How Congress is harming the economy

February 5, 2009

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, is a senior fellow at the Hudson Institute and former chief economist at the U.S. Department of Labor. The views expressed are her own. –

At the very time that the Senate is debating whether to spend $800 billion or $900 billion to stimulate the economy, the government is considering other legislative and regulatory initiatives that would impede economic recovery.

Growing Protectionism

By inserting protectionist provisions that require some goods financed by the stimulus bill to be made in America, Congress is risking a trade war with important trading partners in Europe and Asia. A trade war would reduce exports, potentially destroying millions of American jobs.

Cutting Defense Spending

Although Congress is trying to revive the economy by expanding domestic spending, the Pentagon is reportedly facing budget cuts next year. But with President Obama promising to deploy more troops to Afghanistan, America needs more defense spending, not less.

America needs to purchase more weapons, ordnance, vehicles, and body armor so that our troops have the best equipment possible. Defense supplies are generally made in America, and production employs Americans with a wide range of skills.

If America increases regular forces by 100,000 and hires 100,000 more civilians to support them, these individuals would acquire useful skills when they leave the Defense Department for the private sector. Their presence would enable the Pentagon to bring home reserve and National Guard troops, some of whom have been deployed for over a year.

Individual Emissions Standards for States

Earlier this week auto companies revealed that sales had reached a 27-year low. Yet, under a new directive from President Obama, states such as California would be able to set their own emissions standards, which will be—you guessed it—stricter than federal law. This would complicate engineering and production, raise costs, and send the industry into an even greater decline.

Since California is America’s largest car market, companies would have to make lighter, more fuel-efficient cars that consumers might not want to purchase. Domestic companies would be particularly hard-hit because they make larger cars. It makes no sense for Congress to bail out Detroit with loans and give tax deductions for purchases of new cars and trucks, while at the same time decimating the market of the Big Three. More red ink for the auto industry, and more layoffs across America.

Employee Free Choice Act

This misnamed bill would change the law to allow workplaces to be unionized without secret ballots. A workplace could be unionized if a majority of workers sign an open card in favor of unionization — a process known as “card check,” exposing workers to union intimidation. This bill passed the House in the 110th Congress and will be soon brought up in this congressional session.

One of the bill’s House sponsors was House Committee on Education and Labor Chairman George Miller. In 2001, he and five colleagues wrote to the state arbitration board of Puebla, Mexico, saying, “we feel that the secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose.” If Mexicans deserve a secret ballot, so do Americans.

States where employees do not have to join a union in order to work have lower average unemployment rates than other states, so it would not be surprising if increased unionization would raise unemployment rates.

As well as protectionism, cuts in defense spending, unionization by intimidation, and arbitrary environmental standards, the economic stimulus bill would open the floodgates of deficit spending. The ensuing debt would burden Americans far into the future.

The Democrats, who control both the White House and Congress, should know better. No wonder consumers are scared, financial markets are tumbling, and unemployment continues to rise.

Diana Furchtgott-Roth can be reached at dfr@hudson.org. For previous columns, click here.

99 comments

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Good to see somebody’s actually thinking in this very serious situation….

I is time our leadership understand and address the real cause of this crisis… private sector debt! If a stimulus package does not address and begin to fix this it will fix nothing…

Posted by R. Johnson | Report as abusive

of course an opinion from the hudson institute founded by the RAND corp would want increased spending on the military and incase she didnt notice the last administration did nothing but deficit spend to the tune of over 5 to 6 trillion dollars.

Posted by gdub | Report as abusive

The critic to the protectionism is the only valid one. Increase WAR spending? right, that’s what we need, another war to make money (obviously only for the same reduced circle of people). There’s enough crazy people fighting over everything, deplying and hiring more americans for stupid wars? I don’t see as part of the solution but the problem PER SE. Now, it would be more cost-efficient in the long term to produce better cars, EVEN if people don’t like it at the beggining, they’ll get used to it and will be greatful, but no, Mrs. Diana would like to keep helping the car makers to produce the same contaminating cars that are killing our own planet, so they can keep making money, instead of using new technologies that already exist to help us save money, and also the planet. I wonder how leveraged she is in OIL and american car companies??? it must be a bug chunk of her stock to say the least. Do i need to say anything else?

Posted by Catherine | Report as abusive

geez Diana, bleach the hair, get more attitude, be the new Ann Coulter, maybe even get on the Rush show. yep, being a right wing naysayer, that’s the ticket.

Posted by nazdagg | Report as abusive

It is exciting to give opinion. there are many individual like to express opinions. The opinions come from intellectual investigation to deliver a proper opinion to prevent or deter or cure a crisis that is call a genius. I feel some disgrace to see that some of us making opinions without understand the core problem of this crisis. The crisis begun when Mr.Bush was taking cash to support the war and the bank was facing huge shortage of cash. So, Paulson thought if quickly he put some cash in the bank the bank will come in the right track but it was too late. By the time the economy was paralyzed. The voters of Bush should pay the consequences not the ordinary citizens.

Interesting point of view yet, I don’t worry about Obama’s policy. It can’t be worst than Bush’s one.
Americ will not accept a too tough protectionism, at least, I hope so.

Posted by Sarkozy François | Report as abusive

Well, it seems obvious this “expert” economist is a globalization junkie and gets payoffs from the US auto manufacturers.

1) Globalization already has shipped millions of US jobs overseas and what for – childrens toys that contain lead banned in the US, dodgy food products that kill our babies and pets.
2) The Big 3 car companies only have themselves to blame, they can make better engines they already do for Europe, e.g. the Lincoln MKZ, the equivalent car in Europe called the Monday now has a diesel engine that gets nearly 50 mpg. She should stop lying for these companies, if they can do it elsewhere they can do it here.

All in all she appears to be peddling the same junk that got the US into the current mess.

Posted by Lee Magee | Report as abusive

It is interesting that everybody talks about collateral expenditure and how this will help economy.

band aids do not work very well as we saw in 1928 depression. All the infusion of money and job creation did not help but what got us out of depression was major catastrophe like world war II. Now question is should we have another war to get us out of depression or maybe we could invade another Galaxie or planet to serve the same purpose. At least it will help the economy to a large extent or may be we could start a war on some barren land for the psychological point of view.

Now the question is will it help or not. At lest we should give it a chance at least it would not hurt.

Posted by vj | Report as abusive

Three things need to happen to get us out of this mess…
(1) Corporate capital investment has to be incented…the most efficient way to achieve this is to cut the corporate tax rate to about 22%..
(2) The consumer has to have confidence reinvigorated. Again, getting people back into shopping centers, buying new homes and new cars can best be accomplished by tax policy. A $15,000 immediate tax credit for the purchase of new homes will at least slow down the decline in housing prices. A $5,000 immediate tax credit for the purchase of new automobiles would salvage more jobs in the auto industry without just handing out cash to the unions and postponing the inevitable collapse of the industry.
(3) Capital has to start flowing again so we must find a way to incent banks to loan the money rather than attempting to repair their balance sheets…maybe the answer to this dilemma would be to let the banks that have acted so foolishly fail…new banks with fresh capital and healthy balance sheets would spring up like wheat in the summer!

Posted by lefty mclawhorn | Report as abusive

It is interestingto read these comments. Ms. Furchtgott-Roth brings up very good points which are proven basic economic factors this country has had for decades. The fact that we spend money on Defense is just that defending the country, which by the way includes jobs. The open union vote is so stupid that it is hard to believe anyone would think it isgood. Just look at the UAW and what they tried to do with the auto bail-out. they said “no we will not open the contracts in new negotiations.” That tells me they would rather put thousands of their workers out of a job rather than work in conjunction with everyone to mae things work. From where I stand a little of something is a lot better than a lot of nothing. To stimulate the economy quickly why doesn’t anyone suggest stopping the Federal income tax for 2 years. The money would be put back into thepockets of the American worker, they would spend it on goods and services, and the economy would move forward…Oh yea, then everyone would see just how much they pay in taxes and Congress would be help accountable…Nah, that won’t work.

