FDR was Hoover, too

We've all heard by now that FDR cut spending in 1937, sending the economy into a sharp recession that reversed much of the rapid economic growth his New Deal policies had helped spur in his first term. 

What's less well known, I think (at least to me), is that when he reversed course after this disastrous bout of balanced budget fever, he did so only fitfully, with ambivalent half measures, and the economy sputtered on with weak growth and unemployment near 20% until 1941, when wartime spending kicked in. Moreover, his assault on big business, via populist denunciations and new corporate taxes -- driven mainly by a need in 1935-36 to cover his left flank and stave off a feared populist third-party challenge -- left a widespread perception that he'd driven away the confidence fairy. David M. Kennedy summarizes in Freedom from Fear: The American People in Depression and War, 1929-1945:

Yet so far as the economy was concerned in 19838, Roosevelt's actions looked for the moment to be something considerably less than revolutionary. The president may have planted the seeds of the "Keynesian Revolution" in American fiscal policy, but it would be some time before they would fully flower. In the meantime, Roosevelt seemed to have wrought the worst of all worlds: insufficient government spending to effect recovery, but sufficient government sword-rattling to keep private capital cowed. "The President won't spend any money," an exasperated Jerome Frank exclaimed. "Nobody on the outside will believe the trouble we have with him. Yet they call him a big spender. It makes me laugh." As for private businessmen, they still hesitated to make new investments. Why, the president mused on night at dinner, did they lack confidence in the economy? Eleanor replied tellingly, "They are afraid of you."  Deprived of adequate public or private means of revival, the economy sputtered on, not reaching the output levels of 1937 until the fateful year of 1941, when the threat of war, not enlightened New Deal policies, compelled government expenditures at levels previously unimaginable.

Promise and peril for the Affordable Care Act

In December 2009, Atul Gawande expressed hope that a "hodgepodge" of cost control measures stuffed into the Senate healthcare reform bill, most of which later made it into the Affordable Care Act, might have a transformative effective over time:

Where we crave sweeping transformation, however, all the current bill offers is those pilot programs, a battery of small-scale experiments. The strategy seems hopelessly inadequate to solve a problem of this magnitude. And yet—here’s the interesting thing—history suggests otherwise.

Gawande goes on to review the history of Federal government intervention in the agriculture sector in the early 20th century gradually but radically transofrmed farming methods andled to massive increases in productivity.  For healthcare too, he argues, there is no master switch. Trial and error, orchestrated by carrot and stick, is the model:

Rat race or fluid human dance?

Way back when, while teaching freshman composition, I used to sometimes assign an essay by Tom Wolfe in which he stood on the mezzanine balcony at Grand Central Station with a social scientist who compared the commuters below to rats. "Listen to them squeak," the guru said -- and sure enough, Wolfe reported, there was a regular squeak of pivoting soles.   This was, we were given to believe, the rat race made literal.

Productivity revolutions can hurt

Program update: thanks to Hurricane Irene, I am held over in Ireland -- a very nice place to be stuck, I must admit.  Continuing squibs based on current reading....

In December 2009, Atul Gawande drew an extended analogy between the agricultural revolution of the early 20th century, sparked by an array of creative government programs that promulgated improved farming techniques, and the welter of cost control measures packed in the Affordable Care Act, which collectively may have the potential to radically lower healthcare costs while improving quality. Here's Gawande's overview of what happened in agriculture, circa 1900-1920:

The United States did not seek a grand solution. Private farms remained, along with the considerable advantages of individual initiative. Still, government was enlisted to help millions of farmers change the way they worked. The approach succeeded almost shockingly well. The resulting abundance of goods in our grocery stores and the leaps in our standard of living became the greatest argument for America around the world. And, as the agricultural historian Roy V. Scott recounted, four decades ago, in his remarkable study “The Reluctant Farmer,” it all started with a pilot program....

What seemed like a hodgepodge eventually cohered into a whole. The government never took over agriculture, but the government didn’t leave it alone, either. It shaped a feedback loop of experiment and learning and encouragement for farmers across the country. The results were beyond what anyone could have imagined. Productivity went way up, outpacing that of other Western countries. Prices fell by half. By 1930, food absorbed just twenty-four per cent of family spending and twenty per cent of the workforce. Today, food accounts for just eight per cent of household income and two per cent of the labor force. It is produced on no more land than was devoted to it a century ago, and with far greater variety and abundance than ever before in history.

What I'm learning from David M. Kennedy's Freedom from Fear: The American People in Depression and War, 1929-1945  is that however good this 'revolution' proved to be for consumers, it was absolutely wrenching for farmers. According to Kennedy, American farmers (who still made up 30% of the U.S. population in 1930) had been suffering a Depression of their own since the end of World War I, when prices collapsed. The problem was essentially massive oversupply, triggered by those wonderful productivity gains. The early New Deal remedy was the set of subsidies -- paying farmers not to grow certain crops -- that plague us to this day. Then as now, too, those subsidies disproportionately benefited large holders -- particularly southern landlords, who responded to incentives not to grow by depriving their sharecroppers of their less-than-bare-subsistence livelihood.

Another disillusioned pundit

N.B. I am trekking the Kerry Way in Ireland this week and just slipping in a squib or two from current reading here and there...
-----
After the president signed a controversial bill that most economists believed would worsen a sharp economic slowdown, a former admirer wrote that he

had surrendered everything for nothing. He gave up the leadership of his party. He let his personal authority be flouted. He accepted a wretched and mischievous product of stupidity and greed...

Why? The pundit probed for the President's tragic flaw:

He has the peculiarly modern, in fact, the contemporary American, faith in the power of the human mind and will, acting through organization, to accomplish results...[but] the unreasonableness of mankind if not accounted for in [his] philosophy...in the realm of reason he is an unusually bold man; in teh realm of unreason he is, for a statesman, an exceptionally thin-sknined and easily beweildered man...He can face with equanamity almost any of the difficulties of statesmanship except the open conflict of wills.

When the social contract was new

One perhaps obvious point about the United States' formative period is brought home vividly in Pauline Maier's Ratification: The People Debate the Constitution, 1787-1788.  It's this: the framers, and many of those debating ratification, were quite consciously trying form a new social contract -- that is, implement some version of the social contract theory developed over the prior century-and-a-half. In fact, worries about the chaos that might ensue if the inert federal government was not replaced with a functioning one made some fear the return of a state of nature, which must have added to the sense of being in at the birth.  The sense of consciously forming something new, yet doing it deliberately and in accordance with the norms of representative government already developed, is really quite astonishing. It was an almost scientific experiment and a lived creation myth rolled into one.  Here is James Wilson making the opening bid for ratification in the Pennsylvania ratification convention (as paraphrase/quoted by Maier):

"Government...taken as a science may yet be considered in its infancy," Wilson said, and it had in the past been the product of "force, fraud, or accident." America, he said, offered the first instance "since the Creation of the world...of a people assembled to weigh deliberately and calmly, and to decide leisurely and peaceably, upon the form of government by which they will bind themselves and their posterity."

That's true, isn't it? Remarkable...

Polarized politics, 1787

In the United States, the bitter charge that a majority that wants to bring an ambitious project to a vote is trying to ram it down our throats has a long pedigree.  In Pennsylvania, the first state to ratify the Constitution, such was the lament of the minority who were either opposed to ratification, undecided, or in favor of making ratification conditional on the opportunity to amend.

Moreover, the minority was right, according to the narrative stitched together by Pauline Maier in  Ratification: The People Debate the Constitution, 1787-1788.  Pennsylvania proponents of the Constitution wanted to be the first to ratify. They convened the ratifying convention in November, just two months after the framers completed their work, and before copies of the Constitution had had time to fully penetrate the enormous rural expanse of the state. In fact they scheduled the ratifying convention before Congress had decided the manner in which it would present it to the states.  That led a conditional supporter of the proposed new scheme of government, Robert Whitehill, to complain, "I don't know any reason there can be for driving [the Constitution] down our throats, without an hour's preparation"...unless it was "a plan not fit for discussion" (p. 61). 

Program note

I'm going to be mainly out of blogging range this coming week.  A couple of posts are scheduled to go up, on Sat. and Monday and next-gen family guest bloggers may appear. Have a good!

