Archive for February, 2009

Once More, With Feeling

February 9, 2009

All of this has happened before; all of this will happen again.

Sherman, set the Wayback Machine for the bygone days of 1993, which up until last month was the last time a Democratic president took office accompanied by Democratic majorities in both houses of Congress.

After campaigning for a year and a half decrying “the worst economy in the last 50 years”–despite the fact that the mild recession of 1990-91 actually ended in March of ‘91–one of Bill Clinton’s first priorities was to try and ram through (wait for it) a “stimulus package.” Back in those days, politicians hadn’t yet realized that they could add another three zeroes to their raids on everybody else’s pockets, so the Clinton bill was by today’s outlandish standards relatively modest, starting at a mere $30 billion dollars. Most of that was sold as “targeted stimulus,” which meant it was carefully targeted to pay off Democratic grandees and constituencies that had contributed to the 1992 campaign

All of this has happened before; all of this will happen again.

Things did not go all that swimmingly for the Clinton “stimulus” package. By the middle of February, the bill had stalled in the Senate thanks to a Republican filibuster, and the White House sent out its chief economic advisor, Laura D’Andrea Tyson, to warn of the wonderful results should this recalcitrance end:

“The administration estimates that the stimulus package, taken by itself, will add about 0.3 percent to the annual growth rates of real gross domestic project in 1993 and 1994, creating 500,000 additional jobs by the end of 1994,” Tyson said. She forecast economic growth of 3.1 percent this year and 3.3 percent in 1994 if the package is approved.

The Clinton “stimulus” bill failed, going down to final defeat on April 22, 1993. It was never revived. As we all know, the American economy never recovered–oh, wait, that’s not correct. A year later, despite the non-presence of a federal “stimulus” law, unemployment had dropped from 7.1% to to 6.6%. Tyson’s growth prediction was not quite correct, either; the US GDP positively boomed in the fourth quarter of 1993 to the tune of 5.5%, and rose by 4% in 1994–all without the help of Clinton’s “stimulus” package.

The boom accelerated in the second half of the decade, with the greatest gains being realized from 1995 onwards–after the Democrats had been swept out of Congressional power, and as a result, Clinton’s penchants for tax hikes and big spending packages were effectively neutered. There were no grand “stimulus” packages from that point on, only good, old-fashioned gridlock that kept the government from raising taxes or spending to outrageous excess.

All of this has happened before… and if we’re very lucky, all of this will happen again.

Doublethink

February 8, 2009

The current debate over the monstrous and misnamed “stimulus bill” is bringing out the worst of the established Washington press corps. For a group that up until three weeks ago prided itself on “speaking truth to power,” this bunch is awfully comfortable with unexamined ideological assumptions, so long as power is in the hand of people who share those assumptions.

At Newsweek and the Politico, it’s taken as a given that the House Democrats’ monster of a spending bill is a benign attempt to save a faltering economy, and that any opposition to it is by definition illegitimate “playing politics.” Here’s Politico’s Jeanne Cummings, pausing in a column full of hosannas for The One to toss out a 20-year-old leftoid gripe about those meanies on the AM dial:

Despite Obama’s sky high personal approval ratings, polls show support has declined for his stimulus bill since Republicans and their conservative talk-radio allies began railing against what they labeled as pork barrel spending within it.

[snip]

[W]hile the White House team struggled to adapt, it was business as usual on Capitol Hill for Republicans.

They could practically sleep-walk through their attack plan once House Democrats began to fill in Obama’s broad outlines for a stimulus with a few pet projects of their own.

It required two simple steps: Scream pork, call Rush Limbaugh.

Actually, Jeanne, it was The Savior who quite stupidly called out Limbaugh, bringing him back to the forefront of national political scene after several years in relative obscurity (although anybody with an audience the size of Rush’s–easily comparable to Obama’s vaunted 13 million email addresses–is never going to be all that far away from the political center ring). It’s also worth noting that Cummings assumes as a matter of course that any accusation of “pork” from the right must be false–but she can’t even keep her own narrative straight. Further down in her “analysis” piece, she notes,

[I]t’s hardly a secret that the president found unhelpful the House Democrats’ decision to slip funding for special groups into its version of his stimulus bill.
Funding to allow Medicaid programs to provide contraceptives as part of its family planning services to low income recipients was the Republicans’ first easy mark for attacking the legislation.