Posted by Ed | Report as abusive

The author has strung together such a list of over-simplifications and misleading statements, that it is frightening to think that she was the head economist for the Department of Labor (under Bush, of course). This article is simply an echo of the discredited ideologies of the neocons, which I am coming to believe is a subterfuge for the destabilization that has unwound the world but created some winners who are all the paymasters of the Bush disaster.

Posted by Jonathan Cole | Report as abusive

Obviously it is the fault of unions who demand fair wages and benefits for their members. Clearly Wall Street and the US automakers are not at all at fault and need to be supported by the average American because now they hold toxic assets. This woman is a shill and a propagandist for the criminals who ruined the US.

Posted by JAN | Report as abusive

Employee Free Choice — It is just not fair that the unions have the chance to intimidate the workers without giving the company the same opportunity. That’s right buddy, you don’t work here anymore!

Posted by Neil Tevepaugh | Report as abusive

Diana get your facts straight on the defense budget cuts. There is no cut. The Pentagon budget is increasing, it is a matter of how much. Obama wants an 8% increase, joint chiefs suggested a 16%.

http://blog.wired.com/defense/2009/02/40 -billion-incr.html

Posted by dusty | Report as abusive

Ms. Furchtgott-Roth is basically repeating the neoconservative thesis that what we need is simply greater doses of the medicine that’s already made us sick.

She’s even shilling for throwing more milk and honey at Halliburton and Blackwater. So we’re supposed to recruit more troops, with each new soldier shadowed by someone getting paid five times as much to provide inedible food, dirty drinking water, and electrified showers? Take your broken ideology back to the drawing board, lady!

Posted by Art Marriott, Seattle | Report as abusive

This author is a liar. She will only be happy when the USA is a 3rd world country with no middle class, just a mass of poor willing to work for bread, and a thin layer of rich elites running the country. She undoubtedly also advocates cutting taxes for rich people…so they can show their patriotism and ship more jobs overseas.

Notice how she doesn’t bring up how China manipulates its currency rates to “dump” its cheap products on the USA. China uses protectionism, so does Japan, South Korea, and all of Europe.

The US had protectionist policies since its inception as a nation. Under Reagan, continued under Clinton and the Bushies, these policies were dismantled. Look where it has gotten us. An 8 trillion dollar trade deficit, destruction of manufacturing sector…now tax revenues are so low off this sucky Walmart/McDonalds service economy that there isn’t enough money for schools, roads, and bridges.

We need fair trade, there is no such thing as free trade. No one is going to declare a trade war with the US because they have more to lose than we do. Remember, we are already losing.

Posted by Marc | Report as abusive

the absence of any rational thinking in this column is a devastatingly clear example of the mentality that got us into this mess in the first place.

Posted by kent | Report as abusive

Everyone needs to slow down…there are surely some wild claims, the truth is no one knows. I think that if we look to the past, we can get an idea of what may happen by various responses. However I believe that just need to focus on one thing, and not throw money at everything to see what sticks, I think we need to fix the one thing that went wrong in the first place and that is housing. Fix the housing mess and everything evens out.

Posted by Debra Kerr | Report as abusive

Everything the government is doing is band aids and political garbage.

The problem we are facing is the same as in the 30′s; a lack of demand. The war got us out because it created demand for weapons and supplies. Try offering a huge tax refund for anyone who buys a house this year instead of wasting money on the corporations that got us into this mess and see what happens to demand.

Posted by Craig | Report as abusive

Is there any way we can get the unions and the reactionaries into the SAME party? You’d think there was some kind of law granting equal evil to political parties! Oh, I know! There is no legitimate purpose served by trade unionism that is not better served by birth control, so maybe they can both be against that!

By the way, Boss, I’ll be on strike in Bermuda for the next two weeks.

Posted by Kurve Ball | Report as abusive

So what you are suggesting is that to improve your
economy you need to kill more people. Brilliant.
Perhaps you could invade a few African countries
and start a conflict in South American. Israel could
probably start a few wars for you in the middle east
too. The problem with your economy is a lack of
innovation. This is clear you are trying to produce
goods which are produced better and more cheaply
in Asia. What you need to do is produce goods
which others are not producing, keep innovating
so that they lead the market, and they are desirable
because of innovation not because they are identical
to what is produced in Asia. Why are you afraid of unions?
Unions are just groups of people who seek change through
collective action. You’d all be working 80 hours a week, living
in sheds, and chained to the factor floor without the Union movement.
They are not evil that are just workers who act together to
seek better conditions. If we don’t protect the environment then
we’ll all be dead. Money has nothing to do with it. There is
no consumption if we are dead or dying from Mercury poisoning,
or drowning as the ocean’s rise upon the land. You are talking
a lot of nonsense. People don’t need money. People need food,
clean water, shelter, and a well-sustained environment, so that
they can live a reproduce. Money has no intrinsic value other
than as a firestarter.

Posted by luke | Report as abusive

Finally, a little common sense. However, point of concern 1, War does not produce any consumable goods or services which increase the efficiency of the economy. The consumption of war is non productive compared to consumption based on free market civilian consumer demand. Point 2, re different auto standards is totally valid. Point 3, regarding labor is also true. Organized labor is a root cause of the current economic problems. Unions restrict labor supply and wages grossly exceed their true free market value. It is a fools paradise which cannot be economically sustained. Lets also not forget that union seniority clauses promote incompetence instead of promoting worker productivity and efficiency. Dealt with a government union worker lately? Point made.

Posted by JJ | Report as abusive

I sure hope the protectionist clause stays in. We need to be using American made goods when we spend taxpayer money to purchase things to stimulate our economy. I would much rather use tax payer trillions to pay Americans to make something than any foreigner. America needs to cut it’s military spending drastically by bringing the empire home. With more than 700 military bases globally and 2.5 million serving globally I’d say we have spent a bit much on our military empire. That needs to come to an end now. America’s auto emissions laws should be uniform across the states. The auto manufactures should be allowed to fail and be replaced if they are doing so poorly. Let the market decide what kind of cars people want to drive. A workplace should not be allowed to be unionized by a vote of workers. If an employee doesn’t like the deal they made for employment then they should find a new job. If an employer provides a terrible workplace then don’t work there or take it to the judicial system. If that sleazy employer cannot find workers and is in violation of state labor law then he will not be in business very long. Let workers be united in their personal standards on their own. We already have plenty of regulation in place regarding the workplace. Perhaps some states just need to enforce it a bit more. The writer leaves one to believe that Democrats are less spendy than their Republican counterparts. Don’t be fooled. Both parties spend equally the same. One doesn’t make a move without the other. It’s all a big show to provide false legitimacy around election time and keep their interests in place. To build tax payer funded infrastructure with American made steel over foreign steel seems pretty smart to me. Call me a protectionist if you want but I think it makes good sense.

Posted by jason | Report as abusive

I agree with Ms. Kerr, chill. The way people rant and try to down grade another persons opinion is exactly why we are in the mess we are in right now. People close their ears to an idea that is different from their own. Not any one person is totally right or totally wrong in their comment. All of you have some very good points but each one by themselves is only a small part of what is happening right now. Some times it is better to listen, think, and then talk. You forget one thing, real people write these articles, and they have feeling just like you do, so state your opinion with out insults please.

