February 10, 2009

• The Future of the “Stimulus”

  The Stimulus will fail. 

  It will get passed and it will help a little but the ending verdict of the society will be that it is a dismal failure. Why? Because it’s already failed.  The only way the Stimulus might have succeeded in spite of all our problems is if it had produced a massive increase in consumer confidence. How could it have done that? Only if there was overwhelming universal support for it. A rising tide of belief in the Stimulus itself and belief in the American people’s ability to get out of this economic crises with the help of its government’s assistance. That could have lead to many other bills being passed pushing us on to a better course.

  But that hasn’t happened and it won’t. The ways of partisanship are too entrenched in Washington. It seems apparent that Republicans in Congress have either been deluding themselves entirely or are looking toward victory in the next election cycle no matter the cost to the American people.

  And of course, as always, Democrats have been outmaneuvered at every turn. It’s sort of sad really. There’s no way the Stimulus should have come out of the House without Republican input. They should have let the Republicans put as much input as they want into the bill, I mean who cares? It’s not like the Democrats can’t vote down every amendment they don’t like, and maybe leave a couple token measures in to be able to point to to show how compromising Democrats could be.  The charge that Democrats are being too partisan should quite simply NEVER have been leverable against them. This is an Epic Fail and it was the beginning of the end.

  Then Obama screwed up by thinking the Republicans would be reasonable. Rather than attacking them as being obstructionist, he went to the House and gave them photo ops. And then they turned around and ignored everything he said.  The President cared more about his image as a Peace Maker President than getting his agenda passed with bipartisan support. It was teh wrong strategy for the time.

  The Stimulus then got to the Senate with all that baggage behind it already so it’s not really a surprise that only three republicans voted for it. But much worse is the anti-Stimulus media blitz that arose from the Senate coverage. Republicans charged that the Stimulus was a pork bill full of useless crap that doesn’t Stimulate the economy directly.

  What “stimulates” the economy “directly” is of course largely in the eye of the beholder. But the reason why this charge gets traction is largely a matter of semantics more than anything else. The Democrats, and Obama in particular are after something much larger than mere “stimulus”. A lot of the “useless” provisions are designed not to just get us through this recession but to be the very first steps on a plan to restructure the American economy in  more equitable and fair way. In other words, the Democrats want to create an economy that can’t ever get into this mess *again*. That’s why you see funding for education and new energy efficiency initiatives. The goal is to make the United States continue to be a global leader in the fields that will drive the world’s economy in the future.

  The Democrats screwed up here in that they didn’t name the bill what it was.  It shouldn’t have been the “economic stimulus” bill,  it should have been the “economic restructuring” bill. And the rhetoric should have been from the very beginning to create a bill that not *just* puts people to work, but that fundamentally changes the culture of America so that the excesses of the past are impossible in the future. This bill could have been followed by other “restructuring” bills changing the banking sector, the housing sector, the medicaid and medicare system, social security, taxes,  etc.   Branding is everything in Washington and the “stimulus” brand was easily coopted for political purposes.

  So what now for Obama? It appears his honeymoon was absurdly short and he’s not going to be the super productive President he hoped to be.  His options with regards to the Stimulus is to lessen its significance or possibly even abandon it and start over (not really an option for him I think since he sees it as so essential and mission critical), or start to turn this failure around on the Republicans for obstructionism. The later is hard when the Democrats control both houses of congress (you’d have to push through super aggressive highly partisan bills in the Senate that force a fillibuster) and is not the kind of thing Obama wants to be known for.

  So Obama is stuck between a rock and a hard place.  His only way out is if sadly if the stimulus remarkably works better than anyone’s greatest dreams (and Democrats can claim credit), or if the economy gets so damned bad that everyone rallies behind him for lack of anyone having any better idea of what to do.

  Much more likely is that economy will stay largely the same, helped only a small amount until the next election where Republicans will blame Obama and/or the House and Senate Democrats for failed leadership and take back both houses of Congress. At which point Washington will be at a standstill until 2004 wherein Republicans will continue to blame Obama in order to get their guy in. Probably Americans will give Obama a second chance (we tend to always like to give our Presidents the benefit of the doubt), and nothing meaningful will happen for another 4 years.  With luck the economy will correct itself all on its lonesome sometime within that period just in time for our looming healthcare crises to hit us full on sending us back into recession. Without luck… well then we really will have a Great Depression. Maybe more rightly called a Greatest Depression.

  I hope I’m wrong.

  • 10:01 am
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