According to The Washington Post, this was the reaction of House leaders to President Obama's proposal to use tax credits to expand employment:

The administration also wants to put an additional $100 billion toward an immediate jobs bill. One of the most significant ideas would award tax credits worth as much as $5,000 per new hire to employers that expand their payrolls this year. By the administration's calculations, the tax credit would create 600,000 jobs at a cost to the government of about $33 billion.

That is my reaction as well.  If the Federal government could administer a problem this intricate, I doubt we would be in the shape we are in.  We are over two years into these discussions of stimulus and bailouts, and it is disappointing to continue to see these gimmicks being discussed.  What are we going to have next, "Cash for Coworkers?"  The basic lesson does not seem to have sunk in -- when you are relatively poor, you must be more careful with your money, not less.  You should be spending your money only on what you need and not spending it on what you don't.

Reports of strong growth in the fourth quarter of 2009 were a welcome addition to the positive growth in the prior quarter, but I remain concerned about the sustainability of that growth.  The recession took down the financially weakest firms and weakened the rest.  Without robust growth in the rest of the economy, we will see the financially weakest of the remaining firms contract as well.  My home institution of Dartmouth is a case in point. 

For those not following the local news, the College has tasked itself with trimming $100 million from its annual expenditures over a two-year window.  The number comes from the simple arithmetic of having lost a billion dollars of endowment (which, at a 5% spending rate, is $50 million) and from making a prudent decision to reduce its spending rate down by 2 percentage points to about 5% (creating the other $50 million, when applied to the remining $2.5 billion).  The College's president has stated, correctly, that this cannot happen without reductions in staffing. 

At the Economix blog on Thursday, Catherine Rampell posted a must-read analysis of the composition of the unemployed population.  But I think her conclusion is too pessimistic.  She writes:

Whatever the underlying cause, the result is disconcerting: compared with previous recessions, many more of the employment gains in this recovery will have to come from new jobs.

That is much easier said than done.

Workers whose entire occupations — not just the previous payroll positions they held — are disappearing (think: auto workers) will need to start over and find a new career path. But the new skills they will need take a long time to acquire.

Even if the employment gains in this recovery will have to come from new jobs, it is not necessarily the workers whose entire occupations are disappearing that will have to fill the new jobs in emerging fields. 

Donald Marron calls it "sobering," and James Pethokoukis gives nine reasons why it is "bad news" for Democrats.  Mark Thoma discusses the story beneath the story, which is that the decline in labor force participation kept the unemployment rate from rising despite the loss in jobs.  Menzie Chinn also discusses some subtle aspects of the report.

The Free Exchange blog at The Economist posted yesterday about "the stimulus that should have been."  The complaint -- too little infrastructure spending:

It's even more frustrating that this is so when one considers that substantial infrastructure investments will be necessary in any case, as stimulus or not. And it's outright maddening when you recall that massive economic slack and falling resource prices, thanks to the recession, would allow a given dollar of infrastructure spending to go a long way indeed.

But there was felt to be a limit to which money could be allocated to the infrastructure cause, based on shovel-readiness; if too few projects could take advantage of the available funding while the economy was still weak, then that funding would make for poor stimulus and could be better used elsewhere.

There is no use crying about it now.  After all, it's not like anyone proposed serious alternatives to firing money out of a cannon while blindfolded (a.k.a. timely, targeted, and temporary) as a way to stimulate economic activity.  Two years ago, where were the people proposing a better way to deal with downturns or a budget that plans for the future by taking such a long-term view of infrastructure investment?

So what should our elected officials do about it today? 

Floyd Norris had an interesting article in yesterday's New York Times about the state of the auto industry.  He notes that car buyers in general are coming back and, as he shows in the second graph, there's been a sharp uptick in consumer purchases.

But I'm not one of these buyers, and am not going to be for quite some time in spite of the fact that my current car is almost seven years old and that I've never had a vehicle this long before.  The reason?  Somehow the experience of buying a new car has become even worse than it was before the economy in general and the auto industry in particular tanked and it's simply not worth my time or frustration.

So I'm voting with my feet...and wallet.

It was good that Stan reserved the right to change his mind after the news this morning.  From the BLS, we learn that the forecasters had it right and the employment picture is not pretty -- another 663,000 net jobs lost, a jump in the unemployment rate from 8.1 to 8.5 percent, an employment-to-population ratio now below 60 percent at 59.9 percent, and the most comprehensive unemployment measure (U-6) now above 15 percent at 15.6 percent.  A President can have many successes, but if the events that still seem beyond his control are this bad, then it is very hard for those successes to build much momentum.

What's this world coming to?  First the editorial page at The New York Times, and now a blog at The New Republic.  I am largely in agreement with this post by John Judis:

There are plenty of grounds on which to criticize Obama’s economic programs, and I certainly haven’t hesitated to do so, but as far as I can tell, his performance at the G-20 has been flawless. Obama and Treasury Secretary Tim Geithner are absolutely right in pushing for the other G-20 countries, and particularly Germany and China, to increase their stimulus programs. It’s not a question of rescuing the “assholes” here, but of a global economy that is woefully lacking in the private demand that could spark a recovery. The only way to stimulate the demand at this point is through public expenditures, which means running very large deficits.  

There were two interesting pieces in The New York Times today about bankruptcy proceedings.  It was nice to see this sound advice via Andrew Ross Sorkin's Dealbook:

“If I’m a bondholder, the best forum for me is in front of a judge,” said Daniel Alpert, a founding managing director of Westwood Capital, an investment bank. “Let’s face it: the biggest problem at G.M. is still its cost basis, and that’s chiefly labor,” he added, suggesting a judge would look at the situation dispassionately.

So far, bondholders have been offered 8 cents on the dollar in cash, 16 cents on the dollar in new, unsecured debt, and a 90 percent stake in G.M. G.M.’s bonds closed Monday at 16 cents on the dollar. Hoping to apply some public pressure to the bondholders, Senator Carl Levin, Democrat of Michigan, said Monday that if G.M.’s bondholders “refuse to work out a deal, they will likely end up empty-handed.” (That is not exactly true.)

I am on a reading binge of late, soaking up American history from new (to me) perspectives.  Here's one I found while reading The Irony of American History by Reinhold Niebuhr (1952).  It is from Thomas H. Huxley's American Addresses (1877):

... To an Englishman landing upon your shores for the first time, travelling for hundreds of miles through strings of great and well-ordered cities, seeing your enormous actual, and almost infinite potential, wealth in all commodities, and in the energy and ability to turn wealth to account, there is something sublime in the vista of the future. 

Do not suppose that I am pandering to what is commonly understood by national pride.  I cannot say that I am in the slightest degree impressed by your bigness, or your material resources, as such.  Size is not grandeur, and territory does not make a nation.  The great issue, about which hangs a true sublimity, and hte terror of overhanging fate, is what are you going to do with all these things?  What is to be the ends to which these are to be the means?