In the face of implacable Republican obstruction to any kind of fiscal stimulus, I asked last night what Barack Obama could or should do to get the economy moving again. Jared Bernstein answers:
I like FAST! [Fix America's Schools Now, a national infrastructure program to repair, retrofit, insulate and “green-up” the nation’s stock of public schools] and recommend he runs with that, or some other idea that meets these criteria: it can be stood up quickly, it’s labor intensive with a decent bang-for-buck re jobs, people get it and feel good abut it right off the bat (so, as much as I like the infrastructure bank idea, I’m not sure it works here).
“But wait!,” you shout. We’re out of bullets—there’s no more money for such things—and Congress will refuse to add any of this to the deficit. How can you advise the President to block everything else out and call for measures Congress will refuse to consider?!?
That’s the kind of second guessing, negotiating-with-yourself that has us stuck in the mud. The President needs to decide what this economy needs, make sure it meets the above criteria, especially the one about the solution being easy to understand and feeling good, and fight for it nonstop from here until the unemployment rate starts to steadily decline.
That sounds great, and I agree that writers and pundits should be demanding this kind of thing. But it doesn't change the fact that House Republicans will flatly refuse to even debate such a bill. So what's the real idea here? Not so much that it will actually help the economy, but that it might help Obama's reelection by firmly putting him on the side of the working man against a do-nothing Congress.
Which is fine with me. Because frankly, if the economy gets much worse, Obama runs a pretty strong chance of losing in 2012. But I have to say: if you're going to go down, you might as well go down fighting. Besides, a really ambitious program would give all the rest of us something to rally around, it would unite the Democratic Party, and it would give the chattering classes something to chatter about. In other words, it might actually use all the channels I talked about yesterday to move public opinion. And you know what? It might actually make a difference and, in the end, force Republicans into action. It's worth a try, Mr. President.
UPDATE: Matt Yglesias (and others) suggest using Fannie and Freddie, which are now wards of the state, to help "refinance or restructure a large number of outstanding mortgages in a way that will hasten the deleveraging process." In other words, unilateral executive action to help folks with underwater mortgages. That's more in the spirit of what I was asking last night: something aggressive that (a) doesn't require congressional action and (b) might actually make a difference.