Posted by Karen | Report as abusive

It’s sad to see so many people trying to excuse very poor decision making in our current White House team by saying “it’s better than Bush”. Making good leadership decisions is not about comparing your choices to someone else’s bad choices – it’s about making the RIGHT choices.

I don’t necessarily agree with Diana’s thoughts here but I DO agree that the current “stimulus” plan is huge government spending being marketed as a saving recovery plan and I DO agree it will do very little if anything to solve our economic problems.

“They spent money so we can too.” Yeah, that’s going to work.

How about giving some incentive to get people to let go of some of the $4 trillion sitting in the bank accounts of U.S. investors and businesses right now? If I don’t have a reason to invest – I’m not investing.

Posted by Kelly | Report as abusive

The author is being attacked by those who think that they know what is best for everyone else (just like most politicians). Those who are concerned about these issues must keep the pressure on the elected officials in Washington. Write, call, send e-mails. Tell them what YOU want. The reason the Senate is beginning to waver on the so-called stimulus bill is because they are hearing from the taxpayers. Keep up the pressure on all these issues.

Posted by Jack S | Report as abusive

I thought this was a satiric piece at first. But then about a third of the way through, i realized you were being serious.

Increase military spending? Increase by 100 thousand? then have a support team of another 100k? That’s your big plan to stimulate the economy?

And then complaining about more stringent emission standards? HEAVEN FORBID American car manufacturers have to actually spend time engineering lower emission, more fuel efficient vehicles (like the rest of the world is already doing). If this is not taken care of now, the issue will just resurface again in the future. This “don’t worry about it now, just push it till later” mentality is half the cause of the mess we now find ourselves in.

It never ceases to amaze me that all this “experts” pop out of the woodwork to give their opinions, when nothing they say puts them in the line of fire if things were to go sour due to their non researched opinions.

Apologies in advance if this sounded rude, it just boggles the mind to read over what was written and try to take it seriously.

Regards.

Posted by Sol | Report as abusive

The CBO has stated that the stimulus bill would do more harm than good over the next ten years. Home mortgage interest rates jumped significantly today, probably in anticipation of massive government borrowing. During President Carter’s reign, interest rates hit 20 percent. As for protectionism, it can be shown mathematically that countries engaged in free trade are mutual beneficiaries. Cuba and North Korea do not participate in free trade and they are economic basket cases. Respectfully, Albert

Posted by Dr. Albert Gortenbull | Report as abusive

AMEN, AMEN, to: gdub, Catherine, Nazdagg, Lee Magee, Jonathan Cole, Jan, dusty, Art Marriott, Matrc, Kent and Kurve Ball!!!

Oh dear! Protectionism destroys exporting jobs. How many American products are highly exported? Buy American creates domestic jobs, doesn’t it?
America needs to purchase more weapons, ordnance, vehicles, and body armor so that our troops have the best equipment possible. How about America needs to stop fighting wars half a globe away killing people who have never done us any harm? What’s the maxim? Live by the sword. . . .
Stricter emissions standards would complicate engineering and production, raise costs, and send the industry into an even greater decline. I doubt it, but even if so, how many lives would such standards save and how much of the earth’s degrading environment would be improved?
States where employees do not have to join a union in order to work have lower average unemployment rates than other states. Yeah, they also have lower per capita incomes, fewer services, the worst schools. . . .
Lady, why do you wear shoes on only the right foot?

Why are you namimg Congress in your article. This one is from the man himself- Barack!! He is the smartest man in the world and he was sent to save us so we must trust him and spend our way to prosperity. As long as we trust B.O. everything will be alright in the end. But right now it is a matter of trust. Hope…Change…Trust. Almost sounds Biblical doesn’t it? YES WE CAN!!

Posted by Bill | Report as abusive

I like how many responders to this story believe that their hatred of Bush supports their positions on issues. I’m no Bush apologist, but Congress is the primary destroyer of this country. They make the laws, they appropriate funds, they meddle with the private sector when it suits their interest, and whichever president happens to be in office take the heat. Congress is responsible for the housing crisis and they share complicity in the Iraq war. It will be this band of inept, morally bankrupt, shisters that bring down the country.

Posted by BushRuinedTheWorld | Report as abusive

Another stay with the old, fear the new piece. She is defending out DOD budget? She is disagreeing with states right to impose their own emission standards? Why don’t the republicans come up with a new party, They want Bigger gov. more then anyone!

Posted by joethedumber | Report as abusive

Interesting how with all the debate, no one EVER mentions a prominent problem in my eyes: there is no monetary standard. Economists call the entire system of American (and world) finance “imaginary money” because the only reason anyone’s money has value is because it is accepted as money. There is no solid base for the current financial situation in the world (i.e. gold standard, etc.), there is only credit, and with America’s seeming lack of good capital I don’t see much hope aside from band-aides here and there. Increasing defense spending is equally illogical. Like many have said, if America didn’t have bases spread across the globe (including places like Arabia, where such presence is deeply resented), there would be less need to spend so much on defense. We still have bases in Germany and I have never understood why. It’s like we’re afraid that as soon as we leave the armbands and black shirts will come out of the woodwork.

Posted by Zack | Report as abusive

While we are it since the nation is such a dire economic situation let’s suspend all air pollution regulation standards, endanged species acts, and labor laws. God only knows we MUST do anything and everything to get America back on track even if it’s at the expense of our humility.

Posted by mabart | Report as abusive

JK Galbraith, in “The Affluent Society” pointed out decades ago that the USA production was over-satisfying its needs to such an extent that demand (sic) had to be created [by advertising] and that while individual consumption was catered for, public consumption (and “public goods” lke clean air and water) was not.
If Obama is going it inject public money into Detroit’s automakers, it would only make sense that some “public good”, like cleaner emmisions, less fuel consumption is built into the package.
Of course, since most of the big sponsors of terrorist organisations are oil-exporters, reducing consumption would also be striking a blow at terrorist organisations

Posted by colin | Report as abusive

Hey Obama bashers:

We tried it YOUR WAY! YOUR WAY CAUSED THIS DEBACLE!

The election was a referendum on YOUR WAY. YOU LOST!

NOW, at least, WE’RE GONNA TRY SOMETHING ELSE. It can’t POSSIBLY be worse than the mess YOUR WAY CAUSED!

Posted by Dave Kauble | Report as abusive

First ECON 101 DEFENSE DOLLAR SPENT IS A WASTED DOLLAR SPENT.
Second
SOLUTION TO TRADE AND “BUY USA”
Simply made our “free trade laws the MIRROR of our “fair trade partners” AKA China must own 50% plus of any firm, so does USA,
Japan “safety (disassembles) checks imported cars” USA does same, can employ many at our ports for that one. Labor laws lacking offshore, simply “fee” (not tariff as that is “bad” the amount such would add to product and attach at our entry port.
China charges “fees” not tariff on selected USA products, we do same
NOW SEE HOW EASY IT WOULD BE.. AND SO FAIR NONE COULD GO TO WTO AND GRIPE..

AND WOULD SOMEONE EXPLAIN HOW COME ALL THOSE UNION HATER’S ARE NOT AFTER THE COPS, FIRE AND WORST MOST CLOSED UNION THAT EVEN LIMITS IT’S PRODUCT, LAWS AND COURTS TO ONLY UNION MEMBER’S MAY WORK THERE
THE AMERICAN AND STATE BAR ASSOCIATIONS?

Posted by chuck | Report as abusive

Cut the size of our bloated, grossly overpaid,unproductive politicians, bureaucrats and unionized government workers at every level by only 15% and we would not have to spend a penny injecting new money into the economy. They have all bled us dry, and are enslaving our children with a debt which can never be paid off. While we lose our jobs, homes and futures, they have given up nothing.

