The Sexy Gadfly

Photo courtesy of CNN.

People are very particular about their choice of stimulants. Coffee or Yerba Matte? Red Bull or Monster? Cocaine or crystal meth? Never mind that they all do the same thing, to different degrees. Users have all sorts of reasons why they prefer one over the other and why you should prefer one over the other.

Economic stimulants are the roughly same, but Congress (and every armchair economist) is obsessed with debating the finer points of cutting taxes versus spending increases.

When I was five, I tried to eat a Big Mac. For some reason, McDonald’s lounge singing moon-headed mascot sold me on the burger, which fell apart after a few bites. My mother just shrugged and said, “It all goes to the same place.”

Exactly.

Same thing with stimulus plans.

I realize there are some differences. To what degree each particular item in the stimulus bill will actually stimulate the economy is a question for the unfolding future. The economic crisis we’re currently in should clue us into our inability to tell where the money will go.

But more on that another time.

Personally, I believe tax cuts are the way to go, but not because I think they’re a superior form of economic stimulus. However, many Americans do.

President Obama lassoed the American hearts for the election. Doing the same for the stimulus bill shouldn’t be that hard. After all, if you can win a presidential election, shouldn’t you be able to get a bill passed?

So much of politics is psychology. That’s obvious. What isn’t as obvious is how much of economics is also psychology. Behavioral and Neuroeconomics are very nascent fields compared to economics proper. Maybe all the graphs and Greek letters and long formulas have given us the impression that economics is more left brain than right, but it’s real people with irrational leanings and bizarre superstitions who spend the money. If we were all rational, we simply wouldn’t be in the mess we are in right now.

The psychological impact of immediate and broad tax cuts could be huge, providing that we believe that it’s safe to begin spending again, and banks believe it’s safe to start loaning again. Those provisions, however, won’t matter to us. All we will care about are the tax cuts.

One of the things that appealed to me about Barack Obama when he was running for office was his thoughtful approach to the economy. Whereas John McCain and many Republicans wanted to make broad, almost indiscriminatory, tax cuts, Obama wanted a more nuanced policy.

Unfortunately for Obama and those of us who favor subtlety, the mood of the country and the world is desperate. Desperate people don’t want nuance. They don’t want to have to think about whether or not they’ll receive tax cuts under what they see as a complicated policy. Desperate people want loud, definitive answers. And they want them now.

George W. Bush, with all of his failures, was the perfect president for the financial crisis that was exacerbated by the attacks on September 11.

That’s not a compliment, at least not to the American people.

The man knew that we wanted blood, money, and validation of our primal cravings and reactions.

President Obama should take a page from Bush’s playbook regarding the TARP banks, and to some degree, he’s doing just that.

Only not as well.

It’s great that he wants to cap executive salary, even though that’s been done before.

The American people want to see bankers hanging from their neckties. Obama needs to speak the language of desperate people right now. He needs to “declare war on corporate greed.”

He can save his subtlety and nuance for the backroom.

And he should definitely forget about spending right now, even though spending is probably a good idea. Spending, in a way, is very similar to Obama’s nuanced tax cuts. We simply don’t want to spend our mental energy on figuring out whether or not the new jobs he seeks to create or the programs he wants to fund will put money our pockets. The shortest distance between two points is a line, and the shortest distance between the government and our pockets is a blunt and loud tax cut. That tax cut must also have a sunset far off enough into the future so we don’t hoard our money fearing that the rug will be pulled out from under us soon. People are snatching up guns because they’re afraid Obama is going to ban them or ubertax them. “Available for a limited time only” is a tried and true sales trick that doesn’t just apply to deals at Jack-in-the-Box.

Obama can spend later, once we’re doped up on tax stimulants. And he should spend later. His plans to revamp our infrastructure are absolutely laudable. At the end of the next recovery, it would be nice to have something to show for our economic investment other than an even bigger deficit and a closet full of Louis Vuitton.

Desperate people have a “me-first” attitude, and there is nothing wrong with that. We have every right to ask what our country can do for us. We pay taxes, watch as our government makes bad decisions with our money, and saves the corporate bigwigs that don’t need saving. Our very existence is for this country. Obama needs to recognize our desperation, and he needs to talk us down.

And when we do get talked down, perhaps Hollywood can be persuaded to create Carl Reiner-type shows that teach us the value of rational spending and investing.

Surely they could find a way to make that sexy.