Commentary Magazine


Topic: stimulus

Speaking of Failed Big-Government Programs…

The ongoing debacle that is the administration’s rollout of ObamaCare has reignited debate about technocracy and big-government liberalism. But Democrats who worry that their mode of coercive politics will be discredited by ObamaCare should be thankful it took this long.

A very well-timed reminder of this arrived yesterday from the Brookings Institution. Scholars at the left-leaning think tank analyzed the so-called “Cash for Clunkers” program, the 2009 “stimulus” program intended to get cleaner cars on the road by providing cash vouchers for those who trade in older gas guzzlers and buy newer, more efficient cars. The administration patted itself on the back when the program ran out of money, apparently pleasantly surprised that people took free money during an economic downturn. But Brookings confirms that this was, of course, a terrible program. Here are their major findings:

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The ongoing debacle that is the administration’s rollout of ObamaCare has reignited debate about technocracy and big-government liberalism. But Democrats who worry that their mode of coercive politics will be discredited by ObamaCare should be thankful it took this long.

A very well-timed reminder of this arrived yesterday from the Brookings Institution. Scholars at the left-leaning think tank analyzed the so-called “Cash for Clunkers” program, the 2009 “stimulus” program intended to get cleaner cars on the road by providing cash vouchers for those who trade in older gas guzzlers and buy newer, more efficient cars. The administration patted itself on the back when the program ran out of money, apparently pleasantly surprised that people took free money during an economic downturn. But Brookings confirms that this was, of course, a terrible program. Here are their major findings:

  • The $2.85 billion program provided a short-term boost in vehicle sales, but the small increase in employment came at a far higher implied cost per job created ($1.4 million) than other fiscal stimulus programs, such as increasing unemployment aid, reducing employers’ and employees’ payroll taxes, or allowing the expensing of investment costs.
  • Total emissions reduction was not substantial because only about half a percent of all vehicles in the United States were the new, more energy-efficient CARS vehicles.
  • The program resulted in a small gasoline reduction equivalent only to about 2 to 8 days’ worth of current usage.
  • In terms of distributional effects, compared to households that purchased a new or used vehicle in 2009 without a voucher, CARS program participants had a higher before-tax income, were older, more likely to be white, more likely to own a home, and more likely to have a high-school and a college degree.

That last part just seems like pouring salt in the left’s wounds. Not only was the program a massive failure, but it was also, by the way, a taxpayer-funded subsidy for white homeowners–just in case the left reached for an “inequality” or race-based argument in a desperate attempt to shut down the debate on the program.

And along those lines, conservatives will especially like that first finding in the list above: a tax cut would have been a better stimulus than this program. Of course, that isn’t a very high bar to clear; here’s the headline from the Washington Post’s Wonkblog: “Almost anything would have been better stimulus than ‘Cash for Clunkers’.” It would have been difficult to come up with a worse idea for a stimulus than the program Obama chose.

It’s not like they weren’t warned, however. As the Post notes:

The program had something for everyone: It would lend a hand to the ailing U.S. auto industry. It would tamp down on oil consumption. And, once launched, the program proved so popular with consumers that it burned through $1 billion in its first five days. Sure, a few critics argued that the program wouldn’t be very cost-effective, but no one was really listening.

But, as it turns out, the critics were on to something.

Yet we’ve known for almost a year that some aspects of Cash for Clunkers were failures. Part of the rationale for the program was to help the environment. In early January of this year, the environmental-news website Grist.org reported that Cash for Clunkers “drove right into a brick wall of waste.” (It’s fair to say the program was at least a stimulus for headline writers.) Grist explained:

Billed as stimulus both for automakers and the environment, the Car Allowance Rebates System, better known as Cash for Clunkers, turned out to be clunker itself. Besides fueling more unsustainable new-car-buying consumerism, the program also destroyed thousands of older, functional vehicles — vehicles that, according to the Automotive Recyclers Association (ARA), were almost 100 percent recyclable. Through Cash for Clunkers, about 690,000 vehicles had their engines destroyed and many were sent to junkyards, bypassing recycling companies altogether.

