Bernanke for Stimulus
Fed Chair Ben Bernanke says it’s time for stimulus: “With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by Congress at this juncture seems appropriate.” The fact that the Fed thinks it can’t do anything to prevent “several quarters” of weakness and possibly can’t avoid a “protracted” slowdown is significant. Any time there are any economic problems, you get this conversation about should we do infrastructure projects as stimulus. In general, I like infrastructure projects, but the stimulus is usually not such a hot idea since it can’t act quickly enough. What Bernanke is saying is that we don’t need to worry about that concern so much.
Meanwhile, House conservatives are responding to the push for stimulus with the same package of tax cuts for rich people that they put forward as an alternative to the $700 rescue package for the financial system.
Kevin Drum observes that John McCain’s maverick status virtually guarantees that the GOP will move to the right if he loses. Similarly, note that the House GOP caucus is likely to, for the second election in a row, suffer disproportionate losses among its more moderate members. The resulting House GOP rump will be very rightwing, and also totally uninvolved in substantive policymaking. Consequently, there’ll be nothing to stop them from drifting ever further into the delta quadrant.
28 Responses to “Bernanke for Stimulus”
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October 20th, 2008 at 2:38 pm
Consequently, there’ll be nothing to stop them from drifting ever further into the delta quadrant.
Could it be the Gamma Quadrant instead? Which, if I recall correctly, was full of beings with a religious attachment to their conception of beings called “The Founders”.
October 20th, 2008 at 2:42 pm
Kevin Drum observes that John McCain’s maverick status virtually guarantees that the GOP will move to the right if he loses.
Right. The fire-breathers on the right aren’t going away, and they’ll surely be even more dominant after the election. This by rights ought to make things easier on the Democrats in the 2010 midterms — an election I predict will be no cakewalk even against a bunch of extremists (given the likelihood that the electorate will be poorer in 24 months’ time than it is now). My only advice to the Democrats is at least get UHC passed. Ideally you want to have a concrete achievement under your belt you can point to when your facing the voters — especially one that offers substantial benefits to most of them.
October 20th, 2008 at 2:46 pm
Is Bernanke saying that the House should take up a stimulus package now, as opposed to after January?
October 20th, 2008 at 2:47 pm
Yes, a McCain victory in the primaries combined with a loss in the election could turn out to be the very worst case for the saner, more moderate rump of the Republican party.
What might be even worse is that the cocooning of Sarah Palin by McCain’s campaign from the press may limit the damage inflicted on her in the blame game aftermath of their defeat, and thus reinforce the belief that if only they had a more right-wing candidate they could have won.
October 20th, 2008 at 2:49 pm
House conservatives are responding to the push for stimulus with the same package of tax cuts for rich people that they put forward as an alternative to the $700 rescue package for the financial system.
To be fair to the Republicans, $700 really wasn’t a sufficient rescue package.
October 20th, 2008 at 2:55 pm
neat delta quadrant reference.
October 20th, 2008 at 2:58 pm
Arthur wins the thread.
Meanwhile, House conservatives are responding to the push for stimulus with the same package of tax cuts for rich people that they put forward as an alternative to the $700 rescue package for the financial system.
The great thing about tax cuts for the rich is that not only do they help bring the country out of a recession, they’re also wonderful in times of economic health! They’re like budgetary pizza — a great choice at all times!
October 20th, 2008 at 3:11 pm
The only question about the Republicans in Congress is how much longer will the media consider them relevant to discussion of politics. As on January 2009, the Republicans will be irrelevant from a policy point of view but when will people stop thinking of the Republicans as a major political party.
The quesiton about the Democratic party is what will the effect be as more former Republicans start voting in the Democratic primary since those will be the only relevent elections in the future.
October 20th, 2008 at 3:26 pm
One thing is puzzling about this piece of conventional wisdom:
The last two recessions had their unemployment peak about two years after the recession itself kicked in … so in what sense is there any serious basis for concern that a fiscal stimulus cannot act “quickly enough” to help out with unemployment?
Indeed, the more confidence that businesses can have that a recovery is likely to be strong, rather than tepid, the more likely we are to have a strong recovery.
October 20th, 2008 at 3:31 pm
Similarly, note that the House GOP caucus is likely to, for the second election in a row, suffer disproportionate losses among its more moderate members. The resulting House GOP rump will be very rightwing
If you’re into long-view calculations, then the big game is in the state legislatures when the 2010 Census results come out. In many swing states, it should be possible to squeeze out a couple ultra-conservative Reps whose districts border moderate and liberal areas. Some, like the US Reps from Utah, would be untouchable of course, but it could take a bite out of the systemic advantage that the current districts often give to hard-liners.
October 20th, 2008 at 3:34 pm
Bailout this Bailout that…Where does the money come from in the so called global financial crisis. Have you looked into who owns the U.S. debt?
http://nomedals.blogspot.com
October 20th, 2008 at 4:19 pm
I am a supporter of fiscal stimulus to drive growth, but the government has got so many initiatives on hand with a seemingly myopic view that I question how many of these programs will actually work. For example an earlier direct to consumer $50 billion stimulus package, provided a lift to consumer spending of 0.4 percent in May, but dried up after that. Similarly the 2008 housing relief bill did not save the housing market or GSE’s - Freddie and Fannie. Despite being politically popular, both examples of fiscal action failed miserably. With the floodgates of government spending opened, it is likely that our financial chiefs and lawmakers will keep on coming back for more. We are essentially spending away our futures to save the political and financial backsides of those people who got us into this mess in the first place.
October 20th, 2008 at 4:19 pm
Ok, so there’s no way that Congress is passing a stimulus package two weeks out from a presidential election. Let’s assume for the moment that Obama wins. Does he try to influence Congress to put together a stimulus package in Nov./Dec. as a means of showing that he’s going to hit the ground running as so he can tap the moderate Republicans who might not be thrilled with the rightward bent of the party, or does he wait until he takes office so he can have a larger Democratic majority in Congress and make putting together the package his first act as President?
And Trek references are always welcome.
October 20th, 2008 at 9:50 pm
And the national debt just continues to rise and rise… young people like myself will bear the burden of this. The government can’t just print free money…
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