Brute Force Policy

Three years ago, my stepdaughter developed asthma-like symptoms, but that treatment didn't work.  She felt good enough to fly back to Atlanta, but had to be carried off the plane.  Some of the best pulmonary specialists in the country couldn't figure out what she had until a full-body MRI showed a blood clot in her lung.  They gave her blood thinners and fully expected them to work.  The next day's MRI revealed several more blood clots.  They didn't wait for a better diagnosis, they threw everthing they had at it -- different and much higher dosage intravenous blood thinners and a catheter into her heart to prevent any clots from going beyond.  For a day or two, we weren't sure if she was going to survive.  She did thanks to brute force methods.

They don't teach brute force policy methods in economics grad school.  Professors rarely teach the insufficiency of their theories and applied research.  Politicians are more willing to engage in brute force methods in wars and in depressions and in other emergencies, but their instincts to pay back supporters along the way can prove very wasteful and burden future generations.

Now we're caught up in a debate over whether to borrow $780 b. or $816 b. or much more or much less to throw cash at consumers and at state governments and at road building in hope that this will arrest an alarming drop in economic activity.  My clients ask me every day how much stimulus I see in the various versions of H.R.1, the Economic Recovery and Reinvestment Act.  My answer: somewhere between 45% and 65% may get spent in the next 18 months, depending upon what you assume about how quickly those recipients will spend it.  Is there waste in this?  Of course there is.  That's not the issue.  When you're fighting for your life, you use brute force methods, no matter how wasteful.  Can we minimize some of this waste?  Of course we can.  Will we?  That depends upon our political leaders rising above old ways.  Are they?  Not from the sound of this week's debate on the Senate floor and of this morning's talk shows.  The Democrats still love to spend, and the Republicans still love to cut taxes.

President Obama is pushing a post-partisan, pick the best ideas, and get it done brute force policy of at least $800 b., and he's getting slammed behind the scenes by Democrats without picking up much Republican support for his trouble.  He's being called naive to his face, and both parties are posturing for the next election as if the voters will return every incumbent despite an unemployment rate that will rocket over 10% within the next six months.  This is the Washington I know and love, even when it makes me sick to watch it.

I'm glad President Obama and his family have repaired to Camp David as I write this.  It's important to keep a clear head in times like these.  Next Thursday, President Obama will travel to Springfield, Illinois to celebrate Abraham Lincoln's 200th birthday.  What a great move.  Anyone who knows Lincoln knows he suffered merciless torment from just about everyone in Washington because he didn't look the part, because he had no formal education, and because he kept switching generals and policies without seeming to have any coherent plan to win on the battlefield or to sue for peace.  Lincoln was called a dictator for suspending habeous corpus and for spending money without congressional appropriations and for backing a general who occasionally drank to much.  Of course, now we forget all that and remember only that Lincoln saved the Union and emancipated the slaves.  Lincoln didn't have the answers, but he used brute force methods and kept applying them until something worked.

President Obama is quite right that we need at least an $800 b. stimulus bill right now, even if it's not perfect.  He'll probably have to ask for more funding for TARP later this year.  He may have a tough time getting it.  He may have to take over some very large banks.  He will suffer a lot of criticism and even more second-guessing, but eventually, we'll look back and realize his brute force methods worked better than all of our bright ideas and criticism and second-guessing.