A Stimulating Snow Job

KingNewsMedia.com Editors Op/Ed

May 20, 2009

As we approach the mid-point of the year, it is becoming increasingly and more painfully clear every day that the “stimulus package” and all its related bills and budgets that were frantically passed in the early days of the new Obama Administration and Democrat-controlled Congress was a monumental example of bad government. I cannot label it a “mistake” or an “error” because it was not at all. The bill that was passed so hurriedly was intentionally approved and signed the way it was. There were no mistakes here. Just what I believe will be proven to become a federal failure of historical proportions.

 

Do you recall how in the euphoria of Obama’s first weeks before and after his inauguration there was a mad dash to write, pass and sign a “stimulus” bill? Do you recall how Obama held press conferences every other day while he was the president-elect and aggressively pushed the outgoing-Congress and inc0ming-Congress to get the job done as quickly as possible? Do you recall the new president’s gloomy, fatalistic and all-too daunting comments in January about how bad things looked and how the nation was on the edge of a cliff ready to drop? Do you recall how a complicit media–overwhelmingly in the pocket of the new president–fawned over him and gave a free pass to practically everything he said and did? Do you recall how the media paid more attention to what the new First Lady wore and if the president’s children were going to get a playground on the White House grounds instead of paying attention and dissecting the economic bill being written and passed on Capitol Hill?

 

 Well, here is what we got for it all: a terribly and hastily written bill that contained many pieces of political “pork” (wasteful spending) and extremely short-sighted and amateurish language that provided so many loopholes and vague instructions that it could not possibly have been passed with any real thought. But, of course no real thought was given to it since the bill, several hundred pages long, was not even READ in Congress. To be clear, there were a few members in Congress on both sides who called for calm in passing this package and requested more time to review it. But those folks, in my opinion true heroes in government, were simply shouting in the wilderness.

 

Now, as the summer approaches, we can plainly see this mother-of-all-economic-bills will be a failure simply because of the way it was drafted and passed. The problem is this bill was not a routine bill. Its importance in the history of our nation could not be elevated more. The influence it should have had was enormous. It was to be a solution-provider. It was to be literally a stimulus to get us back on track and moving forward with confidence, focus and motivation. It was to generate jobs, investment, lending and all those great and fundamental things that make an economy work. Instead, we have glaringly bad bill that may, ironically, hurt us more than help us. But, that should not be surprising today since it becomes clearer everyday that our government may be the worst impediment to prosperity in the nation.

 

All the folks who have complained that our government is seriously over-bloated, out-of-touch, ineffective, corrupt and irresponsible are correct. We are in serious trouble when a new president with such power in Congress along with a party in such control of Washington, D.C. with such backing of a partisan media and approval of the public cannot even pass a meaningful, intellectual, honest and effective bill that we desperately needed. As if we ever needed another example of how power corrupts, we have it here at the worst possible moment. The sheer power and ego that came into play with Congress and the White House experiencing near untouchable control led each to recklessly act without the thought and meaning they promised and so many Americans believed would occur.

 

Among the most glaring failures of the economic stimulus were the minimizing of two critical features that should have actually been two of the most dominating features of the bill. First and foremost, this bill did practically nothing, zero, I mean nothing for one of the most fundamental components of our economy—small business. How this segment could be so terribly omitted is coming back to haunt the administration and Congress as each day passes because you cannot have a recovery without it. Data and testimony coming in from across the country is showing that small businesses are failing, close-to-failing or doing whatever they can do to survive and ride the storm–including eliminating jobs.

The other monumental failures of our government recently–the tons of money given to the largest banks, insurance companies and automakers–have done little if anything for small business. Besides not receiving anything substantial in the stimulus package, small businesses are also dealing with the fact that the “credit crunch” is practically as bad as June nears as it was at the start of the year. The very banks that received obscene amounts of tax money have yet to provide attainable credit to business. Smaller banks that customarily loan to small and mid-sized companies cannot provide loans simply because these banks themselves cannot get the large mega-banks to give them money either. It is natural to give the large public companies all the attention when it comes to layoffs and they certainly have cut thousands of jobs. But this is a bad habit. What does not get attention is the thousands of jobs lost by smaller companies too. And as this segment continues to falter, more jobs will be cut, offices will close and other businesss relying on those companies will hurt too and do the same and there you have an unending cycle.

