1 day ago
Yes, unemployment is rising, but that doesn’t mean the stimulus is a failure. It wasn’t designed to stop job loss altogether. Rather, it was designed as a backstop. Don’t ask what unemployment is now, ask what it would have been without the stimulus (FYI, most economists estimate it’s boosted GDP ~3%)
The interim budget avoided state worker layoffs and office closures. It also delayed some tough financial decisions in a state facing a $3 billion shortfall while struggling with the nation's highest unemployment rate, a shrinking auto industry, a high home foreclosure rate and an economy that soured long before the national recession.
With the stopgap signed by Democratic Gov. Jennifer Granholm, lawmakers have 30 days to put a permanent budget in place. The interim budget was adopted less than two hours into Michigan's second partial government shutdown in three fiscal years — implemented after lawmakers failed to agree on a permanent budget before midnight Wednesday. Michigan's 2007 shutdown lasted four hours.
FOR years now, many businesses and individuals in the United States have been relying on the power of government, rather than competition in the marketplace, to increase their wealth...Lately the surviving major banks have reported brisk profits, yet in large part this reflects astute politicking and lobbying rather than commercial skill. Much of the competition was cleaned out by bank failures and consolidation, so giants like Goldman Sachs and JPMorgan had an easier time getting back to profits. The Federal Reserve has been lending to banks at near-zero interest rates while paying higher interest on the reserves the banks hold at the Fed....
...finance and health care are two separate issues, of course, but in both cases we’re making the common mistake of digging in durable political protections for special interest groups. One disturbing portent came over the summer when it was reported that the Obama administration had promised deals to doctors and to pharmaceutical companies under the condition that they publicly support health care reform.