Let’s face it–a $1,000,000,000 here, a $1,000,000,000 there, what’s a Billion Dollars among friends?
The newly elected 111th Congress, led by the most assuredly competent House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, is utterly frustrated that their plus-$1Trillion stimulus bill has been facing scrutiny from the minority Republicans and unrest by the American Public.
“We won,” They like to say, almost as if still in amazement, “So why can’t we do whatever we want?”
The schoolyard taunt, first uttered by President Obama at a luncheon with Republican House members last week, has become a mantra that has prevailed during the endless debates in The House and Senate.
President Obama has promised the American Public that the Stimulus Bill would be sans-earmarks, but this is a promise that neither he nor his party-members in Congress have no intention of upholding.
First I would like to point out a hypocritical duality that proves that The Democrats trust their awe-inspiring genius to save an economy that is derailed worse than an Amtrak Train.
Last year direct stimulus checks to American Taxpayers were viewed as “less than successful”, so there has been no serious consideration given to this move. However, TARP has been so successful that we are now saddled with the almost certain probability of ANOTHER economic stimulus plan that will total well over $1Trillion dollars (TARP has added a debt of $1.2Trillion to the National Debt thus far). Not only that, but a second TARP seems to be offing in the near future, once this pork-barrel plan has been successfully shoved down the throats of American Taxpayers.
The rationale, on inspection, is this: The Economy is composed of over 70% consumer spending. But consumer spending has been curtailed due to the lack of consumer confidence (income+easily available credit). Because the consumer confidence has been in decline (insecurity with employment and inability to borrow money on credit), the only way to increase consumer confidence is to pass the largest single collection of government-directed spending, pet political projects, and overt political pay-back to party supporters ever in the history of mankind. Then, in theory, consumer confidence will once again rise up to pre-Wall Street Crash levels, financial institutions will once again begin lending money to consumers so that they can purchase things they can impulsively buy on the hope and expectation of future income, and a new bubble will grow in some region of the economy that not even the best of economists can yet foresee, but the American Public, in our glee to invest and speculate in the vast American Ponzi Dream, will again recklessly make the same mistakes we oh so enjoy making, cycling again from recession to, as Alan Greenspan would say, ” irrational exuberance”.
The plus-$1Trillion Pork-Barrel Stimulus bill is supposed to be the equivalent of every holiday, every birthday, every citizen winning the lottery, and every home sports team winning a world championship simultaneously.
That the American Public might be skeptical of such a plan, that we are not quite clear on the idea itself, that we may not see eye-to-eye with the expertise of our Congress in being able to wave a magic wand and return the United States, and in fact, the World Economy back to how it was even just a year ago, is beyond the pale of their understanding.
While the Republican Minority Congress has been trying to pick it’s battles on some of the more glaringly obvious and irresponsible spending measures in the current version of the Stimulus Bill, the Democrats and President Obama have been trying to demonize the opposition, using the Politics of Fear and Anger to turn the American Public against its best common sense instincts.
Apparently, we are supposed to think, when we hear a Republican Lawmaker say on any one point taken from the 1,400 pages of the proposed bill, “How does this measure have any ability to create even one job or stimulate the economy?”, “Wow, the Republican who is saying that is really just mad those tax dollars are being taken by someone other than himself”, or worse, the best argument that the Democrats have when they are not trying to rely on the Politics of Fear is reminding us over and over again, whether the assumption is true or not, that we have no one to blame for the American Economic Collapse other than the Bush Administration, the irresponsible and greedy fat cats on Wall Street, and the Republicans in Congress.
Let us look deeper at the campaign to frighten and anger the American Public into supporting a growing-by-the-minute Stimulus Bill.
On Wednesday, February 4th, President Obama and Timothy Geithner, even though delaying what they have been promising as their “wide and sweeping framework” for the spending of the second half of the $700billion TARP program, announced that, because the actions by the companies that received the first half of the TARP–executive bonuses, spending sprees, gross financial negligence, etc–citing anecdotal going back as far as early 2008, late 2007, that executive compensation for companies that are in “exceptional assistance”; i.e., that they are on the verge of collapse without the help of TARP, would be coming.
