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Ignore the Republicans
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It doesn't matter what the GOP says about the stimulus package or how they vote on it. If the economy is better off in four years, they lose.
Does anyone remember how many Democrats voted for Ronald Reagan’s tax cuts in 1981? Of course not, because it doesn’t really matter. What matters is that Reagan used the economic misfortune of his time to defund government in the ultimate hope of reducing its role in America’s economic life. Liberal Democrats were horrified, and stood in angry opposition. More conservative Democrats trimmed around the edges but ultimately got on board because they themselves had grown distrustful of their party’s economic orthodoxy, and because the people they represented wanted to give Reagan a chance. The liberals, who generally held safe seats, spent the 1980s in sulking defiance, while many of the more conservative Democrats, who represented Southern and Western areas that were rapidly turning red, lost their seats despite their best efforts to play nice with Gipper. In other words, nothing the Democrats did really mattered. They were set pieces in Ronald Reagan’s play. He seized the moment to change America’s political economy, and because his efforts seemed to work—because Americans felt better off in 1984 than they had four years before—he reaped the rewards and Democrats paid the price.
When it comes to Obama’s stimulus plan, everyone has an interest in pretending the Congressional Republicans matter.
Today the flip side is true. When it comes to Obama’s stimulus plan, everyone has an interest in pretending the Congressional Republicans matter. Conservative commentators pretend they do because they see the stimulus debate as the first shot in the battle for the soul of the post-Bush GOP. Liberal commentators pretend they do because attacking the Congressional GOP is the closest activity to Bush-bashing still available, and thus, it comes naturally. (Thankfully for them, Dick Cheney keeps opening his mouth. If they’re really lucky, he’ll get a show on Fox.) The mainstream media pretends Republicans matter because they want drama, and they know that the only real drama in the stimulus fight is whether it passes with bipartisan support or not. They also like the idea of seeing Barack Obama stumble. They’ve grown tired of the Obama-as-messiah narrative, and are eager for the next act, in which the hero stumbles and shows he’s human after all. Failing in his efforts at bipartisanship would be such a stumble.
But it’s all much ado about nothing. In policy terms, to be sure, Republican critiques of the stimulus are important: We’re engaged in an extraordinary experiment in whether Keynesian economics works, and whether it works more effectively through spending or tax cuts. But politically, the critiques are irrelevant. The Obama stimulus will pass. For a while, the economy will almost certainly remain bad. If by 2011 and 2012, it starts to markedly recover—as the American economy did in 1983 and 1984—Obama will get the credit, no matter how many Republicans voted with him. Blue states and districts will grow bluer, and many of the Republicans who represent them will lose, or else retire before they can. (See Gregg, Judd). Republicans in safe conservative states and districts will keep their jobs, and watch Obama’s triumph in brooding insignificance.
If, on the other hand, the stimulus fails, and the economy is no better when Obama begins campaigning for re-election than it is today, all Republicans will benefit, whether they backed the stimulus or not. (Although by that time the country will be so desperate and irate that we could see serious independent candidacies, latter-day Francis Townsends and Huey Longs promising all manner of populist rescue schemes.)
So relax, Republicans. It’s out of your hands. The other team is at the foul line with no time left on the clock. If they hit the shots, you lose. If they miss, you win. Whether you offer words of encouragement or jeers of disapproval, it doesn’t really matter. You’re spectators in someone else’s game.
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BernieO
Too late. The Dems have compromised so much that the bill will balloon deficits without being a strong stimulus. All our data says that the most effective kinds of stimulus is in the form of aid to low income people who will spend it quickly, with food stamps being the best. The bill cuts these programs. Tax cuts always balloon the deficit and have never been shown to be strong stimuli. Yet the new bill has THREE TRILLION DOLLARS OF TAX CUTS!!
This bill will almost surely fail to give the economy the stimulus it needs, while driving up deficits. Obama's bipartisan schtick has been a disaster.
Jay4lyphe
Very good read.. You make some great points
Konchster
Bernie's got the gist of it Unless the dems rewrite this mess there will be little benefit to the economy and potential disaster In all economic models tax cuts are the least bang for the stimulus buck with food stamps being the greatest. It's simple f*ck the repugs make it almost entirely benefits to poor and rebuilding infrastructure
tylerschuett
You've really hit the head on the nail here. Your analysis on this situation is spot on. Cheers.
connie47
Where was this article last week, before the bill got gutted? I don't understand why the Dems are caving on issues they believe in. If the people had wanted more of the same, they would have voted for it.
