Is $100 Million A Lot of Money or Not?

by: David Sirota

Thu Apr 30, 2009 at 08:36


About a month ago, Obama administration officials like Rahm Emanuel and David Axelrod were storming Washington, D.C. television studios to insist that $165 million in AIG bonuses wasn't a big deal. The basis for their argument was the contention that, in the context of the federal budget and financial crisis, $165 million is a tiny amount of money that nobody should really care about (this rationale is why the Congress ultimately did nothing to stop the AIG bonuses).

Yet, last week, the same Obama administration is running back to the same Washington, D.C. media insisting that the president's demand for his cabinet officials to cut $100 million in federal spending is a very big deal:

"Only in Washington, D.C., is $100 million not a lot of money," Gibbs said. "It is where I'm from. It is where I grew up. And I think it is for hundreds of millions of Americans."

I'm confused. Does the Obama administration think $100 million (or $165 million) is a lot of money or doesn't it? Or are we expected to believe it's a tiny amount of money when it might embarrass the administration, but a huge amount of money when it might cast a positive light on the administration?

For my part, I've always thought $100 million is a lot of money, no matter whether it's being given to Wall Street executives or cut out of important government programs. I'm just confused about what the Obama administration thinks.

Just like someone can't be half pregnant, the administration either thinks $100 million is a lot of money or it doesn't. You can't say $100 million is insignificant and then a month later say it's hugely important - well, actually, you can, but not without shredding your credibility.
David Sirota :: Is $100 Million A Lot of Money or Not?

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Is $100 Million A Lot of Money or Not? | 14 comments
that's politics (0.00 / 0)
I like Obama better than most politicians, but his administration still does the same message/spin BS as all the rest of them.

I'm glad you point this out though, I do agree that it is useful to remind people that the President doesn't walk on water.  That's not to say that he isn't doing a good job for the most part.

True... (0.00 / 0)
Although I don't think his spin is as bad as W's.   On par with Clinton.
[ Parent ]
Well, 100 mio/day is "only" 36.5 billion a year... (0.00 / 0)
..as Krugman recently pointed out. The bailouts are about several times that sum. So, no, for the president of the US, 100 millions is not much money. If he would start "micromanaging" decisions on such a scale, he would only waste his time. This stuff should be left to the officials of his administration, and he should concentrate on the big picture and finding the right course.  
Here's that Krugman column, postedlike a week ago! (4.00 / 1)
"pretty soon, even here in Washington, it adds up to real money," says the president.

Except, you know, really it doesn't. Let's say the administration finds $100 million in efficiencies every working day for the rest of the Obama administration's first term. That's still around $80 billion, or around 2% of one year's federal spending.


http://krugman.blogs.nytimes.c...

Apart from Krugman rightly putting that "large" (relative to the wages of a worker or the income of the president) sum into perspective, pls note that the president obviously SUPPORTS the view that this is "real money" (as if anyone doubts that. Governement doesn't issue counterfeit money. Yet.). At the same time, of course, 165 million isn't much money relative to a bailout that consists of several hundred BILLIONS.

No misunderstanding, sure it's right to fight against decandent boni for managers of a failed company. Their ship is sinking, and nobody should get a golder lifeboat. But the point about the administration not seeing 100 million as a significant sum is a bit farfetched, imho.

[ Parent ]
There are several points concerning numbers of people and big money (4.00 / 1)
If the dozen cabinet members each found $100M the savings might indeed be relatively paltry. But if each of them passed the challenge to others the numbers would get significant pretty quickly.

Conversely those golden lifeboats did not go to many people and the total was a very small percentage of the total bailout. On the other hand I saw where if the bonuses were divided among the bank tellers rather than the CEOs that it would have paid off all their mortgages! I did not see the math but would not be surprised.

[ Parent ]
Spin (0.00 / 0)
David,

You know very well that in the world of political spin you can ALWAYS be half pregnant ;-)

Kind of like a Schrodinger pregancy! (0.00 / 0)
As long as nobody has seen the baby, it's existence is undetermined!
:D

On second thought, this actually happens from time to time. Pregnancies that turn out to be based on an extreme appetite for fast food and chocolate, obese teenagers who totally unexpectedly become a mother...
:-/

[ Parent ]
David... (0.00 / 0)
I don't think they have any credibility left, at least as far as I'm concerned  From the Bank Bailout to continuing to defend the Bush/Cheney state secret act in the courts...to the comment last night at his press conference ACCURATELY referring to waterboarding as torture, then calling it just simply a mistake and not calling it a CRIME that should be prosecuted to the fullest extent of the law is an absolute disgrace!  At this point, I have NO RESPECT for Obama or his Administration period! And by the way, I know there are people who claim to "like" President Obama better than the majority of politicians, but "liking someone" doesn't mean giving him a "pass" on upholding the rule of the law and the defending the Constitution...
To Be Or Not To Be...Consistent that is... (0.00 / 0)
The President's people are one of the most talented and educated team we've ever been blessed with in this country. However, to modify a quote from Calvin Coolidge, "Nothing is more common than unsuccessful people with education."

Let's hope we'll see this team ramp up their level of competence before another ten million US citizens become unemployed.

Mama E Relationships Advice  

That's a new account. And a commercial link. On the other hand... (0.00 / 0)
...citing Coolidge to make a valid point is somewhat cool.
:-/
Chris, what shall we do with, hmm, "reasonable" spammers like docrich here?
[ Parent ]
Its all relative, I guess (4.00 / 1)
$100,000,000 is 1/2 of the total ARRA funds directed toward the NIH for purposes of distributing to researchers across the country to stimulate new projects, build equipment infrastructure, while retaining and creating jobs. On the basis of that $200 million allotment we have just completed the application process for grant proposals (Challenge Grants; brand new mechanism) that generate roughly 10-15 thousand proposals, each with a 2 year budget of roughly $1 million each. The estimate is that the funding rate will be about 0.014 to 0.02% - pretty paltry. Compare to the average funding rates (way down, BTW) over the last few cycles of around 10%.

So, yeah, $100 million is a lot of money, but in some contexts, far too little.

Are we really proud of the fact that the bankster bonuses are roughly the same amount of $ we have devoted to stimulating the NIH research?  

"It sounds wrong...
     ...but its right."

If you want more virtue from the government (0.00 / 0)
you have to change the culture so that we all are more virtuous.

There is no shortcut.

Depends on... (0.00 / 0)
...what the meaning of "is", is. :)

To us mere mortals, a hundred million is a sum that is hard to grasp. That it seems a pittance to DC pols and Wall Street "wizards" might be part of the reason we are in the sorry shape we find ourselves in today.

No tennis courts? (0.00 / 0)
How dreadful!
Is $100 Million A Lot of Money or Not? | 14 comments
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