In the final stages, it's like watching two teams of squabbling sculptors shaping a huge graven image to appease the gods of economic destruction, slicing billions of spending here, sticking back tax cuts there, while chanting the mantras of their competing belief systems.
In the Senate version, which stands to win no more than three Republican votes as opposed to the House bill, which won none: Forty billion of state aid is out and seventy billion to spare thousands of middle-class Americans from paying the alternative minimum tax in 2009 is in--heading a laundry list of cuts for education, sciences, the environment and health care
Why? To make the bill filibuster-proof in the Senate and then hammer the misshapen thing into some final form that will end up on the President's desk to be signed by the middle of the month.
The final product, despite the expensive buying-off of Sens. Specter, Collins and Snowe, will be owned by the Democrats because Republicans sense more political profit down the road by blaming Democrats than signing on to a half-hearted bipartisan effort.
The bottom line on the stimulus is that nobody, nobody--Democrats, Republicans, economists of all stripes--actually knows what will and won't work but all agree that doing something is vital.
The absurdity is seeing them wrestling over the details while pretending to know what they're doing.
Showing posts with label tax cuts. Show all posts
Showing posts with label tax cuts. Show all posts
Sunday, February 08, 2009
Friday, February 06, 2009
Deck Chairs on the Titanic
The shipboard news today is that the new president is tightening his grip on the helm as Republicans reach for the wheel, but only a few dour souls are up on deck scouring the horizon for icebergs.
Obama rallies Congressional Democrats at their retreat: "We're not going to get relief by turning back to the very same policies that, for the last eight years, doubled the national debt and threw our economy into a tailspin. We can't embrace the losing formula that says only tax cuts will work for every problem we face, that ignores critical challenges like our addiction to foreign oil, or the soaring cost of health care, or failing schools and crumbling bridges and roads and levees.
"I don't care whether you're driving a hybrid or an SUV-- if you're headed for a cliff, you've got to change direction."
In the first-class lounge, Peggy Noonan sees passengers "braced" for impact while she points out that Obama's "serious and consequential policy mistake is that he put his prestige behind not a new way of breaking through but an old way of staying put. This marked a dreadful misreading of the moment. And now he's digging in. His political mistake, which in retrospect we will see as huge, is that he remoralized the Republicans. He let them back in the game."
Scanning the horizon, Paul Krugman points out that "most economic forecasts warn that in the absence of government action we’re headed for a deep, prolonged slump" and agrees that "the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh."
Krugman and the Times editorial page call for full steam ahead, Republicans want to stop stoking the boilers and the rest of us keep trying to remember how we got shanghaied onto this luxury cruise in the first place.
Obama rallies Congressional Democrats at their retreat: "We're not going to get relief by turning back to the very same policies that, for the last eight years, doubled the national debt and threw our economy into a tailspin. We can't embrace the losing formula that says only tax cuts will work for every problem we face, that ignores critical challenges like our addiction to foreign oil, or the soaring cost of health care, or failing schools and crumbling bridges and roads and levees.
"I don't care whether you're driving a hybrid or an SUV-- if you're headed for a cliff, you've got to change direction."
In the first-class lounge, Peggy Noonan sees passengers "braced" for impact while she points out that Obama's "serious and consequential policy mistake is that he put his prestige behind not a new way of breaking through but an old way of staying put. This marked a dreadful misreading of the moment. And now he's digging in. His political mistake, which in retrospect we will see as huge, is that he remoralized the Republicans. He let them back in the game."
Scanning the horizon, Paul Krugman points out that "most economic forecasts warn that in the absence of government action we’re headed for a deep, prolonged slump" and agrees that "the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh."
Krugman and the Times editorial page call for full steam ahead, Republicans want to stop stoking the boilers and the rest of us keep trying to remember how we got shanghaied onto this luxury cruise in the first place.
Monday, February 02, 2009
The Bipartisan Tango
The Washington air is filled with fake piety as Republican survivors of 2008 try to feign amity with a popular president and vote against him by making villains out of Congressional Democrats.
In the House, they lined up unanimously against the stimulus bill, despite more schmoozing with Barack Obama than any recent president, while blaming Nancy Pelosi for their disaffection.
Pointing out Obama's belief that "economic recovery is about psychology as well as money and that Americans will have more confidence in the future if they see the nation's politicians cooperating to resolve the crisis," E. J. Dionne Jr. notes in the Washington Post:
"If achieving bipartisanship takes priority over the actual content of policy, Republicans are handed a powerful weapon. In theory, they can keep moving the bipartisan bar indefinitely. And each concession to their sensibilities threatens the solidarity in the president's own camp."
The test will come this week in the Senate, where the bipartisan tango will be less robotic as real bargaining beyond posturing begins. The battles will be over increasing infrastructure spending, government-backed low-interest mortgages and how to target tax cuts, among other issues. (Nostalgia note: John McCain is still railing about pork.)
Meanwhile, legislators in both parties are still trying to parse the Obama definition of bipartisanship, Democrats worrying about weakening their agenda, Republicans questioning how much of it is window dressing.
Rep. Zack Wamp, who headed Fred Thompson's ill-fated primary effort, may have summed up the GOP position best: "We got the sense that he was very genuine," he says. But if Obama "comes and meets with us like that and it doesn't have an impact, it begins to hurt his credibility."
In times like these, presidential credibility counts more than ever.
In the House, they lined up unanimously against the stimulus bill, despite more schmoozing with Barack Obama than any recent president, while blaming Nancy Pelosi for their disaffection.
Pointing out Obama's belief that "economic recovery is about psychology as well as money and that Americans will have more confidence in the future if they see the nation's politicians cooperating to resolve the crisis," E. J. Dionne Jr. notes in the Washington Post:
"If achieving bipartisanship takes priority over the actual content of policy, Republicans are handed a powerful weapon. In theory, they can keep moving the bipartisan bar indefinitely. And each concession to their sensibilities threatens the solidarity in the president's own camp."