Posted by luke | Report as abusive

Hmmm….Hudson Institute–other famous trustees, fellows and official advisors; Conrad Black, Douglas Feith, Scooter Libby, Richard Perle.
Clearly an honorable institution full of sage advice.

Posted by polat guney | Report as abusive

I think its pretty obvious that the citizens of the US of A no longer buy this sort of corporatist shill. I wonder who pays her salary these days? Military-Industrialist? Anti-Unionists perhaps? Why is it that any regulation that seeks to help or protect the regular, average person in America inevitably is sold by this type of person as ‘harming the economy’?

Posted by lupus le fou | Report as abusive

As our fore Fathers had the logical sense to know about 200 years ago and where the true trouble for America is:

“‘I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” – Thomas Jefferson 1802

If people would read history and understand it every time we have been in war it has boosted our economy to go to war just for this reason…Well we all understand (I hope) that’s not a very wise move. However, it does not change the fact that we are in war not just one but two.

To eliminated bases is a pure ignorant statement this is what continues to insure our safety with other countries. Not terrorities they do not play by the rules of warfare but democratic countries do and this is part of our defense. Even with us in Germany look at what Russia has just done in the past six months!!!(Hello) and as there economy is weaker then ours they have increased their spend on defense by another 30% of GDP. Please!!!

Everyone is upset at where we are today but to make statements that are un-warrant by so far everyone that I have read shows the lack of understanding of our economy and more importantly our world which we do life in. I would agree that we do need to bring more innovation into our system but then again every time we have the foreign markets are the ones coping then finding was to make it cheaper and with not as good quality as American products. But than us Americans want things cheaper and the cycle continues.

This stimulus package is a bad idea you want to jump start this economy take the money start buying small businesses account receivables at a very small discount. Get the money into the hands of companies that if they had the cash could hire employees back you’ll restore confidence into the market because it would then have cash people would not lose their jobs spending would then begin again and make it a three year program…….

Posted by Todd | Report as abusive

I’m tired of hearing another set of Republican talking points so Ms. Roth can tout her credentials during the tough times brought on by the policies she has supported in the past. Why would anyone listen to her now? Where are her new ideas and problem solving skills? That’s what we need, not retread conservative ideology.

She’s one of the fools that got us in this mess. This is propaganda plain and simple. You have to wonder why people publish this nonsense…or do you?

Posted by Dbird | Report as abusive

Too much capacity in the auto industry and has been for over 30 years, some need to go away.
The belief in the paper we exchange to purchase things is the only backing any currency has. The trust that we can continue accepting it day after day and the country that printed it.
If we pull our bases away from the middle east now we are doomed as a nation. We need to move 5 million americans and others to Iraq and set up another colony preaching western ways and love of freedoms, not the radical jihad movement. Tax free living for two years stay and a million dollar bonus if you leave alive.
People will never stop being greedy or gluttonous. Its everywhere around us with messages telling us to consume more. A fat group of cows don’t complain and that pretty much describes America and their people. As long as they can go to the 7-11 run by Achmed and Raoul to get their beer, chips, soda and cigarettes, Americans don’t give a care about much. Fat and happy at Wal Mart.

Posted by cmentd | Report as abusive

Ms Furchtgott-Roth,

Where were your complaints about congressional damage of the country the last 8 years when your man Bush was at the helm of national destruction?

Remember the election results? You and your corporatist robot-robbers lost! ! ! ! And not a minute too soon either.

Please, just fade away. Take your trust fund and go to an island somewhere and stop whining.

Posted by Paul | Report as abusive

1. allow workers to have unions unhindered.
2. enact universal healthcare immediately.
3. reduce the pentagon by 80% as a start.
4. reduce all bases by 80%
5. bring the troops home
6. nationalize the oil industry.
7. create a national government run banking system.
8. assist access to higher education
9. limit interest rates on homes to a max of 4%
10. cap non productive wages (ceo’s) to 5 times what a worker on the line makes.

I think yopu get the picture, as capitalism failed society we the new social order must now rebuild from the ground up a just society whereby the citizens control
the nation not the select few.

Have a nice year!!

Posted by arthur buonamia | Report as abusive

Ayn Randian nonsense. Move along – nothing to see here. The discredited elite are sounding like a broken record.

Posted by Spastica Rex | Report as abusive

The author is a complete advocate of the status quo.
My comment isn’t based solely on this article, most of her previous posts prove the point too.

When it comes to protecting old money & entrenched interests…. Miss Roth is the go to girl.

Posted by Darren | Report as abusive

You have not learned your lessons of 1939. Government spent lots of money to get us out of the depression. And causing technology to stay still is not helping this economy. We would not have computers if we followed your negative thoughts. People do not need computers. Yet today there almost a computer in every house.

Posted by Sandy | Report as abusive

Same old same old. “hey worker, we’ve screwed up and we need profits again. You can have a job if you send your sons and daughters off to murder and die for Uncle Sam, give up whatever scant protection you have, and break your ass making guns and bombs to drop on other workers, and then I’ll be rich beyond the dreams of Croesus again and then life will get better for you, I promise”

Come on, do you really expect anyone at all to swallow this rubbish?

Posted by micros | Report as abusive

Diana Furchtgott-Roth
You tell the truth…..many do not like it. As an American I will have to blindly follow the country\’s president. Therefore I plan to tune up my car, inflate my tires and save American thousands in oil. Although our leaders set our standards, I will not raise my heat to 80 degrees like the president, I will wear 2 sweaters and take C tablets so I don\’t get a cold while trying to stay alive at 62 degrees when todays low was 2 degrees. I will do without and buy less so I can do my duty and pay more taxes. I will give up my guns so when we are attacked again…I can safely sing KumBiYa with those who want to take us over. When we close Gitmo I will remove my underwear so I don\’t offend anyone and grow my hair long so when they hold my severed head on the internet…they can swing it back & forth for effect. And like Biden, I will not give to charity… other than a few dollars. I will sue my employer because I don\’t get the same salary as my bosses, or ask all to be paid piece work or commission so that all income is fair. I am looking forward to giving my grand and great grandchildren something special to remember me by…..thousands of dollars of debt so that we can fix landscaping…pay for abortions…and insulate homes for people who should not have a home due to not being able to pay for one because they may not want to work for one like I did. Those who disagree with you only prove to me that there are a large number of mind numb uninformed fools out there who don\’t have a clue what is going to happen to them and want to be lead like sheep to the processing plant. I guess Stupid is just Stupid and love to be told what to do and how to live.. To those who like to be told how to live….give your property and belongings to someone on welfare and go to Mexico and live with the people who you want America to become.

Let’s do a little research about who and what Ms.Roth allies herself with

Following from Google:

Quote

The Hudson Institute’s IRS Form 990 for the financial year ending on September 30, 2003 showed total revenue of $9.34 million, including over $146,000 in government grants. Other known funders listed in the institute’s 2002 annual report include:

Ag Processing Inc
American Crop Protection Association
American Cyanamid
Archer Daniels Midland
Cargill
Ciba-Geigy
ConAgra Foods
Conrad Black
CropLife International
DowElanco
DuPont
Eli Lilly and Company
Exxon Mobil
Fannie Mae
General Electric Fund
Heinz
IBM
Lilly Endowment
McDonald’s
Merck
Microsoft
Monsanto
National Agricultural Chemical Association
Nichols-Dezenhall Communications Management Group
Novartis
PayPal
PhRMA
PriceWaterhouseCoopers
Procter & Gamble
Sunkist Growers
Syngenta Crop Protection
United Agri Products
Westfield Corporation

end Quote

So fellow readers, are these organizatons that you trust & have faith in?

Ms Roth is a mouthpiece for a front that is funded b corporate America.

