Politicususa: Tim Pawlenty was on Fox News Sunday today, but instead of getting softballs tossed his way like Sarah Palin did last week, he was hammered for his economic plan. It looks like Pawlenty is not one of the FNC chosen ones.
At a time when Republicans are introducing non-economic economic plans on a regular basis, Pawlenty’s plan is so ridiculous that it is attracting ridicule from many conservatives, but what a difference a week makes on Fox News Sunday.
Seven days ago, Sarah Palin was on the show and given the fawning drooling treatment by Chris Wallace.
Greg Sargent (Washington Post): A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday.
The report, by Moody’s Analytics chief economist Mark Zandi, offers fresh ammunition to Democrats seeking block the Republican plan, which would terminate dozens of programs and slash federal appropriations by $61 billion over the next seven months.
….Zandi will of course be dismissed in some quarters because he has aggressively defended the stimulus. But this is the second outside analysis to reach this conclusion. Last week Goldman Sachs, in a confidential report to clients, concluded that House GOP budget cuts would be a drag on the economy and cut economic growth by roughly two percent of GDP.
Steve Benen (Washington Monthly): If federal policymakers want to make the economy worse, on purpose, all they have to do is approve the Republican agenda. The Financial Times has this report today:
“The Republican plan to slash government spending by $61bn in 2011 could reduce US economic growth by 1.5 to 2 percentage points in the second and third quarters of the year, a Goldman Sachs economist has warned……”
…Remember, this analysis comes a week after additional research found that the Republican spending cuts could lead to roughly 1 million job losses. (Asked about this, Speaker John Boehner replied last week, “So be it.”)
…We now have independent analyses showing that the Republican spending measure would push the economy back towards a recession and would deliberately make unemployment worse. If Democrats balk, the GOP will shut down the government.
Why this isn’t the lead story in every news outlet in the country remains unclear.
Update: I suppose the next question is why Republicans would pursue a plan they know would slow the economy. Among the possibilities … they have to hurt the country on purpose to undermine President Obama’s re-election chances … I’d love to understand the GOP’s motivations, but just as importantly, I’d love for the media to press the GOP on its motivations.
Financial Times: US retail sales surged last year at the strongest pace since 1999, as consumers shook off their fears of recession and started spending again amid tepid inflation … Commerce department figures on Friday showed that total sales in 2010 were up 6.8 per cent from 2009, marking the sharpest such increase in more than a decade.
…Retail sales are a big part of consumer spending, which accounts for the bulk of economic output in the US. Last year’s rise offers hope that consumers will be able to help fuel the economic recovery, in spite of stubbornly high unemployment.
“Clear and sustained evidence of renewed life in household spending since July indicates that the market pessimism this summer had very little lasting impact on consumer activity,” said Michael Woolfolk, strategist at BNY Mellon Global Markets. “Not only did US consumers hit the holiday shopping season in full stride this year, but the recent tax stimulus plan ensures that the momentum will carry over into 2011.”
Bloomberg: Sales at U.S. retailers rose in December for a sixth consecutive month, capping the biggest one-year gain in more than a decade … sales advanced 6.7 percent in 2010, the most since an 8.2 percent jump in 1999.
Analysts this month boosted 2011 forecasts for household spending, which accounts for 70 percent of the economy, as tax cuts and an improving job market put more money in Americans’ pockets. Ford Motor Co. and Dollar General Corp. are among companies planning to increase payrolls this year, pointing to gains in employment that may accelerate the recovery.
Consumers are “feeling that the worst is definitely behind them,” said David Semmens, a U.S. economist at Standard Chartered Bank in New York …. “The first quarter should definitely receive a boost in consumer spending from the fiscal stimulus and the improvement in hiring.”
….Ford said Jan. 10 it plans to hire more than 7,000 workers in the next two years … the Dearborn, Michigan-based company will hire 4,000 factory workers and 750 engineers this year and add 2,500 hourly workers next year… Other companies are boosting their payrolls. Dollar General, the biggest of the U.S. dollar discount stores, said Jan. 3 it plans to add 6,000 jobs as it opens 625 more stores in fiscal 2011.
President Barack Obama and Vice President Joe Biden arrive to deliver remarks on financial reform on in the Diplomatic Reception Room on January 21, 2010 in Washington, DC. Obama announced measures to narrow the size and scope of banks and their investment activities.
President Barack Obama speaks about financial reform after his meeting with Presidential Economic Recovery Advisory Board Chair Paul Volcker at the White House in Washington January 21, 2010.
President Obama rolled out a new set of proposals Thursday to “protect American taxpayers and the American economy from future crises”.
“We simply cannot accept a system in which hedge funds or private-equity funds inside banks can place huge risky bets that are subsidized by taxpayers and could pose a conflict of interest,” he said.
“My message to members of Congress of both parties is we need to get this done. My message to leaders of the financial industry is to work with us,” Obama continued: “If these folks want a fight, it’s a fight I’m ready to have.”