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.

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?

Obama Puts on a Clinic in Political Maturity

As much as I usually loathe Maureen Dowd's shallow, personality-driven take on politics, I do have to say that her Sunday New York Times column is an excellent summary of the Obama-GOP meeting that occurred on Friday and that I urged folks to watch in full on the web.

This British-Parliament-style "question time" displays the Obama that I still must say I believe in, the Obama who understands that his place in American history may involve becoming the leader of – or at least midwifing the birth of – a new centrist or center-left party – they could call it the American Party or something like that – that blows up, once and for all, this ridiculously intractable red-blue partisan divide that we find ourselves in.

Can't say I got the shout-out to Camus though.

The Demise of the Southern Veto

As a region, the South is more politically isolated right now than at any time since the Civil War. For most of our nation's history, the South has been so disproportionately powerful that the section has wielded a "Southern Veto" over U.S. politics and policy. A brief and admittedly oversimplified history of the Southern Veto over the years would include the following:

In 1776, Thomas Jefferson was forced by delegates from Georgia and South Carolina to remove a clause from the Declaration of Independence condemning the African slave trade.

During the drafting of the Constitution, the Southern states insisted on being allowed to include their slave populations to determine representation in Congress and the Electoral College. The Northern states objected of course, since they had few slaves. To break the impasse, delegates from North and South agreed to count three-fifths of a given state's slave population in determining that state's representation. This shifted the balance of power in the Electoral College to the South in such a way that it routinely swung antebellum presidential elections in favor of candidates that were acceptable to the South.

When the modern Democratic Party organized itself the 1820s, it decided to require a two-thirds majority in order to nominate a presidential candidate. This gave the South an effective veto over any Democratic presidential nominee. For over a century afterwards, the Democratic Party existed as a coalition between Southern slaveholders and segregationists and the big-city machines of the North. Thanks to the two-thirds rule, every Democratic presidential nominee and his platform had to be acceptable to the South.

As a northerner, FDR found his New Deal initiatives severely constrained by the Southern Democrats who controlled key Senate committees. For instance, to get Social Security passed, FDR agreed to exclude agricultural and domestic workers from the program, leaving huge numbers of Southern Blacks out of Social Security entirely.

Other than Obama, the only non-Southern Democrat to be elected President since FDR was JFK. His domestic social agenda, which included civil rights and Medicare, went nowhere until after he was assassinated. His Southern successor LBJ pushed through both initiatives, turning the "Solid South" over to the Republican Party in the process.

Today, with Obama in the White House, the G.O.P. boasts electoral strongholds only in the South and in the sparsely populated Plains states. The Southern Veto, and especially its power over the Democratic Party, appears to have been finally overridden, at least for the time being. For example, there was only one Southerner among the "Gang of Six" centrist Senators in this summer's health care debate: Mary Landrieu from Louisiana. It is instructive that this lone Southern moderate hails from a state with a polyglot, cosmopolitan culture and history that sets it apart from the rest of the South.

Barack Obama is the gravest threat to the political power of the South since Lincoln. Viewed against this backdrop, the current town-hall-birther-deather-teabagger freak-out makes a bit more sense to me.

Obama's Health Care Speech

A classic of rhetorical technique:

1. Start with Ethos: Establish your credibility as someone to listen to. "When I took office, the economy was on the brink. Things are still bad, but we've pulled back from the edge. I am a competent manager."

2. Logos: Give a logical argument for why your approach is best. Obama offers a series of wonky arguments for why his reform is the best route.

3. Pathos: Appeal to the heart, and ask people to take some action. Obama invokes Ted Kennedy, and reminds us that wanting to help your fellow man is not a partisan issue.

Rhetorically, a very strong speech. Unknown is how many persuadable people actually watched it.

Comparing Obama and FDR

This New York Times op-ed, Roosevelt: The Great Divider, argues that FDR rammed through his New Deal program with nary a care for the opposition. The implication is that Obama can and should do the same with health care reform.

However, there are some key differences between the situations faced by Obama and FDR:

1. The economy was much, much, much worse during the Great Depression than it is now. Much worse. Unemployment was 25%. There was no government safety net to speak of. The severity of three and a half years of Depression prompted the electorate to demand a radical response.

2. The economy was so bad, in fact, that the middle class identified politically with the poor, which is rarely the case. It certainly is not the case today.

3. The Congress is much more evenly split today. In 1937, the GOP was down to 17 seats out of 96 in the Senate and 88 seats out of 435 in the House.

4. The populist energy during FDR's administration was on the left and it demanded change. Today, the populist energy is on the right and it opposes change.