Tennessee Taxpayers Get a Bailout (Along with Everyone Else)

Not a fan of the stimulus? Consider this:

State and local governments collected 2.9% less in tax money in Q1 of this year than in Q1 of 2008. Fortunately, the federal government stepped in to bail them out.

Thanks to quick bursts of stimulus money from Washington, the total cash available to state and local governments is 1.6% more than the first quarter of last year. Not quite enough to keep up with inflation, but still a huge help. Without the stimulus, the states would be in a deep, deep mess.

Thank goodness we are one nation, indivisible. And thank goodness the Republicans didn’t get to stand in the way.

With the dramatic upswing in money from Washington and downturn in various tax revenues, federal funds are now the biggest individual source of income for state governments for the first time ever.

Another interesting tidbit from the same article:

State sales tax revenues are down 2% nationwide because of the economic crisis.

But state income tax revenues are down 11%.

I still believe an income tax is a stronger, fairer system but I'm not going to close my eyes (or my blog) to interesting facts just because they're inconvenient to my position.

Hypocrisy (Lamar vs. the Stimulus, Pt. 3)

“As I listened to the president I thought he wanted to change the way Washington works,” he says. “[We should] talk to one another and come up with something that both Republicans and Democrats agree on, not just, ‘we won the election, we will write the bill, and see if we can pick off two or three senators.’”

The hypocrisy of a Republican saying “hey, he promised he wasn’t going to do things the way we did things” aside, no, wait, let’s take a second to focus on the hypocrisy of a Republican saying, “hey, he promised he wasn’t going to do things the way we did things.”

Besides which, it’s total bull.

Every Republican that wanted a seat at the table got one. Democrats were cutting things out of the stimulus bill right and left every day, just to accommodate Republicans. The bill is 40% tax cuts to start with, just to accommodate Republicans. That $15,000 incentive to buy a new house? Just to accommodate Republicans.

It’s your fault if you didn’t join in on the fun. But you decided to play the obstructionist. And at the end of the day, no matter what the Democrats did, the Republican refuse to acknowledge that Democrats were doing any compromising at all.

Was it because there’s no political advantage for Republicans to sign onto a bill the American people would associate 100% with President Obama anyway? Especially when it’s not a silver bullet anyway?

You could have put your fingerprints all over it if you wanted to, Senator. The changes were coming fasts and furious. But you didn’t want to.

But the deficit! (Lamar vs. the Stimulus, Pt. 2)

“There is no doubt about the fact that it increases our national debt,” he says. “The debt is not some abstract thing. Our national debt is $10.7 trillion.”

Okay, deficit spending is bad. I’m with you there, Senator. I consider myself a huge national debt hawk.

But raising that argument right now is kind of like arguing for water conservation when the house is on fire. You’ve been in the Senate for six years now supporting George W. Bush; you’re one of the ones who was playing with the matches.

Short-Term Thinking (Lamar vs. the Stimulus, Pt. 1)

Sen. Lamar Alexander (R-TN) raises some good points about the Stimulus Bill but comes up with the wrong answers.

“It borrows an unprecedented amount of money – $1.2 trillion – spent mostly on projects that don’t create jobs in the near term,” he says. And he defines the near term as “in the next few months.”

Okay, the sooner the better on job creation, sure. I’m with you there, Senator.

But we’re going to need those new jobs in six months or a year, too, unless you’ve got a magic wand to wave. This economic catastrophe isn’t going away any time soon. Long-term thinking is a good thing.

If you’ve got a stimulus idea that’ll generate jobs in a matter of weeks, I’m sure the Democrats would love to throw it in there! At least they would have last week, but you let that train leave the station – not them. You’ve got a phone, Senator. You get yourself involved.

Listen, I know you can’t wait for 12 months to pass so you can turn around and pretend the 2009 economy was all Obama’s fault. We all know it’s coming. Whatever, that’s politics. But in the meantime, stop whining and get to work!

If it takes several months to stimulate job growth (and it does), then we better get cracking now! It’s not like the Democrats deliberately left out projects that cause immediate job growth. They just didn’t limit themselves purely to short-term goals.

And thank goodness! There’s no way to dig our way out of George W. Bush’s mess(es) in just a few months. You know it, I know it.

But I’ll make you a deal… We’ll still let you blame Obama a year from now even if you don’t act totally worthless now.

I promise!

I Still Don't Get It

Maybe, maybe, if I understood how you could think an $600 million tax cut to the auto industry would stimulate the industry, the economy, job creation, and apple pie, but spending $600 million on American cars wouldn’t stimulate anything or create any jobs, then maybe I could understand how Republicans view the economy.

