TARP companies but having a czar weigh in on all executive compensation

Executive compensation in America is out of whack with the rest of the world, and is hurting our competitiveness. Discussing ways to slightly limit salaraies that range in the tens of millions annualy is not socialism. Again, check your theory.

TARP execution (as opposed to intent)

How so?

Which one isn't fundamentally the government taking control of the means of production?

None of them actually are. The closes is the GM case, but it is by design and intent a limited foray.

[Eric Martin]

The question is which parts aren't? Examples?

Parts:

1. Every elected Democratic lawmaker. None has ever favored such an outcome, and their policies are consistently pro-business, with a slight variance from GOP policies in some minor willingness to expand social safety nets and slight variation in the tax code.

2. The overwhelming majority of registered voters. There is no constituency that favors such.

Asking to prove a negative is a dubious means of dialogue.

For example, let me ask you this: which portions of the Republican Party aren't committed to imposing a fascist state? Examples?

[hairshirthedonist]

Right now the senate is busy reviewing prototype designs for the 2020 Camaro and the house is deciding which facility will ramp up manufacture of brake pads for large pick-ups and SUVs. Or not.

[Marty]

Eric,

Taken out of context the quote "There are large portions of the Democratic coalition that certainly want to create the socialist worker's paradise" and my response can be taken to any level of degree you want, socialist policy to communism.

I don't pretend that the Democrats or the Prsident are communists, they do want and strive for a variety of socialist policies that are, in fact, big government bureaucracies that will cost us lots of money and won't necessarily add that level of value.

It would be nice if they would just admit that in general they think the government will do a better job than the market or even state government at just about everything.

[Marty]

"Right now the senate is busy reviewing prototype designs for the 2020 Camaro and the house is deciding which facility will ramp up manufacture of brake pads for large pick-ups and SUVs. Or not."

But their reps are sitting in the Board room deciding how to do the CEO search and retain their edge in costs by working with the union co-owners to make sure the Ford contract is more costly. (Some or all of this is true, all could be)

[Marty]

"all of the anecdotal data says there is an upsurge in individual enterprise in response to the high unemployment

Marty, you realize that anecdotal evidence is not data at all, right? By definition."

And just BTW my data on this point was as good as Jacobs, which was the point.

[Eric Martin]

I don't pretend that the Democrats or the Prsident are communists, they do want and strive for a variety of socialist policies that are, in fact, big government bureaucracies that will cost us lots of money and won't necessarily add that level of value.

Again, like what? I think single payer medical insurance would constitute a big government program (with arguments as to costs to be had), but even that is not socialism. It is insurance, after all, not the provision of medicine - and it allows for private expenditure and private practice.

Besides, there was no support for single payer amongst elected Dems.

Further, other than that, I can't really think of any. Please provide actual examples.

It would be nice if they would just admit that in general they think the government will do a better job than the market or even state government at just about everything.

But that is just wildly incorrect. A gross exaggeration that is telling.

Obama, you might note, didn't opt to seize and recapitalize the banks (temporary nationalization) even though many dedicated capitalist economists said it would be the best thing to do (for capitalism, on a short term basis, to get lending back on track - lending to entrepreneurs and small businesses, ie, capitalists).

No, he defiantly made it known through his reps that, and I quote, "This isn't Sweden" so the government would not pursue the recap option.

What you don't seem to realize is that the Democratic Party, and its elected leaders, believe that the market will do a better job than federal or state government in the vast, vast majority of contexts.

There are, however, exceptions. Such as health insurance. And public education. And the military/police/fire department/road building type functions.

But there's the catch: the Democrats are not so rigid in their outlook that they have to take the position that the government proposed solution is always bad, no matter what. They can pick and choose. There is, sadly, less flexibility on the right.

[Eric Martin]

But their reps are sitting in the Board room deciding how to do the CEO search and retain their edge in costs by working with the union co-owners to make sure the Ford contract is more costly. (Some or all of this is true, all could be)

Huh? Do you have evidence to support this?

