Monthly Archives: November 2008

Remember when TreasSec Henry Paulson got down on his knee to beg Nancy Pelosi to support his $700 billion recovery plan? He said he would use the money to buy mortgage securities in order to set a floor on their value and restore faith to the credit markets. Treasury Department wonks talked about reverse Dutch auctions and other fancy ways of making sure that the bailout would succeed and maybe even earn a profit for taxpayers.

Immense pressure was put on Congress to pass the bill authorizing Paulson’s plan. “If there is even the slightest chance it will work,” one congressman said, “we should do it.”

Now, a mere seven weeks after Paulson bent his knee, not only is there not the slightest chance it will work, there is not even the slightest chance that Paulson is going to do it. Paulson now admits that “it was clear to me” as early as October 3, the date the President signed the bailout bill, “that purchasing troubled assets” would not work. But he waits almost six weeks to tell us?

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Remember those transit agencies that are in trouble because of the credit crisis? It turns out this is all the fault of “public-private partnerships.” At least, that’s what U.S. Representatives James Oberstar (who chairs the House Transportation Committee) and Peter DeFazio (who chairs the Highways and Transit Subcommittee) said in a letter to Secretary of Transportation Mary Peters last week.

Recall that transit agencies decided to exploit a loophole in federal tax law (since closed) that allowed them to “leverage” their capital investments to get an extra 3 percent out of those investments. They “sold” their capital investments to some bank, then leased them back. The banks would get to depreciate those investments on their taxes (which the transit agencies, not being taxpayers, couldn’t do), saving about $6 million out of $100 million. They split the savings with the transit agencies.

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Dear President-Elect Obama,

Congratulations on your historic victory, and my condolences for the economic mess left you by your predecessors. Here are a few ideas that may help. They boil down to two words: user fees.

Many people have suggested that one way out of our current economic crisis is for Congress to pass a stimulus package focused on infrastructure. If you let it be known that you support this idea, everybody and his sister will try to make their pet projects look like “infrastructure.” They will come to you with all kinds of multipliers showing how their infrastructure projects will do all sorts of wonders for the economy. It will all be very persuasive and it will all be a lot of hooey.

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About 40 percent of Americans are hard-core Republicans and 40 percent are hard-core Democrats. The way to capture the White House is to appeal to the 20 percent who are often called “independents.”

So the Antiplanner was puzzled after the Democratic convention when Obama’s acceptance speech was so clearly oriented to the left wing, while McCain’s vice-presidential pick was so clearly oriented to the right wing. How, I wondered, will either of them capture the center that way?

The answer today is clear. Obama’s acceptance speech committed him to nothing; he could go out and give more centrist-oriented speeches and sweep up the independents.

In contrast, by choosing Palin, McCain committed himself to the right wing. Sure, Palin “energized the base” of the Republican Party, but that only meant that 40 percent of the public will vote for McCain-Palin. Selecting Palin also meant selecting Palin’s rhetoric, such as claims that Obama “pals around” with terrorists and that he is a socialist.

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