Over at Division of Labor, Frank Stephenson points to an interview in which the Secretary of the Treasury says this:
GEITHNER: They want — businesses want certainty. They need certainty so they can make long-term plans today. And that’s why it’s so important that Congress gets health care behind us, that we bring financial reform in place so people know what the rules of the game are. And that’s a very important thing to do. And that’s why we’re working so hard to make sure we bring clarity quickly.
Wow. Of course, Geithner is right that business needs certainty about the rules of the game in order to make long-term plans. And the government probably did need to step in to the financial sector once it started to implode. But nationalizing GM was totally discretionary. Cap and trade legislation — which would touch every corner of the economy — didn’t have to come up during a profound recession. Even fiscal stimulus was completely elective, and it certainly didn’t have to take the form of an up-for-grabs carnival of government spending.
Creating completely irresponsible, economically chilling regime uncertainty would appear to be the basic modus operandi of the Obama administration. When Geithner argues that the debate over health-care reform needs to be resolved quickly in order to establish certainty about the rules of the economic game, he pretty clearly implies that the Obama administration has indeed made a bad situation worse. Because, of course, health care reform didn’t have to come up. It should have been blazingly obvious that attempting to reshape one-sixth of the economy during a deep recession would only throw more sand into the already grinding gears of an already faltering economy. But the shock doctrine teaches never to let a crisis go to waste, and so the Obama administration attempted to push their most ardently desired policies through the window of crisis.
That this audacious strategy would hamper the ability of the economy to recover, as Geithner sees that it has, was totally predictable. The choice to go for the gusto anyway, instead of focusing narrowly on getting the economy back on its feet and getting the unemployed back to work, amounts to putting partisan politics before the economic welfare of struggling Americans. It amounts to gross mismanagement of the economy. If the unemployment rate is still in double digits ten months hence, the Democrats are going to be in big trouble. One of the reasons is that Republicans will be able to argue, rather plausibly, that Obama and congressional Democrats irresponsibly chose to tick off boxes on their partisan Christmas wishlist (and a pony!) when they should have been tending to the economy, and this choice made the recession worse.