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?

A Couple of Points re Obama’s Tax Proposal

A couple things that I don't think have been covered sufficiently, either because they're too subtle for the day-to-day news cycle or because Obama has failed to communicate them; probably some of both.

1. The so-called “Bush Tax Cuts,” as enacted, are scheduled to expire on December 31, 2010. That was the law that President Bush pushed for and signed. He may have wanted and expected the tax cuts to be made permanent at some point, but that's really neither here nor there. You don't get credit for good intentions, or you shouldn't, anyway. If people (with incomes less than $250,000) are paying the same marginal tax rate in 2011 that they did in 2010, that's Obama's doing, not Bush’s. I suppose it's too much to request that such a policy be referred to as the “Obama tax cut;” anyway when even Democratic partisans fail to do so it’s probably not gonna happen.

2. The phrase “allow the tax cuts to expire for those making more than $250,000” makes it sound like people with income in that range are going to lose the entirety of their Bush-era tax cuts. Not so! It just means that they’ll no longer pay the lower Bush-era rates on the dollars above $250,000. Dollars 1 through 250,000 will still be taxed at the lower rates, which means that if Obama follows through on his campaign promise, this cohort will still get a substantial tax cut. Smaller than the tax cut that Bush gave them, sure, but larger than the zero tax cut they’d have if Obama does nothing.

Target Reaps Political Donation Backlash

Back in January when the Supreme Court handed down its decision in the Citizens United case allowing coporations and labor unions to donate to political candidates, I was pretty sanguine about it, thinking it might clarify links between donors and candidates.

Talking Points Memo highlights a recent controversy involving Target that illustrates the sort of situation that I had in mind:

We noted recently that Minnesota-based Target had availed itself of the new freedom created by the Citizen's United decision to give $150,000 to support far-right Minnesota gubernatorial candidate Tom Emmer. And in so doing they reaped a big backlash. Target's aim seems to have been to support Emmer's economic policies. But the backlash came over Emmer's extremely anti-gay policy stands. (He's also really against waiters.)

Target's CEO has now taken the pretty extraordinary step of issuing a public apology for the donation.

Target, as it happens, has a quite good corporate record on LGBT issues and workplace policies. So it's a fascinating example of how cross-cutting and complicated Citizen's United giving may turn out to be.

If Target had donated to Emmer under the old regime, via 527s and other shadowy routes, would we have even heard about it?

When Politics Was a Lark

In the comments responding to Lord John Whorfin's recent post on ancient political themes to resurrect for a new era, the election of 1884 leaps to the fore. Desmoinesdem recalls that the Democrats were branded as the party of "Rum, Romanism, and Rebellion," prompting Whorfin to recite the bouncy couplet "Blaine, Blaine, James G. Blaine – Continental Liar from the State of Maine."*

Another catchphrase from that contest was "Ma, Ma, where's my Pa?" a taunt directed at Blaine's opponent Grover Cleveland, who may or may not have fathered a child out of wedlock. The taunt backfired when Cleveland refused to disavow the child, and he won anyway, prompting his supporters to gleefully answer,"Gone to the White House, ha, ha, ha!"

Also, too: Mugwumps.

My own crackpot theory is that the period between Reconstruction and World War I — when it was clear that the U.S. was going to survive as a nation, but before it had assumed the mantle of world leadership — was America's adolescence. The nation was industrializing, and prospering, more or less, but it had no international responsibilities. The Presidents were callow political hacks, big-man-on-campus types, known more today for their fanciful facial hair styles than for their policies. The Lincoln-Douglas debates and the Gettysburg Address gave way to sing-song rhymes and slogans born of a nascent culture of advertising.

But surely the frivolity and whimsy of Gilded Age politics is preferable to the grim cable-news political culture of today. If your go-to rhetoric once a new president is elected is to accuse him of being a fascist/communist/socialist who wants to destroy America, you don't leave yourself much room to maneuver. You're pretty much required to compare all his policies to Hitler's from here on out. Both sides engage in this apocalyptic stuff, but it's undeniable that the Tea Party, abetted by the media, has taken it to a whole new level.

Well, nothing much to do about it, I guess, but wait and hope for a relatively peaceful transition of the U.S. to "hegemon emeritus" status, like the U.K., so that we can hopefully emulate the more down-to-earth regard that the British have for their head of government.

*Issue for further study: Does the relative ease of rhyming "Maine" in campaign doggerel hinder the presidential aspirations of politicians from the Pine Tree State?

Stay on the High Road

The "Go for it" taunt made me wince. Sorry to see that it was apparently part of the prepared remarks as well. It's a needless bit of dancing in the end zone, if you ask me, and out of character for Obama.

