The wrong kind of stimulus

In order to make any change happen in a democracy, you must create a tidal wave of interest toward a simplified, symbolic version of that change.

Right now, Republicans are telling you that Democrats are trying to wreck the country with their “stimulus” package — and stimulus has become a dirty word.

Democrats fire back that their proposal isn’t some stimulus package, it’s a “jobs package,” which sounds a lot better.

What’s the true issue about?

First hint: stimulus packages aren’t all the same, and they aren’t all bad.

At his pen and pad briefing with reporters on Capitol Hill on Tuesday, a journalist asked: “Will Democrats accept — basically Leader Cantor told us yesterday he doesn’t, he and House Republicans can’t accept most of the stimulus spending, so he’s more looking at reforms in the tax packages that the president has proposed. Do you think that if at the end of the day that is what Congress can pass, is that acceptable to you and to the House Democrats?”

Hoyer said, “no,” adding that “the fact is that Republicans continue to focus on their tax [cut] proposals; I don’t think they’ve changed since 1981, when I came to Congress.” – CNS

Second hint: both sides are offering you a stimulus package. The Democratic one works by taking in more taxes, and then spending it on citizens; the Republican one works by cutting taxes.

Both dump money into the economy. So what’s the difference?

Democratic packages take money from the middle class and above, and dump it into those below the middle class.

Republican packages cut taxes for the middle class and above, and the corporations in the fastest-growing areas of our economy.

In other words, the Democratic plan is “wealth redistribution,” as all leftist plans — on topics as diverse as global warming, education and finance reform — tend to be.

The Republican plan is a typical conservative idea, which is “trickle down” economics, or dumping money into the sectors of the economy who are most likely to spend it in constructive ways.

And in a first for, a Biblical allusionTM:

For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods.

And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey.

Then he that had received the five talents went and traded with the same, and made them other five talents.

And likewise he that had received two, he also gained other two.

But he that had received one went and digged in the earth, and hid his lord’s money.

After a long time the lord of those servants cometh, and reckoneth with them.

And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more.

His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.

He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them.

His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.

Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed:

And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine.

His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed:

Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury.

Take therefore the talent from him, and give it unto him which hath ten talents.

For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.

And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth. – Bible Gateway

I picked the Bible because it’s an ancient book, and I like this parable. What’s going on here?

A man tells his servants to do something useful with the equal amounts of money he gave them. Some were able to make more money, where others had no such ability.

The metaphysical point mirrors the practical point: some are more able than others and if we give them resources, they make more for all of us.

The Republican plan is to give more money to the servants (of the public, we hope) who are able to make more money.

The Democratic plan is to hand out the money so that it goes directly into a dead-end financial trail. It doesn’t make more money. It makes grocery stores, liquor stores, check cashing places, convenience stores and creditors happy, but it doesn’t spread the wealth to the rest of us. And after sixty years of this crazy policy, we have more people than ever before.

Economic growth and job creation are top priorities for all American families as the unemployment rate hovers above 9 percent nationwide. When one considers that that figure jumps more than 16 percent for black communities—not to mention more than 40 percent for young black men in many communities—it becomes painfully clear that job creation is not enough.

We need to spur job creation and fight employment discrimination at the same time.

Fortunately, the President understands, and offered the sort of “both/and” plan we need more of in America.

The President recognized that some parts of the country have been disproportionately impacted by the unemployment crisis – and that those areas should receive special consideration for tax incentives and stimulus funding. This means that hard-hit urban areas like Detroit and Cleveland, along with countless rural communities from coast to coast, will receive the assistance they need. – NAACP

When you hear people complaining about the stimulus plan, they’re not complaining about the idea of stimulus, which is essential — they’re complaining that we’re taking from those who make more money, and giving to those who dead-end the money and spend it on dead-end consumer goods.

If you had five billion dollars, and you handed it out to large corporations and the upper middle class, what would happen?

They’d spend it on salaries, distribute it as stock dividends, inventing new technologies, enhancing existing equipment, or buying business-to-business goods that help them make more money. That five billion could end up being fifteen billion.

