Monday, March 09, 2009

How Stimulating

Do you understand The American Recovery and Reinvestment Act of 2009, aka the Stimulus Package? Are you skeptical? Have you wondered aloud, in public, if it's such a good idea to keep bailing out banks and financial institutions?

Then you should probably check out to last week's This American Life on NPR (listen here to 2/27/09's episode 375: "Bad Bank") for an easy-to-understand - but not dumbed-down - explanation of what happened to cause the current banking crisis and what sorts of things we can do about it. It's a very useful, and surprisingly interesting show. But if you're a multitasker like me, you'll need to be doing something else while listening, like driving. I dusted my house while listening to the show and felt both smarter and more productive afterward.

I have a couple of rants about the way people are talking about the stimulus package, the economy, and Obama's administration, and I'm going to share them with you right here, right now! Hold onto your wallets.

1) "Why should I pay for . . ."

This is a line of thinking that drives me batty. Why should I pay for the schools, when I don't have children? Why should I pay for the military when I'm a pacifist? Because we're citizens of The United States of America and our country has determined that educating our citizens and having a standing military to protect us in times of war are important. If we don't like the government's priorities, we should change the government. But the "why should I pay" thing is just ugly and stupid.

Most of us pay taxes, and they come out of our paychecks before they even get to the bank. We might end up paying thousands of dollars a year, though the largest percentage may well go towards our own retirement (Social Security). How many of your dollars are really going to bail out the banks? Not very many. Most of your money is still in your own pocket, and most of your tax dollars are still going to things like public health initiatives, interest on the federal debt, and Iraq/defense. Yes, the economic stimulus package is a lot of money, but it's all about scale.

2) Who's going to bail me out? I want free money, too!

No one's getting free money. Why is it that people don't seem to get this? The government is LOANING money to banks and financial institutions, to "bail them out," not handing them huge checks of free money. The government has been buying illiquid mortgage-backed securities. When the economy - and in particular the housing sector - recovers, the government makes back the money, WITH INTEREST. How is this a bad thing? Of course, if the banks are allowed to fail, then, in addition to plunging the country into a very scary economic depression, that money will be gone gone gone.

Personally, I've got a mortgage, two car loans, and two credit cards, plus perpetually lingering student loans. I don't want anyone else to loan me money right now. Free money's always nice, but see above. TANSTAAFL.

3) Things should be looking up by now.

Economic recovery always looks worse before it gets better. (Witness the early 80's and the early 90's.) Obama and most of the economists I've heard talking about this - the folks with impressive titles and PhD's after their names - have always said that things aren't going to turn around over night. Did people really believe Obama would be inaugurated and miraculously global climate change would reverse, the economy would recover overnight, and unicorns would frolic with winged fairies in crystal castles filled with rainbows? He's smart and charismatic, but he's also, you know, human and stuff.

4) This is what you call bipartisanship?

Do you know how you kill bipartisanship? You reject out of hand everything that the other party says, then attack them for not working with you. You act like a negative Nellie without offering reasonable solutions of your own. You over-simplify complex solutions and rely on popular sound-bites instead of doing the right thing in a complex situation, no matter unpopular it might be in the short term.

President Bush was a big fan of less government regulation, more big business, etc. But after being briefed exhaustively on the economic crisis, he came to the conclusion that stimulating the economy in this way was necessary. When he was criticized by other neo-conservatives for this change of heart, he said that he hoped they'd have done the same, when faced with the same crisis and information he'd had.

In the panic of last fall, lots of Republicans were for infusing money into the banks to keep them from failing. Now that the election's over and the political climate has changed, some have started openly hoping and working to ensure that Obama fails (by making sure that we can't fix the economy any time soon) rather than actually doing their damn jobs. I'm perhaps a tad riled up about this.

There is, of course, room for reasonable and intelligent people to disagree about how we got here and what we should do to address the current crisis. But I find a reliance on soundbites instead of intelligent analysis of a complex situation, an automatic rejection of the opposing party's proposals regardless of how many of their economic advisers come from your own party, worrying about image rather than substance in times like these: unconscionable.

