I’m watching Andrea Mitchell interview David Broder in what’s amounting to a sort of parody of High Broderism. But setting aside the unsupported a priori assumption that a bill with input from both parties is necessarily better than a bill put forward by a single party, he just said that this Stimulus Bill is a big risk because we already had one Stimulus Bill (i.e., TARP) and it didn’t work:
(ed.note: A few readers say they think Broder was referring to last year’s tax rebate law. I guess that’s possible. Watch the video and judge for yourself. If he’s referring to that, his error would not be as bad as I say below, though it would still be a bad comparison since that was 100% tax rebate rather than a bill heavily weighted toward spending. — jmm)
Now, I think there’s a legitimate debate about the effectiveness of TARP. My own take, by no means definitive or fully informed, is that on balance it helped arrest the collapse in the financial system. It was poorly managed. Treasury cut very poor deals on behalf of the taxpayers. And I suspect that in one form or another, we’re going to have to spend a lot more money to stabilize the finance sector.
But it wasn’t a stimulus bill. A stimulus bill — though a pretty amorphous catch-phrase — is either spending or tax cuts (usually spending, since it’s more efficient) to put extra demand into the economy during a recession. TARP was an effort to recapitalize the banking sector. End of story. It wasn’t a stimulus bill. Nor is this just a semantic point since he’s leveraging his own error as evidence for the perils involved in enacting this legislation.
This is such an elementary point that you really have to wonder why Broder’s being allowed to go on TV.