On the one hand, I'm mildly disappointed in Obama -- not so much for what he's trying to do, as for being tactically clumsy about it. He was very transparent about his intent to include some of his long-term spending goals in the stimulus package, which in a strategic sense is admirable. Problem is, since this *is* supposed to be an emergency-panic stimulus, anything that doesn't provide extremely immediate relief is arguably inappropriate, so he gave his political enemies a great big wedge issue to hammer him on. It feels very much like he was expecting, if not a honeymoon per se, at least for the Republicans to forego the usual partisan bickering and give his ideas a chance; in the current environment, that was naive.
That said, if I'm a little disappointed in him, I'm appalled by most of the Republicans, whose grandstanding and hypocrisy goes way beyond even their own norms. Hammering the plan for not being immediate and stimulative enough, and then immediately yelling "Tax Cuts! Tax Cuts!", is just galling. Every middle-ground economist I can find agrees that most tax cuts provide relatively weak stimulus, and are an inappropriate way to attack a situation like this. (With one or two *very* specific exceptions, but they aren't focusing on those exceptions.) Mostly, it just illustrates how intellectually bankrupt the Republicans are right now -- instead of hitting back with ideas that actually make sense, they're simply returning to the old well, and being even more nakedly opportunistic than the Democrats.
More than anything, though, I find myself fed up with economic religion. I heard a partial interview the other day with a Cato Institute economist, who was basically saying that Keynesianism was laughably washed up and discredited. But that's only half-true: Keynesian *religion* -- the grossly exaggerated version that says the government can micro-manage and stabilize the economy -- was entirely discredited a couple of decades ago. But the underlying idea that spending can act as essentially a shot of adrenaline -- a blunt but effective tool to revive in a crisis -- still holds some potential.
And on the flip side, I think that market religion -- the notion that the markets always know best, that lower taxes will always make the economy stronger, and that freer markets and less regulation are always better -- has been just as clearly discredited now as Keynesian religion was in the 80's. And for the same reason: too many people took a fundamentally reasonable economic idea, and inflated it into a fundamentalist religion that was a shallow mockery of that idea.
These things are *tools*, folks. Government is a tool. Markets are a tool. Regulation is a tool. Taxes are a tool. Spending is a tool. They are not the be-all and end-all, and no one of them is the solution to every problem. The economy (and the country, and the world) is a gigantic dynamic system, with lots of competing forces and lots of feedback, and it requires all of these tools in order to stay in balance.
So the next time some politician claims that there is one simple way to make things work right, ask yourself whether he's doing so as a student of these tools, or simply as a preacher who is trying to over-sell one of them. At this point, I'd say that the Republicans are almost entirely the latter, just as the Democrats were back in the 70s. We need much less of that, and much more recognition that you have to use *all* of these tools in balance if you want a healthy economy. There's room for reasonable disagreement about what the balance point should be, but the first step is to stop worshipping the idols. The Democrats have mostly gotten that clue; the Republicans need to do so...