I can’t think of a more damning association.

Posted by Gary r | Report as abusive

Ms. Furchtgott-Roth,

I am very pleased to have read your interesting opinion on this important issue. Personally, I think this is matter of great magnitude that all American’s have the right to be passionate about, and judging by the responses that you have received thus far, American’s clearly are passionate about the current economic stimulus plan.

I very much believe that you make many good points, but do not present the other side of the issue and prove that your point is in any way superior to the opposition. I would like to address some of the gaps that are presented in this article section by section.

Firstly, on American Protectionism: by enforcing that some goods be produced in America we insure that the residual profits, jobs and most of the money that is earned in the US will get re-spent in the US, resulting in a stimulated American economy through the money multiplier that will eventually have an overall positive effect on the world economy as well. Surely such an idea will not be a tough sell for international diplomats and Foreign Service Officer’s as this is a perfectly logical argument. The American stimulus package needs to address America’s needs first, and will have little effect on our image abroad.

What may affect our image is a continually bloated defense budget. There are more musicians in the United States Defense Department than there are diplomats abroad trying to build relationships and advance the interests of the United States. Perhaps this money could be more efficiently used within the Defense Department or would be better allocated to building international relationships instead of furthering conflict.

On the advancement of troops in Afganistan, you conveniently forgot to mention the simultaneous withdrawal of troops in Iraq. Without a true cost analysis it is rather presumptuous to declare that the Department of Defense Budget must not be decreased.

Next, there is the seemingly counter intuitive allowance of the elevation of California emission standards. I must point out that this point is mildly hypocritical of you to make given your point on increased protectionism. This law will require that automakers produce more fuel efficient cars which currently would help foreign automakers. To deny the State the change based on the tendency of small, foreign, vehicles to meet emission standards may also appear to be a protectionist measure that you wish to guard against. However, it is seemingly ignored that US automakers are becoming increasing competitive in this market as well (including the Chevy Volt). This law would also increase the number of jobs in order for the industry to adapt to the new industry standards.

As for the open employee-free-choice act, well your points seem to be an anti-union rant. One can not forget that when times are good and labor markets are strapped for blue-collar workers, unions can be in their best interests. While it is easy to point fingers a unions during hard times, one might just as easily point out that unions have no bargaining power in companies that are not profitable. The idea of the provision is to make it easier to start unions, but the new system would require more votes than the “secret ballot” system. Perhaps it is really just another option that would provide to be equally difficult, but any financier and economist know that options have value, especially over time.

As well as protectionism, cuts to defense spending, individual emissions standards, and the addition of a new option to form unions, the article above does not indicate anything but soft, one-sided argument against the economic stimulus package.

Finally, the article above attacks the Democratic Party for deficit spending and the current economic crises. Perhaps I am wrong, but wouldn’t it be better for us all to focus on bettering our ideas and plans to further the American cause than to point fingers and play a meaningless blame game?

Posted by Jordan H. | Report as abusive

NOT THAT I SIDE WITH EITHER SIDE OF THE AISLE, BUT TO BE FAIR, AND I QOUTE HERE”No wonder consumers are scared, financial markets are tumbling, and unemployment continues to rise” ACTUALLY TOOK PLACE WAY BEFORE PEOPLE EVEN KNEW WHO IS GOING TO BE A PRESIDENT OR WHO IS GOING TO CONTROL EITHER HOUSE. I WONDER IF MRS DIANA ROTH WAS ASLEEP FROM SEPTEMBER THROUGH JANUARY WHEN THE MAIN JOB PROVIDER IN THIS COUNTRY(AMERICAN CORPORATIONS IN GENERAL)LOST OVER 7 TRILLION DOLLARS OF THEIR VALUE.

Posted by MAAA | Report as abusive

As one of our friend already mentioned – another republican talk. Look what “business all the time for everything” did to America. And now the new administration took charge to do something right for the American people, writer like you have started to speculate with unnecessary details.

Rather than proposing idea for peace and prosperity, people like you go for defense spending so that your conservative thinking can rule the world making it unnecessarily unstable all the time. Guess what madam, time has changed and emerging market would be new rulers of the world leading the people like you to the right direction.

Thank you friend for laying out the names of the corporation with whom our writer is associated. I can’t understand after all the things that happened to America and rest of the world, reuters lets people like her to express views on its esteem website. Well, freedom of speech I guess.

‘companies would have to make lighter, more fuel-efficient cars that consumers might not want to purchase’
What’s wrong with that premise? European motorists have been used to this for years and it has I believe, had no negative effect. US car makers have had the technology for years (gathering dust on their shelves)to produce lighter,lean-burn,efficient vehicles, but they continued blindly down the road of the ‘gas-guzzler’ ideal. Despite what most Americans may think, we in Europe are no worse off for endeavouring to be efficient in the way we drive.
It’s really all in the mind!

Posted by Roy Davis | Report as abusive

quote —
Since California is America’s largest car market, companies would have to make lighter, more fuel-efficient cars that consumers might not want to purchase.
— unquote

OMG of course americans want bigger cars that suck more and more on gaz so we can use more our credit cards at the station.

What the heck ? Dont you think that if there was at least the choice between high gaz-mileage and the usual
SUV or big cars, some consumers would choose gaz efficiency ? Who are you to pretend consumers wont purchase better mileage cars ? You may not want a smaller car, but I do, and I am not the only one here.

We had 8 years of Bushism, hardcore republican way to deal with issues. You had yer time Mrs Roth, please at least wait to see what this new administration in DC can do before you judge them. You can only judge what yer friends did during the past 8 years, and there’s PLENTY for criticism there.

Posted by Wiz | Report as abusive

Many of these comments miss the point.

This is a wealth problem not a cash problem.
Fact: Government activity destroys wealth. Capital will flow out of this country and economic activity will dry up. The question to ask yourself is when was the last time you worked for a poor man?

Posted by M A Rand | Report as abusive

The U.S. has been literally bankrupted by 33 years of a trade deficit (the last surplus being in 1975) that now totals $9.2 trillion, all financed by a sell-off of American assets. While I agree that a strict “buy American” provision is a clumsy way to go about restoring a balance of trade, ANY policy that moves us in that direction is the ONLY way to breathe real life back into the economy. It’s astounding to me that economists can believe that an enormous trade deficit can be sustained in perpetuity. It’s time to kick out these economists and replace them with people who can understand the basic principles of a balance sheet.

Pete Murphy
Author, “Five Short Blasts”

Dear Sirs.

I don’t think so at all the Americam financial institution is not going in the right track when the subject is financial crisis. During long years the banks made a lot of money in doing so they construtect a empire, by charging high tax and others sort of what they call “service”.

Nowadays they ask for financial help from the governament and lawmakers. It is a abuse to take money from the people i mean, much money and give to them in a generous way.

Noboday knows if that package is the true solution but they think so.

My personal point stand is contrary such decision and i must confess, that i have never imagined American governament were do thing like that.

thanks,

Luis C. Moreno
lucamo78@gmail.com

“Freedom without Discipline is CHAOS
Discipline without Freedom is ANARCHY”

Any ideology practiced without discipline will give similar results. Nature likes freedom, but let us not forget to clean our gardens of weeds.

Nothing that can put your existence at stake can happen overnight, patience is the word, civilizations have survived centuries before us and history has proved that many chances and opportunities were available to rectify the mistakes. New President has just taken over, give him some time to implement his ideas and vision, after all he has the mandate of quite a majority.

Criticism is similarly important, but do not get carried away by it and let those responsible hear what has been said, “Absolute power corrupts absolutely”.

Posted by k p | Report as abusive

[...] and businesses are still spooked look no further than some of the Democrats’ policy plans. Diana Furchtgott-Roth writes: “As well as protectionism, cuts in defense spending, unionization by intimidation, and [...]