"You are too shallow, Hastings...to sound the bottom of the after-times"*

There is a certain strain of conservative British fantasist that pits the folly of the common people, Coriolanus-like, against the beleaguered wisdom of leaders. George MacDonald, in The Princess and Curdie,  portrays a benevolent king gradually worn down by the recalcitrant foolishness and greed of his people.  In Tolkien's Lord of the Rings, battle-hardened chieftains keep the faith and hold the line against the encroachments of Mordor as their people weaken.  C.S. Lewis has more of a feel for the ways in which the powerful and ruthless deceive and enslave common folk, but he too betrays a weakness, in the Dawn Treader vignette of the Dufflepods ruled by a fallen star, for the vision of the wise ruler bemusedly enduring the follies of his simple subjects  (though Lewis is more consistently smitten by the fantasy of a contented and submissive populace willingly ruled by wise and benevolent monarchs).

Perhaps it is in this spirit that Sir Max Hastings laments that voters in the western democracies will punish at the polls leaders who tell them the hard truth about "the scale of upheaval and the sacrifice necessary to meet it."  Suggesting that "we get the political leaders we deserve" -- which may in some ultimate sense be true -- Hastings seems blithely unaware of the first axiom of political science: economic conditions (absent all-encompassing catastrophe) shape the dominant public perceptions of leaders everywhere. There's not much point in excoriating "pampered European and American voters" for blaming "bad news" on leaders currently in power. All electorates everywhere do that, to the extent that they're free to choose at all. 

Some comparisons are obvious...

of course, of course. But still, this echo gave me a bit of a chill.  One passage in my rebuttal of Drew Westen's attack on Obama bounced around the web quite a bit, e.g., in the LA Times online:

Sprung, blogging at Xpostfactoid, compared Obama's challengers on the left to Martin Luther King Jr.'s critics during the civil rights era. "Let's not forget that many African Americans at times regarded King as an appeasing sellout, much as many progressives now see Obama as one," Sprung wrote. "The Panthers and the Nation of Islam were more satisfying to many. King called out his adversaries, but he never shrank from engaging with them. Neither has Obama — though the results have not always been what his base could have wished."

Obama, of course, quotes King all the time, and is not shy about identifying with him or Lincoln (and damn the obvious "Mr Obama, you're no..." rejoinders).  As in Iowa yesterday:

"I think that we forget when [Martin Luther King Jr.] was alive there was nobody who was more vilified, nobody who was more controversial, nobody who was more despairing at times. There was a decade that followed the great successes of Birmingham and Selma in which he was just struggling, fighting the good fight, and scorned, and many folks angry.  But what he understood, what kept him going, was that the arc of moral universe is long but it bends towards justice.  But it doesn’t bend on its own.  It bends because all of us are putting our hand on the arc and we are bending it in that direction.  And it takes time.  And it's hard work.  And there are frustrations."

O hear Emanuel: the deficit war may already be won

If this trend reported by Maggie Mahar holds up -- and if theSupreme Court doesn't sandbag it -- it could be worth more for America's long-term fiscal health than all the deficit reduction plans put together:

While our elected representatives wrangle over slicing entitlements, virtually no one seems to be paying attention to an eye-popping fact: Medicare reimbursements are no longer accelerating at a break neck-pace. The new numbers should be factored into any discussion about healthcare spending:  From 2000 through 2009, Medicare’s outlays climbed by an average of 9.7 percent a year. By contrast, since the beginning of 2010, Medicare spending has been rising by less than 4 percent a year. On this,  both Standard Poor’s Index Committee and the Congressional Budget Office (CBO) agree. (S&P tracks healthcare spending with the help of Milliman Inc., an independent actuarial and consulting firm.)...

Obama's uncertain trigger finger, cont.

I have suggested before that Obama's endgame in the deficit reduction fight is basically the busted Boehner deal, which in turn looks awfully like the plan the President sketched out in April: an alleged $4 trillion in deficit reduction over 10-12 years, with $800b -- $1 trillion coming from new revenue, $2+ trillion in alleged spending cuts, and close to $1 trillion from alleged reduced interest payments.  Two bullet points in the White House's outline of the debt deal struck in early August would seem to bear this out:

•  ...the President will demand that the Committee pursue a balanced deficit reduction package, where any entitlement reforms are coupled with revenue-raising tax reform that asks for the most fortunate Americans to sacrifice. 

• The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.

History of the United States: Counterfactuals in the Prequel

I am about 1/4 through a remarkable book, historian Pauline Maier's Ratification: The People Debate the Constitution, 1787-1788 (2010).  What's remarkable about it is that, so far at least, Maier has delivered precisely on the narrative premise she posed in the introduction:

A writer can build suspense in telling a story, [Barbara Tuchman] said, even if the reader knows how the story turned out, so long as the writer never mentions the outcome until it happens at the proper place in the story. This book is, among other things, an effort to test that theory.
     For the experiment to succeed, however, requires readers who are willing to play a game. They need to forget for the moment much of what they know about the American past, and return in imagination to another time when there was no Constitution, when the federal Convention had not even met, and watch events occur, step by step, unaware of how they would turn out (p. xvi).

This is precisely what's so fascinating about the book. Maier's narrative sympathies, if not her settled judgment, are with those who objected to the Constitution in the form in which it was presented for ratification.  State by state, she relates the objections and anxieties of those who rejected or had serious reservations about the Constitution or about the ratifying process (people complained, with some justice, that the Constitution was being "rammed down our throats"!). These included the little matter of the absence of a bill of rights, the nonrepresentative nature of the Senate, the new Congress's powers of taxation, the lifetime tenure of judges, and the lack of provision for trial by jury in civil cases.

An implacable conciliator

Drew Westen's full-fronted assault on President Obama's performance, rhetoric and character riveted liberal America.  To my mind, Westen core charges have been definitively refudiated. Westen idealized and mischaracterized FDR, vastly overestimated the power of presidential rhetoric, short-changed Obama's legislative accomplishments, ignored what he actually said in his speeches and impugned his motives without any meaningful discussion or evidence.

Westen did, however, touch a  raw nerve in progressives frustrated by Obama's refusal to acknowledge that Republicans have not dealt with him in good faith, and by his endlessly proffered willingness to engage with them under the assumption that they are willing to compromise to find solutions to the country's problems. Michael Tomasky offers a more substantive critique than Westen's of this conciliatory approach to leadership.  While acknowledging a variety of possible contributory causes, Tomasky focuses on Obama's political philosophy -- which is easily verifiable in his writing, speeches and engagement with Congress:

An Obamite response to Romney's "Corporations are people"

I've never presumed to script my own fantasy speeches for politicians I support -- especially Barack Obama, who, we tend to forget at this low point, has written a few good ones.  But what the hell...I found myself imagining Obama being asked to respond to Mitt Romney's response to a liberal questioner at an Iowa event yesterday --

"Corporations are people, my friend..Of course they are...Everything corporations earn goes to people. Where do you think it goes? Whose pockets? People's pockets. Human beings, my friend."

-- and started vocalizing a doubtless overly nuanced and prolix response  -- sort of like Obama's in press conferences.  So here it is: 

GOP debate: Santorum misquotes Lincoln

In the GOP debate tonight, Santorum took a shot a Romney after Romney, defending the healthcare reform bill he passed in Massachusetts, asserted that the individual mandate is in accord with the Massachusetts Constitution but not with the U.S. Constitution. Santorum said, roughly, what's wrong is wrong, regardless of written law. Then: "Lincoln said, states have no right to do wrong."

Coincidentally, I just wrote about Lincoln's First Inaugural today, noting that Lincoln not only affirmed the Southern states' right to maintain slavery undisturbed, but said that he would not object to a Constitutional amendment codifying that right.  So I looked up Santorum's cite, which is from the Lincoln-Douglas debates.  Lincoln did suggest that in an ultimate sense, the states have no right do to wrong, insofar as no one has a right to do wrong (the actual quote was with reference to Douglas: "he cannot logically say that anybody has a right to do wrong." Full context below.)  But in the very same passage, he first affirmed the Southern states' legal right under the Constitution to maintain slavery, and asserted that Republicans would not interfere with that right.