But I’m pretty doggone happy I can’t.

Here’s the deal, guys – selling products is good. It’s important to the economy. It’s helps people keep their jobs. There’s nothing better that can happen, economically speaking. Even tax cuts.

And, heck, it’s good for the federal government, too. They actually get some nice cars out of it. It’s not just a handout. Pretty cool, huh?

Too bad Rep. Marsha Blackburn doesn’t get it.

About That Stimulus Bill

“As it stands, there are no new jobs in this bill, no new ideas, just new spending.”

So says my U.S. Rep. Marsha Blackburn (R-TN).

Let’s compare that to reality:

The White House released figures Wednesday saying the package would boost employment in every state, including saving or creating 75,000 jobs in Tennessee over two years.

But you don’t trust the government, do you? Bunch of liberals.

David Penn, a Middle Tennessee State University economist, said the Obama administration's projection seems achievable.

But you don’t trust economists, do you? Bunch of liberals.

Gregory Brown, who teaches economics at Martin Methodist College in Pulaski, Tenn., considers the White House estimate of jobs a conservative one. He expects the stimulus to save at least 100,000 jobs over the two-year period and create another 25,000 to 30,000 positions.

But you don’t trust academics, do you? Bunch of liberals.

Still, a number of business and industry leaders in Tennessee laud Obama's stimulus concept as a way to create jobs and head off an even deeper economic crisis, reports the Tennessean.

But you don’t trust the media, do you? Bunch of liberals.

Well, damn, I guess the only people left to trust is Marsha Blackburn herself. So lets see what she says just two sentences later in the same press release:

Included in the new spending; is $600 million to buy new cars for government workers, $50 million for the National Endowment for the Arts, and $335 million for STD education and prevention.

Um, Congressman? Who’s gonna make those cars? Who’s gonna sell those cars? Who’s gonna ship them to Washington? What about the artists and art supply stores and art supply manufacturers and museum owners, etc.? What about the doctors and the pharmaceutical companies and printing companies that get to print out all those clymedia brochures?

Yeah, that money doesn’t just vanish, Congressman -- IT GOES INTO THE ECONOMY!! And even if your whining made any sense, which it doesn’t, you’re only talking about 0.118% of the bill. Is that really the best you’ve got?

(Why the heck is there a semi-colon in that last Marsha Blackburn snippet? But who cares what grammar teachers say anyway. Bunch of liberals.)

Goodbye Goody's

Goody’s is gone. The retail chain employs 9,800 people, including 800 in Knoxville, where the company is headquartered. All those people are about to be unemployed.

Ghost Mall

Is there anything left in Bellevue Mall besides Macy’s? Let me rephrase: Is there anything left in Bellevue Mall at all? Because that Macy’s is being put out of its misery. Unfortunately, that means 76 people in Nashville are losing their jobs.

Overall, Macy’s is closing 11 stores in 9 states, laying off 960 people.

Damn Hippies at Dow Corning

According to Stephanie Burns, CEO of Dow Corning: “We’re… confident that solar technology represents a tremendous opportunity for both clean energy and economic growth.”

How confident are they? So confident that they’re investing up to $2.5 billion in a joint venture with Hemlock Semiconductors in Clarksville, Tennessee. Today’s announcement means 1,000 construction jobs in the short term and up to 800 high-paying jobs at the facility in the long run.

"This is a huge win for Tennessee. They're talking about a range of investment of between $1.2 billion to $2.5 billion over time. If they get to the upper end of that range, it will be the largest investment in our state's history," Gov. Phil Bredesen said.

Corker Tells a Lie

Fox Business reports:

The UAW concessions include allowing the domestic automakers to postpone their required health-care contributions from 2010 to 2012 and to eliminate the controversial jobs bank.

Sen. Bob Corker says:

The fact that they [the unions] were willing to make no concessions — zero — and let these companies fall into peril as they are now, to me, as I wake up today, it’s pretty surreal actually.

One of them is lying, and for once it’s not Fox.

One Billion Dollars!

Gosh, maybe President-elect Obama is right! Green technology just might be the key to economic strength! Looks like Hemlock Semiconductor is going to invest a billion dollars or more in developing solar technologies, right here in Tennessee.

Merry Christmas from Sen. Bob Corker

After Senate Republicans killed the auto industry bailout, GM was forced to immediately announce the shutdown of 20 manufacturing plants for the month of January, temporarily laying off all those workers in time for Christmas.

No word yet how that will affect Spring Hill workers here in Tennessee. But I have a pretty good guess how it will affect the economy.

A quick reminder to the GOP: jobs = good, layoffs = bad.

