"A failure to act, and act now, will turn crisis into a catastrophe."Ouch.
-- President Obama, Feb. 4.
Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill.
....And yet more damaging to Obama's image than all the hypocrisies in the appointment process is his signature bill: the stimulus package. He inexplicably delegated the writing to Nancy Pelosi and the barons of the House. The product, which inevitably carries Obama's name, was not just bad, not just flawed, but a legislative abomination.
It's not just pages and pages of special-interest tax breaks, giveaways and protections, one of which would set off a ruinous Smoot-Hawley trade war. It's not just the waste, such as the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.
It's the essential fraud of rushing through a bill in which the normal rules (committee hearings, finding revenue to pay for the programs) are suspended on the grounds that a national emergency requires an immediate job-creating stimulus -- and then throwing into it hundreds of billions that have nothing to do with stimulus, that Congress's own budget office says won't be spent until 2011 and beyond, and that are little more than the back-scratching, special-interest, lobby-driven parochialism that Obama came to Washington to abolish. He said.
Not just to abolish but to create something new -- a new politics where the moneyed pork-barreling and corrupt logrolling of the past would give way to a bottom-up, grass-roots participatory democracy. That is what made Obama so dazzling and new. Turns out the "fierce urgency of now" includes $150 million for livestock (and honeybee and farm-raised fish) insurance.
The Age of Obama begins with perhaps the greatest frenzy of old-politics influence peddling ever seen in Washington. By the time the stimulus bill reached the Senate, reports the Wall Street Journal, pharmaceutical and high-tech companies were lobbying furiously for a new plan to repatriate overseas profits that would yield major tax savings. California wine growers and Florida citrus producers were fighting to change a single phrase in one provision. Substituting "planted" for "ready to market" would mean a windfall garnered from a new "bonus depreciation" incentive.
After Obama's miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie. The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell -- and that this president told better than anyone.
I thought the awakening would take six months. It took two and a half weeks.
If the nation is truly in such a dire emergency, then instead of rushing through a bill outside the normal appropriations process where all this new spending can be debated alongside other spending and see if it should be a higher priority. Strip out the parts of the bill that are indeed stimulus and pass that. Save the rest of the extra spending that might be totally defensible, but do it under normal rules and as part of the budget.
Just remember, after they get done with the so-called stimulus, they still have to deal with the threatened TARP II for the banks and more bailout for the auto companies. Then they have to undertake to try to pass the regular budget which they haven't even started to tackle.
7 comments:
The issue is that neither side (in general) seems capable of agreeing on what is stimulative. They throw out rather lame defenses (such as incomplete, draft CBO reports, etc) to justify their interpretation of what is and is not effective. I am no fan of Pelosi or Reid, as both are partisan and ineffective leaders, and are really (IMO) the source of the true poker, partisan portions of this bill. I like Obama's ongoing effort to change the dialogue and approach of Washington but its naive to think he would succeed immediately or that there wouldn't be fall out as the effort was made. Ever clean your mother's attic? Washington and its processes are full of the same sort of "what the heck do I do with this?" kind of material. I also have no problem with Obama attempting a reality check for the public. We are collectively a very stupid and lazy bunch of people (stupid is stupid, regardless of political position). Yes, it probably does have some short term compounding effect on the down economy, but I suspect its long term necessary to jolt us into smarter behaviors. Worse was Bush who a) encouraged us to feel we shouldn't have to bear a burden in our personal lives during the Iraq war and b) encouraged reckless personl spending as a way to prop up the economy during recession of 01-02.
There are some examples of positives things about this exercise.
1) The group of 18 senators working on a compromise. I liked they kicked out their aids, etc and began haggling instead of focused on the strategies of their political handlers as folks like Reid, Graham, etc seemed to be doing.
2) McConnell pushing what effective was an idea that Paul Krugman suggested and was apparently ignored by Pelosi and Reid. That is the push to drive down fixed mortage rates to 4%. It would help avoid some impending foreclosures, help stablize the house market and free up personnal income without the budgetary impact of a tax cut, and would be much more immediate than a tax cut.
Both are examples of folks (IMO) negotiating and accepting we are a country of multiple opinions and expect leaders to work it out... not treat it as a team sport ("I only win if you lose!")
