Archive for the ‘Public Opinion’ Category

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More Public Opinion Fail

Thursday, October 7th, 2010

While I’m on the subject of stupid views widely held by the public, I might as well include attitudes toward the stimulus bill that Obama signed shortly after taking office.

Recently a government report concluded that money from the stimulus bill was well spent:

By the end of September, the administration had spent 70 percent of the act’s original $787 billion, which met a White House goal of quickly pumping money into the nation’s ravaged economy, the report says. The administration also met nearly a dozen deadlines set by Congress for getting money out the door…

Meanwhile, lower-than-anticipated costs for some projects have permitted the administration to stretch stimulus money further than expected, financing an additional 3,000 projects, according to the report…”Certainly, the fraud and waste element has been smaller than I think anything anybody anticipated,” said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan watchdog group.

…An independent board established to provide oversight has received just 3,806 complaints — less than 2 percent of more than 200,000 awards. Prosecutors have initiated 424 criminal investigations, representing 0.2 percent of all awards. Typically, 5 to 7 percent of government contracts attract complaints, [Jared] Bernstein said.

The Congressional Budget Office reports that the stimulus has created 3.5 million jobs and kept unemployment about 1 to 2 percent lower than it otherwise would have been with very little waste or excessive delay.

This is what well-managed government looks like. Of course it was too small to produce real growth but getting a larger bill through Congress would have been impossible.

But does the public care about well-managed government?

Apparently not. As Kevin Drum writes:

Unfortunately, it’s also a testament to how little most people care about good policy and competent execution. As near as I can tell, it’s practically conventional wisdom these days that the stimulus package was a complete bust—and all because the Obama administration initially made a lousy projection about the future course of the recession and suggested that the stimulus package would reduce unemployment to 8 percent. If their forecast of the depth of the recession had been correct and they’d predicted, say, 11.5 percent unemployment without a stimulus package and 10 percent with it—which is what happened—elite opinion about the stimulus would probably be completely different.

So there you have it. Good policy and good execution gets you bubkes. All it takes is one wrong forecast number to wipe it all out. Welcome to the real world.

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Posted in Economics, Governance, Public Opinion | No Comments »

Befuddlement Over Reactions to TARP

Wednesday, October 6th, 2010

It is a matter of enduring befuddlement why TARP, the legislation that rescued the banks and other financial institutions, remains unpopular.

Although it is appropriate to question the fairness of a program that rescued wealthy bankers and not homeowners, nevertheless the TARP programs were largely successful in accomplishing their task without very little costs to taxpayers.

Even as voters rage and candidates put up ads against government bailouts, the reviled mother of them all — the $700 billion lifeline to banks, insurance and auto companies — will expire after Sunday at a fraction of that cost, and could conceivably earn taxpayers a profit.

A final accounting of the government’s full range of interventions in the economy, including the bailouts of the mortgage finance giants Fannie Mae and Freddie Mac, is years off and will most likely remain controversial and potentially costly.

But the once-unthinkable possibility that the $700 billion Troubled Asset Relief Program could end up costing far less, or even nothing, became more likely on Thursday with the news that the government had negotiated a plan with the American International Group to begin repaying taxpayers.

Two years ago, many assumed that the hundreds of millions of dollars authorized to be spent to rescue Wall St. would disappear. But now it appears likely that the whole program will cost nothing and the public may actually make money on it.

Of course, we almost certainly won’t hear anyone from the administration boasting about these encouraging results, because public revulsion for TARP is unrivaled in our discourse. Indeed, the word “bailout” has managed to become synonymous with “evil,” so much so that nearly every policy debate involves participants trying to figure out a way to characterize the other side’s position as a “bailout” to someone.

Brian A. Bethune, the chief financial economist in the United States for IHS/Global Insight, called the program over all “a tremendous success.” Another industry insider said that TARP “is the best federal program of any real size to be despised by the public like this.”

It is estimated that letting the banks fail would have increased unemployment to at least 16% if not more.

As Matt Yglesias wrote:

Do you think letting the banks fail would have had zero disruptive impact on the economy? None whatsoever? What other programs can you name that garnered support from Nancy Pelosi and George W Bush, helped people millions of people, and had a negative cost to the government? And yet people think it’s horrible, in part because the public sphere has utterly failed to defend it.

