“The Stimulus was about implementing the Obama agenda”

A “sensitive and confidential memo” written by White House economist Larry Summers shows that Team Obama made campaign promises and liberal causes célèbres the top qualifiers for the dispersal of Stimulus dollars.  Journalist Ryan Lizza was given access to that memo, along with hundreds of pages of internal White House documents as part of the research behind a lengthy piece recently published in The New Yorker – “The Obama Memos: Barack Obama, Post-Partisan, Meets Washington Gridlock.”

James Pethokoukis, writing for the American Enterprise Blog, pored through the entire Summers memo (which is available for download) and discovered a number of interesting (yet unsurprising) things, specifically:

  • Campaign commitments (read: payoffs to loyal constituents) and green energy programs were made top priority items as Stimulus funds were dispersed
  • Obama’s economics team realized that his programs were much more costly than his campaign had claimed, and that his promises to reform and streamline existing programs would save far less money than advertised.  They were also worried about the impact of his new programs on deficit spending.  Still, the team plowed ahead with the Stimulus program without coming up with strategies to address any of these other problems.
  • The economic team’s assumptions about the severity of the recession, and the most likely pace of economic recovery, were grossly wrong.  (This is also discussed in another excellent article recently published in The Guardian.)  In the Administration’s defense, they obviously had no way of knowing how big a drag the Obamacare bill would be on hiring.
  • Another idea proposed by the economic team (but thankfully never implemented) was to introduce legislation that would allow courts to re-write mortgage loans for underwater mortgagees.   The team also acknowledged that a great deal of the destruction caused by the financial and real estate market meltdowns could have been avoided if government regulators had simply enforced the laws that were already on the books.
  • An IPAB (Independent Payment Advisory Board) or similar executive-level “health board,” which Sarah Palin deemed a ‘death panel,’ had always been part of the overall health care reform plan of the Obama Administration.  The Summers Memo admits that the government would have to struggle with “making tough decisions on the long-term budget” as it became more and more responsible for health care.

As I have previously contended, when stimulus is corrupted by politics and becomes little more than government subsidies for the pet projects and policy goals of the ruling party, it is doomed to fail.  Obviously the Obama Administration made no attempt to identify areas within the economy where consumers would most likely increase spending if more products or services were made readily available at a more competitive price – that’s how you are supposed to allocate STIMULUS dollars.

True ‘stimulus’ money is spent with the specific purpose of incentivizing private investment (more employees, more production/warehousing facilities, etc.) and, through the increased availability of desired products and services, spurring consumer spending.  The resulting increase in economic output causes a corresponding increase in earnings and therefore an increase in tax revenue, which is then used to recoup the money spent on the stimulus.  At least, that’s how it’s supposed to work in theory.

If you don’t follow the formula for stimulus, or your layouts do not spur additional growth or spending (either public or private) beyond routine necessities, then you do not have a stimulus.  All you have is a massively expensive subsidy program, financed by debt, with no forseeable way to sustain the subsidized activities once the subsidies run out.

In other words, you have Obamanomics.  Nice going, Mr. Summers.

Chicago Sun-Times Shows White Flag: No More Political Endorsements
Mitt Romney paid out 42% of 2011 income in taxes, charitable giving
  • jim_m

    Yes. The admin ALWAYS knew that the stimulus was a payoff to donors. 

    *The auto bailout was nothing more than a gift to the UAW. 
    *They knew long ahead of time that their support of “green energy” companies was a bad investment and that is why they asked Solyndra to postpone firing it’s employees until after the election in 2010. 
    *They knew that healthcare was going to be a drag on the economy and that is why they immediately started granting waivers to every from of the dems that they could find.
    *And they always knew that some unelected governement committe (ie “death panel”) would be deciding whether grandma got her cancer treatment or if junior was worthy of having his chldhood diseases treated. 

    ALWAYS they knew these things and they lied all the way. 

    Now we get the drip, drip, drip of disillusions lefties like Larry Summers coming out and telling us what we have known all along: that obama is little more than a corrupt keleptocrat and his socialist agenda is nothing more than a retread of policies rejected in Eastern Europe 20+ years ago.

    • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

      Millions of jobs saved with the GM bailout.

      The right’s insistence on letting the US auto industry die will haunt you throughout the next election.You guys tried to put a million Americans out of work just because most of them were union. For shame…

      • jim_m

        We kept on life support a moribund industry and did nothing to resolve the underlying problem which is the unsustainable union contracts, healthcare and pension plans.  We will have to do it all again.