[Uncle Kvetch]

(Some or all of this is true, all could be)

This thread just keeps getting better and better.

[Marty]

"Besides, there was no support for single payer amongst elected Dems."

Huh?

"Obama, you might note, didn't opt to seize and recapitalize the banks (temporary nationalization) even though many dedicated capitalist economists said it would be the best thing to do (for capitalism, on a short term basis, to get lending back on track - lending to entrepreneurs and small businesses, ie, capitalists)."

No, he forced them to take TARP funds(for good reasons) then allowed them to be punished and excoriated for all manner of things. Then started tinkering with compensation at all levels.

Realistic evaluation of what happened is more important to me than what he "said". No one doubts his political speaking savvy.

[Eric Martin]

Huh?

No, he forced them to take TARP funds(for good reasons) then allowed them to be punished and excoriated for all manner of things. Then started tinkering with compensation at all levels.

None were really "forced." Some institutions, after getting massive amounts off the top in counterparty payments from the AIG bailout, said they didn't need it. Most didn't have a choice because they were going under without TARP money (AIG, ie).

Regardless, how were they punished? And how have they actually tinkered with compensation - not discussions, but actual provisions that have been implemented?

Regardless, that is not an example of taking over the means of production. That is saying to these institutions: if you accept hundreds of millions of taxpayer money to bail you out, you will have to abide by certain minor rules so that we can be sure the taxpayer money is not blown on executive comp for the same executives that bankrupted you.

Besides, there was no support for single payer amongst elected Dems."

Huh?

Well, which elected Dems support single payer, and who sponsored the single payer bills in either Congress or the Senate?

I don't recall seeing any, but maybe you could help me out.

[Eric Martin]

Realistic evaluation of what happened is more important to me than what he "said". No one doubts his political speaking savvy.

Just to follow up: He did not nationalize the banks. Not just "said so" actually didn't nationalize the banks. Full stop. Savvy or not, he didn't do it.

And TARP was a Bush administration law and plan. Obama picked it up midway, but the "forcing" - to the extent it happened - had happened already.

[Marty]

"But their reps are sitting in the Board room deciding how to do the CEO search and retain their edge in costs by working with the union co-owners to make sure the Ford contract is more costly. (Some or all of this is true, all could be)

Huh? Do you have evidence to support this?"

Like what? This quote "The announcement of Henderson's sudden departure underscored the tough oversight being exerted by a slate of new GM directors led by Whitacre and selected by the automaker's majority shareholder, the U.S. Treasury"

from here

[hairshirthedonist]

No, he forced them to take TARP funds(for good reasons) then allowed them to be punished and excoriated for all manner of things. Then started tinkering with compensation at all levels.

The thing about this is that, to the extend that your characterization is accurate, it followed a massive financial meltdown that the president did not ask for or want. That meltdown was caused at least in part by insufficient or ineffective regulation and the failures of private industry and the holy free market. The government took action because it had to and because the private sector failed - big time. No one simply decided on a whim that government ought to get suddenly involved with investment banks because of some abstract notion that governments can do things better than the private sector or markets. Something big and bad happened, and it wasn't Obama's doing.

[Eric Martin]

This quote...from here

Fair enough Marty, that sure does qualify as evidence. Not proof, but evidence nonetheless.

But remember the bottom line: since the US bailed out GM, it took back stock so that the US taxpayers would be repaid all or some of the aid. The US is the majority shareholder, so it selected board members. But the board runs the show, and they are pursuing profit making in the private sector.

[Eric Martin]

That is to say, following up on, and paraphrasing HSH, no one simply decided on a whim that government ought to get suddenly involved with GM because of some abstract notion that governments can do things better than the private sector or markets. Something big and bad happened, and it wasn't Obama's doing. The involvement with GM was an alternative to letting GM fail.

