Worrying about the stimulus

By BRAD WARTHEN
Editorial Page Editor

    “This is your bill; it needs to be America’s bill.”

            — Sen. Lindsey Graham,
         addressing Senate Democrats

What worries me, after all the rhetoric, exhortation, accusations, counter-accusations, fault-finding and blame-laying, is that the stimulus bill that spent the week staggering its way through the U.S. Senate might not work anyway.

     There was always that very good chance. Several weeks back, Paul Krugman — who as a Princeton economist is a Nobel Prize-winner, but as a political columnist is a partisan automaton — said as much. He said it wouldn’t be enough to give the economy the jolt it needs to overcome the lack of activity in the private sector. He made a persuasive case.

    Then, last week, Mr. Krugman wrote that this bill just had to pass, that those blasted Republicans opposing it were “putting the nation’s future at risk.” Obama’s mistake, he now said, was trying “to transcend partisanship” and work with the Republicans at all.

    I believe the exact opposite to be true. I believe the chances of the bill doing any good declined with each step into the thicket of partisanship.

    I never won so much as a Cracker Jack prize for economics, much less a Nobel, but there’s one thing I think I understand: Whatever Washington does in the way of stimulus — and it needs to do something (with the private sector in paralysis, this is a job for the Keynesians) — it won’t work unless America can believe in it.

    Just as Mr. Krugman is right about some things, so is Phil Gramm. Remember how indignant the Democrats got when the McCain adviser said, in mid-campaign, that we were experiencing a “mental recession”? Well, he had a point. While it doesn’t make the real-life pain any less, the mechanisms that get us into a predicament like this have an awful lot to do with what’s going on in our heads.

    When businesses think they have a chance to grow, they invest and create jobs. When they’re scared, they freeze up. When buyers and sellers believe home values will keep appreciating, the real estate market is hot. When they start to doubt values, buying and selling stop. When everyone believes a stock’s value will keep rising, it does keep rising; when they don’t, it crashes. When you think the lousy economy is threatening your job, you stop spending and stuff your earnings, literally or figuratively, into a mattress, and the workers who depended on you to buy what they produce lose their jobs, which of course increases everyone’s pessimism.

    No, it’s not all in our heads. At some point, certain things have real value. But we’re not going to start buying and selling and hiring and investing and taking risks at the levels needed to pull ourselves out of this tail-spin until we reach a consensus that things are getting better, or about to get better.

    You can argue about the specific provisions in the stimulus all you want, and Democrats and Republicans have been doing so enthusiastically. But I don’t think I’ve seen a specific idea yet that couldn’t be argued both ways. Even the worst idea pumps some juice into the economy; even the best one is no silver bullet.

    With private sector leadership — especially on Wall Street — having failed us so spectacularly, we need something intangible from our political leadership every bit as much as we need infrastructure spending and/or tax cuts: We need to look at what Washington is producing and believe that it actually is for the good of the country, and not for the good of the Democrats or the Republicans or this or that politician.

    As he entered office, I thought Barack Obama had what it took to lead us in that direction — to pull us together and help us believe that we can solve our problems. To persuade us, as FDR did, that we had nothing to fear, that we were going to get through this, together.

    I still think he can. But last week, I saw him stumble. I’m not talking about the Tom Daschle business. As the stimulus package faltered, he reverted to campaign mode, blaming Republicans who wanted to cling to those failed policies of the past eight years we heard so much about in 2008.

    Helping him in this counterproductive effort were such Republicans as our own Jim DeMint, who most certainly was clinging to the ideologies that have failed his party and the nation — such as the stubborn idea that tax cuts are the only kind of stimulus anyone needs.

    A far more sensible position was taken by our other senator late Thursday. Lindsey Graham grabbed headlines by saying “this bill stinks,” but he had smarter things to say than that:

    You know, my problem is that I think we need a stimulus bill. I think we need to do more than cut taxes. But the process has been terrible. The House passed this bill without one Republican vote, lost 11 Democrats. Nancy Pelosi said, We won, we write the bill.... (W)e’re not being smart and we’re not working together, and people want us to be smart and work together, and this has been a miserable failure on both fronts.

