Saturday, January 19, 2008
WASHINGTON — Watching Ben Bernanke bash members of Congress over the head with woe-is-us news about the economy was a study in frustration.
In an unusual display of candor, the bearded, unflashy chairman of the Federal Reserve Board Thursday warned Republicans and Democrats alike that a stimulus package is essential, must be done quickly, must be temporary and must have a real impact. He steered clear of saying we’re on the brink of recession but said that high energy and food prices, the credit crunch and the housing crisis have come together to cause a serious economic slowdown.
It was the equivalent of a bishop standing on his head in church to get attention.
Did they get it?
The questioning by legislators showed they got it. Sort of. Each has his or her own ideas on staving off recession; most still seem unwilling to compromise. In general, Republicans have been resisting any rush to action, insisting they don’t want the government mucking about in business other than making President Bush’s tax cuts permanent. In general, Democrats have been saying the sky was falling and that pumping money into the pockets of lower- and middle-income families is vital whether through tax rebates, housing and energy assistance, more food stamps or direct checks.
Finally, Bush jumped into the fray, saying, yes, something probably should be done. Perhaps the legislators will get together in a month or so and agree to send out checks of as much as $600 to taxpayers. Not likely — Congress never moves quickly — but possible.
In 2000, we elected a president without asking him what his views on foreign policy were. In 2008, we’ve been so caught up in the political circus we have paid little attention to the candidates’ economic credentials even as growth slowed, housing foreclosures soared, layoffs mounted and gas prices and heating oil caused extreme belt-tightening.
In the twinkling of an eye, or rather the gyrations of the stock market, we have veered from basing the next election on national security — and the merits of continuing the war in Iraq — to one in which finding an antidote to economic meltdown for millions of Americans is crucial. Many are complaining that if we weren’t spending a trillion dollars in Iraq, we could do a better job helping people put gas in their cars, stave off foreclosure and pay for health care. Bush still says that is a nonsensical analogy.
A potpourri of plans
We are now being called on to sort through stimulus plans quickly thrust forward by the White House and the candidates. Bernanke said that anything short of $100 billion won’t be worth much; the candidates’ packages have been much lower. Now everybody is saying, in effect, “To heck with the deficit (and our national $10 trillion debt). Spend more now.”
And so, once again, we lurch from crisis to crisis even as we contemplate whom to pick as our next leader. None of the candidates has dealt realistically with the problems of Social Security and Medicare entitlements, although the next president will have to propose either raising taxes or cutting benefits. For now, the candidates are back sniping at each other’s half-formed, unexplained plans.
Nobody has put forth a serious strategy if the top rating for U.S. Treasury bonds topples or what we’re supposed to do if we surge headlong into stagflation. Discussion about achieving energy independence or rebuilding our crumbling infrastructure has been peripheral.
Nobody has said how exactly federal spending should or would be cut — other than the knee-jerk response of not replacing retiring federal employees.
We got into this mess because we spend more than we make and we save nothing. Now, once again, the politicians are suggesting they’ll give us a few of our tax dollars back.
Visibly wincing, Bernanke said that should help — as long as we don’t save the money but spend it.
X Scripps Howard columnist Ann McFeatters has covered the White House and national politics since 1986.