President Obama stated, “This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. But what gets people upset – and rightfully so – are executives being rewarded for failure. Especially when those rewards are subsidized by the U.S. Taxpayer.”
Treasury Secretary Timothy Geithner reiterated that sentiment, saying, “There is a deep sense across the country that those who were not….responsible for this crisis are bearing a greater burden than those who were.”
The American Public’s anger with the failure and administration of the first half of the TARP is indeed justified, and so far, unmitigated, because as it stands in the current moment, there has been absolutely no accountability for the use and distribution of the TARP, then-Treasury Secretary Hank Paulson knew that he was on his way out of government and is likely to get his cushy Wall Street job, or Washington D.C. lobbyist job, so who knows what back-room dealing was in fact involved with every move he made with TARP.
Something that any American Consumer who has ever borrowed substantial amounts of money at one time knows: A person can not go out and borrow $150,000 for a house, then turn around and spend that money on $150,000 worth of Jello. So if there can be contractual stipulations and language to ensure the uses of the money that we use as consumers, why did it prove so hard for Hank Paulson and his Treasury Department to provide the same accountability in their actions?
There is no doubt that the populists President Obama and Geithner are correct in their assessment of a certain strata of the anger that has been spreading like a prairie wild-fire across the country, but the method by which they proposed to redress this are miniscule, at best. Because only the “most distressed” institutions would be held to this standard, not all recipient companies of TARP funds, nor companies that had already received funds from the first half of TARP (AIG, Bank of America, Citigroup, among others) would be held to this standard–and all are most likely already past the point of being in need of continued “exceptional assistance”, which is not to say they will not be holding their hand out again, just that they can make the case that they are no longer in need of “exceptional assistant”–the salary restrictions and complex stock-option rules are not likely to be enacted in anything other than the most severe and ongoing cases, such as the Detroit Big Three. There is a loophole present, however, for “generally healthy” companies that receive TARP assistance, which begs the question–“why would a “generally healthy” company receive TARP funds, but this has yet to be seen. That Geithner and Obama are taking extraordinary steps that were not even attempted by Paulson and his, at best, incompetent and at worst, criminally conspiratorial regime, is commendable.
The timing of these measures, however, has to be put in question, and especially in consideration of the release of the TARP funds, which were authorized for the new Administration even before President Obama’s inauguration, and the continued delay in the roll-out of the restructured TARP program in relationship to the “emergency stimulus package”.
If the reorganized TARP program is successful in unfreezing the credit markets, and this is successful in getting the consumer markets and consumer spending back on the road to recovery, then what good will the Stimulus Package have in additional economic recovery?
The likely answer–it is not even aimed at this goal. A close examination of the more than 1,400+ pages of the current Stimulus Bill shows that the vast majority of programs and initiatives involved are nothing but vast Government Spending Programs, de facto earmarks in support of political pet projects and payback to Democratic Party Donor Constituencies. There has been no demonstratable or wide-ranging essential “jobs programs”, as is the perception that is trying to be sold to the American Public, a perception that the Republican Minority, largely themselves demonized as the cause of the current economic crisis, are not in a position to effectively combat.
Today, President Obama released an Op-Ed piece in the Washington Post, titled “The Action America Needs”, in which President Obama refers to the politics of fear to try and quiet the public outcry that has been rising throughout all segments of the American Public.
“By now, it’s clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression. Millions of jobs that Americans relied on just a year ago are gone; millions more of the nest eggs families worked so hard to build have vanished. People everywhere are worried about what tomorrow will bring…Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.”
Indeed, millions of jobs and nest eggs are gone. Is pork-barrel spending going to bring them back?
Associated Press, “Obama caps executive pay tied to bailout money”By Jim Kuhnhenn
Washington Post, “The Action America Needs” by President Barack Obama
(*This article was originally published February 5, 2009 on the Yahoo Contributor Network)