Political Hay

Mr. Geithner Lays an Egg

With help like this, who needs a recovery?

By 2.11.09

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Would it be terribly uncharitable to suggest that Treasury Secretary Timothy Geithner was better at navigating the Internal Revenue Code than revitalizing our flagging economy? He seems to be doing a pretty good Hank Paulson imitation.

After announcing, in relatively vague terms, his plans for spending, oh, one, maybe two trillion dollars on our ailing financial system, the Dow Jones Industrials market index nose-dived, losing 381.99 points or -4.62%, the largest drop since President Obama took the oath of office.

Either the stock market did not like what it heard, did not have enough details or simply lost faith in the Administration's general approach, well, to everything. A lot of the commentary tried to attribute this drop to the lack of details, mere details. Few linked the laying of this egg with the Senate passage of the monster stimulus package.

You know we are in trouble when our Commander-in-Chief starts defending out-of-control spending, garnished with a light sprinkling of actual economic stimulants, by citing the once fiscally incontinent Republicans for running up a trillion dollar plus deficit over the past eight years. "If they could do it, we can do it,” seems to be the sub-text of the President's line of argument. Yes, we can. God made Democrats to spend, not Republicans. Let the amateurs step aside for the real pros. No, he didn't really say anything like this. But he really should come up with a better argument than "The Republicans did it, too.”

The Republicans did lose their souls and spent like it was 1965. Shame on them for that. Still, as my wise mother told me, time and time again, two wrongs do not make a right. Newsweek says we are all socialists now, and that government at all levels is going to consume close to 40 percent of our GDP!

I am starting to get really depressed. I was listening to Senator Lamar Alexander (R-TN) on C-SPAN radio Monday while driving home from work. He used to be Secretary of Education. He observed that the stimulus bill doubles -- doubles! -- that Department's budget, which is $68 billion, with no provision for reforms of any kind. Whodathunkit? This is just one of the many snakes which will continue to crawl out of this legislative tangle. We will be hearing about these kinds of abominations for months to come if this becomes law. If? I wish.

Have you noticed how President Obama seems to be assuming a passive-aggressive stance with respect to the deliberations on the stimulus package? On one hand he seems to say that he is respectful of differing opinions. On the other he is calling down hellfire on those who would presume to doubt the wisdom of massive deficit spending for pet programs at the expense of real stimulus. As the Wall Street Journal has noted, the President has signed on for the view that just about any kind of federal spending qualifies as "stimulus" except for those contraceptives they recently ditched.

And perish the thought that any supply-side tax cuts, i.e., reducing marginal income tax rates, might be seriously considered in this stimulus package. That economic boom during the Reagan years, which carried over to the benefit of Bill Clinton, was just a mirage.

One positive note: the GOP seems to have found its conscience, although it is pretty late in the game. Except for the usual suspects, it is heartening to see Republicans stand shoulder to shoulder against what promises to be another four-year spending spree right on the heels of their previous eight-year run.

Thank the Lord for small favors.

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About the Author

G. Tracy Mehan III served at the U.S. Environmental Protection Agency in the administrations of both Presidents Bush. He is a consultant in Arlington, Virginia, and an adjunct professor at George Mason University School of Law.