The New Republic

From your keyboard to Obama's eyes, Jonathan. An excellent political maneuver. It seems to me it might be good to wait a little while, let the policies and budgets start kicking in, and things to get a little bit worse, before hoping up and down and point fingers. Then again, they've been in control since Jan 2011 and things have gotten plenty worse already under their stewardship. It's already painfully obvious to me that the stimulus was helping, but it hasn't even been a year and I can understand why letting things play out a little longer might be advisable.

- GSpinks

August 4, 2011 at 12:25pm

Ah, another framing question. How depressing.

- liberalref

August 4, 2011 at 12:33pm

Deadweight Chait -- what utter and complete BS -- even for you Obamanation had control of Senate & Congress for two years and he passed a series of ill-fated policies that have either partially paralyzed the private sector with regulations or just added debt with no real economic value, e.g.:" 1. ObamaCare 2. Cash for Clunkers 3. Homeowner subsidy 4. Broadband for rural areas 5........ the list goes on Republicans are re-surgent because of Obama's economic failures. Thus the crushing defeat of Democrats/liberals during the last election. Again you get it exactly wrong --- If you are too stupid to understand that -- and believe that more liberalKeynesian treatments will help but Republicans are evil for stopping it -- then go ahead and try to sell that. I dare you -- as most non-moonbats have a handle on basic finance and logic. And FYI, Keynesian models: a) don't create demand when debt service contrains consumer cash flow disposable income b) Artificially increase GDP and lower jobless by creating parasite jobs that are not sustainable -- thus adding no longer term value to economy c) have been largely abandoned since stagflation of the Carter era -- a situation that was supposed to impossible under Keynesian model Get a clue. Read a book. Gov intervention in economy (around the world) continues to be dominated by monetary policy -- as it is today in the US. The stimulus pales in comparison to the dollars pumped into economy by QE1 and QE2, and likely QE3. Obama will get the blame as US enters another recession. Game over for liberal policy. Thank goodness

- mr_rationale

August 4, 2011 at 12:51pm

Obama desperately needs to quit blaming "Congress" for things, and instead blame the "Republicans" for things. Otherwise, the Republicans crow to their base about all the "good" they're doing cutting spending, and how it's all the Democrats and Obama/Reid/Pelosi who are holding back the economy, even as Obama/Reid/Pelosi implement Republican policies. It's NOT "the Congress's" fault this is happening, it's "The Republicans". And the sooner Obama starts saying it that way, the better. It would be horrible if in 2012, the Republicans take credit for cutting spending, while tar Obama with the resulting crap economy.

- AllanL5

August 4, 2011 at 12:53pm

Rat, what exactly was wrong with the homeowner subsidy or Cash for Clunkers? They both did exactly what they were supposed to do -- goose demand for home and car purchases during a period when demand for both plummeted precipitously (along with the thousands of jobs that are associated with home and new car sales). They had plenty of "real economic value" as short-term economic stimulus, because they were not intended as long-term economic "value" solutions to the problems facing the real estate and auto industries. Your bromides are a perfect illustration of what Keynes meant when he said, "In the long run, we're all dead." Sitting around on one's hands while the short-term economy melts down while claiming that you are just implementing long-term solutions with "real economic value" is like deciding that you won't eat for the next two months so that you could reduce your long-term risk of heart disease.

- wildboy

August 4, 2011 at 1:06pm

I know that Obama is congenitally attuned to compromise, etc., etc., but this has to be the real pivot point to re-election. I have defended his compromises in the first two years as being motivated by a desire to get legislation passed and have defended his compromises in the last nine months by his need to work with Republicans to prevent governmental paralysis and, with it, economic catastrophe. Now that the debt ceiling is off the table until after the election, there is no need to continue to say nice things about Republicans and blame it on some generic "Congress". Obama should go ahead and blame those for whom blame is due -- Eric Cantor, Paul Ryan, Mitch McConnell and the Republican Presidential contenders. He can give John Boehner a pass since he apparently likes the guy, but the rest of the lot need to be named and shamed. It's already worked with Ryan (don't see to many "America's Accountant" stories about him anymore), and it should be repeated with the others.

