Sounds like one of those spam emails you get, huh? Well, it feels like the members of Congress operate that way. People keep talking about stimulus as a way of stemming the financial global meltdown (um, it might be rough again today–foreign markets all plunged deeply and the Dow futures is showing a huge loss also). It’s the "let’s get people to shop" strategy:

To offset this shrinkage, and head off a severe recession, the Democratic leadership in Congress is “seriously considering” a large fiscal stimulus proposal, which would send a significant amount of money to states and cities.

“We have to prop up consumption,” Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, said in an interview in which he revealed some of the details the party leadership is discussing.

The new proposal would be far greater than the $60 billion stimulus package that the House passed in late September, Mr. Frank said.

   What is astonishing to me–perhaps it shouldn’t be astonishing at this point–is what a small vision people have. The crisis is ultimately the result of peoples’ incomes being squeezed (that’s one reason, for example, that average people are in hock up to their eye balls in credit card debt and, now, without any over-inflated home values to rely on as a place to get cash). Throwing a stimulus plan out there is not objectionable but it is like a speck of sand on the beach.

    If you want real consumption:

• Raise the minimum wage to $10 immediately.
• Enact a single-payer health care system immediately. It could be done before the next Administration takes office. It would do more to put money back in peoples’ pockets than any short-term stimulus.
• Make it national policy–in real-life–to have broad unionization. You want consumption? Get people real paychecks. You can start by passing the Employee Free Choice Act–though I don’t believe that it’s the silver bullet labor claims it to be, it’s a start.

   Now, people will say, "oh, you can’t all that passed, too controversial". Maybe yes, maybe no. But, the markets certainly have gotten peoples’ attention. Certain things seem possible now that didn’t seem possible a few weeks ago–like a $700 billion bailout for bankers or buying stakes on banks. So, why shouldn’t we think–AND DEMAND–big?

   Otherwise, to circle back to the title of this post, short-term stimulus is just economic masturbation–a little pleasure but not much on long-term satisfaction…