Don’t Panic! OK, Panic! And Now… Take a Deep Breath and Look Into My Eyes

by Will Wilkinson on February 5, 2009

So the President has taken to the pages of the Washington Post to freak people out over the terrifying, irreversible devastation that will befall us if the world-sized deficit spending bill doesn’t clear the Congress. If you’re into the macroeconomics-as-mind-control game, this is a bit of a paradox, isn’t it?

In order to “restore confidence” we are alleged to require interventions contained in the deficit spending bill. But the bill won’t clear Congress unless the President succeeds in terrifying the public into clamoring once more for his spending extravaganza kludge. So, the idea seems to be that in order to save the economy, you’ve got to get people to flip out first, so that you can do what it takes to calm them down later. This may seem a bit like dumping gas on a person on fire so that they can more easily burn through the wall standing between them and the lake. But I’m sure this feat of psychological needle-threading can be achieved with laser-like accuracy by deploying the virtuoso mood-management skills of Obama’s first-rate team of applied mathematicians. 

Kevin Grier’s comment on the following section of Obama’s lamentation is pretty special:

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. …

People, an irreversible recession means that GDP will shrink to zero and the USA will cease to exist. Can it really be that Porkulus is the only thing standing between us and extinction?

It’s Porkulus or starvation, nation. Choose sides carefully.

  • "you’ve got to get people to flip out first, so that you can do what it takes to calm them down later"

    Pretty sure the people were flipping out before they read this editorial. There remain reasonable doubts about the virtues and viability of the proposed legislation; but everyone was already pretty much on board with the idea that we're in an economic crisis that is more than merely disconcerting.
  • Bill Gardner
    "This is both politically feasible and would work as well as or better than any alternative plan out there."

    I agree with the proposal. What is the evidence that it is politically feasible?
  • This post has been linked for the HOT5 Daily 2/6/2009, at The Unreligious Right
  • Will, I think you're a little off on this one. I think you'd be right if Obama were writing such an editorial in a relative vacuum, but its meaning in the current (political) context changes. In other words, I think he *would* be lowering the level of debate over the stimulus package if it hadn't already been lowered. Rather, I think he's responding to those critics, and I hope he's doing so in order to force those who refuse to have a substantive debate about what would make a good stimulus package into engaging in just such a debate.
  • Paul O'Pinion
    Our president reminds us that the nation voted for change in November. Nancy Pelosi put it more eloquently: "We won!" Pork is more of the same, not change. Obviously someone is selling a massive and expensive system to computerize health care records. Can we guess that they are connected to the winning party. We already spend more money per student than any other country on earth. The problems are mom and dad and discipline. Vouchers work better than the 40+ years of more and more money. The college education dream is very much alive. I work in a community college full of students with full and part-time jobs taking a full load of courses.
    I do love the idea of rebuilding our country's infrastructure. Put the money there. Delegate the distribution of the money to a local level and spread the money around to contractors who aren't lobbyists or major campaign contributors.
  • The only thing we have to fear is ... not being afraid enough!
  • x. trapnel
    This was a big problem with the socialism-for-bankers bill, too: first we were told that this was absolutely necessary; then Congress refused; then markets tanked, unsurprisingly--but was this because the package was needed or because the political theatre had meant that everyone thought everyone else thought the package was needed, etc.? The nature of financial / equity markets means that they are far more susceptible to this sort of expectations stuff than the 'real economy,' too.
  • curious
    that's interesting. i didn't realize the US ceased to exist during the great depression. i was laboring under the silly impression that a lot of people were unemployed, undernourished, and generally pretty miserable.
  • Nothing would be a good start.
  • RonCo
    Will, your hatred for politics is getting to pretty astronomical heights. So let me ask you directly--what should we do? Nothing? Let nature take its course? Stimulate, but just a little bit? Please, no discursions into the bankruptcy of macroeconomics, and no use of terms like mind control, kludge, or Porkulus. If everybody in Washington wasn't stupid and everybody who has political convictions wasn't a hyponotized idol-worshipping zombie, what kind of response to the current crisis would you suggest--if any?
  • I would offer a simple stimulus bill that takes "timely, temporary, and targeted" seriously. Use current need-based transfer mechanisms -- TANF, EITC, unemployment insurance system, etc. -- to put a lot of cash directly into the hands of people most likely to spend it right away. Temporarily cut the Social Security payroll tax in half. That's it! This is both politically feasible and would work as well as or better than any alternative plan out there.

    Spending increases on infrastructure should go into a later bill specifically about infrastructure, which should be subject to a careful cost/benefit analysis review process.

    The current bill is just careless and irresponsible, and Obama made a huge mistake right out of the gate by pushing it.
  • webgrrl
    My only reservation here WW is that the policy mechanism has to ensure no one saves their check and that the people who are most hurting get money now.

    This is my only reservation with relying too heavily on the SS payroll tax cut - the people who will spend this money right away when we need them to probably aren't working. I think we should like to see most of the money go to unemployment really - let's say 45% of the money should go to the SS payroll tax cut and EITC.

    To my mind these are the kinds of policy discussions we should be having - what percentages have proven most effective in the past? The Bush stimulus didn't work because it was all tax rebates, which got saved. So tax rebates aren't the best mechanism. But we've done this before at different times - what worked best then? Any comment?
  • RonCo
    It's a deal; you've got my vote. I had actually expected something like this from Obama's team, with maybe some direct aid to local/state governments. But if there's anything like that in there, it's buried under so many layers of junk that I can't find it. I would have thought that with Rahm Emmanuel as chief of staff, Obama could have kept the Congressional Democrats from porking it up so much. Greater fool (or hypnotized idol-worshipping zombie) I.
  • Facebook User
    "Rahm Emmanuel ... kept the Congressional Democrats from porking it up so much.."

    Lets just contemplate that for a while.
  • Cool Cal
    President Obama (speaking via TV or YouTube): ... Well, citizens of the United States of America, that's my plan. And if you aren't already convinced of its efficacy, I'm pleased to present ... Scarlet Johansson's ample, naked bosom.
  • GU
    So Mr. Grier is in favor of mass starvation?!?!?!?!?!?!?!?!!?!?
  • Braden
    I thought dichotomies didn't exist as per the great one's inauguration speech?
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