I think the best economists are those that know how to reduce the theories, equations, statistics and history of their profession into simple prose, understandable by anyone. Because economics isn’t science, not even a dismal science. It’s the psychology of your bank account, it’s about the human need to value today by forecasts of tomorrow.
So here’s my explanation of the giant federal “stimulus package,” in a bit of prose that puts what’s happened, and what’s happening, in perspective. See if you can identify who’s who, and what’s what, in my story and link it to our real economic world.
Mountains to molehills
A year ago, 300 million mountain climbers got stranded on top of Mt. Wilson by a blizzard that had been forecast for the past decade. When later asked about their bad judgment, they replied that they were led to believe it would never, ever snow again and to ignore the negativity of the forecasters and their "theories."
When told of the stranded climbers, the Bush administration at first said, "No they're not." Then, when it became impossible to ignore the stranded climbers any more, they (the Bush administration) hatched a rescue plan that consisted of a no-bid contract to Halliburton to excavate the bottom of the mountain until the mountain was lowered enough that the climbers could simply walk off on level ground.
They based this solution on work done back in the 1980s by a miner named Arthur Laffer who, on the back of a napkin, had proved that if you removed dirt from the bottom of a mountain, the top of the mountain would come down. And the more dirt you removed, the closer to the ground the top of the mountain would get.
While Bush hurried to get his rescue plan enacted, now-President Obama was campaigning on a platform that, if elected, Obama wouldn’t dig the mountain out and bring its top down to the ground so that the climbers could walk off.
Obama said he would instead send a helicopter to rescue the climbers. And the voters thought that a good idea and elected him in a near landslide (in fact, he even won the backwards state of Indiana).
And sticking to his word, on the day of his inauguration, he asked Harry Reid and Nancy Pelosi to gather Congress to decide which helicopter charter firm to call.
“Whoever heard of using a helicopter to rescue people?”
The Republicans in Congress said they did not want to charter a helicopter. When asked why, they said it was because they were not sure that using a helicopter to rescue stranded mountain climbers would work. In fact, they said, history had proven that using helicopters for rescue operations didn't work. Didn’t everyone know that FDR had tried to use helicopters to rescue mountain climbers in the 1930s, but that had simply increased the number of stranded climbers -- no matter how many helicopters were sent?
But, the Republicans repeated, what if we tried excavating out the bottom of the mountain, instead? Ronald Reagan had shown that digging the bottoms out of mountains so that the tops would come down to ground level worked!
They, in fact, were so sure of this that they demanded that a helicopter not be used and that excavation be the plan enacted.
Some Republicans actually went so far to argue that we shouldn't do anything at all and that a rescue would upset the natural order of mountains. Besides, they said, can you trust the government to lease a helicopter?
Anyways, they continued, in the long run, erosion would naturally reduce the mountain until the climbers could just walk off and everything would be fine on its own.
Bi-partisanship doesn’t work if the other side is crazy
The Democrats in Congress went ahead and made the call to lease the helicopter --whereupon the Republicans claimed they were not allowed to give any input nor supply the number of a reputable mountain-excavating company (Halliburton).
The Republicans said that calling the helicopter leasing firm, instead of letting Halliburton take the dirt out of the bottom of the mountain, showed that Obama wasn't serious about being bipartisan.
They also said the call to the helicopter leasing company was made too quickly without any chance for them to study the construction blueprints of the helicopter that would be used, even though they would not vote for the helicopter no matter how long they had to look at its blueprints because helicopters are not useful machines when you need to rescue people.
Finally, they argued that a trillion dollars to lease a helicopter big enough to rescue 300 million people off a mountain was just too much money. “Why, just look at the helicopter!” they said. “It's got white-walled tires! An extravagant flourish that must have cost at least $10 extra!”
Even Sean Hannity chimed in, claiming there was a scent candle in the helicopter's water closet and wasn't it interesting that Chicago boasts a scent-candle factory? Obviously there are earmarks in the helicopter lease, he told his listeners.
(It later turned out that there was no scent candle, but by then no one cared to correct the record.)
Or if there are some on your side who are clueless
Meanwhile, some Democratic “centrists” feared that, while a helicopter was probably okay to rescue the now-near-death climbers, that the helicopter chosen, though very, very large, might not be big enough to carry both the climbers and their personal belongings off the mountain.
Oh, and that the helicopter was too loud inside for comfort. And, apparently, the pilot's cat always rode along in the helicopter, and taxpayers shouldn't have to pay for a cat to get a free ride in a huge $1 trillion dollar helicopter along with 300 million people separated from some of their personal belongings.
And that’s all you need to know to understand the stimulus package and why some people did the right thing and voted for it while some people did the wrong thing and didn’t.
Gregory Travis can be reached at firstname.lastname@example.org.