Both sides are stringing the budget talks along. The latest meeting between President Obama and Republicans ended tonight with the parties closer, but not yet pulling out the cigar.

The House passed a one week stopgap bill that would continue funding for the troops (could their gamesmanship be any more transparent?) and Obama promises to veto it.

Apparently, the holdup is abortion funding and clean air. Does anyone not see this as mere Republican blustering?

Tonight's meeting at the White House didn't produce a budget accord. It's becoming more and more apparent that this is a game, being milked by House Speaker John Boehner and Republicans who have insufficient power or smarts to do anything but bluster.

I hope Obama doesn't make any concessions. It's pretty apparent Boehner will have to give in tomorrow, or face the wrath of the public when the reality of what a shutdown entails finally sinks in.

We're being set up for a last minute deal. Does anyone doubt an agreement will be announced tomorrow? This is all like a poker hand, and the question is, who's bluffing?

Avoiding a shutdown is good. But the games, and rewarding the losing players with concessions, are not. Obama should hang tough, refuse further budget cuts, and call Boehner's bluff. [More...]

It sounds tense in Washington. Can President Obama convince Congress to avoid a shutdown? He's trying.

Or will the Republicans in Congress just let the country fall apart?

NYTimes:

The United States economy showed signs of kicking into gear in March, as the Labor Department reported Friday that it added 216,000 jobs and knocked the unemployment rate down another jot, to 8.8 percent.

Via the New York Times, meet the new face of psychiatry. There's no more talk therapy, no more couches, no more 45 minute sessions where your shrink listens to your problems.

Insurance companies stopped paying for it. Instead, you book a 15 minute appointment and get....pills. The Times article profiles one doctor who switched from Sigmund Freud psychotherapy to pill prescriber, Dr. Donald Levin of Chicago. His interview is honest...to a point, and sad. He makes no excuses. It's all about money.

I miss the mystery and intrigue of psychotherapy,” he said. “Now I feel like a good Volkswagen mechanic.”

[More...]

Krugman:

The economic news has been better lately. New claims for unemployment insurance are down; business and consumer surveys suggest solid growth. We’re still near the bottom of a very deep hole, but at least we’re climbing. It’s too bad that so many people, mainly on the political right, want to send us sliding right back down again.

[. . .] Over the next few weeks, House Republicans will try to blackmail the Obama administration into accepting their proposed spending cuts, using the threat of a government shutdown. They’ll claim that those cuts would be good for America in both the short term and the long term. But the truth is exactly the reverse: Republicans have managed to come up with spending cuts that would do double duty, both undermining America’s future and threatening to abort a nascent economic recovery.

What Krugman does not say - The Deal is at the heart of today's spending cuts battle. By agreeing to slash taxes for the rich in December, the Obama Administration invited the slashing of government spending in March. And this will strangle the chances for recovery. The Deal was a terrible mistake.

Speaking for me only

A good jobs report:

The nation’s employers added 192,000 jobs on net in February, after having added just 63,000 jobs the previous month, the Labor Department reported on Friday. [. . .] The unemployment rate ticked down to 8.9 percent, falling below 9 percent for the first time in nearly two years.

Of course, we've been down this road before, a few good job reports followed by mostly bad reports. And with "austerity" the watchword in Washington and in state capitols, my personal view is this will be remembered as a blip. But today, this is good news.

Speaking for me only

GDP for the 4th quarter of 2010 revised sharply downward:

Budget cuts by state and local governments hurt the economy more than originally thought, according to a government release Friday. Gross domestic product, the broadest measure of economic activity, was revised lower to an annual growth rate of 2.8% in the three months ending in December. The initial reading had been for a 3.2% growth rate in the period. That's a surprising dip, given that economists were expecting the rate to be revised upward to 3.3%.

Surprise will be the reaction this year as the economy struggles along with little job growth and federal government spending cuts. Our Lost Decade proceeds apace.

Speaking for me only

3 stories for your consideration:

Obama Administration a year late and a lot of dollars short with haircuts for banks:

The Obama administration is trying to push through a settlement over mortgage-servicing breakdowns that could force America's largest banks to pay for reductions in loan principal worth billions of dollars. [. . .] Under the administration's proposed settlement, banks would have to bear the cost of all writedowns rather than passing them on to other investors. [. . . E]ven if banks agree to a $20 billion penalty, the number of mortgages that can be cured with that number is limited [. . .]

Goldman Sachs says budget cuts will significantly reduce economic growth:

After last week's drop to 383k new unemployment claims, everyone was declaring the beginning of the end of the jobs crisis. As I noted in this post, this repeats the experience of last year, when everyone was ready to declare the beginiing of the end of the jobs crisis. And like the last time, the calls were delusional. Aggregate demand remains extremely weak. Unless and until aggregate demand shows consistent growth, the jobs crisis will continue. Today's weekly jobless claims report supports this view:

More people applied for unemployment benefits last week, one week after claims had fallen to the lowest level in nearly three years. The Labor Department says 410,000 people sought unemployment assistance last week, a jump of 25,000 from the previous week. The rise was much larger than economists had expected.

It's not Recovery 2011, it is the continuation of our Lost Decade. And our leaders do not seem to care, as Austerity 2011 goes into full swing.

Speaking for me only

Krugman:

[President Obama] has effectively given up on the idea that the government can do anything to create jobs in a depressed economy. In effect, although without saying so explicitly, the Obama administration has accepted the Republican claim that stimulus failed, and should never be tried again.

What’s extraordinary about all this is that stimulus can’t have failed, because it never happened. Once you take state and local cutbacks into account, there was no surge of government spending. [. . .] Fiscal policy didn’t fail; it wasn’t tried.

Meanwhile, The New Republic tells us how great Tim Geithner is because "Wall Street looks like a patient that staggered off its death bed and promptly took up ultra-marathoning[.]" Yes, that should warm the hearts of Dems and progressives everywhere. Mortgage crisis? Unemployment? Not Geithner's problem. Banks making obscene amounts of money? Job well done Timmeh. Sheesh.

Speaking for me only

The Obama Administration has discovered the secret to dropping the unemployment rate --get people to stop looking for work:

The United States labor market slowed to a crawl in January, adding just 36,000 jobs last month, far below consensus market forecasts. With 13.9 million people still out of work, the unemployment rate actually fell to 9 percent in part because of a readjustment of population figures and also because fewer people looked for jobs during the month.

Happy Days are here again!

Speaking for me only