Highlights include Emerson Electric (EME), General Electric (GE) and 3M (MMM).

Two things were clear last night -- first is that Obama has a solid grasp of economics. The second is that he understands just how serious the problem is, even if he is erring a bit on the optimistic side. Hey, that is understandable given his position that he would not want to totally spook the markets.

It's a fine line between being truthful about the situation we are in and inducing panic. The watered-down stimulus bill had already cleared the Senate; hopefully it can be improved in the conference committee and still retain enough Senate votes to overcome the opposition's obstructionism.

There is clearly a tension between the need to get it done fast as the economy continues to swirl around the bowl, and the need to get the package right. Calling the opposition's bluff and letting them actually filibuster would gum up the works for a few more weeks -- and besides, there is other work for Congress to do.

The call between a compromise that weakens the bill and insistence on the most bang for the buck that significantly delays it is a tough one. Obama's answer about what kind of bill to send up in the first place -- one that was most geared towards real spending stimulus rather than tax cuts -- and then give some ground in the negotiations was instructive. Let us see it that is indeed the lesson he has learned from this experience in the future.

The Senate bill is clearly a much less effective package than that of the House, but is still much better than nothing. The Senate bill wastes money by giving a $15,000 gift to people who would probably buy houses anyway, and the vast majority of those are existing houses. The stimulative impact on that provision is approximately zero, despite a cost of over $40 billion using any sort of realistic assumptions.

The Senate's AMT patch is needed, but everyone knows that it would have been taken care of in separate legislation, just as it has been every year for over a decade now.

The Senate bill reduced spending on food stamps, which most econometric studies have shown to have the single highest multiplier effect (economist-speak for "bang for the buck") of all the provisions in the bills. It eliminated $40 billion in aid to the state and local governments, so any tax cuts at the federal level are likely to be offset by increases in state taxes, or the states will have to lay off huge numbers of workers -- like teachers, police, prison guards and firefighters. Letting them get laid off does not strike me as a way to stimulate the economy, nor does it strike me as a good thing for the society.

Instead, it keeps a silly provision that allows companies to carry back their losses this year to offset the profits they made over the last 5 years. This is flat-out special interest pork legislation aimed at homebuilding companies and banks. The $19 billion that provision would cost would be far better spent on repairing schools (which was cut) to make them more energy efficient, which provides jobs immediately to those doing the repairs, and will provide a good long-term return on investment by lowering energy costs.

The jobs that it would create would go to one of the groups that have seen the biggest drops in employment -- construction workers. It would also provide lots of orders for companies like Emerson Electric (EME) and General Electric (GE) to provide the new energy saving lighting fixtures, and firms like 3M (MMM) providing building supplies. One of the good things about school renovations is that it is impossible to outsource those jobs.