When you spend $787 billion, there's a lot of pressure to show results. So, there's no surprise that success is being proclaimed across the country. States are saying that they've used the federal stimulus package money to create or save more than 388,000 jobs this year. Teachers, construction workers and other professions have realized the upside of stimulus cash according to reports from 33 states and Puerto Rico, with the remainder of the results being released on Friday.

Of course, the numbers "should be taken with a grain of salt," says Ethan Pollack of the Economic Policy Institute. The states were tasked to count the jobs created or protected, but the results have been of dubious accuracy. This doesn't mean the stats can't provide fodder to people on both sides of the aisle.

Columbia Business School's Frank Lichtenberg says the data shows a solid economic impact, and the Obama administration's Council of Economic Advisors believes the stimulus spending has taken care of between 600,000 and 1.1 million jobs.

And, there are those who disagree.

A note on economic polls: when evaluating them, subtract 15-20%. Case in point: U.S. public opinion toward outgoing President George W. Bush.

A CNN/Opinion Research Corporation poll taken in December 2008 found the following:

Despite the worst U.S. recession in decades, rising unemployment, declining median incomes, unprecedented home foreclosures, massive U.S. government borrowing to bailout / rescue the bank sector, and the lowest job creation of any eight-year president in the modern era, the poll found that:

• 23% of the American people said they would miss Bush, 25% said Bush managed government effectively, and about a third said he would go down in history as a good president.

Roughly a third of Americans viewing Bush as a good president?, with 25% saying he managed the government effectively? What's going on here?

Who are these people? Upper-income Americans or strong Republicans?

Exactly: either, or possibly both, which is why you need to deduct 15-20% when reading a poll, to gauge a president's support, particularly on economic issues.

The 2001-2009 presidency of George W. Bush ends in less than a week, so it's appropriate to evaluate the Bush years and his economic legacy.

Two foreign policy notes (which also affected economic conditions): History will determine whether the Iraq War did/did not further American interests of democracy and an enduring peace in the Middle East.

Also, President Bush effectively maintained the safety of the United States at home: there has not been another terrorist attack on U.S. soil since September 11, 2001.

**
As the Clinton administration ended, the United States entered the new century and decade with the strongest, most-resilient, most-adaptable, and technologically advanced economy on the face of the earth, according to an analysis by the U.S. Central Intelligence Agency. Job growth had been enormous in the 'Roaring 90s' -- with more than 22 million jobs created in eight years. Median incomes were rising, poverty rates were at their lowest levels in decades. Business investment and new business formation were strong. The stock market was booming, capital markets were sound, and driven by the promise of new technologies, the United States was poised to enter a new phase of growth and development, with the benefits spread across its society.

**
The Bush administration began in 2001 with the passage of a $1.35 trillion tax cut -- a cut many economists and analysts felt was not necessary, given that the U.S. economy was already recovering from the mini 2001 recession.

Tax cut favored the rich

But the biggest problem with the tax cut was that it was tilted too much toward the rich and upper-income citizens -- Bush's political base -- and it almost guaranteed that, over time, broad-based demand would remain soft, and probably fail, in a few years.

It's not as bad or as large as it looks is how one economist put it, but try convincing U.S. taxpayers of that.

The U.S. budget deficit soared to a record $485.2 billion in the federal government's fiscal first quarter, (October-December 2008), the U.S. Treasury Department announced, as the government implemented its financial system stabilization plan.

The December 2008 budget also increased to $83.6 billion from $48.3 billion a year ago.

Further, the deficit is on-track to total more than $1 trillion this year, fiscal 2009. The Congressional Budget Office (pdf) is projecting a $1.2 trillion deficit for the current fiscal year.

In addition, the $485.2 budget record for fiscal Q1 already exceeds last year's budget deficit for the full year of $454.8 billion.

What to make of the U.S. Treasury's extension of a $17.4 billion TARP loan to General Motors and Chrysler?

Way to go, inside the beltway gents and ladies!

Indeed, the plan, which contains performance requirements and thresholds that monitor viability, will be castigated by the right and left, by everyone from libertarians to vegetarians, but they won't sway economist Richard Felson into opposing the action.

"Arguably, this is the best economic news we've heard this year, outside of the oil price drop, and that shows you what type of year we've had," Felson said. "With a GM (NYSE: GM) and Chrysler failure, the U.S. economy would have neared a depression, with probably disastrous consequences for the U.S. stock market. Look on this loan not as an auto bailout, but as the first step in the restructuring of the U.S. economy."

Loan / restructuring package buys time

Is it the best use of taxpayer dollars? No. But who's to say this is not a good use of those funds, particularly during a national crisis?

Could 10 or 12 economically conservative Republican Senators prevent a Big Three auto rescue and the cessation of domestic auto manufacturing operations?

Indeed they could. Many of the conservative Republicans come from states where General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler do not have a large manufacturing presence. Hence, there's likely to be little home-front pressure.

