Wednesday, February 17, 2010

The Daily Strike-2/17/10-One Year Stimulus Push

Good evening and welcome to the Daily Strike. It's been one year since we were disappointed that Congress only enacted at $787 billion spending bill chalked full of progressive priorities because it wasn't big enough. We were right, of course. But still, times have changed.

STIMULUS: Today, the President and politicians across the spectrum marked the one-year anniversary of the American Recovery and Reinvestment Act. New York Times David Leonhardt seems to have emboldened liberals by writing a great piece citing the successes of the stimulus. Independent analysts now agree that the stimulus saved or created at least 2.4 million jobs. The economy went from losing 700,000 jobs per month a year ago from basically breaking even the past few months. We are now growing at a 5.6% pace, when we were actually contracting a year ago. It's time for everyone to admit it: the stimulus worked.

The President tried to make that case today. He correctly noted that the stimulus helped us avoid a Great Depression, and has helped facilitate our recovery. He was introduced by Vice President Biden, who has successfully overseen the implementation of the act, with only minimal hiccups.

The problem for the Democrats is that virtually nobody sees the stimulus as a success. An insanely low 6% of Americans think that the stimulus created jobs, according to a recent poll. The obvious reasons for this. The unemployment rate has risen since the act was signed, which is pretty much all people see or care about. It's hard to be touting a successful economic policy with 10% unemployment. This confirms Paul Krugman's theory a year ago, that the stimulus would be too small, meaning it wouldn't be effective enough to change the employment picture, meaning it would be associated with economic failure.

The Democrats therefore will have to embark on a massive political effort to sell the stimulus. They've been using a pretty effective strategy lately by pointing out the hypocrisy of GOP members of Congress railing against the stimulus while attending ribbon-cutting ceremonies of stimulus-funded projects at home. What they really should do is hammer home real-world examples of stimulus money creating jobs. Firemen, policy officers and teachers are always good to highlight. They can also throw this graph around a lot.

JOBS: Breaking news: Harry Reid is a pretty bad Majority Leader. Last week, Senator Reid scrapped a bipartisan Senate Finance Committee Jobs bill and instead pushed a pared-down $15 billion bill. Apparently, this move has angered enough Republicans and Democrats that Reid may not have the 60 votes needed to advance the bill. Reid will need to hold his entire 59 member caucus together, and he needs to pick up a Republican vote. Apparently, Reid has been reaching out to none other that new Massachusetts Senator Scott Brown. I'll be interested to see if Brown can support a tiny bill that's basically full of tax cuts. My guess is that, as always, the Democrats won't get any Republican votes, because Republicans, again do not want Democrats to succeed at anything.

HEALTH CARE: There is a small possibility that a deal could be in the works on health reform. Apparently the White House is helping to ease the process of the House passing the Senate bill, with both chambers passing fixes to the bill through reconciliation. The proverbial unnamed Democratic source even says that Senate Democrats are now likely to support this effort because they just want health care to go away once and for all. Rep. Chris Van Hollen, assistant to Speaker Pelosi, claims that the House and Senate are on the cusp of a deal. I'll believe it when I see it. It would be great if the Democrats could have a firm plan to handle health care when President Obama holds his bipartisan summit on February 25th.

That's it for now. See you tomorrow!

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