Fear Factor and the Obama Stimulus Plan
John Judis at The New Republic joins a growing chorus of voices wondering if President-elect Barack Obama’s stimulus plan goes far enough. We’re talking about a
Jul 31, 2020243.5K Shares7.3M Views
John Judis at The New Republic joinsa growing chorusof voices wondering if President-elect Barack Obama’s stimulus plan goes far enough. We’re talking about a massive spending works plan here, and everyone from Judis to contributors to the Wall Street Journal’s Real Time Economics blog say even more needs to be done. What’s surprising is that in the financial world, there’s no political ideology tied to supporting or criticizing the plan. It’s all about the fear factor, and people on both sides of the political fence are very, very nervous. And they think Obama should be, as well. Judis writes:
“„Does Barack Obama understand the seriousness of the economic crisis? Yesterday, he laid out his economic agenda, and it was filled with all sorts of important exhortations and proscriptions. He appropriately condemned the “anything goes” policies of the last administration. He declared that government is now the solution to our woes, not the problem. Still, I worry that the president elect is underestimating the problem he and the country faces.
“„We may not simply be facing a steep recession like that of the early 1980s, from which we can extricate ourselves in a year or two, but something resembling the Great Depression of the 1930s. For starters, the current crisis is global, which means that one part of the world can’t lift the other out of its misery; everyone will go down together, which is what happened in the 1930s. Secondly, the downturn has combined an unusual decline in the real economy–employment in durable-goods manufacturing fell by 21.9 percent from 2000 to 2008–with a financial crash precipitated by the bursting of the housing bubble. The bubble resulted from an attempt to sustain growth and employment in the face of an underlying decline, which, too, is what happened in the late 1920s.
“„Over the past six decades, policymakers have used some tactics from the Great Depression to quell recessions–such as spending on roads and bridges to create jobs, transferring payments to raise consumer demand, and infusing money into the credit system. But these stopgap measures, which are at the heart of Obama’s recovery program, may prove inadequate.
For one thing, Judis says infrastructure spending won’t be enough. The United States, he says, could do things like invest in high-speed rail transportation. Yes, it would be expensive, but it also would create good-paying jobs, revive American industry and improve the country’s trade imbalance.
Judis and others are thinking big, and they want Obama to do the same. The fight over the stimulus package, at its heart, isn’t a typical Washington back-and-forth over tax cuts or power plays. The stakes are much, much higher. It’s become increasingly clear that putting together the most effective stimulus package – right here, right now – is all about the economy’s survival, not political posturing. To Judis and others, Obama needs to transcend politics on this one, and take the kind of immediate, dramatic steps that this crisis requires. Falling short means the kind of economic failure none of us will want to live with, no matter what side of the aisle we’re on.
Dexter Cooke
Reviewer
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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