Burying Hoover

I had thought Herbert Hoover, and his politics, were dead and buried until I opened my newspaper yesterday.

Consumers are pulling back. Reducing debt. Businesses are pulling back. Reducing debt. We’re hunkering down.

So, what does our government propose? More of the same. Except bigger, bolder.

“It’s politics as usual on steroids,” says Doug Williams, president and chief executive of Atlantic Capital Bank, who’s gaining notice for opting not to participate in the government’s bailout program.

Not that there is any compelling, or even halfway compelling, evidence that this spending will stimulate the economy. But it sounds good, and after all, that’s what’s important.

The author was Tom Oliver, a reporter I knew vaguely when I was on the business beat here in 1982. A follower then, he's a follower now, which is how he got to be the last one standing at the AJC business desk. And what he's following is the basic Republican kant now being used against the Obama economic program. Hoovernomics.

Which is based entirely on a lie, a lie I boldfaced. When everyone is selling you buy. When no one is spending the government must. Or else, as the Republicans suggest, we can sit around for a decade and wait for a pony.

There is more than ample evidence that spending stimulates the economy. That's what the whole "experiment" called the Great Depression was about, Skeezix. Germany, Italy and Japan did a lot more stimulus than we did, got a lot more growth, and became the Axis powers who nearly destroyed us in World War II, which prompted our government to do its own stimulus, also called arming ourselves to the teeth.

What we learned afterward is that stimulus-through-arms is inefficient. The Apollo Program was a much more effective economic stimulus, as was the Interstate Highway system. While approved based on arguments of national security and cold war, both brought with them enormous economic growth, creating our suburbs and the Internet among other things. (Not to mention Tang!)

If all Oliver's Republican friends have are lies, this should be an easy win. Democrats are arguing about whether we're doing enough, about whether accelerating the middle class tax cuts is too much a bone to throw to Republicans, about whether the President-elect is "compromising" too much with his adversaries. (Picture from PunditKitchen.)

But understand how the game is played. The grand game, the game that changes history. You compromise when you're strong, and become partisan only when threatened. Right now the President-elect has the political wind at his back, so he can afford to be magnanimous. Republicans aren't going to get credit for the success of this package, and they're going to attack it at the first sign of trouble. But enough will vote for it that the whole party will be complicit when dollars don't come flying out of everyone's wazoo by July, which ain't happening.

The same lesson applies elsewhere. Hullaballoo is obsessing over Republican efforts against Attorney General designate Eric Holder. It's not going to work, not on the facts at hand now. Republicans are just making themselves foolish. Why assume you're going to lose when you know you're going to win? And hopefully the opposition will serve to steel Holder's spine when he goes after Republican crooks, as he's bound to have to do if he wants to enforce the laws.

You're so used to losing you don't know how to play a winning hand. The way you do that is by going on offense, not defense. You be the tip of the spear and let the President take the surrender. Don't defend Holder, attack those who are attacking him. Don't defend the economic plan, attack those who are attacking it. Bring up the critics' own records of support of the $1.2 trillion annual deficit we're going into under Bush.