- wildboy

August 4, 2011 at 1:10pm

Finally, someone with the guts to say it out loud - Cash for Clunkers destroyed the economy. If only Obama had agreed to unwind it as Repubs demanded as the price for raising the debt ceiling, we'd already be adding so many jobs that we'd be begging Mexicans to cross the border to work. But no, Mr. Socialist is so damn proud of his achievement that he was willing to default on the nation's debt just to keep from having to acknowledge his mistake. One might ask, if Bush inherited a budget in surplus, turned it into the largest deficit in history, then saw the biggest economic contraction since the Great Depression, why was this not evidence of a failure of conservative policy? Well, Bush never paid people to trade in their old cars for new ones, Dummy! That's not to say Bush was perfect - for one thing, he should have started cutting taxes on job creators the minute the subprime market started looking shaky. Sadly, this mistake pales in comparison to the biggest one. Due to a failure of imagination, he never dreamed that a Socialist Muslim might defeat McCain, so he did virtually nothing to pass a constitutional amendment forbidding government assistance for people buying new cars. We'll be paying the price for that for decades, because the damage Obama has done to economy assures that all Repub efforts to stimulate it through lowering taxes and shredding the safety net - even if they cut taxes to zero and go door-to-door taking money from the poor and elderly - will not be enough to restore growth. But, be brave, M. Rat - Somalia barely has cars, and the idea of C-for-C is as foreign to them as air conditioning, bug-free food and clean drinking water right of the tap. They will welcome you with open arms, and you can rest assured that you will be free of the hellish oppression that we call the US government.

- GeoffG

August 4, 2011 at 1:21pm

"Ah, another framing question. How depressing." If you knew even the slightest little thing about politics, lib, which you do not, you would know that winning the framing battle is tantamount to winning the rhetorical war. By the time you are arguing within the other side's frame -- as Obama has done by legitimizing the Republicans' anti-deficit frame -- you are already toast. Sad, but true. One can only imagine the disasters that would follow if you were actually involved in politics. I might have to move to Canada.

- roidubouloi

August 4, 2011 at 1:36pm

rat says: "Get a clue. Read a book. Gov intervention in economy (around the world) continues to be dominated by monetary policy -- as it is today in the US. The stimulus pales in comparison to the dollars pumped into economy by QE1 and QE2, and likely QE3." Amazing! From the lips of an economics ignoramus, comes a pearl of wisdom, unnoticed. That is exactly right, rat. And it is the precise reason we are still mired in a recession (by my definition, lower GDP than the peak or even lower per capita GDP than the peak). You see, in a deep recession, monetary policy is inadequate to the task, just as Keynes taught. Under those circumstances, the only way to replace lost demand is not for the government to give people money, via tax cuts and the like, but to spend it for them. We are stuck now because we have failed to combine strong and sustained fiscal policy with monetary policy. The resulting failure is just what Keynes explained it would be. Inadvertently, you have put your finger right on the problem. Bravo! Your notion that government jobs are "not sustainable" is pure, unadulterated horseshit. It has exactly zero empirical evidence to support it. Religious zealotry and fanaticism masquerading as economics. You might as well insist that the earth is carried through the heavens on the back of a giant turtle. That would be at least as well supported empirically as your other claims.

- roidubouloi

August 4, 2011 at 1:44pm

When an entire political party doesn't believe in math because it screws with their feverish electoral dreams, that means that fiscal policy needs to be handed over to a Federal Fiscal Board, staffed with professional economists and possibly led by a presidential appointee tasked with speaking for the Board. Mainstream economists should not have greenlit Reaganomics or the Bush tax cuts, and I'm much more faithful that they would issue prescriptions that raised taxes and kept economically beneficial government spending, without all the "government is evil" ideology.

