Larry Summers Economic Memo To Obama: The Stimulus Was Never About Stimulus


The New Yorker has a lengthy piece on Barack Obama and his rise to power (which never seems to mention starting his political career in the living room of unrepentant domestic terrorist William Ayers), making Obama out to be some sort of anointed one who always spoke about Americans coming together, but, gosh darnit, too many people on the extremist ends of the political spectrum (read “all Conservatives and Republicans, and a few liberals”) blocked the anointed on from following through.

If there was a single unifying argument that defined Obamaism from his earliest days in politics to his Presidential campaign, it was the idea of post-partisanship. He was proposing himself as a transformative figure, the man who would spring the lock. In an essay published in The Atlantic, Andrew Sullivan, a self-proclaimed conservative, reflected on Obama’s heady appeal: “Unlike any of the other candidates, he could take America–finally–past the debilitating, self-perpetuating family quarrel of the Baby Boom generation that has long engulfed all of us.”

First, if you’re quoting Andrew Sullivan as an actual conservative, get out the chest high hip waders. Second, Obama was always good at talking the talk, but, could never walk the walk, because he himself was intensely partisan to the far end of the progressive spectrum. There is nothing wrong with that, people have their own set of beliefs. It’s when one acts on beliefs, forcing them on people, that the problems start. And James Pethokoukis at The American Enterprise finds 11 stunning revelations from a confidential Larry Summers memo to Obama in December 2008 that was a key source for the New Yorker article. Here are a few of them (the bold is James’ writing, the italic is Larry Summers own writing

The stimulus was about implementing the Obama agenda. The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary. … The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.

Team Obama knows these deficits are dangerous (although it has offered no long-term plan to deal with them). Closing the gap between what the campaign proposed and the estimates of the campaign offsets would require scaling back proposals by about $100 billion annually or adding new offsets totaling the same. Even this, however, would leave an average deficit over the next decade that would be worse than any post-World War II decade. This would be entirely unsustainable and could cause serious economic problems in the both the short run and the long run.

The financial crisis wasn’t just Wall Street’s fault. A significant cause of the current crisis lies in the failure of regulators to exercise vigorously the authority they already have.

The first one is the most significant, which highlights what we all inherently know, that the point of the stimulus was to give payback to campaign contributors and elected Democrats, as well as pushing Obama’s far left progressive agenda without regard for realities. Solyndra is the perfect example.

Oh, and then we see the “death panels” crop up even back then

IPAB was there at the very beginning. There are two possibilities for making tough decisions on the long-run budget, which could be done either separately or together: creating an executive-branch “health board” (which focuses on one part of the issue) and a Congressionally chartered commission (which could focus more broadly).

From the beginning, Team Obama wanted to implement the panel of 15 unelected and unresponsive bureaucrats to make decisions on our personal health care.

Doug Ross writes “The revelations in this document alone should be enough to bring down the Obama administration. The level of dishonesty laced throughout the Obama White House is both shocking and repellent.” Let’s add some fuel to that fire, looking at the very first paragraph in the Larry Summers memo

In the absence of fiscal stimulus the economy is projected to lose 3 to 4 million jobs in 2009. Together with the jobs we have already lost and population growth, we will be 7 million jobs short of full employment. The unemployment rate is projected to rise above 9 percent and not projected to start falling until 2011.

That is Summers saying what would happen without the Stimulus, which is mostly what happened with the Stimulus. Except, with the Stimulus, jobs loss was greater, and the unemployment rate didn’t start to fall until late in 2011, partly due to people dropping out of the job market, essentially giving up.

Summers also concluded that a core package more than $300 billion was not “feasible to design sensible proposals along these
lines that go much beyond this total size.” And then they go on to propose hundreds of billions more.

There are all sorts of interesting tidbits in both Pethokoukis’ article along with the Summers meme, which provided a blueprint for spending obscene amounts of taxpayer money for political payback and pushing Obama’s extremist political agenda, which wasn’t even in the same landmass as his supposed “post-partisan” coming together speeches. Read them both.

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

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