Commentary—

Can Retreads Get Us Out Of This?

By Donald Kaul

These are confusing times. Hardly a day goes by without yet another huge company getting the promise of a huge government check. Twenty-five billion here, a 100 billion there, a trillion on the way and, to paraphrase Senator Everett Dirksen, pretty soon you’re talking real money. Frankly, I don’t know what real money is anymore. Just a few months ago, we were talking about the scandal of $18 billion in wasteful earmarks. John McCain seemed to think that if we got rid of them, he could balance the budget.

Ha!

If a corporation came to Washington these days, asking for $18 billion, it would be laughed out of town and labeled not worthy of rescue. Eighteen billion dollars is chump change, or so it seems.

The reason we’re passing out all of this money we’re told, is to save the economy. And Lord, does it ever need saving. If the economy were a boat, it would be the Titanic. An airship, the Hindenburg. And if it were a football team, it would be the Detroit Lions. The idea is that if we throw enough money around to enough institutions, things will get better.

(This is the famous economic theory put forth in the Bible: “Cast thy bread upon the water; for thou shalt find it after many days.” As my Uncle Walt used to say: “That is also a good way to make your bread soggy.”)

Will it work? I haven’t the slightest idea. (I seem to have misplaced my Nobel Prize in economics.) People who are supposed to know believe it will. Probably.

There are dissenters, of course. Rock solid free-marketeers who think that government action will simply prolong the misery rather than end it. Let the markets do their work, they say. If you need investment banks, they will rise up out of the rubble of the resulting crash.

Yeah, say the other guys, but they’ll be Japanese and Chinese banks. The fear is that letting our financial system and our auto industry collapse would throw us into a Deflation, which would mean a ten-year Depression during which time our world economic leadership would become a quaint memory, like the Studebaker.

The situation is made even more confusing by the fact that we seem, at the moment, to have two presidents. Every few days, the real president, a glum-looking George W. Bush, comes out to announce that everything is going to be OK, while Hank Paulson, his Treasury Secretary, stands behind him wearing an expression that says: “Fire! Run for your lives!”

Then Barack Obama, sounding cool, calm, and collected, holds a press conference announcing yet another genius pick for his Cabinet. You don’t know whether to be scared or reassured.

So far, Obama’s choices have gotten unqualified high marks from the people we call experts. This has been particularly true of his economic team — Paul Volcker, Lawrence Summers, Timothy Geithner — each of whom is accustomed to being the smartest guy in the room.

I have two things to say about that:

1. I remember when President-elect George Bush announced his national security team — Dick Cheney, Don Rumsfeld, Colin Powell. A “Dream Team,” the experts called it. Which is what it turned out to be, if your dreams resemble a Stephen King novel. Even geniuses can make stupid mistakes.

2. Most of his appointments so far are retreads from the Clinton administration and carry the baggage of that association. True, but that’s the inevitable result of having been out in the cold for a long time. If you want experienced Democrats in your administration, the Clinton administration is the only source you can look to.

All of which gives one pause, perhaps, but not much. The important thing in any fledgling administration, and particularly one that faces such a raging sea of troubles, is to get competent people of proven ability who know the territory and can hit the ground sprinting.

That, as nearly as I can tell, is what Obama is doing. I hope it works.

(Don Kaul is columnist based in Washington, D.C.)