- chaitless

August 4, 2011 at 1:47pm

"It's already worked with Ryan (don't see to many "America's Accountant" stories about him anymore), and it should be repeated with the others." Exactly, wildboy. The single time, that I can recall, that Obama roused himself to advance a partisan counter-narrative to the Republicans, the short-term results were terrific. Then he shot his own dick off with his debt-ceiling disaster. Among the other losses of this botch-job were his lead over a generic Republican in the polls. Gone. Do you think our first post partisan president can learn how to be a politician soon enough to avert various disasters? No evidence that he can or even wants to. He is stuck in his self-indulgence desire to be above partisanship and party.

- roidubouloi

August 4, 2011 at 1:48pm

chaitless, you might well be right, but such policy solutions are far beyond our reach at the moment, as are most any policy solutions to anything, due to Obama's political ineptitude. We will not have any policy levers again within reach unless and until the Democrats, led by the president, accept that the only thing they can now control is their own political rhetoric and get on about the job of fighting and winning the rhetorical battle. There is as yet no evidence at all that they have the will.

- roidubouloi

August 4, 2011 at 1:52pm

Broadband for rural areas is a great idea, a marriage of private & public sector efforts that will yield positive long term results. I'm proud to support the notion of the government facilitating or prodding internet providers to lay some cable & open lines of data transmission to our non-urbanized friends around the world. Global high speed internet will bring prosperity and accomplish more than 10 armies & 3 decades of Provincial Reconstruction Teams' efforts in the 3rd world.

- Konstantin

August 4, 2011 at 1:54pm

"How is the [Republican] policy working out? Should conservatives expect growth to begin accelerating? I see no sign that they actually believe their new-found control over short-term policy has paid any dividends or will pay any dividends. " Exactly right. They don't want it to work. They want to steer the economy farther into a ditch and then convince voters that it's Obama's fault. This strategy is beyond cynicism. It's downright criminal when you think of all the people who are being hurt by it. And many of those poor saps have voted Republican and will continue to do so. The Republicans must really laugh at those pathetic dupes behind closed doors. I keep hoping for the Great Awakening. To Mr. Rat: Why do you keep coming to this website to spew your right-wing nonsense? Why don't you get a motel room with Karl Rove.

- DAVIDDREIER@EARTHLINK.NET-old

August 4, 2011 at 2:04pm

I don't know how the Rat can say that Obama's policies caused the shellacking when the clear cause is that democrats didn't come out to vote in 2010. Of course, I have a hard time justifying whatever the Rat says. Obama needs to go after tax reform and he needs to articulate an economic message that progressive rates are the best way to fund the government. None of this: "pay more because it's patriotic" or "Pay your fair share" or "corporate jet loophole sh*t." Who's going to buy that crap?

- Nusholtz

August 4, 2011 at 2:18pm

This is the point, as I'm not the first one to express, at which Obama's strategy of capturing the middle ground so as to lock in re-election against a GOP crazy (or a probably-normal-plus-one-crazy ticket) by keeping the Independents on his side, may look better on paper. The theoretical advantages of a plan like that presupposes a disaffected but not scared electorate -- as we had three years ago -- willing to embrace someone new with a refreshing style and an inspiring but non-confrontational message. The danger now, however, is of such a demoralized polity that the crazies even make headway in a presidential election. America is not, repeat not, divinely protected against serious political and social upheaval, and Obama may discover that what he thought was the middle ground is a wasted no-man's land between contending forces. It wasn't the way in 2008, but we're not in 2008 anymore, Tonto.

- ironyroad

August 4, 2011 at 2:27pm

Irony. Could you comment on The Geithner Mystery? http://www.independent.ie/opinion/columnists/gene-kerrigan/gene-kerrigan-were-shamed-by-conspiracy-of-silence-2800010.html I'd dearly love to read your take on it. You're ideally placed being a solid Talkbacker and an AmericanMick.

