DAVID SIROTA Executive Pay Packages: We Told You So My previous post looked at three new government reports that prove progressives were right in their criticism/predictions about the economy, and our Beltway Bailout artists were wrong — wildly wrong. But let me now add a fourth "we told you so" example to the pile — this one arguably the most frustrating of all. Rate Cut Towards Zero Expected news.bbc.co.uk — U.S. interest rate-setters, led by Federal Reserve chairman Ben Bernanke, are expected to cut rates from the current level of 1 percent. They are expected to lower it to 0.5 percent or even 0.25 percent. As they run out of room for further cuts, the policymakers may give details of what other tools they plan to use. Other possible measures include buying debt backed by home loans, in the hope of halting the dramatic decline in the housing market. It was problems with mortgage-backed debt that set off the problems in the U.S. in the first place, but the Federal Reserve may decide that increasing demand for it could help to stimulate the economy. Industrial Output Falls 0.6% marketwatch.com — The output of the nation's factories, mines and utilities fell 0.6% in November on broad-based weakness across manufacturing industries, the Federal Reserve reported. Output fell in all the major manufacturing sectors — autos, computers, machinery and metals. With the recession now a year old and worsening, industrial output has fallen 5.5% in the past year, while factory output is down 7.3% compared with November 2007, the steepest year-over-year decline since 1980. "The manufacturing sector is flat on its back," wrote Joel Naroff, president of Naroff Economic Advisers. Factory output is on track to fall nearly 10% at an annual rate during the quarter, the weakest since the early 1980s, said Aaron Smith, an economist for Moody's Economy. com. Bankruptcy Filings up 30% money.cnn.com — Bankruptcy filings rose 30 percent during the government's 2008 fiscal year, which ended Sept. 30, according to figures released by the Administrative Office of the U.S. Courts. Total bankruptcy filings increased by 241,724 cases, or 30 percent, to 1.04 million in the 12 months between Oct. 1, 2007, and Sept. 30, 2008. For the three months ended Sept. 30, total bankruptcies rose nearly 34 percent to 292,291, up from 218,909 in the same period last year. Fiscal fourth-quarter filings were up 60 percent from 182,973 in the previous quarter. Non-business filings totaled just over 1 million for the year, up 30 percent from the 775,344 non-business filings in fiscal 2007. Business filings rose 49 percent to 38,651, up from 25,925 business filings in the previous 12-month period. SEC Ignored Fraud Warnings washingtonpost.com — The Securities and Exchange Commission learned about what it describes as one of the largest securities frauds in history when Bernard L. Madoff volunteered his confession, raising questions about the agency's ability to police the financial marketplace. The SEC had the authority to investigate Madoff's investment business, which managed billions of dollars for wealthy investors and philanthropies. Financial analysts raised concerns about Madoff's practices repeatedly over the past decade, including a 1999 letter to the SEC that accused Madoff of running a Ponzi scheme. But the agency did not conduct even a routine examination of the investment business until last week. State Jobless Funds Drying Up iht.com — With unemployment claims reaching their highest levels in decades, states are running out of money to pay benefits, and some are turning to the federal government for loans or increasing taxes on businesses to make the payments. Thirty states are at risk of having the funds that pay out unemployment benefits become insolvent over the next few months, according to the National Association of State Workforce Agencies. Funds in two states, Indiana and Michigan, have already dried up, and both states are borrowing from the federal government to make payments to the unemployed. Bailout Payout Tops $8 Trillion politico.com — As the holiday season commences, it’s worth taking stock of the last gift that President George W. Bush and the 110th Congress have left for U.S. taxpayers. It’s a package of about $8.7 trillion dollars’ worth of potential taxpayer commitments for loans, guarantees and other bailout goodies for businesses and distressed homeowners. That amounts to more government aid and assistance than nine other historic bailouts and big government outlays combined. The New Deal, for instance, cost an estimated $32 billion in its day, which would be about $500 billion in today’s dollars. The Marshall Plan cost about $12.7 billion, which is the equivalent of a paltry $115.3 billion. The Louisiana Purchase? The French got $15 million, which would be worth about $217 billion today. Iraqis Doubt U.S. Will Withdraw mcclatchydc.com — The deadlines sound clear enough in the security agreement: U.S. combat troops must be out of Iraqi urban areas by June, and all Americans should withdraw from the country by Dec. 31, 2011. However, those deadlines have appeared anything but firm to Iraqis over the past week. Iraqi government spokesman Ali al Dabbagh suggested that Americans might be needed in the country for another 10 years. And U.S. Gen. Ray Odierno, the top military commander in Iraq, said Saturday that American forces might remain in Iraqi cities after June, despite the deadline in the security agreement. Tots Face Toy Deficit cnn.com — The Marines have been making children's Christmas dreams come true for nearly 60 years, but the corps may be seeing fewer smiles this year. With demand up due to the poor economy and toy donations down, Toys for Tots, the Marine Corps' program that distributes Christmas toys to children in need, is facing one of its toughest years, according to Bill Grein, the Toys for Tots Foundation vice president. Grein said the program last year distributed approximately 16.6 million toys and books, but this year he doesn't think they will be able to reach that number.   