An implacable conciliator

Drew Westen's full-fronted assault on President Obama's performance, rhetoric and character riveted liberal America.  To my mind, Westen core charges have been definitively refudiated. Westen idealized and mischaracterized FDR, vastly overestimated the power of presidential rhetoric, short-changed Obama's legislative accomplishments, ignored what he actually said in his speeches and impugned his motives without any meaningful discussion or evidence.

Westen did, however, touch a  raw nerve in progressives frustrated by Obama's refusal to acknowledge that Republicans have not dealt with him in good faith, and by his endlessly proffered willingness to engage with them under the assumption that they are willing to compromise to find solutions to the country's problems. Michael Tomasky offers a more substantive critique than Westen's of this conciliatory approach to leadership.  While acknowledging a variety of possible contributory causes, Tomasky focuses on Obama's political philosophy -- which is easily verifiable in his writing, speeches and engagement with Congress:

GOP will damn the polls and maintain tax intransigence

Andrew Sullivan, who wanted Obama to come out strong for Bowles-Simpson and make a crusade of deficit reduction in his State of the Union address, now suggests that Obama do the same with tax reform, a linchpin of any viable deficit reduction plan. (That is, a revamping of the tax code that shrinks loopholes, lowers rates, and nets substantial new revenue.) In support, Sullivan cites a compendium of polls from Bruce Bartlett:

They all show heavy majorities (most in the mid-60s) in favor of raising taxes on the wealthy as part of a deficit reduction plan. Yet this is the one issue on which Republicans seem determined to take a stand. If the Democrats cannot marshall 2 - 1 support for their policies into actual legislation, they really need to pack it in as a viable party (although one could argue they packed it in years ago).

This would be true if we lived in a sane political environment, especially since Republicans will not be able to prevent the Bush tax cuts from expiring if Obama and the Democrats are willing to let them all expire.  Reversion to Clinton-era rates would raise an estimated $3.6 trillion over current rates in ten years -- as opposed to the $1-2 trillion Democrats would be able to extract through tax reform, would Republicans agree to any increase at all.

We do not, however, inhabit in a sane political political environment.  Consider:

That sick "Obama's sliding" feeling

Bitterly disappointed as I was in Obama for letting himself be hijacked in the debt ceiling deal, I have been willing to reserve judgment through the next round -- the supercommittee negotiations -- and possibly through the endgame of the Bush tax cut expirations.  But this from Obama today triggered that "there he goes again" reflex:

Last week, we reached an agreement that will make historic cuts to defense and domestic spending.  But there’s not much further we can cut in either of those categories.  What we need to do now is combine those spending cuts with two additional steps:  tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare (my emphasis).

Couple that with this warning from Panetta:

A lover of fairy tales casts Obama as villain-in-chief

This one is going to hurt.

In what seems like a bid to definitively cement the perceptions of progressives disappointed in Obama, psychologist Drew Westen, a student of the alleged power of stories to shape political perception, has put together his own master narrative about Obama -- a merciless tale of presidential FAIL. It's a quadruple-length op-ed (over 3000 words) on the front page of The New York Times' Sunday Review section -- a rhetorical nuke dropped on ground zero in the liberal heartland.

Westen is a good storyteller. There is real force to many of his charges. But modeling what he says Obama should have done, he  tells a simplified morality tale -- highly selective, with a clear villain, and in some points demonstrably false. He makes copious use of political cliches about messaging that fail to take into account the degree to which economic conditions shape audience reception of a politician's message. Founded on the alleged timidity of the 2009 stimulus, his story fails to engage the question of whether Obama could have got a larger stimulus through Congress. And in the end, it devolves into an ad hominem attack with recourse to cheap psychologizing (notwithstanding Westen's protestations of scientific detachment) and unfounded impugning of motive.

Prophets of the new millennium

A stray link took me back in time and made me think of various chilling prophecies uttered when the millennium was young. Read them and weep.

1. February 2, 2000 

So how can those reasonable men advising George Bush think that he can offer $1.3 trillion in tax cuts? Assuming that they are neither planning to raid Social Security nor counting on favorable revenue surprises to save them (unfavorable surprises are, of course, out of the question), they must have in mind a sharp scaling back of government programs.

Taxes or trigger!

Nancy Pelosi was not entirely clear when she said that Democrats negotiating (if such a thing is possible) with the GOP on the bipartisan supercommittee charged with putting forward a deficit reduction plan should be "as forceful as possible and as unified as possible," but that they should not rule out reforms to entitlement programs. She raised a lot of Democratic eyebrows by declaring "you won't see me drawing lines in the sand."  But if I understand her right, she's right. 

There is confusion about the kind of line in the sand Democrats on the supercommittee must draw. They will have to resist Republican intransigence, not mirror it. That is, they have to hold the line on taxes, not entitlements.

Getting serious with items in series

In my letters to a certain high profile blogger, I've more than once inveighed against "items in series" -- that is, sentences that pack together a host of comma-separated items alleged to illustrate a thesis, often a purported precis of a public figure's alleged accomplishments or sins. It's so easy to smooth over a world of ambiguity, or incongruity, slipping in some highly questionable assertions, like the xeroxed dollars that a pair of drug addicts slips into a wad of cash in The Wire.

From Andrew Sullivan, here's a fresh example: a list of Obama's accomplishments:

On policy: ending the US torture regime; prevention of a second Great Depression; enacting universal healthcare; taking the first serious steps toward reining in healthcare costs; two new female Supreme Court Justices; ending the gay ban in the military; ending the Iraq war; justifying his Afghan Surge by killing bin Laden and now disentangling with face saved; firming up alliances with India, Indonesia and Japan as counter-weights to China; bailing out the banks and auto companies without massive losses (and surging GM profits); advancing (slowly) balanced debt reduction without drastic cuts during the recession; and financial re-regulation.

The debt ceiling stickup as precedent...or not

As the debt ceiling stickup lurched toward its traumatic climax and please-no-one resolution, the laments have been many that a dreadful precedent has been set for government by extortion. Jonathan Chait has been eloquent about this:

The problem is that, even if we get through this crisis with little damage, the debt ceiling is still sitting there, a weapon that will one day explode. Indeed, if there's one good reason to downgrade U.S. debt, it's that House Republicans have discovered a kind of doomsday device that, if not used this time, will probably be used eventually. Any use of the debt ceiling to extort policy concessions will encourage subsequent uses.

And right on cue, once the deal was done, Mitch McConnell heralded the new nuclear norm:

What we have done, Larry, also is set a new template. In the future, any president, this one or another one, when they request us to raise the debt ceiling, it will not be clean anymore. This is just the first step. This, we anticipate, will take us into 2013. Whoever the new president is, is probably going to be asking us to raise the debt ceiling again. Then we will go through the process again and see what we can continue to achieve in connection with these debt ceiling requests of presidents to get our financial house in order.

Many see in this precedent evidence of U.S. decline. Here's Ezra Klein, commenting on McConnell's boast above (same link):

Larry Summers hearts the busted Obama-Boehner deal

Progressives were having conniptions when details of Obama's never-consummated deal with Boehner emerged.  Three trillion in spending cuts, just $800 billion in new revenue -- no more than expiration of the Bush tax cuts for the wealthiest 2% of Americans would yield, and less than half the amount proposed by the right-leaning Bowles-Simpson plan. On the benefit side, social security benefits chained to the "chained CPI" (a less generous inflation calculation than the current CPI) -- and more jarringly, the Medicare eligibility age raised to 67.

A plan, it would seem, that Timothy Geithner could get behind (and probably was behind).  But I was surprised to read from Larry Summers today that he too apparently considers approximately the same level of revenue and presumably the same revenue-to-spending-cuts ratio sufficient:

Bee balm in the rust belt, cont.

Reposting, with photos from this year's Garden Walk, here.

It's time again to celebrate a city besotted with gardening -- Buffalo, which hosts its annual Garden Walk this weekend.  370+ city households will throw open their front and back yards to thousands of visitors, who tour self-guided through neighborhoods tony and raggedy -- some of them revived in large part by gardening that's spread like a good virus block-by-block.  Lots of intense small urban spaces and often low-budget creativity.  My earlier paean here; albums here; update on the spreading fame and impact on the city in the Buffalo News here; info on the self-guided tours, maps, etc. etc. here.

