Nothing significant has happened, but suddenly the economy is looking better. Excitement over snippets of good news, or more accurately less-bad news, is underscoring how much of it all is psychological and suggesting that Obama's aggressive stimulus attack, no matter how flawed, wasteful and even wrong-headed, has been crucial to keeping us from going over the edge.
In the past few days, the usually sober New York Times has been agog with happy talk about the economic crisis, climaxed today by a Paul Krugman assertion that Big Government "saved us" by not fearfully cutting spending and "unlike in the 1930s, the government didn’t take a hands-off attitude while much of the banking system collapsed."
This follows an analysis saying: “A report card on the stimulus plan offered by analysts nearly six months after it was passed by Congress suggests that the punch from increased government spending has helped the economy begin to bottom out faster than it would have otherwise.”
Yet another interpretive piece concludes that "the evidence is now pointing pretty strongly in one direction: history books may conclude that the financial crisis of 2008 turned out to be far less bad than it could have been and that Washington deserved much of the credit."
Before passing all this off as liberal wishful thinking, contrast today's situation with the economic free fall of the 1970s when accidental president Gerald Ford tried to cheerlead the nation out of stagflation with WIN buttons (Whip Inflation Now) and presided over low growth and runaway inflation that persisted through the Carter years into the Reagan era.
It will take months, even years, before the verdict is in on the wisdom of every aspect of the enormous Obama spending and deficit growth, but one thing is already clear: All that furious activity has been more reassuring than a President McCain approach of tax cuts and hoping for the best.
For the economy as a whole, Cash for Clunkers may signify the importance of getting consumers to feel that the sky is not falling and, given enough time, they will do the rest.
Showing posts with label Obama stimulus. Show all posts
Showing posts with label Obama stimulus. Show all posts
Monday, August 10, 2009
Monday, February 23, 2009
Stimulus as GOP Hopefuls' Iraq
Republican gubernatorial presidential wannabes are facing a dilemma over the Obama stimulus similar to the one that led Senate Democratic hopefuls into voting for George W. Bush's invasion of Iraq in 2001.
Just as Hillary Clinton, Joe Biden, John Edwards et al feared retaliation at the polls in 2004 for being soft on terrorism, we now have Bobby Jindal, Sarah Palin and Mark Sanford arguing against government spending in their states during a crashing economy to appease the Republican conservative base for their 2012 primary runs.
On Meet the Press, Gov. Jindal bloviated over his refusal to accept $100 million for unemployment compensation in an estimated $4 billion of aid for Louisiana: “Now is the time, and it’s a great opportunity for Republican governors and other leaders to offer conservative-based solutions to the problems.”
He was followed by Charlie Crist of Florida, whose ambitions reach no higher than the Senate in 2010, saying, “There is a national leader, his name is President Obama...I think we do need to be bipartisan. We need to be, in fact, nonpartisan.”
Arnold Schwarzenegger, whose state is drowning in red ink and is ineligible by birth for running for the White House, is also more philosophical. “Even though it is against your principles or philosophy,” he notes that officeholders should be doing “what the people want you to do rather than getting stuck in your ideology.”
Voting for Iraq left a lot of Democrats scrambling to explain themselves to voters later on. No matter how the stimulus turns out for the economy, some of their Republican counterparts now may have trouble persuading even their base why it was a good idea to open their umbrellas in a financial drought when it was raining federal money.
Just as Hillary Clinton, Joe Biden, John Edwards et al feared retaliation at the polls in 2004 for being soft on terrorism, we now have Bobby Jindal, Sarah Palin and Mark Sanford arguing against government spending in their states during a crashing economy to appease the Republican conservative base for their 2012 primary runs.
On Meet the Press, Gov. Jindal bloviated over his refusal to accept $100 million for unemployment compensation in an estimated $4 billion of aid for Louisiana: “Now is the time, and it’s a great opportunity for Republican governors and other leaders to offer conservative-based solutions to the problems.”
He was followed by Charlie Crist of Florida, whose ambitions reach no higher than the Senate in 2010, saying, “There is a national leader, his name is President Obama...I think we do need to be bipartisan. We need to be, in fact, nonpartisan.”
Arnold Schwarzenegger, whose state is drowning in red ink and is ineligible by birth for running for the White House, is also more philosophical. “Even though it is against your principles or philosophy,” he notes that officeholders should be doing “what the people want you to do rather than getting stuck in your ideology.”