    As I wrote this column, much remained unsettled. By the time you read it, something may have passed. But as I wrote, I was sure of this: If the Congress gave the president a bill that was pleasing only to the Harry Reids and Nancy Pelosis, it wouldn’t help the president inspire the kind of confidence that the whole nation needs to recover. (The same would be true if Jim DeMint got all he wanted, but there was no danger of that.)

    But if the president has a bill that Lindsey Graham and John McCain and Ben Nelson of Nebraska and Susan Collins of Maine all voted for, the nation would have a chance of moving forward together. And together is the only way we can recover.

For more, please go to thestate.com/bradsblog/.

Comments

[Lee Muller]

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.

Everything not vital to spend in the next 90 days needs to come out and be debated on its own, in a separate bill for each item.

[bud]

Brad, this is so disappointing. You obsess over this bipartisanship stuff to the point of losing touch with reality. Simply put, the American people has spoken and they want the Democrats to decide. Obama whipped McCain by a substantial margin in the election as did the Dems in a huge majority of the senate and congressional races. So they get to make the laws. Obama tried to reach out but was rebuffed. So what is he suppossed to do, let the GOP write the stimulus bill? That would be a discredit to the election process and a slap in the face to the voters.

But you really miss the point of Krugman's criticism. He is not so much a Dem partisan as he is a liberal thinker. He's afraid the bill will be watered down by GOP tinkering. And he has a very big point. If too much compromising is done in the name of bipartisan cooperation then the bill won't work.

Obama, Pelosi and Reid need to show leadership and pass a bill that the people gave them the power to pass during the election. If a few moderates from the GOP want to join in fine. But to make concessions to the Limbaugh wing of the party would disrespect the voters. They rejected the GOP brand of governance and will embrace a largely Democratic bill. That's the American way.

[slugger]

Just because the Democrats won and Obama is President then that makes them smart enough to be in charge of billions of dollars to go for the supposed stimulus of the economy?

You mean that now everybody can stop thinking for themselves because the Democrats were elected to do our thinking?

The only thing that this so called stimulus bill will do is put us further in debt. What are we going to pay the Chinese and the Japanese with when they call in their markers?

Stop this train and let the politicians off before it leaves the station with our future.

[bud]

Sometimes the ends justify the means. Sometimes not. But never should the means alone be sufficient grounds for policy. That seems to be what Brad is championing here. Essentially Brad is suggesting that if some sort of bipartisan bill is passed then all will be right with the economy. Never mind the details or whether that is what the American people want or need. If it's bipartisan then it's good, period. If it's passed along party lines then by golly it is a bad, bad thing. We can't have that. No siree.

Of course this is bunk. biparianship is vastly over-rated as a political goal. The Iraq war resolution was passed largely in a bipartisan manner an look where that got us. Death, destruction, trillions in wasted money, servicemen commiting suicide at record rates. And for what? So our president can get a measure of revenge against Saddam.

[Lee Muller]

"Sometimes the ends justify the means." - Bolshevik slogan, used by Democrats who want to ignore the Consitution and loot the Treasury as part of their socialist revolution.

[Birch Barlow]

"Sometimes the ends justify the means." - Bolshevik slogan, used by Republicans who want to ignore the Constitution and take away civil liberties as part of their War on Terror.

[Brad Warthen]

I don't know why bud has so much trouble understanding me, but he does.

It's not about the means; it's not about the process, yadda-yadda. It's about the fact that the particulars of these various versions of the bill don't matter all that much. All would offer some stimulus; none would offer enough. This is a case in which the psychological effect is greater than the particulars. And if roughly half the country believes this was a partisan bill rammed through by people of one party, rather than something for the good of the whole country, it won't do ANY good.