Grasping at straws

as I hit the road this morning...maybe the cuts are backloaded to allow some space for recovery. Maybe defense cuts in the trigger will constrain Republicans more than commenters think. Maybe programs that benefit the poor are adequately protected. Maybe there's less to the first round cuts than meets the eye Maybe Obama will find his spine and push forcefully for tax hikes in the upcoming gang of 12 negotiations--if only because the downside of enraging progressives may now finally outstrip the consequences of bucking GOP intransigence. The mendacity of hope?

About that buyers' remorse

Last week, Clinton consigliere David Rothkopf wrote a mash note to Hillary:

In this moment of national confusion and public despair with officials in Washington, variations on the following cry have often been heard, "Somewhere in the world there must be an American political leader with a vision of tomorrow, a focus on what is really important and an ability to translate rhetoric into success."

I'm pleased to report that there is. If it has escaped your attention it's because that politician has been on the other side of the world the past couple of weeks advancing American interests and the policies of the president with meaningful results and exceptional skill.  

That politician is Secretary of State Hillary Clinton...

When I first encountered this via a well-placed plug in Mike Allen's Playbook, I wondered instantly whether this wasn't the first note in an orchestrated campaign to draft Hillary for the Democratic nomination in 2012.  I brushed the thought off as far-fetched on many fronts. Now in the wake of Obama's debt ceiling debacle, I'm not so sure.

Obama's uncertain trigger finger

The debt ceiling deal negotiated today relies heavily on triggers for future action. The finger on the final trigger is the president's. Hence, from a progressive's point of view, the deal is only terrible if you mistrust the president.  Unfortunately, the way the deal went down makes it very hard to trust the president.

As Jonathan Chait has been pointing out for weeks, progressives are better off with a cuts-only deal, end-stopped by the expiration of the Bush tax cuts on Dec. 31, 2012, than with the revenue-light grand bargain Obama was negotiating with Boehner. That deal would have raised only $800 billion in new revenue over ten years, roughly the amount that would be gained by letting the Bush cuts for the wealthiest 2% expire while leaving the bulk of the cuts in place. Expiration of all the Bush cuts, in contrast, would raise an estimate $3.6 trillion in new revenue of ten years.

The deal negotiated today calls for $900 billion agreed-on cuts in discretionary spending over 10 years and establishes a bipartisan committee of senators and MCs to propose a long-term plan that reduces the deficit by at least another $1.2 trillion. Congress must give that plan an up-or-down vote without amendments.  If the plan is voted down, or (I think) if the committee fails to agree on a proposal, that failure triggers $1.5 trillion in automatic spending cuts, split evenly (as of now) between domestic and defense spending. Ditto if the president vetoes the plan.  The Democrats failed to get tax increases included in the trigger, despite Harry Reid's announcement yesterday that they would not agree with a plan that failed to do so.

The trigger behind the trigger is the Bush tax cuts.  Obama, if he were a different person, could threaten to veto any any plan put forward by the committee that did not include tax reform yielding, say, $2 trillion in new revenue over ten years -- the amount proposed by Bowles-Simpson.  If no such plan materialized, and automatic cuts were triggered, he could also promise to veto any subsequent tax legislation that did not raise said $2 trillion (or whatever benchmark he chose). If no such legislation emerged, the Bush cuts would all expire, and the additional revenue, coupled with the triggered spending cuts, would put the budget in effective balance.

Obama is in fact indicating rather weakly he will use this this leverage:

Reid draws a line

For those who worry that Democrats will agree to an enforcement mechanism in any pending debt ceiling deal that will empower Republicans to cut spending again without any tax increases in the second phase, an important assurance from Harry Reid:

"We have a closet full of triggers, people have suggested dozens of them but even though earlier this week, I was sitting talking to Jack Lew about triggers for an hour and a half and we can't get Republicans to move on any trigger. We're not going to have cuts on more programs without some revenue - that is a line we've drawn in the sand," Reid said.

Next question: in phase 2, will Democrats trade the pending $3.6 trillion tax hike that would result from letting the Bush tax cuts expire at the end of 2012 for some piddling amount of revenue, as Obama was prepared to do in a grand bargain with Boehner?

UPDATE: That didn't take long. Reid has signed off on a deal in which the triggers reportedly do not include new tax hikes. The only deterrent to prevent Republicans from rejecting the deficit reduction plan to be put forward by the Gang of 12, and so triggering automatic cuts, is to make half of those cuts in defense spending. And once again, with near-total victory nigh, Boehner is pushing back, insisting on fewer defense cuts in the trigger. 

Looks like another Dem cave, followed by another GOP balk, to be followed by further Dem concessions...

Bee balm in the rust belt

It's time again to celebrate a city besotted with gardening -- Buffalo, which hosts its annual Garden Walk this weekend.  370+ city households will throw open their front and back yards to thousands of visitors, who tour self-guided through neighborhoods tony and raggedy -- some of them revived in large part by gardening that's spread like a good virus block-by-block.  Lots of intense small urban spaces and often low-budget creativity.  My earlier paean here; albums here; update on the spreading fame and impact on the city in the Buffalo News here; info on the self-guided tours, maps, etc. etc. here.

My talisman, once more

No prognosticator is a prophet.  As the economic news has gone from bad to worse over the past 3-4 months, however, I find myself periodically grasping at the reed of a February 2011 forecast by Goldman Sachs economist Alec Phillips (I've noted this once before). At the time, the shutdown loomed and the House GOP was demanding $61 billion in cuts to FY 2011.  Phillips wrote:

Federal spending cuts deserve the most attention. They are the most likely of these issues to occur, and could have the largest magnitude. The assumption we incorporated into our recently revised budget estimates—discretionary spending cuts of $25bn and $50bn below the CBO baseline for FY2011 and FY2012 respectively—would shave nearly one percentage point off of the annualized rate of real GDP growth in Q2, but would fade quickly with a negligible effect on growth by year-end.

If Phillips was right, we may be at the nadir now. And none too soon, with Obama's approval rating hitting an all-time low of 40% today.

Hostile takeover: Screwtape at News Corp.

Anthony Lane, reviewing various memoirs and other evidence of the culture and ethos at Murdoch's sleazy British tabloids, recounts an incident from Piers Morgan's memoir in which a victim of deliberate misrepresentation in the News of the World refuses to take it as a joke.  Lane sums up:

Such is the quintessence of the tabloid: to bruise and bully, and then to back off, exclaiming, Come on, we're only having a laugh. Can't you take a joke? The British sense of humor is both an invaluable broadsword and an impenetrable shield.

Screwtape lives, and still stalks the sceptered isle! C.S. Lewis  fans will recall the savvy counsel of this senior devil, provided to a junior colleague charged with tempting a Briton to perdition:

Hoping for less change

Ezra Klein today puts his finger on Obama's core underlying weakness in the budget battles. The expiration of the Bush tax cuts at the end of 2012 gives Democrats the ultimate leverage: if Republicans don't negotiate tax reform on their terms, we revert to Clinton-era rates and get $3.6 trillion in additional revenue over ten years. But as I've noted before (and again), Obama doesn't want that revenue:

Greenspan reverts to form

Alan Greenspan is as hard to follow as ever. Seemingly, too, as convinced of the transcendent wisdom of the market as ever.  Today, in a Financial Times op-ed, he argues that governments in wealthy countries overreach in trying to shield citizens from a variety of major risks. Along the way, he seems to equate strict earthquake-proofing standards for buildings, high capital ratios for banks, and a propensity to bail out banks that get in trouble as different manifestations of the same government malady. 

Those equations are hedged a bit. I don't think that Greenspan means to suggest that Japan's earthquake-proofing standards are as ill-advised as bank capital ratios that he regards as excessive or the bailout of Bear Stearns. But that's how I read it the first time:

The buffer may encompass expensive building materials whose earthquake flexibility is needed for only a minute or two every century, or an extensive stock of vaccines for a feared epidemic that may never occur. Any excess bank equity capital also would constitute a buffer that is not otherwise available to finance productivity-enhancing capital investment...

Was a debt ceiling hostage scenario unavoidable?

