A Stimulus, Yes, But At What Cost?
The latest lefty talking point is that Republican opposition to the Obama stimulus bill means Republicans would rather score partisan points then rescue the economy. That is, of course, nonsense. Let’s start from the reasonable assumption that both parties want desperately to get out of the economic slump we are in. The stimulus package as proposed by Obama is one possible solution – it’s not the ONLY solution.
Phil Levy, writing in Foreign Policy, identifies three types of thinkers as relates to the current downturn: Scientific Keynesians, as typifed by Krugman (what is the economy capable of, what is it actually producing, government spending efficiently plugs the gap); the Cost-Benefit Covey (Levy identifies himself as one of these, as do I), who do not see all government spending as being equal, but rather see the type and cost of spending as relates to the benefits as critically important; and Animal Spiritualists, who believe that perception is everything, and the public basically needs to be conned into thinking everything will be okay because we’re working on it.
Levy goes on to look at the cost of Obama’s victory, including the death of Obama’s transparency pledges, the fear-mongering and demagoguery that, so ironically, is reminiscent of nothing so much as what the Left accused Bush of, and, of course, the embrace of protectionism:
Politically, President Obama seems to have dashed many of his major thematic campaign promises in his very first foray into large-scale policy-making. The crafting and selling of the stimulus package have been neither transparent, innovative, calm, nor bipartisan. Much of the package was crafted behind closed doors. The rush to push money out quickly left no time to develop creative new approaches. The president’s dire warnings of doom did little to soothe fears, particularly in those who had doubts about the stimulus package’s efficacy. And hopes for bipartisanship may have been the biggest victim of the endeavor. While President Obama was willing to exchange pleasantries with Republicans, those Republicans were largely excluded from the crafting of the bill and voted overwhelmingly against it.
Of course, a natural response by the Obama administration is that the Republicans were just engaging in rank partisanship. There are certainly Republicans motivated solely by politics, but this is why Sen. Judd Gregg’s withdrawal as Commerce nominee is so devastating. Even President Obama’s hand-picked reasonable Republican found the process unpalatable. [emphasis mine]
On the international front, the bill portends trouble. The original excesses of the Buy American clauses were trimmed back, but President Obama missed a golden opportunity. Had he embraced Sen. John McCain’s amendment to remove the clause, he would have demonstrated bipartisanship, assured the world that America was not embracing protectionism, and still retained existing legal authority to direct some contracts toward domestic producers. Instead, Sen. McCain’s amendment was defeated. The remaining clause sends a bad signal, allows protection, invites retaliation and risks provoking numerous trade disputes.
If worried allies wish to call up and seek reassurance, they likely won’t find the right person on the other line, as key international economic positions remain unfilled: Ron Kirk, the nominee for United States Trade Representative, has not yet had hearings scheduled, and there is a new vacancy at Commerce. The Treasury, meanwhile, may be otherwise occupied.
President Obama got the stimulus plan that he wanted, but at potentially a very high cost.
Obama accused the Republicans of trotting out the ‘same old tired solutions that got us in this mess’ in their preference for lower taxes and less regulation as a stimulus, but regardless of the truth of that assertion, he resorted to the same old tired Washington strong-arm demogaguery and horse-trading that his election, or so we were assured ad infinitum, had put an end to.