These points are unfortunately right on…

Regardless of party affiliation, the Congress needs to act for the people, not against it. This President was elected on a promise of change, new leadership, a different direction. So far it is a rerun of the FDR presidency with a bunch of Clinton retreads and tax evaders. Where is their thinking? Their ideas?

How does a return to protectionism (and old concept that does not work in a global economy), less military spending in a world filled with terrorist, individual emission standards by state (just like we have 34 different gasoline blends depending on region or state that plays havoc with supplies and production)and pro-union (which has been the catalyst for Americans being unable to compete in a global economy) payoffs in the form of Employee Free Choice – a stupid idea that is not good for America or stimulating a weaken economy? How is it that people can vote for the President of the United States in secret but not whether they want to be unionized? Tell me this is not simply social engineering on the order of FDR. We know, according to the CBO, that half the stimulus package as conceived will not hit the economy for up to 2 years and half of it stimulates nothing but the pockets of unions, lawyers and special interest.

New vision – change – leadership…. LOL It’s back to the past with stupid ideas.

Instead of labeling people, let the posters give us reasons why these ideas are good for America. Let’s look forward with workable ideas, not backward at failed ideas.

Posted by Jim | Report as abusive

With our economy in dire straights why must we have a bail out package that contains everything that each lawmaker wants. Why not just pass a bill that will only cover what is necessary to stimulate our economy and worry about the extras later? Is this too hard to see? We are going nowhere with all the bickering and add ons. I thought the biggest problem that hurt the economy was the housing market and because of this the banks had problems. Let’s take care of one thing at a time and make it worthwhile!

I live in New Zealand (found in the South Pacific), I would like to give you a simple way of stimulating your economy.

America is the biggest arms trader in the world, and promoting or initiating a good sized war or two, would really get the economy moving.

As much of the goods produced would be destroyed, it is a self sustaining market.

George Bush managed to get two wars going, so it can be done.
If George could do it , anyone can.

Posted by Bruce | Report as abusive

Just a thought about your worries about the financial/banking/economic problems you are having.
Consider WATER instead .

Much of your country is now getting short of water,and when you discover that you don’t have enough to go around , the other worries will take a back seat.

Other countries, like Australia and China are having the same problems, only worse.

Will anyone take any notice of me, Sadly =no.

Posted by Bruce | Report as abusive

Congress and especially Repulicans should remember the next elections are around the corner and if they are not reasonable in supporting the new President elected by peoples mandate, they will be reduced to insignificance. For the last eight years, they kept rubber stamping and their party’s President who did nothing but ‘cut brush’ to set the fire we are facing now. REMEMBER 2010 mid-term elections GOP.

Posted by Syed | Report as abusive

Sounds like you are all for the short term bandaid approach. I.e “arbitrary emission standards”, “build smaller fuel efficient cars that consumers may not want” etc. These are exactly the kind of attitudes that perpetuate the problems that we are in. We have our current issues and looming environmental climate change catastrophies and foreign oil dependencies to deal with as well. The longer we put those off the worse things are going to be in the future.

Posted by Brian | Report as abusive

I think you’re right about protectionism and dead wrong about the rest. Military spending, at least in terms of hardware contracts, is by definition wasteful spending. The amount you absolutely need to defend yourself is _necessary_ wasteful spending, but anything beyond that is spending for spending sake. You might as well have people digging and filling holes. It produces neither useful product nor capital for the future. Contrast it with, say, energy infrastructure or spending on education and you immediately see the difference. Those are real investments in future economic growth. Your argument against stricter auto emissions – that the auto companies would be forced to make lighter more efficient vehicles – is an argument FOR stricter regulations, not against them. This is precisely what the US auto industry needs to do, both for itself and to minimize the costs incurred by us all in oil dependence and health risks. You object to this because these are cars that people “might not want to purchase”? Have you noticed which car lines have been selling worst? Lastly, this is precisely a time when unionization is crucial to protect workers rights, as higher unemployment increases the leverage of employers.

Posted by pg | Report as abusive

The observations by Diana Furchtgott-Roth at especially on target with respect to the spectre of Union intimidation. Honest union stewards and presidents all admit that card signing peer-pressure is effective….and WRONG. Part of this economic contraction is the anticipation by investors and business that the Democrats are putting union support on a par with patriotism and apple pie. Union strength is seen only in dying industries, government, schools, and certain trades. With the exception of trades, the expansion of unions into new territory will only bring our economy down faster. We should reject anti-fair billes such as this anathama titled bill. The congress should be ashamed of itself on this political pay back.

Posted by Warren K. Spellman | Report as abusive

Diana is spot-on concerning these issues.

Deficit spending has been occurring for several decades. A household that does this for as long as the federal government has would find itself between a rock and a hard place. Eliminate deficit spending! Do we want to place the burden of our financial mistakes on our children? I wouldn’t like it if that was done to me. Neither will they. When I can’t pay for something, I do without. Let’s hold the government to the same standard. They can start by phasing out entitlement programs. I know that rubs some people the wrong way. They are unconstitutional (see Article1, Section 8).

The directive that Obama passed about vehicle emissions standards is called an executive order. I thought legislative powers belong to the legislative branch, no matter how small the issue. This power of executive orders borders on autocracy and not a republican (not a political affiliation) form of government like I thought this country was founded on.

This is my opinion and my right to free speech. I am so grateful for the principles that I have learned through my association with Six Degrees Leadership.

This piece of garbage is anything but a stimulus plan. The devious Liberal ideologues in charge are using scare tactics to jam social engineering down the citizenry’s throat. If the CBO says that 75% of this idiot handout package will not be spent for 2.5 years, while the longest post WWII recession lasted a total of 18months ( Jimmy Carter’s administration) , what is the purpose of this Liberal Christmas tree? In economic terms, “stimulus” means CREATE NEW JOBS nothing else. What the disgracefully disingenuous Democrats are referring to as a tax cuts are clearly welfare hand out payments to 60 million Americans- who do not pay one flat penny in Federal taxes! If this isn’t a form of income redistribution, please tell what is? As always, the liberal elites need to create fraudulent titles for their actions in order to disguise their motives, for the ideas which their whims are based, possess no intellectual merit.

The Democrats are effectively redefining the definitions of established English language words and verbiage, to push through their agenda. This is a serious situation. How is a hand out a tax cut? It would be like paying someone to take something away for free and referring to this gift as giving that person a “discount”. It is blatant nonsense! Historically, it has been the duty and responsibility of the free press (media) to shed light on and expose politician swindles, however today’s mainstream media bias has made this procedure a thing of the past.
The truth/ facts are something liberals refuse to acknowledge. Business activity creates jobs, Business and Capital Gains tax cuts spur the economy; monetary stimulus, not fiscal stimulus spurs the economy.

Posted by cris | Report as abusive

This is the same Diana Furchtgott-Roth who was telling us last year that the economy was just fine, and that deregulation had strengthened the banking industry, so that risk were well contained. She also argued that Bush’s tax cuts would eliminate the deficit.

The poor thing obviously hasn’t the faintest clue about economic matters. Why are we even bothering to listen to her views any more?

Posted by Mark | Report as abusive

The most important parts of the bill, the parts that will truly stimulate the economy in the long-term, are being stripped out as “fat”. It’s disgraceful.

Unfortunately, American growth and expansion has been fueled by squandering wealth on the belief that housing prices would rise indefinitely. It was a bubble, just like the tech bubble or every other bubble that’s been keeping us lurching along in the past two decades. With or without the stimulus, unless America fundamentally changes how it conducts business, we’re going to end up on the other side of the recession with the same fundamentally-flawed economic structure and simply waiting for the next bursting bubble.