Jonathan Bernstein thinks I dreamed up an impossible counterfactual in suggesting that Obama might have refused to negotiate over the debt ceiling:

The ability of the president to force Republicans to separate deficit limitation from the debt limit, in Sprung's (or any other) scenario, is limited to the threat of invoking the 14th Amendment and running through the limit. Whatever the Constitutional status of that threat, I would have argued that it contained grave, serious threats to the president. Invoking the 14th now, or next week, after well-demonstrated GOP stubbornness and immanent danger, is one thing; declaring the debt limit unconstitutional by executive fiat right after a GOP landslide would have been seen by everyone except core partisans as an illegitimate overreach. Instead of constant reminders about presidents of both parties supporting increases in the debt limit, we would have been subject to constant reminders about how presidents of both parties accepted the limit, even when Congress delayed or attached stuff to it. At least that's my best guess. In my view, it would have handed the Tea Party House a huge gift: they, and not the president, would have been the reasonable ones.

Harsh words for Obama from Frum, frenemy

Since at least early 2008, former Bush Jr. speechwriter David Frum has been a trenchant critic of Republican extremism. He saw Sarah Palin for the unqualified fraud she is.  He saw the need for a Republican healthcare reform strategy beyond blocking/negating/demonizing the modified Romneycare put forward by the Democrats. He acknowledges the need for stimulus from both the Fed and the Federal government.

He has therefore earned some credibility as a critic of President Obama.  And his latest, Obama's 5 Big Mistakes, delivers a pretty devastating brief that Obama has failed to lead -- in fighting for further stimulus after the first dose, in coddling bankers, in negotiating away the store -- or more precisely, the debt ceiling. And worse, in ceding core Democratic priorities:

Gone candystripin'

Once again trailing my (mid)wife on a medical mission, I'll be mainly out of blogging range until Monday. Very glad to see today, though, that Grover Norquist has blown a multi-trillion dollar loophole in his ridiculous and destructive no-new-taxes pledge, signed by over 90% of GOP Senators and MCs. Kudos to Chambliss and Coburn for softening him over the past few months with multiple challenges (per links below) to the ridiculous premise that every closed-out targeted tax break must be offset with an equal tax cut. 

Some Norquist chronicles:
Could ending the AMT square the circle?
Back to the future: Norquist's extortion
A GOP oath best kept in the breaking?
Coburn: ending the ethanol subsidy is (half?) a tax cut
Did Tom Coburn just quadruple the debt ceiling ransom?
Writhing out of Norquist's embrace, Part IV
Forget Ryan - watch Coburn and Chambliss
Writhing out of Norquist's embrace, Part III
Chambliss Seizes the freedom to acknowledge that 2+2=4
Chambliss, Coburn, Crapo to Norquist: Kowtow or brush-off?

(Un)pulping the bully approach to presidential politics

Early this year, we heard much about the Catch-22 of presidential leadership: that the president's advocacy for a given position guarantees that the opposing party will...oppose it.  Quantified by political scientist Frances Lee, this theory was  voiced to explain Obama's failure to lay out a detailed deficit reduction plan in the SOTU or shortly thereafter by Jacob Lew, Kent Conrad, and Obama himself.

Today, via Mike Allen's Playbook, we have a further endorsement from a GOP Senate aide:

--A Senate Republican leadership aide emails with subject line “Gang of Six”: “Background guidance: The President killed any chance of its success by 1) Embracing it. 2) Hailing the fact that it increases taxes. 3) Saying it mirrors his own plan.”

Could ending the AMT square the circle?

A clue here, I think, to why the sudden revival of the Senate Gang of Six's deficit reduction plan, modeled on Bowles-Simpson, won a "surprise jolt of bipartisan support" when presented to 50-odd Senators:

A key question remains whether the plan might receive any support in the House, where Republicans have strongly resisted any new proposal that could bring in new taxes. The gang's plan would bring in $1 trillion in new tax revenue over 10 years by narrowing several tax breaks. But Mr. Conrad said it would also lower tax rates and end the alternative minimum tax. He said the combination of tax changes would be viewed by budget experts as a $1.5 trillion tax cut (my emphasis).

Ending the AMT allows Republicans to wriggle out of Grover Norquist's no-new-taxes-ever straitjacket, as Jonathan Chait explained with regard to a somewhat smaller package that also proposed to offset modest tax and fee hikes by ending the AMT:

How the Journal editorialists measure Murdoch

Felix Salmon and Joe Nocera have effectively exposed the moral bankruptcy of the Wall Street Journal editorial board's aggressive defense of Murdoch and News Corp.  But leaving aside the apologists' they-did-it-toos and  it-wasn't-so-bads and we-know-our-boss-for-an-honest-man modes of denial, let's focus for a moment on the editorial board's expression of its true credo (my emphasis):

Our readers can decide if we are a better publication than we were four years ago, but there is no denying that News Corp. has invested in the product. The news hole is larger. Our foreign coverage in particular is more robust, our weekend edition more substantial, and our expansion into digital delivery ahead of the pack. The measure that really matters is the market's, and on that score Mr. Hinton was at the helm when we again became America's largest daily.

To be fair, this market fundamentalism from the Journal's opinion wing long predates the Murdoch takeover.  In an odd way, it suggests good faith in their defense of bad faith practices The market was measure for every scandal the Journal editorialists explain away even as the paper's top-notch reporters were breaking them. They pooh-poohed, in turn, the equity research scandal, the options back payments scandal, the insurance broker kickback scandal, and the subprime mortgage scandal. They were relentless in defense of corrupt investment bankers and analysts, corrupt insurance brokers, corrupt top executives and boards, and corrupt mortgage underwriters.

Call my bluff, Eric

Last week, fundraising emails from the DNC trumpeted Obama's alleged warning to Cantor, "Eric, don't call my bluff" as evidence that "the president and Democrats are holding strong against [GOP] obstinacy."

On trusting Obama, revisited

James Fallows, while expressing increasing consternation over the ground Obama has ceded in deficit reduction talks, airs the views of a couple of Obama faithful. Here's one:

And now he has taken the Republican stupid-assed, testosterone addled attempt to hold the debt ceiling hostage, and has judo-thrown them into forcing a discussion of the very problem that they've been purportedly complaining about.  He is using their own two-faced complaints about the deficit...and presenting them with a very sound, very practical, very compromised, totally solid proposal to deal with the long-term structural deficit, which any Republican four years ago would have leapt at, and which contains the very broad-based sacrifices that he promised in his inaugural address...

If he succeeds in his big picture deficit plan, he'll go into 2012 having tamed the long term deficit.  He'll be in a position to lambast the Republicans and hopefully, gain more control of Congress, and, when he's reelected, he'll have a powerful mandate to pursue his more adventuresome and long-term beneficial programs. It'll take a few more years, but he's  a long-term strategic thinker, and I think he'll get us there. The Republicans look like a lot of power-addled men who are really out of touch with the electorate.

Fallows' own response: "It is indeed pretty to think so [hmm...seen Midnight in Paris lately, JF?]. And perhaps this will turn out to be true."  As for my own somewhat shaken faith in Obama's moxie as a long-range strategist, here are the caveats and counter-caveats:

1) No one questions Obama's high intelligence and analytical approach to policymaking.  But smarts don't trump nature, they bend to it, and even the smartest are susceptible to confirmation bias.  Obama's greatest character strength is also his weakness: he has got where he is by deploying what Garry Wills called "omnidirectional placation, and which in a kinder interpretation (i.e., mine, a while back) might be recast as a bottomless confidence that he can always disarm, win over, find grounds for cooperation with the most seemingly implacable ideological foes.
 
That orientation has determined his strategy, for better or worse: he is hell-bent on appealing to Republicans' better angels. The face he put on reasonable Republicanism is John Boehner. That made sense as far as Boehner himself goes -- I have been impressed by him this year -- but we recently seem to have learned that Boehner does not speak for his party, particularly the frosh (for the measure of their extremism, read Stan Collender's account of the first Tea Party caucus meeting of the new House).   

One part of Obama's most recent argument, expressed in his last two press conferences, indicates to me that he may be invested to the point of personal mania in transforming GOP intransigence.  It's this:

Five questions for Obama

After three presidential press conferences in two weeks, I have a few questions of my own for President Obama:

1)You said today that we are dealing with two problems: the debt ceiling, which is "a problem manufactured in Washington" for political grandstanding, and the structural deficit, which is difficult but solvable. Why then have you yourself embraced negotiations under the debt ceiling deadline as "a unique opportunity to do something big"?

