March 10, 2009
You Don't Say: "Stimulus" Isn't Very Stimulative - UPDATED

Round 2 coming?

The report by a group of economists including Mark Zandi, chief economist of Moody's Economy.com, says the recently enacted $787 billion stimulus package will fall far short of the Obama administration's goal of saving or creating 3.5-million jobs.

Zandi said only 2.5 million jobs will be saved or created over the next two years, and told House Democrats that a second stimulus is needed as well as more money for banking stabilization and housing. [emphasis added]

Maybe there was something to the idea that loading up the stimulus with pork projects and social program spending wasn't actually as stimulative as its supporters claimed?

All of which creates a quandary. Team Obama allowed Congressional Democrats to fill the first stimulus up with a Christmas list of non-stimulus tricks & trinkets. That gave the GOP and conservative critics easy pickings to question the structure of the proposal and propose an alternative (which was not so surprisingly ignored by most in the media).

What would happen now if Obama and Democratic leadership try to push through a second stimulus - especially with moderate Democrats increasingly afflicted by the "sticker shock" with the totality of Obama's agenda?

UPDATE: how soon until some Democratic legislators in Olympia start holding out hope for a 2nd stimulus windfall rather than actually work to come up with a real budget plan? One has to hope not too many.

UPDATE II: Vindication! Howard Fineman rewards this blogger's talk of a potential center-left Establishment revolt against Obama with this:

Obama still has the approval of the people, but the establishment is beginning to mumble that the president may not have what it takes.

We're less than two months into his Administration and the Establishment is already potentially turning on the One? Amazing.

Posted by Eric Earling at March 10, 2009 01:02 PM | Email This
Comments
1. Just how many TRILLIONS till we break the bank?

Posted by: Medic/Vet on March 10, 2009 12:56 PM
2. The whole "saving jobs" thing is just plain asinine. If the economy loses 5 million jobs in the next 4 years, Obama will just claim, we would have lost 10 million without my stimulus magic. Is anyone actually falling for this stupidity?

Posted by: Palouse on March 10, 2009 01:03 PM
3. Obama may not have what it takes??? Gee, I don't know how a guy who was only in the Senate for four short months wouldn't be totally prepared for this huge job. /sarcasm off/

Posted by: Michele on March 10, 2009 01:17 PM
4. Obama and team is rapidly becoming the Greatest Threat this Nation has ever faced.

Posted by: Daniel on March 10, 2009 01:38 PM
5. I think it was the Duffman who I am paraphrasing, but hey, the stimulus is working. Obama saved my job since I won't be able to retire when I wanted.

Stimulus II was on the table even before I was passed. Why the excitement? Internet reports show the total giveaways to total 10 trillion or so. This is just another step.

First, Obama has apparently bought off Shelby and a couple other Republicans by giving them pork/handouts/earmarks in exchange for their vote on the omnibus bill- that is 500 billion with 9000 pork projects.

And, I have been saying that the first so-called stimulus was not a stimulus. I was saying if the country needed a stimulus then the stuff should have included what it takes to provide a stimulus- not the pork the Democrats and 3 Republicans voted for.

Posted by: swatter on March 10, 2009 01:50 PM
6. We all know it's just moments before our pet liberals stand up and start screaming to remind us how smart the toodler is, how his administration is just so chock full of all those Harvard economic whiz kids.

In glieeful anticipation I pass on a question posed in the Times UK If his fellow Harvard MBAs are all so clever, how come so many are now in disgrace?

Posted by: Ragnar Danneskjold on March 10, 2009 01:56 PM
7. Swindle-us II: This won't hurt a bit folks...just bend over and grab your ankles. It'll be over when you've paid for it, or in about 50 years....which ever comes first.

Posted by: Saltherring on March 10, 2009 02:04 PM
8. Obama is shaping up to be what little Jimmy Carter was and less. His utter inexperience, naive hard left worldview and thin-skinned revengeful nature makes him much more adroit at going after private citizens than managing a White House, let alone a country in a funk.

He's an unusual cross between Jimmy Carter and Eddie Haskell. A little punk who's as dumb as a rock.

Posted by: G Jiggy on March 10, 2009 02:29 PM
9. Rags, I am finding that the liberals are tongue-tied. They are speechless. Obama's agenda is even more radical than they let themselves believe. Or, if they were in the stock market, they thought they could keep their wealth and only the rich got soaked. Little did they know. Well, I know you tried to warn them.

Posted by: swatter on March 10, 2009 02:56 PM
10. Swatter's comment @5 about his job being saved because he can't retire hit the mark. I was hoping to retire this year or next, but now I'll be working past age 70. There's no one to buy the business.

