Stimulus Now
But it is the policy, not the personnel, that is most important. The early signs are that the policy is essentially sound. Obama has directed his economic team to put together a major jobs package that would "put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies."
That's the good news. The bad news is that the economy is tanking so quickly we can't wait around until January 20, and a lame-duck government has essentially abdicated its role to Ben Bernanke's Fed and Hank Paulson's Treasury. But the Fed's attempts at monetary stimulus have lost almost all traction: long-term interest rates and the Fed funds rate are now moving in opposite directions.
We should expect no leadership from Bush and company at this point. But Congress can take steps now to hold the economy together and to move quickly toward a deeper stimulus package. Congress should reconvene after Thanksgiving to pass an immediate bridge loan for the auto industry and its workers to get them through to January, before debating a more comprehensive rescue package that transforms Detroit into a more viable, innovative, green industry
