IF THE STIMULUS WAS "MIND-BOGGLINGLY LARGE," WHY WAS IT EXPECTED TO BE LARGER?
I don't want to go into a detailed criticism of Jonathan Chait's New York Times article "What the Left Doesn't Understand About Obama," though it does make me want to say, "All right! All right! I give up! The Obama presidency has been perfect! He hasn't made a single mistake, ever!" -- which seems to be the only response that will satisfy Chait. I'll limit myself to a response to this:
It's worth recalling that several weeks before Obama proposed an $800 billion stimulus, House Democrats had floated a $500 billion stimulus. (Oddly, this never resulted in liberals portraying Nancy Pelosi as a congenitally timid right-wing enabler.) At the time, Obama's $800 billion stimulus was seen by Congress, pundits and business leaders -- that is to say, just about everybody who mattered -- as mind-bogglingly large. News reports invariably described it as "huge," "massive" or other terms suggesting it was unrealistically large, even kind of pornographic.
Blue Texan at Firedoglake points out that a number of people -- among them Paul Krugman, Dean Baker, Brad DeLong, even the centrist Mark Zandi -- declared the stimulus to be too small. But I want to add that the Pelosi swipe is uncalled for.
Yes, back in December 2008, Pelosi did call for a smaller stimulus than we actually got -- not $500 billion, but actually $500-600 billion:
House Speaker Nancy Pelosi (D-Calif.) has increased the size of the economic stimulus package she will support when Congress reconvenes next month, saying it will need to be $500 billion to $600 billion.
That’s up from the $400 billion to $500 billion that House Democrats had been expecting. Pelosi gave the figure during an interview with Al Hunt of Bloomberg Television's "Political Capital with Al Hunt."
"This week we had our most recent presentations from economists to tell us what – how robust such a package should be in order to have an impact on the economy, to turn the economy around," Pelosi said. "Economists told us that the package had to be strong enough, half a trillion, $600 billion, somewhere near that." ...
But a month later, even before Obama was inaugurated, the figure cited by congressional Democrats, according to The Washington Post, was in the $800 billion range -- and expected to grow to nearly $1 trillion:
House Democrats yesterday presented an $825 billion stimulus package that includes more government spending and less tax relief than President-elect Barack Obama had proposed....
The House measure is far larger than lawmakers envisioned when the stimulus idea surfaced last fall and, as the recession shows signs of worsening, Democrats predict the price tag could grow to nearly $1 trillion before the bill reaches Obama's desk....
Senate Democrats have predicted their stimulus wish list could rise to $850 billion, including many provisions not included in the House bill. If a $70 billion fix to the alternative minimum tax is included in the final legislation, as expected, the final version could top $900 billion....
Which is not surprising because, as Ryan Lizza pointed out in The New Yorker in October 2009, Rahm Emanuel thought the stimulus package would get bigger as it passed through Congress, which is one reason the White House's proposal was well under $1 trillion:
[Christina] Romer's analysis, deeply informed by her work on the Depression, suggested that the package should probably be more than $1.2 trillion. The memo to Obama, however, detailed only two packages: a five-hundred-and-fifty-billion-dollar stimulus and an eight-hundred-and-ninety-billion-dollar stimulus. [Larry] Summers did not include Romer’s $1.2-trillion projection.... At the meeting, according to one participant, "there was no serious discussion to going above a trillion dollars."
[Rahm] Emanuel made the final call: six hundred and seventy-five to seven hundred and seventy-five billion dollars, with the understanding that, as the bill made its way through Congress, it was more likely to grow than to shrink.
So to sum up:
The smart canny congressional veterans thought the stimulus would get bigger, and that the general belief would be that the end product wasn't "mind-bogglingly large." That was a colossal misjudgment of the intransigent GOP -- not a realistic reading of the larger zeitgeist. And when the GOP dug in its heels, no one fought back effectively. There was a belief that a larger stimulus was possible, even likely. No one, however, knew how to get it past the GOP, and in retrospect it seems that no one grasped how hard a fight would be necessary.
That's still the case -- no one ever seems to know how to fight the psychos in the Republican Party.