        The auto bailout shafted investors and paid out a multi million dollar windfall for obama’s political support.

        A better long term solution would have been bankruptcy, which would have facilitated the capital and resource to be reallocated to other, healthier companies that could use it to actually grow a sound business.  If you knew anything about Detroit, it has been a disaster for jobs and the economy for decades.  Extending the disaster is not saving jobs in the long run.  It is just putting a bandaid on a major injury.

        PS  GM employs 91,000 people.  Even when extended to ancillary industries you will never reach even one million jobs saved.

        Idiot.

        • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

          Nice to see you’ve finally learned how to sign your name, Jim M. What a big boy! You’re doing an excellent job of being a 12 year old.

          And of course, as usual, you’re wrong.

          a contraction of the Detroit Three would result in direct and indirect job losses of 2.5 million to 3 million in 2009.

          :

          Hey look everybody, jim has been caught spreading bullshit again!

          • jim_m

            Link?  Data?  evidence that your block quote is something other than admin propaganda?

            Once again lacking.

            You don’t get to “Millions” of people out of work by a GM bankruptcy. (NOTE:  You said GM now you are saying “Big Three” and Ford never took bailout money so you are presuming that Ford needed a bailout to survive, which it most obviously did not.) 

            Whatever your source is it obviously neglects to include the fact that in any bankruptcy og GM its assets would be sold off and the most liekly outcome would have been the purchase of those assets by competitors.  Like I said, a BK would have allowed redistribution of capital in a more efficient manner, which would have lead to better job growth in the long run.

            With some estimates of the federal subsidy of the Chevy Volt reaching $250k per car I can think of a lot of better ways for us to be spending our money.

          • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

            right after you post a link supporting your data – then I’ll do the same.

            Or you can just google “number of people employed by the auto industry” you fathead, and find out that way.

            And if the big three support 3 million jobs, then GM’s gravity supports 1 million jobs.

          • jim_m

            see link below, or go learn how to google you moron.

          • jim_m

            OI found your BS source.  Here’s one explaining why it is bogus because it uses an outdated assessment of the industry.  It also explains how the notion of the auto industry being “responsible” for jobs was stretched to an absurd point.

            http://economix.blogs.nytimes.com/2008/11/17/how-many-jobs-depend-on-the-big-three/

          • jim_m

            BTW, even your apparent source says

            That said, even if they were to go into bankruptcy, many of their workers will continue working. 

            So while it says that millions would be unemployed it backs off the claim immediately by stating the obvious that in a BK not everyone would lose their job.

          • retired.military

            You idiot. Say GM went bankrupt. DO you think their customers would just disappear.  No. They would buy other cars like say umm Ford which took no bailout money.  Ford would then expand production to keep up with demand and you would have a company which makes money vs a company which is losing hand over fist.

          • Wild_Willie

            Stephen, I’ll always stand by Jim’s figures over the propaganda you swallow.  There is more avenues of info for you besides media matters and MSNBC. Check them out. I think idiot is a well placed word describing you. Spot on. ww

          • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

            Feel free to post data which shows I”m wrong. God knows Jim won’t find anything, so feel free.

            Oh wait, I”m telling the truth and you’re not.

            Well then, post a link to a right wing blog where a liar makes up data. Maybe Jim can provide some links to the bullshit he reads and swallows.

          • jim_m

            I’ll note that , while requested for a link you have so far refused to produce one.

            You are very reliable in refusing to produce links to support your assertions.

            You are quick to call others liars, but very slow to produce anything backing up your propaganda.

          • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

            Still waiting for your ink, Jim, then I’ll give you mine.

            Come on little fella – you can’t call for a link and not provide one of your own.

            Of course you can if you’re just making up BS, which is about all you do around here.

          • jim_m

            read the thead, dumbass.  I posted a link 20 minutes ago.

          • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

            You made the assertion.  You have the burden of proof.  How old are you, eleven?

          • jim_m

            Thanks,

            Here’s a link for Stephen: http://www.numberof.net/number-of-gm-employees-in-the-us/
            GM had 91,000 US employees pre-bailout.  They have 68,500 after.

            While their Wikipedia page claims their worldwide employment is 209,000 one must remember that they also manufacture Opel, Holden and Vauxhaul exclusively overseas and that they also have American brand manufacturing outside the US as well.

