The Age of Ideological Uncertainty
Indulge me, if you will, in a little self-reflection.
I would probably describe myself as a libertarian conservative. I’m pretty sympathetic to the ideas of limited, decentralized government, free markets, and a decent respect for history and the culture. One thing I can’t muster, however, is the righteous certitude that seems to characterize so many critics of this Administration. Take, for example, this editorial on the stimulus from The Washington Examiner:
Today nearly a year later, unemployment stands at 10 percent. The actual total is closer to 17 percent when you include people who gave up after months of fruitlessly searching for work. The Obama stimulus program has become the butt of jokes on late-night talk shows, thanks to revelations by this newspaper and others of the phantom nature of more than 100,000 of the 640,000 positions claimed by Obama to have been created or saved, as well as revelations about jobs saved or created in congressional districts and ZIP odes that don’t exist.
Now along comes the Associated Press with a detailed study of whether the Obama stimulus program had any measurable effect on the construction industry. The AP study was reviewed by economists at five universities. Here’s what AP found: “Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry,”
Despite the evidence that federal stimulus spending does not do what its advocates promise, Obama and his Democratic allies who control Congress are determined to take another whack at the taxpayers by passing a second stimulus program, the $75 billion Jobs for Main Street Act that will spend most of its funds on — what else? — construction projects. The House approved the proposal in December on a narrow 217-212 vote, and the Senate is expected to take it up later this month. The basic reason government stimulus spending doesn’t work is this: For the government to spend $75 billion in one part of the economy, it must first take $75 billion out of the economy somewhere else. There is another name for this process — robbing Peter to pay Paul.
You’ll excuse me if I don’t find the folk economics of The Examiner’s editorial staff – “robbing Peter to pay Paul” and all the rest – terribly persuasive.
For starters, their agenda is transparently obvious: Make things seem really bad by citing a few out-of-context numbers and then suggest the stimulus – rather than, say, a terrible economic climate – is to blame. Never mind the fact that the 17 percent unemployment rate they point to is taken out of context and wildly-inflated. Never mind the fact that botched local jobs or faulty record-keeping are indictments of individual projects, not the economic logic of counter-cyclical government spending.
The rest of the editorial is hardly better. The widely-cited AP study on construction stimulus funds is, of course, a lot more complicated than The Examiner’s editorial excitedly makes it out to be. The construction industry – the actual source of the study’s data – called the AP’s conclusions “fundamentally flawed.” As for The Examiner’s contention that “federal stimulus spending does not do what its advocates promise,” the notoriously-liberal American Enterprise Institute seems to think the bill worked pretty well: “. . . substantial support from fiscal stimulus, coupled with inventory rebuilding, boosted real GDP growth in the second half of the year to an estimated 3 percent annual rate. Without fiscal stimulus and inventory building, however, growth would have remained negative–an ominous fact because the fiscal stimulus will fade rapidly by mid-2010.”
None of which is to say that the stimulus was an unqualified success. None of which is to say that liberals aren’t guilty of similar bouts of self-righteous back-slapping. But as someone who tends toward conservative outlets, I’m shocked by frequency of similar proclamations, which seem more akin to religious mantra than anything approaching sober analysis (Shelby Steele’s latest op-ed immediately comes to mind: “But where is the economic logic behind a stimulus package that doesn’t fully click in for a number of years?” I don’t know about the logic of the stimulus package, Shelby, but I sure as hell wouldn’t turn to someone who “specializes in the study of race relations, multiculturalism, and affirmative action” for macroeconomic analysis).
In the wake of an incredibly disorienting collapse that defies just about every facile ideological diagnosis, I don’t find absolute certainty all that attractive anymore. Call me a squish or a bad team player or someone who’s unwilling to take sides when the chips are down, but the Great Recession of ’09 has shaken my faith in dogmatic economic analysis of just about any stripe.