What If We Wanted An Economic Recovery?

As Opposed To Political Gamesmanship?

Right now the concept of stimulus packages being passed by Congress or not passed by Congress is a political idea that has very little to do with economic reality, and much more to do with one party or the other scoring political points. It is certain that hundreds of billions of dollars, perhaps trillions, are in play — but very little attention is being paid to the larger questions of what we expect to receive from those dollars. Barney Frank will tell you that he never saw a bridge built without a tax increase, and John Boehner will ask how contraceptives stimulate the economy, and those might be interesting sound bites, but they’re very narrow. In much of what I’ve read in the past several months, most of the analysis (or what passes for it) has been for entertainment value and gamesmanship: who is on offense and who is on defense. Which pol is getting slammed and which pol is looking sharp. Which party is “winning” and which is “losing”.

Very little of it has had to do with economic reality, and I don’t know about you, but the general sense of unease that so many people (from both parties) are feeling has everything to do with the fact that at some level, large numbers of people in this country correctly sense that their lives are burning while the politicians fritter. That social unease will get worse unless we take positive steps to change it.

To advance that aim, I’d like to ask people to please read something that could instead get them thinking about what our real priorities in an economic recovery should be. This is not something that politicians or people who are primarily interested in fiscal policy as an extension of politics are very good at doing, and that fact alone is one of the more disappointing aspects of all the recent calumny. It’s going to be a shame to spend hundreds of billions of taxpayer dollars without people talking about the real issue. So let’s start a new discussion based on something approaching a view of reality that describes the situation, asks some questions, sets some goals, provides some rationale, and explains what that rationale and those goals would require. In other words, let’s look at this as a problem we’d actually like to try to solve.

I recommend the following article and I want to offer it up for discussion here at Redstate:

Economy Recovery Plan for the United States by Philip Greenspun, November 2008.

I have no idea which political party Philip Greenspun belongs to, aside from the Party of Smart People, and hopefully reading that article will start some debate about the ideas and the concepts, not the partisanship. Greenspun is asking the right questions here, offering tangible suggestions, and most importantly, he understands how to make the distinction between the political debate and the economic debate. Politicians are not business managers — their entire world operates according to different rules, with different goals. If we listen to the politicians instead of telling them what to do, we will truly deserve what we get from the various and sundry “stimulus packages.” And what we might get, in the end, is a national economy that looks like Michigan writ large.

The ideas in this essay have virtually nothing in common with those one hears from politicians. Why? The perspective of a politician is completely different than that of a business manager. For the politician, U.S. citizens and corporations are an endless reserve of potential tax dollars ripe for the taking. The politician’s career goals are generally 2-6 years ahead. An increased tax today will yield an instant revenue increase. It might take businesses or individuals subject to the tax 5 or 10 years to move their factories or otherwise adjust. By that time the politician will have moved up to the next office. Giving public employees a more costly pension may avoid a strike and will cost almost nothing in the short run. By the time the pension obligation has buried a city or state, the politician has moved on to a national office.

How about federal politicians? They spend all of their time in Washington, D.C., surrounded by wealth and beautiful marble architecture. They give speeches every day where they refer to the U.S. as the greatest country in the world. Humans are highly suggestible and we eventually begin to believe our own rhetoric. A person who is constantly saying how the U.S. is the world’s best country is unable to imagine that a multinational company might move its headquarters to Ireland or Dubai and turn the U.S. operation into one of many local subsidiaries.

The business manager sees a newspaper article about how South Korea public school graduates have the highest math achievement of any nation worldwide and thinks “Maybe we should set up a laboratory over there.” The politician thinks “How can I use this number to damage my opponent in the next election?”

Please read the rest and treat this as a comment thread. As a Republican I find a lot to like in many of the things Greenspun is saying, and I think you will too. Even if I weren’t a Republican, I would recommend this article because I respect Greenspun’s intelligence and I also truly, deeply know that the only way to move America on a path toward economic recovery is to really understand what is being said here. More importantly, we will get a lot of things we didn’t ask for from the “stimulus packages” and none of the things we want, unless we think about what we want in the context of economic reality. All of the “shovel ready” projects in the world will not change the very high unemployment rate that America will suffer from if our politicians from both parties are not forced by the voters in both parties to grasp the basic facts of what will make our economy recover over the long term. It’s time to stop the partisan fighting for its own sake, or at least tone it down. Let’s get down to understanding what a real economic recovery will require.

Humbly submitted for your comments and criticism.