A new report out by the CBO finds that the stimulus most likely saved this country:

President Obama's much-maligned economic stimulus package added as many as 3.3 million jobs to the economy during the second quarter of this year, and may have prevented the nation from lapsing back into recession, according to a report released Tuesday by the non-partisan Congressional Budget Office.

In its latest quarterly assessment of the act, the CBO said the stimulus lowered the unemployment rate by between 0.7 and 1.8 percentage points during the quarter ending in June and increased the number of people employed by between 1.4 million and 3.3 million. The higher figure would come close to making good on Obama's pledge that the act would save or create as many as 3.5 million jobs by the end of this year.

The CBO said the act also increased the nation's gross domestic product by between 1.7 percent and 4.5 percent in the second quarter, indicating that the stimulus may have been the primary source of growth in the U.S. economy. The Commerce Department estimates that GDP grew 2.4 percent in the second quarter, a figure many economists expect to be revised lower in a report due out Friday.

Since the stimulus passed, Republican leaders, like John Boehner, have jumped in front of the cameras at any chance to say it was a failure. These numbers sure don’t look like a failure to me. As matter of fact, they would probably be much higher if we could have had a bigger stimulus passed. Sadly Republican obstructionism wouldn’t allow that.

Elizabeth Warren has been one of the most sound voices during this financial crisis. Republicans and Democrats have both looked up to her analysis of the problems plaguing our economy and have touted her as one of the brightest minds when it comes to economics.

Tim Geithner – not so much.

So this story should come as no big shock to those that follow the soap opera filled world of economics:

Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner's views.

The financial reform bill passed by the Senate on Thursday mandates the creation of a new federal entity charged with protecting consumers from predatory lenders.

But if Geithner has his way, the most prominent advocate for creating the agency may not be picked to lead it.

The last thing we need is someone heading another economic unit of the federal government, who will fall into the “good ole’ boys club”. We need differing views and opinions, because that is the basis for the best ideas. To me that is an awesome reason to give Warren the job. Let the powers disagree and argue it out. Then we might start getting sound policy to turn this train wreck around.

That’s what leading economists are saying (via Cesca):

The recovery is shaping up to be stronger than expected and there is little risk the economy will slip back into a recession, according to USA TODAY's quarterly survey of 46 leading economists.

Yet most still say the rebound will fall short of the sharp, V-shaped upturns that often follow severe slumps, and the 9.7% jobless rate will fall slowly.

As the Fed meets to assess the economy this week, seven in 10 economists say they're more optimistic than they were three months ago.

"I think we've gotten to a point where it's a self-sustaining recovery," says Standard & Poor's chief economist David Wyss.

Even Joe Scarborough is going on about the economy improving this morning. This kind of news will really help Democrats out this fall, especially if you tie it to the Republicans filibustering financial reform. Then you can also add the countless sound bites of Republicans saying “get rid of the stimulus” and you got a big winning campaign for the Democrats. Now we only need the powers to be to seize on all this news and inform the American people of what is happening.

From a Washington Post breaking email alert:

Sales at U.S. retailers rose more strongly than expected in March as consumer stepped up purchases of vehicles and wide range of goods, government data showed on Wednesday, suggesting a broadening of the manufacturing-led economic recovery.

The Commerce Department said total retail sales jumped 1.6 percent, the largest increase since November, from an upwardly revised 0.5 percent rise in February. Sales in February were previously reported to have gained 0.3 percent.

I wonder how much of this is because of people getting back larger tax refunds this year? It would play into the fact that more middle class Americans will be more willing to spend their money than the top 2%. It also would be another indicator that the stimulus is working.

And we can thank Tom Coburn for this:

Extended unemployment benefits will temporarily expire for thousands of Americans on Monday because the Senate went on its spring recess without approving a one-month deadline extension.

The extension, which had bipartisan support, would have cost about $10 billion, but a lone Republican, Sen. Tom Coburn, said no until the costs are offset.

The Oklahoma senator objected to a commonly used unanimous-consent agreement to pass the bill under emergency conditions, even if it increases the federal deficit. Coburn wants to eliminate additional government spending to pay for the bill.

