JONATHAN COHN AUGUST 19, 2011
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President Obama’s plan to give a major economic speech after Labor Day means that, finally, Washington is going to have a serious conversation about creating jobs. And it can't come a moment too soon. While Thursday's stock market decline shouldn’t alarm you, the conditions that sparked it should.
Of course, whether that conversation on jobs leads to action on jobs is more a question of politics than policy. Republicans want no part of anything with Obama’s name on it and, until that changes, very little can pass Congress.
Still, the best policy conversations start with what we should do, not with what we can (or can’t) do. And it’s not like we have to think too hard about ways of boosting growth: Infrastructure projects, direct aid to the states, assistance for the unemployed, and other familiar remedies should work just fine. As Josh Bivens of the Economic Policy Institute noted recently,
There are not many new and exciting policy levers that can be pulled by Congress and the president to solve today’s unemployment crisis. Fortunately, the old (and presumably boring) policy levers could reduce unemployment much more quickly if applied with enough force.
The key is finding the right mix of these ideas and getting the details right. With that in mind, here are three essential elements of a successful jobs agenda, based on conversations with a series of economists -- mostly center to left -- who can speak to this issue with way more authority than I can.
Size. This one can be said very simply. The jobs program should be big.
The most recent economic forecast from Mark Zandi, of Moody’s, suggests that gross domestic product will grow at an annualized rate of near 2 percent this year and 3 percent next year. That’s not good. That rate of growth will create roughly enough jobs to keep up with population growth, but no more. And that’s not enough when more than 9 percent of the country is out of work, not including those who have stopped looking altogether. The goal should be putting those people back to work, not merely absorbing the latest comers to the workforce.
So how much faster do we want the economy to grow? One of the economists I consulted was Harvard's Jeffrey Liebman, a former budget official in the Obama Administration. In his response, via e-mail, he started with Okun’s Law, a basic tenet of economics about the relationship between growth and unemployment:
Okun’s Law tells us that in order to reduce the unemployment rate by 1 percentage point, GDP needs to grow 2 percent faster than trend for a year. U.S. trend growth is around 2.5 percent. So we need real GDP to grow at 4.5 percent a year for two years to bring the unemployment rate below 7 percent. Achieving 4.5 percent growth for the next two years should be the goal of U.S. economic policy. It is hard to see this happening without additional fiscal stimulus of at least 2.5 percent of GDP in each year. What we need is a second stimulus bill as large as the Recovery Act, but this time the composition needs to be 100 percent stimulus. Ideally, this stimulus legislation would be paired with legislation resolving our medium-term deficit problem. Eliminating the uncertainty about how our fiscal imbalances will be corrected would raise confidence among economic actors and significantly increase the chance that we hit the 4.5 percent target for GDP growth.
What would that be in dollars? Over the next two years, GDP is projected to be between $15 and 16 trillion annually. Do the math, as Liebman suggests, and you're getting to the neighborhood of $400 billion a year, depending on whether you account for extensions of unemployment insurance and the payroll tax break already in effect. And it could easily be more if, say, the current economic projections turn out to be optimistic.
Liebman was from from the only economist talking in those terms. Even more conservative estimates I heard amounted to hefty sums, at least by the standards of today's fiscal debate. Here's Dartmouth’s Andrew Samwick, who was a presidential adviser during the early years of the Bush Administration, via e-mail:
It really depends on what you spend it on. If you are going to do things that are temporary and don't change people's long-term expectations, then you will need to pump in more money. If instead you do things like spend $250 billion a year for four years, and spend it on closing our public infrastructure gap, then households and businesses will likely make complementary investments -- because the public investments raise the returns to the private investments.
The point is not to get hung up on a specific number. The point is that whether it's $300 billion, $400 billion, or more, we're talking about a lot of money.
Speed: The economy needs help. And it needs help now.
That’s not necessarily an argument against measures with delayed impact. The sorry state of American infrastructure would call out for public investment even if the economy were growing rapidly. With interest rates as low as they are, it’s frankly stupid not to borrow money to build infrastructure. Besides, the way things are going, we’re going to need stimulus in 2012, and 2013, and maybe beyond.
