Friday, February 06, 2009

Stimulus Package

Though New Orleans’ counter-proposal will be on the table Saturday night (and on the couch, in the bedroom, in the kitchen, in the streets, dripping down your leg, etc.), the national stimulus package has been the talk of the country for some time. I mean, it should be, as we’ve gone from “the fundamentals of our economy are sound,” “America is a nation of whiners,” and “let them shop at Nieman Marcus” six months ago to “please step back from the ledge, you have a lot to live for.” What surprises me isn’t that we’re talking about it, but how we’re talking about it.

On January 20th, we celebrated the inauguration of a charismatic Democratic President, who won a huge electoral and popular victory, enjoys high job approval ratings and on whose coattails were padded the Democratic majority in the House and Senate. How the hell, then, did Republicans get control of the debate in less than a month? I have three explanations and I’ll order them from most important to least important:

1. Part-of-the-Problem Democrats. Not just Tom Daschle, grand poobah of the out-of-touch-insider, but also the Pelosis, Reids, Franks, Rangels and Waxmans of the world who are undefeatable in their home districts and can’t understand why they have an image problem in the rest of the country. While Obama’s been settling into his new job (and I don’t care how much of a head start your transition team gives you, or how experienced you are, moving into the office of the President of the United States of America has got to have some initial headaches that require your immediate attention). Without Obama around, cameras and microphones end up in front of certain Democratic faces that are neither charismatic nor illuminating and are part of that last Congress which received a lower approval rating than that of Former President Bush.

2. The Republican Machine Always Operates in the Underdog Role. (And Dante has explained this far better than I ever could.) This is their bread and butter – standing back and watching Democrats screw up or explain things badly. They know how to operate as a caucus, they know how to make mountains out of the molehills of policy, and they know to stop talking about ideas that sound ridiculous in the current climate (and that we’ll see that one again if the economy every picks up). They may have sucked as a majority party post-Gingrich: after he left, the only thing they seemed to do was complain about things they had control over; but as a minority party – from the right-wing radio to the most junior member of Congress, they know the playbook. What is more infuriating, having been on the receiving end of this playbook since 1992, most Democrats haven’t figured out how to defend it or where it comes from. They give Rush Limbaugh free airtime and overstate his importance, while he rolls out a well-timed, well-written, seemingly bi-partisan proposal. This train is never late, and the lines never change.

3. Wholesale Strategic Priorities. Yeah, I get it, they were in the minority for so long, they’re excited to get their hands on some legislation that may pass. But politics and policy rarely meet up so closely. All we’re hearing from the GOP is about tax cuts, government as the problem and complaints about pork barrel projects. I recognize that line – it’s the same one they’ve been using since 1994. Let us ignore the 2000 – 2006 years when the GOP controlled the whole government (and had a majority or the Presidency from 1994 to 2008) and constructed all US economic policy based off those ideas – the economy that just collapsed.

The only reason the GOP is not on the ropes right now is because Democrats want to take the whole bite at once, and don’t really have the credibility to do so. Can you imagine how much faster this would be if the Dems showed up on the first week, and hammered out a $300 billion infrastructure bill? Interstates & US highways, power grids, rail, levees, air control upgrades, navigation – these are things everyone knows we need to spend money on (And Democrats could quietly remind voters who didn’t spend money on these things). Opposing such a bill would be incredibly difficult, even if you added provisions to support mass transit, coastal restoration and help to the states for infrastructure projects. It would also start employing folks immediately, and give you a victory and credibility. Next up, go with a $75 billion bill to assist states and cities in school renovation and upgrades; after that, a bill that spends $75 billion police, fire, first responder and emergency responder equipment, hiring and training upgrades. Where would the opposition come from? Follow this procedure and then in a year or two and prove what a good job you’re doing. Then you can spend some money on the lower priority stuff that may not employ as many people.

But the way this is going, Obama will be dealing with a GOP Congress in 2010, for the exact same reasons Clinton dealt with one in 1994.



Eric said...
This comment has been removed by the author.
Dante said...

I'd argue the #1 reason Democrats are having a hard time selling the stimulus package is actually best explained by a certain bad ass in Glengarry Glenn Ross: "A-B-C. A-Always, B-Be, C-Closing. Always be closing, always be closing."

Democrats aren't out there selling the actual package. How is the stimulus going to work? Something Newt learned back in the mid-90s was that people don't automatically buy what you're selling just because you won an election. You have to continue to sell your plan. HOW is the stimulus plan going to work? WHY is it going to work? Instead of frantically parading the need for immediate action, how about calmly and reasonably explaining how we're going to do something as counter-intuitive as spending our way out of recession? And then repeat it over and over and over again. Sell the plan to the people. And stop worrying about Republican opposition. If you really think this is going to work, then its far better politically to leave them behind.

patsbrother said...

