I was surprised to read the Washington Post quote economist Mark Zandi this morning: "'the economy has been measurably worse than anyone expected,' with a surprisingly sharp 'collapse in employment and surge in unemployment.'"

This is surprising, because the economy has absolutely not been "measurably worse than anyone expected." It has been pretty much following exactly the course that some of us predicted. In addition to myself, I can think of Paul Krugman, Joe Stiglitiz and Jamie Galbraith as economists who said that the economy was sinking faster than the projections used by President Obama implied. Here is an example and here, and here.

It would be nice if some of these folks could acknowledge being wrong rather than falling back on the no one could have known story. The great thing about doing economic policy in this country is that you can be wrong every single day on everything you say and it doesn't affect your credibility one iota.

The House's passage of the Waxman-Markey bill raises the possibility that the United States will finally do something on global warming. This prospect has the industry hacks screaming at top volume about the horrible fate that awaits the economy. Everyone should know not to take them seriously, as I will explain in a moment.

First, we should acknowledge the obvious: The bill is awful. It gives away permits to greenhouse gas emitters that should instead be auctioned. As a result, money that could be rebated to taxpayers or used to fund the development of clean technologies instead goes to the industries that are the source of the problem.

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Okay, that's not exactly right, but there is an important link. In his column in the NYT today, the former chief economist to President Bush warns that a public health care plan could in the long-run lead to lower pay for doctors and therefore fewer doctors. Of course one of the reasons that we pay twice as much as everyone else for health care is that our doctors get paid twice as much as in places like Canada, Germany, and England, so one part of controlling costs will probably involve making doctors' pay more internationally competitive.

Greg warns that this will lead to fewer doctors in the long-run. While there is surely some truth to this (we could remove the protectionist barriers that limit the flow of qualified foreign doctors), there is the obvious question of what else these would be doctors could do. After all, physicians are the most highly paid profession.

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Actually I did. Ed didn't tell me that he was thinking of taking out an Alt-A loan, but I did try to warn Ed and everyone else in sight about the housing bubble. We even ran an essay contest offering $1,000 for the best essay arguing that there was no housing bubble which got written up in Ed's newspaper (twice). Needless to say, Ed didn't listen, but more importantly Alan Greenspan and the other great minds in the economics profession didn't listen.

Ed will have to deal with his loan officer, but what about all the other folks who somehow could not see an $8 trillion housing bubble expanding in front of their face? What sort of economic system do we have when you can drive your bank into the ground peddling these garbage loans and still have a job the next day?

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The Obama administration is having a tough time getting its request for $108 billion for the IMF through Congress. Bank bailouts are rapidly losing popularity. And bailouts of foreign banks are probably even less popular than bailouts of U.S. banks.

But, NPR is rushing to the rescue. It had a piece this morning telling listeners that it was important to get the IMF more money to help the poor countries of the world. The piece never mentions the fact that the bulk of the IMF lending at present is going to East European countries, not the developing world.

The basic problem is simple. The West European bankers proved to be every bit as stupid as the Robert Rubin-Citigroup crew in dishing out loans. The main outlet for their bad loans was Eastern Europe, where they made enormous loans denominated in euros.

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The Obama administration's plan for General Motors is a serious effort to try to make the best of really awful situation. In the current economic situation, sitting back and allowing GM to be liquidated was not a serious option. This would have wiped out a whole network of suppliers and ancillary businesses in Michigan, Ohio, and Indiana, devastating the economies of these three states.

The federal government would have been forced to step in with large-scale aid in this case just to prevent mass destitution.The state and local governments would have lacked the resources just to maintain basic services like schools, hospitals, and sanitation facilities. Of course the plan is not perfect and it can be argued that one or another of the parties got too much or too little.

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Everyone in Washington policy circles agrees that we need a systemic risk regulator to prevent another economic disaster like the one we are now experiencing. This quest ignores the fact that we already have a systemic risk regulator. It's called the Fed.

The Fed has often stepped outside the narrowly defined realm of monetary policy when it perceived larger risks to the economy. The two most obvious examples are its efforts to stem the stock market crash in 1987 and its intervention in the unraveling of the Long-Term Capital hedge fund in 1998. In both cases the Fed acted because it argued that there would be much greater damage to the economy if it just let the market run its course.

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We know it's not easy being an economist these days. Everyone blames you for the fact that they are losing their jobs and their homes, and their life savings. They hold you responsible because you didn't warn the country about an $8 trillion housing bubble.

Well there's no point in mourning about the past. The point is to get it right next time. And this is next time.

The recession continues to deepen and throw more people out of work by the day. While the stimulus passed by Congress in February will be helpful, it clearly is not enough given the severity of the downturn.

So, it's time to step up to the plate and seize the opportunity. Add your name to the list of those calling for a third stimulus. It's what the economy needs and you can make your kids proud by saying it clearly.

Okay, that's not exactly right. In fact he just wants to get rid of Social Security and Medicare. Apparently he thinks the world was better back in the days when people over age 65 couldn't get health care insurance and mostly lived in poverty.

Since he considers those days so great, Samuelson no doubt thinks we would be better off without the Internet and the wheel also. After all, if we got rid of the Internet we wouldn't have any more problems of Internet porn. And think how many traffic fatalities could be avoided if we didn't have the wheel.

Samuelson is upset because out broken health care system is projected to cause Medicare to deplete its trust fund in 8 years. Serious people would look to fix the health care system. Samuelson wants to tell the elderly and disabled to die in the streets.

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It is great to see Kim Bobo's book on wage theft drawing attention on TPMCafe and elsewhere. It is outrageous that millions of workers have their earnings stolen from them by their employers. Hopefully, this book will help to ensure that enforcement is stepped up so that this practice is brought to an end.

However, one aspect to this issue has intrigued me. Wage theft is often seen as an issue of regulation. The idea is that we need an effective regulator at the Labor Department to ensure that employers do not steal wages from their workers.

This is intriguing because there is no reason to view this as a question of regulation: it is a question of law enforcement. Would anyone call the prevention of shoplifting a problem of regulation? How about the prevention of bank robbery?

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Progressives should be feeling good right now. There is clear evidence that we are winning on two really big issues.

Starting with the smaller of the two, Sallie Mae, the largest private issuer of student loans, is now proposing to accept a plan in which the government is the sole issuer of government guaranteed loans. Sallie Mae's plan is that it continue to be given the opportunity to originate these loans, picking up fees in the process.

This proposal is in response to the Obama administration's plan to get the private sector out of the government guaranteed loan business. There is ample evidence that the involvement of private firms just adds costs -- approximately $90 billion over ten years according to the Congressional Budget Office. Sallie Mae's compromise proposal is a recognition of the fact that it cannot stop the Obama plan.

If this story is good, the news on health care is even better.

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The current craze in DC policy circles is to create a "systematic risk regulator" to make sure that the country never experiences another economic crisis like the current one. This push is part of a cover-up of what really went wrong and does absolutely nothing to address the underlying problem that led to this financial and economic collapse.

The key fact that everyone must always remember is that the story of the collapse was not complex. We did not need great minds sifting through endless reams of data and running incredibly complex computer simulations to discover the underlying problem in the economy. We just needed some people who understood the sort of arithmetic that most of us learned in 3rd grade.

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The media coverage of the auto bailouts has focused on the need for union autoworkers to take big pay cuts, causing them to once again miss the real story. The Fiat-Chrysler deal shows that the pay problem is at the top, not the bottom. At the end of the day, the new Chrysler is still likely to be producing most of its cars in the United States. What the new company will be getting from abroad is technology and top management.

This big story was so easily missed because it runs against one of the main myths that our elites have cultivated about the US economy: that the country has a "comparative advantage" in highly skilled labor. In this story, the United States will continue to lose manufacturing and other "less-skilled" jobs as its economy becomes more concentrated in highly skilled sectors.

This story was convenient for our elites because it meant that the decline of manufacturing was a necessary, if sometimes painful, part of a natural economic progression.

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Timothy Geithner seems intent on moving forward with his scheme to subsidize the banks by providing up to a trillion dollars of non-recourse loans to investors to buy their junk assets. As many of us have pointed out, this is a subsidy in that it creates a "heads the investors win, tails the taxpayer loses situation." If the investment turns out well, the investor makes lots of money. If the investment does poorly, then the taxpayer gets most of the loss.

As many of us have pointed out, this will allow some investors to do very well on investments they would have made otherwise, since the government is giving them a large dose of cheap loans. More importantly, it is a huge subsidy to the banks, since it will lead investors to pay considerably more than the market price for junk assets, since the government is bearing most of the downside risk. There are also ample opportunities for gaming, which the shrewd Wall Street crew can be expected to fully exploit.

While this all looks pretty bad, we can use PPIP as an opportunity to remake Wall Street.

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There is no doubt that the economy would be better off if most of our banks were not insolvent, but only those who are really bad at arithmetic would think that repairing the banking system will restore prosperity. The economy would still be faced with a massive shortfall in demand with the unemployment rate soaring into the double digits.

The basic problem is that the economists who missed the housing bubble (EMHB) somehow still don't understand how the bubble drove growth earlier in this decade. There were two main channels:

Residential construction expanded from its average of 4 percent of GDP to more than 6 percent of GDP at its peak in 2005; and

Consumption boomed based on ephemeral housing bubble wealth, as the adjusted saving rate turned negative over the years from 2004 to 2008, compared to a post World War II average of 8 percent.

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