Jewish World Review Jan. 16, 2002 / 3 Shevat, 5762
http://www.NewsAndOpinion.com -- THE greatest success yet this session of Congress has been its failure to pass an economic stimulus bill.
Just look at the results: The Dow Jones is hovering around the psychologically defining 10,000 mark, and confidence is back up with it. The business news is cheering again: ``Consumer confidence soars to 93.7/December index led by 6.4 percent rise in new home sales, other big-ticket items.''
Just suppose you'd been reading those headlines after Congress had produced an economic stimulus package back in the fall. Its action would have been hailed as a great success, at least before the inflationary impact hit. So why not congratulate Congress on its inaction? It seems to be working.
It's just remarkable what an economy can do if left alone, as the country should have discovered during the Eisenhower Era. One suspects the real reason for the economic rebound, besides the size and health of the American economy, is the successful prosecution of the war in Afghanistan.
Imagine the Vietnam Era headlines if this country had got bogged down in another indecisive land war in Asia, and the country was looking at an endless drain of blood and treasure. In war there is no substitute for victory, an American general famously said. There's no substitute for it in peace, either.
Day by day the country is slowly recovering, and that includes its economy. For which let us thank the men and women of the armed forces of the United States -- and those leaders who let them do their job without undue interference.
The contrast has seldom been greater between the effectiveness of the country's military and the ineffectiveness of those politicians who saw the war as a splendid opportunity to promote their favorite interests. And which special interest, from Amtrak to the tourism industry, has not painted its needs as essential to national security? Seldom have ``defense'' bills been so laden with pork:
The speaker of the House, Dennis Hastert, rammed through a $30 billion subsidy for Boeing Aircraft, which by chance had just moved to his state. Phil Gramm, whose candor is going to be missed in the House no matter how much it grated, called the Boeing provision the grabbiest piece of work he'd seen in his 22-year political career, which says a lot.
Eager to take credit for how much advantage they'd taken of the country, congressmen like Patrick Kennedy have been firing off letters to the home folks bragging about how many goodies they've been able to grab for their districts in the midst of this emergency. (In his case, he'd grabbed $90 million worth.)
To quote David Brooks in the Weekly Standard: ``Is there a starker contrast than the one between the glorious triumph of American arms abroad and the grubby selfishness of our politics at home? While American soldiers, seamen, and pilots risk their lives in and around Afghanistan, while the American people rally around their nation's cause with a new sense of seriousness, the atmosphere of inspired patriotism leaves no practical mark on Capitol Hill. There, the season of war has been a golden season for lobbyists ... .'' And, soon enough, for partisan wrangling. It's already begun.
Economic stimulus? What's being proposed sounds more like an economic grab bag. This proposal wouldn't just repeal the minimum tax on corporations, but refund the minimum tax that the biggest ones have paid over the past 15 years. The folks left out of the last round of tax rebates would finally get theirs, but businesses would get all sorts of dubious write-offs.
All in all, it's estimated that this bill would slash government revenues by almost $100 billion this year and $159 billion over 10 years, just when the country needs to pay for a war and rebuild its defenses.
Only the proposed tax cuts on capital gains might benefit the economy in any significant way over the long run. (No country ever went broke attracting capital, as the salutary effects of the Kennedy and Reagan tax cuts should have taught us.) The rest of this package varies between the mildly beneficial and the utterly wasteful. No wonder that the failure to pass it has been such a success. In economics as in medicine, the first rule should be: Do no harm.
There are times when a do-nothing Congress can be a great asset. Because doing nothing is a vast improvement over doing everything and then some.
Yes, but what will George W. Bush have left to propose in his State of the Union address if not a wide-ranging economic stimulus? He's got to say something when he gets up to Capitol Hill. I'd suggest he take his cue from Dwight D. Eisenhower, that great duffer on and off the golf course. When asked if his administration lacked the courage to act in the face of a recession, the old general sagely replied:
``Listen, there is no courage or any extra courage that I know of to find out the right thing to do. Now, it is not only necessary to do the right thing, but to do it in the right way and the only problem you have is what is the right thing to do and what is the right way to do it. That is the problem. But this economy of ours is not so simple that it obeys to the opinion of bias or the pronouncements of any particular individual, even to the president. This is an economy that is made up of 173 million people, and it reflects their desires, they're ready to buy, they're ready to spend. It is a thing that is too complex and too big to be affected adversely or advantageously just by a few words or any particular -- say, a little of this and that, or even a panacea so alleged ... .''
There, that ought to clear everything