But when it comes to putting people back to work right away, infrastructure programs, in particular, can be slow. The whole point of the infrastructure bank, for example, is to subject every proposal to rigorous cost-benefit analysis. That takes time. One way around this problem is to change some of the rules for public works – and, as Gary Burtless of Brookings explains, applying some lessons the federal government learned after the 1994 Northridge earthquake in Southern California:
The feds learned a bitter lesson from San Francisco’s very slow spending of federal aid dollars after the World Series earthquake a few years earlier. Wanting to avoid a repetition of that fiasco, the federal gov’t told CA and L.A. that the U.S. earthquake relief dollars had to be spent within a specified period. It worked. L.A. repaired its wrecked freeways much faster than the Bay area fixed its wrecked highways and bridges.
Another answer is to focus on programs that can get up to speed quickly. Jared Bernstein, who also served in the Obama Administration and now works at the Center on Budget and Policy Priorities, continues to talk up the “FAST” proposal that would finance a burst of school repair and renovation projects around the country. I continue to think that’s a good idea, particularly since it's labor intensive work and there's quite a lot of it to be done. It turns out we have many schools that need work -- a case of bad news being good news, at least if you’re trying to come up with policy ideas.
Of course, that also strengthens the case for other kinds of interventions that have quick effects. Extending unemployment insurance is one obvious policy initiative that satisfies this criteria, as Burtless points out:
Helping the long-term unemployed through direct transfers (unemployment benefits, generously subsidized health insurance) is sensible policy from the perspective of its anti-recession effects (the target population will spend the money faster than you or I) and from a humanitarian viewpoint.
It’s also a strong argument for direct assistance to local and state governments, which could use the cash immediately to plug budget holes – and stop laying off workers, the way they are doing now.
Smarts. Yes, I was trying for three “S”s, just to make this post a little more memorable. But it’s also a good principle. And I mean smart in the sense of fiscally smart.
Deficits aren’t a problem right now, notwithstanding what so many politicians and pundits have been saying. But they will be a problem in the future. That’s an argument for offsetting economic boosters with spending cuts and/or revenue increases in the future. Fortunately that is easy to do. All of the measures that are, or should be, under consideration would be temporary and relatively short-term. So it’s relatively easy paying those off over time.
But there’s another way to make these proposals smart: To make them expire when economic conditions improve. In an ideal world, extra unemployment insurance and aid to the states would act as truly “automatic” stabilizers, to borrow the economics lingo. In other words, they would start when the economy in bad shape and end when the economy has recovered, no longer requiring separate acts of Congress as each new emergency arises.
An easy way to do that is to link their duration explicitly to an economic indicator – and say, for example, that one or the other or both would end when unemployment declines below a reasonable threshold of 7 percent.
***
So there you have it. The ideal jobs package would inject hundreds of billions of dollars into the economy as quickly as possible – but in a way that paid for itself over the long run and, ideally, diminished automatically once a strong recovery is under way. The administration could do a portion of this on its own, whether by using Fannie Mae to help distressed homeowners or getting China to help U.S. exports by revaluing its currency. The Fed could obviously lend a hand, maybe a big hand, as well. But to meet these criteria, Congress would have to take some action.
Is there a chance Congress would do that? Not right now. Among the proposals circulating on Capitol Hill, the initiative from progressive House Democrats comes closest. Republicans, on the other hand, have very different ideas: They dismiss such proposals as "more failed stimulus." And they can block legislation, given that they control the House and have enough votes to mount filibusters in the Senate.
But given the alarming news about the economy and Obama's determination to press the issue this fall, there should be a chance to do something The closer it adheres to these principles, the better it will be.
Update: With a few edits and clarifications.
50 comments
"President Obama’s plan to give a major economic speech after Labor Day means that, finally, Washington is going to have a serious conversation about creating jobs." Sorry, but it seems to me that the President Obama's plan to give a major economic speech means only that that we are going to hear an economic speech by President Obama. His speech may or may not seriously address the jobs crisis and whether or not it seriously addresses the jobs crisis, the likelihood that the speech will stimulate a serious conversation in Washington is small.
- AaronW
August 19, 2011 at 12:51am
until the housing market stabilizes, GDP (and job) growth will be sluggish. Obama should have listened to now retired FDIC chairwoman Sheila Bair about housing. The USA needs a big dose of CONFIDENCE, and Obama is running a huge personal deficit in being able to inspire confidence. Maybe he can just stay on vacation until Christmas and outsource this speech to Bill Clinton.
