The ironies here just don't quit, since the "stimulus package" doesn't just thumb its nose at liberal economic theory-it thumbs its nose at Milton Friedman, as Krugman noted back on January 21:
Stimulus issues
The big problem with attempts to provide temporary economic stimulus is how to ensure that the money gets spent. As Milton Friedman pointed out 50 years ago, consumers tend to base their spending on "permanent income" - the income they expect to have over the long run - rather than their income in any given year. So an $800 check from the Treasury tends, other things equal, to be mostly saved rather than spent.
How does one get around this?
One answer is that not everyone bases spending on permanent income. In particular, people who don't have a savings cushion and can't borrow (or can only borrow at high credit-card rates) may be "liquidity constrained," spending less than they'd like to given their permanent income. For example, a laid-off worker who expects to get another job eventually, but meanwhile is running low on savings, is very likely to spend an extra check.
Another answer is for the government to spend the money directly - or simply refrain from spending cuts that would otherwise happen. For example, state and local governments, which aren't supposed to run deficits, may be forced to slash spending in a recession; aid to these governments can avert these spending cuts, which is a real plus for the economy.
All of this suggests that if you want a stimulus plan to actually affect demand, it should focus on people likely to be liquidity constrained and on sustaining government spending.
Of course, this is the exact opposite of what Bush has insisted on-and the Democrats have acquiesced.
But don't worry, the Versailles media is here to tell us it's a good thing-a double-plus good thing!
"Deal Spotlights Rarity Of Bipartisan Action" blared the headline of a January 25 Washington Post article by Peter Baker and Jonathan Weisman, which had the subhead, "Some See Chance for More of the Same."
The article begins:
As they unveiled a $150 billion package of tax breaks for consumers and businesses yesterday, Republicans and Democrats hoped to rescue not only a troubled economy but also a government that increasingly has seemed as if it could not get anything done.
President Bush hailed "the kind of cooperation that some predicted was not possible here in Washington." House Speaker Nancy Pelosi (D-Calif.) used the words "bipartisan" and "bipartisanship" 10 times in a brief appearance. "Many Americans believe that Washington is broken," said House Minority Leader John A. Boehner (R-Ohio). "But I think this agreement, and I hope that this agreement, will show the American people that we can fix it."
The agreement on a stimulus package represented the first time since divided government returned to Washington a year ago that the two ends of Pennsylvania Avenue sheathed their swords and came together on a major initiative without any bloodletting first. But the White House and House leaders face two critical questions now: Can they make it stick in a balky Senate? And can they extend this moment of cooperation, or is it a one-time deal in the face of economic and political desperation?
It's all about the bipartisanship. Reality is nowhere to be found.
Matthew Yglesias weighed in on this farcical article, and was quoted in whole by UC Berkeley Economist Brad DeLong:
Washington Post Death Spiral Watch
Why oh why can't we have a better press corps? Peter Baker and Jonathan Weisman put on the floppy shoes and the big rubber noses and misinform the American public once again, this time about the stimulus package.
Outsourced to Matthew Yglesias:
Matthew Yglesias: Bipartisanship!: There's something hilarious about the tone of this Washington Post "analysis" article on the stimulus package. Basically, the theme of the piece is that bipartisanship is good, that passing legislation is good, and that bipartisanship is good because it makes it easier to pass legislation, which is good. Lost in the fog somewhere is the point that it's better to pass good bills than bad ones and that this stimulus package is a pretty bad one.
Indeed, the CBO estimated that the most effective stimulus idea would be a temporary boost in food stamps. They concluded that the second most effective stimulus idea would be an increase in the duration of unemployment benefits. Democrats proposed both of those things. But Republicans wouldn't go along with either. So in order to make the bill bipartisan, the best idea was stripped out. And so was the second best idea. I don't necessarily blame the Democrats for making the compromises necessary to get a bill passed, but the fact of the matter is that bipartisanship made this bill worse than a one-party bill would have been...
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My friend Daniel Froomkin tells me that Peter Baker is an honorable reporter trying the best he can to inform the American people from the absurdly difficult position and under the extremely painful constraints of being a White House beat reporter. I reject that.
Such is the fact-free Versailles press. There is nothing the least bit unusual about this, except that in this case the economics are just so cut-and-dried. There's no "reasonable people can disagree" here. They don't even bother with forging documents. Heck, it's only the economy, stupid!
The Larger Pattern
There's a subtext to this, of course-and it's not just Barack Obama. The worship of bipartisanship is a major article of faith that sustains Versailles, except, of course, when they are worshiping Captain Codpiece and his manly men.
Earlier this week, Glenn Greenwald put together a little list we might well call, "What Bipartisanship Means To Me." Here's Glenn (slightly reformatted):
"bipartisanship" is already rampant in Washington, not rare. And, in almost every significant case, what "bipartisanship" means in Washington is that enough Democrats join with all of the Republicans to endorse and enact into law Republican policies, with which most Democratic voters disagree. That's how so-called "bipartisanship" manifests in almost every case.
Many people, especially partisans, always believe that their own side is compromising too much and that the other side is always winning, so it's best to consult objective facts in order to know how "bipartisanship" works. Here are the vote breakdowns by party over the last couple years on the most significant and contentious pieces of legislation, particularly (though not only) in the area of national security.
In almost every case, the proposals that are enacted are ones favored by the White House and supported by all GOP lawmakers, and then Democrats split and enough of them join with Republicans to ensure that the GOP gets what it wants. That's "bipartisanship" in Washington:
To support the new Bush-supported FISA law:
GOP - 48-0 / Dems - 12-36
To compel redeployment of troops from Iraq:
GOP - 0-49 / Dems - 24-21
To confirm Michael Mukasey as Attorney General:
GOP - 46-0 / Dems - 7-40
To confirm Leslie Southwick as Circuit Court Judge:
GOP - 49-0 / Dems - 8-38
Kyl-Lieberman Resolution on Iran:
GOP - 46-2 / Dems - 30-20
To condemn MoveOn.org:
GOP - 49-0 / Dems - 23-25
The Protect America Act:
GOP - 44-0 / Dems - 20-28
Declaring English to be the Government's official language:
GOP - 48-1 / Dems - 16-33
The Military Commissions Act:
GOP - 53-0 / Dems - 12-34
To renew the Patriot Act:
GOP - 54-0 / Dems - 34-10
Cloture Vote on Sam Alito's confirmation to the Supreme Court:
GOP - 54-0 / Dems - 18-25
Authorization to Use Military Force in Iraq:
GOP - 48-1 / Dems - 29-22
On virtually every major controversial issue -- particularly, though not only, ones involving national security and terrorism -- the Republicans (including their vaunted mythical moderates and mavericks) vote in almost complete lockstep in favor of the President, the Democratic caucus splits, and the Republicans then get their way on every issue thanks to "bipartisan" support. That's what "bipartisanship" in Washington means.
The point of all this is quite simple. The objective evidence is has become overwhelming. Bushism is no longer the enemy. Republicanism is no longer the enemy. Both of them are history-or would be, at any rate, if it were not for the real enemy, and the real enemy is bipartisanism.
"Bipartisanism" is the ideology of bipartisanship as a good unto itself, not in service to any other purpose, except, of course, "getting things done." The question of whether they are good things or bad things, wise things or foolish things, sane things or crazy things, life-sustaining things or life-destroying things-all such questions are not simply irrelevant, they are forms of blasphemy against the one true faith.
All bow down, and surrender your reason. |
