Stimulus: Size Matters
(photo courtesy a Facebook friend of mine, no, she is not American)
The Obama Message Shift Time Gone is the warm and fuzzy talk about how everything is on track and Washington can get along at bipartisan White House cocktail parties. In is the tough talk about how members of Congress--particularly Republicans--have to stop bickering and threatening delay, and get something done. .............. In the last few days, we've seen proposals arise from some in Congress that you may not have read, but you'd be very familiar with, because you've been hearing them for the last 10 years, maybe longer. They're rooted in the idea that tax cuts alone can solve all our problems, that government doesn't have a role to play, that half- measures and tinkering are somehow enough, that we can afford to ignore our most fundamental economic challenges: the crushing cost of health care, the inadequate state of so many of our schools, our dangerous dependence on foreign oil. ............... Those ideas have been tested, and they have failed. They've taken us from surpluses to an annual deficit of over $1 trillion. And they've brought our economy to a halt. And that's precisely what the election we just had was all about. The American people have rendered their judgment, and now's the time to move forward, not back. Now's the time for action.The idea behind deficit spending to get an economy out of a recession goes back to Keynes and FDR, it is another thing that it is said when the two met they did not much like each other, kind of like Newt Gingrich and Bill Gates, when they met, they did not much like each other, there was no talk.
Before Keynes the orthodoxy was only someone stupid would spend money they don't have. Going into debt was not what wise people did.
The American economy really only turned around after the monstrously massive deficit spending that World War II forced the country into. Otherwise the recession of the 1930s was a deep ditch. We don't call it a recession, it was a depression. It was a major flunk.
The American economy today does not have a 30% unemployment rate, so this is not a depression, not yet. But then a recession mishandled is a depression. Don't count it out yet. This is the financial SARS virus that America has already exported all over the world. The entire global economy is sneezing.
If mishandled, this downturn could hit a tipping point, and then there would be no turning point. It would go downhill from there. At that point a trillion dollar jolt is going to feel like something on the cheap.
What the American economy has is a cardiac arrest. And it needs a jolt. That is why size matters. Reducing the size of the stimulus is exactly the bad idea. And you can't do it in steps. A jolt has to be one big step. Spending a trillion $100 billion a year over 10 years would be too lukewarm. It would not be a jolt, and hence not a stimulus.
The stimulus has to be announced with a bang, not a whimper. It has to be implemented with a bang. It has to be followed through with a bang.
There is an urgent need for a new global financial architecture. That is the number one lesson. But it will be much easier to shape that new architecture if the US economy is not in the bad shape it is in right now, if the world economy is feeling some upswing.
This is not a recession that comes once every 10 years or so. This is something that happens once or twice a century, once every 70 years or so. This is big. This asks for a big dose of medicine.
This is the time to think big, and engage in massive spending programs, massive infrastructure programs.
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Howard Dean Was Grassroots 1.0, Barack Is Grassroots 2.0
- President Clinton as president described then Governor Dean as the best Governor in the nation when it came to health care.
- Howard Dean is a doctor. We need a doctor in the house.
- A doctor or two. His wife is also a doctor.
- Barack was a Deaniac in 2004, so was I. I came to Barack by way of Dean.
- Howard Dean authored the 50 state strategy. It delivered in 2006, it delivered in 2008. He was great as DNC Chair. If he had won the primary in 2004, he would have won the general.
- Howard Dean was the original anti-war candidate.
Howard Dean Should Have Been Obama’s Pick All Along Truthdig, United States Within a week of Obama’s winning the presidential election, Dean’s name began to circulate as a top contender for the job. Dean is a physician, a former family practitioner in fact, and during his 11-year tenure as governor of Vermont, health care and other welfare-related reforms were a priority. ........ Dean became imprinted on the national consciousness when he surged to the head of the pack during his run for the 2004 Democratic presidential nomination by playing the angry anti-war candidate. His novel use of the Internet to raise funds and organize supporters produced a meteoric rise in the polls. ........ I lived in Vermont for nearly all of Dean’s 11 years as governor. The 2004 presidential contender who whipped crowds of young voters into frenzies with his bracing oratory was someone we had not seen before. ....... Though Dean can be famously argumentative, he is not known as a politician who holds grudges. As governor, he’d fight like mad for an initiative he believed in but on the next issue of importance could work with those who had just opposed him. ...... He served much longer as chief executive of a state with a fixed budget and very real health and human services responsibilities, and his track record in that capacity should count for much. ........ “When Dean left office in early 2003, most states were in dire financial shape, their revenues hammered by the collapse of the dot-com economy. Vermont, by contrast, had a comfortable surplus, thanks largely to Dean.” ......... “The only real exception to rigid budget discipline was health care. … This did stretch the budget some, but those costs were offset somewhat by increased tobacco taxes.” ....... Dean “for the first time pushed governmental health care coverage out beyond the welfare population to working people who did not qualify for Medicaid.” ......... “Government observers in Vermont usually cite two highlights among Dean’s accomplishments in office: tight budget management of the state’s economy, and Success by Six, an effort to link early education programs to social services. … Dean, perhaps because of his medical training, demanded measured results.” ........ “One of my most persistent activities during the early ’90s,” recalled Glenn Gershaneck, who was Dean’s press secretary before eventually heading the state Transportation Agency, “was trying to fend off the more liberal wing of the Democratic Party. The will to spend money always exceeded the resources available, and the push to spend came mostly from the left.” ....... Dean’s strained relationship with Obama’s White House Chief of Staff Rahm Emanuel, with whom he famously clashed over strategy during the 2006 midterm election—Emanuel wanted DNC money to be targeted where it could help Democratic congressional candidates win immediately while Dean was intent on a long-range plan to build party infrastructures in all 50 states ....... But just as presidential candidate Dean paved the way for now-President Obama’s use of the Internet as a campaign tool, it was DNC Chairman Dean whose 50-state strategy helped candidate Obama keep John McCain on the defensive in traditional red states. ....... Dean was a true Washington outsider who took over a broken political machine and achieved astonishing results. ....... Dean’s proven strengths—his medical training and his ability to work within budgets, to name just two. And no one could bring more passion to the job ...... imagine the damage that could result from an effort led by a career politician with no understanding of the dynamics at play in our health care system, let alone the human organism ...... After so many years of fruitless rhetoric by politicians, why not let a medical doctor with proven success as a political operative and a record for plain talk and common sense have a chance? ....... As governor, he made advances in the area of health and welfare by gaining support for initiatives such as health insurance for children and prenatal care and other preventive wellness measures that cost relatively little and offered long-term savings and sustainability.
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