ABC's Jon Karl Scoffs at Robert Reich's Call for More Government Stimulus
It's bad enough that the weekly Sunday political talk shows are dominated by Republicans and Blue Dog Democrats week after week, but we also get treated to the "reporters" on those shows spouting Republican talking points as well, as ABC's Jonathan Karl does here.
The entire segment was a mess with Christiane Amanpour cutting off Reich in the middle of trying to make some of his points on the need for more government spending to get our economy moving again and in the segment above, Karl scoffs at the notion there's any more that the government can do to stimulate the economy.
Alabama Senator Richard Shelby inadvertently explains what the real problem is, and that is the Republicans refusal to admit that economic stimulus does any good at all and there's no way they're going to allow the Congress to pass any, regardless of the obvious fact that more is needed, as Reich rightfully pointed out.
Transcript below the fold.
AMANPOUR: So that comedic set-up had you all laughing. What is the reality? Has one been hit by a truck? Is it a headwind? Let me ask you first. You've dealt with labor and -- and the job market. Is this cyclical? Or is this a real structural hole?
REICH: Christiane, the central problem is on the demand side. Seventy percent of the U.S. economy is consumers, and consumers are hit with the equivalent of a truck. I mean, their housing prices are dropping like mad. Their wages, adjusted for inflation, are dropping. Their jobs are disappearing, and almost everybody knows somebody or has somebody in their own family or themselves are worried about losing a job.
Under these circumstance, consumers are pulling in. They are not spending. And if they're not spending, then jobs are not going to be created. There has got to be -- in fact, the jobs program we need is a way of putting money back in people's pockets and creating jobs even directly is considered.
AMANPOUR: So we sort of know, but is there a plan -- is there a plan to get Americans back to work, not long term, but now?
SHELBY: Well, I believe that stimulus basically doesn't work, for the most part. We've tried that. I think what we've got to do is create the conditions, tax reform, which we could do and we haven't, incentives for manufacturing. We've lost millions of jobs in manufacturing. And say this a new day. We've got to do it. We've got to be buoyant about where we're going. We've got to grow this economy. The market grows the economy. Government -- we've grown the government, but we haven't grown the economy, and we better be mindful of that.
AMANPOUR: You're shaking your head. You know, obviously, the debate right now is about how much government intervention. Even people who don't want to see government intervene say that sometimes that's what a government has to do in an emergency.
REICH: Look, Christiane, I really -- I deeply respect the senator and the senator's position, but it's just sheer logic. When consumers and private-sector investors are pulling in because there is not enough economic activity, because consumers are scared, because consumers are 70 percent of the economy, then government has got to fill the gap. I mean, we've done this for the last 75 years.
KARL: But look what we've tried. I mean, look what the administration's tried. We've done $800-plus billion in economic stimulus. We've done tax cuts, the big, you know, tax cuts passed in December. And the Fed has kept interest rates at virtually nothing.
REICH: Yes, but there's...
KARL: And there aren't many tools left.
REICH: Look it, the scale of the crisis was much larger than anybody anticipated. This was the worst since the Great Depression. Exempt the first $20,000 of income from payroll taxes for the next year. Redo the bankruptcy code so people can declare bankruptcy on their primary residence and, therefore, have enormous bargaining leverage with their lenders if they are trouble. Have a WPA, a direct employment program.
KARL: But do you really think a new spending plan is going to pass muster in Congress? I mean...
(CROSSTALK)
AMANPOUR: It won't politically, will it?
SHELBY: First of all, no -- I don't believe any new stimulus is going to pass in Congress. I don't think it has any credibility. We have seen what the past stimulus did, for the most part. What we need to do is create some certainty, some conditions for people to invest, to grow, to have some confidence. There's not a lot of confidence in the economy right now all over America.
that wasn't true?
He basically said what has been tried has not worked, there aren't many tools left and what Reich is proposing won't pass. You want a reporter to say, "Gee Mr. Secretary, that kind of intervention sounds like the ticket, and if Dems had spine and balls they would
propose it until they are blue in those balls."
"That's fu*#ing retarded."
Big City Mayor
He didn't have to enjoy saying it so much. It probably seems absurd to him to try to change the way things work in Washington.
