Representative Eric Cantor of Virginia, the House Republican Whip, has written a substantive critique of the stimulus bill in an Op-Ed article in USA Today. He implies that the stimulus bill has its roots in the pre-2008 election political maneuvering in the Congress dating as far back as January 2008 to make the most of the then impending crisis.
President-elect Obama, elected with an overwhelming mandate in November 2008, had indeed “won”. However, as elected officials often do, he misinterpreted the reasons that had catapulted him to his victory. Because of this misinterpretation he has really “lost.” Candidate Obama had won the election because of the Iraqi morass which, despite former President Bush’s change of strategy in the fall of 2006, had undermined any chances the Republicans would have had at winning the 2008 election. Besides, the Democrats had fielded two very historic primary candidacies: a woman and an African-American, with both wanting to renew America, though not quite saying how they expected to do so, besides dangling the feel good days of the Clinton presidency in front of the voters’ eyes. The undercurrent of the politically ambivalent discontent of the electorate, both skeptical of Clinton and unsure of Bush, was turned into political capital by the Democrats after the 2006 mid-term elections by blaming the economy since 2007 on Bush even though its roots lay, a decade earlier, in the economic crises since 1997.
As Iraq was improving toward the end of 2008, to seal up their bid for the White House, the Democrats needed a hedge. And that hedge was the economy. The timely crisis had served that purpose well, as the majority Democrats, in January 2008, began shaping pre-election economic policy in the Congress, while Bush was still in the White House. Thus was born the Pelosi-Summers economic stimulus in the winter of 2008 to herald a spring that has still not come.
The consumer tax rebates were followed by a housing bill which was then followed by the Troubled Asset Relief Program (TARP), giving a little to both Main Street and Wall Street just in time for the first Tuesday in November. These transfer payments had bought the votes for the Democrats, as if that was a policy head start in action to prep the ground for the Democrat entering into the White House. The Republicans, having begun to lose the economy under their watch beginning 2007, shifted focus to national security and the improving Iraqi situation. The people had decided on the economy on Election Day, hoping for the spring to come.
That spring, being purchased by payments for liquidating bad loans on both Main Street and Wall Street, with some going to fix pot holes and rusty bridges and incentives that would become government spending only when they are used for investment, and with little thought about focusing on what really went wrong because such a focus could undermine the very economic ideology and agenda of the returning Clintonites, was snuffed out prematurely by the third quarter of 2008 as the rebate checks faded out only to be frosted since by the persistent economic chill. The world was a different place after 2000. The Clinton miracle was not feasible because of the very same reasons why the rebate checks did not work sustainably: Clintonomics was financed by funny money made by drilling holes in the pockets of consumers who make up nearly 70 per cent of the U.S economy.
President Obama, having triumphed over Hillary Clinton in the Democrat primaries, may have won the election but inherited the losses of the Clinton era and fixing a bleeding wound with the same axe that had caused it is not economic policy.
The freshness of candidate Obama must be matched by the freshness of what can become his policies if he thinks about a blueprint for a robust recovery based on reform. It is time to make a clean break with the past by cleaning house to win.