The Obama stimulus bill is now law, and some Republicans are elated.
The House Republican leadership, John Boehner and Eric Cantor, in particular, are gloating as if they just won a multi-million dollar lottery. In fact, they lost a legislative battle, but let’s not concern ourselves with the small stuff right now.
Boehner and Cantor are gloating because twice when versions of the bill came before their legislative body, they convinced every single one of their GOP colleagues to vote against it. It’s their version of the Alamo, where all of their troops were invited to surrender, and not one crossed over the line to the other side.
Of such high drama are poor TV pilots written.
The House Republicans would have reason to be proud of the unanimity of their opposition to the stimulus bill if that opposition had been based on principle, and for some elected members of Congress, it undoubtedly was. They – the honorable opponents – firmly believe that government spending of any kind is the wrong way to handle the economic crisis the country finds itself in. Their alternative merits mention and analysis, which I’ll get to shortly.
But first, let’s consider the chortling that Boehner et al. are engaging in this week.
In politics, if you can’t win, make it seem like the other guy lost. That was clearly the game plan devised by the GOP hierarchy as their Democratic counterparts in the House hatched the original stimulus bill. The Republicans quickly decided to oppose it as a pork-laden grab bag of special interest projects that weren’t intended to stimulate the economy so much as they sought to fund infamous “pet projects.”
Of course, many of the allegedly offensive measures in the original bill (the quarter billion dollars for the film industry, for example) would have most assuredly stimulated economic development, even if they were intended to help an industry whose most publicized stars have often been supportive of Democratic candidates. (The film industry, after all, is private enterprise to the core, and it does represent employment for thousands of workers, whose jobs are threatened in a depressed economy.)
But the “loyal opposition” saw an opening, and the marching orders were quickly dispensed: oppose the bill; say that it doesn’t create jobs; attack it as excessive spending that will only increase the national debt; call it anti-small business. Those are all easy lines to spout mindlessly, especially when talk radio icons are picking them up and running with them.
In truth, the original bill was both too much and far too little. It was too heavy on tax cuts, which will do virtually nothing to stimulate the economy, and far too light on spending, especially the kind that creates jobs. The final version suffers the same deficiencies. Thus, Obama, without more, is likely to come up short on his promise to “create or save four million jobs.” (The number has gone up since his election as the economy has gotten worse.)
But whether too big or not big enough, the bill represents a commitment to finding a solution to the mess Obama has inherited. The principled opposition to it does not.
Here we deal with the true conservatives in the crowd (as opposed to the Republican “loyalists” described above, who will march in step with their leaders, no questions asked).
The true conservatives are those who specifically oppose the kind of initiatives represented by the stimulus bill precisely because they believe any government spending in a capitalist economy destroys the integrity of the entire system. These are the folks who, if they could, would repeal every social program from the New Deal on, every government regulation beginning with the anti-trust acts, and every effort to spend government funds (taxpayer dollars) for anything other than national defense and domestic security.
They trust in the purity of the capitalist model in which the worth of production is measured by its acceptance in the market place. From this simple formula, for these folks, everything else flows. Thus, if the economy hits a tailspin, let the victims fall where they will, be they businesses or workers, wealthy or poor, producers or consumers. Eventually, the theory goes, the markets will adjust and new enterprises will develop which will find new consumers who will want those products, which will create jobs that will pay salaries to workers who will then buy and consume the products.
So government, the theory goes, needs to stay out of the marketplace, leaving it to self-adjust, painful though those self-adjustments may occasionally be.
And, of course, the theory only works well when taxes and other forms of government revenue are kept as low as possible. For the pure capitalist, taxes represent money taken out of the flow of commerce, which lessens the purity of the system, since dollars earned that are taken away from those who earned them are dollars lost to the economic machine, thereby creating the greater likelihood of disruptions in normal economic cycles.
The problem with pure capitalism is that in a complex society (to wit: anything beyond the pre-industrial revolution stage of economic development) it doesn’t work. Too many variables, like a 9/11 attack, or a Hurricane Katrina, or a sub-prime mortgage crisis can disrupt the perfect equilibrium that the pure capitalist theory depends upon.
And so is the disingenuousness of the principled opposition to Obama’s stimulus plan revealed. It claims that the government cannot “create” jobs, but it means the government should not try to create jobs. It claims that welfare produces dependency, but it means that welfare supports the economy’s failures. It claims that excessive spending is inflationary, but it means that excessive spending takes money out of the free-market economy.
Thus can the debate over Obama’s stimulus plan be properly understood. The President sees a crisis and seeks to use the powers of the federal government to help the economy right itself. The principled opposition still believes in the dream of a free market system that will ultimately correct itself if given the time. And the rest are just spouting political balderdash.
I really have no opinion on Pres. Obama’s stimulus plan! I haven’t analyzed it or pondered it much. Why? Because in my mind who and what failed our economy miserably this year should be up for serious analyzing!!
Perhaps some research into the great Sun Tzu’s strategies are in order. He wrote on devestating economies–and how no nation was immune to the costs of war. No logical war strategist would approve of a 6 year war while simultaneously juggling several other military jaunts.
Now that were in this unbelievable– though predictable mess– why not accept that whatever was happening prior to the stimulus certainly did NOT work, therefore, it’s time to change the channel, even if it means something radical or not of popular opinion.
I say buckle your seat belts, were in for a ride into reality.
I’ll keept this short and too the point… A $787 billion stimulus on top of the $700 billion bank bailout on top of the $150 billion stimulu/rebate bill last year is irresponsible. Bush was not a fiscal conservative in the least. The deficit ballooned under him, and Obama made mention of that numerous times in the campaign.
There is no fiscal accountability in Washington. We will be paying for this for thousands of years. The interest on the debt is going to balloon. This is the most massive spending by a goverment since FDR. Pretty soon we are going to have spnd 50% of our tax revenues on paying INTEREST on the debt. The out of control spending needs to stop. We need someone with Bill Clinton’s fiscal conservatism in Washington not the tax and spend liberal policies of Bush/Obama.
Adam –
I disagree with your assessment of the spending under the two administrations. The Bush deficits were a combined result of funding a wholly unnecessary and irresponsible war and cutting taxes in advance of and in the face of it. The Obama spending is intended to generate an economic resurgence that will ultimately pay for that spending with increased productivity and tax revenues.
Your reference to FDR’s deficits is also curious, since they were prompted by the same kind of economic crisis that Obama faces. The result of FDR’s spending was an economic recovery. While it took WWII to get the country into the black again, without the spending FDR initiated, the country likely would have been far less able to gear up for the war and any recovery thereafter would have been significantly muted.
The alternative to spending our way out of the current economic meltdown would be to let the markets recover on their own, a highly problematic strategy that would create tremendous pain for many Americans who have done nothing wrong and are more than willing to do their share to solve the problem.
The point I tried to make in my column is that spending in and of itself is not right or wrong. It depends on when the spending is taking place and for what purpose.
I’m no historian nor do I know much about macro economics, but FDRs New Deal, WWII, and the GI Bill combined into a massive, government stimulus (or spending) plan and, no doubt, massive debt. What was the result of all that spending and debt by government? I’m not old enough to say first hand, but what little I do know is that there’s no comparing this Nation’s economic condition in the 1930’s with that of the 1950’s. I’m at a loss as to how modern day conservatives can say that the New Deal was a bust and Keynes was wrong. Do they really believe that recovery would have come quicker had FDR only cut taxes and reduced government spending? At best they could argue that it won’t work this time because conditions are different from Great Depression.