Sen. Graham estimated the cost of the McConnell 4% "solution" at "around $200 billion. Sen. Reid said at a press conference that Democrats were willing to take a look at it and estimated its cost at "between $300 billion and $1 trillion." Those disparate estimates show, of course, that neither of them have a clue as to what they are talking about nor what the actual cost would be. They throw out numbers just like Bush threw out numbers for TARP and Obama is throwing out numbers and fear for this "stimulus package."
stubedobedu,
Who are you? Your tone reminds me of someone else we see here often but I really want to ask you why you think Obama is trying to rush what you (rightly) seem to think is a partisan and damaging bill.
You obviously want to see a better bill and I commend you for your preference that it should be bipartisan (or perhaps even "anti-partisan" if such a thing could exist) but again, why would Obama want to rush a bad bill? Do you think he doesn't know any better? Do you think he is afraid of Pelosi, Reid or other expectant constituencies? Obama is the President and his party holds both houses, so why does it appear that he cannot successfully influence a better bill?
Bachbone, I too am of the impression that most of them are fairly clueless as to the real numbers. As I understand it, the plan would be capped (total dollar amount and duration available), so it's silly for them to proclaim what it would require. Idea would be part of a larger effort to stem the tide and help stablize the housing market. All the talk seems to focus on foreclosures, but a real problem is a significant number of people own loans greater than the value of their homes. In micro terms, its easy to say "sucks to be you" but in macro terms that means many of those folks will not be players in the home buying or improvement market for a heck of a lot longer that a 'normal' cycle would expect. That means a drag on the economy that will continue a lot longer than the "recovery" from the recession. If we can get that in motion, through cheap and stable, loans... presto, folks begin to be able to rationalize the trade off of the initial loss due to selling an overvalued asset versus the long term benefits associated with a different house, etc. I do not believe they can fix the foreclosure issue without addressing the pace of home value loss. Plus, fixing the foreclosure is easier to sell if more folks get something directly out of it (the "what about me?" arguments).
If someone has a better idea, I'm open to it.
I've posted in Betsy's board before as stfreak (nickname given to me by friendt) and I posted in the past on Election Projection. I'm a political junkie and a bit of a blog nomad. When I have time, or a desperate need for a distraction, I post.
Yes, I would prefer a better bill. I personally feel the origin of problems with this bill are petty vengence on the part of folks like Reid and Pelosi as revenge for exclusion in legislative efforts of the last 6-8 years. It was stupid then and its stupid now. I don't agree with assessments that call this all pork, etc as I agree with pundits and economists that suggest its 2-5% but that is still too much. I also do not agree that tax cuts should be the primary tool merely part of the overall. I think people look at the effect of the Reagan era tax cuts and think continual cuts will yield similar benefits but I think the math suggests diminishing returns. The overall problem this bill had regardless of its components is that it is or will be near a trillion dollars!!! That is a psychological barrier folks just can't get around no matter how it is structured and it doesn't matter that 1 Trillion doesn't have the same effect on the over all debt and GDP that it had 10 years ago or what ever... its a Trillion dollars!!!! :-)
The other problem with this bill is the timing. The issue it appears we are trying to stop is the escalation of the recession. The speed of the job losses and business failures appears to be increasing. The psychological benefit of action (must happen now)and desired outcome of the various stimulus components (all parts help for their phase of the recovery) are in conflict.
As to how Obama is playing this exercise, I think it is too soon to judge. If he wants to change things, he needs to at times be forceful, tranparent, secretive, selective, passive, etc. The 'game' is knowing when to utilize the right tool. If he pulls it off? He (IMO) is a genius. If he fails, I wouldn't be surprised and it is a pretty daunting task. There is a reason folks don't trust our government... fixing it is hard work and avoidance combined with the blame game is very easy.
stubedobedu,
I don't know if you've ever listened to "Money Talk", a radio program hosted by Bob Brinker, but last weekend he put forth a number of well thought through plans that originated from a variety of sources. These potential solutions to our current economic problems didn't require enormous financial outlays and seemed to me to utilize traditional market forces to good ends.
I listen to the program on WMAL and I hope some of our Washington insiders are paying attention because there were some innovative solutions aired. One in particular impressed me because it used tax incentives to encourage people to buy homes in foreclosure. There was also a plausible suggestion over the economic and environmental benefits of converting government fleet vehicles to LNG and how this could pave the way for wider commercial use and finally create a viable market of individual consumers.
My point is that there are many viable ideas to consider and time to do it. I am distrustful of Pelosi and Reid and a bill that appears destined to retard recovery.
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