If you hand out five billion dollars to the poor, what happens? Well… the creditors get paid for a month or two, and there are a few extra parties, but not much else.

Your five billion dollars is now worth less than five billion dollars, because you starved the healthiest parts of your economy in order to throw more money at the under-performers.

This is like evolution in reverse. Forget saying that conservatives oppose evolution; liberals oppose evolution. They deny the theory, except on paper, that nature made better things by throwing more resources at the best it had so far.

If you wonder why the left is always bringing out highly symbolic issues like race, poverty, gender bias, sexism, etc., wonder no more — these are justifications for their desire for wealth redistribution.

Obama and the Democratic party no more care about poor black people than they do stray cats. They just want an issue to rally all the angry people around, and to give them someone else to blame for their own problems, then hand out pitchforks and seize power!

Funny, that’s just how the French and Russian revolutions happened.

13 Responses to “The wrong kind of stimulus”

  1. Slava M. says:

    What? No, the poor people deserve a handout because they’re oppressed right now, they can’t get a break! Whitey be holdin’ them down. Many budding geniuses and future engineers are among their ranks.

  2. Josaphine says:

    This is just brilliant, Brett. I am forwarding it to everyone I know.

  3. Cantillon says:

    Nice piece.

    Honestly though, stimulus is the last thing that is required right now. Consumption has been fine, but hiring and capex have been depressed. One major reason has been entrepreneurs’ uncertainty over tax rates and the future burden of regulation. Cutting taxes now when arithmetic implies they are likely to be raised in the future is better than doing nothing, but it isn’t the thing to focus on this second. Cutting spending aggressively (NOW, not theoretical cuts years in the future) would help ameliorate this concern on both fronts. There would no doubt be a couple of weak quarters, but the market economy is much more self-healing than our social engineers seem to realize. There were some special features of the downturn of 1920-21 (there always are!) but that episode is worth studying – despite major cuts to government spending, that episode set the foundation for many years of strong growth.

  4. Nicholas Marville says:

    You are saying that cutting these taxes will send money into the sections of the economy which are most productive.

    Which means more hamburger stands and ‘filler-jobs’ because these days we have service-based economies that don’t actually produce stuff or make stuff. It’s only going to result in hypish shit such as the newest ping-phone with a Hillary Duff welcoming screen or whatever, because ‘the proles’ are the no1. consumer of all those productive streams – although this means they are putting themselves into pawn shops.

    • Nicholas Marville says:

      All this ‘booming business sectors’ are actually the trash farms which ruin our countries – cute gadgets made by men hired on temporary contracts. It’s ONLY flourishing because ‘the proles’ are putting themselves into debts to buy all that crap.

      If you want a sane society you’ll want real roles, real commitment, real craftmanship.

      • Nicholas Marville says:

        Then again I’m always for less taxes – because it implies less feeding throughs for bureaucrats.

  5. slava m. says:

    whatever the problem you see with the hello kitty screensaver industry, throwing cash on the opposite end of the stick is guaranteed to be a waste because that section lacks the capacity for productive endeavor; to design a virtual pet, you need a lot of brain power.

  6. […] Stephens, at, describes the Obama Stimulus with a Biblical Allusion to The Parable of The Talents. Brett argues convincingly that this story […]

  7. Anthony DuClare says:

    Great post as usual, Brett.

    Regarding the parable of the talents: the minority of Roman Catholics who are seriously into liberation theology turn it on its head, interpreting the rich man as an evildoer who steals from the labor of others, and the unprofitable servant as some kind of first-century whistle-blower. It really goes to show that liberalism can be so insidious that even centuries of traditional interpretation, the power of the Magisterium, and the plainly obvious words on the page are powerless against it.

  8. LuxLibertas says:

    Unfortunately the government is not a competent investor, regardless of whether the capital flows to the lower class, preferred corporations, or defaulting banks. Malinvestment occurs frequently. Large companies that defraud their customers are shielded from liability, and their books artificially pumped with the coffers of the state. One cannot substitute the organic flow of market exchange with a command economy, and (as I learned from your site) one cannot have responsible capitalism without a strong culture.

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>