Stimulus Package – I’m Getting OK With It

Search Results – THOMAS (Library of Congress).

I have a couple thoughts about the stimulus package.

Lobbying Problem Costs Us Governance Of, By, and For the People

Until we fix the lobbying problem, Washington will be incapable of making any decisions in the interest of the citizenry at large.  We will not be able to fix the economy, health care, Wall Street or anything else right until lobbyists can be eliminated from the equation.  Every time we try, 50% of what we spend and do will be in the interest of small groups at the expense of the whole rather than in the interest of the nation as one.  That said, we can’t just  do nothing until that day comes.

A lot of what is in here really will stimulate the economy.

When discussion of a stimulus package of this sort started, we were done a disservice by those who focused on “infrastructure”, namely, roads and bridges.  Rebuilding roads and bridges and improving mass transit systems will create jobs, will stimulate the economy, and in many cases will prove to be beneficial in the long run.  But when you look at the 3 million people who have lost their jobs in the last few months… you know, how many of Microsoft’s 5,000 layoffs poured concrete for a living?  How many of the tens of thousands laid off from companies like Starbucks, Macy’s, Panasonic, General Motors, Sprint, Pfizer, Caterpillar, or United Airlines would know a piece of re-bar if they tripped on it?

Have you ever driven a bulldozer?

The fact is that if we created 4 million new jobs building roads, we would probably have to take that stupid fence back down to do it.  The  skills that exist in the talent pool being rapidly created in this country is way to diverse to be efficiently sopped up with “shovel ready” concrete-intensive projects.

That’s why the stimulus bill has money going in so many different directions.  It is also why it is over 700 pages long and growing by the minute.  We live in an extremely complex economy, our government itself is extremely complex, and when we have to line item one by one by one even the large buckets of project types and classifications we need to fund… it takes a lot of pages.  At the end of the day, though, this bill is providing stimulus funding of unprecedented scale that will create jobs in the healthcare sector, the information technology sector, the energy sector, construction (of course!), electronics, research, agriculture, security, defense… every major department of government is getting money to use to stimulate those portions of the economy that it interfaces with.

A lot of this stimulus shouldn’t be called stimulus.

For 30 years, since 1981, we have treated the government as a problem rather than a solution.  We have starved it, under-funded it, punished it and neglected it, and then complained about how inefficient it is and how poorly it works.  For instance, there was scalding hot testimony on the hill today from a whistle-blower who gave the SEC intricately detailed evidence of Madoff’s ponzi scheme… in 2001!  The SEC didn’t do anything with it, largely because there apparently wasn’t anyone left there whose job it was to deal with ponzi schemes and outright fraud.  Last year when Congress pushed Chairman Cox to increase the SEC budget so it could do a better job, he declined.

We all complain about education, but we routinely vote against tax increases for education.  We complain about the DMV, but while the people in there do tend to shuffle more than hustle sometimes… the core problem is that it is understaffed by what, 50%?  Our judicial backlogs aren’t just because our courts are inefficient… we simply are not paying for the number of them that we need to handle the work.  When a social worker or a public defender has a case load 5 times what they should, the problem isn’t just that there are too many cases or that these folks are working too slowly.  We are starving these systems to death… and then complaining about how weak and ineffective they are.

Good government like good cars, good wine, good clothes, good toys and good service costs good money.

From what I see, a lot of the money in this stimulus package is going to funding, or at least partially and temporarily funding, many of the starved, malnourished, desperately impoverished functions of government and many of the beneficial and necessary investments we should have been making for decades, that we have failed to make.  This funding will, indeed, have a stimulative effect.  But at this level, all spending stimulates the economy… but not all spending should be considered emergency stimulus spending.  A lot of what is in this bill on a temporary basis are small, probably tiny, down payments on funding decisions that eventually need to be made permanent.

Americans, we do still have the biggest economy and the biggest military in the world, by far.  But we are not the most advanced nation, despite what we are constantly told.  All over the world, nations pay less per capita for health care than we do and they get better results! We do not have the safest, best, and most efficient road system in the world.  We do not have the most modern telecommunications infrastructure in the world.  We do not have the most energy efficient houses.  We do not uniformly have the best schools.  We certainly don’t have the world’s best legal system.  We are not the smartest, we are not the wealthiest, we do not have the richest cultural environment, etc.  We can be, but we have chosen not to invest in these things.  Where we have failed to invest and it is impossible to earn a return from an investment that hasn’t been made.