That's why, awhile back, Obama was talking about wanting his bill to pass with 80 votes. Now Reid is trying to push something through with all the Democrats, Lieberman and two Republicans. And a bill like that will NOT help the country. Think of it this way, bud: Just under half the politicians in Washington will be invested in bad-mouthing and undermining confidence in this bill. (I'm thinking maybe you can follow me better if you think of it in terms of the harm those mean ol' Republicans can do.) Since the bill itself lacks the content to fix the economy on its own -- Krugman was right about that, back in January -- having the further taint of having been a case of partisan strong-arming will make it completely ineffective.

This situation is very different from the Deficit Reduction Act in 93. Then, it didn't matter whether there was a broad consensus of support for it. All you had to do is pass it, because the bill itself had the power to do all that it needed to do. Why is that? Because it was about GOVERNMENT revenues and government spending. This legislation is about stimulating the entire economy, which requires a lot of intangibles that are beyond the power of mere legislation. And a narrow, partisan bill lacks the necessary intangibles.

[Birch Barlow]

Brad,

Maybe we could pass some kind of a placebo-stimulus. Democrats and Republicans will get together and say they have a trillion dollar plus bill full of tax cuts and spending and the President will sign the official-looking document. The bill will have the necessary psychological stimulus but in reality will be an empty piece of paper.

Meanwhile, no real dollars will have been added to the deficit.

Everybody wins.

[Rich]

Brad,

How is it a "narrow, partisan" bill if 60 out 100 Senators vote for it?? The Democrats control 2/3 of the House and 58-59% of the Senate. Technically, you should be able to pass a bill with a majority first past the post.

The Republicans are not half of Washington anymore. They are a minority party representing a percentage of the population far less than their actual numbers would suggest.

Figure out the population totals of the states that have sent Republican senators against the population of states such as California that, like Maine, have only two senators but a much greater percentage of the electorate.

If we had a Congress that was truly based in both houses on population, small states would be pooled with their neighbors in Congressional districts that would cut across state lines to represent a roughly equal number of people per senator and representative.

The result would be, I believe, a Congress that is 80% Democratic and 20% or less Republican.

Our constitution has some undemocratic features that the Founders explicitly built into it to protect the aristocracy from the passions of democratic rule. They feared that the uneducated, overly religious masses would steal all of their property and level society.

Who knew that the very mechanisms they wrote into our federal system would be used so consistently over history to throttle the will of an educated, progressive majority of the country election after election?

Southern senators stymied civil rights and anti-lynching legislation for years. They fought any legislation that was not pointed at aggrandizing our military or the power of the titans of industry and finance with whom they were allied.

Rather than protecting a book-reading, Enlightenment aristocracy of benevolent social supervisors who, by the way, would also protect their property and their agrarian lifestyle, the system erected by the Founders has been consistently used to frustrate any and all attempts to extend social justice to the broad mass of the people in order to serve the interests of rural, conservative yahoos who hate government.

And why do they hate government? Because unlike the fear that the founders had of oppression coming from the center, rural conservatives have always supported state and local rights over federal prerogatives--the better to keep their own poor whites, Hispanics, and Blacks in line.

It's time for constitutional reform at the federal level. It's time for the third American republic!

[Phillip]

Brad, your column on the surface seems very sensible. However, I ask you one very simple question:

What kind of bill do you think would have garnered even as many as 15 Republican votes?

Really, I implore you to think about that. You chastise DeMint (rightly) for "clinging" to old ideologies, but the truth is that nearly EVERY Republican voted for DeMint's proposal, and EVERY Republican, I think, did vote for McCain's similar one. The Republican party is nearly unanimously clinging to these tired ideologies. Sure Graham acknowledges the need for "some" spending. Numbers, please?

You are unfairly blaming Obama for being the one to revert to "campaign" mode. You'll notice that in Graham's little petulant snit on the Senate floor that impressed you so much, he made NO specific criticism of the bill ITSELF.