Could you imagine if a Democrat did this on one of Bush’s bills for the Iraq War? People like Tom Coburn didn’t mind draining the bank book for that, but if a Democrat did block it, we would hear cries of traitor and treason from the right. 

But here’s something to ponder. A lot of the Tea Party people are unemployed. I wonder how many will see their benefits dry up today because of Coburn? I also wonder who quickly the Republicans will try to shift blame to the Democrats on this and if the Tea Party people will buy into it? In those two questions pose the reality that Tea Party people don’t really know what is happening in the government, or what the two parties really stand for.

We are finally starting to see some job growth, though unemployment still remains at 9.7%:

The nation's economy posted its largest job gain in three years in March, while the unemployment rate remained at 9.7 percent for the third straight month.

The increase is the latest sign that the economic recovery is sustainable and healing in the job market is beginning. Still, the healing is likely to be slow, and most economists don't expect job creation to be fast enough this year to rapidly reduce the unemployment rate.

The Labor Department said employers added 162,000 jobs in March, the most since the recession began but below analysts' expectations of 190,000. The total includes 48,000 temporary workers hired for the U.S. Census, also fewer than many economists forecast.

Yes it is:

Unions and liberal groups have dismissed Sen. Harry Reid’s $15 billion jobs bill as "puny" while calling for larger stimulus measures.

More than two dozen organizations, including the AFL-CIO, National Association for the Advancement of Colored Peoples (NAACP) and National Council of La Raza, warned Democratic leaders in Congress to avoid tackling the troubled economy through incremental action.

They urged the Senate to pass the $15 billion jobs measure, which features a hiring tax cut for small businesses, but called for much more legislation to bring down an unemployment rate the White House projects to average 10 percent this year, more than 9 percent next year and over 8 percent in 2012.

"If this $15 billion was the only thing [that passed], that would be like having an amputated arm and sticking a Band-Aid on the end of it," said Richard Trumka, president of the AFL-CIO, on a conference call Friday.

This bill is 1/71 the size of the TARP bill. It’s another example of how the people of this country just don’t matter to the lawmakers in Washington.

Some good news on the unemployment front as the new numbers for January show a decline to 9.7%. Now we get to wait and hear the Republicans explain how this is a failure of the Obama administration.

Now that the American people have bailed out the banking system and our leaders are looking at ways to recoup the hundreds of billions of tax dollars we have spent, Wall Street is starting to look at ways to get out of paying us back.

According to an article in today’s New York Times[1], the Securities Industry and Financial Markets Association, which is the main lobbying arm of Wall Street, sent a e-mail to the heads of Wall Street’s legal departments last week saying that the tax may be unconstitutional since it would single out big banks. They have also hired Carter G. Phillips of Sidley Austin, an attorney who is no stranger to the Supreme Court, to review the proposal and determine if it could be considered unconstitutional.

When introducing this proposal last week, President Obama sent a warning shot to Wall Street, saying: “Instead of sending a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to help evade the fee, I suggest you might want to consider simply meeting your responsibilities.” Now it seems like Wall Street isn’t intent on doing that and instead wants to fight their responsibilities.

This becomes another gloomy chapter in corporate America’s milking of the people. They stood with their hands out when is was time to pass out money from the stimulus, but now that the government wants to take action to recoup costs and maybe prevent further failures, Wall Street is turning their noses at us. You can just hear Gordon Gecko muttering those famous words: “greed is good.”

But to argue that the proposed tax singling out banks would make it unconstitutional really doesn’t seem to hold water. Already our tax code is peppered with provisions that single out one group and not another. A common example would be the tax credit home owners get, while those who rent are stuck paying extra every year. Or how about the tax exempt status of some churches? They can bring in millions a year and function as a full fledged business, yet the IRS can not touch them. All of these rules have stood the tests of time, so I really don’t think a challenge to this tax will be successful. Of course we do have a new court now, so there is a chance they could prevail, but would that open the flood gates to more challenges to our tax code? 

New numbers came out today and one of them shows that inflation rose 2.7% last year. That’s pretty bad when people aren’t making us much money and we still have a big unemployment problem, but the problem doesn’t stop there.

