If you’re looking for a good primer on Big Shitpile and other recent economic events, I highly recommend Peter Goodman’s Past Due: The End of Easy Money and the Renewal of the American Economy. It’s well written, and does what many other books about the recent economic collapse fail to do: puts it into a larger context. But this small excerpt from Past Due hits the nail on the head as to what our problem is:
Washington has grown accustomed to muddy compromises that can be spun into clear-cut victories by both parties, as their leaders appear on Sunday television talk shows to argue over who won the week. But the economic crisis confronting the country is not well addressed by this traditional mode of politics: the process is a sideshow, and only the results count. Either the government will marshal the resources to stave off a potential economic catastrophe or it won’t. The merits of the spending plan adopted can only be assessed once the money reaches its final destinations–the classrooms and state office buildings that are to be upgraded, and the construction workers who are supposed to be employed.
The tools to fight a further rise in unemployment are threefold:
- Banking policy–have the Treasury buy or guarantee risky financial assets in enormous amounts in order to boost asset prices and get businesses back into a position where they can profitably obtain financing for expansion.
- Monetary policy–have the Federal Reserve goose asset prices by taking steps that lower real interest rates somewhere along the yield curve.
- Fiscal policy–have the government spend money, either by hiring people directly or by buying things from private companies that then hire people directly.
The populist anger and fallout from the last set of banking policy interventions has taken the first of these off the table.
The current complexion of the Federal Open Market Committee has taken the second of these off the table.
And now Barack Obama is taking the third of these off the table.
Will someone please tell me how this is supposed to be good policy?
Simple: it’s not.
People have to like this crap. Nobody will care about consistency on procedural issues when they don’t have jobs, when they’re still in massive debt. Nobody will care about intellectual consistency when they are economically miserable–and while they’re still miserable, they will blame virtually everything, often in a contradictory manner.
What I don’t get is why Democrats don’t realize this. The immediate, tangible results are what matter, not adherence to slogans (besides, the Republicans will demonize you anyway, so why not pass a policy that gets you re-elected?). To steal Atrios’ line, I’m old enough to remember when ten percent umemployment was really bad.
Stupidest political party in recorded human history.