Now that Congress is on the verge of passing a $790 billion stimulus bill we can all breathe a huge collective sigh of relief, right? Our homes will be safe from foreclosure, unemployed workers will soon be heading back to their jobs, and no one else will lose theirs?
And what if the Congress hadn't pushed through this behemoth? Well, we have President Obama's word that a failure to act could have turned "a crisis into a catastrophe."
But apparently, not everyone is buying the Obama Miracle Plan. The stock market was down sharply on Tuesday -- nearly 400 points -- when Treasury Secretary Timothy Geithner announced sketchy details of the Obama administration's plan to spend $2.5 trillion to rescue the American financial system.
Indeed, investors have been noticeably bearish since the election. The Dow Jones stood at about 9,300 on Oct. 31, 2008; as of Thursday, Feb. 12, 2009, it had fallen about 1,400 points. Not all of the decline reflects mistrust of the new president and his team -- but it sure doesn't indicate much faith that he can rescue us either.
And that's the problem for President Obama. Many Americans voted for the president -- whose actual record of accomplishments was thin at best -- on hope alone. It was the basis of his whole presidential campaign, what he called the "Audacity of Hope" after a sermon from his former pastor, the now infamous Rev. Jeremiah Wright.
President Obama's hope lies in government. Monday night, in his first presidential news conference, he told the American people: "(T)he federal government is the only entity left with the resources to jolt our economy back into life. It is only government that can break the vicious cycle where lost jobs lead to people spending less money, which leads to even more layoffs." And he promised he would create jobs -- 4 million of them to be exact.
But presidents don't create jobs, employers do -- mostly in the private sector and primarily in small businesses, not large corporations. Which is why the congressional stimulus package won't do much. There are some tax breaks, but not the rate reductions and big capital gains cuts that could spur businesses large and small to take on new workers.
Just as important, the lack of available credit means that many businesses won't have access to the cash to pay workers in those industries that must rely on credit to fund their payrolls.
Linda Chavez is chairman of the Center for Equal Opportunity and author of Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics .
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