The stimulus needs a boost?

There’s an old truism: “The wheels of government grind exceedingly slow.” We need to bear this in mind before we bitch about the apparent failure of the so-called stimulus plan.

Not that it was a perfect plan. It was too small, as many economists predicted, Paul Krugman among them. It was a compromise, to bring aboard a measly two Republicans. It was weak, which delighted those who hoped it would fail, who would use that failure to score political points — as they’ve already been doing.

See, we need to remember this about Republicans: they put party ahead of country. Don’t believe it? Listen to them. Pay attention. The Republican party is more important than the economy, just like it’s more important than climate change.

But let’s get back to the truism: maybe the stimulus plan was too modest, but we don’t know that for sure yet. What we do know is that the government can’t do anything fast. No one in their right mind would want the Treasury to throw money out the door. I actually don’t know how the government works in cases like this, and I’m too old to learn. I know there’s always a lot of paperwork involved, and that all by itself takes time

It’s true that we’re still hemorrhaging jobs, but once again economists try to remind us that jobs are a lagging indicator of economic recovery. Those still with jobs have to start spending again, and only then will the rehiring begin. They’ll start spending when they regain some confidence in the economy — and Republicans are doing their best to undermine that confidence.

A lot of things have to happen for this economy to turn around. Banks have to start lending again. The foreclosure problem has to be solved. People have to start buying houses again. Demand for other goods has to rise. Existing jobs have to be preserved. Perhaps most importantly, Republicans have to shut up.

I urge those independents out there (the ones I described as kinda wishy-washy, philosophically, in an earlier post) to resist the urge to throw their support behind Sarah Palin, or some other equally unqualified conservative (one George Bush in our lifetime is enough thank you) and be patient. Americans hung tough during the 1930s. We can do it again.

It’s the jobs, stupid

Whatever the causes of the recession, addressing those causes alone will not end it. We are currently seeing an acceleration of job losses, which is the path to depression. An economy can absorb a certain level of unemployment without serious problems. Above that point, higher unemployment becomes a self-perpetuating condition as shrinking incomes reduce spending, resulting in still more unemployment. Jobs will be lost in service sectors, small businesses will shut down.

Foreclosures will increase, but now among those who had traditional mortgages, who had till now been making payments without difficulty. Cars will be repossessed. Spending in all sectors will decrease–including the retail food sector. Restaurants will close. Those still with jobs, of course the majority, will curtail spending out of fear. The travel sector will experience declines.

At this time it is essential to preserve however many jobs that can be preserved. That’s the primary reason for bailing out the automakers. While it’s true that there are currently very few customers for new cars, improvement must be anticipated as people are put back to work.

President-elect Barack Obama has made it clear his top priority will be job creation. He sees the threat of spiraling unemployment. That the current administration refuses to address this concern makes one suspect that Republicans may wish to allow conditions to worsen even more, leaving the new president with an almost hopeless depression even before he takes office.