Instapundit:

I don’t think Obama realizes — or, more frighteningly, perhaps he doesn’t care — what this spending is going to do to the economy. After all, the free market is just a rival power center. As Tim Noah says: ‘On Wall Street, financial crisis destroys jobs. Here in Washington, it creates them. The rest is just details.”

I’ll have more thoughts on this Munchausen Syndrome By Proxy tomorrow at PJM.

[Update a couple minutes later]

Glenn’s post was motivated by Megan McArdle’s thoughts on deficits, and who to blame for them:

The problem with the budget deficit is not any particular program, or even any particular tax cuts. It is not that George Bush or Obama is a bad person who does bad things. The problem with the budget deficit is that, unlike the deficits George Bush ran, the deficits projected under Obama (and beyond) are actually large enough to potentially precipitate a fiscal crisis. If our interest rates suddenly spiked up, perhaps because lenders were worried about the size of our budget deficits, we’d find ourselves in the kind of nasty fiscal jam that regularly plagues third-world countries. The difference is, no one has enough money to bail us out.

Obama is the one who will have to prevent this. Yet instead of plans, we’re getting fairy numbers from the OMB. That’s worrying, and it’s sure not George W. Bush’s fault. His OMB liked to inflate the deficit projections, so that they could take credit for a mostly imaginary reduction.

It’s almost like he wants to wreck the economy.

The $787B mistake:

…the 1930s Keynesian model that was used to sell the idea of fiscal stimulus to Americans was eliminated from economics decades ago.

And this abandonment of Keynesian multipliers does not reflect any ideological or partisan issues that divide conservatives and liberal economists. Rather, it is because the old Keynesian model does not come anywhere close to meeting today’s standards for economic analysis…

…modern economic analysis shows that the impact of government spending on the economy depends on what it is being spent on and how it ultimately is paid for.

The upshot of this new research is that multipliers are nowhere near the numbers that were cited in support of ARRA and, in fact, can be negative, depending on how the spending is ultimately financed. Robert Lucas, the 1995 Nobel laureate in economics who specializes in macroeconomics and government policy, recently remarked that the promise of large multipliers presented by private macroeconomic consulting firms in support of ARRA was “schlock economics.”

One of the infuriating things about the rush to passage of that disastrous legislation was the continual lies, from people like Ed Rendell, and Chuck Schumer and others, that most economists agreed that it was essential to recovery when, at best, there was merely a consensus that something should be done to soften the blow of the financial implosion, but not ARRA. And the media, of course, never called them on it. And of course, the president and others trotted out their usual straw men, and false choice, saying that anyone who didn’t want to implement that legislative atrocity wanted to do “nothing.”

Simply suspending the payroll tax for the rest of the year would have been a lot more effective, and cost a lot less, without creating this huge new tidal wave of debt in the out years.

[Lunchtime update]

Rasmussen: 45% say cancel the rest of the stimulus spending. Only 36% disagree. Expect that number to go higher. And that’s not “adults.” It’s likely voters. Democrats will ignore this at their peril next election season.

And note this:

A plurality of government employees believe speeding up the stimulus will be good for the economy. However, those who work in the private sector strongly disagree.

In other words, the people who understand how the economy works (because they’re the ones who make it work) are opposed to this, while the people who get their money from it are in favor. The goal of the Big Government party (on both sides of the aisle) is to increase the latter and decrease the former, not understanding that, eventually, this will cause the collapse of the nation.

[Another update a couple minutes later]

Here’s a nice visualization:

Will Wilkinson:

Some are grumbling about Deese’s lack of relevant experience. (He has driven a car and once slept in the parking lot of a GM plant!) But the real issue isn’t Deese’s resume. The real issue is why anyone should have the power to “rewrite the rules of American capitalism.” Unlike Deese, Treasury Secretaries Paulson and Geithner are men of experience. But what kind of experience could justify the immense, arbitrary power they’ve exercised in the wake of the financial meltdown? Experience centrally planning the global economy?

Deese’s embarrassing rawness is actually welcome, for it draws our attention to the invidious inequalities inherent in a government with unconstrained discretion. Deese isn’t going to pick the colors for the Chevy Malibu. But he could. And Obama can tell us that Congress won’t dictate which factories GM should close. But it will.

Liberals used to care about inequalities in power—and they were right to. Because equality of power ensures freedom. Being equal in our basic rights, no one has a natural right to rule over another. This kind of liberal egalitarianism is the root of the prohibition on titles of nobility found in the American Articles of Confederation. It is also the root of the very idea of limited government—the idea that a government’s power is legitimate only if it is carefully parceled out, well-checked, and limited in scope to tasks only a government can perform.

The answer is simple: they’re not liberals and haven’t been in a long time, if they ever were.

[Update a couple minutes later]

The prescience of Robert Heinlein — he saw the future of the US auto industry.

This looks like an incipient disaster.

Fictional job numbers from the administration? I’m shocked. Of course, if we had a press corps that was a watchdog, instead of a lapdog, they wouldn’t continue to get away with this sophistry.

[Update a few minutes later]

“Drop dead, American business:”

So the question is, why does Obama advocate a policy that so flies in the face of everything that economists have learned? How could Obama possibly say, as he did last month, that he wants “to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens?” Further, how could Treasury Secretary Tim Geithner call a practice that top scholarship has shown increases wages and employment in the U.S. “indefensible?”

I have to admit I am at a loss. Maybe it is good politics to bash American corporations, and Obama isn’t really serious about making this change happen. But if the change is enacted, and domestic corporate taxes aren’t reduced to offset the big tax hike, the result will be a flight from the U.S. that rivals in scale the greatest avian arctic migrations.

As I said yesterday, it’s Munchausen By Proxy. By keeping the economy permanently sick, they hope to entrench their power, as FDR did.

[Update early afternoon]

Cue the laughter. It’s pretty sad when Chinese students are a lot more business savvy, and understand basic economics better than our own home-grown press. Or the US Secretary of the Treasury…