Tuesday, July 07, 2009
Our Democrats could learn a thing or two from the French, and how the stimulus bill is like the Iraq war
If you are going to believe in state socialism and the concentration of power in the nation's capital city -- which, in case it is not obvious, I do not -- at least you ought to do it well. The French, apparently, are months ahead of the United States in actually implementing their stimulus package:
All told, Paris has set aside 100 million euros in stimulus funds earmarked for what the French like to call their cultural patrimony. It is a French twist on how to overcome the global downturn, spending borrowed money avidly to beautify the nation even as it also races ahead of the United States in more classic Keynesian ways: fixing potholes, upgrading railroads and pursuing other “shovel ready” projects.
“America is six months behind; it has wasted a lot of time,” said Patrick Devedjian, the minister in charge of the French relance, or stimulus. By the time Washington gets around to doling out most of its money, Mr. Devedjian sniffed, “the crisis could be over.”
Gallic pride aside, Mr. Devedjian has a point. While he plans to spend 75 percent of France’s stimulus money this year, the White House is giving itself until fall 2010 to lay out that big a share of the American expenditure. And many experts predict that Washington will fall short of that goal.
"Sniffed." Now there is a word to describe a French bureaucrat. But Mr. Devedjian makes the same point that many Americans have been making: Hey, dude, where's my stimulus? Good question, for it raises the "competence" issue. Republicans may have taken years to learn how to run a counterinsurgency (a chore Democrats never mastered when they had the chance), but the Democrats seem to have forgotten how to execute on big government.
I supported a stimulus program, including one with direct government projects, because I was worried about a second leg in the credit crisis arising from substantive defaults of loans (as opposed to the collapsing value of securities) if the economy kept heading down. The persuasive argument for me was that tax cuts and transfer payments would go right in to savings or the reduction of personal debt (as they have), a pointless financial round trip that amounts to nothing more than the government borrowing instead of households.
Opponents of the stimulus package actually enacted argued, correctly it now seems, that it would unfold too slowly to make a difference. Indeed, in retrospect perhaps the best argument against the stimulus bill was not that it made no sense in principle, but that most of the federal and state agencies charged with implementing it were not competent to do so. This, by the way, is eerily reminiscent of the claims of regretful Democrats who supported Operation Iraqi Freedom in its early days: I thought it was the right thing to do at the time, but the Bush administration screwed it up.
If I were the political genius manufacturing Republican talking points, I would immediately start saying that the stimulus might have been good in theory, but the Obama administration has executed on it incompetently. We know this strategy works, at least when directed at Republicans, and it is sufficiently true that even a few journalists might start asking it about Democrats.
I really don't think that it was a good idea executed badly.
I think it was a catastrophically bad idea....executed badly.
We have delayed the natural oscillation of the market, destroyed consumer confidence, gone into massive debt and everyone with disposable income is hoarding it.
The foolishness is stunning. Moveing forward with massive, poorly conceived energy legislation and fiddling like fools with health care is WORSE than fidling while Rome burns...it is heaping coals on the fire.
One has to ask whether such incompetence is even possible...or whether the perceived chaos is intentional.
Quite some time ago, I read a study of "stimulus" projects in Public Interest.
The conclusions were interesting. Almost every president since WW II (including Reagan) had tried to use a speed up in spending on infrastructure to help the economy. All presidents who tried this had failed, because it was so difficult to speed up the state and federal bureaucracies.
So I expected this effort to fail, too. (Especially since environmental regulations have made it far harder to build things than it was even twenty years ago.)
The "stimulus" was all about the friends and family program as practiced in Chicago. It had nothing to do with the economy, and everything to do with awarding key constituents.
Just as the Republicans manipulated 9/11 to go to war with Iraq, the Democrats manipulated the market crash into a cashapalooza for their pals.
The largest single set of financial donors to the democratic party in the last election cycle was the financial services industry. I think we can all see how that worked out. It seems to me that since the democrats got their hands on the purse strings that we haven't let too many banks go down, thus preserving their donor's capital. The auto industry on the other hand has gone to hell.
Personally I am so tired of both parties spending us into a hole and spending my money on programs that I don't agree with, that I think it's a shame that plane went into the pentagon instead of the capital.
We still have the power to take back our government at the ballot box if we want to. But most Americans are too dumb to realize what is going on.
By the way, the prefered method of pharmaceutical administration in France is the suppository, so I guess the one thing the Obama administration could learn from them is how to give it to us in the assets.
Oh, hey, wait a minute... Seems they already know how to do that...
As I write Obama & Co are floating trial balloons for Stimulus II. Laura Tyson spoke today, saying that $787 billion now looks too small. She's calling for more infrastructure spending. This follows Biden's statements this past Sunday.
I often have trouble telling whether Obama & Co are being diabolically clever or just incompetent. It was obvious to many of us that Stimulus I wasn't intended to help a recovery in 2009 -- the nature and timing of spending didn't compute. Instead I thought Obama was using the crisis as cover to get many of his programs funded. I assumed Obama intended to create a sugar rush in 2010, and wanted 2009 to suck.