            You would have to assume that every employee of every company that did business with GM would be fired to get to 2.5 million jobs. 

            Chrysler employs about 51,000 people in the US.  You aren’t getting to a milllion jobs much less 2.5 to 3 with a total loss of all GM and Chrysler jobs.  Even with the ancillary industries you would have to say that for every GM and Chrysler job there are 18 to 21 more people employed exclusively supporting them.  Not gonna happen.  Even if that were true I would say it is even more argument for the reallocation of resources into more secure, long term profitable corporations.

          • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

            Poor little Jim. He’s in way over his head, as usual.

            JimM: “Even when extended to ancillary industries you will never reach even one million jobs saved.”

            And now widdleJimmy wants to ignore the “ancillary industries” and just count the direct jobs at GM.

            That’s dishonest Jim. We count all the jobs, not just the ones that suppoorts your bullshit position.

            ! million jobs, easy. It’s a fact Jim. You can lie all you want, but facts are facts.

          • jim_m

            You never posted a link!  I posted one demonstrating that I was correct on the number of GM employees and then I posted one to an NYT article saying how your source was a bunch of BS.

            I know, the NYT isn’t necessarily a reliable source, but I will accept their comparitively detailed analysis over your flat assertion.

          • jim_m

            Oh and Iwasn’t suggesting that we ignore the ancillary industries.  I was stating that even when we include them you cannot reach 2.5 to 3 million jobs.  Read the NYT link I posted. 

            You do know how to click on a link?  You never post one so I thougt I’d ask.

          • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

            You just provided a link which didn’t address the ancillary numbers whatsoever.

          • jim_m

            Quit complaining dumbass.  If you read the NYT article it does address those numbers. 

            And anyone who refuses to post a link supporting their claims should just STFU.

            Seriously WTF? The whole NYT article is devoted to debunking the claims on the number of jobs dependent upon the auto industry. Obviously you didn;t even read the article.

          • retired.military

            Ford is one of the big 3 and they didnt take bailouts. Meanwhile taxpayers continue to subside each Volt produced to the tune of thousands of dollars. 

      • 914

        Barry succeeded where you say the right tried You moron.

      • GarandFan

        Hahahahaha!  Keep drinking the Kool Aid!

        “Millions” of jobs ‘saved”?  Then how come the workforce declined by over FOUR MILLION after Barry came to office?

        WHY was unemployment OVER 8%.  WHY does it continue?

        • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

          Cause jobs saved don’t count as “unemployment” moron.

          • jim_m

            I defy you to show even one substantiated study showing how many jobs were saved.   By definition “saved” jobs are pure conjecture and the numbers are basically pulled out of the administration’s ass.

            Oh wait. You still haven’t posted a link to prove your earlier claim.

            Time to put up or STFU Stephen,

          • GarandFan

            He can’t.  Even Barry’s BULLSHITTERS have admitted as much.  The only thing ‘saved’ was government jobs, at the federal and state levels.  The next year the states expected another bailout, then the cuts started when no federal money was forthcoming.

            Guess Stevie-poo wouldn’t consider those as “formerly saved jobs”.

            And he still hasn’t mentioned the JOBS LOST since Barry became King.

          • jim_m

            I know he can’t.

            Just like he can’t back up his earlier claim.  He won’t post links to back his bs up because he doesn’t have them.  He just whines about what you post and then lies about it saying that it doesn’t address the issue, despite the fact that it directly debunks everything he claims.

            Seriously, I don’t think he even clicks through to check it out.

          • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

            Let me step in for Stephen and provide with this:

            http://www.politico.com/news/stories/1111/68965.html

            “CBO: Stimulus added up to 3.3M jobs”

            “The economy would have been in much worse shape without the 2009
            stimulus — which increased employment in the third quarter of this year
            by as many as 3.3 million full-time jobs, according to a report by the
            Congressional Budget Office.Read more: http://www.politico.com/news/stories/1111/68965.html#ixzz1kbr5hluM

          • herddog505

            Didn’t Barry tell us that unemployment wouldn’t go above 8.8% even without the stimulus?
            Why, yes he did!  According to this prodigy and all his genius advisors, unemployment EVEN WITHOUT porkulus was supposed to be around 6% by now.

            http://articles.businessinsider.com/2011-10-09/news/30259697_1_unemployment-rate-president-obama-stimulus-plan

            I realize that the left is desperate to forget this, desperate to pretend that Barry pulled us back from the brink (isn’t that how he likes to portray his actions?), but it ain’t so.