[Marty]

"The thing about this is that, to the extend that your characterization is accurate, it followed a massive financial meltdown that the president did not ask for or want. That meltdown was caused at least in part by insufficient or ineffective regulation and the failures of private industry and the holy free market. The government took action because it had to and because the private sector failed - big time. No one simply decided on a whim that government ought to get suddenly involved with investment banks because of some abstract notion that governments can do things better than the private sector or markets. Something big and bad happened, and it wasn't Obama's doing."

This is just justifying the nature of the solution by saying there was a problem. Every President has problems, they get solved in the way the President views the world.

I would say that the way TARP and GM were handled are very indicative BECAUSE there was a problem that had to be deealt with quickly, so there was less time to actually spin the solution.

In both cases the solution was government control, note control, not aid.

[Eric Martin]

But Marty TARP was a Bush law! Why did Bush opt for control?

And control is absolutely an exaggeration with respect to TARP. It was as close to a blank check as you could get without actually being a blank check.

Executive comp and bonuses are up to pre-meltdown levels. What practical control has there been of financial institutions.

Curiously, what would your solution for the GM crisis have been? Simply write a check and then let GM go on its merry way?

[Marty]

"And TARP was a Bush administration law and plan. Obama picked it up midway, but the "forcing" - to the extent it happened - had happened already."

I think you should check the timing on this, the broad distribution was done post election and I believe post inauguration. I just don't have time to check right now.

[Sebastian]

"But their reps are sitting in the Board room deciding how to do the CEO search and retain their edge in costs by working with the union co-owners to make sure the Ford contract is more costly"

I'm not sure what people are questioning, (maybe the sitting in board room parts?) but it is a fact that for the first time in decades the UAE has contracts with material differences between the US 3 automakers, and it is a fact that those differences are all cutting against Ford (the only healthy of the three) and all in favor of GM (the one which the union has a huge financial interest in). At the very least that is an ENORMOUS conflict of interest which hurts the only remaining successful US auto company, and probably isn't nearly enough to save the horrific GM.

Is any of that in dispute?

[Eric Martin]

I think you should check the timing on this, the broad distribution was done post election and I believe post inauguration. I just don't have time to check right now.

So?

TARP was a Bush law. To the extent it gave control to the US government, it was a Bush law.

To the extent that such "control" was seen as the best way to remedy the crisis, again, it was a Bush law.

[Eric Martin]

Is any of that in dispute?

The collusion to achieve the specific objective. I'd also like more evidence as to the differences in the contracts. But not dispute as much as curiosity/request for evidence. Which I acknowledged upthread I believe.

[Sebastian]

I'm off to a bridge tournament, but for a thumbnail you can see here.

The unions have always negotiated with the view that all three automakers have to be under the same rules. Now that they effectively own one of them, huge breaks can go to that one, while they continue against Ford. At the very least the UAW needs to break off its Ford union to eliminate that huge conflict of interest.

[Eric Martin]

Seb: your suggestion sounds quite reasonable.

[Tony P.]

I don't get what Sebastian is complaining about. At Ford, the union members are workers; at GM they are both workers and owners. As owners, they drive a hard bargain with the workers -- just like any proper capitalist would do. So what's Seb's beef?

--TP

[Jacob Davies]

(Thanks for the nice remarks.)

"unless it refers to the portion of GDP that is government spending"

It does. Sorry!

"And just BTW my data on this point was as good as Jacobs, which was the point."

I was making a negative statement ("things will remain the same as they have been"). You want to make a positive statement. The onus is on you to provide evidence of change.

As for the idea that there exist significant numbers of people in the Democratic party who favor a socialist worker's state, there is a complete absence of evidence for this. There is a complete absence of a constituency for it. Most of the people in the Democratic coalition would violently oppose such a transformation.

There is a more reasonable worry that despite the intentions of the people involved, something will get out of control and disaster will ensue. Thing is, if you look at how the communist states actually came to exist, it was not a process of incremental changes that ran away. It was a process of revolution, and only a very few marginal people in the US support that kind of change. (To a large extent it was a process of revolution against systems that demanded work from people but didn't distribute a decent share of the production to them. That failure mode is one of the reasons why the American system is superior.)