Perhaps unsurprisingly, auto dealers are speaking out to defend the boondoggle. Politico sums up their defense of the program: “And since many states and localities place high taxes on auto sales, the program generated $900 million for municipal and state coffers, according to the auto dealers.” That’s the defense: the program was a massive waste of taxpayer money whose benefit was to increase tax revenue during an economic downturn.

So yes, ObamaCare should serve to discredit big-government liberalism. But so should just about every other ill-conceived program dreamed up by the Obama administration.

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Obama Spins His Unpopularity As a Virtue

Barack Obama unveiled his new campaign theme last night: the president is unpopular. More specifically, the president keeps enacting unpopular policies. If this sounds familiar, it’s because it’s also Mitt Romney’s campaign theme: he, too, wants you to know the president is unpopular.

The audience last night heard this point alluded to throughout—usually euphemistically as a willingness to make tough choices–but Obama himself explicitly brought it up. “If the critics are right that I’ve made all my decisions based on polls, then I must not be very good at reading them,” Obama said near the end of his speech. And he’s right.

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Barack Obama unveiled his new campaign theme last night: the president is unpopular. More specifically, the president keeps enacting unpopular policies. If this sounds familiar, it’s because it’s also Mitt Romney’s campaign theme: he, too, wants you to know the president is unpopular.

The audience last night heard this point alluded to throughout—usually euphemistically as a willingness to make tough choices–but Obama himself explicitly brought it up. “If the critics are right that I’ve made all my decisions based on polls, then I must not be very good at reading them,” Obama said near the end of his speech. And he’s right.

Even after the Supreme Court upheld Obamacare’s constitutionality, only 13 percent of the country, according to Gallup, wanted to keep the law in place as-is. (Only 20 percent of Democrats did, so opposition to the bill continues to be bipartisan—though to be fair, 45 percent of Democrats wanted the law to be changed to expand the federal government’s role.)

By now, everyone paying attention is familiar with the Obama administration’s promises on the stimulus bill, and the massive failure of those promises. Polls reflect that as well; heading into the 2010 midterms, 68 percent of Americans said the bill was a waste. As the Hill noted at the time:

The figure suggests that the cornerstone of the Obama administration’s agenda to bolster the economy has fallen flat with voters as elections loom in four weeks. The poll also hints that the White House’s effort to sell the bill to the public has been far from successful.

It’s safe to say that Americans’ impression of Obama’s “agenda to bolster the economy” hasn’t much improved, as last month’s Gallup poll found only 36 percent approve of the president’s handling of the economy.

Of course, the centerpiece of the Obama effort to brand himself as a public opinion-ignoring executive is the auto bailout. It was mentioned all throughout last night’s convention lineup, and was likely what the president was thinking about when he joked about his inability to read polls. But the auto bailout was so unpopular that this is how the New York Times described its improving numbers:

It was, to put it gently, unpopular. In polls at the time, 3 in 4 Americans said Washington should not broaden its effort to help the carmakers, as it ended up doing; nearly 6 in 10 poll respondents opposed the bailouts once they happened; and 54 percent of people said they were “mostly bad for the economy.” Largely negative polls accumulated through 2010 and 2011, too.

But more recent polls seem to show a thaw in public opinion — even if the auto bailout remains relatively unpopular, as far as government initiatives go.

Keep in mind, that was the “good news.” So yes, the president’s policies are unpopular. But why is he reminding the public of that? The plain answer is that he has no other options. There is no getting around the president’s failure on the economy or the unpopularity of his policies. So the only way to spin those numbers is to depict the president as a man who follows his gut instead of the polls.

How to tell the president has nothing to run on? Just read the New York Times’s editorial on Obama’s speech. Its headline? “President Obama’s Second Chance.” The president, so fond of golf, wants a mulligan. And trying to turn his unpopularity into a virtue is his last shot at getting that second chance.