2) You said today that cutting $2.4 trillion in spending without adding new revenue, as Republicans have proposed, would, to paraphrase, "effectively gut a whole bunch of domestic spending." Why would making the same cuts while adding a few hundred billion in new tax revenue not "effectively gut" the programs in question?

Obama's tax strait jacket

Last Sunday, when Chuck Schumer defended Obama by denying that middle class tax hikes were on the table, it occurred to me that Obama has not so much shifted to the right on tax hikes vs. spending cuts as remained where he was in 2008:

That unwillingness to tax "the middle class" is a core precept of Obama's. I recall my disappointment during the 2008 campaign when Obama made it clear that he would seek to roll back the Bush tax cuts only for the wealthiest 2%, which accounts for  I believe a quarter of the revenue forgone by those cuts. You simply cannot get to $2 trillion in additional revenue over ten years without taking it out of "the middle class" so broadly defined -- that is, everyone from the 97th percentile on down.  Even with thoroughgoing tax reform, which lowers rates in exchange for reducing tax expenditures, strictly limiting the most popular tax breaks would probably raise net taxes on more than the top 2% of taxpayers.

The moderate Bipartisan Policy Center's plan, for example, radically restructures the tax code, vastly reducing tax expenditures, taxing all capital gains as ordinary income, flattening income tax rates to 15% and 27% and the corporate rate to 27%, and adding a 6.5% national sales tax; it would raise some $2.2 trillion in new revenue by 2020 but also raise net taxes on every income group but the lowest quintile. Obama has never been willing to do that.

I had assumed, as I think others had, that Obama would use tax restructuring -- lowering rates and closing loopholes -- as cover to raise taxes on at least some people making less than $200k (or families under $250k). No dice, apparently.  The strict line that Obama drew in 2008 limiting the tax hikes he is willing to entertain still stands.

The shift of the goalposts to the right thus predates Obama's presidency. Republicans have shifted them by making the Bush rates the status quo and relentlessly demonizing all tax increases, and Obama's half-acquiescence goes back at least to his candidacy.  Those like David Brooks who charged that Obama was putting his agenda in a tax straitjacket back in 2008 were right -- and he is not using tax reform as a cloak to broaden the tax hike pain.

 This basic fact has dawned on a lot of people this week. Ezra Klein noted yesterday:

But we’ve also learned a lot about President Barack Obama. Take taxes. The prevailing theory has been that the Obama administration would seek the largest tax increases it could plausibly pass. Liberals are now dismayed to learn that that notion is false. Instead, the Obama administration wants to take the tax issue off the table as soon as possible; the president is willing to take much less in revenue in exchange for spending less time arguing about taxes.

The Baltimoring of America

As Congress and the President go down to the wire negotiating a package of enormous spending cuts and tiny-to-nonexistent tax hikes, this state-of-the-nation diagnosis by David Simon, creator of the epic of Baltimore street and political life The Wire, seems tragically as appropos as it was when spoken in 2006:

But what really ails America, in my opinion, is this:  Raw, unencumbered capitalism is an economic force and a potent one.  But it is not social policy and amid a political culture of greed and selfishness, it is being made to substitute for social policy.  The rich get richer, the poor get fucked, and the middle class of this country - the union-wage consumer class that constituted the economic strength of postwar America - is fast disappearing as the need for union-wage work disappears.

Raw capitalism - absent the moderating aspect of a political system that cares for the great mass of voters (or non-voters) who uphold that system - is not good for most of us.  It is great for a few of us.  We are building only the America that we are paying for, and ultimately, it is going to be an ugly and brutal place, much like the city-state depicted in The Wire.  So when Congress fails to raise the minimum wage for the first time in fifteen years because they will do so only if at the same they can eliminate an estate tax for the wealthiest 8,000 families in the country, as they did this month, I at least manage a smile to know that the content of my little television drama is not the stuff of hyperbole; if anything we've been gentle about what the American future is.

Hysteron proteron, or leading from behind (temporally)

The hysteron proteron (from the Greek: ὕστερον πρότερον, hýsteron próteron, "latter before") is a rhetorical device in which the first key word of the idea refers to something that happens temporally later than the second key word. The goal is to call attention to the more important idea by placing it first.

The standard example comes from the Aeneid of Virgil: "Moriamur, et in media arma ruamus" ("Let us die, and charge into the thick of the fight"; ii. 353).

In yesterday's presser,  Obama's hysteron proteron approach to leadership reached a kind of apotheosis.  Check out the temporal transposition in the president's peroration. Here he's explaining why he's agreed to address the long-term debt problem before the jobs problem:

This is how do we operate in a smart way, understanding that we’ve got some short-term challenges and some long-term challenges.  If we can solve some of those long-term challenges, that frees up some of our energies to be able to deal with some of these short-term ones, as well.

That is standing Krugman on his head (logically or not), with a vengeance.

Okay, he's 'leading'....

Leaving aside for the moment Obama's policy positions, does anyone still think that he's too passive/failing to lead/afraid to confront Republicans? In a sense, he is out-crazying them: embracing negotiation under the debt ceiling sword of Damocles as a "unique opportunity"; insisting on a $4 trillion grand bargain; promising to veto any short-term debt ceiling fix; and, via Geithner, ruling out a "14th Amendment solution" in which the Treasury simply ignores the debt ceiling. Insisting under all these conditions that he will not agree to any deal that does not raise new revenue is brinkmanship in the extreme. In fact, we seem to be headed straight over the brink.

Hillary Rodham Pawlenty

Jonathan Chait has been arguing that Michele Bachmann is positioned something like Obama in 2007: she does best among those voters "most attuned to the campaign."

If Bachmann is Obama, Tim Pawlenty seems to be lining up for the role of Hillary Clinton:

Why the president's grand bargain offer is so conservative

Ever since Obama made it clear that he was engaging with Republicans to strike a multitrillion deficit reduction deal, Democrats have lamented how far the goalposts have been moved to the right.  Why were Democrats not insisting on, say, a 50/50 split between spending cuts and tax hikes? Why was the floated half-loaf deal weighted an apparently 83/17 in favor of cuts, and the more recently proffered grand bargain something like 3-to-1? (Though I wonder whether, as in the president's initial proposal, that is not in fact 2-to-1, with another trillion in savings credited to reduced interest paid on the debt.)

I believe that Chuck Schumer's statement yesterday in response to Boehner's rejection of the grand bargain may contain an explanation that's been hiding in plain sight, per the passage I've bolded below:

What's next for Sheila Bair?

Joe Nocera has a wonderful debriefing of just-retired FDIC head Sheila Bair, who fought the good fight on behalf of depositors, mortgagees and taxpayers in the runup to the financial meltdown and throughout it -- fighting unsuccessfully to rein in subprime lending and for effective mortgage modification, and successfully for strong resolution authority in Dodd-Frank to wind down failing megabanks.  Throughout, she was an advocate for market accountability -- that is, for bank bondholders and mortgage holders to absorb a portion of the losses caused by mortgages gone bad and banks gone bust. Nocera also credits her with staving off U.S. adoption of Basel II, the loophole-ridden standard for bank capital requirements that enabled European banks to put themselves in even worse shape than American ones.

Perhaps the article is spun this way, but as Bair delivers her own postmortem it's hard not to speculate about her future:

Obama Sr. and DSK's accuser

I can't be the only reader whose mind jumped to Dominique Strauss-Kahn's accuser when I read this:

Mr. Obama’s father, Barack Hussein Obama Sr., told immigration officials that Ann Dunham, whom he had recently married, would make “arrangements with the Salvation Army to give the baby away,” one document said...

An immigration official had become leery of his “playboy ways” and thought Mr. Obama might have more than one wife, which can be grounds for deportation. Mr. Obama said at the time — falsely — that he had divorced his Kenyan wife, with whom he had two children.

The excerpt of the book says it is unclear whether Mr. Obama intended to have his son adopted or if he was fabricating the story to appease immigration officials. Mr. Obama often gave contradictory answers on the forms, sometimes leaving questions about his marital status blank. 

Jesse Ellison recently reported on the pressures that induce refugees seeking asylum to lie. While the stakes are lower for those on student visas, like Obama Sr., the mind set is still instructive:

Indulging my worst impulses toward despair

Good God, is this the day the Obama presidency died?  Horrendous monthly jobs numbers make it seem so. As the economy dives toward double-dip recession, the president is a self-bound hostage to the GOP, mired in calamitous-looking deficit reduction talks, the results of which are likely to further crimp growth while shredding the safety net.  Having let the GOP set the agenda, Obama is unlikely to find a way to further stimulus.