The things that the Democratic party wants to do, for instance universal healthcare, are things manifestly compatible with a liberal capitalist democracy. You might have been able to make the argument that they weren't in 1948, but 50 years or more of universal healthcare in other advanced democracies make that argument extremely difficult to make.

Now on the other hand I do think that the Republican party contains many people with ideas that would constitute a radical transformation of the American system - but they do so, I think, without appreciating the scope of the changes they propose, largely because they don't understand the functions of the stuff they want to replace or do away with.

I would like to see some actual evidence that the UAW is favoring GM over Ford & Chrysler before commenting further. It's hard to really imagine that the UAW is willing to clobber Ford with its enormous number of employees there. Do you really think that there's a conspiracy to bankrupt Ford so that the UAW can take it over? And that Ford's UAW workers either don't know or don't care that this would happen? (Bearing in mind that even in the best case in bankruptcy enormous numbers of jobs would be lost, and that the market share that Ford loses might as well go to non-unionized foreign manufacturers as to GM.)

[russell]

If, five years from now, the federal government is still a majority owner of either GM or any investment bank, and is engaging in anything resembling hands-on operational control, I'll worry about rampant socialism in the US.

Never mind five, make it two.

I guess the feds could have just sat back, let nature take its course, and watched while the economy of the US and the entire freaking developed world went up in a puff of smoke, but to be perfectly honest I'm kinda glad they didn't.

And if you all don't like unions, there's a very easy solution to that. Pay people better.

In fact, there are damned few economic issues facing us right now that couldn't be addressed by having more of the wealth created in this country finding its way into working people's pockets. Not through entitlements or redistribution of wealth, just through straight up paying them more money.

If that seems like the short path to being uncompetitive, I'll ask why the same argument doesn't apply to the executive class. Those folks siphon billions and billions and billions of revenue dollars into their own pockets. And yes, that was "billions" with a "b".

This country is about as much at risk of "going socialist" as I am of flying to Mars.

[Jacob Davies]

(And just for the record, putting representatives of auto worker's unions on the boards of car manufacturers is something imported from that famous communist utopia, Germany. Last time I checked, German car makers were not exactly what I'd call socialist.)

[Jesurgislac]

I don't get what Sebastian is complaining about. At Ford, the union members are workers; at GM they are both workers and owners. As owners, they drive a hard bargain with the workers -- just like any proper capitalist would do. So what's Seb's beef?

He's a conservative. The concept of a successful business owned by workers rather than by a handful of extremely wealthy Republican Party donors is just wrong.

[Jay Jerome]

Eric Martin: "Yes, this happens when you get a different job after losing your prior job. Or if you lose your job but decide to leave the workforce (retirement, etc.). "

And also if you get snatched by a UFO and go MIA for a while. Both the Establishment Survey and the Household Survey are monthly compilations of U.S. employment data. Are you implying the number of people who get fired and then decide to retire, or the ones who are fired and rehired that same month, make any statistical impact on those monthly numbers at all? If there was any significance to those exceptions, the Bureau of Labor statistics would note it in their reports, and they don't. And if you're retired for more than a month, or 'not in the labor force' you're excluded from the monthly statistics:

Survey definitions

"People are classified as unemployed if they meet all of the following
criteria: They had no employment during the reference week; they were available for work at that time; and they made specific efforts to find employment sometime during the 4-week period ending with the reference week."

(don't worry about answering: I see you have a lot of other brick-bats aimed at you up-thread: quick, duck -- a low flying Sebastian is fast approaching)

[Jay Jerome]

Carleton Wu: I don't know why you think anyone is confused about what the two surveys report (other than perhaps you've just learned yourself).

Carleton, the reason the Establishment report shows lower numbers is because it's based on a narrower sample than the Household report.

