Wednesday, January 27, 2010

Public Ignorance & Polling on the Stimulus

Joe Klein of Time laments poll results indicating that many Americans think the stimulus spending was wasted since, as he reminds us, a big chunk of that went to tax cuts for those same folks. He interprets this state of affairs as proof that Americans are "flagrantly ill-informed" and, "too dumb to thrive."

For this, Dad29 calls Klein a twit, and he is right. Klein is a twit.

Liberal blogger Matthew Yglesias is nicer to Klein, but still thinks he is wrong both in his approach and on the substance. Yglesias argues that the "too dumb to thrive" line makes it too easy to dismiss Klein's argument as elitist. From there, though, he descends into a chilling argument on why average folks don't need to be experts on policy. He argues that what we need are elected officials that "produce results people approve of." He stopped short of calling for bread and circuses, but that can't be too far behind.

I would argue that while the average American may not need to know the intricacies of many policy issues, when the government undertakes a $787 billion spending effort they ought to be able to understand its major components and their basic implications.

Of course there is another explanation. Perhaps what is showing up in the poll results is really dissatisfaction with the infrastructure spending portion of the stimulus. In Klein's piece even he admits that the highly touted shovel ready projects simply didn't exist. Given that, is it any wonder that the stimulus polls badly?

Ultimately, these two items are not mutually exclusive. It seems to me that the poll results get it about right and that much of the stimulus was ill-conceived and poorly executed. But it also seems quite clear that many people remain in the dark about the basic facts surrounding a government supposedly of, by, and for them.


J. Strupp said...

I agree with your line of thinking on this one. It would be more productive if Americans knew at least a little bit about the composition of the stimulus measures taken earlier last year.

I would take it a step farther though and say that it would be productive for people to understand WHY would needed stimulus in the first place and what stimulus was designed to achieve. Likewise, the administration would have done a better service to the American people by better informing them of the composition of stimulus measures taken. As an example, most people have no idea that a substantial portion of the the stimulus package went to fund unemployement insurance extensions for the millions of Americans that were laid off last year. This move has paid huge dividends, in terms of stabilizing GDP over the last year. I'm sure anyone who was on the brink of losing unemployment benefits over the last year can tell you the difference between receiving a couple hundred bucks a week and receiving nothing while they look for work.

Unfortunately, these kinds of measures go largely ignored and the focus is more towards to infrastruction spending side of the stimulus package (which is actually a rather (too) small portion of the overall package).

J. Strupp said...

oops. "Infrastructure".

Jeremy R. Shown said...

I do believe there is a benefit to transfer payments to individuals who experience a job loss.

At times of severe economic stress extending these can have two benefits: Helping the individual and counter-acting a rapid decline in aggregate demand.

It would be nice (and perhaps too much to ask) if our politicians could discuss such matters and then put them into law during the good times. They could have benefit extensions triggered by certain levels of unemployent, for example.

J. Strupp said...

I agree with that.

.....kind of on that same line of thinking: Have you ever looked into the German system of "Kurzarbeit"? It's basically a program of subsidizing employers to keep employees employed until the economy returns to near full employment. While the program is rather socialist in nature, it's proven effective in stabilizing consumer confidence, unemployement levels and allows for businesses to keep their trained employees on the payroll during an economic downturn so businesses can ramp up production rather quickly once the economy snaps back. Anyway, believe it or not some states actually have the ability to install some form of this system to combat unemployement but don't utilize it. Anyway, I've been trying to poke holes in this program for some time now and have failed to do so (other than the price tag).

...something to think about.

BTW, glad I referred over here a couple of weeks ago. I like the blog.

Jeremy R. Shown said...

J. Strupp,

Thanks for the comment.

I'm not familiar with that particular program, but certainly something to think about.

I can think of one possible drawback though. I read something the other day that indicated unemployment in the U.S. was becoming more structural rather than cyclical. Keeping people on payrolls for jobs that the economy will never need again would be a problem.

Thanks again.