Mark Sanford

Tuesday, Mar 10, 2009 10:56 PM UTC

The silliest Republican economic proposal yet

South Carolina Governor Mark Sanford wants to spend stimulus money paying down debt. Where have you gone, Herbert Hoover?

By Andrew Leonard

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South Carolina Republican politicians appear determined to help a woebegone nation get through these troubled economic times by providing us with an unending gusher of comic relief. If it isn’t Senator Jim DeMint declaring that the stimulus bill is anti-Christian, then it’s Senator Lindsey Graham attacking earmarks in general while defending his own earmarks as justifiable spending appropriations.

But that’s old news. Now we’ve got South Carolina Governor Mark Sanford announcing that he will ask President Obama for a stimulus “waiver” that will allow him to apply $700 million worth of stimulus funds to paying down South Carolina’s “very sizable state debt and contingent liabilities.”

Aside from not appearing to understand what the word “stimulus” means, Sanford is displaying a distressing level of ignorance as to the nature of our current economic problems. In a letter to state legislators, Sanford wrote that “[W]hen one is in a hole, the first order of business is to stop digging.”

That kind of thinking might apply to, oh, I don’t know, enacting tax cuts without matching spending cuts, or waging a war without coming up with a source of revenue to offset its cost. But it does not apply to the problem of confronting a collapse in demand. To put it in Sanford’s own terms: to stop digging now runs the risk of making the hole much bigger. Each month in which 600,000 jobs are lost is a month in which 600,000 more people become significantly constrained in their ability to consume goods and services, which means that the companies that produce those goods and services go out of business, leading to more layoffs, and so on. The cycle is self-perpetuating and, so far, steadily accelerating. Paying down government debt at this particular juncture is probably the stupidest use of government funds possible.

The moderate conservative opinion columnist David Brooks had a choice word for this kind of economic strategy, when commenting on House Minority Leader John Boehner’s call last Friday for a spending freeze.

He said it was “insane.”

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.

Monday, Feb 23, 2009 6:10 PM UTC

Sanford: We could end up like Weimar Germany

The South Carolina governor compares the U.S., post-stimulus, to pre-war Germany and Stalin-era Russia, and gets some history wrong.

By Alex Koppelman

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South Carolina Gov. Mark Sanford has been one of the most prominent anti-stimulus voices recently, in large part because he’s made every effort to ensure that he gets the opportunity to tell reporters just how much he dislikes the stimulus. (Sanford in 2012, anyone?) Some of his media opportunities, though, have put him in a less-than-favorable light.

Politico’s Ben Smith points out, for example, two particularly interesting comparisons Sanford has made regarding the stimulus recently, one to Weimar Germany and one to “the Soviet grain quotas of Stalin’s time.”

The governor made the Weimar reference in the course of an interview with Politico in which he repeatedly talked about the lessons of history, drawing upon the old cliché, “people who don’t learn from history are destined to repeat it.” But Sanford also showed, in the same answer, that his knowledge of history could stand a little refresher course.

“The Golden Gate Bridge was a Hoover-era infrastructure project designed to get the economy going,” Sanford said. “The Hoover Dam was a Depression-era, you know, project designed to get the economy going.”

Neither claim is true. The Golden Gate Bridge was first proposed in 1872, and the California legislature passed the Golden Gate Bridge and Highway District Act in 1923. The Boulder Canyon Project Act of 1928, which authorized the building of the Hoover Dam, was ratified in June of 1929, months before the big stock market crash.

It might help Sanford if he chose better reading material. Asked about what he’s been reading to learn about this history; one of the books the governor cited was Harry S. Dent’s “The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History.” Dent’s previous book was “The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010.” In it, he predicted the Dow would hit 40,000 sometime in 2008. MaxFunds.com named Dent one of the winners of its Eight Annual Mutual Fund Turkey Awards, writing:

Of course, those who read The Roaring 2000s, Dent’s 1999 masterpiece, should soon be buying each of us a turkey with all the fixin’s. According to the book, only a year remains before the Dow breaks 40,000 and the Nasdaq hits 20,000, at which time we’ll simply amplify our fortunes by shorting stocks in the coming depression. We can’t underestimate how big this final move up will be before the depression kicks in, since The Dow and Nasdaq are currently quite a bit lower than they were back in 1999 when The Roaring 2000s was published…

Bottom line, when investors are feeling irrationally exuberant, feed ‘em Dow 40,000. When they’re feeling irrationally pessimistic, it’s time to pull out the Depression talk. It might not make your investors money, but you’ll make a killing in book sales.

Update: The Los Angeles Times’ Michael Hiltzik writes in with an important clarification about the Hoover Dam — he says the dam can be counted as a Depression-era project. The idea predated the Depression by some 20 years, and the necessary approval was secured before the big market crash in 1929, but construction wasn’t scheduled to start until 1931 or 1932, and President Hoover opted to move that date up in a bid to ease the country’s economic woes.

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Alex Koppelman is a staff writer for Salon. More Alex Koppelman.