PAUL KRUGMAN When the World is in Crisis, the Rules Don't Apply tpmcafe.talkingpointsmemo.com — Right now the world economy is in a nosedive, and understanding "depression economics" — the weird world you get into when even a zero interest rate isn't low enough, and a messed-up financial system is dragging down the real economy — is essential if we're going to avoid the worst. DEAN BAKER Let's Spend and Spend, but Avoid Bad Spending tpmcafe.talkingpointsmemo.com — Of course, we can find useful forms of spending and this is the great opportunity offered by the crisis. However, it is also important to avoid bad spending — forms of spending that are actually harmful. At the top of this list (after unnecessary wars) is spending that could prevent the housing bubble from deflating or possibly even re-inflate the bubble. ROBERT B. REICH The Logic of Keynes in Today's World robertreich.blogspot.com — Traditional Keynesianism is based on two highly questionable assumptions in today's world, and the underlying logic of Keyenes leads us toward something bigger and more permanent than mere stimulus packages. ARIANNA HUFFINGTON` Will The Madoff Debacle Finally End The "Who Could Have Known?" Era? huffingtonpost.com — When historians look for a name that sums up the Bush II years, they could do worse than calling them The "Who Could Have Known?" Era. MARI COCO Crippling the Auto Union is Just a Warm-Up truthdig.com — Understand that the conservative assault on the UAW is just a warm-up act. The main event will come after Barack Obama is sworn in as president and Democrats seek to pass a measure that would make it easier for workers to organize unions — the Employee Free Choice Act. EUGENE ROBINSON Lemmings on Wheels washingtonpost.com — Despite the popular belief, lemmings don't really hurl themselves off cliffs to reduce their numbers. That sort of behavior is seen only among Republicans in the Senate, who gave us a demonstration when they torpedoed legislation to bail out the auto industry. Even lemmings must be shaking their heads in dismay. JEREMY BRECHER, TIM COSTELLO AND BRENDAN SMITH How the American Health Care System Got That Way truthout.org — The American health care system is unique because, for most of us, it is tied to our jobs rather than to our government. For many Americans, the system seems natural, but few know that it did not originate as a well-thought-out plan to provide for Americans' health. AMY TRAUB The Bush Legacy drummajorinstitute.org — The Florida recount... the invasion of Iraq... No Child Left Behind... the Bush tax cuts... the falling number of consumer safety inspectors... failed Social Security privatization schemes... the economic crash... George W. Bush has left quite a mark as president.   BILL SCHER Progressive Breakfast: Econ Recovery Number Dropping? On today's menu: Pelosi serves up a smaller stimulus, planets align for the auto industry rescue, Obama announces (most of) his "Green Team," Salazar to Interior, Duncan to Education, the Fed meets amid the whispers of "balance sheet," and the Madoff debacle spreads. RICK PERLSTEIN The Vision Thing If you've been enjoying David Sirota's and Bob Borosage's outstanding essays on the foolishness of the mainstream media labeling everything desirable "centrist" and everything horribl, check out this debate between historians Gil Troy and Alan Lichtman. Jay Carney Time magazine's Jay Carney is set to become Joe Biden's communications director. I don't follow Carney's word closely, but I knew I had written something about him...somewhere...that was awfully critical. ISAIAH J. POOLE City Recovery Is National Recovery The incoming Obama administration has promised to bring cities out of the federal policy wilderness to which they have been exiled for the past eight years. And, given the scale of the economic crisis facing the country, it must, for the sake of the country. more from our bloggers >> When given a choice about how government should address the numerous economic difficulties facing today's consumer, Americans overwhelmingly — by 84% to 13% — prefer that the government focus on improving overall economic conditions and the jobs situation in the United States as opposed to taking steps to distribute wealth more evenly among Americans. ... [F]ree-market advocates can take considerable solace in Americans' overwhelming belief that the government should not focus on redistributing income and wealth, but on improving the overall economy. Conservatives often focus on the wrong questions, and this poll, which plays into the caricature of "tax-and-spend" liberalism and the specter of government taking money from hard-working people and giving it to people who are less deserving, is a prime example. Ask people about the direction that progressives actually embrace as opposed to the stereotype presented by conservatives, and they will side with progressives. For example, a February 2008 Associated Press/Ipsos poll found that 70 percent of respondents thought that "increasing spending on domestic programs like health care, education, and housing" would help fix the country's economic problems. A January 2008 Fortune Magazine poll found that 67 percent would support "increasing government spending on things like public-works projects to help create jobs." Bush administration economic policies, if anything, have fostered a redistribution of wealth upward, creating an unprecedented economic gap between the very wealthy and the rest of the country. Progressives believe this is wrong, and most of the country agrees. more pro vs con >>