And, while we're at it, I'd like to scold the people who toss out words like "earmarks" and "special interests" with vitriol like they're extremely bad words. There's certainly plenty of abuse and waste within the system. But: you know what's an earmark? You know what's a special interest? Funding for police departments, hospitals, prisons, and schools is sometimes secured through earmarks. "Special Interest Groups" include just about every organization with a political arm that lobbies congress directly or indirectly, from Planned Parenthood to the National Rifle Association, from Greenpeace to the oil industry, corporations and labor groups, AARP and the American Medical Association, AAA and the Christian Coalition. One of my favorite "special interest groups" is The Arc. I'm also a big fan of the Americans with Disabilities Act, which was heavily sponsored by special interest groups.

So that's me on the economy. Where are you?


Monkeyflower said...

Well said.

I listened to the same This American Life show and found it very helpful.

The rant you sometimes hear about "special interests" drives me nuts. In my mind "special interest" groups that we should ignore are groups that advocate for something that directly benefits them or their clients (usually financially) at the expense of the rest of society (e.g. the coal industry, the tobacco industry). Advocates for environment aren't out for personal profit. They want clean water, clean air etc and they want everyone to have these things too. Same thing goes for advocates for education, equal rights etc. Even people advocating for things I disagree with: "pro-life" or anti-gun control groups aren't "special interest" groups if they aren't advocating these things for personal enrichment, but out of a genuine conviction that they are doing the right thing.

Christina O. said...

I'm just with you; you said that all brilliantly; I get so frustrated by the "opponents" (to the president, to the stimulus package, to the [fill in blank] here) that I can't form a coherent sentence. Thanks for saying what I wanted to say but can't.

Kathy G said...

I bit off topic (because I can't add ANYTHING to your wonderfully-written post)...

The first thing that occurred to me when I read your first point was the local Metro transit mess. Too many people voted against the tax increase last November because they don't use buses/it didn't affect them/they were angry with the Metro management. They didn't think about the greater good for the area. Now we're facing deep cuts in service (there will be NOTHING running where I live)!

Thanks for letting me rant.

Orange said...

A few comments (numbers do not correspond to Sarahlynn's; I just felt like numbering today):

1. Remember how McCain was all about bipartisanship? Yeah, sure. On a handful of specific issues. Does he try to find common ground with Democrats when it comes to issues like abortion or war? Of course not. He's 99.9% solidly GOP on those things. So he's only bipartisan when it comes to matters that don't have a strong bipartisan split? It couldn't be more half-assed.

2. I was reading something yesterday about the much lower tax rate (15%) on capital gains. Richer folks with lots of investments don't have to pay as much in tax on the money they "earned" merely by virtue of having enough money to invest in the first place? Hey, "Why should I pay for..." more than my fair share of income tax to offset the low taxes paid by others on capital gains? Every single taxpayer who has little or no capital gains on their tax return is effectively subsidizing the bigger investors. So the big-money folks need to shut up when it comes to whining about unfair taxation.

3. CNBC's Rick Santelli gained national fame (infamy?) with his rant about not wanting his tax dollars to help people with unaffordable mortgages get their loans reorganized so that they can afford the loans and avoid foreclosure. Santelli is one of those self-absorbed idiots who somehow thinks that keeping our neighbors' houses out of foreclosure harms him. Get a couple abandoned foreclosures on his block—weedy, unkempt, vulnerable to vandals—and he might change his tune.

Sarahlynn said...

Thank you! I get a little anxious when I post something so far outside of my area of expertise, afraid I might get it all wrong . . . but if I do have it wrong, I'd rather know!

Monkeyflower, I like your definition of special interests.

Christina, I wrote this because of feeling exactly the way you describe! (Now I can just link to it instead of stuttering incoherently.)

Kathy, I get so mad about the Metro situation. So mad!

Orange, FABULOUS points.

Thank you!

RobMonroe said...

I think that the thing I appreciated the most during the whole campaign season was seeing the leader of the Native American Coalition (or some such group of Native peoples) on the Colbert Report. Colbert pointed out that McCain had done a ton for the Native people in Arizona and neighboring states, but they were coming out in support of Obama.

Their reason is that even though one was good to the Native Americans, the other would be better for the good of all of the people. I thought that was incredible a testament to the way all Americans should think.

Barrie said...

I'm with you. And you were incredibly articulate in your explanation. Thanks!

Sarahlynn said...

Rob, very nice.

Barrie, I appreciate it! Considering the deplorable sparsity of references and footnotes, that post took me a long stinking time.