The Thirty Days: An exercise in improvisation
FDR had his First Hundred Days. Now the new president seeks to top that ambitious time frame to achieve whatever new New Deal he has in the works. Call it The Thirty Days… and they're taking place before he even takes office.
Think about it. He wants a new "stimulus" bill on his desk ready to sign as soon as he hangs up his coat in the Oval Office the afternoon of January 20. The new Congress is sworn in January 6. So basically, the bill has to be ready to go that day. You have to allow sufficient time for Congresscritters to Christmas-tree the bill with whatever subsidies, tax breaks and favors they want to throw in for their favored constituencies.
When he made his first major economic appointments yesterday, he told them to start putting together recommendations immediately. "That work starts today, because the truth is, we don't have a minute to waste."
So the clock started ticking yesterday, November 24. Figure the bill has to be drafted by December 23 so everyone can head home on Christmas Eve for a break through the New Year. So we're talking about The Thirty Days.
That's 30 days not only to figure out a "stimulus," but to achieve any number of other objectives in the bargain. After all, extending unemployment benefits and the like will be only a small part of the picture if we're talking about a $700 billion bill. As the center-left Josh Marshall puts it, "Clearly to spend that kind of money you need to fund programs that do more than inject money directly into the economy. You need to fund major new programs that will likely shape the economic direction of the country for years, perhaps decades into the future — major spending on infrastructure, laying the cornerstones of a green energy economy and more."
Thirty days to figure out what gets spent on roads and bridges, what gets spent on water pipelines, what gets spent on solar and wind power, what gets spent on whatever is supposed to replace petroleum-powered cars, trains, planes, and ships. And so on. In 30 days.
You see where this is going. Of necessity, there's an awful lot of improvisation going on here, a lot of making it up as they go along.
Alas that's already been Hank Paulson's MO throughout this crisis. A few weeks ago he needs the $700 billion TARP to buy up toxic "assets." A few days ago he decides to dump the money directly into the banks instead. He promises last week to leave half of the $700 billion to the next administration to decide what to do with. Today he has second thoughts and wants to draw on some of it to prop up consumer spending. Sure enough he goes on TV to announce his latest change of heart, and a stock market that opened in the green has dipped into in the red. Traders have no idea what to expect. And considering the continuity we'll be getting at Treasury with the handoff from Paulson to Geithner, this improvisational approach is sure to remain the order of the day.
In fact, the new president promised as much… invoking FDR's First Hundred Days. As Steve Chapman explains in his latest syndicated column…
In his "60 Minutes" interview, [Obama] praised Franklin Roosevelt for his "willingness to try things. And experiment in order to get people working again." What he overlooks is that experimentation creates uncertainty, and uncertainty discourages businesses from doing what they are supposed to do.
During the 1930s, as economist Robert Higgs showed in a 1997 essay, the effect of all the experimentation was the opposite of what Obama assumes. The endless fear of what FDR might do caused net business investment to fall, year after year, prolonging the very catastrophe he was trying to end.
Exactly. Which means that whatever the new president's team comes up with over The Thirty Days is likely to leave a big ol' lump of coal in our collective stockings come Christmas Eve.