At least Obama has succeeded in narrowing the gap between the wealthy and not-wealthy in the country. The not-wealthy must be thrilled at how quickly the wealthy have become less so.

Behind the bluster and toothy smile, I think Obama is scared stiff. His genius (and it was genius) was in getting elected to the next higher office. Now he's on the top rung on the ladder with no next-higher office except Pope, and he can't have that one. With no management experience, he's treating the job of president like it's another campaign. He doesn't know anything else.

Fear, ambition and incompetence make Obama a dangerous man. I thought I never would say that about our country's president.

Posted by: bobinbellevue on March 10, 2009 03:46 PM
11. BobInBellevue,

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

- Sir Winston Churchill

Of course, with the Obamassiah forsaking everything Churchill, it's no surprise he doesn't understand this very basic fact!

HOPE AND CHANGE!

Posted by: Shanghai Dan on March 10, 2009 04:12 PM
12. Putting Mr. Obama at the helm of the USS Hope-n-change has left us floating aimlessly adrift in the sea of incompetence.

Posted by: Rick D. on March 10, 2009 04:35 PM
13. I don't post here often, but this issue has me very worried. Solving 'debt' with 'debt' is a recipe for long-term disaster.

We should have been addressing our entitlement programs and government and private debt in the early '80's, and the fact that none of our politicians stepped up on these issues, and we didn't force the issue, is shameful.

Collectively, we've all (including myself) lived a life of easy credit for the last quarter century, and that's been regardless of party. Actually, some of you on this board have been very conservative with your personal finances and I applaud you for it. Sorry the rest of us have essentially dragged you, and your children and grandchildren down. With 10 Trillion of public government debt, and more coming at an accelerated pace; growing demands from entitlement programs; and foreign buyers of our debt that will eventually say, 'no', we're in quite the pickle.

Please don't bore me with talk about the Clinton surplus and how we were on our way to solving our problems. It wasn't a real surplus if you take into account our future indebtedness from social programs. And, if Clinton had been elected for another term (humor me), he'd have faced the same recession, and same post 9/11 economy as Bush - with likely the same results - remember, we've had profligate R and D Congresses many times before; they don't seem to change their spots very often.

The sad fact is, we are well and truly screwed and there is a MASSIVE unwinding of our debt society - public and private. It took 25+ years to get here, and it will take at least half that time to begin to make a dent in it.

Whether you are an R or a D, the facts don't change. Pay down your own debt, and buy some farmland and rent it out as a backstop until it's time to start shipping vegetables to your own table.

America will rise again, it just won't be the same America we've known and assumed would reward us with all those wonderful government paid benefits.

Posted by: Seattle on March 10, 2009 05:37 PM
14. How interesting that people are now figuring out that the lack of experience of the Commander in Chief is more important than the lack of experience of the VP candidate.

Posted by: Marc on March 10, 2009 05:43 PM
15. "Seattle" is speaking so much common sense that it'd knock down a typical DC politician just to read it. But he's giving good advice when he says to pay down your debt. I heard an economist comment elsewhere that that's one of the things we will have to plan on---working well past what you thought would be retirement age. And some may even end up moving in with their kids (!). Pols would do well to heed what "Seattle" says. Quit spending us into oblivion!I'm currently reading "The Coming Economic Earthquake" by Larry Burkett, and he describes what the end result is of DC spending us into the ground. And it won't be pretty. These pols have acted in complete disregard of the taxpayers and must be told over and over that they must spend less than what they make and stop borrowing. And for crying out loud, stop with the irresponsible level of entitlements. You think things are bad now; just wait another five years or so when Social Security payments can't be made. That will be yet another future 'crisis' to deal with. And if they think they can raise the already-too-high 15.4% tax rate for SS and medicare, they've got another thing coming.....

Posted by: Michele on March 10, 2009 06:13 PM
16. The Republicans in Congress are taking the wrong approach. They should seriously consider soliciting David Brooks for strategy. but doubtful if they will, too much pride...time for them restore their credibility, while the Dems continue to abuse theirs;
See a portion of Brooks' editorial below:

"The G.O.P. leaders have adopted a posture that allows the Democrats to make all the proposals while all the Republicans can say is "no." They've apparently decided that it's easier to repeat the familiar talking points than actually think through a response to the extraordinary crisis at hand.

If the Republicans wanted to do the country some good, they'd embrace an entirely different approach.

First, they'd take the current economic crisis more seriously than the Democrats. The Obama budget projects that the recession will be mild this year and the economy will come surging back in 2010. Democrats apparently think that dealing with the crisis is a part-time job, which leaves the afternoons free to work on long-range plans to reform education, health care, energy and a dozen smaller things. Democrats are counting on a quick recovery to help pay for these long-term projects.