That fact, combined with the filibuster era - - whereby lawmakers routinely abuse the Senate's unlimited debate power to oppose any legislation that does not have 60 votes - - the total need to invoke 'cloture' or cut-off debate - - means a dedicated cadre of Senators has the political and procedure power to defeat any legislative item below the 'sweet 60.' Hence, in that sense a dedicated, numerical minority can undermine the will of the majority, the will of the people.

Now the real auto rescue debate begins

What's more likely is that the economic conservative Senators will use the filibuster weapon as a means to extract additional concessions from Big Three stakeholders - - primarily the United Auto Workers. And their goal is obvious enough: a UAW defeat will drive labor costs lower and represent another victory for those who believe the lower wages fall for the typical person and worker, the better. In this argument, wages are merely another cost in the production machine, and the less money allocated for this expense category - - as with any expense category - - the better.

Conversely, the UAW will argue that any attempt to weaken them - - or bypass them - - will hurt/eliminate the only organized power that the typical person and worker has at the bargaining table and in the American economic system. They'll also argue that a living and decent wage for all working Americans is the foundation for a strong, stable U.S. economy, with sustainable GDP growth.

Each side is likely to offer exaggerated business and economic statistics in favor of their arguments, in a Washington process known as 'rhetoric for dollars' that frequently accompanies appropriations bills and government loans. The economic conservatives are likely to argue that UAW total compensation costs are 'wildly above' those for auto workers in Japan and Germany. The UAW will likely argue that it's already made 'major concessions' in previous contracts, without noting that work rules haven't changed that much.

Experts inside the Bush Administration tried to warn about the mortgage meltdown. They even proposed new regulations to set guidelines for the risky loans written by the banks who now have their hat in hand looking for a bailout. The banks fought these regulations and the Bush administration caved in. Now, we taxpayers are paying for this lapse in judgment in two ways -- an economic meltdown and a huge tax bill. According to an Associated Press report today, regulators warnings to banks in 2005 included:

• Banks were warned exotic mortgages were often inappropriate for buyers with bad credit. Anyone surprised about that?
• Banks that bundled and sold mortgages were told to be sure investors know what they were buying. We know that's not true. AAA ratings were given to much of this debt that proved to be of much lower quality and much more risky.
• Regulators urged banks to help buyers make responsible decisions and clearly advise people that interest rates might skyrocket and huge payments might be due sooner than expected. Do you believe that mortgage brokers or banks clearly warned people about the dangers of the loans they were taking? I don't.

This post is part of a feature in which he wonder whatever happened to some notorious financial felons. See all 17.

Unlike many of our leading financial felons, Jack Abramoff was not a trader or financier. Instead, he was primarily a political operative who managed to turn access and influence in Washington D.C. into a very profitable business. Actually, "criminal enterprise" is probably a better term, as Abramoff is currently serving a five-year prison sentence at a prison camp in Maryland.

Abramoff was a very busy guy and summarizing his misdeeds isn't easy. Highlights of his activities include bribing public officials, stealing from Native American tribes, tax evasion, wire and mail fraud, interfering with the court system in Guam, and defrauding the owners of a Florida cruise line. And then there's the allegation that he had a man killed in Florida.

Abramoff's main business was selling access to the Bush administration. His crimes reveal a lot about the legal and regulatory environment created during the Bush years, an environment that made Abramoff and so many other high-performing felons possible. His career serves as a kind of summary of all that is wrong with the Republican right -- what Bill Moyers calls the "reptilian right" that seeks power though ideological purity but only for the purpose of self-enrichment. Abramoff's power and riches were inseparable from his ties to the Republican Party, which he began serving as the chairman of the College Republican National Committee, joining a long line of operatives including the illustrious Karl Rove.

All House Speaker Nancy Pelosi, D-California, wants for Christmas -- happiness for her grandchildren aside -- is a tax cut.

The incoming Obama Administration, driven by the U.S.'s large economic problems and by prudence, is expected to seek quick approval of a major fiscal stimulus package soon after Inauguration Day on January 20. Even so, Speaker Pelosi may do the administration one better: Pelosi will seek to include a tax cut in a fiscal stimulus package, Pelosi's spokesman told Bloomberg News.

In addition, Congressional Democrats are considering passing two fiscal stimulus packages: one during the current lame-duck session and another after the Obama Administration and new Congress take office in January.

Pelosi favors a tax cut over the earlier stimulus version of tax rebates because the latter would take too long to administer, taxs-news.com reported. Pelosi will seek Senate agreement on a modified-version of a roughly $61 billion stimulus measure the House approved earlier in September, before seeking approval from President Bush.

Selected House Republicans said they had never agreed to a bailout deal, despite only hours earlier Bush Administration officials announcing an agreement on "fundamentals."

That segment of House Republicans, many from the party's conservative wing, say they oppose assisting Wall Street firms, which they believe made wrong business choices that led to the crisis. As an alternative, House Republicans offered a plan under which companies would buy insurance from the government, and that includes proposed tax cuts and a relaxation of government regulations.

Currency trader Andrew Resnick said the House Republicans' plan was deficient from a number of standpoints.