 

In addition, the truth is that most of the “work” that will come from the stimulus package will not be for the bulk of small business. Those that will benefit will be those in a select few segments including, surprise, government-related agencies or programs and construction. And that brings us to the second terrible omission: infrastructure. There may indeed be some jobs and projects generated in construction or related fields but they will not number anything like they should because the stimulus package allocated less than 25 percent of its massive cost to infrastructure.

 

Again, here is another example of how terribly ineffective and hideously clueless our government actually is today. You would think that in this highly-partisan era, one thing that most Americans and politicians could agree on is that our nation’s infrastructure was in need of repair and that there is more than enough work to do and it would be public money well spent to benefit……well, you know the public.

Nope.

 

There would be more tangible and faster ecomomic results from assigning more money to infrastructure projects than what the bill as written could ever do. Build a bridge, repair a highway, install sound barriers, medians or lights etc. etc. and many more businesses (and therefore people) would benefit. Instead, we have a bill that truly is for the few it seems. In fact, since June is approaching and the stimulus has been passed for months now, it is legitimate and fair to question just where is all this money now.

 

The early “returns” of the bill are coming in and I predict we are just going to see more of the same–a few jobs here and there mainly reserved for agencies, companies and people comfortably entrenched in the system.

 

As I write this column today, I point to several things today that really represent what this false stimulus bill is all about:

1. The Federal Reserve issued a far-darker economic forecast for the nation than it did in the wake of the passing of the stimulus package. Now, it says the national unemployment rate could hit 9.6 percent. But the Fed has been underestimating the jobless rate for a while now. So, if you take its past predictions, unemployment could hit double-digits. So, again where are the jobs that a stimulus is supposed to generate if we are now facing year without job growth?
2. The Fed also issued a far-gloomier outlook on Gross Domestic Product (GDP)–essentially all the goods and services we produce. Now, the forecast is that the GDP could decrease two percent. It previously predicted a maximum decrease of 1.3 percent. So, let us ask one more time where is the stimulus package’s influence and effect in our nation? We not only have less jobs but less being produced by exisiting business.
3. Treasury Secretary Timothy Geithner freely admitted today all the government’s manuevers did nothing to free up credit for small business and provide direct aid. Yet, the largest banks that received aid are making profits and want to return the money back so they indeed have money to lend. Hell, it is ourmoney. Furthermore, the tons of tax funds given to General Motors increasingly seems for naught as more observers belive every day the company will go into bankruptcy–which many called for it to do from the beginning.
4. New Jersey issued some employment data today. New Jersey is important to note because despite being in one of the hardest hit regions in this economy, it retains prominence as one of the wealthiest states in the nation. It is also one of the smallest states in the nation too and best educated so what happens there is a good barometer of where we are and where we are headed. Well, the exodus of jobs continues. The state lost more than 14,000 private sector jobs in April across multiple industries. There was one sector of growth. Yep, it was government. More than 1200 jobs were added to the government ranks and many of those were officially attributed to the stimulus package. Keep in mind New Jersey, one of the smallest states in the country landwise and in population, has one of the most bloated governments in the union and is currently seeking a $2 billion loan.

 

To me, all of this smacks of history repeating. Many people believe former president Bush wasted a historical chance to do immense good for the country in the aftermath of the brutal attacks of September 11th, 2001. An opportunity to induce change in government for the better and elevate the presidency to more meaning and effectiveness was wasted.

I believe President Obama has done the same exact thing.

 

People typically forget President Bush, like Obama, came into office labeling himself an outsider and someone who wanted to topple the status quo in Washington, D.C. and enact change in the beltway to better serve the people. Many believe President Bush failed at that. I believe President Obama, like his predecessor just did the same thing. He had an enormous historical and political opportunity in the wake of a terrible economy to force the change he proclaimed. Instead, it seems to me the economic stimulus package could be his Iraq War. As time passes, the cost and failure of this bill will become more apparent and the president may have no choice but to go and attempt to throw more money and legislation at the problem much like President Bush had to throw more money and troops in the Middle East. In both cases, similarities abound.

 

Both seemed rushed actions with little attention to details. Both seemed haphazzardly created without much thought to actual functionality, cost and exit strategy. Both seemed more influenced by those around the president than the president himself. Both actions seemed to benefit people and concerns already profiting from the system. In the end, it seems the people, for whom each man and each Congress serve, failed to take care of basics–the people.

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