I think the real problem is that the bankers took all the money and ran, and they crashed the housing market behind them - scorched earth. Without stimulus and some money, all people want is food and shelter. The bottom line is the wars have to end, subsidies have to end, tax cuts and loopholes have to end, and corporate ownership of congress has to end to do it. That's were the balls come in. It's cowardly to try to balance the budget on the backs of the powerless and working poor. It takes guts to change things at the top - to make the powerful tighten their belts and share the sacrifice.
"Government by organized money is just as dangerous as Government by organized mob"
-= Franklin Delano Roosevelt =-
was that government intervention didn't work. In fact the only problem with the stimulus was that it wasn't big enough. Otherwise Karl basically said we're out of ideas. I'd rather listen to Reich make an effort to propose ideas than watch Karl throw up his hands and Shelby cross his arms and state that he will obstruct any attempts by his political opponents to solve the problems.
When the economy is failing and when the causes are glaringly evident it is the JOB of the government to step in and fix it. Shelby and all the other criminals in congress are negligent when they just sit there and say nothing will work. He should have his pay docked until the economy turns around.
Our government has been rendered incapable of dealing with the fallout from the economic policies of the last 30 years. They cannot be rehabilitated. WASF.
"Someday somebody related to some of these sufferers, these victims, these collaterally damaged souls, may try to kill you. And I have to tell you, I think you’ll have it coming." - Christopher Cooper
that the stimulus wasn't big enough, but there are a lot more structural problems in the economy that need to be fixed than just expanding the monetary base. The problems don't go back just a few years, or even to Bush. They go back 30, 40 years. As I have said before though, the problems do require more radical solutions than either party is at willing to consider. Certainly the millionaire pundits, who don't care about or understand working people, are cut off from the reality of the majority of the country.
So, the range of options are extremely narrow and won't really solve the fundamental problems of the economy.
Just because the elites pretend there aren't solutions available doesn't mean we should go along with it.
I'm not saying you are, just saying that a larger stimulus AND other, more fundamental, changes need to happen. If we can't radically change our trade policies, don't do anything about the explosion in wealth inequality, taxes, financial deregulation and the push for massive privatizations, then we can only moderately improve the situation.
We really do have to propose real alternatives, or we're screwed.
The stimulus alone will not save us. The fundamental changes needed to turn things around are now out of our reach. We are owned by the financials, the insurance companies and the defense industry.
"Someday somebody related to some of these sufferers, these victims, these collaterally damaged souls, may try to kill you. And I have to tell you, I think you’ll have it coming." - Christopher Cooper
bingo
Real wages haven't grown in decades. Household debt has exploded in recent decades. Wealth inequality has gone through the roof. Keynes (he does still matter) showed that if wealth inequality was too high there wouldn't be enough demand in the economy to buy what is produced, economists call this a glut. Our trade policies have de-industrialized the country. The economy has become financialized. What of these problems has even begun to be fixed? I would argue that none of them have really even been touched.
I also think it is a bit odd to pretend that the stimulus hasn't done anything to help the economy. The logical argument Karl would have to give is that if the government didn't spend that the private market would have made up the difference. Where in the world is the evidence for this? If you subtract the stimulus from the economy demand would have fallen even further. If anything the critics of the size of the stimulus have been proven right, not the pro-austerity crowd.
What Reich said is factually true, demand by consumers ISN'T there. Job growth isn't keeping up with people entering the work force and this is supposed to be the recovery. The fact that the stimulus didn't work should show people the magnitude of the problem we are facing. If the economy is THIS bad after all the help it has been given maybe, just maybe, something more drastic must be done.
I would have to assume that people like Karl think that if the government doesn't spend more corporations will make up the difference in productive investments, consumers will spend more and the economy will recover. Or, that won't happen and the market will correct itself at a new equilibrium, after many many more people lose their jobs. When a new equilibrium is established, and wages are low enough, environmental standards are more lax and more services have been privatized, investment will kick in again.
Also, if you think austerity is the way to go, could you explain how it is benefiting the countries in the EU right now doing this?
Is it also not true that many times more money was given to the banks to bail them out? Isn't it true that tons of toxic financial assets were transferred over to the public? Do you think for a second if banks were in just a bad of shape now as they were when the crisis began that those in power would think twice about throwing a few more trillion at the banks?
Sheeet, never thought I'd see the day.
What Jon Karl forgot to mention was that half of that "behemoth" $800 billion stimulus, he referred to, was in the form of tax cuts. So it is a very selective claim of "what does not work." Since, if we add all of the tax cuts had a bigger footprint than the spending in the stimulus. A stronger case can be made that tax cuts don't work. Alas the Republican senator went on unchallenged by the ABC toadie, when he went on propose just that: more tax cuts and reduction in govt. spending.
So it is not that the stimulus did not work, but that it only worked partially, because it was not large enough to deal with the magnitude of the economic crisis. That is a very important distinction. Ironically, that was a claim made by some of the lefties, you love to disparage so much in this board, who are being proven correct once more. That may explain your adoption of a republican narrative -again- with such gusto, I guess.
CTHULHU 2012 "Why vote for a lesser evil?"
you would find I was never convinced the stimulus was adequate. Nor was I ever convinced anything stronger would get passed. I also remained convinced most of the left leaning critics of Obama couldn't pass gas after a weeklong diet of frijoles a la charra.
"That's fu*#ing retarded."
Big City Mayor
say these types of things: "I also remained convinced most of the left leaning critics of Obama couldn't pass gas after a weeklong diet of frijoles a la charra."
We'll have to take your word for it, since you never really articulate much counter logic. You always have good one liners, good put downs. Kinda silly to watch, since the left has been proven right in its criticisms enough to at least warrant respect. You can't just brush people off, pretending they don't have a sound argument when they do. If you think that the left wing critics of Obama are wrong explain why, don't just call people names.
If people are drawing a conclusion that the problem is that the stimulus was too BIG or that counter cyclical measures won't work and haven't worked, and that austerity is the road to go, then their objectives aren't to put people back to work or to allow households to pay back the massive amount of debt they've accumulated. They also probably don't care about the history of these policies in practice.
You can't pay down debt without a job and a decent wage. Austerity is 100% certain in this economy, given its structural problems, to lead to a downturn and to throw even more people out of work.
If you could provide an example where austerity lead to sustainable economic growth when a country was in something like our position, let us know. The IMF has been calling for similar policies when other countries where in the type of position we are in now and the policies always made the situations worse. The IMF itself has admitted this but hasn't changed anything.
I don't really care enough to use the search function.
So basically the administration managed to pass something that you now claim it does not work. A casual observer would point that is a very precarious "achievement" to use as an excuse to disparage the left who, in this case at least, are/were correct.
Since the Dems controlled the executive and both houses, they only managed to pass a severely compromised stimulus. In scatological terms that is a far cry from the gaseous tour de force interpretation of the 1812 Overture, more like a faint shart from extremely liquidly diarrhea with diluted blood throw in for good measure (you should have that checked BTW). And sharts usually produce embarrassment, seldom pride... But hey, whatever works for you.
CTHULHU 2012 "Why vote for a lesser evil?"
I gave a shortened summary of what I though Karl was trying to say.
It did not work well enough to promote economic recovery. It staved off total disaster.
It's effects are now wearing off.
"That's fu*#ing retarded."
Big City Mayor
If the John Karl's of this world didn't simply buy the deficit meme put out by the Republicans, and act as if the tea party could bring more than 50 people to it's rally, then we could know why more stimulus is politically impossible. They mouth and remouth the Republican talking points, without ever letting an expert like Reich or Krugman get more than a sentence out, Political reality doesn't equal economic reality.
JimmyPete
to do what World War II force us to do: Tax the rich and spend the money. Move the top tax rate to 95%, top estate tax rate to 95%, capital gains rate same as income tax rate. Tax every speculative financial transaction at 2%. Remove all corporate tax loop holes. Add a 95% tax on excessive executive compensation. Do something for the workers: Move the minimum wage to $20/hr in $2 increments per year. Double OT for everyone except corporate officiers. OT pay for more than 32 hr in a week.
yup ..
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
The problem is too many people who do no real work (politicians, media personnel, banksters) have too much money, and the rest of us, trying to make a living by doing actual work, no longer have jobs.
Why? Because much of the real work is done by foreign labor or by machines.
So in America while the moneyed classes are feeling less than no pain, the rest of us suffer.
We should all get monthly dividend checks, just like citizens of many other countries do.
