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Bailout plan statement

Up today at EPI with two colleagues.
I think there are better options out there for a bailout, but the failure today is not something to celebrate. A better package would include more liquidity infusion in exchange for equity in bailed-out firms; but options are limited given the political environment and the need to do something quickly…

Bailout plan must help the middle class and grow the economy

Bailout plan must help the middle class and grow the economy
by Lawrence Mishel, Ross Eisenbrey, and John Irons
Congress is currently haggling over an agreement to bail out the financial markets. While a final agreement is still up in the air, we must not forget than inaction is not an option. Without action to shore up the banking system, financial markets may very well freeze up, stalling the overall economy. And without action to spur job creation and support working people, the labor market will freeze and fundamental economic weaknesses will continue.
Far from being an unforeseeable natural disaster, the current financial crisis is a predictable outgrowth of excessive risk-taking, regulatory failure, and lack of accountability in corporations and government. Unfortunately, we are now in a position of having to act to lower the risk of a global market meltdown.
The administration’s initial proposal to shore up the markets was offensive; it essentially asked for a $700 billion blank check for the Treasury secretary with no oversight, no review, and no transparency. Members of Congress this weekend hammered out a better version that includes taxpayer protections, transparency requirements, and government oversight, as well as provisions that will begin to provide assistance to homeowners. Far from ideal, it nevertheless could have been a step forward if Congress had enacted it.
More…

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Economists Favor Obama

New survey of economists…

Economists Favor Obama — Political Wire

Economists Favor Obama
A new poll of economists finds Sen. Barack Obama is overwhelmingly preferred over Sen. John McCain by a 66% to 28% margin.
The survey consisted of 523 economists who are both U.S. citizens and members of the American Economic Association.

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McCain 16 times: “Fundamentals of our economy are strong”

Exactly which of these fundamentals are “strong”?

When ‘fundamentals’ matter – First Read – msnbc.com

“Fundamentals of our economy are strong” was the key phrase. But it wasn’t new.
First Read searched through our database of the candidates’ speeches and found McCain had used the phrase at least 16 other times, between Jan. 1st and June 5th of this year.

It was a regular portion of his stump speech during the Republican primary, but there was about a three-month gap after June 5th — effectively when the general election began — when McCain did not use the now-maligned turn of phrase.
Then on Aug. 20th, McCain appeared on conservative Laura Ingraham’s radio show and made the claim yet again. The Obama campaign has since tried — futilely — to make it stick.
But on this rare day when the economy was in full focus, it seemed to break through.

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Tax Plans: Graphic

ChartJunk does a better chart of Obama vs. McCain tax policy. Be sure to click through for the chart.

chartjunk » Blog Archive » Tax Plans (that’s one for you, nineteen for me).

Tax Plans (that’s one for you, nineteen for me).
There’s a graph that Obama supporters are sending around, showing the differences between the Republican and Democrat tax cut proposals. It shows that Obama is not in fact planning to raise taxes – he’s planning to cut them for all but the very, very rich. I couldn’t help but notice though – the graph is still massively weighted towards the interests of the super-rich. For example, the bottom two-thirds of the population are given only a third of the space on the graph, while the top 0.1% of the population – one in a thousand people – gets almost 10%. What’s more, an “average tax cut” is then given, which seems to have been derived from taking a total of the nine income brackets shown and dividing it by nine. Journalists should really volunteer to take remedial arithmetic, you know. Once again, this ignores that one of the brackets represents one thousandth of the population.
So let’s make this a bit more accurate – let’s keep all the brackets, but draw it to scale.

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Corporate and High Income Tax Cuts and The Economy

Still on paternity leave, but I may be making some opening remarks at the event below…

Corporate and High Income Tax Cuts and The Economy

The Economics, History, and Public Debate of Supply-Side Policies
September 12, 2008, 12:00pm – 2:30pm
About This Event
Since the late 1970s and building through the era of Ronald Reagan, there has been an ongoing debate about the effectiveness of supply-side economics. Do tax cuts spur economic growth and pay for themselves with higher revenues on additional economic activity stimulated? This debate will be revived in the coming year as the incoming President and Congress will soon decide whether to renew of a variety of tax cuts adopted starting in 2001 and set to expire in 2010. Economists now have years of experience with this tax policy. What does the evidence show us? What has been the public debate about tax policy and supply-side and has it shifted in light of growing inequality and limited sharing of the benefits of economic growth?
The Economic Policy Institute and the Center for American Progress invite you to this event featuring prominent economists, writers and pollsters to discuss the impact and history of supply-side.
Papers by Professor Frankel, Michael Ettlinger, Vice-President for Economic Policy at the Center for American Progress and John Irons, Research and Policy Director at the Economic Policy Institute, will be also be released.
Panel 1: The Economics of Supply-Side
Featured Speakers:
Lawrence Summers, Charles W. Eliot University Professor, Harvard University; former Secretary of the Treasury and Chief Economist of the World Bank
Gene Sperling, Senior Fellow, Center for American Progress; former National Economic Advisor to the President and Director of the National Economic Council
Jeffrey Frankel, Harpel Professor of Capital Formation and Growth, Harvard University’s Kennedy School of Government and director of the program in International Finance and Macroeconomics at the National Bureau of Economic Research; former Member of the Council of Economic Advisors
Moderated by:
Sarah Rosen Wartell, Executive Vice President for Management, Center for American Progress
Panel 2:  The History and the Public’s View
Featured Speakers:
Jonathan Chait, Senior Editor, The New Republic, and author of The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics
Anna Greenberg, Senior Vice President, Greenberg Quinlan Rosner
Moderated by:
Christian Dorsey, Outreach Coordinator, Economic Policy Institute
A light lunch will be served at 11:30 a.m.

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