Shortly after the election, while basking in the afterglow of the historic outcome, I - like many proud Americans - watched Steve Kroft interview the new first family on 60 Minutes. I was struck by one particular statement made by the president-elect, and even highlighted it in a post at the time:
Kroft: "Where is all the money going to come from to do all of these things? And is there a point where just going to the Treasury Department and printing more of it ceases to be an option?"
Mr. Obama: "Well, look, I think what’s interesting about the time that we’re in right now is that you actually have a consensus among conservative Republican-leaning economists and liberal left-leaning economists. And the consensus is this: that we have to do whatever it takes to get this economy moving again, that we’re gonna have to spend money now to stimulate the economy. And that we shouldn’t worry about the deficit next year or even the year after. That short term, the most important thing is that we avoid a deepening recession."
At the time I considered consulting the intertubes and dragging up quotes from a few dozen economists to contradict the assertion, But, I was feeling lazy, and as he had only been elected a few days before, had not been sworn in, and we had not even really started the honeymoon yet, I couldn't be bothered. My only editorial comment in that post was a reminder that someone (our children and grandchildren), someday would have to pay the price for this additional debt, in either taxes, inflation, devalued currency or all of the above.
Since then, as the massive
"Economists from across the political spectrum agree that if we don't act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment and the American dream slipping further and further out of reach." - Barack Obama 3-Jan-09
"Every economist from right to left, Republican, Democrat, advises that (a government stimulus) has to be a very substantial package" Rep. Steny Hoyer (D) 4-Jan-09
"Everybody, I think, from economists on the left to economists on the right realize that we must make critical investments at this time," - White House chief of staff Rahm Emanuel 18-Jan-09
"There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy." — Barack Obama 09-Jan-09
Last week, my procrastination paid off, as the Cato Institute published a full page ad [PDF] in the New York Times to set the record straight (and make this post a whole lot easier):
"With all due respect Mr. President, that is not true. Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth."
This almost gives me hope. I'd like to believe that something has fundamentally changed. I'd like to believe that people have stopped believing the fairy tale that government intervention in the form of massive new spending and massive new debt that can only be funded by printing money is somehow a solution to the problem of a burst economic bubble created by government intervention in the form of massive spending, massive debt, and easy monetary policy.
It is encouraging that public support for this bill is now below 37%. It is encouraging that rational arguments are at least being heard in opposition to this bill. Examples include: Megan McArdle (also here), with Sully chiming in (but still apparently unable to resolve his claimed conservative principles with his continuing P.D.S. affliction), Steve Verdon at OTB, and Greg Mankiw among others.
Encouraging, but I don't believe it. This is all Kabuki theater. After applying a little lipstick, this pig of a bill will pass (H/T to Q&O for the graphic). To satisfy the constituents of conservative Democrats and Republicans, the bill must be voted down once, just so Senators can run an ad in their next campaign saying they voted against waste in Washington. Then the deck chairs will be rearranged and a bill of comparable size and scope will sail through. The same Senators can then also run an ad saying they saved the economy, and brought home the bacon.
Nick Gillespie hits the nail on the head:
"McConnell's change in attitude seems suspiciously unprincipled and mostly partisan. I'm all for divided government (here's hoping it delivers gridlock), but one of the problems with unprincipled pols is that, well, they don't have principles. Which means they will flip the moment they get enough goodies promised them to go one way or the other. And if the experience with the financial sector bailout is any indication, expect the second (and third, and fourth, and so on) bills to be even worse than the awful first draft. And expect McConnell sometime soon to be on the other side of the vote, the one with all those shiny, happy Democrats yapping about how they just guaranteed a car in every pot and two chickens in every garage by funding bullshit infrastructure programs in every ZIP code in the country."
"Now, in the past few days I've heard criticisms of this plan that echo the very same failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems," the president said at the White House. "I reject that theory, and so did the American people when they went to the polls in November and voted resoundingly for change."
My overwhelming 52% electoral mandate means that Americans want to flush another trillion dollars that we don't have down the toilet. Because I say so. No matter what that Rasmussen poll says.And you know what? He is probably right. Pucker up.
UPDATE: 05-Feb-09 Apparently the portion of Obama's comments not related to executive pay yesterday got repackaged and regurgitated into a Washington Post op-ed today - The Action America Needs. Compare this quote from the op-ed to his White House comments yesterday (quoted above):
"In recent days, there have been misguided criticisms of this plan that echo the failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems; that we can meet our enormous tests with half-steps and piecemeal measures; that we can ignore fundamental challenges such as energy independence and the high cost of health care and still expect our economy and our country to thrive. I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change."
Did we learn nothing from the hastily passed $700 Billion Wall Street bailout last year? You remember - when we witnessed the rampant stupidity of a craven congress rolling over to an executive demand for fast action on the basis of economic fear mongering - and as a result - were treated to the spectacle of our representatives wasting massive amounts of taxpayer resources without really understanding what they are passing or having any idea where the money will go or how it will be used. Apparently we learned nothing. This is exactly what is happening on the floor of the Senate as I write this.
As predicted: Unable to pass a $900 Billion massive pork-laden stimulus spending package that will do nothing except spend money we do not have on stuff we do not need, wildly increase the debt burden on future generations, and ultimately require devaluation of the dollar - the Democrats are in the process of paying off a couple of Republican Senators with a share of the pork, and will likely pass a $800 Billion massive pork-laden spending package that will do nothing except spend money we do not have on stuff we do not need, increase the debt burden on future generations, and ultimately require devaluation of the dollar.
UPDATE: 10-Feb-09 The Senate just passed their version of the stimulus bill. I'll have some thoughts on this abomination as it wends its way through the conference process over the next week. In the meantime, this YouTube dramatization of the passage of the bill pretty much sums up exactly what just happened. Ned Beatty gives an Oscar worthy performance as the American taxpayer. The other two characters in this clip are playing the United States House of Representatives and Senate.