This feels like nemesis nipping at the U.S.'s heels, the next tumble down a staircase that began with the Lewinsky scandal, carried through the busted and stolen 2000 election, then on to Bush busting the budget and defunding the federal government while shredding civil liberties and various norms and taboos of governance. Now, I'm haunted by Cassandra Krugman's constant forecasts of calamity triggered by too-weak progressive response to the financial meltdown, half measures that discredit a sane stimulative response.  Now the lunatics are poised to once again take over the asylum after four years of powerful incentives to sink ever deeper into lunacy -- discrediting stimulus, discrediting the once-conservative approach to universal healthcare codified in the ACA, discrediting effective regulation, discrediting an even minimal safety net.

We are in the dangerous circumstance of having a two party system in which one party is not fit to govern and the other -- its leader, anyway -- may lack the will to effectively counter that extremism.  The country cannot afford another period of Republican misrule before that party changes its character, chastened by a period of Democratic success. The abyss yawns.

A stupid post, I know, but I'm going to ride with the feeling of the moment.

Update: thanks to commenters for the buck-up messages. I do hope that this post looks really stupid a year from now, and it was probably silly to put it up: I have been determined to reserve judgment on the debt ceiling talks until we see what results, but jumped my own gun.  

Debt deal does not compute

I was glad in a way to read in the Times last night that Obama has allegedly widened the scope of the deficit reduction talks to include about $1 trillion in new revenues over ten years, approximately the benchmark (conservative but not outlandish) set by Bowles-Simpson and by Obama's own plan floated in April. But the notion that such an enormous deal -- including tax reform and social security reform as well as large Medicare/Medicaid and defense cuts -- can be hammered out and agreed on before August 2 simply does not compute. Not only Cantor and McConnell but Boehner too continue to swear that no deal can include net tax increases -- that any closure of tax expenditures must be offset by reduced marginal rates. Also, the sheer scope and complexity of the deal smells like a two-or-three year project, not a product of a few weeks of intense negotiations.

I'll pay you to sell me less...

The FT's John Kay inveighs against the deceptive business practice of offsetting a low headline price with price-gouging at the margins, as in hidden bank fees and $10 minibar beers.  The subject put me in mind of a recent dodge in US packaged foods: don't change the price, but downsize the package. Deceptive? Maybe. But after 30 years of supersizing it's probably a good thing from a health point of view.

Whole Foods lines up various blends of coffee, all the same price, but in 10, 11 and 12 ounce cans. From one perspective, that's the opposite of deceptive. There before your eyes, if you have eyes to see,  is the ascribed premium value of french roast.

Obama is two years early on deficit reduction negotiations

To listen to Obama's statement about budget negotiations this afternoon, you would think that he has willingly embraced the debt ceiling deathline as a means to force a deficit reduction deal quickly: the current negotiations under threat of default are, he said, "a unique opportunity to do something big."  Refusing to entertain the possibility that a comprehensive 10- or 12-year deal won't be struck before the August 2 debt ceiling deadline, Obama said that lawmakers should not "kick the can down the road" with a short-term fix.

I hope Obama proves me wrong, but it seems to be that there is something fundamentally wrong with this "opportunity." He should not be trying to negotiate a multi-year $4 trillion deal in this short time frame, under threat of default, with a GOP that continues to swear, as Boehner did today in response to Obama's speech, that it will not raise taxes at all. It's either madness or some kind of feint.

Bill Clinton negotiated a comprehensive multi-year deficit reduction act that reflected his priorities in August 1997, two and a half years after the Gingrich Congress was sworn in swearing to radically cut both spending and taxes.  For the first 11 months of 1995 the GOP essentially refused to compromise, maintaining throughout the bill-drafting process and in the omnibus budget bill they finally sent to Clinton all the provisions he had pledged to veto -- $245 billion in tax cuts, nearly $300 billion in Medicare cuts, nearly $200 billion in Medicaid cuts. And veto he did -- the omnibus bill, as well as  emergency debt ceiling and short-term spending bills with onerous provisions. It was only after the Republicans had broken their heads against multiple vetoes, two government shutdowns, a slow drip of partial appropriations and a short-term deal in April 1996 for the fiscal year ending that October that thy were ripe for a comprehensive deal -- mainly on Clinton's terms.

The more perfect union we love to hate

Just read two 4th of July essays that I can't help juxtaposing, because each has a valid point to make, and yet they're all but contradictory.

First, E. J. Dionne, arguing that the Tea Party fundamentally misunderstands the American experiment:

Back to the future: Norquist's extortion

October 1, 1995.  Bob Dole, Senate majority leader and presidential candidate, is working to shepherd an omnibus spending bill incorporating the GOP's seven-year deficit reduction plan to passage, around the promised veto of Bill Clinton.  A marquee feature is $245 billion tax cuts, scaled down from the Contract with America's call for $354 billion but representing a consensus GOP figure since legislation took shape in the House and Senate in the spring of the year.  After months of Democratic attacks, however,a Washington Post poll finds  that 69 percent of respondents deemed "leaving Medicare services basically as they are now" to be more important that cutting taxes. Dole wavers:

"Will {the tax cut} be $245 billion? I'm not certain at this point," he said on CBS's "Face the Nation." "We have to get into the Finance Committee and see what we can achieve"(Washington Post, 10/3/95).

Heresy!  Up rears an enforcer all too familiar to those following the current budget battles in Washington:

Why Obama can't entirely channel Bill Clinton circa 1995

Worried by the Obama administration's apparent large concessions to date in the debt ceiling negotiations (demanding paltry revenue hikes in exchange for massive spending cuts), I've been reading newspaper chronicles of Bill Clinton's epic budget battles with the Republican House and Senate in 1995 and 1996, seeking a kind of benchmark and maybe a bit of reassurance.

Clinton pretty much won these battles, which were not really resolved until the Balanced Budget Act was agreed upon in August 1997. The $284 billion in Medicare cuts over seven years that the Republicans had written into their 1996 bills was winnowed down to $112 billion; the GOP's $182 billion in Medicaid cuts was reduced to a fraction of that and offset by $24 billion for the S-CHIP program to provide Medicaid to uninsured children; the $245 billion in tax cuts became $95 billion in cuts reflecting Clinton's priorities.

"He made it worse"...compared to what?

ca·su·ist·ry... n. pl. ca·su·ist·ries

1. Specious or excessively subtle reasoning intended to rationalize or mislead.

Mitt Romney is having a hard time convincing people that he hasn't been relentlessly lying about Obama's economic record since he officially kicked off his campaign. Let me offer my assistance.

In the fundamentally misleading speech with which Romney launched his campaign, he said this about Obama:

When he took office, the economy was in recession. He made it worse. And he made it last longer.

A  video by DemRapidResponse catches Romney saying substantially the same thing repeatedly since then, e.g., in the GOP debate:

What this president has done, is slowed the economy. He didn't create this recession, but he made it worse. And longer.

Challenged yesterday by an NBC reporter who pointed out that the economy is, in fact, growing, Romney said:

 "I didn't say that things are worse. What I said was, that the economy hasn't turned around."

That is really as clever as Clinton's "There is no sexual relationship." It's true, Romney did not say things are worse. He said that Obama made it (the recession) worse, presumably starting on Jan. 19, 2009, and made it "last longer."

You must insure your vehicle (of life)

In  arguments about the Constitutionality of the individual mandate in the Affordable Care Act, proponents have pointed out that the law obligates car owners to buy auto insurance, because the costs incurred and inflicted by uninsured drivers would be absorbed by the state.  Opponents have countered that no one is forced to own a car, and hence the state does not force us to buy car insurance. The ACA, by contrast, mandates that everyone buy health insurance, regardless of any prior economic decision.

There is a "vehicle" that each of us owns, however: our bodies. And while we don't "choose" to own them, we do choose to maintain them.  If we don't insure, we self-insure -- that is, make what provision we can to pay for the health care that we will inevitably consume.  But the self-insured rely on a massive reinsurer or stop-loss insurer whom they don't pay: the state. Federal and state law decree that no one may be denied care.  Hence failure to carry health insurance is an economic decision that affects the larger community. "Self-insuring" constitutes economic activity that may be regulated by Congress.

