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- Jun 28, 2004
Many of my strongest criticisms of President Obama is that he has, far too often, continued, if not escalated some of the worst policies of George W. Bush. The bailouts for banks (and the growing interconnection between American finance and politics), the bailouts for Detroit, Wire tapping, abuse of eminent domain, the wars in Afghanistan and Iraq (which involve sacrificing the nation's best people in order to give politically connected firms and local politicians the opportunity to engage in massive graft on our tax payer dime), The war on drugs (The primary reason that black and brown people are much more likely to be in jail or on parole or on probation than whites) and wasteful agricultural subsidies and government backed cartels on food production that cost the poor in their wallets and on their tables. The answer to the practices, I just named, is clear, put a stop to all of them and do as soon as is practical and yet he has not used any of political capital to truly bring about positive change that would have been widely supported and would have been real, rational and non partisan populism.
Instead of doing those things, he opted to push through a stimulus bill that had been warped by politics that it had no chance to ever foster private sector growth. It was largely a bailout for spendthrift States, that hire massive numbers of public employee union members; gimmicky and temporary tax cuts and giveaways, that did as they usually do and did little to change behavior of households/consumers and it targeted the most politically connected groups. The original stimulus plan concentrated heavily on getting those who were unemployed back to work and doing something very useful. That is to say, the original stimulus looked to, very quickly, get unemployed construction workers, who were unemployed because they had to work building and fixing the housing stock anymore and they could have used their brawn and their skill and their precision to improve the very roads in Sun Belt States, which had been rendered crowded because of the housing boom that had immediately proceeded.
What followed was an example that the old refrain "it works in theory but what about in real life?" which, in public policy debates and discussions, is invariably applied to any pro market statement about economics, ought to also be applied to any statement that asserts that more government action is the key to prosperity. In theory, of the stimulus was supposed to be "timely, targeted and temporary" according to Larry Summer, one of his chief Economic advisors. In practice, in "real life," the theory completely disintegrated when it faced the crucible of special interest in it crafting and reality in its implementation. The package was not timely because there are no "shovel ready projects" according to the President. It was indeed temporary in nature and if the goal is to change consumer behavior in order to get them to spend more, adding a few dollars to some take home pay for a year or two will not get workers to shop until they dropped, neither will mailing out one time only stimulus checks for a few hundred dollars.
Worst of all, the stimulus was not targeted. The government spending was disproportionately bestowed on demographics, sectors and regions with the least amount of unemployment. Women who worked for the government and who live in DC metro area or in Madison or in other low unemployment areas were much more likely than males, who had been working in construction who lived in Las Vegas, Phoenix or suburban Florida to be beneficiaries of the 2009 American Recovery and Reinvestment Act's largesse. If you are going to engage in Keynesian style stimulus, have the political will to say no to special interest, this time at least, and give the plan the best chance to succeed and not only save government jobs (as it did) but to also push up demand in the most unemployment stricken areas and help to create conditions for private sector job creation (it failed miserably to do that).
His other landmark legislation summed up the worst of all worlds theme of this Presidency. The insistence on being very progressive at the wrong times and desire to act like "Country Club," "Chamber of Commerce" conservative when being progressive would have not only been good policy but would have been widely popular. Both Health Care Reform (HCR) and Financial Regulation (Fin Reg) combine the progressive tyranny of centralizing decision making, taking sovereignty from many and giving it to an insular, arrogant and woefully under informed group of technocrats. It weds that with that old school, pro business Republican mindset that what is good for existing firms is good for America, as a whole.
Free enterprise is suffocated in either medical insurance, healthcare providers, financial services and in banking and the consumer wins but Washington power, and those who live by it, are happy and enriched and the managers of these newly public-private ventures love the stability of only having to please a few lawmakers instead of millions of existing and potential customers. At the end of the day, these revolutionary new laws, meant to reign in out of control "corporate greed" and "corporate power," left us with more or less a permanent bailout fund for bankers and a mandate that we must buy health insurance that is provided by a small cartel of insurers. Perhaps the results would have been different, had the administration and its allies in Congress understood that everyone is greedy and that when greedy corporations do not get subsidies and monopoly privileges from the state, that will compete and inadvertently increase consumer welfare. Perhaps they also should understand that while greed is simply part of the human experience that corporate “power,
Instead of doing those things, he opted to push through a stimulus bill that had been warped by politics that it had no chance to ever foster private sector growth. It was largely a bailout for spendthrift States, that hire massive numbers of public employee union members; gimmicky and temporary tax cuts and giveaways, that did as they usually do and did little to change behavior of households/consumers and it targeted the most politically connected groups. The original stimulus plan concentrated heavily on getting those who were unemployed back to work and doing something very useful. That is to say, the original stimulus looked to, very quickly, get unemployed construction workers, who were unemployed because they had to work building and fixing the housing stock anymore and they could have used their brawn and their skill and their precision to improve the very roads in Sun Belt States, which had been rendered crowded because of the housing boom that had immediately proceeded.
What followed was an example that the old refrain "it works in theory but what about in real life?" which, in public policy debates and discussions, is invariably applied to any pro market statement about economics, ought to also be applied to any statement that asserts that more government action is the key to prosperity. In theory, of the stimulus was supposed to be "timely, targeted and temporary" according to Larry Summer, one of his chief Economic advisors. In practice, in "real life," the theory completely disintegrated when it faced the crucible of special interest in it crafting and reality in its implementation. The package was not timely because there are no "shovel ready projects" according to the President. It was indeed temporary in nature and if the goal is to change consumer behavior in order to get them to spend more, adding a few dollars to some take home pay for a year or two will not get workers to shop until they dropped, neither will mailing out one time only stimulus checks for a few hundred dollars.
Worst of all, the stimulus was not targeted. The government spending was disproportionately bestowed on demographics, sectors and regions with the least amount of unemployment. Women who worked for the government and who live in DC metro area or in Madison or in other low unemployment areas were much more likely than males, who had been working in construction who lived in Las Vegas, Phoenix or suburban Florida to be beneficiaries of the 2009 American Recovery and Reinvestment Act's largesse. If you are going to engage in Keynesian style stimulus, have the political will to say no to special interest, this time at least, and give the plan the best chance to succeed and not only save government jobs (as it did) but to also push up demand in the most unemployment stricken areas and help to create conditions for private sector job creation (it failed miserably to do that).
His other landmark legislation summed up the worst of all worlds theme of this Presidency. The insistence on being very progressive at the wrong times and desire to act like "Country Club," "Chamber of Commerce" conservative when being progressive would have not only been good policy but would have been widely popular. Both Health Care Reform (HCR) and Financial Regulation (Fin Reg) combine the progressive tyranny of centralizing decision making, taking sovereignty from many and giving it to an insular, arrogant and woefully under informed group of technocrats. It weds that with that old school, pro business Republican mindset that what is good for existing firms is good for America, as a whole.
Free enterprise is suffocated in either medical insurance, healthcare providers, financial services and in banking and the consumer wins but Washington power, and those who live by it, are happy and enriched and the managers of these newly public-private ventures love the stability of only having to please a few lawmakers instead of millions of existing and potential customers. At the end of the day, these revolutionary new laws, meant to reign in out of control "corporate greed" and "corporate power," left us with more or less a permanent bailout fund for bankers and a mandate that we must buy health insurance that is provided by a small cartel of insurers. Perhaps the results would have been different, had the administration and its allies in Congress understood that everyone is greedy and that when greedy corporations do not get subsidies and monopoly privileges from the state, that will compete and inadvertently increase consumer welfare. Perhaps they also should understand that while greed is simply part of the human experience that corporate “power,
