A new Rasmussen poll shows that support for the now $900B+ stimulus package being engineered by Democrats is down to 37% – it was 45% 2 week ago. Some 20% of those polled are now undecided.
Some of the blame for the proposal’s failure to win over voters belongs to the Democratic Congress that larded the bill up with so much ideologically-motivated pork that it couldn’t be ignored. When interest is added to the tally, the package would top out at about $1.3T in expenditures.
(By comparison, the war in Iraq that Democrats had claimed was bankrupting the country has, in total, cost less than half of that amount.)
More fundamental to the problem of public support, however, is the popular notion that Wall Street caused the current economic problems by fraudulently disguising collections of toxic loans in the form of derivative securities. Is that feeling on the part of ordinary Americans justified?
An earlier NY Times article discussing the disconnect between Main Street and Wall Street contained this little gem that speaks directly to the problem:
Larry Meyers and Gerard Novello, who work for an Italian securities firm, ducked into a Mexican cantina for a drink. It was Mr. Meyers’s 43rd birthday, and he ordered the tequila.
“On Main Street, ‘bonus’ sounds like a gift,” he said. “But it’s part of the compensation structure of Wall Street. Say I’m a banker and I created $30 million. I should get a part of that.”
The instant I read that paragraph I thought, “And what if you’re a banker and you lose $30 million?” One can easily imagine the sound of crickets chirping while Meyers ponders that one.
Paul Krugman asked the same question a couple of days later and came to this obvious conclusion – “Uncle Sam to the rescue!”.
Moreover, Krugman says:
Saving the economy is going to be very expensive: that $800 billion stimulus plan is probably just a down payment, and rescuing the financial system, even if it’s done right, is going to cost hundreds of billions more.
The fact is that, if this bill is the Democrat’s idea of an economic stimulus, it and they both deserve to fail miserably. That begs another question, which is whether a stimulus bill is needed at all. It’s easy to be convinced that Obama and the Democrats do not believe that it is necessary, else they would not have tried to slide this corpulent barrel of pork past Congress and into law.
If Democrats truly want a stimulus package to pass they should cut out the funding for liberal agenda items and other non-immediate projects and concentrate on the matter at hand, namely injecting a shot of adrenaline into a paralyzed economy.
Allegedly that’s important. We all recall the sense of urgency that the Obama administration attempted to attach to the confirmation of Tim Geithner as Treasury Secretary. By playing politics with the stimulus, the Democrats have, according to their own words, put the country at risk by delaying or sinking its passage.
If Krugman is correct and the ultimate bill for jolting the American economy will be trillions of dollars of additional debt piled on to the already massive burden to be shouldered by our children I would suggest that there is something fundamentally wrong with the country’s economic structure.
Exhibit A: the budget “surpluses” of the Clinton years were based in large part upon expected revenues to be derived from corporate profits that did not materialize because the .com boom was mostly a stock and accounting mirage.
Exhibit B: Larry Meyers, et al, says that he creates $30 million dollars. But the truth is that no banker ever created any sort of wealth whatsoever. At most lenders provide liquidity to others, men and women who produce goods and services that others buy. These transactions create actual wealth, unlike the paper-based ponzi schemes of the investment bankers whose primary objective is to take a cut of the profits from their deals and pass the risk on to someone else. Shorter version: industry produces real wealth, bankers create illusions – and here we are.