It’s the Jobs, Stupid
I may have witnessed a glimmer of hope for a productive, bipartisan solution to the stimulus bill quandary when Sen. Ben Nelson (D – Neb) came forward to speak about the upcoming Senate debate on the legislation.
“What I’m hoping to do is bring together a bipartisan group of Republicans and Democrats and offer changes that will attract others and improve the bill,” he told FOX News. “People want this to succeed.”
Asked how many Republicans he can get to vote for the bill, Nelson said he didn’t even know how many Democrats would vote for it.
Here’s the bottom line, though we really shouldn’t have to go through it again. It’s all about the jobs. The Republicans can stop harping about some minimum amount of tax cuts. They’re really nice, but during times of economic and employment uncertainty, people will put that extra money in the bank or pay off their debt. Not a lot of stimulus there, really. And the Democrats can put off their wish list of progressive agenda items for a few weeks. You’ve already shown you can railroad through pretty much anything you like now. As long as people are losing their jobs or worrying about losing them, the economy will continue to tank. Every element of the stimulus bill should be directed at efforts which are most likely to produce or retain the largest number of jobs in the immediate future.
It’s time for the Senate to have a crack at this, and it sounds as if Senator Nelson is on the right track. A significantly smaller bill which serves the above purposes will attract support from both sides of the aisle. If they can then work with the House for a combined, final version that meets these criteria, we can get this wrapped up in a reasonable amount of time. Let’s hope that reason prevails and our new Congress and President can deliver what’s needed for the country in a timely fashion.
9 Responses to “It’s the Jobs, Stupid”
The Senate bill may be different and more effective as pure stimulus. But that doesn't mean it will be smaller. Expect a fix of the AMT, which will cost a ton. But then a removal of some of the non-stimulus stuff in the House version. The net dollar amount might be similar to now.
It's very simple. You stimulate the economy not by throwing money at homeowners, but by removing some of their obligations. Remove their expensive health care premiums and remove the interest on their mortgages for one year. They take the money they save, and because they are a herd of hungry consumers, not hoarders, they go out and consume, stimulate demand, creating jobs..they stay in their homes instead of lose them, housing values stabilize. Banks net worth stabilizes. Banks feel better about making loans. Making loans stimulates new business..
And the beat goes on baby..
It seems so horrible to the rich (politicians), this solution..I know. But if they think of it as giving back dividends to the “stockholders” (working poor) they've made so very much more money off exploiting over the years, they'll realize they are actually helping themselves stay rich in the end.
It's just hard…so very hard…to consider…imagine! Temporarily removing burdens from the working poor? I don't know….could be risky…they might run out and blow it all on new cars, peanut butter and beer…
Wait a minute. I've got stock in GM, Nabisco and Coors….hmmmm….maybe it's not such a bad idea after all!
I'd like to think that the bill will be stripped down and improved in the Senate, but I think Elrod's most likely correct. I'm having deja vu- I had the same hope when the first bailout package was going to be redone by the Senate- high hopes that it would get better but it just got more bloated as they did the usual horsetrading and bribery to get more votes.
Republicans have tended to point out that there are economists that have problems with the stimulus package. They somehow always fail to mention that there are also economists who think that it's too small.
Of course. Heaven knows that doing anything to help the unemployed keep their homes, keep themselves warm, put food on the table or any of those other meaningless luxuries can be put on hold indefinitely.
You may be shocked to know that I agree with you on that last part, Jim. I do think this bill should provide for relief in the form of extended unemployment benefits (I may not agree with all of the specifics, but in principle) and I'd even agree to the part about cutting checks to the working poor (those misnamed 'tax rebates.') That type of thing can also have a stimulus effect by increasing consumer demand because the people getting those benefits and checks will necessarily be spending on necessities.
I think you're first statement is simply pointing out the obvious and shouldn't be a criticism of the GOP though. That's politics- one political party or group pushes for one type of policy and other groups (like in this case, those who are farther to the left than mainstream Dems and argue from the other point of view that you mention, that the stimulus should be much much larger) push for opposing principles. It's a bit ridiculous to argue that the more conservative of our two parties ought to not actually argue for conservative economic principles.
The fact is that no one really knows which group of economists is right. No one even knows who's more right about the Great Depression- would a larger or quicker stimulus have helped decrease the length and severity of it, or should they not have gone in for the increased government spending at all? And what's missing from all those discussions is the effects of trade policy- Smoot Hawley was disastrous and I fear we're getting into an environment of people calling for protectionism again. We may be missing the most important piece of the puzzle- maybe the whole stimulus doesn't even matter that much one way or the other if you keep the global economy from melting down by adapting to free trade and resisting the urge to pull back. Or, maybe the stimulus does matter but you still have to get the other part right.
“Smoot Hawley was disastrous…”
Wow. Something else we can agree on. As far as not needing the stimulus if we just adapt to free trade, the rest of the world is in no better economic condition than we are. Also, free trade will only work if it is fair trade. How large are the subsidies that many, if not all, Asian nations give their steel producers? Shouldn't the Chinese quit rigging their currency's exchange rate? Are there any adaptations we can make to deal with those problems when compounded by the vast disparity in wages, benefits and environmental rules that won't rip the heart out of our middle class? If you don't like the stimulus package because of its uncertainties these questions should give you an even greater pause.
Hey, I said it first. We need to relieve the working poor of their financial burdens in such a way that keeps them in their homes and spending spending spending. They won't hoard.
You don't need a super economist to know the little guy keeps the machine going.. And if you take too much from the little guy and whip him too hard, you get what is called a “Revolution”..seeing as how the little guy outnumberst the big guys like 99-1.
Hungry tummies and cold bodies have a way of stimulating the “fight or flight” hormones.
See, science saves the day again…
You're right, there are definitely some serious difficulties on the trade issues, Jim. I'm just saying that it's incredible (and frightening) that no one even seems to be looking at that angle much at all even though I think most economists agree that it needs to be addressed and that it was one of the major causes of the depth and length of the Great Depression.
Actually there is an economics blog called Calculated Risk that I read sometimes that has been pointing out some of the problems of international trade in this crisis.