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Obamanomics

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Once again, a Washington Post reporter asks Team Obama how they are going to keep from wasting the hundreds of billions of “stimulus” dollars by spending it too fast and Team Obama replies that they are going to work hard to not spend it too slow:

Because they are intended to pump cash quickly into the economy, stimulus measures are released from the usual budgetary constraints that require the cost of new programs to be covered by cutting spending elsewhere or by raising taxes — a one-time pass that could invite lawmakers to load the bill up with favored items.

[Larry] Summers and other Obama advisers said they are keenly aware of the problem and are working to convince lawmakers of the wisdom of limiting the package to projects that would create a large number of jobs quickly or make a down payment on Obama’s broader economic goals, such as improving the health-care system or reducing emissions that contribute to global warming.

“While this may be Christmastime, it doesn’t mean there’s going to be a large number of unrelated ornaments under the Christmas tree,” Summers said. “There’s a commitment by all of us to discipline and to doing the right things in terms of accountability.”

Summers said Obama’s budget team is “scrubbing” various proposals for “basic soundness.” The team also is developing ideas to make expenditures transparent to the public, perhaps through regular progress reports or even Internet sites where “people could monitor the fraction of each project that had been spent out,” he said.

Does the term “spent out” connote to you a deep concern for making sure the taxpayers get their money’s worth?

(Republished from iSteve by permission of author or representative)
 
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From the Washington Post, “Obama Team Develops Stimulus,” about what’s now being spitballed as costing $850 billion:

The potential for massive new spending has touched off a frenzy among interest groups eager to claim their share of the expanding stimulus pie. The profusion of requests from governors, transportation groups, environmental activists and business organizations is spawning fears that the package could be loaded with provisions that satisfy important Democratic constituencies but fail to provide the jolt needed to pull the nation out of a deepening recession.

“It’s everybody’s wish list, everybody’s favorite program. And I think that’s a big mistake,” said Alice Rivlin, a Brookings Institute economist and former budget director for President Bill Clinton who has been advising Democrats. “I agree with the Obama team that we need a big increase in public investment, but it should be done very, very wisely,” rather than through a rushed process that risks being “seen as scattering money to the wind.

An Obama adviser involved in crafting the stimulus package said the transition team was keenly aware of the potential pitfalls and was focused on funding ideas that would quickly pump money into the sagging economy, fulfilling Obama’s promise to create or preserve 2.5 million jobs by 2011. Because many ideas probably won’t meet that standard, the adviser said, the team is developing a screen to keep them out.

So, let me see if I have this straight … Experienced Democratic expert Alice Rivlin is worried that the Obama Administration will spend the money too fast and the Obama adviser responds that they are devising a system to make sure they don’t spend the money too slow.

Maybe I’m just not showing a positive mental attitude, but this does seem like a fundamental conundrum — you have to spend it fast to make it a stimulus, but then you are probably just going to waste it — that somebody ought to ask Obama about before Congress hands him $850 billion.

And why all the huffing and puffing over “infrastructure,” which obviously takes more time to get going than just hiring, say, some social workers. Is it because “infrastructure” sounds manly and complex? Is it because the unions have been demanding more spending on infrastructure since 1982? (I recall identical authoritative sounding predictions during the 1981-82 recession from the AFL-CIO that America was about to collapse in a heap unless Congress voted a giant increase in infrastructure spending.) Is it to keep illegal immigrant construction workers from going home to Mexico before they can be “put on the path to citizenship” (and voting Democratic)? Is it because that’s what they do in Chicago and Obama mostly knows the Chicago Way?

And shouldn’t we start thinking about how to export more? The most obvious government policy to cut the trade deficit by selling more abroad is the for the government to cut back on environmental restrictions on mining.

(Republished from iSteve by permission of author or representative)
 
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The Washington Post catches up to what I’ve been saying all along:

Stimulus Package to First Pay for Routine Repairs

President-elect Barack Obama calls it “the largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s.” New York Mayor Michael R. Bloomberg compares it to the New Deal — when workers built hundreds of bridges, dams and parkways — while saying it could help close the gap with China, where he recently traveled on a Shanghai train at 267 mph.

Most of the infrastructure spending being proposed for the massive stimulus package that Obama and congressional Democrats are readying, however, is not exactly the stuff of history, but destined for routine projects that have been on the to-do lists of state highway departments for years. Oklahoma wants to repave stretches of Interstates 35 and 40 and build “cable barriers” to keep wayward cars from crossing medians. New Jersey wants to repaint 88 bridges and restore Route 35 from Toms River to Mantoloking. Scottsdale, Ariz., wants to widen 1.5 miles of Scottsdale Road.

On the campaign trail, Obama said he would “rebuild America” with an “infrastructure bank” run by a new board that would award $60 billion over a decade to projects such as high-speed rail to take the country in a more energy-efficient direction. But the crumbling economy, while giving impetus to big spending plans, has also put a new emphasis on projects that can be started immediately — “use it or lose it,” Obama said last week — and created a clear tension between the need to create jobs fast and the desire for a lasting legacy.

“It doesn’t have the power to stir men’s souls,” said David Goldberg of Smart Growth America. “Repair and maintenance are good. We need to make sure we’re building bridges that stand, not bridges to nowhere. But to gild the lily . . . where we’re resurfacing pieces of road that aren’t that critical, just to be able to say we spent the money, is not what we’re after.”

Minneapolis Mayor R.T. Rybak is proud that his city was able to quickly rebuild the Interstate 35 bridge that collapsed into the Mississippi River in 2007 while making sure to include capacity for a future transit line on it. But he worries that many of the road and bridge upgrades around the country will not be done in a similarly farsighted way, given the time pressures.

“The quickest things we can do may not be the ones that have the most significant long-term impact on the green economy,” he said. “Unless we push a transit investment, this will end up being a stimulus package that rebalances our transportation strategy toward roads and away from [what] we need to get off our addiction to oil.”

In other words, under Obama’s “use it or lose it” rule, we’ll end up doing right away a whole lot of things like repainting bridges that didn’t seem worth doing back when we had lots of money.

(Republished from iSteve by permission of author or representative)
 
• Tags: Obamanomics 
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The two basic shortcomings of Obamanomics are that Obama is planning for 2009 with ends that are very 2007 (compact fluorescent lightbulbs! carbon! inequality! health insurance for everybody! spiff up inner city schools!) and means that are very 2008 (Carnival in Rio spending!).

Obama’s thinking is still stuck in the 2007 mindtrap, the assumption that the fundamental problem of scarcity has been solved so now all we have to do is redistribute wealth and reorganize society in a more Stuff White People Like fashion. Instead, it turns out the Bush Boom was really a Bush Bubble and we actually have much bigger problems than the conventional wisdom of 2007 assumed.

(Republished from iSteve by permission of author or representative)
 
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Steve Sailer
About Steve Sailer

Steve Sailer is a journalist, movie critic for Taki's Magazine, VDARE.com columnist, and founder of the Human Biodiversity discussion group for top scientists and public intellectuals.


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