There is no bill that can emerge with 75 votes because there are not that many Republicans who would vote for any package that had significant-enough spending to have the impact this bill supposedly needs to have, and there are surely not more than a couple of Democratic members who could swallow the kind of Bush-43-redux tax cuts that would be necessary to include to get as many as 15-20 Republicans.

Obama went as far as he could go. He is the President, the election WAS decided on the economy moreso than even foreign policy issues, I think you'll agree, and it was precisely the old DeMint-Bush thinking that was rejected.

Once again, I ask you: what kind of stimulus-spending package really could get even 15 Republican votes? Tell me. What would it look like?

Brad, your point about confidence, etc., is well taken, but if person X gets a job and spends a little more money and person Y's business starts to do a little better as a result, and as part of all this some long-standing national needs are addressed to the satisfaction of a majority of populace, do you think people are going to remember (or care) if this all came about with 61 votes in the Senate vs. 73?

[Harry Harris]

This bill is essentially an attempt to increase economic activity by increasing aggregate demand. There are a number of ways to do that, many of which are incorporated into this bill. The real fight is between the approach of tax cutting versus government-funded demand (spending and transfer payments). The factor left out of such arguments is the fact that nearly all of the Repulican-promoted approaches depend on consumer borrowing rather than increased earnings to increase demand. Is the inflation of housing prices beyond the means of many wage-earners a desired outcome so that we homeowners can consider our houses an ATM that we can easily borrow against? Should the government pay the first $15,000 toward purchasing a home with a tax credit (for those making enough to owe 15K? We do not, in my view, need to reinflate housing prices. (70% of my own assets are in residential real estate). We should stop the bleeding in forclosures by wringing out the sorry, often exotic, practices financial institutions have used to sell unfair and unwise mortgages. TARP was poorly-used even though it likely prevented a meltdown. The provisions Republicans are attacking to provide help to the governors (bypassing them if needed) to avoid layoffs in education and other services will save a huge number of jobs and will kick-in immediately. Lastly, since 2001, when we had a budget surplus, 5.5 trillion has been added to our national debt with a net loss in jobs and a 3% (so far) increase un unemployment. Few Republicans criticized that debt being passed down to our children - now they are appalled. Hmm.

[jessup]

Republican recalcitrance is the problem behind any sort of meaningful bipartisanship. Their ideologically binding southern strategy, while working well in their home districts does not work well in a rapidly changing intellectual environment which necessitates stepping more nuance and less dogmatism, which sadly is reflected in the columns of Mr. Warthen, no matter how fairminded he, and many other dogmatic posters of the far right claim themselves to be.

Clearly, if the Republicans intend to remain relevant, they must change, or face a rump status for many years to come.

[Lee Muller]

Tax cuts are more effective and more fair.

First of all, it is high taxes which prevents economic growth in manufacturing, farming, mining, refining and power generation.

Tax cuts lead to private spending, which has a multiplier effect of about 3.6 times the tax cut.

Government spending has a multiplier effect of 1.6% for the very best projects.

Reductions in tax rates across-the-board, for everyone, as Bush and Congress did in 2001, put money into the economy immediately by reducing payroll deductions and quarterly tax deposits by businesses.

It allocates the most money to those who are making the most money, because they are the most effective investors. It puts the most money into the hands of those who will make the best investment decisions.

[Lee Muller]

Barlow,
You apparently did not realize that I was quoting 'bud', who was quoting Lenin.

"...the ends justify the means..."

A lot of people who voted for Obama had no idea that Obama was a socialist. They don't even know who Lenin and Hitler were.

