The headlines for the past week have not been for the faint of heart. The Dow drops 600 points in a day; some dickheads at S&P decide to downgrade our credit rating (these are the same geniuses who were giving AAA+ ratings to subprime securities in 2007. Honestly, if someone gave out the names of the people who did it, would you be tempted to go and punch them in the stomach as they walked down the street?); London may soon look like it did in A Clockwork Orange.
‘Double-dip recession.’ Terrifying. How on earth could we go through that all over again?
Meet the Press featured its customary panel of liberal-moderate-conservatives on Sunday. By now the arguments have become rote: Democrats warn that a contraction of government spending and benefits for the middle class/poor during a downturn is asking for disaster; Republicans claim that you need lower taxes to spur job growth from those with capital. Alan Greenspan was also on, giving his usual dry, almost callous analysis (he was skewing somewhat right on that day).
What quickly becomes apparent is that all of them are very nervous, and none of them seem like they totally believe what they’re saying. This is not what Greenspan actually said, but it was what I took away from the conversation:
DAVID GREGORY: Is there going to be a double dip recession?
GREGORY: Why do you say that?
GREENSPAN: We need to watch what’s happening in Europe very closely, to see what actions the Central Bank will take to prevent default in the larger economies of Spain and Italy. We also have to consider what options are left for the Reserve, after so many rounds of quantitative easing. But there don’t seem to be structural indicators pointing towards a contraction, or at least any we can be reasonably certain of.
GREGORY: Do you have any idea what you’re talking about?
GREENSPAN: No, I do not.
GREGORY: Why do you say there won’t be another recession?
GREENSPAN: I just didn’t want to be a jerk.
‘It’s the economy, stupid,’ Bill Clinton reminded us. Yeah, okay Bill, I agree. But it seems that trying to talk about the economy makes people stupid, too.
I’m a liberal, so my gut will always tend to agree with liberal answers to things. But I freely admit that there’s no way to know, and I further contend that no one knows. If there is a hard bipartisan truth to how to recover from a recession someone is hiding it pretty darn well. Regardless of your political orientation, I think we can agree that:
1) The Fed has done everything it can to control the damage. No responsible economist, left or right, would argue we should have tried to tighten fiscal policy (like the Fed did at the onset of the Great Depression) when the market threatened to collapse in 2008.
2) The results of the stimulus, if it worked at all, were disappointing. Most of the money ended up in bonds or other securities instead of concrete investment in the economy.
I mean, the jury is probably still out on whether the government really can do much of anything to actually cause an economy to recover. Cut taxes? Physically put a thousand dollars worth of cash into every person’s hand? In a terrible economy are the recipients of such boons more likely to start a business or hide it under their mattress?
The best thing government could do is to make people feel better—about themselves, about their country. And that’s where Obama is failing. I don’t know what would have been an appropriate response to the debt-ceiling issue. Again, I’m a liberal, so inwardly I thought the whole crisis was made-up. But maybe it wasn’t. Maybe our debt was threatening to threaten our prosperity permanently. I can buy that. But what kind of solution was THAT? A mealy-mouthed, dragged-to-the-altar-at-point-of-a-shotgun ‘compromise’ which basically left most of the problem left over for some super-committee to decide. Is everything from here on out going to leave a bad taste in our mouths?
I don’t like how Obama keeps reminding us that he inherited this economy. I know you did, man. But it’s not worth going over—no one is going to vote for you in 2012 because they’re still angry at Bush. And stop talking about the good economic things that have happened during your presidency. Because as far as 99% of us our concerned, there have been no good things. Admits it’s terrible. Face the facts. If you really, truly feel like the Tea Party element of the Republican Party is hurting the country and there’s no way to bring them around, then you have to plan to crush them, no equivocating allowed. You should have invoked the Fourteenth Amendment to raise the ceiling unilaterally, if you really believed that was the right thing to do.
I’m almost at the point of thinking there may be no truly ‘correct’ thing to do. Every dollar we throw at the problem may be going to waste. But just the fact that Obama is doing something, something with a purpose and a plan, can only help the collective national psyche, even if the tangible benefits are thin. Wouldn’t it make you feel just a little bit better to have an occasional headline which reads, ‘Obama Announces Bold New Jobs Plan,’ or ‘Sweeping Employer Tax Credit Goes Into Effect,’ competing for space with ‘World Going to Hell, Possibly in Hand Basket?’ Heck, you can even be slick about it and make them relatively cheap programs with impressive-sounding names. Just do the whole rolling-up the sleeves thing and pretend like you know what you’re doing. It has to be better than trying to hold onto a reasoned center that no longer exists, and constantly looking burned-out and close to the edge.
And don’t even worry about the election. One thing is clear–there is no Obama campaign for reelection. The economy, and our confidence in its future, is the reelection campaign.