Nightmare On Main Street

Scene: The Oval Office of the White House. Present are President Barack Obama and his economic team: Treasury Secretary Tim Geithner, head of the National Economic Council Larry Summers and chair of the Council of Economic Advisors Christina Romer.

Geithner: So in conclusion, Mr. President, the worst of the financial crisis is beginning to pass. The deflation risk is abating. Investor cash is starting to go into TIPS bonds--that's Treasury Inflation Protected Securities.

JCII: How do you know that?

Summers: Yields on TIPS are headed down faster than coed math SAT scores, Mr. President. That means money is crowding in, driving yields down.

Romer: Watch your balls, Larry.

JCII: But isn't inflation just as bad as deflation? Hillary's people are whispering that I'm the second coming of Jimmy Carter.

Geithner: We want some inflation, Mr. President. Two to three percent a year would be ideal. People and businesses would start spending again. And, yes, you are the second coming, Mr. President, but not of Jimmy Carter.

Summers: Suck-up.

JCII: Watch your balls, Larry.

Romer: Mr. President, young Mr. Tim describes the fear of another Great Depression. Deflation makes everyone paralyzed. If you think the price of goods and services are headed down, you sit on your cash. Small doses of inflation would be good right now. But let's be honest. The economy is still in terrible shape. Unemployment is headed to 10% if we don't do something now.

JCII: But we are doing something. The stimulus package, my vessel of audacious hope. Surely you have heard of it.

Romer: Nancy Pelosi has made the stimulus package audacious, all right. Unfortunately, with $335 million for STD prevention and $50 million for the National Endowment of the Arts, the American people are turning against it. I have a better plan.

JCII: Let's hear it.

Romer: We cut corporate taxes from 35%, the second highest in the world, to 20% but link it to the creation of American jobs.

JCII: My base will kill me if I cut corporate taxes.

Summers: Consult the electoral map, Mr. President. You won the election in the suburbs, where corporations are cutting jobs.

JCII: Tim?

Geithner: I'm afraid Christina and Larry are right. Not morally right like you are, of course, but practically right.

Romer and Summers: What a suck-up.

JCII: Do you have a better idea, Harvard man?

Summers: Let's also mend mark-to-market accounting, Mr. President. Have Sheila reinstate the short uptick.

JCII: Wouldn't that reward greedy bankers?

Summers: You can bully bankers from your pulpit all day long. You're quite good at that. What we need is to get banks lending again. Main Street is getting killed. You don't want small-business owners turning against the administration.

JCII: Christine?

Romer: Harvard man is right.

JCII: So, if I want to revive the American economy, I've got to cut corporate taxes and link this cut to American jobs. I've got to end or amend mark-to-market accounting and reinstall the short uptick rule. Anything else, my capitalist stooges?

Romer: You won't like this sir, but you should tell the American people you won't raise taxes on income and capital gains before they expire at the end of 2010.

JCII: I thought I won the election!

Geithner, Romer and Summers: You did, sir! You want to win re-election, don't you?

Exit Geithner, Romer and Summers. Enter Chief of Staff Rahm Emanuel.

JCII: Did hear that? Did you hear that? I thought I was the most important person in the world. Now these capitalist clowns are telling me that businessmen, bond traders and stock investors are more important than me. Is this true, Rahm? You worked at an investment bank.

Rahm: It is true, big guy. Sad, #!*!!! true.

JCII: So what now? I just cave into the greedy capitalist line?

Rahm: Yes, sir. But we do it in a way that gives you all the credit.

JCII: Explain.

Rahm: Remember when I said, "never let a crisis go to waste." This is our crisis. Let's not waste it.

JCII: I'm not following.

Rahm: Let me arrange a meeting. I'll get Pelosi and Reid in here, along with Boehner and McConnell. You summon back your three capitalist stooges. We'll all sit down and come to an understanding. The Stooges get what they want--tax cuts and accounting rules changes--but only after your stimulus package passes the House and Senate. You tell Pelosi, Reid, Boehner and McConnell it is going to be your package. You are president, and you will #!*#!!-ing get what you want.

JCII: How do we force their hand?

Rahm: Easy. I tell them to consider Tom Daschle's recent spate of unwanted publicity.

JCII: Was that you, Rahm? Did you drop the dime on Daschle?

Rahm: #!*#!!-ing A I did. On Geithner, too.

JCII: You're a Chicago man, Rahm.

Rahm: Thank you.

JCII: So how does your plan play out?

Rahm: The stimulus, your stimulus passes both houses. Then the Three Stooges enact their changes. The stock market will rise 40% this year, and the economy will recover by October. You will be a hero, and Democrats will sweep the 2010 elections. In 2011, you can nationalize health care. This will kill the economy all over but not until 2013. By then, you'll be in your second term. You'll be golden.

JCII: I like the audacity of your plan, Rahm.