Again, I am flabbergasted. After hearing FOR YEARS about the cost of the wars in Iraq and Afghanistan, I am flabbergasted that we've gotten to this point.

"Can you believe it; since 2001 we've spent $500 billion in the wars in Iraq and Afghanistan?"

I heard that from every one of my friends who had half an ear to the road. $500 billion. Really? Really really? $500 billion? Over seven years?

Then some bozo comes out and says: "I need $700 billion by Tuesday, or else really bad things will happen."

And we produced it.

Then we find out our government has already put up about $2 trillion in loans to random entities, some of which it's not required to inform us about exactly.

Say what?

Then someone else comes out and says we really should be spending another $700 billion, 'cause the first installment didn't (or isn't going to) work.

Wait, wait. Maybe that should be $800 billion. $900 billion? More?

Then some dunderhead of an economist says we need to be worried about not spending...enough.

And all of this is so the hump of unemployment isn't so high for a couple of years...considering the projections have unemployment at the same rate in 2011 or 2012, with or without any kind of current action.

Say what?

And what's even more amazing is that the government's own accounting firm says the vast bulk of the infrastructure money (which is a small portion of the $700 to $900 billion spending plan) won't even touch the ground for three years. Until after the hump of unemployment we fear so bad is expected to pass.

Say what?

To top that off, the reason the infrastructure spending in the massive spending bill is such a small part of that bill is because the majority of the spending part of the bill is going to things that DO NO STIMULATE THE ECONOMY.

I know you desparately want New Orleans to get freebie money for its schools, but that's not actually freebie money, and you shouldn't spend money you don't have, and if you're telling people you're about to mismanage their funds and their futures to stimulate the economy and prevent economic collapse, you really, really should restrict yourself to things that might do what you've just said you've set out to do.

If you're simply out to spend more money on more pet programs (read: programs you want funded) with money we don't have, you (read: the supporters of the bill) need to come out and tell people this plainly.

I voted for a Republican last year because I thought he'd do a better job, and not because of long ties to that party. However, even if I don't vote Republican in the next election, this chicannery will prevent me from voting for the Democrats. If they lose Congress in 2010, it's simply because it has taken them far less time then it ever took Republicans to prove to people (or, at least, me) that they are incapable of running the country (except, maybe, into the ground).

DADvocate said...

Yeah, what patsbrother said.

A couple of other things I've noticed. Obama was always eloquent and convincing on the campaign trail. Now he sounds inept. How often Obama and his press staff refer to "the American people." "The American people expect action..." First, the polls show the only action they want on this bill is to bury it. Second, this sounds like Richard Nixon's "Silent Majority" an appeal to authority of some group that doesn't exist.

Cousin Pat from Georgia said...

I'm pretty much in agreement with everything Dante said, because this is what happens to Democrats: they win elections and think they don't have to convince people that their plans are good ideas anymore. Always. Be. Closing. Indeed.

As to Sprout's stream-of-consciousness-diatribe: I personally hate the idea of such stimulus packages, but I also recognize that our society could take a real bad turn if we let all our financial institutions fail at once. I mean, it is one thing if a business runs itself into the ground all on its own while everyone else is doing OK. But when you have an environment set up for your major institutions to merge, merge, merge; and you encourage the creation of too much money without making anything - a few collapses can bring the whole thing down.

And all of the money spent outside the restoration of Wall Street will be stimulative and employ people. The question is, will it be stimulative enough. Not how much, but how effective? That's why I'm so frustrated, and wrote item #3 in the post above. This stuff should be easy.

For example, let's talk about your "freebie money" for New Orleans schools. (We'll not get into the strategic importance of New Orleans and Louisiana that makes Federal money anything but "freebie.")

There is simply no better way for stimulus money to be spent outside education and infrastructure, because the money you spend their is up to 4X as effective. Here's how.

On schools: Money into building more schools and hiring teachers and buying equipment. That puts people to work right now fixing things, building things and teaching things. By making this investment, you stop the downward flow of property values, helping stabilize the housing market. The people you put to work will be able to do so in urban, suburban, exurban and rural areas, which help stimulate your economy's money makers across a diverse geography.

By investing in run-down schools, you are targeting the most at-risk student populations, increasing your top-end graduates who will be your professional class down the road, as well as bringing up some of the most at risk students - saving money almost immediately in terms of social safety net programs and the corrections system.

Infrastructure projects are almost as good, because they put people to work now and make brick-and-mortar investment in the future. How much money do businesses lose on transportation, navigation, and energy inefficiencies? By working on infrastructure, you can spend almost any money - even borrowed money - and get a huge return on your investment.

That's why those two things should be the first "stimulus items" billed out to the Congress, and how the Democrats could sell any part of the stimulus bill worth having. Closing is about reassuring the buyer that they will get a return on their investment.