America is a nation of middle managers and a labor force accustomed to a standard of living that isn’t supportable by sound economics. We’re overpaid even though our median income has been falling for decades and we don’t provide value-for-money anymore, and the biggest problem with tax cuts or non-infrastructure stimulus spending is that its not preparing us for the next phase of economic growth: the era when we can coast from one bubble to the next.

The most important provisions of the bill? They are funds and grants for basic, fundamental research, the research that fuels downstream capitalist-driven innovation. They are the school reconstruction and improvement funds. They are the alternative energy funds. They are the scholarships. They are the health-care reforms that should help shift the burden of maintaining a healthy workforce from businesses that can’t afford to onto the government, which can. They are the fundamental elements that should be aiding America to restructure the way it does business, because relying solely on private funds to take care of this stuff has taken us to this embarrassingly inadequate position.

For too long we’ve been relying on a bunch of greedy bastards looking only to the next quarter to determine our economic well-being and we only have ourselves to blame for letting them get away with it. It’s time to take it back.

Our REAL economic recovery will not come in a year or two years or four years: it will come when America learns to start making something worth its exorbitant price, something that America can monopolize for the next two decades while the rest of the world catches up. America still makes the best super-conductors and the best satellites… we don’t make the best cars or the best computers. We need to reposition ourselves for the long term and that means getting out in front again.

And we’re not going to get out in front with tax cuts.

Posted by Simon | Report as abusive

This woman, and the organization with which she is affiliated are part of America’s problems. Seriously so. They have promoted policies and programmes that have brought America to the disastrous economic situation it now finds itself in, and the advise on foreign policies a they promoted over the years have made made the world a dangerous place for Americans, alienated America’s friends, and led to the Iraq war. It bodes ill for the future that these misguided fanatics are still taken seriously by so many unthinking people.

Great article, thanks. This is common sense, something that is unfortunately lacking these days in the push for government stimulus and growth. Yes, I meant that the way it sounds… this bill is to stimulate and grow the government, not the economy.

Frankly, anyone who doesn’t agree with every word of this article is grasping for some reason to reinforce their vote for the current liberal administration and feels that they can’t actually use their brains for fear of doubting the wisdom of their votes.

Don

Posted by Don | Report as abusive

The US economy has been been on financial steroids since 1995, just look at a chart of the SP 500 from 1950 to now. Goldman Sachs is the Balco of financial steroids and its dealers (Ruben, Altman and Paulson) have put the US economy at great risk.

President Obama, more financial steroids is not the answer.

Dear Republicans: You couldn’t lead, you refuse to follow, so please… just get out of the way.

Posted by Scott | Report as abusive

It is a shame to read all the dem and rep bashing as if one party deserved the blame for the current crisis. for over 30 years we have been sold out by government regardless of party to serve special interests that pay for play. It doesn’t matter if it is union or wall street. When no party is willing to give up anything and is only out for short term gains this is what will happen. I’d prefer a depression and a rebuilding of our entire financial structure over what is happening now, but that ain’t going to happen. As for blame it falls mainly on the american voter for failing to educate themselves as to what is really going on and voting the people into office they do. fixing anything takes something away from a party with a lot of money and almost ensures one isn’t elected. We have an electoral system that punishes people with the courage to tell the truth so don’t complain when you get exactly what you’ve asked for. We are in the 21st century and debating the teaching of evolution in schools, gay marriage, etc. Nader, Perot, and almost everyone who has told the american public the truth gets nowhere.

Posted by dcb | Report as abusive

Why is there still no middle ground on the idea of so called “free trade”? Why is it that we still believe the hyperbole surrounding our trade policies in the USA and anyone who expresses the notion that the WTO is a flawed institution is immediately branded as “protectionist”? The fact is that many of our trading partners, most notably China, do not embrace any notion of “free trade” at all. Take for example the requirement of joint ventures with Chinese firms just to be able to sell automobiles in China, and to avoid a pretty steep tariff. If we attempted to do the same thing here in the US, I doubt the US/China trade lobbies and their various mouthpieces in academia and think tanks would waste a moment before proclaiming such a move as “protectionist” or “isolationist” or some such nonsense. The same scare tactics employed for such noble causes as the war in Iraq, and the recent TARP legislation are at work here. Who among us now believes that our flawed approach to trade, and our disdain for regulation in general, have not played a role in keeping wage growth low, in exacerbating our growing disparities of wealth, and ultimately in eroding the American middle class as an economic and political force. When will we realize that rising productivity and skyrocketing corporate profits have benefited a truly tiny portion of our people, and that our trade policies are among the culprits responsible for our current situation? I for one would be happy to pay more for consumer goods, and to consume a bit less generally if it meant that we might actually produce something other than financial services and real estate agents in this country. The discussion is so one-sided at this point that we have definitely lost any trace of common sense. While not a great fan of Ross Perot, or any other politician really, it does seem that he was correct way back when in his opposition to NAFTA. It seems as if we are addicted to an extreme ideology. And we seem unable to take the first step, to admit that we have a problem. Don’t get me wrong, trade is great, but it is not and never has been “free.” This may represent the last bit of ideological baggage from the past 30 years that we need to let go of. The expert fear mongering we get instead prevents any real discussion from even taking place, and paralyzes any efforts to examine the mistakes of the past in any practical way. And so it goes. Until we find the courage to think for ourselves we are probably doomed to continue making the same mistakes. At least we can do it in the comfortable knowledge that The Experts, who have done such a bang-up job so far, are letting us off the hook with their eager advice. What a shame.

Posted by richard | Report as abusive

Diana Furchtgott-Roth is spouting the mirage of added costs for domestic vehicles manufacturers if they have to make cars to meet California’s stricter emissions guidelines like it was the end of the conversation.

The solution: make ALL vehicles to meet the strictest standards. Not one vehicle for California and one for Mississippi. Japanese cars regularly get 35MPG NOW, and are stylish, well-built, and last a long time with little maintenance.

But oh, wait, everyone already knows that. It’s time to take your head out of the sand. We ALL want to breathe clean air, and it shouldn’t be up for debate, unless anyone thinks southern California wants to return to the horrible smog-filled days that blocked the sun (like Beijing now).

Posted by Robert Pratt | Report as abusive

Remarkable amount of ad hominem amongst commentators. This is the lowest form of criticism. Readers, raise your standards! Can you not comment on the points made in the article with reason, rather than vituperative?

Well, I guess I’ve had enough of conservatives telling us how the economy is supposed to work when they’re the ones who have created the economy that’s now crashing. Isn’t it convenient how their economic theories just happen to be really good for the rich as well as, supposedly, the poor and working class? I believed you for a long time but, sorry, I think I’ll take my chances with the compassionate liberals instead of the opulent conservative elite this time around.

Posted by Dan | Report as abusive

Ms. what’s-her-name could not be more inaccurate. I’m very familiar with the Hudson Institute. One of the most conservative right wing organizations on the planet. They and the American Enterprise Institute work the numbers like an evangelist works the crowd in the tent.

Wake up madam, the old world is gone…and your GOP buddies destroyed it. Rather than fielding an instrument to support your goofy theories, field an accurate one. You will be surprised with the outcome.

Posted by Drefus Smith | Report as abusive

Forget Politics for a second,
The biggest decisions of this financial crisis have just been made. Did you miss it? GM, Ford, Toyota, and others have just begun the biggest event since the space race between the USA & Russia, the biggest change since the Model T Ford.
They have all embarked on the challenge of dumping gas guzzlers,and electrifying the transport industry. The Government & BIG business has finally plugged-in, and the auto-makers have switched on. The question is who will win??? The Chinese, the Japanese, the Russians, the Middle East, or will the US prevail??
Mark my words.
This will be the biggest decision made in this Century. I can’t wait. LET THE RACE BEGIN!!!!!!

