Diary

More on the Failed Stimulus: Democrat Cannibalism

Liberals taking bites out of liberals – whyever should I do anything but sit back and enjoy.   But for the correct view of history….

However, this is also most certainly going to be a campaign point.   How else will this president, in the face of mounting debt, growling gas prices and, despite last month’s passing jubilation, a continuing unemployment problem, explain why his near-trillion dollar signature economic plan had failed?   The answer, we’re now told, is that it failed because bad DINOs never let him see the bigger, better stimulus option.

Pure horse#%!*.

I give you The New Republic, which today gives laser-like focus to this latest Stimulus push-back, originally provided to us in The Obama Memos, a January piece in The New Yorker.   As this meme goes, in the early days of Camelot Part Deux, guys like Larry Summers and Peter Orszag thwarted the fabled “larger stimulus,” never allowing Barack Obama to hear that there was the option of a bigger package, and thus The Stimulus was doomed for failure as a result.   Cenk Uygur tore into this new story line a few days ago in Who Killed the $1.8 Trillion Stimulus?   Note how Uygur’s story is less about what the President wasn’t told and more about the evil villains, Summers and Orszag.  Every hero needs villains.

But, from TNR’s piece, EXCLUSIVE: The Memo that Larry Summers Didn’t Want Obama to See:

What happened? When Romer showed Summers her $1.7-to-$1.8 trillion figure late the week before the memo was due, he dismissed it as impractical. So Romer spent the next day or two coming up with a reasonable compromise: $1.2 trillion. In a revised document that she sent Summers over the weekend, she included the $1.2 trillion figure, along with two more limited options: about $600 billion and about $850 billion.

At first, Summers gave her every indication that all three figures would appear in the memo he was sending the president-elect. But with less than twenty-four hours before the memo needed to be in Obama’s hands, Summers informed her that he was inclined to strike the $1.2 trillion figure. Though Summers, like Romer, believed more stimulus was almost unambiguously better, he also felt that a $1.2 trillion proposal, to say nothing of $1.8 trillion, would be dead on arrival in Congress. Moreover, since Obama’s political operatives were convinced that any stimulus approaching a trillion dollars was hopeless, Summers worried that urging more than this amount would stamp him and Romer as oblivious in their eyes. “$1.2 trillion is nonplanetary,” he told Romer, invoking a Summers-ism for “ludicrous.” “People will think we don’t get it.”

Romer was uneasy with this. She felt that $1.2 trillion was itself a pragmatic middle ground. She also believed the president-elect should deeply grasp all the trade-offs he faced, and in this she wasn’t alone. Peter Orszag, the incoming budget director, agreed in retrospect that the figure should have been included in Obama’s memo even though Orszag personally opposed the larger number. “I think there’s a basic principle that if a senior member of the economic team wants something presented to the president, it should be presented—with the pros and cons,” he said. “I do not think it’s the role of the economic team to play politics.”

But Romer was reluctant to second-guess Summers on political questions in light of his imposing government résumé. She protested, but dropped the matter when Summers held firm.

When the economic team finally walked through the contents of the memo with the president-elect on December 16, Romer mentioned her preference for over a trillion dollars. Summers allowed that bigger would be better.   BUT THESE POINTS WERE MADE IN PASSING.    (All-caps mine for further emphasis).

Just a reminder of why this is all necessary: because the Congressional Budget Office just released its report, Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2011 Through December 2011, showing terribly anemic economic bang for our Stimulus buck.

We’ve all heard the Krugman rant on how the Stimulus was too small.   So, Barack’s defense to his liberal base is that it wasn’t that he chose the smaller stimulus package, it was that his less progressive staff withheld the information and didn’t even allow him the option.   I suppose the subhead here is: “The Rehabilitation of Christina Romer,” which is nothing if not amusing.   Once upon a time in 2009, we were told that this was a Council of Economic Advisers stocked with an unprecedented level of econ talent.     Puh.    It’s three years later.    Yes, I’m still holding.

But this whole business is galling if it ever gets off the ground.   Even if it does involve blue-on-blue crime.   The point here is that history should be accurate and that we not allow the myth built around this President a single ounce of breath.  So, as Christina Romer tells us in her own words in this clip below, there is a correct record of what the President knew and when the President knew it.   Policy notwithstanding.   And, if the left wants to continue to argue that the Stimulus wasn’t big enough – then fine. But, please, let’s not repaint history just because Barack needs a leftside campaign defense on this failed policy.

Mrs. Romer, if you would please?

 Christina Romer (4/12/11):  Since you mentioned that I was pushing for a bigger stimulus and Rahm took it out, the important thing is that I put it back in.  So he was certainly aware that there were other options and it was very much ‘what we could possibly get through Congress.’   So, I certainly made sure that he knew there were other options and we were certainly making decisions. . . . y’know, I think what . . . .  I’ve often told the story of a famous meeting. . .  there was a meeting with the President where the whole economics team flew to Chicago to meet with him.   And before it, David Axelrod  had been sort of telling us what his polling data was showing about sort of where the American people were.  And one of the things that he said – and I don’t know if we’re still on tape – he said, “the American people haven’t had their ‘holy sh*t moment’ yet,” where they’re going to say, “Oh my gosh this is really a horrible recession.”   They hadn’t yet realized just what had hit us with the collapse of Lehman.   And so, I actually started my presentation with the president by saying, “Mr. President, this is YOUR ‘holy sh*t moment.’  The economy is…. we knew it was sick, and it’s even sicker.”   And so that was the context in which we were all making the case that what people were thinking would be needed for the fiscal stimulus needed to be much bigger.   And at that point we decided: as big as Congress will do.