Progressive Breakfast: Econ Recovery Number Dropping?

Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.

Pelosi Low-balling Economic Stimulus?

After Obama transition team members said the size of an economic recovery program may need to be between $700B and $1T [1] over two-years, Speaker Nancy Pelosi told USA Today [2] Monday that she expects the House bill, slated for passage before Obama is sworn in, to be between $500B and $600B. [2]

"Planets Aligned" for Auto Rescue

LA Times reports a White House auto rescue could happen tomorrow: [3]"'It seems like the planets are becoming aligned,' said Rep. Fred Upton (R-Mich.), co-chairman of the Congressional Auto Caucus, who added that administration officials indicated to him that an announcement was likely by Wednesday.'"

Bloomberg: [4] The U.S. Treasury may adopt a plan that would let a car czar or the Treasury Secretary force General Motors Corp. and Chrysler LLC into bankruptcy if the automakers don’t show they can survive without government aid, a U.S. senator said. GM and Chrysler would be required to submit viability plans by March 31 or lose any further U.S. support, Carl Levin, a Democrat from Michigan, told reporters in Detroit yesterday. The Treasury plan would resemble a measure passed by the U.S. House last week that was rejected by the Senate.

Cheney turns into voice of sanity on Rush Limbaugh: [5] "it comes at an especially bad time because as I say it's on the heels of the financial crisis and we're on the downside of a recession that may be the worst since World War II. And if the automobile industry goes belly up now, there's a deep concern that that would be a major shock to the system. It might be different under different economic circumstances. It's also important to remember that in most cases what we're talking about are loans. There's the expectation that eventually the taxpayers will be paid back; that these entities, including the banks, as well as the automobile industry, will be responsible for repaying the funds that are being advanced at this point."

National Review's Kathryn Lopez [6] tries to take Gallup poll data [7] to deem the US auto industry problems a "Union Issue."

But that's a highly warped reading of the data. 1) 64% blamed auto industry executives [7] for the legislative failure, versus 43% blaming unions. 2) Only a majority of Republicans (59%) blamed unions, [7] versus 41% of independents and 35% of Democrats.

Union-bashing is still in style, and much false information is flowing freely in the media and distorting public opinion (those independent and Democratic numbers in particular would be lower if the traditional media reporting was factual), but there is limited success in scapegoating workers.

(Most of) Green Team Officially Announced

Grist's Kate Sheppard reports: [8] "Barack Obama officially rolled out his green team at a press conference on Monday afternoon ... Obama emphasized in his remarks today that 'there is not a contradiction between economic growth and sound environmental policies,' and also noted that smart environmental policy goes hand-in-hand with national security." David Roberts adds: [9] "he stressed that his '21st century investments' will create jobs 'that would not otherwise have been created,' kickstarting city and state investments that have been put on hold. They aren't intended as a full solution, however, but a means to 'jumpstart an era of innovation' in the private sector." Joe Romm: [10] Top five reasons Chu is a great energy pick.

Salazar Reported For Interior

W. Post's Al Kamen: [11] "The Interior Department slot had been difficult to fill, with various contenders popping up and then going down in the last month. The leading contenders last week were Rep. Raul Grijalva (D-N.M.) and Rep. Mike Thompson (D-Calif.). But hunters and fishermen thought Grijalva too green. Enviros, however, thought Thompson too close to hunters and fishermen and maybe too close to Madam Speaker Nancy Pelosi, especially geographically. So, rather than offend, Obama is calling on Salazar -- though some enviros are unhappy with his support for some oil shale drilling."

Are enviros unhappy? Doesn't look like it. Grist's Kate Sheppard: [12] "He has vocally opposed Bush administration moves to open up land in Colorado and other Western states to oil-shale development ... Salazar got a score of 85 percent from the League of Conservation Voters for the 110th Congress, and has an 81 percent lifetime score."

Politico: [13] A former environmental lawyer, the first-term senator has backed numerous environmentally friendly policies. Just last week, for instance, he urged lawmakers to base the nation’s economic recovery package around clean energy infrastructure – a goal Obama laid out in announcing his energy and environment team Monday. Salazar also recently called Interior’s decision to move forward on commercial oil shale development in Colorado, Wyoming and Utah 'premature and flawed.'"

Some liberal bloggers are not a fan of the Blue Dog Democrat. Open Left's Chris Bowers: [14] "It is a real disappointment that [Rep.] Raul Grijalva wasn't the choice. Perhaps I spoke too soon about the degree to which Obama was listening to progressives during the transition." Booman Tribune: [15] "Well, if you were looking for a progressive to fill the position of Secretary of Interior, you will be disappointed to learn that Sen. Ken Salazar (D-CO) has been selected. On the other hand, if you are interested in seeing a more progressive Senate, this could lead to that outcome."

