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.
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