“How you can spend hundreds of millions of dollars on contraceptives — how does that stimulate the economy?” House Minority Leader John Boehner asked.

With a phone call from the White House, Obama had that provision stripped from the legislation but the damage was done and Republicans soon moved to the next so-called pork project to launch a new attack.

Um, which is it, Jeanne? Is the bill larded up with “funding for special groups,” as you note in one sentence, or is all that just blithely dismissible as “so-called pork,” just a couple of lines later? Why exactly is it out of bounds to point out–or God forbid, get rid of–money being appropriated for no particular good use?

Ah, well. Like they say on The Simpsons, cartoons don’t have to be consistent.

Even more laughably, Newsweek’s Michael Hirsh manages to double-back on himself at least twice in this convoluted graph:

Obama’s desire to begin a “post-partisan” era may have backfired. In his eagerness to accommodate Republicans and listen to their ideas over the past week, he has allowed the GOP to turn the haggling over the stimulus package into a decidedly stale, Republican-style debate over pork, waste and overspending. This makes very little economic sense when you are in a major recession that only gets worse day by day. Yes, there are still some very legitimate issues with a bill that’s supposed to be “temporary” and “targeted”—among them, large increases in permanent entitlement spending, and a paucity of tax cuts that will prompt immediate spending. Even so, Obama has allowed Congress to grow embroiled in nitpicking over efficiency when the central debate should be about whether the package is big enough. When you are dealing with a stimulus of this size, there are going to be wasteful expenditures and boondoggles. There’s no way anyone can spend $800 to $900 billion quickly without waste and boondoggles. It comes with the Keynesian territory. This is an emergency; the normal rules do not apply.

I really love all that. Hirsh walks right up to considering the idea that the Pelosi payoffs might be just kind of unwarranted, but than shrugs it off with a “Nah, it’s more important to just borrow and spend a buttload of money and not worry too much about where it’s going.” It’s as perfect an expression of establishment Washington groupthink as you’re ever likely to read. Any consideration that this monstrosity wouldn’t do much of anything to help the economy at large is brushed away as “stale, Republican-style debate over pork.”

Here’s Beltway grandee Norm Ornstein in The New Republic, bemoaning the growth in lobbyists and their salaries relative to Congresscritters and staffers:

In 1969, a member of Congress earned $42,500. Today, the pay is nearly four times that, $169,300. But in 1969, the salary of a first-year associate at prime Washington firms was around $10,000–while today, the starting pay for a first-year associate is $160,000, not including hefty bonuses for those who have clerked for a federal judge. Back then, a senior partner in a Washington law firm would earn a bit more than a member of Congress; today, that partner might make ten times a congressional salary.

The disparities have grown even sharper with lobbyists. In 1969, a newly minted lobbyist with solid Capitol Hill experience could count on making a touch more than the $10,000 they earned as congressional staff. Today, the congressional staffer making $50,000 can look at a peer making five or six times that much as a lobbyist. An assistant secretary in an executive department can make similar multiples upon leaving office and taking up lobbying. The explosion of public relations and lobbying firms has meant that huge conglomerates like Burson-Marsteller, Ogilvy, Hill & Knowlton, and WPP have bought up boutique firms created by former executive branch and congressional staffers, turning these staffers into instant multi-millionaires.

To his credit, Ornstein does admit just why there’s been so much growth in lobbyist and lawyer salaries:

In 1970, the federal budget was all of $195 billion. Today, the budget is over $3 trillion.

With so many federal dollars at stake, the capital injected into the system to influence government decisions has exploded.

… but, captive as anybody else to the Washington spend-first-ask-questions-later mentality, he never draws the obvious conclusion: if you want to get money out of Washington, then the government should take spend a whole hell of a lot less of it. Instead, Ornstein goes off on the normal goo-goo tangent, talking about restrictions on lobbyists and ethics reform packages and such. All well and good, I suppose, but also nowhere near as necessary if we simply had a government that didn’t trowel out so damn much cash, and exert so damn much influence over individuals and businesses, who then think they have to hire lobbyists to protect themselves–or try and get their own piece of the piggy pie.