Conservative RedState building another false narrative: [16] "When your gasoline bill goes up again next year, remember: it’s because Ken Salazar hates oil shale development more than he likes American fuel consumers." Or maybe it won't be non-existent oil shale technology [17], but because we're hooked on OPEC. NYT: [18] "OPEC is meeting ... to discuss ways to stem the drop in prices. Chakib Khelil, the organization’s president and the Algerian oil minister, suggested last week that producers would approve “a severe production cut to stabilize the oil market.”

Duncan for Education Secretary

Mixed, contradicting reactions.

WSJ: [19] "[Arne Duncan] has straddled two competing factions of the education community: the teachers unions, who push for more funding and smaller classes, and a movement that favors accountability and free-market-style incentives and looks to hold schools and teachers more accountable for student performance."

USA Today: [20] "Duncan has supported higher pay and better working conditions for teachers. He has championed district schools, managed by the Academy for Urban School Leadership, that train new teachers and boast a 90% teacher retention rate. Duncan has backed No Child Left Behind, President Bush's 2002 education law, but he testified in 2006 that Congress should amend it to give schools, districts and states 'the maximum amount of flexibility possible' to implement it."

Booman: [15] "I think you can safely consider Duncan to be a true progressive selection, although he won't necessarily hew to the teacher union's party-line."

Jack and Jill Politics' rikyrah: [21] "He has done nothing for the Chicago Public School system. Not for the children that need it the most ... the worst appointment that Obama has made."

TNR's Seyward Darby: [22] "It's a relief for the education reform camp, which sees the appointment of one of its own as a heartening sign of Obama's education priorities. But, while Duncan is a respected and aggressive change agent, he also appeals to the more traditional Democratic establishment and teachers' unions."

Earlier, The Nation's Alfie Kohn wrote: [23] "Duncan ... has been called a "budding hero in the education business" by Bush's former Education secretary, Rod Paige. Just as the test-crazy nightmare of Paige's Houston served as a national model (when it should have been a cautionary tale) in 2001, so Duncan would bring to Washington an agenda based on Renaissance 2010, which Chicago education activist Michael Klonsky describes as a blend of 'more standardized testing, closing neighborhood schools, militarization, and the privatization of school management.'"

As Fed Meets, New Buzzword: "Balance Sheet"

Bloomberg: [24] "The Federal Reserve may today reduce its main interest rate to the lowest level on record and prepare for one of the boldest experiments in its 94-year history: using its balance sheet as the key tool for monetary policy....Bernanke, a scholar of the Great Depression, indicated in a Dec. 1 speech that policy makers will need to focus on “the second arrow in the Federal Reserve’s quiver -- the provision of liquidity,” including options such as purchasing Treasuries to inject more cash into the economy. A formal commitment to expand the balance sheet would constitute “the most extraordinary policy approach we have seen” so far, said Brian Sack, a former economist at the Fed’s Monetary Affairs Division, who is now senior economist at Macroeconomic Advisers LLC in Washington."

LA Times: [25] "In theory, the Fed's balance sheet is infinite and will permit the central bank to buy as many troubled assets as it thinks necessary. 'Bernanke is the only person who can create money out of thin air,' [former Fed economist David] Jones explained. 'Any time he buys an asset, he writes a check and that becomes reserves for banks. Nobody can do that except the Fed. They can write a check, and that creates reserves and that creates money.' If all goes well, economists say, the Fed will eventually have to cut back the money supply before inflation takes hold. But the Labor Department is expected to confirm today that signs of inflation at the consumer level have all but disappeared."

Madoff Scandal Reverberates

Newsweek's Mark Gimein: [26] "The question that everybody with big chunks of money parked with exclusive fund managers on Wall Street will be asking today is whether there are other possible Bernard Madoffs out there: high-profile managers who've been lying about their returns for years. The answer to this is going to be 'yes,' which leads to the second question of, 'Is there any way to spot them?' Or, in other words: Is there a way to know whether a money manager's returns are too good to be true? ... One thing that almost everyone on Wall Street has had drummed into them is that bad news is, in Wall Street lingo, 'highly correlated': It tends to come in clusters and bunches. If one investment manager's holdings can go from $17 billion to zero overnight, it's likely there are several more multibillion-dollar blowups just waiting to rear their heads."

Liberal bloggers look to lax SEC reg as root cause.

Digby: [27] "Apparently, the Madoff ponzi scheme is making even some Republicans question whether the SEC might not be doing its job."

D-Day: [28] "Because in this era of trusting the market, in believing in magical men who make money appear in everyone's numbered back account, the SEC didn't come close to investigating the scheme ... Investment firms were as off-limits under Clinton as they were under Bush. In fact, as long as everyone made money, regulators weren't much exercised to investigate. This is the same root cause that led us to the crisis. Nobody checked the derivatives, nobody checked the CDOs and the credit default swaps, and nobody checked out Bernie Madoff. In good times, these bullets could be dodged. Not so now."