- K2K
August 19, 2011 at 8:42am
There's no such thing as a "serious conversation" about anything in Washington anymore. No matter what Obama proposes, the Republicans will dismiss it as "more wasteful spending that will do nothing to get Americans back to work." Then they will say that the way to stimulate the economy is to give the rich (excuse me, the "job creators") another huge tax cut. Meanwhile, schools will continue to deteriorate, the infrastructure will continue to fall apart, and the unemployment rate will stay at 9 percent or above. The only way Obama will get anything done is to make his case so forcefully to the American public that they will demand that his proposals be put into action. If the Republicans see their poll numbers dropping as a result of their intransigence, then they may be forced to enact some of the measures being put forth by Obama. But they will dilute his proposals to ensure that they have a minimal effect on the unemployment rate. Then, in the fall election campaign, they can charge that Obama has increased the deficit without improving the employment situation. It will be "Where are the jobs?" all over again. Until Americans wise up and marginalize the GOP for a generation, nothing of any substance will get done in this country. The Republican brand seems to be in growing disfavor among the electorate, so perhaps that's a possibility. The 2012 election will show us if there are enough people out there across the land with sufficient brainpower to have FINALLY seen the Republican Party for the collection of lying rats that it is.
- DAVIDDREIER@EARTHLINK.NET-old
August 19, 2011 at 8:46am
K2K: until the housing market stabilizes, GDP (and job) growth will be sluggish. That's not completely true. Until the housing market stabilizes, consumption will be sluggish. However, GDP growth is governed by Y=C+I+G+X-M or Income equal (C)onsumption + (I)nvestment + (G)overnment + e(X)ports - i(M)ports. Sufficient government spending can compensate for a lack of consumer spending to boost GDP growth.
- sighthnd
August 19, 2011 at 9:16am
Thanks, sighthnd. It is always useful to recall the basics. Also, the problem is not the housing market, but the consumer debt overhang. The notion that having the real cost of anything we consume rising, including a very big piece of consumption such as housing, is a path to prosperity is actually backwards. Housing was over-priced and we are better off if it stays down and hence more, not less, affordable. This, however, leaves high debt relative to assets. The way out of that is simple -- inflation. Notice Rick Perry, the latest tribune for the über-rich, declaring that Bernanke should be physically harmed for so much as thinking about inflation? That almost tells you all you need to know. We are stuck both due to lack of government spending and lack of inflation. The way to get both is to spend money and finance it with the printing press rather than debt or taxes. Getting inflation up to 4.5% would be a very good thing for a several years. Together with the spending, output would increase, the debt, including the Federal and State debt, would decline in real terms. We would pop up like a cork. Housing could then stay down in real terms with either no nominal depreciation or low nominal appreciation.
- roidubouloi
August 19, 2011 at 9:59am
DaveyD is exactly right. The days of a serious conversation taking place in DC are over. A few days ago, the Iowa straw poll went and crowned as its hopeful a congresswoman crazy as a fruitbat, and she is the odd-on favorite to win that primary in 5 months. New Hampshire will go to a man who made bushels of money essentially by buying companies and firing the workers and who's gone on to prove his economics acumen by insisting the debt ceiling should not have been raised. South Carolina is almost certain to be awarded to... it pains me to say this... another uberconservative neocon Texas village idiot evangelical who believes in neither global climate change nor evolution, but who seriously considers abstinence-only education the way to go in educating our teens against the potential hazards associated with sexual activity. And who, yeah, considers another quantitative easing by the Fed on a par with Benedict Arnold putting a For Sale sign up on the front lawn at West Point. These are not people who take governing seriously, nor do the electorate they represent. These are people who - let's not mince words - are perfectly ok with seeing the US economy shrink down to be small enough to drown in a bathtub and to see a worldwide depression just so long as a certain socialist Kenyan interloper is thrown out of the White House. They say, better to have a republican at the helm of a ruined land than a democrat commanding a nation made great again. They say, better to reign in hell than to serve in heaven. And so they are determined to make their own citizenry go through hell. I don't envy the President's mission, but he MUST find a way to pull back the curtain for the majority of our nation who simply don't seem to be paying much attention.
