More Economic Stimulus Now?

Suppose Charlie got into a wreck with his car and was seriously injured. Let’s suppose he had multiple internal injuries that were very painful.

The emergency technicians gave Charlie some pain killers and sped him off to a hospital where he was attended to by some famous physicians. The medical team knew the sources of the injuries were in the abdomen but they were not positive about the exact nature of the internal injuries. So they decided to operate.

As sometimes happens, the operation produced more than one theory about the best course of action. It seems that more than one organ was injured and plans to improve one trouble spot would greatly irritate another. They sewed Charlie back up, gave him some pain medicine to deal with the ramifications of the surgery and decided to wait and see for a while.

Dr. Mean, a nationally known kidney specialist noted to Charlie and his family that the patient was in really bad shape but was lucky to have such a prominent practitioner on his case. Dr.  Nice, a recent winner of the Best Liver Surgeon in Alabama Award took pictures with the family while he administered another round of pain medicine to Charlie. Drs Nice and Mean quibbled about the best way to proceed and made sure that Charlie had plenty of medicine to carry him through as they ordered test after test to measure the pace of Charlie’s healing.  Meanwhile the famous doctors went to their respective annual conventions and made stirring oratories about their latest contributions to vanquishing kidneys and livers.

Thankfully the medicine did get Charlie through the worst of the pain and he was able to walk and pinch nurses with that usual Charlie sparkle in his eye. Natural healing was taking place but it was clear that Charlie would never again hurdle fences or otherwise run from the police. Drs Nice and Mean were having daily meetings at the local pub discussing fervently the best approach to Charlie’s health issues but had still not hit on an approach that would deal with all the internal issues.

They did notice that Charlie was started to slur his words (more than usual) and they concluded that he might need a different pain medicine.  So they prescribed another one. Of course there was some debate about which drug might work best but eventually the doctors agreed on a new one. Charlie was happy enough but it was a little frustrating. The medicine made him want to dance with the nurses but unfortunately his internal injuries wouldn’t really allow for anything much beyond a one-minute polka.

Okay – this is getting a little tiresome and tedious right? But come on – is it not exactly the stupid story our politicians are telling us? Our great sage of the Fed notices that the economy is not running full tilt and tells us that we need to keep up the stimulus – unprecedented levels of stimulus. But has the Fed, the Congress or anyone else really attended to what caused the recession of 2008/2009? I don’t think so.  So they want to keep the I-V going as they and the rest of government avoid the real causes of our economic problems. The President says “be patient” and predicts that we will soon emerge from this temporary hiatus in growth. But he has done next to nothing to create real belief that some particular remedy is working.   

Have they spent the four years devising a solution that stops financial institutions from giving mortgages to people who cannot afford them? Have they effectively legislated actions that would prevent huge financial institutions from taking excessive risks behind closed doors? Have they done anything to even remotely encourage hedge funds to go back to hedging? Have they done one thing to prevent the government from having another half century of virtually back-to-back budget deficits? Have they really extinguished the factors that contribute to double-digit increases in health care costs? Have they made businesses be more flexible and competitive?

But you might argue – they have begun the process. They put in a stimulus program and lots of committees are dealing with new regulations. They know that it is time for the stimulus to end but some experts worry that we have to wait until the recovery is more solid.

Pasha! Give me another dose of pain medicine! This reminds me of the “old take-off the band-aid controversy.”  Should you take it off fast or do you take it off slow? With a quick rip you get an intense ripple of pain and then it is over. Imagine pulling off a large band-aid over the course of a couple of years. You get a little bit of pain each day for a long time. Perhaps you hope that over all that time some miraculous invention will intercede and the band-aid will just fall off without pain. But this approach guarantees nothing but pain and more pain. We would be in much better shape if the government had moved more quickly with some real remedies. Yet even today some say that there is no urgency. Harry Reid said the other day that there was no emergency to reduce the government deficits and debt.  He sees no problems on the horizon. PLEASE HARRY – stop the drugs and pull that damn band-aid off!

I know you can add to my list of diseased organs – troubled organs that our economic doctors continue to ignore over and over.  But whether or not you can agree on the size of the list, it seems easier for them to pump us full of pain medicine than to focus on real remedies. We are the patients and we seem completely addled by the drugs. So we shuffle our feet on the way to the bar and let them get away with it. And then we almost clap when things get worse and they order another round. Thank goodness our good doctors are treating pain! Unfortunately world investors are catching on to our game.  At some point even the pain medicine won’t do much good. Greece must now pay its creditors 30% for its loans. Perhaps we should think about this for a while as we sip our Greek coffees with a shot of Ouzo.