It seems like just yesterday that Republicans, wingnuts and teabaggers suffered a collective schizoid embolism over the passage and signing of the American Recovery and Reinvestment Act.
One year ago today, the president signed the bill amidst protestations from Fox News, talk radio and Rick Santelli about how the "porkulus" spending bill wouldn't work -- how it wouldn't stimulate economic growth or create jobs. It was called generational theft, socialism, communism, Nazism and any other -ism that could be quickly plucked from the glossary of Glenn Beck's fifth grade social studies textbook.
Nearly all Republican members of Congress voted against it -- the first shot in their "trash and cash" strategy whereby they screech about the evil stimulus and how it's an unmitigated catastrophe, while also gleefully celebrating the incoming cash in their districts, scores of Republican lawmakers outright begging various cabinet-level agencies for stimulus grant money. In all, 111 members of Congress have engaged in this hypocrisy. One of many reasons why they're consistent only in their unapologetic self-contradictions.
And, at the end of the day, they can get away with it because of annoyingly common misconceptions about the bill. Chief among these misconceptions is the mixing up of the stimulus and the bailout. A recent CNN poll shows that only 25 percent of Americans think the stimulus helped the middle class, while a majority think it helped bankers. Of course the stimulus had nothing to do with bankers.
CNN Polling Director Keating Holland: "It's possible that the belief that the stimulus bill helped bankers and CEOs is due to the public confusing the stimulus bill with the various bailout bills that were passed at roughly the same time last year."
So let's clear this up.
The American Recovery and Reinvestment Act is "the stimulus." Those signs you see along the highway just before driving onto super-smooth new asphalt? That's the stimulus. The recovery act. When you hear "stimulus," it references this $787 billion spending bill, and it contains the following key provisions.
1) Financial assistance to states that were about to fire scores of workers, from firefighters to police officers to teachers, as well as an extension of unemployment benefits and generous COBRA health insurance subsidies. 2) Spending on new infrastructure and manufacturing: those newly smoothed roads and highways on your commute to work, along with spending on transit and green energy technology. 3) The largest middle class tax cut in American history -- $288 billion in tax relief which, I might add, every Republican (save for three) voted against.
TARP, on the other hand, is not the stimulus. The Troubled Asset Relief Program is the $700 billion bank bailout signed by George W. Bush. Not to get too remedial with this, but hundreds of banks were rescued with this money. Some of the larger ones have paid the money back, and others haven't. For example, the piddly little bank that owns my mortgage here in Pennsylvania received $300,000,000 in TARP funds. It's repaid only around $13 million. But when you hear someone talking about the bailout, they're talking about this program. Not the stimulus. The stimulus is the recovery act.
Are we good?
If I were to pinpoint the Obama administration's first political mistake, it would have to be the piss poor framing of the stimulus. From the outset, they should've called it "the recovery bill" or "the recovery plan" or "the jobs bill" but somehow the word "stimulus" was injected into the debate and unfortunately it stuck. A year ago, in fact, it was mainly known as "the stimulus package," which sounds a little bit like a sex toy. Now it's just "the stimulus." Nevertheless, with such a technocratic frame, it's been easier for people to confuse it with the bank bailout, and it's been easier for Republicans to take advantage of this confusion. (Incidentally, the administration's first big policy mistake was to lowball the dollar amount of the stimulus in the name of bipartisan compromise.)
But the question remains: has it worked? The answer is an unequivocal "yes." Despite the fact that the amount was lower than it should have been, the recovery act has not only been successful in preventing a second Great Depression, but contrary to the far-right's fear-mongering, we're not an enslaved Nazi-commie OLIGARHY controlled by a radical Muslim tyrant because of it.
Remember a year ago when Sean Hannity and others were breathlessly repeating the phrase "The Obama Bear Market?" Well, here's the DJIA since Fall 2008.
You might be saying, Good for Wall Street. But what about me? The snark is partly justified, but at the same time, with a recovering Dow, we're also seeing the recovery of 401(k) retirement plans, mutual funds and other market driven investments held by average Americans. So yes, Wall Street continues to get away with murder, but the recovery of the Dow is not entirely in favor of the crooks.
Let's say, though, that the visibly upward slope of the Dow beginning just after the passage of the recovery act is a coincidence. What about jobs? The following chart has been widely circulated recently:
The New York Times reported today:
Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody's Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.
1.8 million new jobs on its way to 2.5 million new jobs. And that's somehow a failure? Unemployment is still high, and another spending bill is mandatory to really bring that number down, but the above chart clearly illustrates that the jobs are coming back. Not as quickly as we'd all prefer, but there they are. It's also worth noting that the recovery act kept "6 million Americans out of poverty and reducing the severity of poverty for 33 million more," according to the Center on Budget Policy Priorities.
