the (hopefully transparent) politics of "stimulus"

We've been trying "stimulus" for nearly two years-- first, under Bush and now, under Obama.

Obama's efforts have been prolific and more debt-laden than Bush's. But those who like to trash Obama need to make sure they throw some blame at the "conservative" Bush who blazed this unfortunate trail and helped make all of this garbage possible.

Obama has been sly-- hopefully, too sly by half-- in seeming to hold back the stimulus. This has allowed him a little more wiggle room to propose spending more money. Perhaps he thinks it will work. In any case, he's certainly enough of a political beast to recognize the political benefits of correlation. If he keeps spending, then sooner or later, his efforts will be at least correlated-- albeit not causal-- with recovery. (For those who think it will eventually be causal, why haven't the last two years worked?)

Here's Jonathan Weisman in the WSJ with the news coverage...

President Barack Obama pressed forward with an expansion of his $787 billion stimulus plan Tuesday, unveiling job-creation proposals that largely build on the initial package, including a hiring tax credit that his own party jettisoned as unworkable and some business owners deemed ineffective....

The biggest political question will be the federal deficit. Mr. Obama said Tuesday that lower-than-expected losses from the TARP give the administration room to spend more on job creation and lower deficit projections for the coming year. Republicans are largely united in their demand that all $200 billion in unanticipated TARP savings be devoted to reducing the deficit.

Here are the WSJ editorialists on the politics of this:

When it comes to spending, the Democrats who run Washington can't decide on their message. On the one hand, as President Obama said this week, they claim we have to "spend our way out of this recession." On the other, they keep telling us the deficit is too large and isn't "sustainable." In this tug of political spin, watch what they spend, not what they say....

Even harder to figure is Mr. Obama, who is likely to sign this budget behemoth even as he keeps telling us it's time to "make the hard choices necessary to get our country on a more stable fiscal footing in the long run." Word is that his 2011 budget proposal will propose a spending freeze of some kind, which is another election-year pivot.

After so much double talk, we've concluded this is all part of a conscious political strategy. Spend so much and run up the deficit to unprecedented levels, then turn around and claim that there's a fiscal crisis that can only be solved with higher taxes. They spend, you pay....

Here's another (micro) angle on the politics from the WSJ editorialists: buying votes one at a time, program by program-- with our own money...

If at first fiscal stimulus doesn't succeed, spend, spend again. That's the motto President Obama embraced...

But wasn't that also supposed to be the point of last February's $787 billion stimulus, or for that matter of the Nancy Pelosi-George W. Bush $165 billion stimulus of February 2008?

Nearly two years after that first Keynesian stimulus that was supposed to prevent a recession, and nearly a year after the second that the White House said would keep the jobless rate below 8%, the President now feels obliged to propose a third....sooner or later the White House is bound to get the political timing right....

There's also a flood of new spending, with the amount presumably to come later from Congress (oh oh!), on highways and other public works. Perhaps you thought these "shovel-ready" projects had been included as part of Stimulus II. Alas, that was merely the sales pitch. In the event, the bulk of that money was shovel-readied to such transfer payments as Medicaid, welfare, community block grants, and cash for the clunkers who run failing public schools. This time, we're told, roads and bridges really will get the money—and you can bet they'll all be built with higher Davis-Bacon wage rates that will balloon their cost, too....

Mr. Obama is also proposing to use funds repaid by banks to the $700 billion Troubled Asset Relief Program. When Congress passed TARP a year ago, the Democrats who ran the joint vowed that the cash was intended to save the financial system and that any returns would promptly go to pay down the debt. As Candidate Obama put it, "every penny" would go "directly back to the American people." That was then....

TARP is now morphing into a revolving line of Democratic political credit. Barney Frank wants to divert at least $4 billion to bail out more home owners. Virginia Senator Mark Warner wants $50 billion for loans to small business. Mr. Obama proposed yesterday to use TARP to finance his own ideas as part of Stimulus III, and if he and fellow Democrats succeed the taxpayers will never see this cash again....