…versus reality:

…it should be clear that the Fed causing a housing bubble in order to bring about “soaring household spending” was Krugman’s optimal situation, whether or not he thought it was doable at the time. Given the consequences of the housing bubble that did ultimately happen, that alone should be enough cause for the public to stop listening to this fellow.

But…but…! He has a Nobel Prize! And he writes for the New York Times! The New. York. Times.

Not listen to Paul Krugman? Why, it would be madness!

Next, they’re going to tell me I should pay no attention to Maureen Dowd, or Frank Rich.

[Via Joe Katzman]

..and the devastating response:

It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall.

Uh-oh. Why are the verbs now in the future tense? And what happened to the specific and oft-repeated prediction of 3.5 million jobs by the end of next year? Those are important language changes, along with the implicit admission that the stimulus has not yet “ramped up.”

This did not have to be a two-year program. Congress could have front-loaded the stimulus had they instead given the cash directly to the American people, as they did on a bipartisan basis in early 2008. We would have saved much of it, paying off our mortgages, student loans, and credit cards (which would not be a bad thing). We would have spent the rest much more quickly than the federal and state government bureaucracies now stumbling through their usual corrupt, slow and inefficient processes. Instead the President handed the money and program design over to a Congress of his own party, who saw it as a big honey pot rather than as an exercise in macroeconomic fiscal policy. The President’s primary macroeconomic policy mistake was allowing Congress to pervert a rapid Keynesian stimulus into a slow-spending interest-based binge.

The President is correct that the stimulus will increase economic growth, mostly next year. That is too late, and later than it could have been had they done it right.

I wonder who actually wrote the thing?

[Mid-afternoon update]

Stephen Spruiell takes it apart as well:

The swift and aggressive action we took in those first few months has helped pull our financial system and our economy back from the brink. We took steps to restart lending to families and businesses, stabilize our major financial institutions, and help homeowners stay in their homes and pay their mortgages.

Let’s examine that phrase, “swift and aggressive action.” For Treasury Secretary, Obama rammed a tax cheat through the confirmation process by claiming he was the only man who could do the job. Secretary Geithner then proceeded to unveil a plan to save the banking system that inspired so little confidence, the Dow fell 300 points upon its announcement. Geithner’s Public-Private Investment Partnership to buy troubled assets from banks has failed to launch, primarily because the Financial Accounting Standards Board loosened mark-to-market accounting rules, thus enabling banks to avoid write-downs on their toxic mortgage-backed securities. Now that banks can hold those assets without booking losses, they have little incentive to sell them at a discount to the P-PIP. With P-PIP looking increasingly like a dud, the adminitration’s only real plan to deal with crippled banks is to cross its fingers and hope the economy grows fast enough to enable them to recover on their own.

Nor has Obama’s Making Home Affordable plan been any great success, as Joe Nocera explained in Friday’s NYT (best summed up by the phrase “drop in the bucket”). As NRO’s editors pointed out when the plan was announced, “The relatively small group of in-deep but creditworthy homeowners who could be helped by Obama’s plan already are positioned to refinance at better rates, or to move from variable-rate loans to low-drama fixed-rate mortgages, without a $475 billion government intervention.” That’s $75 billion for the program and $400 billion to shore up Fannie and Freddie, the real beneficiaries of the deal.

On the other hand, Obama did move swiftly and aggressively to sign the Lilly Ledbetter act, exposing companies to spurious equal-pay lawsuits; to roll back Clinton-era welfare reforms; to use TARP funds to shield the UAW from the full fallout of the GM and Chrysler bankruptcies, and so on. Maybe that’s what he meant.

It’s a barrel chock full of fish to shoot.

[Update late afternoon]

The war against the producers.

… in his attempt to take over a third of the economy. If that be treason, make the most of it. Henry Waxman is behaving like a fascist.

And there’s a good reason for that.

[Update a few minutes later]

The unraveling begins:

The Obama White House and their congressional allies have built expectations among their core supporters that this is the year to pass a government-takeover of American health care. With expectations set so high, most elected Democrats have concluded they have no choice but to set out on a forced march to try to do exactly that — despite unified Republican opposition. But a partisan bill means that Democrats own all of the messy and unattractive details too. The debate is no longer about vague concepts of “coverage” and “cost-control” but who pays and who is forced out of their job-based plans. The more people learn about these details, the less they will like them —which is why the Democratic committee chairmen are working desperately to shorten the time between a full public airing and a vote. They’re hoping there won’t be enough time for public opposition to put a halt to the proceedings.

Just keep giving them more rope, please, and prepare the gibbet for 2010.

[Update a couple minutes later]

And is the Sotomayor nomination in trouble with the public?

Rasmussen’s June 29–30 survey found that support for her confirmation has fallen 8 points, to 37%, while opposition has risen 10 points to 39%…

…Rasmussen also picked up a negative movement in her favorability ratings. In May, a few more voters checked the “very favorable” box (20%) than the “very unfavorable” one (17%). By late June, she was upside-down on this important measure, with only 14% very favorably disposed toward her and 24% very unfavorably disposed.