The Household report is the cupboard; the Establishment report is only a few shelves in it. If I told you the cupboard was bursting top to bottom with canned goods, and you said, no: there's only 27 cans of Bush's Baked Beans on two shelves, would that be an accurate assessment? Or would you be full of legumes?

The Household reports samples the ENTIRE civilian non-institutional population: including those who are self employed (about 25% of the work force), and farm workers, and other free agents, and ALL paid employees of ANY kind.

The Establishment report, however, only surveys businesses and factories and offices and stores and federal and state and local government entities, who hire and fire workers (the same ones who are included in the Household sample) See, Beans & Corn & Bumble Bee Tuna & Chef Boyardee Ravioli, & Del Monte Peaches &... ah, it's lunch time... so I'll finish this fast.

Carleton, here's where you're confused: the Establishment survey isn't an alternative to the Household survey, it's a more narrowly focused adjunct, a smaller sample useful for picking up month-to-month changes because of its smaller margin of error. But the Household survey shows the bigger picture, because it includes a more expansive segment of the population.

Therefore your statement that 'the often-preferred Establishment survey showed a less-sexy drop of 190k jobs for October' and equating that as indicative of the actual unemployment numbers seems a wee bit deceptive.

[Carleton Wu]

Marty,
all of the anecdotal data

Thanks for the oxymoron

And just BTW my data on this point was as good as Jacobs, which was the point.

So, you're point was that thinking that the plural of "anecdote" is "data" is foolish, and that by demonstrating this foolish leap you have somehow pointed out Jacob's lack of hard data? And you think that this was a more effective technique than just asking him for hard data?

I envy you. Unlike you, the rest of us read your posts sequentially as if they had some rational pattern and intent. And, lord, this hurts.

"And TARP was a Bush administration law and plan. Obama picked it up midway, but the "forcing" - to the extent it happened - had happened already."

I think you should check the timing on this, the broad distribution was done post election and I believe post inauguration. I just don't have time to check right now.

30 seconds of Googling later- the TARP article in Wikipedia, and the first footnote is the CBO's report on expeditures through Dec 31, 2008- 243B worth of capital purchases. From the wikipedia article itself, currently 296B has been expended by TARP overall, and that includes quite a bit outside of capital purchases (eg 21B in loans to the auto industry).

Im not sure how your brain makes the post-election but pre-inauguration period Obama's responsibility. Since I saved you a few minutes by looking up those figures, perhaps you can take that time to review Article II of the US Constitution and figure out who was President during this period.

Which one isn't fundamentally the government taking control of the means of production?

Weasel word: fundamentally. Unlike the standard definition, here it appears to negate the rest of the sentence.
Translation: none of these things are like that, but apparently you don't like them and this is enough, in your view, to call them "socialist". But you're still rational enough to recognize that they aren't government ownership of the means of production... ergo "fundamentally".

[Marty]

Carleton, and now I remember why I rarely post here anymore. Not one of your comments added any value to the discussion we were actually having. As for your 30 seconds, it still didn't answer the question, "when did we distribute TARP funds with the strings attached adn make banks who didn't needd them take them?"

Fundamentally is a fine word, things in politics are rarely 100% "by definition". There is complexity to interpret and have opinions on, or we wouldn't be here discussing this.

And yes, "But you're still rational enough to recognize that they aren't government ownership of the means of production" I make a distinction between ownership and control, asserting my opinion that both create socialist policy.

[Marty]

I forgot

"Im not sure how your brain makes the post-election but pre-inauguration period Obama's responsibility. Since I saved you a few minutes by looking up those figures, perhaps you can take that time to review Article II of the US Constitution and figure out who was President during this period."

I was wondering who controlled Congress and approved the funds and the controls (or lack of) and who is responsible for most of the execution of the program. Hint: not Bush or Republicans.

[Carleton Wu]

Carleton, the reason the Establishment report shows lower numbers is because it's based on a narrower sample than the Household report.

