An Economist Mind with a Mother's Intuition

One of the best blogs out there when it comes to understanding the current economic crisis and the efforts to do something about it is the Economist Mom, edited by Diane Lim Rogers of the Concord Coalition.

Lim Rogers declares the blog as the place . . . “where analytical rigor meets a mother’s intuition”–where honest math and sound economics is communicated in a way that makes common sense and is relevant to our daily lives. The issues they discuss span a wide and unusual range as suggested by the blog’s title–from “do deficits matter?” (yes) to “can I get my family life in perfect order?” (no, she can't). Lim Rogers says that "among the broader policy issues there will be a particular focus on the economics of fiscal responsibility, with the hope that this blog will be part of a newly effective, “grassroots” movement involving ordinary American parents and grandparents, encouraging our policymakers to “do the right (fiscal) thing” for the sake of our children and grandchildren.

I'm a big fan of Lim Rogers, but if there is a criticism that I would make of the over-arching theme of the blog it is that by relying on a "mother's intuition" to generate the common sense side of the blog, Lim Roger's sometimes falls short on understanding the strategic choices that need to be made in order to find that sweet spot where fiscal responsibility and a mother's intuition meet meet effectiveness of effort.

A recent case in point was Lim Roger's (vocal) appearance tonight on NPR's Marketplace. Unlike so many other commentators, Lim Roger's understood that the bill being considered by Congress right now has two key components: stimulus and competitiveness. She gave a concise and clear explanation of the two components that should be framed and placed right in frot of every pundit in the country so that they understand it as well. However, on her Blog she seems to make the case that we can afford to wait on the parts of the package that will take longer to get into the economy but will position the US to be competitive in the global economy. This is where she's wrong and a bit of common sense and mother's intuition will go a long way toward understanding why.

If you think that the partisanship and posturing over the current bill is bad - just wait until we are another trillion dollars in the hole. Even the most far sighted folks will be wringing their hands about spending the money needed to achieve the goal of creating a "smart grid" or bringing some other sustainable technologies to market. In fact, I would make the case that if we had to choose between immediate stimulus and investments that will ensure our competitiveness for the future, that we should endure the hardship of short term for the promise of the long term.

When the crisis of 9-11 generated international goodwill that could have been turned into an opportunity to unite the world in an all out effort to end our dangerous dependence on fossil fuels, President Bush told us all to go shopping and he missed the most powerful teachable moment in recent history. Woe unto us if President Obama is equally shortsighted.

If we sacrifice what is important for what is urgent, we will emerge from this recession as a second rate economic power without the will or the courage to take the action that will be necessary to make us competitive for the long-run.


"Deep Roots" Poster and Card

Quote under the photo:

All that is gold does not glitter,
Not all those who wander are lost;
The old that is strong does not wither,
Deep roots are not reached by frost.

J. R. R. Tolkien

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Hastening the Green Revolution with the Stimulus

Obama can assure his future and get the country back on track at the same time by seeing green.


President Elect Obama faces a daunting challenge in reviving our economy. The full measure of his success will be not the support he has up front but both the success and his support level as we emerge at the other end of the recession.

If we go on a national spending spree simply to stimulate short-term employment, the end result will be an American public with a fiscal hangover and a staggering debt, looking for someone to blame and likely to hold the Obama administration responsible for creation of debt built on spending instead of investment.

I am personally confident that the President-Elect understands this, but it is worth repeating over and over again lest the profligate spenders see this crisis as the opportunity to spend on projects with no long-term gain for the country.

Lets face it, getting a stimulus package passed will not be the hard part. Obama is likely to get a lot of latitude from the American people, as well as the Democrats and moderate Republicans in Congress. As difficult as this may be – it really is the easy part.

However, with some smart ideas and careful positioning Obama can dig deep into the more conservative factions of the Republican Congressional delegation as well. He can do this by focusing on investments that have long term implications and seed revolutionary change at the same time. He can do it by developing proposals that political self interest will compel even conservatives to support. By appealing to their patriotism; their market oriented and investment-minded inclinations; and, their electoral self interest, President Obama can turn the economy around, usher in a new green era based on renewable energy sources and inoculate himself against the charges of being a mindless spender in the process.

Over the next few weeks we will propose a number of ideas that can help make this happen.

Any discussion of a stimulus package to bring the nation out of this deep recession will have to take a myriad of factors (and actors) into account. Most important among them:

1. The Need for Speed:

In order for a stimulus to be effective if must proceed with “all due haste”. We can’t afford to waste a moment. History has shown us that Roosevelt’s caution in acting on the economic crisis that we now know as the great depression may have prolongued that recession by years. In fairness the presidential handover in that time was later in the year and thus nearly 3 more months of transition added to that delay, but historians and economists are generally agreed that this delay exacerbated the Depression’s depth and length. Obama has clearly demonstrated that he understands this and as much as he would deny it, Obama is acting as defacto President in may respects already, particularly when it comes to using the “Bully Pulpit” of the office to calm the nation and to focus our energy and understanding.

The need for speed will mean that general public works projects will need to focus on those that are “shovel ready”. In other words, those projects that have all the necessary environmental, legislative, federal and state approvals. In his remarks before the Governor’s recently, the President Elect showed that he understood this. More important, in later remarks he demonstrated that he would take a no-nonsense “use it or loose it” approach to assure that Governor’s looking to nab federal funds won’t overstate their readiness without consequence.

2. Investment Not Spending:

Both simple mindless spending and carefully crafted investments will generate jobs in the short run, but spending that does not have a long term benefit that qualifies it as investment in the future will run out of steam fairly quickly – perhaps before the nation emerges from the recession. The Bush approach of sending checks to taxpayer just won’t do the trick. Our nation’s resources need to be consolidated and invested.

3. Moving the Nation Toward Energy Independence

Given the very short attention span of politicians and the American people in general, historians will look back at the dramatic rise in the cost of energy in late 2007 and early 2008 as a Godsend that focused the nations attention on our greatest long term threat to peace, security and economic stability. Furthermore, recent declines in these costs have eased the pain as winter approaches another fortunately timed, but we must not allow ourselves to become complacent. Where ever possible the components of the stimulus must take into account the need to quickly move the nation toward energy independence.

Additionally, investment that focuses on creation of energy independence will bolster both small and large businesses that offer green technology and renewable energy options at a time when the lack of private investment threatens their short term viability.

4. Creating Synergies with other National Imperatives

Other national imperatives like improving the quality of education and providing healthcare to all Americans need not be cast aside in this process if we can create components of the stimulus that will create short term jobs and long term gains at the same time. Strategic investments in these areas can play an important role in addressing those issues and ending the recession as you will see from our first suggestion below.

5. Building Long Term Political Consensus:

The atmosphere of bitter partisanship that has driven the national dialog over the past decade or more must be replaced by a political realignment. To hope for a truly post partisan era is probably polyannish to the extreme but a new governing coalition where constructive engagement trumps partisanship in electoral politics might be possible. At the very least a government that governs from the “radical center” might be able to isolate the extremes on both the left and the right and truly bring about change.


Over the next few weeks I’ll propose several green initiative that meet the five challenges outlined above.