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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?


To: longnshort who wrote (32667)2/13/2009 10:18:00 AM
From: DuckTapeSunroof  Read Replies (1) | Respond to of 71588
 
Yeah, I listened to the interview.



To: longnshort who wrote (32667)2/14/2009 10:38:06 AM
From: Peter Dierks  Respond to of 71588
 
Obama's Enablers in Chief
Three Republicans voted for stimulus.
FEBRUARY 13, 2009, 10:10 P.M. ET

"I have worked with my colleagues -- Republicans and Democrats -- to cut wasteful spending in this bill and focus taxpayer dollars where they will do the most good." -- Sen. Kent Conrad, one extremely relieved man.

"[The stimulus is] much more focused on jobs after Senator Susan Collins of Maine, I and a bipartisan group of senators cut $110 billion of non-stimulative spending . . ." -- Sen. Bill Nelson, if possible, even more extremely relieved.

The cause of their relief? Sens. Collins, Olympia Snowe and Arlen Specter, of course. According to the Beltway media, the three GOP amigos -- whose votes this week allowed Senate Democrats to pass an $838 billion "stimulus" -- are now the most "powerful" people in Washington. Bills succeed or spontaneously combust at their very say-so. Want sunshine tomorrow? Ask the senators from Maine. They'll make it happen.

Then again, only in Washington could the word "powerful" be applied to three members who voted for a bill that they always intended to vote for, no matter how big, bad or ugly. Their real accomplishment this week wasn't "fixing" the stimulus; they didn't. Their real role was providing cover for moderate Democrats (smile, Messrs. Conrad and Nelson) who might have been reluctant to vote for an unpopular spending blowout, were it not for GOP back-up.

A week ago the Capitol's phone lines were jammed with Americans -- half of them from North Dakota -- livid about "stimulus" waste. A number of Senate Democrats, several up for re-election in red-state America, were sweating dollar signs. Then Ms. Collins convened her group, which took very seriously its job of fiddling around the bill's edges. By the time they emerged, Conrad, Nelson & Co. were boasting that the final Senate product was a "bipartisan compromise" that demonstrated their continued commitment to "fiscal responsibility." Only in Washington can adding $20 billion to an $817 billion House bill earn you praise as a deficit hawk.

Barack Obama meanwhile can thank them for providing cover for the fiction that the bill, post-"compromise," had somehow been shorn of its worst waste. Going into the Collins huddle, the "stimulus" contained $2 billion for a power plant in Illinois, $75 million for the Smithsonian, $300 million for government cars, and dozens of other embarrassing projects. Coming out of the Senate it contained $2 billion for a power plant in Illinois, $75 million for the Smithsonian, $300 million for government cars, dozens of other embarrassing projects, an additional $420 million for Maine's Medicaid program, and an additional $6.5 billion for the National Institutes for Health (courtesy of Mr. Specter). There's good reason why the Senate's true fiscal disciplinarians -- say, Tom Coburn or Jim DeMint -- didn't get down with the "compromise" party.

And then there's the self-cover. Ms. Snowe had to be worried that someone might remember that she's spent 13.99 of her 14 years in the Senate publicly agonizing, usually in view of a camera, about the "deficit." Or that as recently as, oh, January, she was fervently devoted to "paygo" -- which she waived in deference to $839 billion in deficit spending. She might have even worried her enthusiasm for this bill might finally, after all these years, highlight that her fiscal responsibility only surfaces when it is time to oppose a tax cut, and that she's never met spending she didn't love.

But no worries! Who has time to remember all those obvious facts? If there's one thing the Maine duo love and understand it's the press, which has a habit of forgetting everything in the face of a hearty, happy compromise. These days, the most dangerous place for Chuck Schumer in Washington is between Susan Collins and a camera.

Still unclear is how all this cover will change the final stimulus votes. Now that Sens. Snowe, Collins and Specter have provided their "bipartisan" imprimatur, some House GOP and Democratic Blue Dog critics may well feel free to join in.

If nothing else, this should tip the GOP to the melodrama it can expect with each new legislative item. Any one or two Republicans will have "power" to veto bills -- and will be feted for a willingness to bargain -- though these will be Republicans who would have voted with Democrats anyway, and who will demand little by way of principled change. As Mitch McConnell noted, the voting behavior of these folks is no different today than last year. All that's changed "is that 49 is more than 41."

Nor will the GOP Three be alone. In a city where senators love to be relevant, Harry Reid will be offering lots of opportunity. Some Republicans had hoped the upcoming retirements of Ohio's George Voinovich or Florida's Mel Martinez might unleash their inner conservatives. Instead, both considered voting for the Senate package.

To their credit, the rest of the GOP has played this well. The instinct would have been to bash on their colleagues, but that would have only focused attention on GOP scrabbling. Members have focused on pushing the message that this remains a bad bill written by, justified by, and passed by, Democrats. Cover aside.

Write to kim@wsj.com

online.wsj.com



To: longnshort who wrote (32667)2/17/2009 11:36:52 AM
From: Peter Dierks  Respond to of 71588
 
Don't Believe the Stimulus Scaremongers
Americans are losing faith in the fairness and wisdom of economic policy.
FEBRUARY 17, 2009

By AMAR BHIDé
Our ignorance of what causes economic ailments -- and how to treat them -- is profound. Downturns and financial crises are not regular occurrences, and because economies are always evolving, they tend to be idiosyncratic, singular events.

