A Few Notes on Obamanomics

1) There is, to be sure, plenty to complain about in the stimulus bill that's winding its way through Congress. Some friends of mine have called it a "disaster." I wouldn't go that far--after all, if underneath all the pork there is, as Ryan Avent observes, $500 billion in real stimulus spending, then that's better than $100 billion in stimulus spending, or none at all. The difficult economic question may be whether the stimulus package that finally emerges and is signed will have enough of the sort of "timely, targeted, and temporary" spending needed to generate some real recovery momentum, and thus compensate in some manner or another for the deficits which all this spending will result in. And even beginning to answer that question requires a parsing that is pretty deeply speculative. Some of what counts as directly generating an economic boost along Keynesian lines is pretty obvious, but some is not. For example, the House plan increases the Department of Education's overall budget by more than 100%--from $60 billion in fiscal 2008 to $135 billion next year and $146 billion after that. Pure liberal House Democrat bureaucracy building, right? And yet, what if it were the case that such increases in spending were attached to reforms that made a difference in, say, high school drop-out rates? Cutting those rates in half, Robert Reich points out, would potentially translate into $45 billion in additional tax revenues every year, to say nothing off lower welfare rolls and incarceration rates.

Tough, speculative guesswork. I'd rather that we not run up and trillion dollar tab engaging in such guesswork, but neither would I want non-progressive forces on the Republican side to so intimidate all the partisans in this debate that they fall back on Reagan-era nostrums that are completely inappropriate for our present situation. Thankfully, that hasn't happened yet, though it does seem as if, sometimes, the old guard--and in particular the Republicans--are driving this debate.

2) If there is anything in the House bill that I hope most to survive the pressures which Team Obama face in creating something that Congress will sign off on, it's the provision that infrastructure projects paid for out of stimulus funds be required to use American steel. Protectionism? In the right place, at the right time, in the right way...absolutely. Let's have more of it!

3) And as for the talk about curbing corporate pay, my answer is again: let's have more of it. This is the right kind of populism, an anger that isn't, I think, random resentment, but which speaks to a desire to oblige--or, indeed, if necessary and appropriate, enforce--a level of solidarity between all those who are dealing with the same economic crisis. It connects well with Daschle stepping down, even though everyone acknowledges that his confirmation probably would have gone forward with very little trouble. It's not about saving money, ultimately; there are no doubt all sorts of ways in which accountants could show that requiring senators to drive themselves, or taking away competitive bonuses from chief executives, is inefficient and unproductive. Rather, it's about empowerment and equalization, even if that equalization is superficial. The principle of the civic equality--yes, sure, you make more money than me, you work harder than me, you're luckier than me, you're worth more than me, but dammit, you still don't get to jump to the front of the line!--still holds.