Obama’s Deficit Reduction Plan: Phase II of a High-Risk but Coherent Strategy

I happened to catch the PBS NewsHour last night for the last part of this segment on Obama's deficit reduction plan. The sound happened to be down on the TV at the time. Even so, I could tell just by looking at the posture and facial expression of the liberal guest, Robert Greenstein of the Center on Budget and Policy Priorities, that he was jubilant. He looked like a cat with a bird in his mouth, feathers floating etc:

Philip Swagel

Maybe that was because his conservative opponent was Philip Swagel, a former Assistant Treasury Secretary in the George W. Bush administration, now a visiting fellow at the American Enterprise Institute on a break from his job as an economics professor at the University of Maryland. I had never heard of him in my life; in fact I thought at first that it was Rich Lowry from National Review. That told me a lot as well: The conservative heavy hitters were apparently unavailable to come on the NewsHour to try to argue against the Buffett Rule and so forth.

Rich Lowry

Greenstein is, for my money, the most credible liberal fiscal-policy analyst in D.C. And the guy could barely contain himself with glee. I remember last December when he gave his qualified blessing to Obama's post-midterm-election deal with the House GOP to trade forbearance on raising tax rates on the wealthy for an extension of unemployment benefits and a payroll tax cut. I tweeted the CBPP analysis and linked to it on Facebook, and was obliquely accused by various observers of "cherry-picking" CBPP charts (whatever that means) in order to put a too-sunny face on a bad deal.

But the CBPP seal of approval was really significant to me back in the bleak days of December 2010. Greenstein has a deep understanding of what's politically achievable, he's very well plugged-in to House and Senate Democratic members, leaders, and staff. He's not as flashy as Paul Krugman or Robert Kuttner, but he's done a heck of a lot more than either of them over the last 20 years to get the best possible legislative deals for liberals (which have admittedly been pretty bad deals as pieces of liberal legislation; my point is that K+K are excellent policy analysts but not at all credible as political tacticians).

So as a hopeless Obamaphile, I was sort of jubilant last night too. Because I see Obama's deficit-reduction plan as the execution of Phase II of a high-risk but nevertheless coherent political strategy:

Phase I

1. Realize that as a Black man, he is constrained in his ability to mount a full-throated "angry," "confrontational" opposition to GOP tactics, many of which ("You lie!" the birth-certificate nonsense etc.) were clearly designed to bait him into a furious response. If you watched the NewsHour video above, you heard Swagel try several times to call Obama "angry."
2. Wait until the GOP exposes themselves by taking a one-way trip to fiscal-policy crazy town with, for example, the Ryan plan to voucherize Medicare and the debt-ceiling shenanigans, not to mention Rick Perry's statements that "Social Security is a Ponzi scheme" and a "monstrous lie."

Phase II

1. Unveil a tough and politically powerful deficit reduction plan that places stark choices before voters: Preserve the New Deal largely intact OR keep taxes on hedge fund managers et al. at rates half of what their secretaries pay. But not both.
2. It wouldn't hurt if this unveiling took place in mid-September, after the August vacation and town-hall season had ended.

Will Phase II of Obama's plan work? Maybe not. But for a conciliator-type president who had a filibuster-proof Congressional majority for less than one year, it was a coherent plan. And he deserves the support of liberals for executing it.

Election 2012: 1860 Redux?

With Rick Perry now in the race and doing well, Michele Bachmann’s in trouble out in Iowa. A key staffer is leaving. I still can’t believe that all the Rockefeller Republicans I went to college with are going to stand for this Tea Party takeover. On the other hand, they do have a friend in Obama. As Matt Yglesias tweeted last week, Mitt Romney ought to run for the Democratic nomination.

I don't remember Bachmann making any big mistakes; she impressed me as a campaigner. I think Americans still have serious hangups about women in leadership positions. With time, we’ll get over this, thankfully.

Betty Draper

CTHULHU-INFLUENCED “GENERATIONS” DIGRESSION ALERT: There are so many older silent-generation (b. 1925-42) GOP women who would never vote for a woman for president. (This is the generation of women who were too young to have their value affirmed by the WW II effort and too old to join the 2nd-wave feminists—think Betty Draper in Mad Men.) This entire generation, both genders, is just plain confused about everything (generalizing here), and they’re not sure how to feel about women in power. This generation is also a key part of the GOP coalition. (Did you know that the Silents failed to elect a president? Mondale, Dukakis, and McCain were the only ones to even get nominated.)

How about this: a real 1860 four-candidate barn-burner: Perry wins GOP nomination, Romney starts new Prosperity Party, Obama wins Democratic nomination, and somebody runs to Obama’s left in a Progressive Party. It would have to be an old baby-boomer type, maybe Bernie Sanders (let me know if you can think of a better one...Tom Hayden?) The idea here would be to force through the generational transition of leadership from the Baby Boomers to Gen Xers. Obama’s an Xer; Romney's a boomer but he presents as a modern technocrat. Perry and Sanders will run the Baby Boomers’ last-hurrah campaigns. In this case, I'd say Romney wins, followed by Obama, Perry, and Sanders.

Obama’s Economic Policy

Note: this post started out as a comment to a post on the Iowa politics blog Bleeding Heartland. 

Obama’s critics from the left decry his adoption of the GOP frame on deficit reduction. I join them in this critique as a matter of economic policy; the best course right now is larger deficits to stimulate the economy, combined with a longer-term fiscal policy that aims to roughly balance the budget over the course of the business cycle (run surpluses during booms, deficits during during slumps). (Though I would note that as a sovereign issuer of currency the U.S. can comfortably run annual deficits in the 2% to 3% of GDP range indefinitely.)

Still, Obama refuses to follow the standard Keynesian course prescribed by sensible liberals. Why? Why does he adopt the economic policy that he does?

Here are some possibilities that occur to me:

• He genuinely believes that it is the right thing to do.
• It is part of a poll-tested strategy to retain enough independent voters in battleground states to enable him to win re-election.
• He is a blank slate on economic policy and is carrying out the views of various advisers.
• He is in the sway of shadowy special interests, say key Wall Street figures.
• He is basing his policies on a different set of data or assumptions than are his critics; in this case, both sides would call the other side "misinformed."
• He has a deep psychological need to please establishment figures such as the editorial board of the Washington Post, David Brooks, and the rest of what passes for a DC class of opinion leaders.
• He harbors resentment against liberals and wants to show them who's boss.
• He knows that government spending in this country is tied up inextricably with issues of race and that as a Black man he cannot activate those latent prejudices among the electorate.

I think the likeliest explanation is the poll-tested strategy one, but I think the race issue has been curiously underplayed. Which ones did I leave out?