The Dems should put up the bill they want. If it fails, they lose in the next elections. If it succeeds, they're winners. This is becoming a lose-lose for Obama.
DustyMu
Sunday evening a group of us met in Sebastopol to discuss the economy. The consensus was that we should risk a filibuster rather than dilute the stimulus package. Although we do agree on some of the cuts made as an attempt to reach out to Republicans we are outraged at the cuts in education and state infrastructure. Once again the Republicans show they are out of touch and not a party for the people or for the times we are in.
melissamsouza
Cheney isn't charismatic enough to get his own TV show. He is the anti-people's man. I think he would be happier if we had a government similar to that of North Korea, considering his chronic disdain for public opinion and his flagrantly dictatorial tendencies (grand disciple of The Prince and Leviathan). Taking a cue from Abe Lincoln, if you are unpopular some of the time, so be it; however, if you are unpopular ALL of the time, then you´ve got a problem. America´s problem is fostering people like Cheney in our political system. As for the very good article, I beg to differ on one count. Obama inherits an economic problem that is CONSIDERABLY worse than anything faced by Ronald Reagan, with the aggravating condition that it is global, unprecedented and unfathomable. These are unchartered waters, and to place pressure to rescue the economy from this degree of disaster in just two years is far-fetched. Furthermore, Reagan did anything BUT get government off our backs; he increased government spending to levels only matched by those of W.; his spending came in the form of corporate welfare in defense contracts. It is not far-fetched to compare it to the New Deal II, which was WWII.
mikefromArlington
Very true but, unfortunately, this isn't a pure Keynesian approach as others have pointed out but that really doesn't matter. What will matter is if in two to three years, we are better off.
I'm baffled by this article considering the recent article I read regarding CFR and Ben Steil. Does your boss approve?
http://delong.typepad.com/sdj/2009/02/council-on-foreign-relations-crash ed-and-burned-watch.html
ldcreo
Bravo melissamsouz!
sophia5
Republicans and Democrats are essentially the same
and will waste our money when given the chance.
When congress chastises the car company execs
one wonders why the situation isn't reversed.
Wasn't it the government that forced banks
(community Investment) to loan money
to people who couldn't afford homes, thus
causing the housing collapse, thus causing
the bank collapse, thus causing a credit freeze,
thus creating the collapse of car companies
and other businesses?
Why isn't Congress being questioned
by the banks and car company execs.?
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n--Y--Cooper727AndreainNY
It would be easier to sit back and let the democrats do their thing...if it didn't have to cost us $1 trillion to do so.
whynot
Having some backbone on this stimulus package is something the Democrats need. DustyMu would probably be a better legislator than most we have in Washington.
Infrastructure spending should be the priority of this bill just as the President campaigned on and the people voted for him on. His advisors are living their goal but I think their egos have obstructed reaching the goal.
Maybe with all the tax cuts in the stimulus plan, the politicians can start paying the taxes they do owe. I think given the number of times that's come up in the past weeks that those we now know of and their 'honest mistakes' that have been corrected because they paid up are just the tip of the iceberg. The tax savings might even give them the money to check the Social Security numbers on their household help and make sure they are not undocumented. (Can't say illegal immigrants because the PR is we are a land of immigrants. Nobody seems to notice there is no 'illegal' adjective prior to the word immigrant.)
lordastral
It doesn't matter whether its a Republican or Democrat. It will still costs us a trillion dollars. The only difference is who gets the money the taxpayers are shelling out.
Republicans go on about tax cuts for the wealthy being the key to economic prosperity. Democrats go on about creating programs to foster economic growth.
The truth is that both side are wanting to take money out of the hands of the guy on the street, who pays for all of this crap.
bryanlevi
Mr Beinart lost all credibility in 2004 when he announced that the New Republic was endorsing Joe Lieberman for the Democratic candidate for President. I remember being on the treadmill at the gym watching it on some cable news channel. I didn't know whether to burst into hysterical laughter, or fall down and vomit. It was the stupidest and most anemic thing I think I have eer seen a public intellectual do. I mean he was really in Bill Kristol territory there. Anyway, this is the only thing worth reading Beinart has done since. Hopefully he can keep going in this direction.
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