- Tristan
August 19, 2011 at 10:00am
This is awesome. I love it. We need to see more of it... Democrats’ road tour strikes back at GOP’s stand against raising taxes On Wednesday morning, as his tinted black bus pulled into Randy Hultgren’s congressional district, President Obama told residents that Republicans like Hultgren must be willing to raise taxes to reduce the deficit. A few hours and 90 miles away, Hultgren’s own constituents had picked up the message, repeatedly hectoring the freshman congressman at a town hall meeting to raise taxes on the wealthy and corporations. “We have clear information that . . . tax cuts, especially to the super rich, has not increased any more jobs,” one man told him. “I want to know under what conditions you would be willing to consider increasing taxes, especially on those who can afford it? ” “I just have one question for you tonight,” said another. “Did you sign Grover Norquist’s pledge to never raise taxes?” — referring to the promise that has been signed by most congressional Republicans, including Hultgren. “Don’t you have the confidence in your own ability in Congress to make up your own mind? You need Grover Norquist to tell you?” the man continued. It is a scene that has been repeated at town hall meetings across the country this August as Democrats make a concerted effort to use this month’s congressional recess to change a national narrative on taxes. For years, it has been Republicans who have wanted to talk about the issue, winning elections promising not to let government take more from voters... http://www.washingtonpost.com/politics/democrats-road-tour-strikes-back-at-gops-stand-against-raising-taxes/2011/08/18/gIQAkzJcOJ_story.html?wpisrc=nl_cuzheads
- wkwami
August 19, 2011 at 10:12am
Gee, wkwami. Does this mean you are finally accepting the idea that the political contest is fought almost entirely with political rhetoric, including therein symbolism of various kinds? That would be very welcome.
- roidubouloi
August 19, 2011 at 10:52am
Cohn's analysis is correct. All posters are correct. SO WHAT?? . Care to bet how hard and consistently Obama pushes for jobs, having signed onto deficit reduction?? And how big a program?? And how well targeted. And how much he touts and waits for his super-panel of 12 to recommend otherwise?? Repubs created the disaster, but BHO and Blue-dog Dems have enabled the Repubs. All are part of the problem and need be replaced. The sooner the better. As posted previously,Economics has been a science for over 60 years with much data and testable theories. Keynesian theory is the only one that fits the available data. The present situation is analagous to astronomers observing that a footballfield-sized asteroid will hit earth in six months-- and then funding plans to hit and destroy it based only on ideologically-based calculations that assume F=mv, E=mc, and gravity is non-existent once you reach the stratosphere. Guaranteed disaster-- with the only solution being those making or abetting such nonsense must be replaced. Same with our current upcoming economic disaster in 3-6 months. Those that now need replacing include any Repub, BHO, and Blue-dog type Dems. The sooner any are challenged by those understanding and advocating Keynesian economics, the better.
- drofnats1
August 19, 2011 at 11:47am
Contrary to your assertions, Roi, political contests are never fought almost entirely with political rhetoric. It may have been somewhat true in the 20th century, given the limited, hence easily controlled avenues for messaging available back then, but even then FDR and LBJ, each, utterly failed to shift voters opinions in some cases, with their rhetoric. As I've outlined repeatedly, rhetoric is most effective when strategically used, as opposed to the kind of relentless partisan messaging akin to Tea Party madness you've advocated. In this instance, the President first tried to compromise with the Republicans. The ensuing debacle made it clear to the American voter what the other side stood for (no guessing what they might do - they actually turned down a fair debt deal and threatened default). That sets the stage for the next chapter, with the voter already primed to receive the message and act on it. You see, the very thing you detest the President for - his willingness to compromise, or positioning himself as post partisan - is what set the stage the rhetorical messaging currently being waged. It uses the Republican intransigence against them the way a smaller person might use the weight of a bigger person against them. Voters are best convinced when they can relate experimentally to the rhetoric. LBJ couldn't convince Americans to support his war escalation in Vietnam because his rhetoric didn't match voters perceptions and experiences of the war. Rhetoric by itself doesn't work, or else we'd have a permanent Republican majority by now. More importantly, 20th century messaging strategies should not be adopted wholesale to address 21st century messaging needs. That is what you fail to grasp.