Christina Hoff Sommers has a deeper analysis here:
What happened is that spending on infrastructure got largely tossed aside. Part of the dynamic was that women's group lobbied Pelosi and others: 'We don't want this stimulus package to just create jobs for burly men.'" So even though men have been much harder hit by unemployment, Stimulus I got directed at social spending ... not shovel ready projects. More jobs will get created for women in government positions, which we'll wind up cutting in two years when we run out of funding. We won't even have bridges to nowhere to show for the spending.
Energy was a sequel to this -- we'll see it again with Healthcare: Obama sends Pelosi an outline, and then the House Dems lard it up with every silly provision they can think of. The original goal of the legislation gets overwhelmed. I thought Rahm was around to manage this. Does Obama care, or is this what he wants? As the Sicilians would say, the lobbyists are "eating with both hands."
Biden said that "everyone was surprised" that unemployment is at 9.5% and climbing, not the 8.5% they expected. I told my son a few months ago it would hit at least 10% in the near-term. Am I smarter than Larry Summers? -- hardly. I'm just not deluded. Obama & Co look worried that they misfired with Stimulus I so that high unemployment will carry into 2010. Hence the talk of Stimulus II. Why don't they just rewrite Stimulus I?
Don't these assholes realize that everyone in the private sector has been frozen in fear by all of this hope and change? That their orgy of spending has already created adverse reaction in interest rates and gas prices. That's why unemployment keeps rising. We're already mired in the stagnation I thought was three years out. Memo to Larry Summers -- your nose is growing.
Chicago politics is like an Opera Buffo, so on the diabolically clever versus just plain incompetent question, I have to vote for both.
Where else could a prospective State Senator beat the rap for $ 35,000 in foil wrapped cash in his freezer by saying it belonged to his roomate, and get away with it?
Whether Pelosi, Biden and Summers are similar "idiots" I will leave open to the readers of this blog. But frequent readers will know that I think the true idiots are the Americans who vote for them.
Yesterday I read a NYT story about why oil prices were high even though demand was low. The Times blamed it on "speculators." There was no discussion of any underlying causes for this. It just blamed "speculators."
A few weeks back I theorized that smart money was moving out of dollars and into $40 per barrel oil for the following reasons: 1) who wants to hold Obama dollars, 2) oil was real cheap compared to its historical average, and 3) Obama's plans will only make gas prices higher at the pump over time. Some would call this speculating, I'd call it investing.
Today I read in the Times that the CFTC will be holding hearings about how to stop this "speculation." I'm having a Jimmy Carter déjà vu moment.
p.s. I'd bet that yesterday's Times story was a plant to lead into today's announcement . I retract my prior comment that The New York TImes was half-Pravda. It's all Pravda.
Hey Link, speaking of Opera Buffo, do you have any clue as to what happened with Judge Amy and the 'Bamas Real Estate Fairy (aka Tony)?
I have looked repeatedly for info on the sentencing hearing, but haven't been able to find anything.
when the stimulus was being debated the Democrats were claiming that government spending was better than tax cuts because of a supposed multiplier effect. Well the multiplier does no good now if the money is not spent until next year.
When I got my morning coffee earlier today I noticed on the newsstand that the print editions of both The New York Times and The Wall Street Journal ran the "crackdown on oil speculators" story on the cover in the upper right. It looks like Obama & Co seeded this story with a leak to the Times on Monday, as I said above. Obama & Co want to spin "high prices at the pump" as being caused by "volatility" in oil prices, so they can lay blame on greedy speculators. This ignores that oil has always been volatile in pricing, that the recent run-up is a return to more average long-term pricing, and that Obama & Co are actually themselves directly responsible for at least some of the recent price increases.
Obama & Co have created an environment that's hostile to investment in the real economy. Right now, smart money won't go near a real investment -- the kind that creates jobs. Instead some smart money has moved to speculative bets on markets -- like speculating on oil. Mostly, money is just sitting on the sidelines.
Stimulus I is proving a total failure because expectations about US borrowing -- and general fears about hope and change -- are chilling private investment. There's been a shocking collapse in private investment -- I saw figures of over 30% declines ... which I can't put my hands on right now. It's even hurting consumer spending. I thought the best thing Obama could have done for stimulus back in January was to give a one-year holiday on capital gains taxes on long-term investments of almost any kind. It wouldn't have cost much, and would have unfrozen things. If Obama tried it today, no one would trust him.
So who's more responsible for Stimulus I ... Pelosi or Obama? It's an important question because Energy also got fucked up in the legislative process, as I expect Healthcare will too. Energy was supposed to be a silly ineffective exercise in feel-good cap-and-trade. Under Pelosi, it morphed into something very different, and very scary.
Back in March, I thought we'd hit 10% unemployment. Now I think we'll hit 12% by the end of the year with no recovery. But there will be no Stimulus II, as key Democrats have already come out against it. High gas prices, rising interest rates, and high unemployment will hit before Obama gets his sugar rush in 2010. He'll look very silly claiming credit for bullshit education grants when California can't afford to pay its teachers. It took Jimmy Carter three years to get us collectively fed up with him. Obama may do it in one. We'll know it's happened when enough Democrats in Congress bail on him.