You never want to provide headlines for the other team to put on the locker-room bulletin board. Also, his credibility with independents is too fragile yet to act so cocky.

Obama does this sort of thing from time to time -- cutting remarks like "You're likable enough" to Hillary Clinton and "I won" when in a Roosevelt Room meeting with Dem and GOP leaders last year on the stimulus.

When I saw this, my mind went immediately to the image of President Bush's callow challenge to insurgents in Iraq to "bring it on." Which they did.

Quick Health Care Reform Post-game Show

I grieved the loss of the public option last year. My fear over the past month was more political: that the Democrats would once again get scared of offending someone rather than realize that people respect parties and politicians who disagree with them if one knows where they stand. So winning this vote, as weak as the actual legislation is, should work as a confidence-builder.

Most of the Democrats in Congress have spent their entire careers cowering in fear of someone calling them a “liberal.” It took new blood, someone like Al Franken who hadn't had time to get into the DLC-Frum-Carville defensive crouch, to get impatient and demand that Obama do some spadework on this. And then Pelosi's sharp-elbowed personality, which I hadn't ever found endearing before, was put to good use.

As for the legislation itself, I'm persuaded by the analysis that it's a foot in the door, and an important re-definition of the federal role in health care. We’re closer to a single-payer system now.

Also, back to the politics, I think Obama’s detachment during 2009 was part of a longer-term plan to establish his bona fides as a post-partisan. The country doesn't blame him for his failure to get GOP votes, and the next two issues, immigration and financial reform, are going to be trickier for the Tea Partiers to oppose.

Tyranny

Given the fears of the Tea Party and some prominent Republicans that Obama is a tyrant in waiting, I can't help but wonder what they would think of this scenario:

The Supreme Court rules that a state law, on the books for generations and a deep-seated feature of the local culture, is unconstitutional. The governor of the state in question, responding to the vocal demands of his constituents, announces that he will refuse to abide by this "legislating from the bench" by nine unelected judges. He calls out the state militia to enforce the now technically defunct, but still overwhelmingly popular, law.

The President of the United States, unmoved by either the governor's appeals or an impassioned outcry from the citizenry, deploys an elite brigade of U.S. Army soldiers to implement the Court's decision. He also takes command authority over the state militia away from the governor. The President uses his constitutional power as Commander in Chief of the armed forces to impose his will on the state and its citizens. He wins the confrontation and abolishes, at the barrel of a gun, the state's duly-enacted law.

Of course this scenario really happened, 53 years ago. The President was the noted tyrant Dwight D. Eisenhower.

In 1957, the Brown v. Board of Education decision, which had been handed down three years earlier, was finally implemented, "with all deliberate speed," in Little Rock, Arkansas. The New Yorker has a stirring collection of photographs of the surviving actors in the civil rights struggle in the February 15 issue, and there is a multimedia feature on the New Yorker website. The photo below is from that collection. It depicts, some five decades later, the "Little Rock Nine," the nine Black high-school students who were escorted into Little Rock High School by U.S. Army paratroopers from the 101st Airborne Division in 1957.

 

Image: Platon / The New Yorker.

Homemade Graphs! Now with 25% more context!

This graph from Organizing for America showing monthly job-change since the beginning of the recession has been making its way around the Internet. I think the point is supposed to be that Obama is turning the country in the right direction. Well, maybe he is and maybe he isn't. After all the percentage of home mortgages at least 90 days delinquent was up 2.1% for the year ending Q3 2009. (And the mortgage delinquency problem is not one of those declining-rate-of-decline situations: the Q3 2009 rate was up 5.0% just for the quarter.)

In any event, I have the feeling that one of the lessons we're supposed to take from the OFA graph is something like: "If only Scott Brown voters had seen a graph like this before they went to the polls in January surely they'd never have made the choice they did." I don't know what bothers me more about this: that folks are (still) surprised that reason and fact-based thinking failed to carry the day in the MA special Senate election, or that they think this graph an instance of reason and fact-based thinking.

Anyway, here are a couple graphs that I made myself. (Click on them for full-size versions.) One uses the same BLS data as the OFA graph but gives it some annoying historical context: it goes back to 1946. Each color is a different presidential administration. Looks like Nixon and Reagan had themselves some pretty good years by this measure. Hell, just go back to 2003 and you'll see that Dubya presided over the addition of better than 8 million jobs for a spell. A version of the OFA graph created in January 2008 would have had Bush 43 looking like the King Midas of employment.



And here's one that's about as helpful as the OFA graph in understanding a president's influence over short-term changes in employment conditions. It shows that inflation-adjusted average weekly earnings have gone down since Obama took office (the gold bars) -- after rocketing up in Bush's last half-year.


Maybe this is the one Brown voters saw?

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.