Another issue on which they may have the votes, but will pay for them November next year.

[Late morning update]

More and more people are becoming traitors to the state, it would seem:

The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 30% of the nation’s voters now Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-eight percent (38%) Strongly Disapprove giving Obama a Presidential Approval Index rating of –8. The President’s Approval Index rating has fallen six points since release of a disappointing jobs report last week (see trends)…

…Overall, 51% of voters say they at least somewhat approve of the President’s performance so far. Forty-eight percent (48%) now disapprove.

I think those numbers are going to get worse before they get better. If they get better. Let’s hope not.

Just keep reeling out the rope…

Wanted: honesty in the health-care debate.

President Barack Obama walked into the Oval Office with a veritable halo over his head. In the eyes of his backers, he could say or do no wrong because he had evidently descended directly from heaven to return celestial order to our fallen world. Oprah declared his tongue to be “dipped in the unvarnished truth.” Newsweek editor Evan Thomas averred that Obama “stands above the country and above the world as a sort of a God.”

But when it comes to health care reform, with every passing day, Obama seems less God and more demagogue, uttering not transcendental truths, but bald-faced lies. Here are the top five lies that His Awesomeness has told—the first two for no reason other than to get elected and the next three to sell socialized medicine to a wary nation.

Read the whole thing. Though it’s a little harsh. He’s sufficiently ignorant of economics and other matters that he may have persuaded himself to believe the nonsense.

…of the leftists.

My view of them is that they’re like locusts, or leeches. They find a prosperous area, like California. It is a natural environment in which they can thrive, because the economic conditions have been good for a while as a result of sensible economic policies, and the hosts have become vulnerable to takeover, because it’s been so long since the good policies were put in place that the natives themselves (and certainly the leftists) don’t understand why they’ve been doing so well. They run it into the ground with their insane voting patterns, and then, dissatisfied because they can’t plunder as much as they have in the past due to the suffering economy, move out, to other places like Washington, Nevada, etc., to wreck the next place.

But as Maggie Thatcher notably noted, at some point, you run out of other peoples’ money, either at a state, or national level. We’ll see if the Californians have finally caught on…

Gee, I could expand this into a PJM column.

[Update a few minutes later]

Mourning California.

“If it wasn’t for California, I wouldn’t be where I am today,” said Arizona of Westside 3, the popular sunbelt trio who recently benefited from the late state’s generous gift of fleeing taxpayers and businesses. As a tribute to their mentor, Arizona vowed the group would start spending money “like crack-addled hip hop stars.”

“California’s financial and musical legacy will never die,” said band mates Nevada and Oregon.

At the official funeral service at the LA Coliseum, a grief stricken Washington, who teamed with California on several hit software and wine projects, had to be physically restrained from climbing into the deceased’s gold plated casket.

Similar emotional outpourings were the rule of the day. Stories – apocryphal or not – of the late state’s bizarre self-destructive behavior and fondness for molesting children did little to dampen the the flood of tributes from fans who preferred to remember California as America’s Sweetheart.

From a humble beginning as a water-poor remote Spanish mission outpost, California proved to be a precocious and talented child performer. It struck gold with ‘Sutter’s Mill’ in 1849, earning accolades and attracting millions of crusty bearded prospectors. Black gold soon followed with ‘La Brea Tar Pits.’ Unlike many child acts, California made a smooth transition to adolescence, scoring a major hit with ‘Agriculture’ in 1891.

Even a frightening bout with tremors did not stop the flow of hits. The 1915 megasmash ‘Hollywood’ broke all records, as did the wartime favorite ‘Aerospace.’ More recently, California topped the charts with ‘Tourism,’ ‘High Tech,’ and ‘Coastal Pretension.’

For a time it seemed as if the superstar could do no wrong, but behind the glittering facade of Disneyland Manor troubling signs of mental instability began to emerge. The state developed a well publicized drug problem during filming of 1967’s ‘Summer of Love,’ and briefly dabbled in strange religious cults. Under the influence of spiritual guru Jerry Brown, it began wholesale experimentation in exotic spending programs, eventual resulting in a traumatic 1979 stay at the Prop 13 Rehab Center.

I know I miss California. The California of my youth. I grew up as a little kid wanting to move there from Michigan, and spent a happy quarter of a century there as an adult, but I have to think twice about moving back.

[Update late evening]

Why California is going down the tubes:

THESILKY1

Do you know for a fact, what will happen if you lay-off 100,000 State employees?

Here is an answer to your statement. Half the businesses in the private sector will fold, and the other half that remain open, will not be open for long.

tejouzi

How is laying off thousands of state workers going to help the economy? You want to help the economy, TELL THE PRIVATE SECTOR TO STOPPPPPPP RIPPING OFF THE STATE!!!!! AND WASTING MY TAX DOLLARS BY CHARGING THE STATE TWICE AS MUCH FOR THE SAME SERVICE!!!!! Go take a math class.

Yeah, I’d feel better as a Californian, knowing that these people are on the public payroll.