Cheaper peanut butter

February 7, 2006

This has to be one of my favorite metaphors of all time.

Mr. Bush proposed an array of savings in domestic programs, including big reductions or cuts in 141 programs. Critics asserted those reductions would do little to ease the deficit even as they imposed real hardship on some people, constituting pain for little gain. Gene B. Sperling, a former economic adviser to President Bill Clinton, compared it to a man who leases three fully loaded Hummers, finds it stretches his family’s budget to the breaking point, and decides his family has to start buying cheaper peanut butter.

“They’re trying to create a framework where it seems the government can’t do anything dramatic on child poverty or helping people between jobs because there’s too much discretionary spending,” Mr. Sperling said. “And their own numbers show that’s flat out wrong.”

Damn straight. In fact, instead of highlighting every individual tragedy in the president’s latest budget, I think it’s probably better to summarize something else: the responses to the Bush budget in DC, especially from Republicans.

* Senator Olympia J. Snowe, Republican of Maine, said she was “disappointed and even surprised” at the proposed restrictions in Medicare and Medicaid.

* Sen. Arlen Specter, R-Pa., chairman of Senate’s appropriations subcommittee on education, labor, health and human relations, said, “It is scandalous to provide insufficient funding for our nation’s two greatest capital investments: health and education.”

* Sen. Charles E. Grassley, Iowa Republican and chairman of the Senate Finance Committee, said last year’s Medicare and Medicaid cuts of $11.1 billion over five years were tough and that “any more reductions of a significant scope could be difficult this year.”

* “This budget is utterly detached from any financial reality,” said Sen. Kent Conrad of North Dakota, the top Democrat on the Senate Budget Committee.

* “This budget is not going to happen,” said Stanley E. Collender, a federal budget analyst at Financial Dynamics Business Communications. “Of all the budgets I’ve seen recently, this is the one going nowhere the fastest.”

That about sums it up, doesn’t it?

They are good at saying things and I am sure they believe what they are saying but anyone want to lay odds on whether their actions match their words? The GOP likes to portray the Democrats as wimps (which they are) but they aren’t any better at standing up to this administration and their party.

  • The peanut butter analogy is especially apt because back in the 70s peanut butter prices skyrocketed because of demand: families getting killed by the recession were buying more of it as a cheap source of protein. The price of peanut butter is also often used as an economic indicator, and whether or not it’s considered a luxury is a measure of one’s affluence.

    There’s also an IT version of this analogy called “the peanut butter syndrome.” As it was described in Computer World (3/8/04):

    ‘The recession has forced most IT organizations to cut their budgets, projects and staffs. Companies often believe that by putting all IT expenses into a single budget and squeezing that budget hard enough, they can force total IT expenditures down to some arbitrarily predetermined level. But IT’s purpose is to enhance business productivity. If the central IT budget is overly constrained, the business units will bury IT costs in their own budgets.

    ‘The result is the “peanut butter syndrome.” If you hold a lump of peanut butter in your hands and squeeze it hard enough, eventually some of the peanut butter will squish out between your fingers. Similarly, when the central IT budget is squeezed too tightly, IT spending will spill into other budgets.”‘

    http://www.computerworld.com/managementtopics/management/project/story/0,10801,90789,00.html

    In other words, some things just aren’t compressible such as the basic cost of survival (food, water, shelter). The Bush administration, millionaires all, has never had to compress, so they can’t even fathom this.

  • The price of peanut butter is also often used as an economic indicator, and whether or not it’s considered a luxury is a measure of one’s affluence.

    Excellent point, AYM. I hadn’t thought of that.

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