The Stimulus worked. Virtually every major economist agrees that as bad as things are at the moment, they would’ve been far worse had the Obama Administration not pumped almost $800 billion into the economy. And as bad as 9.5% unemployment might sound – and there is no getting around it, it’s pretty abysmal – try 15%. Because without last year’s stimulus, millions more would’ve been laid off from their jobs from states that were hemorrhaging red ink. Even now California is implementing cut backs to attempt to balance its budget that are draconian to say the least. To even suggest with a straight face that mere targeted tax breaks for small businesses and a tightening of Washington’s purse strings would’ve propelled the economy out of the depths of the worst economic downturn since the Great Depression is the very definition of insanity.
And yet that is the very spin the GOP is going with this summer and fall, and it seems to be working. So why? Why, with the plethora of economists who have verified the validity of the stimulus, has it been so difficult for President Obama and Congressional Democrats to convince the electorate?
What went wrong? How did the GOP capitalize on the economic crisis and turn a resounding defeat in ’08 into an opportunity to win back at least partial control of the very ship they rammed into an iceberg and left badly listing? Well there are three things that sum up the reversal in fortunes, and if they are not corrected, the consequences to long-term recovery in this country are slim to none.
First off, the Administration badly underestimated the severity of the recession when they took office. It was not until months later that Vice President Joe Biden finally admitted their error. Virtually every estimate for growth from the Obama Administration was based on estimates that were grossly understated. The economy was in free-fall when Obama took office and economists like Paul Krugman warned of a need to take serious steps to not only avoid a depression but of the need for drastic sums of money to revive the economy. Virtually every one of his warnings were ignored. Congressional Republicans wanted tax breaks and a reduction in spending; progressives wanted massive spending. Obama opted for a middle of the road solution.
Secondly, the Administration committed the ultimate faux pas by going on record that unemployment would not exceed 8% with the stimulus. There is an old rule in politics: avoid specifics whenever possible. While the stimulus prevented massive layoffs throughout the country it was inadequate to jump-start the economy sufficiently to create the jobs needed to drive it back to full health in 2009. In short, the patient was removed from the critical list, but remains in intensive care. This was the biggest blunder of the Obama Administration. They did just enough to prevent a calamity but not enough to restore prosperity.
And lastly the balance of this can be chalked up to good old fashioned and completely understandable fear and uncertainty. From the moment they took control of the economy, whether they liked it or not, Obama and Congressional Democrats owned the mess they inherited. And with the spoils of victory comes the angst of the multitudes who now demand accountability from their new lords. It matters not that unemployment could’ve been as high as 15% were it not for the steps that were taken, when you’re one of the 9.5% that’s still out of work. It has been and always will be about the economy stupid. And make no mistake about it people will vote their wallets and pocketbooks this November.
So now that we know how all this happened, what can be done to avoid another trip down Titanic alleyway?
Well for one thing the Obama Administration needs to make it abundantly clear just how much the stimulus worked, and not just in general terms. Obama himself needs to visit the states – particularly those states with Republican governors who took stimulus money – and let the people in those states know how many jobs were spared due to the stimulus. Bring some cops, firemen and teachers with you, Mr. President. Last time I checked, they counted as taxpayers too.
Secondly, Obama needs to call out Republican challengers who are running on fiscal responsibility to put up or shut up. He needs to draw a line clearly between the allegations and the actual facts. The truth is that there is no evidence that Republicans, when in charge, have ever been fiscally responsible. The American people need to be reminded of that fact; and not left to assume, as so many Democrats have a habit of doing, that they will figure it out on their own. (Hello John Kerry!) And as for those Republican candidates who, under the auspices of the tea party movement, claim they are nothing like past GOP leaders who betrayed their principles, ask them a simple question: What’s your plan? Spell it out and don’t be afraid to list specifics. And please avoid the usual socialist agenda garbage.
That’s right, specifics: that four-letter word in politics. For instance, when a GOP candidate says they would not have voted for the stimulus, what then would they have done differently? How would they have jump-started the economy? And if the answer comes back something like, “By getting government out of the way and allowing the engine of free-market capitalism to take over” here’s your comeback question: “What part of government would you get out of the way? The Pentagon? The Department of Homeland Security? The Department of Transportation? The EPA? What would you have told the states that were laying off tens of thousands of teachers, cops, firemen and sanitation workers every month to close budget shortfalls? And how would you have balanced the budget while at the same time giving away yet more tax breaks for the wealthy? Please articulate. The voters are waiting.”
You see when exposed to light of day most of the Republican opposition this fall boils down to three things: capitalizing on the mistakes of their opposition, stoking the fears and ignorance of the victims of this recession, and hoping that no one finds out just how bare their cupboard really is.
In 2004 Democrats ran against George Bush by ostensibly saying, “Vote for us, we’re not Bush.” While that may have picked up a few disgruntled votes here and there, in the end it wasn’t enough to propel them over the top. Americans, even those who are disenchanted, still need a reason to vote for a candidate. Republicans are making the very same mistake this year by running campaigns that are anti-Obama. It is up to the Democrats to make them pay for it.