Robert Samuelson, typically known for butchering economics in his column, takes a break today in order to butcher political science. He says the stimulus isn't working because it is composed of the wrong programs, and he blames President Obama specifically for not including things like fiscal aid to states or bigger tax breaks on huge purchases.
But if Samuelson were to remember what actually happened last February, or even do some superficial research, he'd realize that it was the moderate members of the Senate, led by Sens. Ben Nelson and Susan Collins, who stripped out much of the state funding in order to get the bill down to approximately $800 billion, because that's a nice round number. Ironically, as best as anyone can ascertain -- these senators never did get around to telling anyone the economic logic of their proposal -- they decided to do that out of fear of people like Samuelson criticizing them about spending. So Samuelson will never criticize moderate senators for passing bad policy, so long as they do so in the name of deficit hawkery, but by God the president who signs such a bill -- a much-needed bill to ameliorate the effects of a major recession -- will be held accountable!
Similarly, Samuelson's criticisms of the tax side of the bill are ridiculous. He thought there should have been huge tax breaks on big purchases like houses and cars -- but these tax breaks are regressive and targeted at the rich, who won't suffer as much in a recession. Meanwhile, he complains that Obama gave smaller tax cuts to working people, "politically obligated." To recapitulate: When Obama passes tax cuts for workers, that's pandering. If he gave huge tax breaks to the wealthy for cars and homes, that's good policy. There are reasonable arguments in favor of targeting the auto and real-estate sectors, but economic research -- much of it promoted by Mark Zandi, who is quoted in the column -- suggests that tax cuts targeted at working people are more effective stimulus.
I could go on about how Samuelson doesn't understand the connection between the size of the stimulus and its efficacy, or that infrastructure projects do promote economic activity. But the real point is this: People, even people like Samuelson who are supposed to know what the hell they are talking about, will forget six months from now how major legislation gets made, what compromises were necessary to pass any bill at all, who the obstructing senators were -- and the obstructing senators know this. Whatever comes out of the health-care track or the cap-and-trade track or the financial-regulation track will be owned by the administration. That's why the top priority has to be getting the policy right, not the bipartisan optics.
-- Tim Fernholz