Too little economic stimulus – or too much?

The case for the idea that President Obama is not pushing for enough of a an economic stimulus package is made here. by some Congressional Democrats, challenging the administration’s claim (i.e., Larry Summers’ claim) that mass transit and other projects aren’t “shovel ready.”

A variegated collection of libertarians, non-supply side conservatives and economic scolds transcending political labels argues that there’s already too much economic stimulus effort on the table.

My take?

First, I’m disappointed that reregulation of investment banking, etc., has been decoupled from economic relief. Given the Goldman Sachs-heavy makeup of Obama’s economic advisors, I’m afraid we will NEVER get serous re-regulation.

Second, the “too much stimulus” group is right to be skeptical about some parts of the package. While I favor something like allowing mortgages to be sent to bankruptcy court for “cram-down” adjustment, I do also agree that the housing bubble has yet to be fully burst in many places. AND, so far, no mortgage-bankruptcy proposals differentiate between people who got burned and/or suckered, vs. “flippers,” second/third/fourth home buyers, and others making investment buys, who deserve NO help.

Third, the do-nothing crowd is right to the degree that the stimulus package probably needs more focusing. Wall Street Journalop-ed hackery aside, I don’t think the Obama team has yet to answer the question of whether 20th-century Keynesianism (or other 20th-century economic theories) are suitable to a 21st-cenutry recession.

That said, yet more money for mass transit, for green research both by the government and private industry, etc. SHOULD be in a stimulus bill. Indeed, those aspects could be relabeled as an “energy and climate security package.”

But, we won’t actually get this. Instead, we’ll get a Wall Street-friendly package that is NOT what America needs.