Republicans could point out that this crisis is not just an opportunity to do other things. It's a bloomin' emergency. Robert Barro of Harvard estimates that there is a 30 percent chance of a depression. Warren Buffett says economic activity "has fallen off a cliff" and is not coming back soon.

Stock market declines are destroying $23 trillion in wealth, according to Lawrence Lindsey. Auto production is down by two-thirds since 2005. In China, 20 million migrant laborers have lost their jobs. Investment in developing countries has dropped from $929 billion in 2007 to $165 billion this year. Pension systems are fragile. Household balance sheets are still a wreck.

Republicans could argue that it's Nero-esque for Democrats to be plotting extensive renovations when the house is on fire. They could point out that history will judge this president harshly if he's off chasing distant visions while the markets see a void where his banking policy should be.

Second, Republicans could admit that they don't know what the future holds, and they're not going to try to make long-range plans based on assumptions that will be obsolete by summer. Unlike the Democrats, they're not for making trillions of dollars in long-term spending commitments until they know where things stand."

Posted by: KDS on March 10, 2009 06:52 PM
17. It is refreshing to see thoughtful comments in this thread instead of the usual back-and-forth insults. Perhaps it's because the economic collapse is too serious for petty insults. David Brooks, quoted @16, sounds like he's on the right track, and I agree with Michele's praise for Seattle's comments @13. Is it possible to have more of this kind of rational discourse on SoundPolitics?

Posted by: bobinbellevue on March 10, 2009 09:30 PM
18. bobinbellevue: The reason for the civility and thoughtfulness is none of the usual trolls have shown up yet to bait folks into responding to their attacks!

Posted by: katomar on March 10, 2009 10:54 PM
19. KDS,

I'd argue that the proper conservative position is EXACTLY to say no! Let the market work the issues out of its system; interference by the Government will prolong and deepen any economic pains we feel.

I'm proud of the GOP for simply saying "no". It's when they start offering solutions and their own "scaled down/correct" stimulus package that I get worried.

Posted by: Shanghai Dan on March 10, 2009 11:33 PM
20. katomar,

Perhaps the trolls are engaged in a bit of latent thinking? Naw...

Posted by: Saltherring on March 11, 2009 04:28 AM
21. "Never murder a man in the act of committing suicide" ~ Woodwrow Wilson

The same theory applies to political parties in my opinion. Contrary to Brooks, I'd prefer the Republican party first do an assessment of what went wrong when we were given control for 6 years and acted like irresponsibile Democrats and how not to let that happen in the future.

Posted by: Rick D. on March 11, 2009 09:13 AM
22. EPIC FAIL BY OBAMA: Obama, Geithner Get Low Grades From Economists . A few choice quotes:

On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71.

A 59 out of 100. That's an "F" grade. Big time FAIL...

However, economists' main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. "They overpromised and underdelivered," said Stephen Stanley of RBS Greenwich Capital. "Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone's head."

Of course - the Obamassiah and his TAX CHEAT SecTreas haven't a clue what they're doing. Playing at politics seems to be the rule of the day!

The economists' negative ratings mark a turnaround in opinion. In December, before Mr. Obama took office, three-quarters of respondents said the incoming administration's economic team was better than the departing Bush team. However, Mr. Geithner's latest marks are lower than the average grade of 57 that former Treasury Secretary Henry Paulson received in January.

OOPS. The Obamassiah and his team are now ranked LOWER than President Bush by actual economists! There's no surprise for anyone who didn't quaff the Kool-Aid by the gallon...

Face it - Obama is a failure of a President. He's dithered and done nothing other than exacerbate the problem. He has no leadership which is not a surprise for someone who was never in an executive role. He's a campaigner, not a leader...

Posted by: Shanghai Dan on March 11, 2009 04:50 PM
23. You know, S. Dan, I hated it when the "so-called" global warming experts pontificated it was a done deal, and I hate it now that a poll of "economists" say Obama is over his head.

I also don't need an "economist" poll to tell me that or that Obama is hurting in popularity even though Gallup polls, etc. say he isn't.

Posted by: swatter on March 12, 2009 09:14 AM
24. Hi Swatter,

Hey, Obama and his acolytes were all so eager to claim the mantle of "economists support us" back during the campaign and after the election. The fact that support has dwindled is now somehow ignored...

If you choose to have a group lend you credibility, then you have to pay the penalty when that group changes its opinion of you.

Posted by: Shanghai Dan on March 12, 2009 07:11 PM
25. Point taken. I apologize.

Posted by: swatter on March 13, 2009 07:24 AM
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