Just plain nonsense

The more one hears of the contents of the so-called "stimulus" bill, the more it is clear that the only thing sought to be stimulated is the size of the government, not the health of the economy. There are so many items of spending in the bill that will not lead to any jobs or economic growth, that I do not understand how the President can push for the bill with a straight face. Is Obama just lying for political gain, or does he really not understand the bill and its effects? I am not sure which I prefer: a dishonest or a thick skulled president. Right now we need a leader who can understand what is needed and take steps to accomplish it. I doubt that Obama is the one to do it.

I am leaning towards the view that Obama simply does not understand how the economy works. For the last few weeks, Obama has been announcing repeatedly how dire things are and claiming that without the stimulus bill, the US may never recover. This has to be one of the most bone-headed acts ever by a US President (and that is really saying something). The US economy is consumer driven; more than two thirds of all production goes for consumer goods. The worst possible thing for the economy is to scare the consumer into not spending; yet, that is just what Obama has been doing. If you tell people that the economy may not recover -- for whatever reason -- they will decide that it is prudent to save right now and not to spend. If one person makes that decision, it is no big deal. If millions make that decision (because they hear the new President announcing repeatedly that the situation is dire), the effect on the economy is disasterous. Each time that Obama makes one of his gloom and doom announcements, he is probably costing the economy tens of thousands of jobs. It is ironic that the stimulus package will cause job losses in this way, but there is no denying the accuracy of that statement. Only someone who is completely ignorant about the economy could do what Obama has been doing.

Still, this leads to a more perplexing question. Obama may not understand the economy, but the new treasury secretary and the economic advisers certainly do. Indeed, I would be shocked if the economic team has failed to tell Obama of the damage he is doing. So here's the question: why would Obama continue on this course? Does he really not care if the economy tanks? Is he hoping to make things worse so that he can use the crisis to grab even more power for the government (and him)? Are the political advisers and the president so intent on winning that they do not care the consequences of their methods?

There are no good answers to these questions. Our only hope is that the market forces flush the excesses out of the economy quickly enough that a recovery begins despite the actions in Washington.