After decades of diligent research, scholars still argue about what caused the Great Depression -- excessive consumption, investment, stock-market speculation and borrowing in the Roaring '20s, Smoot-Hawley protectionism, or excessively tight monetary policy? Nor do we know how we got out of it: Some credit the New Deal while others say that that FDR's policies prolonged the Depression.

Posted by Peter Dierks

Similarly, there is no consensus about why huge public-spending projects and a zero-interest-rate policy failed to pull the Japanese out of a prolonged slump.

The economic theory behind the nearly $800 billion stimulus package may be cloaked in precise mathematics but is ultimately based on John Maynard Keynes's speculative conjecture about human nature. Keynes claimed that people cope with uncertainty by assuming the future will be like the present. This predisposition exacerbates economic downturns and should be countered by a sharp fiscal stimulus that reignites the "animal spirits" of consumers and investors.

But history suggests that dark moods do change on their own. The depressions and panics of the 19th century ended without any fiscal stimulus to speak of, as did the gloom that followed the stock-market crash of 1987. Countercyclical fiscal policy may or may not have shortened other recessions; there are too few data points and too much difference in other conditions to really know.

Unfounded assertions that calamitous consequences make opposition to the rapid enactment of a large stimulus package "inexcusable and irresponsible" are likely to offset any placebo effect the package might have. Shouting "fire" in a crowded theater, as our last Treasury secretary did to peddle the Troubled Asset Relief Program (TARP), didn't restore financial confidence. Similarly, a president elected on a platform of hope isn't likely to spark shopping sprees by painting a bleak picture of our prospects.

Stimulus therapy poses great risks. Years of profligacy have put the federal government in a precarious financial position. We don't have the domestic savings to finance much larger budget deficits. Unlike the Japanese, Americans don't have much stashed away under their mattresses: We are reliant on capital inflows from abroad. An insurrection by bond vigilantes or the long-predicted run on the dollar triggered by fears of a flood of new government debt is a real possibility.

Large increases in public spending usurp precious resources from supporting the innovations necessary for our long-term prosperity. Everyone isn't a pessimist in hard times: The optimism of many entrepreneurs and consumers fueled the takeoff of personal computers during the deep recession of the early 1980s. Amazon has just launched the Kindle 2; its (equally pricey) predecessor sold out last November amid the Wall Street meltdown. But competing with expanded public spending makes it harder for innovations like the personal computer and the Kindle to secure the resources they need.

Hastily enacted programs jeopardize crucial beliefs in the value of productive enterprise. Americans are unusually idealistic and optimistic. We believe that we can all get ahead through innovations because the game isn't stacked in favor of the powerful. This belief encourages the pursuit of initiatives that contribute to the common good rather than the pursuit of favors and rents. It also discourages the politics of envy. We are less prone to begrudge our neighbors' fortune if we think it was fairly earned and that it has not come at our expense -- indeed, that we too have derived some benefit.

To sustain these beliefs, Americans must see their government play the role of an even-handed referee rather than be a dispenser of rewards or even a judge of economic merit or contribution. The panicky response to the financial crisis, where openness and due process have been sacrificed to speed, has unfortunately undermined our faith. Bailing out AIG while letting Lehman fail -- behind closed doors -- has raised suspicions of cronyism. The Fed has refused to reveal to whom it has lent trillions. Outrage at the perceived use of TARP funds to pay bonuses is widespread.

The Obama administration assures us that it will only fund "worthwhile" and "shovel-ready" projects. But choices will have to be made by harried and fallible humans; witness the nominees who failed to calculate their taxes properly. What's more, subjecting projects to scrutiny conflicts with a strategy of sparking the economy with a jolt of new spending. We may get the worst of all worlds -- savvy and well-connected operators get funding while good projects languish.

The alternative isn't, as the stimulus scaremongers suggest, to turn our backs to the downturn. We do have mechanisms in place to deal with economic distress. Public aid for the indigent has been modernized and expanded to provide a range of unemployment and income-maintenance schemes. Bankruptcy courts and laws give individuals another chance and facilitate the orderly reorganization or liquidation of troubled businesses. The FDIC has been dealing with bank failures for more than 70 years, and the Federal Reserve has been empowered to provide liquidity in the face of financial panics for even longer.

These mechanisms are not perfect or to everyone's taste -- liberals and conservatives obviously disagree about their scope and generosity -- but they have been forged through a much more deliberate, open process than the stimulus bill or TARP. Legislators, the executive branch, judges, competing interest groups and the press have all had their say in their initial design and evolution. As a result there may be occasional mistakes and fraud but not widespread favoritism.

If the current crisis is indeed unprecedented, why not increase the funding and resources to battle-tested measures? When earthquakes or tsunamis strike, we rush in more doctors and supplies. We don't use untested medical procedures or set up new relief agencies on the fly.

Increasing unemployment insurance, bankruptcy judges, and the FDIC's capital and staff would certainly cost money, but these targeted expenditures would be much smaller than grandiose measures to revive overall confidence. And while the cautious approach might lead to a slower recovery, we wouldn't jeopardize the venturesome, pluralistic foundations of our long-run prosperity.

Mr. Bhidé is a professor at Columbia Business School and author of "The Venturesome Economy" (Princeton University Press, 2008).



online.wsj.com