Saturday, November 22, 2008

Massive deficit spending? Oh, hell yeah.

Having watched Obama's weekly YouTube address (something I don't plan on doing every week, as much as I like him), I'm pretty convinced that there really is going to be a very New Dealish public works program at the top of the agenda. This is different than when he was saying it during the debates, where who among us doesn't support Green Collar Jobs (Clinton's TM, actually). He's on the hook for one now. There has to be what looks like more or less a plan to employ 2.5 million people building schools and bridges and solar installations and such. That's not something that can be readily climbed down from, given the scrutiny he's been getting.

Late this week Floyd Norris, in a column which was bad for multiple reasons, scolded Obama for resigning his Senate seat and failing to craft a "bipartisan stimulus package that Bush could sign," saying he "missed an opportunity to exert leadership." And because it's not permissable to point out that George W. Bush is still very much president and maybe he shouldn't be taking so many pictures with women's college basketball teams or whatever they have him doing, this "It's on Obama now" meme has gained traction. So his coming out today with the 2.5 million jobs figure and the 2011 deadline that falls comfortably within his first term is a substantial ante.

Politically, there shouldn't be that much resistance. It should be very popular. It will be interesting to see what the intersection is, if any, between the future of the Big Three and the infrastructure program. I think that could be a nice job-and-face-saving way of winding down some unprofitable companies.

But however the thing turns out, I think it's definitely a good idea. The alternative prospect, of John McCain in office trying to cut non-defense government spending is chilling. Also, Obama's reported selection of Tim Geithner makes me happy as a (maybe the) big fan of the much-maligned financial bailouts. One reason the government should be comfortable borrowing even more than it already has is that everyone still thinks we're good for it. The US government's cost of borrowing is the yield on Treasury bills, and it hasn't been this low since the 1950s. Rather incredibly, we're still a safe haven for capital.

For all the applause (or hand wringing) about the Clinton, ex-Clintonites and Sensible Centrists populating his administration, this is a strong signal that Obama is not going to worry too much about prudish notions of "fiscal responsibility." He's going to run the FDR playbook, or as Rahm put it "throw long and deep." Here's hoping.

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