Update: Fortunately, those temporarily laid-off workers will receive a partial salary in January. Unless Sen. Corker gets his way. Under Corker’s plan for the auto industry, they would get nothing. The federal government would step in and kill their partial salaries during temporary plant closures. Is that want you want your Senator fighting for?

Domestically Speaking, Anyway

Hey, three cheers* for Vice President Cheney. He summed up the Bush legacy perfectly in this Politico headline:

Cheney: It's 'Herbert Hoover' time

*Ask your doctor if sarcasm is right for you.

Corker & The Big Three

I’ve got to say Sen. Bob Corker (R-TN) is right on the money when he sums up the situation for Chrysler and Ford.

He says Chrysler just wants a little spending money to stay afloat until it can sell itself off to the highest bidder:

"The fact is basically what your plan is about is that you want to hang around long enough so that you can date somebody and hopefully get married soon before you run out of money," Corker said.

Furthermore:

He told Ford Motor Co. CEO Alan Mulally, whose company is not in immediate danger of collapse, that he was just there because Chrysler and GM were asking for help.

As for GM, Sen. Corker has some good ideas and bad.

He gave GM a laundry list of solutions to it’s problems, including offering its debtors 30 cents on the dollar, which is more than they’re getting in the debt reselling market right now. Plus, Corker wants the UAW to cut GM some slack on retiree healthcare payments and unemployment payments above and beyond what the government gives laid off workers.

Well, GM should try to buy back its own debt for pennies on the dollar if it can, and that’s not a bad use for a government bailout check, if it gets one.

Here’s where Corker goes wrong. In this economy, the last thing you want to do is take money out of the hands of consumers, even (or especially) unemployed ones. For one, they’re buying necessities, not frivolities. And for two, we want to encourage all the spending we can.

The second-to-last thing you want to do is take healthcare away from retirees. Either the government is going to end up paying for it, or they’re going to have to go without. Neither is a good thing. And the ones that go without are likely to get sick and cost the government a whole long more money in the long run away.

So that’s two more good things to do with a government bailout check.

I’ve been on the fence on the whole auto industry rescue thing, but Sen. Corker now has me leaning towards a bailout for GM at least. The other two… not so much. Ford says they’re not going to declare bankruptcy either way, so if they’re not even at risk of bankruptcy why the hell do they need bailout? Chrysler’s a goner anyway. Would a bailout help them find a buyer or only give them longer to put it off?

Job Obituaries

The Tennessean laid off 67 people today, including 25 in the newsroom. Another 25 empty positions will go unfilled. (The Knoxville News-Sentinel recently got rid of 50 people.)

HCA is laying off at least a 100 people in IT, plus an unclosed number on top of that.

No word how many of the 12,000 people getting the axe at AT&T will be in Tennessee.

AbitibiBowater is shutting down a paper mill in Tennessee as it lays off 1,100 people in the US and Canada.

Thomas Nelson, a book publisher in Nashville, just laid off 55 people.

Bridgestone Firestone will lay off at least 158 people in LaVergne.

On the other hand, the US Census Bureau is hiring 1,000 people at its new office in Knoxville. It’s good news for sure, although these positions will go away once the 2010 census is complete.

$1,000,000,000,000

A one trillion dollar budget deficit in 2009! The entire 2009 federal budget (as submitted by President Bush) is only $3.1 trillion! Holy crap!

That’s what President-elect Obama will inherit, thanks the President Bush’s reckless mismanagement of the federal government, taxes, and economic policy.

The AP describes it pretty well:

While nobody likes a deficit, many economists agree that heavy federal government spending—on food stamps or unemployment benefits or public works projects—may be necessary to keep economies moving in times of recession or war.

The problem is that this time Washington was racking up massive deficits even before the current economic downturn.

We can’t cut government assistance in this economy. We can’t cut anything that would result in significant government layoffs. So the deficit explodes…

If President Bush wants to do what’s best for his country, he’ll immediately start recommending specific cuts to the military budget since these are best received when they come from a Republican (the “only Nixon could go to China” philosophy). Obama, as a Democrat, can then tackle non-military spending cuts.

However, spending cuts can only get us so far. In fact, they’re a drop in the bucket compared to $1 trillion deficit. We’re not talking about trimming the fat here; we’re talking about nearly one third of the entire federal government being financed by deficits.

We’d have to eliminate one third of the federal government to catch up. It’s almost beyond comprehension what that means.

PS: Maybe President-elect Obama bought himself a little political capital on military spending cuts by keeping Gates as Secretary of Defense. If Gates gives the green light to certain cuts, that might help. Perhaps Obama understood that he need the credibility of a Republican Secretary of Defense to do what needs to be done, not just for defense spending but for bringing our troops home.