And finally, what about the economy as a whole? Has the stimulus actually stimulated economic growth, as promised. Here's the GDP chart:
There's no gray area here. The recovery act has worked. For now. I believe we still need serious health care reform in the mix, and, of course, the major caveat here is that nothing is permanent. A sudden and premature shift to deficit reduction and spending cuts, or a failure on health care reform could instigate a backslide.
Referencing back, though, to what I wrote last week, another key factor here is the ability for the Democrats in Congress and the White House to get loud about these successes. So far, the message hasn't really broken through the wingnut noise. Consequently, most Americans think their taxes are being raised and the recovery act hasn't worked. Both are untrue. Who's to blame? I would suggest it's the Democrats who are mostly good on policy, but notoriously awful at framing and bragging.
Regardless of the inability of the Democrats to sell their most successful policies, along with the inability of the Republicans to tell the truth about all of those check-cashing ceremonies they're attending, the recovery act has worked. But while there's much to be proud of, merely rescuing the economy from the brink isn't enough. The thing needs to be made prosperous again, and it needs to achieve this without quick-fix bubbles. I tend to believe that in four or five years, the economy will be cranking along with sustainable growth. I also believe that had the Republicans been in charge, we'd all be living in hollowed out moose carcasses for warmth -- without an angry tea party in sight.
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White House Releases "Recovery by the Numbers"
It would be preferable that it created enough jobs to put a dent on the unemployment rate. Nevertheless, it provided many of us with a roof over our head, food on table, and job training.
thanks for nothing...
There would be no Joe Stack if we did a few things differently:
Public financing of elections (add $30 to that $3 box on your income tax return, if you can afford it). No more voting machines of ANY KIND;
Dismantle the big media empires so that the people's voices can be heard on our airwaves again;
Restore Glass-Steagall for banking sanity;
Take away the antitrust exemption from the predatory "health NO-INSURANCE companies", then declare a Medicare buy-in program for all those who want it;
Reinstate the rate at which the rich paid taxes on their income as it was during the Eisenhower era;
Walk away from the WTO, GATT, NAFTA. Rein in the IMF, World Bank to their original mission;
Do not trust Alan Simpson and his acolyte, and their "Commission". They're after Medicare, Medicaid and Social Security, in a big way.
Lift the FICA cap, and so much more.
Would this bit of magnificence on the part of your hero be the $8/week tax credit (credit, not rate reduction)? Shall we toast the generosity of His Oneness with the Starbucks coffee that it won't quite pay for? Shall we pay homage to His magnanimity when we are given the privilege of paying $3 back on the credit, as taxable income, when we file next year?
I am underwhelmed.
"Financial assistance to states that were about to fire scores of workers, from firefighters to police officers to teachers.." Why would the states choose to fire them, instead of cutting waste and useless entitlements?
It's impossible, in a short post, to list all the waste and cronyism in the porkulus. And to list all the contradictions; how little has actually been spent, the effect or non-effect on unemployment...
Even if you take at face value the number of jobs created, per the administration, the cost per job makes it laughable. And the handful oh houses that have been caulked at $50,000 each.
The author and I define "success" somewhat differently. I can't wait for November, when the score, in the minds of the voters, is tallied.
What would the state's unemployment rate be? What would happen to people if they hadn't received an unemployment extension? How many teachers would have been dismissed? Would schools have closed? What about policemen and the crime rate? Pay attention to your tax refund this year...mine tripled.
End of the day, the only way out of this is through job creation but since that doesn't happen overnight, there has to be an extension in the unemployment benefits. Not necessarily an extension in the number weeks b/c I feel that 99 weeks is enough but definitely an extension to the amount of time that people have to engage these benefits (which expires on 02.28). As usually, congress is dragging it's feet on the most time sensitive and pressing issues while grandstand what they think will win them poll points.
What happens when the money, which went to the politically adept, rather than the productive, runs out? Where will the jobs come from? How will the gap in the tapped consumer be filled? Exports? We make nothing.
Why is Walmart reporting concerns over falling prices...falling beyond their normal mandate to suppliers? Deflation is very bad for a nation with a consumer debt burden that is 350% of GDP. Highest EVER.
I agree completely with Mr. Cesca -- the White House failed miserably at framing this for what it was meant to do -- and allowed the media and the GOP to frame the argument. When even McCain's economic advisor admits that without the stimulus, unemployment would have reached more than 12
% -- it's clear that this stopped the bleeding.
Sad that the White House didn't frame the purpose of the stimulus in this way.
Even more, it's great to have your clear explanation that the parts for which our current administration has responsibility are working more than not, even though it could have done more. That's what I thought was happening, but the mainstream media coverage is almost as confusing as the misrepresentations of the right.
You are also certainly correct that as it has done some other times, the administration did a bad job of making the important distinctions your article mentions (they've had this tone deafness other times, too, unfortunately; public option vs. medicare for all comes to mind).
Finally, it's great to have the hypocrites and liars have their hypocrisy and lies exposed so deftly.