Wednesday, February 11, 2009

Shovel Ready...?

Supposedly when asked about his predictions for the stock market, banking tycoon J.P. Morgan once replied: "It will fluctuate."

That's a bit how I felt after watching economist Joseph Stiglitz's MSNBC interview posted on Bob Westal's blog: "The Stimulus Battle — Some of My Part" (h/t The House Next Door). The segment focused on the current debate over President Obama's $900 billion (or more) economic stimulus bill.

I hate to oversimplify, but Stiglitz seemed to be saying that if a large enough package is implemented, then our economic woes should be over by the end of the year. ON THE OTHER HAND, we should be prepared for the recession to go on longer and get worse. No wonder my eyes glaze over whenever I listen to financial prognosticators. My bad for taking all those marketing electives in college instead of accounting.

I caught an equally interesting exchange between another noted economist ("Left Wing Marxist"), Dr. Jeffrey Sachs, and former GOP Congressman turned MSNBC host ("Right Wing Nut Job"), Joe Scarborough, as they expressed their own qualms about the current rush to pass the stimulus bill.

Sachs reiterated his concerns as expressed in a Huffington Post piece. He's basically supportive of the initiative, but does harbor some doubts:
...taking something highly flawed now rather than a better framework that is never enacted (!) would make sense. I regret and worry, however, that we haven't yet had the kind of public discussion about what's really needed for the medium term, and how we can get there. I don't really know if it's "now or never." If that's true, let's have the legislation now. It just doesn't feel right to me, however. And I do worry that the tax cuts and coming mega-deficits might well frustrate a subsequent convergence on a more meaningful and sustainable trajectory in the coming months and years.
They were joined by Sen. Barbara Boxer, a self described economics major, who was there to give her side of it. Frankly, Boxer sounded like an idiot. She started off by sighing over the fact that people are expressing "so much pessimism." Well, golly, did she watch the President Obama's press conference? How else but "pessimistic" would you call comparing our economy to a car driving toward a cliff?

It may have been a weak attempt at humor, but Boxer then acted like she'd never heard of the Congressional Budget Office. This was mostly in response to the CBO's mixed prediction, as reported in U.S. News and World Report, that the stimulus package could create jobs and increase GDP in the short term, but may actually reduce GDP in the long run. She quipped something about that being their opinion "whoever they are" (punctuated with air quotes).

The senator took predictable slams at Republicans who are now conspicuously back in their familiar and comfortable role of opposing deficit spending. While the GOP's current stance is somewhat laughable after eight years of silence, I don't know why Boxer and Obama even care what they think. Republicans can't stop the stimulus bill from passing. Their loud complaints are no more effective than a child's rant from the backseat of a car (headed towards a cliff?).

Well, it was a Republican, Richard Nixon, who famously observed: "We are all Keynesians now." Then again, another Republican, Judge Smells (Ted Knight in Caddyshack) also once commented: "The world needs ditch diggers too."

No comments: