CNN's Bash didn't note economists' argument that spending is necessary in recession
Research ››› ››› JEREMY HOLDEN
In a CNN.com article, Dana Bash reported that Republicans "trying to return to their small government roots" are "opposing Obama's economic prescriptions." But Bash did not mention that several economists say increased government spending -- as opposed to a return to "small government roots" -- is the necessary "economic prescription" during a recession.
In an April 27 CNN.com article on President Obama's first 100 days in office, senior congressional correspondent Dana Bash reported that "the real reason for the partisan divide may be genuine philosophical differences, especially when it comes the No. 1 issue during the president's first 100 days -- the economy. Republicans working to recover from their drubbing during the last two elections said they are trying to return to their small government roots. That means opposing Obama's economic prescriptions." But Bash did not note that several economists say that increased government spending -- as opposed to a return to "small government roots" -- is the necessary "economic prescription" during a recession. Indeed, Bash did not quote any economists in her article.
In his December 1, 2008, New York Times column, Nobel laureate Paul Krugman stated that "right now we have a fundamental shortfall in private spending: consumers are rediscovering the virtues of saving at the same moment that businesses, burned by past excesses and hamstrung by the troubles of the financial system, are cutting back on investment. That gap will eventually close, but until it does, government spending must take up the slack." In a December 1, 2008, discussion of Krugman's column on National Journal's Economy blog, Martin Regalia, U.S. Chamber of Commerce chief economist, wrote: "In these unusual times, a significant stimulus package is necessary to get the economy moving quickly and, as such, will swell the deficit in the short run. I am not overly concerned about negative effects stemming from a temporary increase in the deficit, especially in such an unusual time period." Similarly, in the same National Journal blog discussion, University of Texas economics professor James K. Galbraith wrote: "Right now and for the immediate future, the budget deficit is the only source of demand that can fuel a recovery." And Brookings Institution senior fellow Gary Burtless stated: "When there are abundant unemployed resources and the government faces very low borrowing costs, it makes sense for the government to increase its borrowing in order to put some of the idle resources to productive use."
Furthermore, in January 27 testimony before the House Budget Committee, discussing the economic recovery bill that was then pending before Congress, Congressional Budget Office director Douglas Elmendorf stated: "[I]n our estimation -- and I think the estimation of most economists -- all of the increase in government spending and all of the reduction in tax revenue provides some stimulative effect. People are put to work, receive income, spend that on something else. That puts somebody else to work."
As Media Matters for America documented, economists made a total of 33 guest appearances out of 639 guest appearances in broadcasts that included guest discussions of the stimulus on cable news channels from January 25 through February 15 during the stimulus debate.
From Bash's April 27 CNN.com article:
In the blame game over the breakdown of bipartisanship, Republicans said Democrats shut them out and never really considered GOP ideas. Democrats accused Republicans of making a political calculation to be the party of "no."
But the real reason for the partisan divide may be genuine philosophical differences, especially when it comes the No. 1 issue during the president's first 100 days -- the economy.
Republicans working to recover from their drubbing during the last two elections said they are trying to return to their small government roots. That means opposing Obama's economic prescriptions.
"We've been throwing trillions of dollars around like it was Monopoly money," McConnell said in the heat of the spending bill debate.
"A way of looking at it is we have spent more in the first 23 or 24 days of this administration, in other words, charged more, than it cost post-9/11 for the war Afghanistan, the war in Iraq and the response to Katrina already."
Yet most Democrats fundamentally believe government spending is the only way to jump-start the economy.
"We're going to have to spend some money to get out of this hole. The government's the only body that has any money," Reid said.
The reality is that bipartisanship on big, controversial issues is usually born out of necessity -- the ruling party historically reaches across the aisle only when it needs votes to prevail.
The Democrats' wide majority has meant that, for the most part, they haven't had to compromise.
It's not clear whether things will be any different over the next 100 days.