Harley Davidson's layoffs are another indicator that the economy is in a freefall.
That is why most economists support the Obama administration's push for a large stimulus package. Private demand (consumption and private investment) is non-existent. The only way to reverse the economy's decline is through increased public demand.
President Obama has proposed an $825 billion stimulus package. Many economists think that Obama's proposal is too modest and that a stimulus in the range of $1.3 trillion is needed.
But not the Republican Party!
The very same Republican leaders who remained silent as President Bush ran record deficits nearly doubling the national debt are now expressing concern over Obama's plan.
These are the very same politicians who refused to extend unemployment benefits, increase food stamp expenditures and expand health care for children from low-income families a little more than a year ago. The only economic recovery measures they support are tax cuts, one of the least effective forms of stimulus.
The right's failure to recognize the severity of the crisis and to endorse an effective federal responses has contributed to the loss of 2.4 million jobs in the last year, more than a million in the last two months.
Once again they are digging in their heels and opposing federal action. President Obama has exhibited restraint in responding to this ideologically motivated opposition. But people are hurting and the Republican Party is standing in the way of help.
Nobel Prize winning economist Paul Krugman summarized the Republicans opposition in his New York Times Column, "Bad Faith Economics" today: "Basically conservatives are throwing up any objection they can think of against the Obama plan hoping something will stick."
President Obama politely listened to Republican gripes about his stimulus package during a meeting with congressional leaders last Friday - but he also left no doubt about who's in charge of these negotiations. "I won," Obama noted matter-of-factly, according to sources familiar with the conversation.
In an earlier interview President Obama was clear about his negotiating style. Right-wing ideologues who have led their party toward irrelevancy and the country to the brink of economic disaster ought to remember what the President had to say.