Divergence between the two surveys is pretty common- the Household survey is much noisier, and there's the possibility that divergence between the two is actually information itself (ie as people move from 'unoffical' employment to 'official' employment and vice-versa).
Also, "sample" is the wrong word here. You're trying to say that the sampled universes are different, as opposed to saying something about the sampling process itself.

Carleton, here's where you're confused: the Establishment survey isn't an alternative to the Household survey, it's a more narrowly focused adjunct

It's the preferred survey when looking at changes in employment- for professional economists, that is. Again, you want to denigrate the Establishment survey bc it isn't telling you what you want to hear. Quoth Bruce Bartlett: Economists tend to focus more on the absolute number of people working, rather than the unemployment rate. This gives a better picture of the overall state of the economy, because it is not affected by changes in the labor force. Furthermore, they prefer to focus on data from a second BLS survey of businesses. Known as the establishment survey, it collects employment data directly from employers. For this reason, economists believe it is a more accurate measure of employment.
Another article on the false controversy between the two surveys (and another money quote for you: Federal Reserve Chairman Alan Greenspan has noted that the Payroll survey is much more reliable than the household survey.)

In this corner, Bruce Bartlett and Alan Greenspan. In that corner, some dude who still doesn't understand how underlying changes in the population affect the Household survey.

Are you implying the number of people who get fired and then decide to retire, or the ones who are fired and rehired that same month, make any statistical impact on those monthly numbers at all?

You should not use your common sense as a substitute for understanding statistics. Consider a basic employment survey (counting jobs) and a basic household survey (counting job-seekers and job-holders)- drop all uncertainty etc. In the US, given population growth around 1%, the household survey would show a growth in unemployment of 100-200k a month at zero job growth in the establishment survey.

And *that's* why economists prefer the establishment survey- there's no addition of noise from changes in the population. Because, while we care about whether more people are looking for work (and this of course has effects on the labor market itself, therefore affecting the economy), that does not indicate directly the growth of the economy in the way that the changes in the number of jobs does.

[Carleton Wu]

And yes, "But you're still rational enough to recognize that they aren't government ownership of the means of production" I make a distinction between ownership and control, asserting my opinion that both create socialist policy.

1)If you want to redefine words, expect to create confusion rather than useful discussion
2)"control" is nebulous enough that it can be claimed under almost any circumstances

So yes, Obama is a Socialist, if Socialism means "wanting to exert any amount of government control over the economy".

Fundamentally is a fine word, things in politics are rarely 100% "by definition".

And yet, we want to maintain the meaning of words, so that a discussion can continue. So a little blurring around the edges is fine. Blurring the entire meaning of a word so that it means something else is a different thing.

As for your 30 seconds, it still didn't answer the question, "when did we distribute TARP funds with the strings attached adn make banks who didn't needd them take them?"

Well, you originally said I think you should check the timing on this, the broad distribution was done post election and I believe post inauguration
So I "still" didn't answer a question that you had not actually asked. I answered the question you did ask (you're welcome). Apparently that question became a lot less interesting to you when the facts weren't where you wanted them to be, so the goalposts are yanked out and moved.

The vast majority of the direct investments were made under Bush, and this was also when Paulson was pushing all of the major banks to take funding so that investors wouldn't use the funding as a weakness signal. Which was probably a good idea, actually, since the last thing we could afford at that time was to signal which institutions the government thought might go under.

If you've got something more specific in mind, perhaps you could find it? That way, you can internalize the question:answer:goalpost-moving process and present us with your final argument rather than some incoherent internal monologue.

[Carleton Wu]

I was wondering who controlled Congress and approved the funds and the controls (or lack of) and who is responsible for most of the execution of the program. Hint: not Bush or Republicans.

