President Obama’s 2009 stimulus package was the sort of
centrally planned project that the progressive left loves: a grab
bag of brainy new policies, from green investments to targeted tax
credits. Pass the stimulus, the administration’s top economists
said, and unemployment would fall to 7.25% by the end of 2010;
reject it and that number could be 8.8%. Paul Krugman briefly
doffed his robes and descended from the halls of Olympus to laud
the administration for providing “comprehensible, honest
reports.”
They were utterly and completely wrong. The president signed the
American Recovery and Reinvestment Act into law in February 2009.
By April, unemployment had hit 9%. It wouldn’t fall below 8% for
another three-and-a-half years. And while the Congressional Budget
Office says the stimulus created jobs, those jobs cost an
exorbitant $228,000 a piece.
And what of the Washington policy wonks who miscalled one of the
most expensive pieces of legislation in history? The principal
authors of the stimulus report, Christina Romer and Jared
Bernstein, are doing just fine; Romer is a professor of economics
at the University of California-Berkeley, and Bernstein is a senior
fellow at the Center on Budget and Policy Priorities and an MSNBC
contributor.
Their leering inaccuracies were never a major scandal. By the
time it became evident just how wrong they’d been, everyone had
moved on to Dodd-Frank. Then by the time Dodd-Frank’s enormous
unintended consequences surfaced, everyone had moved on to
Obamacare. And by the time Obamacare started to rain down damage on
small businesses, everyone had…
This is the overcaffeinated game of leapfrog that’s
characterized Washington for years. Policy wonks and whiz kid
pundits fly to a problem, waving calculators and smacking each
other with rolled-up charts in attempts to get there first.
Legislation is passed that supposedly ameliorates the problem.
Everyone trips over each other and gets a convenient case of
amnesia. Then it’s on to the next problem. And for God’s sake,
don’t look back at the previous one…or at least not for another few
years when everyone can return and try to solve it all over
again.
All this is relevant in light of news from Stephen Moore’s
interview with Speaker John Boehner last week:
“At one point several weeks ago,” Mr. Boehner says, “the
president said to me, ‘We don’t have a spending problem.’”…
The president’s insistence that Washington doesn’t have a
spending problem, Mr. Boehner says, is predicated on the belief
that massive federal deficits stem from what Mr. Obama called “a
health-care problem.” Mr. Boehner says that after he recovered from
his astonishment—“They blame all of the fiscal woes on our
health-care system”—he replied: “Clearly we have a health-care
problem, which is about to get worse with ObamaCare. But, Mr.
President, we have a very serious spending problem.” He repeated
this message so often, he says, that toward the end of the
negotiations, the president became irritated and said: “I’m getting
tired of hearing you say that.”
We do indeed have a health care problem, starting with Medicare
Part A’s impending bankruptcy. But the notion that we don’t also
have a spending problem is absurd, as
plenty of
commentators
pointed out. The president of the United States, elected during
a debt crisis, is refusing to acknowledge the root of that
crisis.
Why? Because he doesn’t want to downsize; that’s not what he
came here to do. Obama never lost his conviction, fundamental to
progressive grass roots and intellectuals alike, that government
exists to regulate, tinker, spend, and solve society’s problems.
For all the conspiracy theories about Obama’s exoticism, he’s
really just another technocrat playing the game of leapfrog. So he
applied the progressive method, bringing in the Romers and
Bernsteins, the experts and whiz kids, believing that, with a
creative new policy here and a quixotic new agency there, he could
fix things. But the problems he “solves” only get worse and the
economy continues to stagnate around him.
This mindset isn’t just limited to Obama. An intellectual
pipeline exists in Washington, with economists and think tanks
conjuring up ideas, wonks and journalists discussing them, and
legislators passing the final results. It pays the bills for a lot
of people, but it’s also very out of place. Politicians like to
think of themselves as addressing the challenges of their time. But
the challenge at the moment, inherent in our massive debt, is to do
the one thing that Washington big thinkers can’t fathom: stop.
This is why House Republicans are repeatedly accused of not
having any ideas. House Republicans actually have plenty of ideas,
but most of them involve big spending cuts, and in most corners of
wonky Washington, that doesn’t count. A subsidy to left-handed
small business owners who promise to invest in voice recognition
technology to cut back on carpal tunnel cases accompanied by a
chart showing a corresponding reduction in health care spending:
that’s an idea. But cutting back? Surrendering control?
Forget it.
It also explains the post-election deification of Nate Silver.
After botched projections on the stimulus, Dodd-Frank, Obamacare,
unemployment…here was a whiz kid in our midst who had calculated
something accurately! In an election between two presidential
candidates, Silver had picked the correct one. This triumph of the
intellect launched him on a victory lap on which he explained how
everyone, from Politico to political pundits, wasn’t
nearly as useful as Nate Silver. Salon.com heartily agreed: “Help
us, Nate Silver!” they
cried, in an excerpt from a book rightly examining the role of
risk calculations in crashing the economy. The lesson learned was
not “Calculations can’t chart our future,” but rather,
“Calculations can chart our future, but we have to put smart people
in charge of them.”
And so, just like the “experts” who fiddled with lending
standards to increase home ownership, or the technocrats who
inflated an education bubble by gobbling up the student loan
industry, or the Wall Street whiz kids who thought they could
eliminate risk, Obama and company will continue to believe they can
think their way through this crisis. All they need are the smart
people; virtuosos and eggheads capable of managing an entire
economy without producing any unintended consequences.
They already have Nate Silver. There have to be more out there
somewhere.