Voting for Iraq left a lot of Democrats scrambling to explain themselves to voters later on. No matter how the stimulus turns out for the economy, some of their Republican counterparts now may have trouble persuading even their base why it was a good idea to open their umbrellas in a financial drought when it was raining federal money.
Saturday, January 10, 2009
The Bumpy Year to Come
Barack Obama is reaching for the controls of an economy in a fog bank, flying blind to who-knows-where with huge numbers of job losses, business failures, home foreclosures and, above all, fear of worse to come.
Unlike the late 1970s during the Gerald Ford interregnum, when a helpless government was reduced to sloganeering with WIN (Whip Inflation Now) buttons, the administration that takes over in ten days has a multitude of plans and proposals for economic stimulus, but with each day, there is mounting anxiety over what kind and how much and for how long.
The bottom line: Nobody knows. And with so much at stake, politicians and economists are in their least favorite mode--uncertainty.
“This is not an intellectual exercise, and there’s no pride of authorship,” the President-Elect told a news conference yesterday. “If members of Congress have good ideas, if they can identify a project for me that will create jobs in an efficient way--that does not hamper our ability to, over the long term, get control of our deficit; that is good for the economy--then I’m going to accept it.”
Republicans are scrambling to look cooperative but wary of the huge federal spending to come, while some Democrats are starting to push back against Obama's concessions on tax cuts to get bipartisan support.
The "experts" are uncharacteristically iffy. “We have very few good examples to guide us,” said a Brookings wonk and Paul Krugman writes about the "Obama Gap," claiming that his economic plan "falls well short of what’s needed," a $775 billion answer to a $2 trillion shortfall of lost production in the next two years.
Success or failure will hinge on developments outside the control of Obama or the Congress, according to Thomas Donohue, president of the US Chamber of Commerce. In his annual State of American Business speech, Donohue said this week that at least 12 major economies are now deeply in trouble.
Meanwhile, the confusion is underscored by jockeying between the outgoing Bush Administration and the new Congress over spending the second half of October's $700 billion financial rescue package. Nobody is sure of exactly what happened to the first installment or whether it did much good, but one way or another, the money will get shoveled out the door.
In his inaugural address, Barack Obama will be in the position of an airline pilot reassuring passengers that the turbulence will eventually subside and that they will get to where they want to go.
But in the meantime, fasten your seat belts. It's going to be a bumpy year.
Unlike the late 1970s during the Gerald Ford interregnum, when a helpless government was reduced to sloganeering with WIN (Whip Inflation Now) buttons, the administration that takes over in ten days has a multitude of plans and proposals for economic stimulus, but with each day, there is mounting anxiety over what kind and how much and for how long.
The bottom line: Nobody knows. And with so much at stake, politicians and economists are in their least favorite mode--uncertainty.
“This is not an intellectual exercise, and there’s no pride of authorship,” the President-Elect told a news conference yesterday. “If members of Congress have good ideas, if they can identify a project for me that will create jobs in an efficient way--that does not hamper our ability to, over the long term, get control of our deficit; that is good for the economy--then I’m going to accept it.”
Republicans are scrambling to look cooperative but wary of the huge federal spending to come, while some Democrats are starting to push back against Obama's concessions on tax cuts to get bipartisan support.
The "experts" are uncharacteristically iffy. “We have very few good examples to guide us,” said a Brookings wonk and Paul Krugman writes about the "Obama Gap," claiming that his economic plan "falls well short of what’s needed," a $775 billion answer to a $2 trillion shortfall of lost production in the next two years.
Success or failure will hinge on developments outside the control of Obama or the Congress, according to Thomas Donohue, president of the US Chamber of Commerce. In his annual State of American Business speech, Donohue said this week that at least 12 major economies are now deeply in trouble.
Meanwhile, the confusion is underscored by jockeying between the outgoing Bush Administration and the new Congress over spending the second half of October's $700 billion financial rescue package. Nobody is sure of exactly what happened to the first installment or whether it did much good, but one way or another, the money will get shoveled out the door.
In his inaugural address, Barack Obama will be in the position of an airline pilot reassuring passengers that the turbulence will eventually subside and that they will get to where they want to go.
But in the meantime, fasten your seat belts. It's going to be a bumpy year.
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