- wkwami
August 19, 2011 at 11:53am
"Guaranteed disaster-- with the only solution being those making or abetting such nonsense must be replaced. Same with our current upcoming economic disaster in 3-6 months. Those that now need replacing include any Repub, BHO, and Blue-dog type Dems. The sooner any are challenged by those understanding and advocating Keynesian economics, the better." I nominate Bernie Sanders for President, and Paul Krugman for Treasury Secretary. By the way, if Krugman believed we needed a larger stimulus, why did he round up the votes for it? He'd have more credibility today if he could say they had the votes for a $2 trillion stimulus package, but the President didn't get on board. Oh, and I nominate Dennis Kucinich for Homeland Security.
- wkwami
August 19, 2011 at 11:58am
Hard to see how federal spending can compensate for a very sluggish Personal Consumption Expenditure (PCE) that is about 70% of the GDP model. If you want PCE to grow, people need to buy and sell housing because every time you buy, you spend some money on durable and non-durables, and local services like painters and electricians. A frozen market due to lost confidence is part of our problem TODAY. When I meant the housing market has to stabilize, I was NOT referring to prices, but to the sudden loss of confidence by buyers in normal (NOT over-built with decent diversified job sectors) housing markets that happened in July, 2011. I am trying to sell (no mortgage) in one very normal market, and have a house I also want to sell in another very normal market, and the buyers in both markets were bubbling up and buying in April-June, then disappeared in July, frozen by the spectacle of rampant bi-partisan idiocy in Washington. Both units happen to have public golf courses a few blocks away even though one is in Van Cortlandt Park in The Bronx and the other is an idyllic village in the Berkshires. I am hoping those buyers calm down after Labor Day to take advantage of the low mortgage interest rates. But, Obama is going to make a speech after Labor Day, so I am not hopeful that CONFIDENCE will return. So, I have to become a landlord, something I never wanted to be since seeing the film "Pacific Heights", and was selling as part of my Estate Planning because I do not want my Executor to have the burden, and was hoping for a final year of peace without real estate lawyers in NYC. Apparently, becoming a landlord of foreclosed properties is what Obama has at the top of his list.
- K2K
August 19, 2011 at 12:17pm
Correction... "It uses the Republican intransigence against them the way a smaller person might use the weight of a bigger person against them in martial arts. Voters are best convinced when they can relate experientially to the rhetoric.
- wkwami
August 19, 2011 at 12:19pm
It's just so pathetic that 3 1/2 years into his administration, Obama is finally going to propose a jobs "agenda," whatever that means. And as usual, the culmination of all the effort is going to be a speech, because that is the only part of being President he understands. Even if the administration got something through Congress (the Congress, if you live in Washington), nothing would happen because these armchair philosophers have no idea how to implement a Federal program. And besides, to judge by yesterday's papers, Obama has already made it clear that this is not a serious legislative proposal, but rather a ploy to make the Republicans vote against it so they will look bad next November. Brilliant! It's all just more proof that Obama has to go. It's too bad that the Repubs aren't smart enough or organized enough to impeach him for something--like incompetence--before the election, because he has too much of a head start and too much money to be beaten in the Democratic primary--unless, unless someone steps forward like right now. Other- wise we are going to lose, and though we won't be losing much, things could still get a lot worse.
- mlottman
August 19, 2011 at 12:21pm
So, you think, wkwami, that had the president advocated forcefully for his ACA and for the best version of it, advocated for a stimulus structured and sufficient to get us out of recession, advocated consistently for policies to fight the recession (he just discovered, in 2011, that people are out of work and we need jobs?), advocated for the necessity of high-end tax increases, stated clearly that holding the country hostage with the debt ceiling was improper, held Wall Street to account, had not legitimized Republican demands for austerity by verbally affirming them, that that would NOT have been a strategy? I just LOVE the fact that you consider yourself a strategic thinker. LOL. Shared dinner last night with a friend and a friend of his whom I had never met. The guy was a self-described "former" liberal Democrat from rural Pennsylvania who campaigned door-to-door for Obama in 2008 and now wouldn't vote for him. Feels completely betrayed. Not someone who was ever highly politically engaged like the people who spend time here, but someone who paid attention all his life. Maybe he just didn't understand Obama's strategy. First, Obama had to make him feel betrayed so that, later, he would realize Obama's genius and return to the fold. Pathetic. Political nonsense. How to win by losing. You actually believe that it was necessary for Obama to make concession after concession, both rhetorically and in policy, in order to be able to demonstrate Republican instransigence?