The test will come this week in the Senate, where the bipartisan tango will be less robotic as real bargaining beyond posturing begins. The battles will be over increasing infrastructure spending, government-backed low-interest mortgages and how to target tax cuts, among other issues. (Nostalgia note: John McCain is still railing about pork.)
Meanwhile, legislators in both parties are still trying to parse the Obama definition of bipartisanship, Democrats worrying about weakening their agenda, Republicans questioning how much of it is window dressing.
Rep. Zack Wamp, who headed Fred Thompson's ill-fated primary effort, may have summed up the GOP position best: "We got the sense that he was very genuine," he says. But if Obama "comes and meets with us like that and it doesn't have an impact, it begins to hurt his credibility."
In times like these, presidential credibility counts more than ever.
Tuesday, January 27, 2009
Buffoonery, Blago's and Boehner's
On subjects both sublime and ridiculous--the nation's economy to catching a small-time crook in high office--the media are once again showing helplessness in the face of idiocy spouted by people in official positions.
For an hour with Larry King after a blitz of other TV outlets, Rod Blagojevich keeps repeating his mantra of Fitzgerald's tapes as "out of context" and his "innocent until proved guilty" grievances against the Illinois legislature, where the only vote not to impeach him was cast by his sister-in-law.
Much more serious is the constant tanned presence of John Boehner (does the man sleep under a sun lamp?), telling us that the answer to a deepening depression is tax cuts and more tax cuts.
There are many ways to dispose of such nonsense, but Paul Krugman's will suffice:
"Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets--and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens."
Yet Boehner's brainlessness keeps being used by the media as "balance" to the Obama Administration's efforts to get a stimulus bill through Congress. There are serious objections that can be made to portions of the bill that can't be reduced to sound bites, but we don't hear them.
It all recalls the time when a US Senator kept waving pieces of blank paper as lists of Communists in the State Department and the media felt helpless not to report Joe McCarthy's lies with a straight face.
We haven't progressed much in half a century.
For an hour with Larry King after a blitz of other TV outlets, Rod Blagojevich keeps repeating his mantra of Fitzgerald's tapes as "out of context" and his "innocent until proved guilty" grievances against the Illinois legislature, where the only vote not to impeach him was cast by his sister-in-law.
Much more serious is the constant tanned presence of John Boehner (does the man sleep under a sun lamp?), telling us that the answer to a deepening depression is tax cuts and more tax cuts.
There are many ways to dispose of such nonsense, but Paul Krugman's will suffice:
"Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets--and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens."
Yet Boehner's brainlessness keeps being used by the media as "balance" to the Obama Administration's efforts to get a stimulus bill through Congress. There are serious objections that can be made to portions of the bill that can't be reduced to sound bites, but we don't hear them.
It all recalls the time when a US Senator kept waving pieces of blank paper as lists of Communists in the State Department and the media felt helpless not to report Joe McCarthy's lies with a straight face.
We haven't progressed much in half a century.
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.
Monday, January 05, 2009
Fear of Failing
Underlying all the finger-pointing about what went wrong and the nervous apprehension over how to fix the economy is a feeling that generations of us have never had--being unable to control our own future.
The hopeless faces in those Dorothea Lange and Walker Evans photographs of the Great Depression are alien to 21st century Americans, but some of their dread is seeping into the debate now as a confident economist like Paul Krugman offers his nightmare scenario:
"It takes Congress months to pass a stimulus plan, and the legislation...is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it’s only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy--well, you can see where this is going.
"So this is our moment of truth. Will we in fact do what’s necessary to prevent Great Depression II?"
Evidence that the Obama administration shares that feeling can be seen in the news of an extraordinary offer of immediate $300 billion in tax cuts for individuals and businesses to gladden the hearts of Congressional conservatives and bring them on board quickly for stimulus legislation.
"The End of the Financial World as We Know It," an analysis of the meltdown in the New York Times this weekend claims that "18 months into the most spectacular man-made financial calamity in modern experience, nothing has been done to change...bad incentives that led us here in the first place.
"Say what you will about our government’s approach to the financial crisis, you cannot accuse it of wasting its energy being consistent...In the past year there have been at least seven different bailouts, and six different strategies. And none of them seem to have pleased anyone except a handful of financiers."
There is a growing sense now that this is our last chance to get it right and as a result, in the months ahead, America will be fighting against both economic and psychological depression.
The hopeless faces in those Dorothea Lange and Walker Evans photographs of the Great Depression are alien to 21st century Americans, but some of their dread is seeping into the debate now as a confident economist like Paul Krugman offers his nightmare scenario:
"It takes Congress months to pass a stimulus plan, and the legislation...is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it’s only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy--well, you can see where this is going.
"So this is our moment of truth. Will we in fact do what’s necessary to prevent Great Depression II?"
Evidence that the Obama administration shares that feeling can be seen in the news of an extraordinary offer of immediate $300 billion in tax cuts for individuals and businesses to gladden the hearts of Congressional conservatives and bring them on board quickly for stimulus legislation.
"The End of the Financial World as We Know It," an analysis of the meltdown in the New York Times this weekend claims that "18 months into the most spectacular man-made financial calamity in modern experience, nothing has been done to change...bad incentives that led us here in the first place.
"Say what you will about our government’s approach to the financial crisis, you cannot accuse it of wasting its energy being consistent...In the past year there have been at least seven different bailouts, and six different strategies. And none of them seem to have pleased anyone except a handful of financiers."
There is a growing sense now that this is our last chance to get it right and as a result, in the months ahead, America will be fighting against both economic and psychological depression.
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