"Is this the way a responsible coalition behaves? You say nothing all day, then in the dead of night present a questionable plan via back-channels? Frankly, it's reckless and bizarre," Resnick said. "The House Republicans are playing with fire. Here we are trying to prevent a financial crisis from turning into a catastrophe and one political camp wants to play partisan politics. It's the height or depth of public irresponsibility."

Resnick said credit markets, already stressed by a series of financial institution and bank failures, as well as forced margin calls, could degenerate further.

"I'll tell you right now this whole [expletive] system could come crashing down if banks continue to hoard funds and a series of cascading sales starts to occur," Resnick said. "The House Republican plan also isn't credible. Few expect it to provide the liquidity necessary to keep the financial system functioning, and their tax cut proposal is just nuts. They want to increase the federal budget deficit more? With the dollar weak and after eight years of deficits?" Resnick added that he was presently flat, or had no open currency trading positions.

Bloomberg columnist Caroline Baum gently reminds us that not every tax cut achieves its intended effect.

Case study: The 2001 Bush Administration federal income tax cut, which included a cut in the marginal tax rate to 35% from 39.6%. The Bush Administration touted it as a tax cut that would increase incentives to invest, save and work.

The result? The tax cut didn't work: saving and investment have been "anemic" during the Bush years, Baum said, citing data provided by Paul Kasriel, chief economist at Northern Trust Corp. in Chicago. Business investment is down, the savings rate is at a post-World War II low. Further, the labor participation rate has declined.

No guarantee tax cut would be invested in U.S.

But why didn't cutting the top marginal rate do all of the good things the Bush Administration touted? Economist Peter Dawson said the reason is the tax cut's inherent flaw.

"The tax cut contained the mistaken belief that rich taxpayers would invest their money and invest in the right way, in the U.S., to increase GDP," Dawson said. "There was no guarantee that they would do that. Someone who is rich could invest the money in Brazil or India, with little benefit for the United States."

There are times when you need an archive of information and evidence to make an argument.

Then there are times when one simple fact or incident makes the case by itself. (Which, incidentally, may very well be the genesis of the adage "A picture says a thousand words.")

Evidence item of consequence: a lunch that global trade consultant Edward Goldberg, a colleague of New York Times columnist Thomas Friedman, had with a Russian trade attaché.

The Russian trade attaché, Friedman relates, years ago was delighted to hear from Goldberg that the Bush administration wanted to drill for oil in the Alaskan wilderness. The reason? The amount of oil derived would be negligible in terms of the U.S.'s needs, and it signaled that the Bush Administration was not planning to do anything to establish an alternative energy program, "which of course would threaten the economic growth of Russia."

The real estate market is collapsing fast. Why? People borrowed more money than they could repay so they could "buy" houses they could otherwise not afford. And the banks that pushed those loans now find themselves the miserable owners of those death support systems for debt. The banks don't want these economic death traps -- so they'll dump them at a fraction of the price at which they were sold. (The Wall Street Journal reports that in June 2008, Credit Suisse sold a 1,230-square-foot home in Corona, CA for $198,000 that went for $450,000 in December 2006).

Bloomberg News reports some stunning statistics about how quickly banks are taking possession of those houses. U.S. foreclosure filings spiked 55% while bank seizures -- when a bank takes ownership of a house also known as real estate-owned (REO) -- skyrocketed 184%. Bloomberg says that "more than 272,000 properties, or one in 464 U.S. households, got a default notice, was warned of a pending auction or were foreclosed on."

This transfer of titles to banks is contributing to a massive loss of wealth. Bloomberg reports that home prices fell "15.8% in May, the most since at least 2001, according to the S&P/Case-Shiller home-price index." And Bloomberg indicates that 33% of home sellers in the second quarter lost money. Moreover, according to SeekingAlpha, 33% of houses bought in the last five years are worth less than the amount of their mortgages.

IndyMac Bancorp.'s failure, along with the failure of seven other banks this year, has erased 17% from an FDIC insurance fund, and will likely propel an increase in insurance fund premiums, Bloomberg News reported Monday.

IndyMac may cost the fund $4-8 billion, in addition to $1.16 billion in earlier bank foreclosure costs, Bloomberg News reported Monday. Premiums for the deposit insurance fund are likely to rise, an FDIC official said.

Economist Peter Dawson said Monday a premium increase would represent the most prudent course for the FDIC.

"Needless to say, given the bank failures, this doesn't come as a surprise or a shock. The FDIC could have explored other funding options, but given the scope of the insurance funds claims, a premium increase would make the most sense at this time," Dawson said.

The FDIC is required to replenish the fund when the reserve ratio, or the balance divided by insured deposits, slips below 1.15%, Dawson said.

The dollar rose to a one-month high Thursday morning, as dollar bulls cheered a report that U.S. Congressional legislation designed to shore-up Fannie Mae and Freddie Mac had passed the House and that the Senate will begin evaluating the measure.

The House voted 272-152 in favor of the measure, and the Senate is expected to pass the bill within days, The Washington Post reported Thursday. President Bush, reversing earlier opposition to a component of the bill that would help communities hit hard by foreclosures, said he will sign the legislation in its current form.