Hard to believe it’s been less than a month since our new President was sworn in. Oh well. So much for the post-partisan era. I actually drew this cartoon in response to Senator Gregg’s cold feet regarding his Commerce Secretary appointment…But there’s a lot more eyeball- rolling partisan childishness going on in Washington than that.

I’m not really sure what the academic basis for Congressional Republicans’ strategy is, but their clenched fist to the President’s outstretched hand (sorry, couldn’t resist) comes across not as principled conservatism (they lost those bragging rights decades ago) but more as half-baked, opportunistic power-play.
We have heard many calls to be wary of Japan’s “Lost Decade.” The reason for Japan’s failure to jump start its economy in the 1990s is that it was – too conservative. The government was fearful of public backlash at too much spending, so its economic actions were incremental and timid. And they failed to adequately orchestrate economic stimulus with the controversial – but crucial – bailing out of the banking system. So because the japanese public saw no results and became increasingly fearful and economically withdrawn, all the half measures and timidity actually compounded the problem.

Any extra money introduced into the economic system now, whether via government or private spending has to loosen the psychological tethers that are stopping the flow of commerce, as we learned with Japan. The boost of capital has to be overwhelmingly massive. We are doing the equivalent of attempting to start a cold engine, which as we all know requires additional fuel and a ton of juice from the battery to get the thing spinning. This is no time for Congressional Republicans to start playing at being pretend fiscal conservatives.
I can’t believe I’m saying this, but we can’t afford to stop the politicians from spending our money like drunken sailors right now. Our economy IS that messed up. And the decade ahead is riding on it.

Though after witnessing the whittling down of the stimulus bill to an arbitrarily, picked-out-of-thin-air threshold of “under $800 Billion” I think it may even be too late.

The second cartoon: NY State Union leaders have ruled out reopening their hard-fought wage contracts that contain guaranteed raises for union members through 2010. They were negotiated in ‘07 right before the recession shredded the NY State budget. The employers (AKA taxpayers) are hurting, but the Union leaders won’t budge. I understand their reluctance but the budget gap for the current fiscal year is bad. And it looks like a bed of roses compared to the projected gaps for the next few years. Unions should give back the raises…Something their tired and bedraggled compadres in the private sector are getting awfully used to.

I’m finding myself siding with Adam Smith on market forces this week. Although it was considered a bad thing that Americans weren’t saving this time last year, it is now, confusingly, considered a bad thing that they are socking money away in savings accounts, (y’know just in case…) It is in fact a self-defeating exercise when it comes to the economy. But:
Now all the banks that we’ve been bailing out are going to notice that they have some extra money to lend in the form of all these increased deposits, which are happening (drumroll…) all by themselves (without government intervention.) Perhaps we will soon see the primordial beginnings of a credit thaw, so that everyone who still has a job can start borrowing beyond their means and buying tons of crap they don’t need again!