- IggyPop

August 4, 2011 at 3:33pm

The key to good policies going forward is to seek to reduce unemployment. And you achieve that by freeing up credit in the banking industry. And you achieve THAT by letting all those CDO-based sub-prime mortgages get refinanced -- the sooner the better. If unemployment is STILL above 9% in September 2012, then the Republicans have a very good argument that Obama has failed. True, he'll have failed because he pursued "compromise" with the Republicans instead of ignoring their lunatic policies, and he'll have failed because those lunatic policies were partially implemented. But that's still failure. All other considerations are simply noise-generators, intended to distract Obama and the electorate from what will really help the economy. If they work, and the Republicans regain control of the White-House in 2012, then the Republicans will make what Hoover did to America look trivial. Obama MUST make this argument when the time comes.

- AllanL5

August 4, 2011 at 3:56pm

Iggy, I wish I had something smart to say in response, but the article (which I'd come across while browsing the Indo a few weeks ago) is both tantalizing and somewhat lacking in solid ground. The basis for the original assertion by the academic journalist guy seems to not have been very rigorously investigated -- which I suppose is partly Kerrigan's point -- so therefore the conclusions are presented with a kind of deductive logic rather than anything like evidence. On the lines of: "If that was the case, then this would not be unlikely." Is it possible that Geithner would intervene as alleged in the context of a G7 discussion on Ireland? I suppose so. Would his motives be to protect U.S. banks in some shape or form? Again, perfectly possible. Was it legitimate? If he was acting as Treasury Secretary, could he make a recommendation in an international forum that was not, say, 'neutral'? Again, I don't know -- are G7 finance ministers national representatives or international civil servants? The former, I'd guess. Curiously, I remember watching the RTE news footage of that first press conference with Obama and Enda Kenny at the outset of the prez's visit. There was a somewhat odd moment when the taoiseach mentioned Geithner in the course of his remarks and Obama looked a bit confused. It was commented on at the time. I wonder if there was a connection (although that was more about the U.S. helping Ireland a bit, not putting the boot in). That's not even ten cents' worth, but basically -- your guess is as good as mine. Incidentally, I remember having a few pints with Kerrigan and a couple of other people in some pub in Baggot St almost 30 years ago. Nice guy, great company. I wrote a bit for the Sunday Tribune in the early-mid '80s, when Brian Trench was foreign editor. GK was working for Magill, I think.

- ironyroad

August 5, 2011 at 10:22am

Fascinating. Didn't know about your literary past Irony. I suppose, the point is that we have to assume it did happen as it hasn't been denied and everyone's very keen not to discuss it. And if it did happen, then it raises all sorts of questions about the international insurance industry and not just Ireland. Plus, what's the point in genuflecting to the White House for that fabled "access" if we can't even raise these issues and are reduced to playing up to stereotypes about the craic and so on. I like Kerrigan's writing, always a good read.

- IggyPop

August 5, 2011 at 11:36am

Iggy, that's true, and I have no argument against what you say. I do think, however, that it needs to be remembered that it was an Irish government decision in September 2008 that guaranteed all deposits and loans at the six banks (Anglo-Irish etc) with no thought to what the rates for such a guarantee should be or indeed what kind of conditions were to be imposed from the Irish side. It may have been made without malice aforethought, so to speak, but it revealed a government utterly unable to grasp the world outside the various clichés about "markets" and "stability" that everyone had been mouthing.

- ironyroad

August 5, 2011 at 11:55am

Couldn't agree more. I suspect we'd be here all day in agreement if we were to aportion blame but I'm talking about this very specific incident that reveals our complete impotence in international affairs. I just found the whole episode very depressing. We're not even allowed ask why we have to pay the American banks money we don't owe. We can't even ask why we're being fucked over. Instead we have to put the ' in O'bama and have the craic! Remember Geithner didn't over rule some peoples court. He over ruled the IMF and George Osbourne who pleaded our case and it was British banks going to take the hit...but it wasn't they had the CDSwaps and it was American banks going to take the hit. My love affair with Obama died that weekend. Not that Hillary wouldn't have fucked us over for the 20 Billion as well. Anyway, pity I didn't get to buy you that pint Irony. Would have enjoyed listen to your stories.

- IggyPop

August 5, 2011 at 2:33pm