The Price of Stimulus
WASHINGTON – Summoned to remove a fish bone agonizingly stuck in a rich man’s throat, British surgeon Joseph Lister did so. When the grateful patient asked the charge for this service, Lister replied: “Suppose we settle for half of what you would be willing to give me if the bone were still lodged in your throat.” The point – that the price one will pay depends on the urgency of the purchase – is pertinent to the president’s “stimulus” proposal.
Frightened people are receptive to his pleas for large and quick action: Just do it – we’ll count the cost later. As Emerson said, when skating on thin ice, safety lies in speed, and the administration’s confidence in what it is doing should be – this is not its fault – thin.
Economic policymaking in turbulent times is a science of single instances, meaning no science at all. When economic theories matter most – when the economy is in uncharted waters – all theories are necessarily untested. Hence attempts to derive prescriptions from the New Deal are somewhat surreal.
Furthermore, our language is bewitching our intelligence. Long ago – a year ago – Russell Roberts, economics professor at George Mason University, deplored terms that suggest that economics is a science akin to medicine. With a “stimulus,” of a sort that makes the legs of a dead frog twitch, the government will “inject” money as a doctor gives a blood transfusion. Or as a life-reviving “jolt” from a defibrillator.
Sensible people are queasy about throwing trillions of dollars at barely understood problems on the basis of untested theories. For Republicans, the question is: What are the duties of the opposition at a moment like this? The answer has three components, beginning with elementary political arithmetic:
Having received near 53 percent of the popular vote – better than Ronald Reagan’s 50.7 percent in 1980 – Barack Obama won 100 percent of the presidency, and almost that much of the nation’s leadership expectations now that the public, which really should diversify its investments, invests such extravagant hopes in presidents. To govern is to choose, always on the basis of imperfect information, and the president may never have more public support than he has now. He deserves some deference. Some.
Second, congressional Democrats have turned the 647-page stimulus legislation into an excuse for something that never needs an excuse – an exercise in wretched excess. They have forfeited some of the president’s claim to deference.
The opposition should oppose mere opportunism, which comes in two forms. One is presenting pet projects hitherto considered unworthy of funding, as suddenly meritorious because somehow stimulative. The other attaches major and nongermane policy changes to the stimulus legislation, counting on the need for speed to allow them to escape appropriate scrutiny. For example:
The stimulus legislation would create a council for Comparative Effectiveness Research. This is about medicine but not about healing the economy. The CER would identify (this is language from the draft report on the legislation) medical “items, procedures, and interventions” that it deems insufficiently effective or excessively expensive. They “will no longer be prescribed” by federal health programs. The next secretary of health and human services, Tom Daschle, has advocated a “Federal Health Board” similar to the CER, whose recommendations “would have teeth”: Congress could restrict the tax exclusion for private health insurance to “insurance that complies with the Board’s recommendation.” The CER, which would dramatically advance government control – and rationing – of health care, should be thoroughly debated, not stealthily created in the name of “stimulus.”
The opposition’s third duty is to assert inconvenient truths, one of which is that the truth shall make you modest. There never is a moment when an open society that wants to remain such does not need the wisdom of Friedrich Hayek, the Nobel Prize-winning economist who said: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” So the deference accorded this president should be proportional to his willingness to acknowledge that neither he nor anyone else can know whether the stimulus will work.
And from the quantity of deference owed to him, Republicans should subtract the sum of the opportunism of congressional Democrats. If Republicans conclude that the truly stimulative portion of the legislation is less than half the size of the portion composed of banal and brazen opportunism, and irrelevant but consequential policies surreptitiously pursued, they should oppose it.
© 2009, Washington Post Writers Group