Christina Romer has a PhD in economics from MIT and has been a professor at Princeton and then MIT before agreeing to serve as the head of Barack Obama’s Council of Economic Advisers. She’s one of the foremost authorities on the Great Depression. Lawrence Summers got tenure as an economics professor at Harvard when he was 28; he’s served as chief economist at the World Bank and as Secretary of Treausury and now he’ll be heading the National Economic Council. Paul Krugman just won a Nobel Prize in economics. These and other people approve of Obama’s plans for a deficit-financed job-creating stimulus package.

Under the circumstances, I really don’t understand how Bloomberg thinks it’s credible to run a Caroline Baum column titled “Obama’s Job-Creation Program Flunks Basic Math”. Brilliant and well-qualified people can be wrong about stuff, but surely Obama’s team knows “basic math.” They know advanced math! To claim otherwise is almost offensive to the reading public.

Meanwhile, her argument concludes with some paragraphs that might be plausible if you’ve been asleep for the past eight (or perhaps I should say 28) years:

It’s said, or used to be said, that government’s role is to create an environment that encourages private job creation. That used to mean a backdrop of low taxes and light regulation.

With the public clamoring for more stringent rules to prevent a recurrence of the current crisis, it doesn’t seem as if a business-friendly backdrop is even on the table.

Maybe that’s why the government has to do the private sector’s work.

Seriously? We’re in this current crisis because recent policy has been insufficiently business-friendly? Who thinks that?

Barack Obama continues to be stupendously popular:

Eighty-two percent of those questioned in a new CNN/Opinion Research Corporation poll released Wednesday morning approve of the way the Obama is handling his presidential transition. That’s up 3 points from when we asked this question at the beginning of December. Fifteen percent of those surveyed disapprove of the way Obama’s handling his transition, down 3 points from our last poll.

The 82 percent approval is higher than then President-elect George W. Bush 8 years ago, who had a 65 percent transition approval rating, and Bill Clinton, at 67 percent in 1992.

[...]

The poll also suggests that the public approves of the President-elect’s cabinet nominees, with 56 percent of those questioned saying Obama’s appointments have been outstanding or above average, with 32 percent feeling the picks have been average, and 11 percent saying Obama’s choices have been below average or poor.

That 56 percent figure is 18 points higher than those who said then President-elect Bush’s cabinet appointments were outstanding or above average and 26 points higher than those who felt the same way about then President-elect Clinton’s nominees.

[...]

A third say that their impression of Obama has gotten better since the election, with only 8 percent saying their opinion has gotten worse.

Of course that’s not going to last. But it does suggest that Obama should have some pretty wide latitude to drum up support for controversial moves. It would be interesting to see if, for example, Obama tries to use his popularity to move the needle on EFCA. But most important is going to be his economic stabilization/recovery policies. He’s got a lot of leeway, but if the economic situation doesn’t improve at some point that popularity will vanish.

I’m definitely concerned by reports of states that just want to use infrastructure stimulus money to build more sprawl-enabling highways. At the same time, the mere fact that “most” of some package may be targeted at roads rather than rails doesn’t necessarily make a package bad for rails — the appropriate baseline for these judgments is the current funding ratio which is nowhere near 50-50.

Sam Penrose asks:

Why do states have to balance their budgets every year?

One answer is “it’s not a very good idea.”

Another answer is that there’s no real reason and, in fact, they don’t really “have to” do it at all. As this primer from the National Conference of State Legislatures makes clear the nature of the balanced budget requirement varies from state-to-state in a number of respects, up to and including the fact that Vermont has no such legal requirement.

The practical issue is that no state has the capacity to issue the sort of routine, revolving debt instruments that are used to finance the federal deficit. I don’t think there’s anything actually stopping a state from trying to change its laws and build this capacity. I do suspect that if a state did try to move toward funding a structural deficit that people in other states might start to worry about what the broader consequences would be of Louisiana or Michigan defaulting on its debt and perhaps you’d see some kind of move to formalize the tradition of state balanced budgets.

But better than balanced budgets would, I think, be some kind of federal requirement for rainy day funds. States would, ideally, be made to sock away an amount of money equal to such-and-such a percentage of annual state expenditures. The funds would be “deposited” in some kind of federal account and then “released” by some kind of fiscal policy board that would also, obviously, have the authority to suspend the contribution requirement. I suppose there might be constitutional issues with this, though it’s not obvious to me that that’s the case.

Dexter Filkins reports on an emerging strategy in Afghanistan to adopt an analog of the “sons of Iraq” militia-recruitment efforts. Spencer Ackerman expresses some considerable skepticism about this.

I’m relatively sanguine. I’ve always thought — and continue to think — that our post-surge tactics in Iraq have been wildly unsuited to our nominal war aims and to our interests in the region. I think those tactics have “succeeded” by redefining our war aims to something like “save face irrespective of the financial, human, or strategic costs.” But in Afghanistan, I think this makes more sense. In Afghanistan, fighting al-Qaeda really is the overarching goal. Afghanistan has no real tradition of effective central government control. And since Afghanistan doesn’t have the same resource curse issues as Iraq, I think it’s much more plausible to imagine a modus vivendi between disparate armed factions being somewhat stable over time.