            Unemployment is slowly coming down, but this is mostly because millions of Americans have left the workforce and aren’t counted any more.  Hint: you don’t push “jobs programs” and umpteen more extensions of unemployment insurance if things are looking up.

            Barry didn’t create many jobs outside of government (this presupposes that Uncle Sugar can “create” any jobs at all).  At best, he prolonged some positions at the state and local level.  Trying to claim, “Well, things would have been soooo much worse!” is, frankly, dishonest.  Bush and his partisans might easily have engaged in the same thing: “Yeah, the markets tanked and unemployment soared in ’07 and ’08, but thanks to our heroic policies, it wasn’t as bad as it might have been.”

            Bah.

            It’s like being caught in bed with another woman and trying to claim, “Honey, cheer up!  It might have been TWO other women!”

          • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

            So you’re mad at Obama because his administration initially predicted things would be better by now – even though nonpartisan economists agree that the Obama administration’s efforts and policies have kept things from become much worse than they would have been.
            I just want to be clear about your position here.

          • herddog505

            jbnonpartisan economists agree that the Obama administration’s efforts and policies have kept things from become much worse than they would have been.

            That would be the same “nonpartisan economists” who helped Barry draft the stimulus and helped him craft his predictions that things would be roses by now.  Here’s a tip: when you’re neck-deep in sh*t, having “experts” tell you to be happy because “it could be worse” doesn’t count for all that much, especially when they told you that you wouldn’t be in this fix to start with.

            Again, the left is desperate to forget porkulus and especially Barry’s rosy predictions about how wonderful it would be, but when they aren’t allowed to, they have to resort to “it could have been worse!”

            Pathetic.

            Although I wish I could use that excuse in my job…

          • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

            That would be the same “nonpartisan economists” who helped Barry draft
            the stimulus and helped him craft his predictions that things would be
            roses by now.

            No. That would be nonpartisan economists NOT involved with creating the stimulus plan. Including the private firm Moody’s.

            If you’re actually interested in facts, read this:
            http://www.politifact.com/truth-o-meter/article/2010/feb/17/stimulus-report-card/

            Also, you should read their analysis of this “Blame-Obama-for-not-completely-fixing-Bush’s-disaster” notion:

            http://www.politifact.com/ohio/statements/2011/oct/13/john-boehner/john-boehner-says-obama-promised-stimulus-would-ke/

          • herddog505

            Oh, yes.  Politifact.  Yep, THAT’S an outfit I’m going to believe.

            Here’s the problem as described by the Heritage Foundation:

            The economic impact of the fiscal stimulus bill must be evaluated by projecting the economy without the stimulus bill and then introducing the fiscal stimulus to that same forecast. The [Council of Economic Advisors] report constructs and then analyzes a forecast of a downward spiraling economy. It runs a “what if” scenario in the wrong direction. Rather than analyzing the economic impact of the fiscal stimulus on a benchmark forecast, the CEA constructs a forecast and benchmarks it to what actually occurred.

            http://www.heritage.org/research/reports/2010/02/did-the-stimulus-create-jobs-white-house-economic-report-is-unclear

            In short, Barry and his gang made a projection of the economy with and without porkulus to sell that hideously expensive pile of crap.  “If we don’t do it, look how TERRIBLE things will be!”  This was much ballyhooed as the salvation to our problems, though a few economists like Crazy Paulie Krugman thought that porkulus didn’t go far enough.  This led to the chart that I posted above and others like it.

            But things didn’t work out, so Barry was forced to (ahem) come up with a NEW projection, one much worse that the orginal.  Scored against that doomsday scenario, OF COURSE porkulus “worked”.  That, of course, is the dirty little secret about CBO: it can only score what it’s given.  Garbage in, garbage out.

            At any rate, even CBO admits that they don’t know whether it “worked” because they don’t know what would have happened in it’s absence:

            “Data on actual output and employment during the period since ARRA’s enactment are not as helpful in determining ARRA’s economic effects as might be supposed, because isolating the effects would require knowing what path the economy would have taken in the absence of the law.”

            http://www.marketwatch.com/story/cbo-fights-back-at-stimulus-critics-2010-02-23

            In other words, CBO admits that they haven’t got a crystal ball.

