Wednesday, February 11, 2009

Throwing Pork at the Problem

I don't, as a general rule, much like Maureen Dowd. Her New York Times editorials so often have a bit of an insubstantial feel, as if she has poured vinegar and pepper not upon a kernel of truth, but on a wilted meringue left over from some Clinton-era Democrat fundraiser.

But every now and then she writes something I can't help but agree with, and today is one of those days:

So much for the savior-based economy.

Tim Geithner, the learned and laconic civil servant and financial engineer, did not sweep in and infuse our shaky psyches with confidence. For starters, the 47-year-old’s voice kept cracking.

Escorting us over the rickety, foggy bridge from TARP to Son of TARP by way of TALF — don’t ask — Geithner did not, as the president said when he drew on the wisdom of Fred Astaire, inspire us to pick ourselves up, dust ourselves off and start all over again.

The Obama crowd is hung up on the same issues that the Bush crew was hung up on last September: Which of the potentially $2 or $3 trillion in toxic assets will the taxpayers buy and what will we pay for them?

Despite the touting, the Treasury chief unveiled a plan short on illumination, recrimination, fine points and foreclosure closure. The Dow collapsed on its fainting couch as Sports Illustrated swimsuit models rang the closing bell. [...]

Geithner is not even requiring the banks to lend in return for the $2 trillion his program will try to marshal, mostly by having the Fed print money out of thin air, thereby diluting our money, or borrowing more from China. (When, exactly, can China foreclose on us and start sending us toxic toys again?)

There’s a weaselly feel to the plan, a sense that tough decisions were postponed even as President Obama warns about our “perfect storm of financial problems.” The outrage is going only one way, as we pony up trillion after trillion.

Geithner is coddling the banks, setting it up so that either we’ll have to pay the banks inflated prices for poison assets or subsidize investors to pay the banks for poison assets.
Aside from Dowd's incautious cracks at Geithner's youth (which gives us the opportunity to recall that Maureen is ten years older than the US Secretary of the Treasury), this piece was right on. Congress is reaching an agreement, and President Obama will soon sign a stimulus package law that will cost us just under $800 billion--and yet there are no guarantees. Not only are the banks not really being held accountable, but this bill is stuffed with so much pork that it reminds me a little of this (which really ought to be renamed "The Stimulus"):

When has any American economy improved because Democrats decided to grow the government? Unfortunately, that's their strategy again this time: stimulate the economy by making sure that various members of Congress can bring home enough bacon, in the form of government grants, federal projects, and so on, to their own home districts to offset the declining profits, widespread layoffs, and other effects of the present economic situation.

If this economic downturn weren't based in a real financial crisis, that strategy might work--that is, it might have relatively little impact on the economy which would then be free to recover on its own, so to speak. But the financial crisis is real, and the effects of what the Democrats are doing here is not unlike a doctor deciding he can cure a patient's broken leg by performing cosmetic surgery on her face--ineffective, and leading to further problems with the limb that's actually broken which will be worse if left untreated.

I may only agree with Maureen Dowd once in a decade, but at least we're agreeing on something important: this stimulus package is a disaster.

1 comment:

Anonymous said...

Do we know if the Health Care "reform" was passed as well in the "stimulus" package or was it removed?