Why not? Our bankers and politicians and media personnel do no real work, but get their monthly check.
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
to know Reich is correct, and the GOP/talking head axis is wrong.
Our country will suffer as a result of this evil collaboration between Birchers and the media.
Once again, it will take a war to end the global depression.
This time, something other than freedom will win.
destined to repeat them. In 1937 the economy was starting to recover from the great depression. The Republicans started complaining about the deficit and demanded lower spending to balance the budget. When this happened the country fell back into a depression again which lasted 4 more years. The same thing is happening now and all the same reasons are being used. Again, the Dems proposed a larger stimulus with no tax cuts but actual monies to stimulate the economy. The GOP forced 50% of the stimulus to be tax cuts which have been proven not to provide a stimulus effect. So actually the 800 billion was more like 400 billion spread out over 3 years. Sending more money to the already rich does nothing to create jobs. Robert R is right, not enough demand due to not enough spending. What is different from the last decade? People starting in the late 90s began a process of refinancing their homes, pulling out money and spending it. This probably accounted for close to 20% of spending in the economy. Consumers cannot do that anymore because their home values are going down and not up. As such, the economy is missing that stimulus from refinancing. This will not be made up in any way. The GOP will do everything they can to starve the economy and suppress growth. They talk jobs but do everything they can to kill jobs, not by accident as part of their political plan to win the presidency in 2012. Anyone who does not think so is just fooling themselves. In May we lost 20% of public sector jobs because of the GOP govs. cutting budgets and firing teachers, firemen and police. All part of a well orchestrated plan.
Thank you for your thoughts.
"that's the secret password that we use down at the club"
"create some certainty, some conditions for people to invest, to grow, to have some confidence " , absolute 100 % horse shit , the GD Republican's nonsensical bullshit repeated over and over and frigging over again , ignoring the obvious which is what Reich said , until the 90 have disposable income and are recovering or rescued there will be no demand and no demand means existing businesses are dead = no jobs and no new business starting up = no jobs , why the hell would anyone start up a business if there is no demand for what they want to sell or for their service because potential costumers are broke ? The stimulus did work but was too small as many said it was , it's petered out , the bulk of the stimulus should have gone to the middle class and lower income , that $ would have got straight back into the economy and got things moving again pronto, a steady stream up , not an occasional drip down . The stimulus was a one shot deal , Obama gambled and was too conservative . Knock Krugman if you want to but he was right and I believe Robert Reich predicted the same thing .
"The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all."
The taxpayer got bugger all while the banksters and Wall Street shysters got million dollar raises. This senator is saying more tax cuts for the rich paid for by the unemployed and diminished middle class. (Class warfare) Throw these wankers out on their ass. Obama is not the one calling the shots or printing billions of USD 24/7. There are greater forces at play plotting to crash the USA and its fiat currency. (One World Government) How many of the politicians have been promised new jobs by the banksters.
If Riech is right and 70% of the economy is consumerism, then its already game over. Wages have not kept up with inflation and other costs have risen. Wait till gasoline is $8/gal. Citizens need to go into survival mode, stock up food, seeds, ammo etc. network and buy physical silver and gold cause the US buck is fuck'd.
TARP was one thing, passed under Stupor Mundi, and the stimulus was another, passed under Obama.
Don't try to confuse the issue with half-truths and gorilla dust.
All this money printing without increasing the interest rate is devaluing the USA fiat currency. Meanwhile gasoline prices rise against the devalued dollar, as an example. Creating more debt only enslaves nations and empowers the bankster cartel. Take a look at what banksters are doing to Greece and Ireland. USA you are next.
of an honest discussion did we get ? I mean, how difficult is it to see that tax cuts don't work and a journalist should not let Repukes get away with it forever as they have. The stimulus did work. Look at a before and after picture and what is happening again with no stimulus. Any idiot should be able to see and these two journalists I'm sure are not that stupid. So once again the media is in cahoots with the Republicans. And the Repukes primary goal is to hamstring the economy and blame it on the Dems. The voting public has been brainwashed and close to 50 percent will believe the Repukes come election time so once again it will be a close thing.
This is the coup de gra the repukes have pulled over the last 30 years. They have eliminated a real journalistic press, and replaced it with millionaires from the "club."
Anybody with 2 critical thinking I.Q. points to rub together, knows the republicans are lying fascist POS, whose policies are laughably stupid and disastrous for the country.
But when you reduce everything in your corporate news cycle to unchallenged talking points, the dims bulbs with no critical thinking skills will lap it up.
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
The Republicans continue to insist for tax breaks for the rich, hands off the corporations and Wall Street thieves, and eventually the good times will drip down to us poor slobs on the bottom. The mainstream media, owned by the corporate cabal echos and inflates the falsehood that if we play along, we too can have the American Dream
They are still following the Reagan playbook of trickle-down economics. It was a lie then and now. The only thing that's trickling down is how much they are pissing on the middle class and the poor.
Democratic Party progressive, Vietnam veteran and proud Union member for 41 years
Which is what makes the meme of the liberal media ridiculous. The entire premise of the discussion starts with the right wing opinion. Not just about this but about almost every topic. Our media is seriously tilted to the right and anyone with just a shred of awareness can figure it out.
So basically the republican plan is to stand in the way and step on America's tail so the economy will keep getting worse, and in their minds, they can win the next election. Then I guess they'll finish us off in the next round of disasterous republican rule.
I might have been for stimulus if it was used to help change us back into exporters, but it wasn't. As long as we remain a consumer driven market, stimulus simply won't work because the moment you take it away the economy is going to fall again. Today, a year from now, 5 years from now, it doesn't matter until we start becoming exporters and creditors again. Nothing new here, this point has been brought up countless times but none in DC are getting it.
Goodnight, Frau Blücher
heck is Karl and what are his creds?
Oops.. read the transcript ...he is a paid republican troll pundit!
I haven't liked Christiane Amanpour since her interview with President Mugabe of Zimbabwe.
http://www.youtube.com/watch?v=svXCf6W_Kfo
http://www.youtube.com/watch?v=SXDaRrUz_lU
The president, who is in his 80s, tried to infuse some facts into the procedure, but Christiane Amanpour would haven none of it.
He objected that there are economic sanctions against Zimbabwe, but she make little wavey movements with her hands, and stated "Oh we know there are no economic sanctions against Zimbabwe."
This is the official US/UK/MDC line, and it is a blatant lie. The reason they have to lie, is because their economic sanctions are extremely unpopulatar with the Zimbabwean electorate, and any party that is clearly to blame for wilfully creating misery for the Zimbabwean people cannot rely on their vote.
In case you hadn't noticed, despite their lies, Zimbabwe is a *democracy*, with a parliament, elected MPs, elections every 5 years, a virulent opposition press and a judiciary that frequently finds against the government.
The economic sanctions that Amanpour *insisted* didn't exist, are a matter of record. I wonder if they have computers over at CNN. If they do, they can go to a ZANU-PF site called Google.com, type in: zimbabwe democracy economic recovery act govtrack, which will lead them to the bill itself. The economic sanctions are in Section 4 C (Multilateral Financing Restriction) and 3 (Definitinions, which mentions the 9 banks that are explicitly mentioned in the bill).
http://www.govtrack.us/congress/billtext.xpd?...
Throughout the 'interview', she employed all kinds of tricks to not allow President Mugabe to respond to the MDC talking points she hurled at him.
I was thinking to myself - is this the Christiane Amanpour who received all these rewards and accolades, and is supposed to be this super duper reporter or now interviewer?
In his article "Genocide In Libya?", Keith Harmon Snow notices:
"When Muammar Gaddafi met with ABC News correspondent Christiane Amanpour for an interview in Tripoli February 28, 2011, someone should have warned Gaddafi that Amanpour is more a US State Department agent than a journalist."
http://www.consciousbeingalliance.com/2011/03...
And she is - she apparently wants to follow in the footsteps of Judith Miller. Of course she has been married to Jamie Rubin for years now.
Anyway, here she is doing the same to Paul Krugman.
2 truths about life:
Facts and logic have no effect on those whose paychecks depends on them not understanding a problem.
Misinformed people rarely change their views when presented with the facts.
Reich has correctly identified both the problem and solution. We're in a balance sheet recession and we need a government-as-last-resort jobs program. History is repeating itself and apparently we've been dumbed down too much to realize it. Tax the rich, give jobs to the unemployed to fix our infrastructure. It worked before and it'll work again.
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