Social Security recipients didn’t get a raise this year. The calculated that in June, so the inflation is mostly since June of last year. So these fixed income seniors will be stuck paying higher prices and not having more money. This is a serious flaw in the system. Add to that the cost sharing on prescription drugs went up a dollar for Medicare, seniors are going to have a really rough 2009.

Also it will be interesting to see what the new federal poverty level looks like. Currently it is at $10,830 for a single person. Will the 2010 level reflect real inflation? If so then it should be at $11,122 this year. It will be interesting to see if the number actually reflects real inflation. If history is any indicator, it won’t. To put this into perspective, the CBO estimates the FPL will be at $11,800 in 2016. Again – we have a seriously flawed system that needs to be fixed.

Throughout 2009 we kept hearing about the need new and more wide-spread financial regulation. That’s when the market was down. Now that it is back up, it looks like new regulations might take a back seat:

So what happened to Frank's initial fervor? The stock market recovery — the Standard & Poor's 500-stock index is up 67 percent since the March 2009 low — drained some anger from the debate, and after months of haggling over health care, legislators heard from their constituents that regulation was no longer a word with magic healing powers.

More important, Frank, House Speaker Nancy Pelosi, and other left-leaning Democrats have had to deal with the New Democrat Coalition, a moderate group inside the party that shares many of the values associated with Bill Clinton and the Democratic Leadership Council, which was founded 25 years ago in the belief that Democrats couldn't win elections without a strong moderate platform.

As Paul Krugman put it yesterday – That ‘1937’ Feeling.

The last decade is by no doubt the Bush decade since he held office for 4/5 of it, so the fact that we had zero net job creating during the decade should really stick to his legacy. To put it in visual terms, check out this graph:

You can only blame 9/11 for so much of it. We did see an economic turn around after the attacks, but those were quickly erased by the lack of attention the Bush administration gave to Wall Street’s fraudulent activities, which resulted in the most job loses in decades. Way to go Bush!

Call the Pope because hell is freezing over:

Senators John McCain and Maria Cantwell are joining forces to reinstate the Depression-era Glass-Steagal [sic] Act of 1933, which separated commercial banking from Wall Street investment banking. According to Newsweek, the two plan to announce the bipartisan McCain-Cantwell bill on Wednesday morning.

The Glass-Steagall law was repealed in 1999, allowing for commercial and investment banking to combine. Bloomberg notes that its repeal has sparked debate as to whether it "helped spawn reckless lending practices and financial speculation that led to the meltdown of credit markets last year and the $700 billion U.S. bailout of troubled banks."

There is something here that really has me scratching my head. Glass-Steagall was repealed by the Gramm-Leach-Bliley Act  in 1999 and proudly signed into law by then-President Bill Clinton. The main author of that bill was Phil Gramm, who also served as the top economic adviser to the McCain/Palin campaign. So Gramm was good enough to advise McCain on economic issues, yet McCain now wants to repeal Gramm’s keystone legislation?

I love the idea of us getting back to real regulation in the banking sector but I really question the motives of McCain on this issue.

Instead of letting Congress vote on one, the IRS went ahead and gave it to them:

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.

I wonder if the IRS would be as generous to you or me? I know the answer to that as someone who has had to deal with them on back taxes.

This is total bullshit and will become another key issue in 2010. Americans are suffering and still can’t find work, yet the administration continues to pander to the people who caused this economic catastrophe. When will the regular citizens get the attention they so much deserve?

Adding… Considering the IRS answers to Treasury, which is lead by Timothy Geithner, how much more will the Obama administration support him? I think a great progressive issue to take up in Congress right now is getting rid of the incompetent jack-ass. President Obama likes to pressure Congress – now it’s Congress’ turn to pressure him. Fire Geithner or watch as we shut down the Congress. I’m sure that will quickly become a bi-partisan movement.

That’s the fewest since December of 2007:

The unemployment rate fell to 10 percent in November as employers cut the smallest number of jobs since the recession began.

The Labor Department says the economy shed 11,000 jobs last month, an improvement from October's revised total of 111,000. That's also much better than the 130,000 Wall Street economists expected.