OK. First, if that were the case, why would you be asking about the Inauguration?
Second, if you had been thinking about who controlled Congress- that did not change during the last election, so why bring up the election at all?
You do realize how transparent you are, don't you? I mean, we can all see that you wanted to blame Obama, and suddenly found that the facts weren't in your corner. So you pivot, and try to blame the Dem-controlled Congress...

But the Executive is, in fact, responsible for the execution of the program- handing out funds, etc.

Again, watching a process that should be internal for you- wanting to blame Obama, checking the timeline, realizing that this wasn't feasible, and deciding to blame Congress. Basically inventing this stuff as you type reveals that even you don't know what your argument is going to be beforehand- as long as the Dems get blamed.

[Carleton Wu]

Yet another good post on the difference between the surveys, and how changes in the gap between them might be predictive. And the money quote (which could've been written just for Jay): One of my longstanding peeves has been the way some bulltards cherry pick between the Household Survey (which measures Unemployment) and the Establishment Survey (which measures non-farm payroll, occasionally called job creation). Whichever is bigger is what they choose to emphasize. The folks who abuse the data that way are economic charlatans, and should be cast out as pariahs — or at the very least, ignored.

[Marty]

The problem with your argument Carleton is that its wrong. You have the timeline wrong, you have my intent wrong and you have the wrong administration implementing controls. So after you are through playing fast and loose with the facts I would suppose by your rules you should be ignored.

[Carleton Wu]

So after you are through playing fast and loose with the facts I would suppose by your rules you should be ignored.

Try me- name one fact that I've got wrong.

[Carleton Wu]

That's our Marty, a genuine profile in courage...

[MEW]

Since both sides of this quibble are either unwilling or unable to do the research at the moment, I'll refer you to this. Bush signed TARP, a bill which came from a Democratic congress, on Oct. 3. The bill, in fact, came out of congress with executive compensation control. "The Bush administration, however, edited one sentence, stipulating that only firms that received bailout funds by selling troubled assets to the government in an auction would be penalized for excessive compensation." You can read the original bill here. On November 12, Paulson stated, having abandoned the initial policy at the gate, that his main focus would be to purchase equity stakes rather than troubled assets. According to this scheme, the Bush signing statement, in combination with Paulson's strategy, left no room for executive compensation controls.

As for Marty's point about distribution, $155 billion had been dispersed as of December and somewhere around half had been allocated. As it stands, through repayment and some meager interest earnings, a little less than half of the original amount has yet to be distributed although almost all of it has been allocated.

Now, to clarify, if Marty's major concern is that executive compensation control was primarily attached to the TARP distributions by the Obama administration, not the Bush administration, then he is right. I think it was abhorrent that Bush chose to remove those controls from the bill, but in the actual act of signing that bill, Bush did deliberately remove controls attached to the TARP funds.

[Marty]

Thanks MEW, I couldn't bring myself to document what was such common knowledge.

[Carleton Wu]

Since both sides of this quibble are either unwilling or unable to do the research at the moment...

Except for the part where I did. At least, if you have a problem with the numbers I cited, could you tell me what it is?

As for Marty's point about distribution, $155 billion had been dispersed as of December

The CBO says that 243B of asset purchases were completed by the end of December.
If you have a different number, it'd be useful to show your sources so we can see where the discrepancy is coming from.

As for trying to deduce Marty's point, I would point out:
No, he forced them to take TARP funds(for good reasons) then allowed them to be punished and excoriated for all manner of things.

At first according to Marty, Obama's crime was forcing TARP money on the banks, something which was virtually complete by the time Obama took office, and much of which took place before the election.

I think you should check the timing on this, the broad distribution was done post election and I believe post inauguration.

Having been questioned on this point, Marty suggests that Obama was either elected or actually in office when the TARP purchases were made. Not clear how president-elect makes policy, but that appears to be Marty's case at this point.

I was wondering who controlled Congress and approved the funds and the controls (or lack of) and who is responsible for most of the execution of the program. Hint: not Bush or Republicans.