This bill does a lot of investing in the name of emergency stimulus that ought to be made in the name of good government.  But as I said at the top, until we clean up the lobbying mess, we cannot really make any of these decisions very well.  What we have here isn’t as wasteful as it seems, even though there is a lot of spending that is no doubt, wasteful.

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6 Comments

Filed under economy, Politics

6 responses to “Stimulus Package – I’m Getting OK With It

  1. William Capra

    First, you are absolutely correct about the starving of government. Government cannot govern if it is not big enough to do the job.

    I don’t entirely agree with you about infrastructure not being an adequate stimulus. Consider any modern project. How many people actually do the work (trip on the re-bar), and how many order that re-bar, stage it, transport it, arrange for the transport of it, hire the people to do all that, run the accounting functions to pay them etc, . etc. Consider, if you will the number of people in our military that actually carry guns, and the number of people (the tail) that support those gun-toters.

    As far as I can tell, any money put into circulation will be spent in one way or another. The metric is, I believe, the velocity of money. As that increases, the economy as a whole should benefit.

    So building schools, jails, God help us, waterboards, should stimulate the economy.

    Re: lobbyists. They’re necessary. They are how the various interests make their concerns known to the 535 legislators and the couple of thousand aides that support them. The problem is not lobbyists. The problem is the money they carry with them; campaign donations; and just plain bribes. Control that and you get government back.

    Interesting comment read somewhere. Lavish pay for financial wheeler-dealers isn’t A problem, it is THE problem. These guys make millions if they have one good year. They can be thrown out on their ears the next year and still retire with millions. So there’s no down-side risk to reckless behavior.

  2. krouda

    Lobbyists aren’t “the” problem, but the lobbying problem extends beyond campaign finance and outright bribery. The “lobbying problem” includes the “influence peddling” that decides which lobbyists even get a chance to be heard and the revolving door that promises “friendly” regulators big jobs and fat paychecks immediately upon their exit from government.

  3. krouda

    Also, I don’t have a problem with infrastructure spending. It is delightful I’m sure and, yes, a lot of that money gets spread around to a lot of different people who don’t pour concrete and, yes, velocity eventually sends it spinning out to everyone, hopefully.

    Have you looked at all the places this money is going? There is no way that we could build this much of any type of infrastructure so quickly, or get this money out as broadly. And if we tried, we would miss out on the many other benefits of this spending like re-education, new education, the costs of keeping the displaced workforce viable, etc. I think if we wait for velocity to carry construction dollars through suppliers, stores, manufacturers, and raw material producers, the raw materials producers will be long since gone by the time it gets there.

  4. William Capra

    The more I think about this, the more I think that the only way a “stimulus” will work quickly is if we spread the money out into many small areas.

    If we decide to lay pipe (replace water/sewer) for example, we’ll find that there’s only so much pipe laying about in steel yards. Beyond that, we have to make the stuff. Well and good, but beyond a certain amount, we have to ramp up production capacity to make the stuff, then your point about lag-time becomes very valid.

    But if we limit our stimuli to purchases that use only available capacity, and no more, then we can get the velocity we need.

    So big projects are probably out. We should not consider, for example, a new big dam that will take ten years to build. But filling pot-holes is probably good.

    A major coast-to-coast sewer updating project won’t have the desired affect. But scattered projects here and there will.

    Make sense?

  5. krouda

    Exactly my thought. Dollars in play is what stimulus is. Dollars going to construction workers are no more or less valuable than dollars going to scientists or musicians. The best two guides should be how fast the money gets into the system and the return on the investment we are making. If we just flat out pay people for nothing, we’ll just create inflation and not fix anything. If we invest in things that make us more productive or competitive in the future then we’ve bought something of value. It goes without saying that not all value can be denominated in dollars and sense, but everyone should agree that flat out corruption isn’t as good an expenditure as investing in figuring out where all the bees are going.

  6. William Capra

    Let’s throw one other factor into this.

    The infrastructure of this country has been neglected shamefully, nay, criminally. Roads, pipes, parks, public amenities, bridges, schools, you-name-it. The “no new taxes” nonsense has sapped our ability to move things, deliver water, remove sewage, treat garbage, etc.

    There is just so much that has to be done to catch up with the neglect of the past decade or two; possibly back to Eisenhower.

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