            What we DO know is that Barry blew through over $800B in “stimulus” cash, much of which went nobody knows where.  In return, he claims to have “created or saved” a few million jobs (let’s be generaous and say 4 million: that’s only $200,000 / job; what a deal!).  This claim flies in the face of the unemployment rate, the shrinking labor utilization rate, and other economic indicators that tell us that things have NOT improved very much.  His (and your) argument?

            “It would have been even worse!”

            So much for the “reality-based community”.  Say, while you guys are at it, why not claim that Barry stopped the world from coming to the end?  Or, if that’s too much of a reach even for you, maybe you can claim that unemployment would have been 50% without porkulus.  Be daring: when you’re making up reality, the sky’s the limit.

          • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

            But I’m not talking about just the CBO, sorry. I’m talking about other economists as well.

            So you refuse to “believe” Politico?

            IF Politico is so “unbelievable”, then why don’t you follow their sources and show how wrong they are?

            Because the hypothetical nitpicking proposed by the Heritage Foundation does not at all apply to the independent economists I mentioned – such as those at Moody’s.

            And yet, those independent non-government experts reached the same conclusions.

            How do you explain that?

            Do you believe independent economic experts at Moody’s did NOT say what Politico said?

            Because I would think the simplest explanation is, they’re right unless you can show specific things wrong with their data. With actual evidence, and not mere hypotheticals.

            Occam’s razor.

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

            Where is your evidence?

        • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

          Oh, come on. You know the economy went to crap before Obama was in office. This isn’t ancient history. We all lived through it just a few years ago.

          Blaming Obama because he didn’t immediately fix the economy with magic powers, and instead took a while to put us back on the right track, is ridiculous.

          8% is better than 10%. Right?

          So pardon me if I go with the impartial CBO and impartial non-right-wing economists on this one.

          • GarandFan

            I’m well aware of when the economy started going south.  And who was in the White House and who was running the Congress.  Sorry to upset you Pookie, I’m merely holding THE CHOSEN ONE to what he said.  One would assume that “The Smartest Man in the World” would know what he was talking about.  Wouldn’t one?

            Or just maybe The Obamassiah is just a hack pol from Chicago.

          • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

            Don’t worry Poopsie, that doesn’t upset me.

            Please show me the quote that you claim you’re holding Obama too.

      • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

        LIAR.  Bankruptcy doesn’t close a company down, dumbass.  All Obama’s intervention in the legal process did was steal from the bondholders, stockholders, injured persons holding judgements, and other creditors and give the money to the UAW. 

        Whatever few jobs which were saved at inefficient factories were more than made up for by the reduction in new growth because of the displacement of resources.  Take an Econ class, moron.

        • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

          You’re a liar, if you’re implying that GM going under means those workers would not have faced disaster.

          What company would they be making cars for?? What company would even buy and retool those factories? How would this have happened without years of restructuring, during which all those workers would be unemployed? And all the businesses depending on the company AND those workers all be struggling also?

          Do you think when a company goes down, another company just immediately swoops in and the workers don’t even miss a week?

          I mean, where do you even get this notion?

  • herddog505

    So much for the post-partisan intellectual president who will get politics out of decision-making, eh?

    But I think that we can all lament that Barry wasn’t around a century ago.  Think of all the horse-and-buggy and oil lamp jobs that he could have saved or created…

  • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

    He’s a politican? What a surprise.

    You clowns aren’t suggesting the GWB or Mitt The Flip or Newt the Magnificent would do any differently, are you?

    Of course not. That would be lying, and conservatives never lie…

    • jim_m

      Larry Sumers is no conservative.  I guess by your definition then we can assume that he wasn’t lying.

      • http://pulse.yahoo.com/_R7FMXY3DZP7JF7SGSPIOSLLXNE Stephen

        Poor Jim, thinking is so hard for you.

        Conservatives never lie, read it again, Jim, and ask your mom if there are big words you don’t understand.

  • Sky__Captain

    Would someone please use Olaf on our resident troll?

    Please?

    The name-calling is a very lame debating tactic.

    • jim_m

      Name calling is one thing. Making repeated claims and never even attempting to back them up whilst calling names and calling people liars is another.

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

      Meh.  He brings sufficient discredit upon his side.  Even our other trolls don’t support him.

      • Jwb10001

        Every village should have an idiot

        • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

          In which case we have a superabundance.

Optimization WordPress Plugins & Solutions by W3 EDGE