Here, Marty explicitly abandons blaming the executive (earlier statements blaming Obama are hopefully scrolled offscreen by now).

you have the wrong administration implementing controls

But finally, he pivots back to Obama, having forgot his earlier embarrassments.

I would argue that trying to craft a coherent argument or position out of that is a fool's game.

[Carleton Wu]

Thanks MEW, I couldn't bring myself to document what was such common knowledge.

You couldn't even get your questions right- ask one question, get it answered, and then wonder why another question wasn't answered.

Now, you want to pretend that MEW's deduced argument was the one you were trying to make all along? Too bad about that scroll button- anyone can scroll up to see that you made all manner of bizarre claims, not even sure who you were trying to blame, let alone what for.

[Carleton Wu]

btw Marty, since you're resurfaced, you want to tell us what facts I got wrong? Im still waiting for you to man up on that, but let's just say Im expecting to be disappointed.

[Marty]

Seems the point of MEW's post was that your facts on who implemented compensation controls thus my thanks
You only asked for one example.

[Carleton Wu]

Seems the point of MEW's post was that your facts on who implemented compensation controls thus my thanks

Ok, you only forgot one tiny little detail- I never claimed that Bush created or enforced any compensation controls. I havent said a single thing about the timing of compensation controls. I was disputing some other points that you made- blaming Obama for the initial TARP strongarming, attempting to weasel out of that position, etc.

So, how about either apologizing, or making me look really really bad by quoting where I said that Bush had anything to do with implementing compensation controls?

[Marty]

Carleton, I expect this could go in this circle forever. The thread you interceded in was a discussion of control between, at least, Eric and me. If in taking up Erics case you didn't mean to actually support his point that it was Bush who implemented controls within TARP, then I do readily apologize for my misunderstanding.

The facts are that out of the 700B (plus or minus) of TARP money even your estimate of 250b is less than half, so most was not dispensed under Bush.

However, (scrolling up as you suggested)the key issue I thought we were discussing was that control was implemented under Obama not Bush, as Eric kept insisting that it was a Bush law etc.

I do believe that much of the strong arming happened post Bush but am happy to concede I may have been wrong about when that was done.

I am sure the strong armed felt even more unhappy as they learned, AFTER being forced to take the money, that there compensation policies were going to be subject to public review and control by a compensation czar. That certainly happened under Obama.

[Carleton Wu]

If in taking up Erics case you didn't mean to actually support his point that it was Bush who implemented controls within TARP

I like to think I write clearly enough; I disputed that Obama was responsible for the major bank investments via warrants with the TARP, or the 'strongarming' of banks to take that money. You seemed to be perfectly clear on what you were debating upthread:
No, he forced them to take TARP funds(for good reasons) then allowed them to be punished and excoriated for all manner of things....
I think you should check the timing on this, the broad distribution was done post election and I believe post inauguration....
I was wondering who controlled Congress and approved the funds...

So no, you weren't merely disputing who implemented compensation controls.

The facts are that out of the 700B (plus or minus) of TARP money even your estimate of 250b is less than half, so most was not dispensed under Bush.

A significant amount of the TARP money has not been dispensed at all (ie most of the dispensed money was dispensed under Bush); again, from the cbo link above Bush was responsible for the vast majority of the direct investment in bank stocks.

I am sure the strong armed felt even more unhappy as they learned, AFTER being forced to take the money, that there compensation policies were going to be subject to public review and control by a compensation czar. That certainly happened under Obama.

That is entirely possible. But I don't see why we'd be interested in making public policy based on what makes bank execs happy.

Obama inherited a situation where the US treasury had made big investments into a number of large banks, and the banks' executives decided to use significant chunks of that money to pay themselves bonuses. He acted within the legislation (and contra MEW, the President does not get to 'chose to remove parts of a bill') to limit this.
You can argue that this is socialism, or displays a socialist bent. But you can't argue that Obama created the situation by forcing the banks to take money- he had to deal with a 'socialist' situation set up by his predecessor.