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Obama’s Triumphal Statist Presidency

In the March/April issue of the Washington Monthly, Paul Glastris offers a long essay in defense of Barack Obama. Titled, “The Incomplete Greatness of Barack Obama,” it is, in its own way, the clearest and most helpful analysis of the Obama presidency that’s been written so far. Glastris’s main contention is that Obama has “gotten more done in three years than any president in decades.” Yet, “the American public still thinks he hasn’t accomplished anything.” He’s right:

Measured in sheer legislative tonnage, what Obama got done in his first two years is stunning. Health care reform. The takeover and turnaround of the auto industry. The biggest economic stimulus in history. Sweeping new regulations of Wall Street. A tough new set of consumer protections on the credit card industry. A vast expansion of national service. Net neutrality. The greatest increase in wilderness protection in fifteen years. A revolutionary reform to student aid. Signing the New START treaty with Russia. The ending of “don’t ask, don’t tell.”

Glastris has unwittingly created a glossary of radical statism as a defense of Obama. His own words: “legislative tonnage,” “reform,” “takeover,” “biggest stimulus in history,” “sweeping regulations,” “protection,” “vast expansion,” “Net neutrality,” “greatest increase” in still more “protection,” and “revolutionary reform.” To liberals, this is the poetry of paternalism but to the rest of America it’s a nightmare lexicon.

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In the March/April issue of the Washington Monthly, Paul Glastris offers a long essay in defense of Barack Obama. Titled, “The Incomplete Greatness of Barack Obama,” it is, in its own way, the clearest and most helpful analysis of the Obama presidency that’s been written so far. Glastris’s main contention is that Obama has “gotten more done in three years than any president in decades.” Yet, “the American public still thinks he hasn’t accomplished anything.” He’s right:

Measured in sheer legislative tonnage, what Obama got done in his first two years is stunning. Health care reform. The takeover and turnaround of the auto industry. The biggest economic stimulus in history. Sweeping new regulations of Wall Street. A tough new set of consumer protections on the credit card industry. A vast expansion of national service. Net neutrality. The greatest increase in wilderness protection in fifteen years. A revolutionary reform to student aid. Signing the New START treaty with Russia. The ending of “don’t ask, don’t tell.”

Glastris has unwittingly created a glossary of radical statism as a defense of Obama. His own words: “legislative tonnage,” “reform,” “takeover,” “biggest stimulus in history,” “sweeping regulations,” “protection,” “vast expansion,” “Net neutrality,” “greatest increase” in still more “protection,” and “revolutionary reform.” To liberals, this is the poetry of paternalism but to the rest of America it’s a nightmare lexicon.

Glastris is equally candid about the long-term impact of these policies. “Some are structured to have modest effects now but major ones later,” he writes. “Others emerged in a crimped and compromised form that, if history is a guide, may well be filled out and strengthened down the road.” In other words, Obama initiatives that look measured or restrained today will only expand and calcify in time. He makes the comparison to FDR’s creation of Social Security. “Only in subsequent decades, as benefits were raised and expanded, did Social Security become the country’s most beloved government program.” Right, and only in decades subsequent to that did it become an unsustainable addiction that we can neither stop nor afford in its present form.

So, the case for Obama’s greatness goes as follows: He came to office with an array of statist notions. He forced “the sheer tonnage” of them upon the country. And he will leave the rest of the leftist dream’s fleshing out to that inexorable statist force-multiplier: time.

You start to see why Obama is okay being thought of as merely ineffective.

As for the foreign policy mentions, it’s a different matter altogether and one that Glastris never really unpacks after that paragraph. But even the administration now understands that its Russia policy is a disaster. And even if you approve the end of “don’t ask, don’t tell,” you must acknowledge that it’s been replaced with the catastrophic Obama-instituted military doctrine of “don’t win, don’t lose.”

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