The 2008 Financial Crisis and subsequent economic recession made economic legislation a priority for newly-elected President Barack Obama. The American Recovery and Reinvestment Act of 2009, better known as 'The Stimulus,' provided a case study in the domestic politics of 'crisis' legislation.
Table of Contents
1. Crisis Legislation
Objectives and Topics
This paper examines the political and economic implications of the American Recovery and Reinvestment Act of 2009, analyzing how the 2008 financial crisis provided the Obama administration with a unique window of opportunity to enact sweeping legislative changes. The research questions how the administration utilized its electoral mandate to push through a stimulus package that critics argue was more focused on partisan redistribution than on sustainable economic growth.
- The intersection of economic crisis and political opportunity
- Evaluation of the American Recovery and Reinvestment Act of 2009
- Critique of short-term redistributive policies versus long-term growth
- Analysis of political lobbying and "demosclerosis" in Washington
- The impact of electoral mandates on executive power
Excerpt from the Book
Crisis Legislation
The energy Obama brought to combating the financial crisis inspires thought of Hamilton’s advocacy for a vigorous executive. In Federalist No. 70, Hamilton asserts, “Energy in the Executive is a leading character in the definition of good government.” (Hamilton, 447) Hamilton advocated a strong, central government as necessary to the protection of liberty and the security of the nation; however, Hamilton failed to foresee an energetic, unitary executive as acting destructively in a self-interested manner. The stimulus package, passed during a financial crisis, would have almost definitely lacked the force if the same legislation had the scenario been different. “Rule one: Never allow a crisis to go to waste,” Mr. Emanuel said in an interview on Face the Nation, “They are opportunities to do big things.”iv Obama flexed the power and force of his electoral success while operating during a financial crisis, but was his economic policy really a necessary measure to stave off financial meltdown? The substance of the legislation points to a more self-interested motive. The Wall Street Journal Opinion Journal points out, “This is a political wonder that manages to spend money on just about every pent-up Democratic proposal of the last 40 years.”v As Speaker Nancy Pelosi put it, "We won the election. We wrote the bill."vi The obvious partisan nature of the substance of the massive appropriations bill lends itself to scathing scrutiny to anyone interested in whether the bill had the ingredients to stimulate the economy. Russell Roberts, a professor at George Mason University wrote,
“The standard stimulus package doesn't change incentives. It's a check from the government. The hope is that the receiver will spend it. But when you just send out checks from the government, whoever gets stimulated is likely to be offset by someone who gets unstimulated. The money has to come from somewhere. If you raise taxes to fund the plan, the people who are taxed are poorer and they'll spend less. If you borrow money to fund the plan, the people who buy the government bonds have less money to spend and that offsets the stimulus. It's like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing—the water in the shallow end doesn't get any deeper.”vii
Summary of Chapters
Crisis Legislation: This chapter analyzes how the Obama administration used the 2008 economic crisis and their subsequent electoral victory as leverage to pass the 2009 stimulus package, while discussing the potential long-term political and economic consequences of this approach.
Keywords
Economic crisis, American Recovery and Reinvestment Act, Barack Obama, stimulus package, federal government, redistributive policy, fiscal responsibility, lobbying, demosclerosis, political mandate, executive power, economic growth, deficit, partisan politics, Washington.
Frequently Asked Questions
What is the central focus of this paper?
The paper focuses on the political utilization of the 2008 financial crisis by the Obama administration to pass the American Recovery and Reinvestment Act of 2009.
What are the primary thematic areas covered?
Key themes include executive power, the effectiveness of stimulus spending, the role of political mandates in legislation, and the long-term impact of redistributive government programs.
What is the primary objective of the author?
The author aims to investigate whether the stimulus bill was a necessary economic intervention or a politically motivated instrument designed to fulfill long-standing partisan objectives.
Which scientific or analytical framework is applied?
The analysis utilizes a political-science perspective, referencing historical theories of executive power (such as Hamilton's Federalist No. 70) and critiques of government growth (such as Rauch's 'Government's End').
What topics are discussed in the main body?
The main body examines the legislative process of the stimulus, criticisms regarding its effectiveness, the concept of 'demosclerosis,' and the resulting fiscal challenges for the administration.
Which keywords best characterize the work?
Important keywords include economic crisis, stimulus package, executive power, redistributive policy, and political mandate.
How does the author characterize the 'crisis' in relation to legislation?
The author highlights the strategy of 'never letting a crisis go to waste,' noting how the administration leveraged the emergency to pass large-scale legislation that might otherwise have been stalled.
What concerns are raised regarding the long-term economic impact of the stimulus?
The author discusses concerns that the stimulus package prioritizes short-term redistribution over long-term growth and risks increasing the national deficit while creating inflexible government programs.
How is the term 'demosclerosis' used in the text?
The term is used to describe a government state where old programs are impossible to remove due to political costs, leading to an inflexible and bloated federal system.
What conclusion does the author reach regarding Obama's political capital?
The author concludes that by using his political capital for the stimulus bill during the crisis, Obama may have inadvertently limited his future flexibility and left himself more vulnerable to political opposition.
- Arbeit zitieren
- Conor Cummings (Autor:in), 2009, Crisis Legislation – The 2008 Financial Crisis and Economic Legislation, München, GRIN Verlag, https://www.grin.com/document/210761