That is the thrust of the 2-1 majority decision in the U.S. Court of Appeals, 6th Circuit, upholding the individual mandate in Thomas More Law Center v. Obama.  Timothy Jost explains that Judge Boyce Martin, writing the majority opinion, redefined the question of whether the mandate regulates "inactivity" as opposed to economic activity:

Judge Martin contends that nearly every individual in the United States consumes health care, and thus must decide whether to purchase insurance or to self-insure.  Self-insuring is no less an economic activity than purchasing insurance.  Self-insuring results, however, in a substantial cost-shift when those who choose to self-insure cannot in fact cover the cost of their care.  For 2008, $43 billion dollars worth of care was passed on by those who chose to self-insure to others.  Thus self-insuring has a substantial impact on interstate commerce.

In fact Judge Martin also asserted that there is nothing in the Constitution or case law to prevent Congress from regulating 'inactivity" if the so-called "inactivity" affects interstate commerce:  "the text of the Commerce Clause does not acknowledge a constitutional distinction between activity and inactivity, and neither does the Supreme Court" (p. 23).    

That said, Martin also argued positively that the individual mandate "regulates active participation in the health care market" (p. 26, my emphasis).  Here again, the concept that those who do not buy health insurance effective self-insure is key: no one, insured or not, is inactive in the health care market; insurance determines who pays; and those who self-insure in aggregate pass their costs on to the insured.  Those who self-insure do so "cognizant of the backstop of free services required by law" (p. 19).

Is Obama exiting placatory mode again?

UPDATE: It was probably foolish to write the post below having read just one extended excerpt of what Obama said in today's press conference. The Journal, in a fuller account, says that Obama stated that the debt ceiling negotiations are aiming at a full-Monty $4 trillion in deficit reduction over 10-12 years. If Obama is really only demanding $400 billion in tax cuts to get there, that is terrible. How can they do $4 trillion without full-scale tax reform  that raises at least $1 trillion in new revenue over the 10-12 year period?  I had assumed that they were working on a kind of halfway-there deal, for which the proposed $400 billion in tax hikes would be proportionate.
     Ezra Klein thinks that the fact that Obama is picking a fight with Republicans over taxes means that he's given up on negotiations. This is actually a point I've made several times, particularly when Sullivan goes on about Obama "leading" on the deficit: when he starts staking out specifics in public and hammering the GOP, you'll know he's given up. Still, I must say, Obama did not sound today like someone who has given up on negotiations.
    Another idea I've been toying with, though, is that Obama's blowing off Congress regarding his Libyan adventure may have been a warmup for blowing off Congress on the debt ceiling. At TNR, Matthew Zeitlin recently recounted several lawyers' arguments that the executive branch could continue to pay debts, ignoring the debt ceiling.  Also in this category: making recess appointments, even if Congress doesn't recess.
    Guess I don't know what the hell Obama is thinking, or what's going to happen...
    Anyway, for what it's worth, here is this morning's post-haste post:
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I go back and forth on the question of whether Obama is unduly "passive," whether he cedes too much ground to the GOP, whether he fails as public advocate for his own policies...or whether it inevitably seems that way when you're presiding over 9% unemployment.

In any case, there have been moments when he's reshaped a debate or bid to decisively close one off -- e.g., his healthcare speech in Sept. '09, and his peroration to the healthcare summit in late Feb. '10.

Today's press conference delivered up what could be another such moment re the debt ceiling:

If everybody else is willing to take on their sacred cows and do tough things in order to achieve the goal of real deficit reduction, then I think it would be hard for the Republicans to stand there and say that, ‘The tax break for corporate jets is sufficiently important that we’re not willing to come to the table and get a deal done,’ or, ‘We’re so concerned about protecting oil and gas subsidies for oil companies that are making money hand over fist, that’s the reason we’re not going to come to a deal,’” he said. “I don’t think that’s a sustainable position.”

The weight of (recent) history

Ryan Avent quantifies a thought that's been kicking around in my head in one form or another for decades:

If people do make history, as this democratic view suggests, then two people make twice as much history as one. Since there are almost 7 billion people alive today, it follows that they are making seven times as much history as the 1 billion alive in 1811. The chart below shows a population-weighted history of the past two millennia. By this reckoning, over 28% of all the history made since the birth of Christ was made in the 20th century. [There's more, and a great chart.]

Some version of this reality first struck me when as a teen I read this dictum from Arthur C. Clarke: "Behind every man now alive stand 30 ghosts, for that is the ratio by which the dead outnumber the living."  My response (as I remember it, anyway): is that all?  After all these millennia? It jibed with some museum display of human population growth expoding in the last few centuries.

Where this came home to me is in education.  The sheer volume of discovery, thinking and writing produced in the last two hundred years -- always accelerating across even that span -- justifies because it necessitates the thinning out of students' exposure to the literature and history of the west from ancient times to the near present.

The slippage in Obama's "days, not weeks" promise

James Fallows, soberly upbraiding Obama for blowing off Congress in his prosecution of the isn't-war in Libya, repeats a quasi-misconception that in an odd way illustrates his point.  Arguing that Obama set himself up for Congressional rebuke by not seeking Congressional buy-in from the start, he writes:

This was a problem foreseeable from the very start* -- more than three months ago, when we were told that this would be a campaign of "days, not weeks."

Obama did not quite say that -- though there is some ambiguity in reports of what he did say on the two occasions when he used the phrase "days, not weeks."

First, on March 18, ABC's Jake Tapper relayed second hand what Obama reputedly said behind closed doors to Members of Congress.  The headline of the short item misrepresents the body content:

Another rough beast slouching

Lenin. Bin Laden. Palin. Stuxnet. Weapons that returned (or will return) to plague those who deploy them.

Thomas Wright of the Chicago Council on Global Affairs warns that Obama cannot have it both ways on cyberattacks: "It cannot on the one hand treat cyber-destruction by others as an act of war but then say that US cyber-destruction is a routine covert action":

What would Nixon do in Afghanistan? Kill a million more

The Times' inaugural revamped Sunday Review section is garnished with an extraordinarily perverse argument by Gideon Rose, editor of Foreign Affairs, regarding Obama's course in Afghanistan.  Rose asserts a) that in Afghanistan Obama should emulate Nixon's withdrawal strategy in Vietnam; b) that he is failing to do so; c) that Nixon's strategy was smart and could have worked; and d) that a similar strategy could work in Afghanistan.

Points a) and d) arguably have some truth to them; b) is largely refuted by Rose himself; and c) is factually wrong and morally objectionable.

Let's start with the deliberately provocative founding premise: that Nixon's "Vietnamization" and phased U.S. withdrawal could have worked.  Emphasizing the outré nature of this claim, Rose boldly quotes Nixon himself (and Kissinger) in seeming refutation:

Jeffrey Goldberg, excommunicator

Jeffrey Goldberg has ignited a blog conflagration with an attack on Allison Benedikt's coming-of-age tale of her progressive disillusionment with the gung-ho Zionism she sucked up in summer camp. I found Benedikt's  narrative riveting, and Goldberg's critique smotheringly self-righteous.

Goldberg asks of Benedikt: "Does she ever try to answer for herself why Israel exists? Or is she happy to subcontract out her thinking about the most important questions facing Jews first to her camp counselors, and then to her husband?"  It's true that Benedikt's stances on the issues are barely sketched in, but that in itself suggests neither a lack of thought nor of due diligence. Her focus is on how her changing perceptions registered emotionally, not on the data points that caused them. Hers is not a policy piece; it's a chronicle about how she navigated the family mania for Israel -- and later, her husband's antipathy toward the country -- over the course of a decade and a half or so. Benedikt's response to Goldberg makes this point better than I can.

I want to focus on Goldberg's most poisonous charge -- which he saves for last. I think it reveals more about him than about Benedikt:

And then there is a whole set of other questions:  Does she ask herself whether she has a responsibility to make Israel a better, more humane, place? Does she question herself about the consequences of abandoning Israel? Does she think about the sin of the wicked son in the Passover story, and how that sin might echo in her own life? 

Abandoning Israel? Goldberg seems to have derived that idea from Benedikt's kicker at the close. Let's take a look: