My plans for the day had included writing an editorial on the stimulus bill currently stumbling its way through the U.S. Senate, but then I spoke to someone in Washington who said it COULD pass tonight. If I knew it were going to pass tonight, and had some idea how it would end up, I could write about how it and the House version should be reconciled. If I knew it WEREN'T going to pass tonight, I could write about what should happen to it in the Senate before it passes. Not knowing, and not having started writing (and having a bunch of other stuff I need to be doing today), we'll be going with a local piece that one of my colleagues has almost finished instead.
But here are some of the points that I would have wanted to make:
- The House bill is a nonstarter. I thought David Broder did a good job of explaining how it got that way in his Sunday column. Nancy Pelosi has done another partisan number on the country similar to what she did on the TARP bill a couple of months back. And the Republicans were only too happy to oblige her by voting against it unanimously. That means the $300 billion or so in tax cuts that were there to garner GOP support is wasted money (they are far too small and unfocused to do the taxpapers any appreciable good, so their ONLY theoretical value was political), without even getting into the waste the Democrats added for pet projects. A mess that would prove to be an overall waste in the end. A lot spent without giving the needed boost to the economy.
- Kudos to the moderates in both parties — Ben Nelson of Nebraska and Susan Collins of Maine in particular — for working together to strip out some of the worst spending provisions. (As for our own Senate moderate — I'm thinking Lindsey Graham is supporting those efforts, based on statements I've seen, and if I were writing an editorial I would check to nail that down. But I'm not. I do know I haven't seen him mentioned in the national stories I've read.)
- But as great as it is that we're getting rid of some of the worst spending ideas, is a SMALLER stimulus bill what we're aiming for? I don't often agree with Paul Krugman, but he IS a Nobel winner in economics, and I have found persuasive his arguments that Obama's proposed stimulus, even if all of it is properly focused, isn't big enough to give the jolt the economy needs. So rather than CUTTING stuff from it, should we not be trying to FOCUS the spending that's there into more productive channels? Such as, more shovel-ready infrastructure… In other words, it's good that the moderates want to prevent wasteful spending, but isn't the problem less the size of the stimulus (which as Krugman says, may not be large enough), but what it's being spent on?
- The Buy American stuff — the latter-day Smoot-Hawley — should go. After a piece I read in the WSJ this morning, which sort of crystalized my half-formed thoughts on the matter, I'm more concerned about this than I was yesterday. If I had written the editorial, though, I'd have had to reach an agreement with one of my colleagues who is not as much of a free-trader as I am. Since I'm not writing the piece, we're not pausing in our work today to have that argument.
As you see, it would have been a fairly complicated editorial, pulling in many different directions, reflecting the complexity of the legislation and the lack of clear sense — on my part, on the Senators' part, on the House's part, on everybody's part (except for the ideologues who SAY they know what to do, but don't) — of exactly what will cure what ails the nation's economy.
Increasingly, I am pessimistic that what finally emerges and gets signed by the president will lead in any obvious way to the kind of dramatic improvement in economic activity that we need. That can further a crisis of confidence in everything from the new president to our ability to effect our own recovery in any way. And that can lead to depression, in more than one sense of the word.
(Oh, and before you comment that my thoughts on this are half-baked and incomplete — well, duh. I told you, this is the editorial I didn't write, so I haven't gone the extra mile of refining and reconciling these various points, as I made very clear above. Having done a bunch of reading and thinking about it, though, I thought I'd toss these points out for y'all to discuss. In case that's not obvious.)
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The main problems with this bill are:
* Only 25% goes to small tax cuts, which are the quickest way to encourage investment – leave the money in the hands of those who earned it.
* Only 17% goes to infrastructure jobs which are supposedly so needed. All new infrasture becomes another on-going annual cost item.
* There is another $300 BILLION interest cost.
* Most of the spending is on government jobs, expanding agencies and creating new ones which will never go away. Almost all the spending is on union jobs.
This job is about expanding government and socializing areas of the private sector in banking, manufacturing and medical care.
Anyone who thinks we need $800 BILLION cash in the economy very quickly should support an $800 BILLION TAX CUT, which would begin immediately, cost nothing to administer, and put money in every sector of the economy based on its prior activity.
Obama sees crisis as opportunity for “remaking America” into a socialist economy
February 3, I was listening to NPR replay a morning interview with Robert Reich.
The show is called “On Point”.
Reich was talking about how this was a golden opportunity to not restore the economy, but to radically restructure it, away from business as the major force. He said Democrats feared that the economy would recover on its own before they could use crisis to push through a new economy that would “cure the disparity of incomes”, “replace our disfunctional healthcare”, and “build a new economy based on climate change”, with industry no longer :just able to make and sell whatever products they want.”
On Jan 7, 2009, Reich and Charles Wrangel had an exchange in a hearing about how, “The stimulus spending should not just create jobs for skilled white construction workers and professionals.”
They talked about “safeguards” to keep white, male engineers, architects and construction professionals from getting the infrastructure and green energy jobs.
It was like Reich was on Truth Serum.
Crisis is always opportunity, for someone.
Creating phony crises is a tactic of demagogues and tyrants.
so·cial·ism
Pronunciation: \ˈsō-shə-ˌli-zəm\
Function: noun
Date: 1837
Source: Merriam-Webster
Lee sees our downward-spiraling economy as a bogus crisis, not a real one.
bud thinks the threat of terrorism is a humbug trumped up by people who just want to send U.S. soldiers in to harm’s way and listen to his phone calls, or something.
I would think that we would be able to form a consensus across traditional political lines that recognize that both are significant problems that require greater-than-usual exertions to solve. If we can’t, then we’re sunk, on both fronts.
“Creating phony crises is a tactic of demagogues and tyrants.” That’s how W and Cheney ran things; the biggest fear mongers the world has known.
Lindsey was on Hardball a few minutes ago talking about the need to work together. Together is the only way. Trying to govern from the radical fringe has to end.
Yeah, just wait til Lindsey runs again. Then he’ll slink back to his “conservative” roots and Brad will endorse him by saying “pay no attention to what he says during the campaign. That’s not the real Lindsey.”
Ummm… Lindsey just ran again. And was re-elected overwhelmingly. Being himself.
Ummmm… Lindsey just ran again. And was re-elected overwhelmingly. Being himself. I’m quite happy with that…
Right, Brad.
So would you get a quote from the Senator as to whether he considers himself a conservative Republican or not? Let’s get him to set the record straight.
And how do you apply your reasoning to Mark Sanford? He won by essentially the same margin as Graham did and he actually had an opponent (remember – the guy you endorsed who took the money and ran)?
Were South Carolinians duped by both Sanford and Graham or just Sanford?
Some economists are afraid to call out Paul Krugman… from Andrew Sullivan:
Robert Barro of Harvard is not a Paul Krugman fan:
[Krugman] just says whatever is convenient for his political argument. He doesn’t behave like an economist. And the guy has never done any work in Keynesian macroeconomics, which I actually did. He has never even done any work on that. His work is in trade stuff. He did excellent work, but it has nothing to do with what he’s writing about.
Barro’s view on the stimulus bill:
This is probably the worst bill that has been put forward since the 1930s. I don’t know what to say. I mean it’s wasting a tremendous amount of money. It has some simplistic theory that I don’t think will work, so I don’t think the expenditure stuff is going to have the intended effect. I don’t think it will expand the economy. And the tax cutting isn’t really geared toward incentives. It’s not really geared to lowering tax rates; it’s more along the lines of throwing money at people. On both sides I think it’s garbage.
I would think that we would be able to form a consensus across traditional political lines that recognize that both are significant problems that require greater-than-usual exertions to solve.
-Brad
Why on earth do we need a consensus? All that’s needed is a majority to pass legislation. The power in party is there for a reason: they were elected based on what they campaigned on. Why should they ever throw away that power. That’s just disrespecting the voters. This bipartisan stuff is just a humbug. I say the dems should just ram legislation down the Republicans throats and simply ignore the whining. They had their shot and they failed.
bud thinks the threat of terrorism is a humbug trumped up by people who just want to send U.S. soldiers in to harm’s way and listen to his phone calls, or something.
-Brad
Not a humbug, just over-hyped. The same thing happened with the war on drugs and where did that get us? We have thousands of folks in jail simply for drug violations. And we have all this nonsense over Michael Phelps’ bong incident. He’s perhaps the world’s greatest athlete so his pot smoking didn’t hurt his ability to compete. How has the war on drugs accomplished anything of value? That was perhaps the most fear-driven “war” in history.
As for the so-called “war on terror”, all this has accomplished is to get hundreds of thousands of folks killed and trillions of dollars squandered. A bit more laid back approach could have accomplished much, much more at a far, far lower cost. We might even have bin-Laden by now. And we wouldn’t be needlessly sacrificing our precious, hard-won freedoms.
I just watched Paul Krugman on MSNBC and read his partisan attack on critics and compromisers of this spending bill in the NY Times.
Krugman depends false history. He talks as if he actually believes the fabrications he is stating. He may.
Krugman’s role is to make Obama and Pelosi look stingy, by saying we need twice as much spending. He said he only saw “maybe a billion dollars” in this bill that was unnecessary. That’s because his lust for government spending is not based on the economic conditions. Krugman has been calling for all this government spending for 20 years, in boom times and recession.
Unemployment is 7.6% – about the average of the Clinton years.
92% of Americans had some form of health insurance coverage in 2008.
Yes, we have a financial crisis which has harmed home building, then automobile sales and other manufacturing. You don’t solve it with go-kart parks in Arizona, doubling the budget of the National Parks Service, or bailing out cities mismanaged by Democrat mayors.
We need to be dealing with the banking crisis first. That means cleaning up FNMA and FMAC. Democrats don’t want to go there, because they created this fraud.
Current Unemployment Rate – 7.6%
Average Unemployment Rate (1993-2000) – 5.2%
Yup Lee, the two are about the same. Anyway that’s a totally bogus comparison anyway. Another good comparison is between Clinton’s last year and Bush’s last year:
Clinton-2000 – 3.97%
Bush-2008 – 5.76%
So while Clinton was creating millions of good jobs Bush and his tax-cutting henchmen were allowing the economy to fester in an 8 year long slump that continues to deteriorate. Whenever the GOP gets control of the economy it falters. Happens every time. We can just name recessions after the GOP president who was in control when they occurred:
The Ford recession, Reagan recession, Bush Sr. recession, Bush Jr. recession number 1 and now Bush Jr. recession number 2. And what does Jim Demint want to do in the current crisis? Nothing BUT cut taxes. What an idiot. Man what a scary bunch they are.
Actually, unemployment averaged 5.4% for Clinton and 5.1% for Bush, even with the last quarter of 2008 jumping above 6%.
We hit over 7% under Clinton.
The liberal media painted Clinton’s 5.4% as wonderful, and Bush’s 4.5% this summer as “the worst economy since the Depression”.
The 7.6% we have just reached, is what we had for years under Jimmy Carter. It was about 8.8% when Carter left office, and grew to 10.2% until the Reagan tax cuts took effect.
I’ve got a few questions you can mull over in a half-baked fashion:
“Is the corporate welfare spending bill (cleverly disguised as a “bail-out”) more fascist or more socialist in nature?”
“How much fascism (or socialism) is good for the U.S. economy?”
“Why does Lindsey Graham always argue based on HOW MUCH money to give to corporations rather than WHETHER WE SHOULD DO IT at all (Constitutionality of the actions proposed without an amendment to the document)?”
Since the feds only collect $1.2 trillion in taxes, and this pork spending bill is going to cost $1.2 trillion with interest, it would be simpler and better to just suspend tax collections for a year, and let the Productive Class bring us out of this recession in a few months.
78% of Americans now oppose this spending bill.
59% want tax cuts alone.
22% want some spending.
– CBS poll 2/5/2009
5% of this bill goes to roads and bridges.
17% would be spent in 2009
37% would be spent in 2010
46% would be spent in 2011 and 2012
– Congressional Budget Office report 2/5/2009
There is no urgency to pass a bill which does not even spend money immediately.
No one has read this entire bill.
The Senate version was not released until 11:00 pm Saturday night.