Panelists debate stimulus’ merits

Members of the Texas Legislature met with public and private interest group representatives from across the state Friday to debate the pros and cons of the 2009 stimulus package and Texas’ appropriation of its portion of the funds.

The event was hosted by the Texas Lyceum, a statewide leadership organization, at the AT&T Conference Center on campus.

The economic crisis heavily on the minds of everyone in attendance.

“I don’t think Obama’s policies are governed by any economic thought,” said former U.S. House Majority Leader Dick Armey, who described the $787 billion stimulus package as unnecessary and misguided.

Armey, who was a professor of economics before his 18-year congressional career, said a better alternative would be to allow the world market to work out its problems over time.

“[Obama is] taking a problem that should have been a short-term problem in my life and making it a long-term problem in your life,” Armey said.

James K. Galbraith, a government and business relations professor in the LBJ School of Public Affairs, was on the same panel as Armey and disagreed with his laissez-faire approach.

“That is what we’ve tried and we’re living through the consequences of that experiment,” Galbraith said, citing high unemployment rates and the collapse of the finance industry as justification for higher government spending.

Galbraith said capitalism is not a self-sustaining system and that government intervention is sometimes necessary.

“Government spending substitutes for private spending,” Galbraith said. “[Capitalism] is not self-sustaining in the absence of a viable credit system.”

State Rep. Jim Dunnam, D-Waco, the chair of the Texas House Select Committee on Economic Stimulus, headed a panel that included state Reps. Jim Pitts, R-Waxahachie, Myra Crownover, R-Denton, and state Sen. Leticia Van de Putte, D-San Antonio. The panelists discussed Texas’ use of nearly $17 billion in stimulus money in areas such as education and transportation.

Ray Perryman, president of the economic and financial analysis firm The Perryman Group, said that however Texas spends its stimulus money, it must be done in a way that maximizes its benefits as quickly as possible.

“We need to think about things as the rules of a game,” Perryman said. “The rules are that this money will be spent. Let’s try to use it effectively and responsibly.”

Comments

3 comments

Steve

Tue Apr 7 2009 03:22

I agree with the idea of "physical economy". Money relationships should be structured to ensure that the physical needs of the population are met, as for example by providing low interest government credit for critical infrastructure "great projects" in areas like water management, development of high-density sources of energy like nuclear, and advanced transportation systems such as maglev rail.

But the current generation of economists has been trained to view monetary relationships as the primary stuff of economics, and teach that physical developments must be subservient to the availability of money - which, in their view, is ultimately controlled by the "market" - perhaps with some token tweaks from government.

Where can we find economic thinkers who understand the primacy of physical development, physical principle, and the sovereign creative intellect as the true content of economics? Where can we find a voice of leadership to inform the Obama administration of the policies which would actually work to restore sanity to the economy?

One wonders, if such an economist existed, would anyone even dare to speak his name?

Have fun,
-Steve

John Durham

Mon Apr 6 2009 20:40

Spending the money should be a easy to figure out except legislatures have forgotten that investment in infrastructure delivers the most return. However, partly because government has not been doing this, we are in such a critical situation that jobs, shelter, transportation, food, medicine for individuals is required. A halt to foreclosures until credit and markets settle down takes care of shelter. Put a vice around the necks of oil traders and companies and take oil prices down to $35 per barrel with the threat of pumping out of the reserve unless the government wants to actually enter the oil market in an absolutely price control manner. Either way will fix the cost of transportation and energy. Grow all of our food in the the U.S. and control the price of all important basic food with tax incentives to growers and an outlawing of short selling by non-producers of food. Put a U.S.A style Canadian like government health system in place immediately. Send graduated income tax forms out only to those who make over $200,000 per year with extremely high income taxes placed on money earned from short term speculative positions and salaries exceeding $500,000 per year, higher for $1 million, still higher for $2 million, way higher for anything above $5 million and take all this money and put it back into the nation and the general welfare instead of having everyone else defend and maintain a system where only a very very few end up with all the "chips".

Your name

Mon Apr 6 2009 02:55

Why not make the historical point that economy is based not on money, but rather on a physical process beginning with a discovery of principle, then a machine-tool introduction of that principle into the real economy as an improvement of standards of living
That technological increase of man's power over nature was the subject of America's War of Independence against the Usorious British East-India model and the subject of Alexander Hamilton's Report on National Credit, a National Bank, and his report on Manufactures.
It is time that Obama learn the American System of Economics rather than try to save Gordon Brown's Derivatives bubble.

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