That’s a problem, in part because the early days of TARP were a huge success for the public sphere…. It became a lost opportunity for ideological instruction. Instead it’s become a moment of anti-instruction, which people think has demonstrated the lesson that the government consists of nothing but corrupt giveaways. It makes me sad. When it was first proposed, I didn’t understand this issue correctly. But in the ensuing two years, I’ve learned more about it and improved my understanding. The public as a whole, however, as just gotten itself more confused.

It doesn’t take much to get the public confused these days.

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The Enthusiasm Gap

Thursday, September 23rd, 2010

Much has been made in the political press about the enthusiasm gap that separates Republicans and Democrats. Registered Democrats outnumber registered Republicans but Republicans are much more enthusiastic about voting this November than Democrats are, so Republicans are likely to pick up seats in the House and Senate.

There are lots of reasons for this enthusiasm gap. The party in power seldom does well in off-year elections in part because it is much easier to get enthusiastic about being an angry critic than it is to defend the hard slog of actually governing. But I think there is something to the view that part of the enthusiasm gap is explained by Obama’s failure to articulate progressive values.

Robert Reich provides a precise example of this failure:

Why is there an enthusiasm gap? Let me illustrate.

Today (Monday) at a “town hall” sponsored by CNBC in Washington, the President took questions about the economy. When a hedge-fund manager complained that Wall Street executives “feel like we’ve been whacked with a stick” by the administration, Obama said most of his critics think he’s been too soft on the Street.

He noted he still hasn’t been able to end the practice of taxing some hedge fund and private-equity earnings at the capital-gains rates rather than the higher income-tax rates. “The notion that somehow me saying maybe you should be taxed more like your secretary when you’re pulling home a billion dollars…a year I don’t think is me being extremist or anti-business.”

Good as far as he went. But that’s as far as he was willing to go. It was a golden opportunity for Obama to connect the dots — to make the case that

(1) super-rich financiers on Wall Street and top corporate executives have grown even richer than they were before the Great Recession, even though most Americans are getting poorer or losing their jobs and homes and savings, and more Americans are in poverty.

(2) Yet the lobbyists for the financiers and top corporate executives, and their Republican allies have blocked or tried to block every effort of the Administration to widen the circle of prosperity, including enacting a major jobs program, providing major relief for mortgage holders who are under water, helping working families afford college for their kids, making sure states and cities have enough money to pay our classroom teachers, and cutting taxes on average working people.

(3) They almost scuttled the effort to make sure health care would be affordable to average Americans.

(4) The super-rich say the nation can’t afford any of this because of budget deficits. Yet at the same time their platoons of lobbyists are fighting off efforts to treat their income as taxable earnings rather than capital gains. So last year the 400 richest families in America, with an average income of $300 million each, were taxed at an average rate of only 17 percent. That’s the same tax rate paid by a family earning $30,000.

(5) And they’re fighting off efforts to end the temporary Bush tax cuts. If they’re successful, the richest 1 percent of Americans will get a windfall of $36 billion next year. Millionaire families will avoid paying $31 billion in taxes. Over ten years, they’d avoid paying $700 billion.

(6) And they’re fighting off efforts to restore the estate tax, which only applies to the top 2 percent of Americans, and which has been in effect since Abraham Lincoln introduced it to help finance the Civil War. How do we afford national defense if the richest and most privileged Americans won’t pay their fair share?

(7) Wealth and power in this country are so distorted that the top 25 hedge-fund managers each earned an average of $1 billion last year. $1 billion would support 20,000 classroom teachers. Yet who contributes more to this country — a hedge-fund manager or a teacher?

But he didn’t.

Instead, he challenged tea-party activists to come up with specific spending cuts. “It’s not enough just to say, ‘Get control of spending.’ I think it’s important for you to say, you know, I’m willing to cut veterans’ benefits, or I’m willing to cut Medicare or Social Security benefits, or I’m willing to see taxes go up.”

Obama has done a fine job of getting progressive legislation enacted. But he has not played the role of educator-in-chief. The country has become more conservative on his watch and he bears some of the responsibility for that. But that is not a reason to refuse to vote in the November elections.

Democratic politicians need to acquire a spine, but so do some of their supporters.

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Posted in Future of Liberalism, Public Opinion, Uncategorized | No Comments »

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