I do not feel stimulated
February 15th, 2009Personally, I am skeptical the stimulus plan will work very well. It seems like a porkapalooza, a political SNAFU in the literal sense of that acronym.
Like the elected officials who voted on the bill, I haven’t read it all, so I’m sure there are some things in the bill (the “law,” in a matter of hours) that I can enthusiastically support and some that will appall me. But in any case it’s done. Whether it will work or not is unclear; that we will borrow money to pay for it is, alas, certain.
Just as I am skeptical about the stimulus plan, I am also skeptical that bailing out Detroit or Wall Street bankers and their shareholders is in the country’s long term best interest. To work, the market ought to be allowed to slaughter those who act stupidly. Creative destruction requires both parts.
But doing nothing when the sky is allegedly falling is not a political act our democratic system is likely to produce. The risk of doing nothing is extreme; it is, effectively, gambling the whole national and global economy on a pro-market bet. If we don’t mitigate the “externalities” of this severe downturn, could there be “systemic risk” to the whole market system? One reason Marx was wrong that capitalism will be supplanted is that democracies have been able to mitigate some of the harshest consequences, no?
But ultimately I think recovering from the current “Greedageddon” requires a de-leveraging of the US economy on a national, corporate and personal level. That is going to be painful. It is going to require some destruction in the creative destruction cycle. It probably means a deep global recession lasting years. But kicking the problem down the field just means we, or my newborn son’s generation, will confront it later, when this national nemesis of over-consumption will be worse (shifted to the government, but worse). Later on, this will be an even more formidable, costly enemy to slay.
God, I hope I’m wrong.
February 15th, 2009 at 4:28 pm
I could not agree more.
There is so much political rhetoric centered stopping the recession before it gets worse. There is no consideration given to allowing the situation correct itself. Prices of all kinds (stocks, homes and some goods) are in need of a correction. Pumping more borrowed money into these pet projects does not seem like a prudent course of action.
There will be some good infrastructure sort of projects that I am in favor of but I fear they are the minority of the bill.
And the worst part in my opinion is that since it has been passed so quickly, if it does not succeed, it will framed as yet another failure of the Bush Administration’s handling of the economy. The “fixing” of the economy has become so political that appearing to help “Main Street” seems to be better than preparing for a longer term economic comeback.
I fear that we are using debt to fix our debt problem.
I too, hope I am wrong.
February 16th, 2009 at 9:16 pm
I hope you’re wrong, too, Walter, but I fear you are right.