Obey's Folly

With Japanese bombs falling all around him, The Captain of the submarine Sea Tiger, played by Cary Grant, searched in vain for his subordinate, played by Tony Curtis. Corralling a crewman, The Captain asked about his first officer’s whereabouts. "I don’t know, sir. He said, ‘where there is chaos, there is opportunity.’" See Operation Petticoat.

The economy is in chaos; leftists see opportunity.

The Times reports on the fraudulently named (c.f. McGreevey, "Millionaires Tax")"stimulus package" – crafted almost exclusively by Congressman David Obey (S- WI) – as follows:

"Included in the package is $30 billion to subsidize health insurance for those who lose their jobs, $20 billion to accelerate new health care information technology, $1 billion to renovate community health centers, $600 million to train health care workers, $15 billion to increase college Pell Grants and $4 billion to help communities buy and improve distressed properties."

Further reports detail vast additional sums for medicaid, unemployment insurance, even birth control. Essentially, every program that the Left has advocated for years is now packaged together in one bill, under the guise of "economic stimulus".

Obey, although proud of his creation, seems somewhat unsure of the results:

"This is my honest effort," he said, "to find a point of equilibrium where a majority of people in the place can feel comfortable with what we have done, and then you hope it works."

Umm. Right. But what, precisely, do you mean by "works"? If you mean "make the economy better", fuggedaboudit; ain’t gonna happen. Big government and economic prosperity are reciprocal: the larger the former, the less the latter.

The Times so implies in a discussion on the effects of the New Deal:

"throughout the 1930s, economic recovery remained frustratingly elusive and arrived only with the buildup for World War II in the 1940s."

Give FDR his due, The Times argues:

"The shorthand verdict on Roosevelt, economists and historians say, is that he was an eloquent and skillful politician ... But Roosevelt, they say, while brilliant in many ways, did not have a sure grasp of how to guide the economy as a whole."

Who knew? The New Deal failed!! So sayeth no less an authority than The Gray Lady herself!!

This, naturally, makes perfect sense. OF COURSE the New Deal failed. It was based upon the notion that government could "... guide the economy as a whole", a preposterous proposition.

The Left, of course, never learned that lesson. Hence, the Krugmanite thesis that the problem with the New Deal was that it failed to borrow and spend enough. Should the present, $1 trillion package fail – and it will – Krugman will, unbowed, contend that if it had only been $2 trillion, it would have worked. Like any religious faith, his belief in the beneficence and omniscience of government cannot be dispelled by mere facts.

The present "stimulus" package will do no such thing. Indeed, it’s based upon the profoundly silly notion that every dollar of governmental spending "multiplies" by 1.5 to 3 times, yielding fantastic results, far beyond those obtainable by simply letting the people keep their own money.

And the evidence for this is ... non-existent. It’s asserted as a matter of dogma.

We in NJ tried something similar, raising taxes 100 times and increasing spending 50%, while borrowing billions, all to hire new governmental employees, build schools and roads, provide greater health insurance for "the poor", etc. In short, we are a mini-laboratory for the socialist enterprise. If Krugman and the left were correct, NJ should be a hive of economic activity, with those new schools and all that borrowing producing a frenetic, lively economy, far outperforming the national average.

Hmm. Musta missed that episode.

So, over the past eight years under W – an economic liberal – we’ve spent up a storm, vastly increased the size of government, and borrowed trillions. In just the last year, we provided tax rebates similar to those Obama proposes (for those who don’t pay taxes) and pumped something like $1 trillion billion in borrowed money into banks, car makers, and insurers. And we’ve got ... what to show for it?

Is not the patent and continuing failure of big government self-evident?

Not to the left, because they’re not interested in stimulus. That’s merely a handy excuse for doing everything they were already interested in doing anyway, because they believe it’s "fair". This program will "work" in the sense of increasing such spending. But it will absolutely not stimulate the economy.

Obey dismissed his critics thusly:

"I would say the vast majority of the Congress, the new White House and the vast majority of the country will favor this package or something very close to it."

About that, he may be correct; the people might actually like this program. While waiting in the unemployment line, they’ll thank Obama and Obey for their checks. As their companies close or downsize, they’ll sing the praises of Obama and Obey for ensuring that they still have health insurance. As months of economic malaise become years of persistently high unemployment and low growth, they’ll praise Obama and Obey for ensuring that their kids’ college tuition is paid.

Then, perhaps, just maybe, they’ll slowly start to draw a connection between all of these spiffy, hugely expensive governmental giveaways and those layoffs, business failures, and that malaise. Perhaps they’ll look at Europe and perceive that the same sort of massive government produces precisely the same sort of economic anemia. Maybe, they’ll cast envious eyes at places like Singapore, which offers few guarantees, but few folks need them, given the 10% growth per annum.

And, perhaps, they’ll come, again, to appreciate that Reagan, not Roosevelt, got it right. Government is not the solution; it’s the problem. The less of it we have, the fewer problems we’ll have to solve.