Posted by Brad | Report as abusive

I read Furchtgott-Roth strictly for the comedy content. She’s a perfect example of a Rack Jite quote:
Conservatives haven’t had a new idea since they discovered they could buy women instead of clubbing them over the head and dragging them back to the cave.

Posted by Ray | Report as abusive

Why do we need DTV; we have cable that is costing a fortune.

Sorry forgot to mention Nissan before,
Yet another auto maker in the race for the EV. This is truly the start of this milleniums revolution. It’s a revolution that has at its core renewable technolgy, energy. Renewable technology, fuel, energy, is the answer to renew our economies. It has to be because the earth isn’t. It is the only way forward, and thank God it is happening. All those who say it’s too expensive, or it can’t be done will be proven wrong. They are just scared because they will have to change. The fact is it will get smaller, cheaper, and easier once we take it and run with it. Look at the first cars, the first space rockets, aeroplanes, phones, computers. The first computer took up an office block, now it fits in the palm of your hand, and continues to astound us every day. The first planes were nothing more than a glider strapped to a man. Now we can break the sound barrier, and send people on holidays to the moon.
A world full of renewables will hapen, it is happening, and not a moment too soon. Get on board before the intergalactic train leaves. Don’t get left behind. Lead the way.
Brad

Posted by Brad | Report as abusive

Most Dems see the current crisis as either a Republican caused problem or a problem with capitalism. People need to realize there was nothing fiscally conservative that either party was doing in the last 8 years. I haven’t voted republican in a long time but I will likely start because they are the only party even talking about fiscal responsibility even if they don’t practice it.

Posted by John | Report as abusive

Obama talks about greater transparency– wonderful… So the only REAL difference between him and Bush is that he’s going to let us know how badly he’s raping our wallets and how the money is being misspent, whereas Bush tried to do things a bit more surreptitiously?

Right wing hack. It is your solutions that have us where we are now.

Posted by Alan | Report as abusive

We are reaping the whirlwind of that swindle called “Free Trade”.

The “Free Trade” hacks continue to refuse to acknowledge the economic devastation their misguided and naive theories have caused.

They continue to screed that it’s an all or nothing situation, with respect to globalized trade, moreso in the face of the devastated local economies all across the USA – local economies that will NEVER recover – that “Free Trade” destroyed.

The hubris of the “Free Trade” economists has turned them into dangerous fools.

The USA economy is not going to recover until the failed experiment of “Free Trade” is ended, commercial regulation is re-installed and the perpetrators of this mass criminal enterprise are locked up.

Posted by RFL | Report as abusive

Those people who blames Detroit for building “gas guzzlers”. They built them because you(consumers) wanted them. All these emphasis media and government puts on hybrids and electrics are ridiculous. People won’t buy them because they don’t make sense.
Let’s do the math. Average Americans drive 20 miles a day and compare a hybrid Prius and similar sized and shaped gasoline vehicle such as Honda Civic. Prius gets 48 MPG in city and Civic gets 25 MPG. Let’s assume gasoline was at its worst point which was $4 per gallon and do the math.
Prius owner would spend $608 a year on gasoline. A Civic owner would spend $1168 a year. Saving of $560 a year. And remember this is at $4 a gallon. If at $2 a gallon like it is now, you would be saving $280 per year.
Now, would you buy $22,000 Prius or $15,000 Civic (both minimum MSRP)? To get that extra $7,000 return, you would have to drive Prius for 12 years at $4 a gallon or 25 years at $2 a gallon.
Point I’m trying to make is that consumers can choose to buy small gasoline vehicle to save gas instead of buying big SUV’s and trucks. And I used Honda as example because its shape is similar to Prius but Detroit makes small gasoline cars too. But you… consumers chose to buy SUV’s and you are blaming Detroit.

And too add, the trouble Detroit is in is because they can’t sell their cars but people have wrong ideas as to why they can’t sell. It’s not because they didn’t build fuel efficient cars. It’s because the banks are not financing. Without financing, people just don’t walk into dealers and pay cash for cars.

Going back to this article which I disagree mostly.

Growing Protectionism: We import more than we export. Just look around in your house and see where they’re made. “Buy American” would bring manufacturing back to America which is what we need.

Cutting Defense Spending: It is fact that defense contractors are the most inefficient industry. They get penalized for coming UNDER the budget so they waste time and money instead of finding ways to save money. This is more so true now since Bush administration eliminated competition and spending actually skyrocketed. The money is better spent in fair market manufacturing.

Emission standard: I agree to some degree since I believe Detroit should spend more money on improving quality and therefore raising resale value of their vehicles instead of hybrid and electric vehicles but this applies to imports as well. This will hurt imports as much as domestic so I don’t believe this is detrimental as she described.

Union: American automakers spend average of $2,000 more on manufacturing their vehicles because of the UAW. This presents unfair competition and something must be done. I believe Union out-lived its purpose and its hurting the industry more than it’s helping. I don’t necessarily agree with the method but it is another attempt to unionize the Japanese plants which I believe would help Detroit.

Brian Choi,
You obviously have something to lose when the world goes electric. There’s no point ‘doing the math’ on current costs of these electric & hybrid vehicles yet as the demand is too low obviously. However once they become main stream they will blow the detroit made gas guzzlers out of the water. What you can do the math on his how many jobs this will create, and the future dominance of whichever company gets there first. That’s easy to work out. You can also ‘do the math’ on the savings to the environment and your own health in the future. You can also figure out that if you don’t have to buy as much oil from your enemy then you won’t have to spend as much on fighting the middle east in pointless wars, because they aint going to buy too much war with sand, are they?

Posted by Brad | Report as abusive

It’s a Catch 22. The only way to stimulate the economy is to get the banks to loan. Because of fractional banking whee the Fed can lend out 33 dollars for every dollar it won’t lend a cent when people en masse electronically withdraw all their money because of scare tactics. The economy runs on fear. Do away with the Fed

Brad, I’m not sure how much of sci-fi you’re being but in near future, fully electric will never become mainstream. Driving for 2 hours and having to recharge for 6 hours will not cut it. Plug-in hybrid, may have more potential but the price will never come down to gasoline vehicle level.
One thing proponents of electric always say is how environmental friendly it is. Have you considered what would happen to all the batteries? Doesn’t sound like a problem now but imagine all the cars in the world running on batteries. We already have recycling disaster with existing batteries we’re throwing away. Dell alone threw away 2 billion used lithium ion batteries in 2006 instead of recycling them because cost of recycling is much greater than making new ones. Lithium ion batteries are declared non-hazard material in landfill but are considered hazard in waters.
So government will have to mandate recycling of used batteries in electric vehicles which will increase the cost.

Sure… you’ll say recycling technology will improve in the future. It may, but until it is proven to be economically viable, it is sci-fi.

My original point was not necessarily about gasoline vs. electric but rather, that we can significantly reduce consumption of oil by purchasing compact vehicles instead of criticizing Detroit for building gas guzzlers because they didn’t force it down your throat. The people driving them chose to buy them. Detroit makes plenty fuel efficient compact vehicles too… and if you didn’t know, Toyota makes gas guzzlers as well. Current crisis in Detroit has nothing to do with fuel efficient vehicles. It’s financing issue.

I wrote a column on electric cars saying much the same as Brian. It received many comments, and can be seen here:
http://blogs.reuters.com/great-debate/20 08/12/18/electric-cars-will-not-cure-env ironmental-woes/

Posted by Diana Furchtgott-Roth | Report as abusive