[Karen McLeod]

Brad, I had hoped that Senator Graham had been willing to show more bi-partisanship, just as I wished that Senator McCain had. And I would be the first to agree with you that Nancy Pelosi is as much a pain as Jim DeMint. But, the Republican party wants little but tax cuts for the wealthy. If this country doesn't do more to put money into the pockets of the average worker, then sooner or later the whole structure will collapse, because the very rich will have no one to whom they can sell their products. These tax breaks have been going on for 8 years. As a result we have food we're scared to eat (they gutted the FDA and the USDA--useless jobs that simply hobbled big business), fewer production jobs (all oversees where corporations can pay less than half they do here, and forget about retirement or medical benefits), and what is probably the least efficient, most expensive medical system in the world. If we had a single, large resource like Venezuela's oil, more tax cuts could end us up like that country, with a few very, very rich, and the rest impoverished. President Obama reached a long way across the table to try to meet the moderate Republicans more than half way. They refuse to come half way, that is, they would rather watch this country sink into depression than compromise in the slightest. To blame their intransigence on President Obama, however, is simply absurd. I hope Mr. Obama will continue to offer them compromise; but apparently the only thing the Republicans will accept is more of Mr. Bush's policies. And that is not acceptable to the majority of the American people.

[Karen McLeod]

Oh, yes, If the ends (that is, what is accomplished) don't justify them means, then what on earth does? I realize that there are some unjustified (and perhaps unjustifiable) means out there, but that only means that what was achieved wasn't worth the price.

[Birch Barlow]

Muller,
I was not challenging your statement, but merely adding to it to paint a more complete picture of the people we elect to lead our country.

[Lee Muller]

In American, the means are limited to the explicit powers in the US Consitution.

Most of this spending bill is outside the legal authority of Congress, but socialists don't care how they achieve power. When they do, there won't be any more elections or a Constitution.

[Lee Muller]

Over half of the so-called "tax cuts" in this bill are actually rebate checks to the lower-income people who already don't pay any income taxes. It is payola to Obama voters, who can't even support themselves, much less hire a new employee. Their money will go to food, beer, cigarettes and gasoline.

[KP]

Brad, I think your editorial was well reasoned and maybe even right.

Bud is wrong when he says the American people want the Democrats to decide. I don't. I also don't want Jim DeMint to decide. I want something that reasonable people (and this, in my view, usually comes from the center) think will work.

[Lee Muller]

Birch, I think it is unfair to say most Republicans are no different than most Democrats. Most of them are in office to help themselves, but there are far more outright socialists in the Democratic Party. You can see that in how many of them are members of socialist and communist organizations, like Barney Frank and most of the Black Caucus.

Obama and Hillary have recently given speeches to communist groups, in honor of long-time leaders. I have posted the dates, places and excerpts here before.

Leon Panetta led a Castro group in college and afterwards. Ralph Nader ran his campaign out of the Communist Party USA offices in Manhattan. Obama ran for office twice on the socialist party ticket.

[Birch Barlow]

Muller,
I was not challenging your statement, but merely adding to it to paint a more complete picture of the people we elect to lead our country.

[Birch Barlow]

Oops, looks like I'm guilty of a double post.

Yes, I will concede that the Democratic Party is closer to socialism than the Republican Party. My point was simply that both parties will sometimes (not all the time) treat the Constitution as a nuisance when it makes achieving their goals a little more difficult.

[bud]

Brad, I understand you. I just adamantly disagree with you. If the president is seeking to pass a bill with 80 votes that is part of the process, not the result. To get that many the Dems would have to sell the farm. And that's not what the American people voted for. What we have is two competing philosophies and neither will garner 80 votes. That's absurd on it's face to suggest that's either possible or desirable. In the end it doesn't matter how many votes Obama gets if the bill is a turkey. The American people don't give a damn how many votes are in favor. Nor should they. The particulars of the bill do matter, not the process.

[Lee Muller]

These bills are not "Obama's policies". They are Pelosi and Reid's policies.

They cooked up the bills before Obama was even certifed by the Electoral College. Obama is just the new salesman.

This bill is only part of the spending spree:

* $350 BILLION disbursed so far for TARP

* $350 billion still unspent for TARP

* $500 BILLION more planned for TARP

* $600 BILLION increase in the M2 money supply by the Federal Reserve since November.

* $1.3 TRILLION regular spending bill by Democrats before June