- roidubouloi
August 19, 2011 at 12:31pm
"It's just so pathetic that 3 1/2 years into his administration, Obama is finally going to propose a jobs "agenda," whatever that means. And as usual, the culmination of all the effort is going to be a speech, because that is the only part of being President he understands." This is funny, but while you accuse him of giving speeches, Roi accuses him of not giving speeches. Which is it, folks? "It's all just more proof that Obama has to go." I once again, nominate Bernie Sanders for President, but I change my mind about Dennis Kucinich at Homeland. I think he'd be a much better job as Secretary for Defense.
- wkwami
August 19, 2011 at 12:35pm
Ah yes, the ancient 20th century, so long ago and far away. Imagine even considering anything that has happened in the last thirty years as relevant today when we need "21st century" something or other. But a question arises. If the year is 2030, does everything of the previous 30 years still pertain because part of the same 21st century, or does the rolling over of the calendar year actually make a firm divide in human history such that everything in the same nominal century matters and nothing in the prior nominal century matters? Just asking.
- roidubouloi
August 19, 2011 at 12:36pm
As I have said repeatedly, wkwami, political messaging does not consist of one man giving speeches. It requires a coordinated strategy at all levels of the organized party. Everyone on sympathetic coordinated message all the time, 24/7. That means first and foremost working with the party and seeing to its organization and health, both of which the so-called post-partisan president has considered beneath him. It also includes symbolic acts, such as proposing, and advocating for, the best proposals you can even though they may get shot down by the intransigent political opposition. That makes it clear they are intransigent. You can even compromise once they have shown themselves intransigent, declaring without cease that the country needs more, but you had to take the best deal that the opposition would allow to get anything done. (You most certainly do not make concessions, as in the ACA, in exchange for no votes at all. You do it to get votes.) If you then blame them, yes, that's right, blame them (and not both parties equally) out loud for their intransigence, and insist that they desist from same for the good of the country, people just might get the idea of who stands for what and who is in the way of progress.
- roidubouloi
August 19, 2011 at 12:42pm
Roi, you continue to suffer from the Alternate Strategy Theory, as Nate Silver explains it... "the other is the argument that an alternate strategy would necessarily have produced a better outcome. These arguments take the form of: if Mr. Obama had done X rather than Y, he could have accomplished P rather than Q, or maybe even both P and Q! (The possibility that the strategy might have failed and that neither P nor Q would have been achieved is usually not considered.) Both types of arguments are hard to prove — or to disprove. That doesn’t mean I begrudge people for making them. But they ought to be stated as speculative, rather than as self-evident truths." You start off with a bunch of assumptions, and proceed to impute best case outcomes to those assumed options, then you make further assumptions on top of that, with further best case outcomes heaped on top of that, and on and on, and voila, you arrive at Fantasyland where Peter Pan is forever young. What a bunch of crap. Jonathan Chait lays it out nicely here... http://www.tnr.com/blog/jonathan-chait/93245/should-obama-demand-big-new-stimulus-eh [The problem is that it begins as a policy argument (we need more stimulus) which is true. But then it quickly acknowledges that Congress won't pass more stimulus, so it switches to a political argument (Obama should attack Congress for opposing more stimulus.) So now we're not really arguing about what to do about the economy. We're arguing about political messaging. But it's pretty clear that the concept of economic stimulus is unpopular. People think it's a big waste of money. So what is the value of devoting a lot of presidential energy to an unpopular message? There's no real evidence that sustained presidential rhetoric can change people's minds on issues where they've formed an opinion. Obama's approach to this problem is to try to break up "stimulus" into individual measures that command public support, like a payroll tax cut. Krugman argues that he's
A large new stimulus is also symbolic, since it has no chance of passing. Even a small stimulus probably won't pass, but it's imaginable. Even if you assume that bite-sized measures have zero chance, that means you're just choosing between different symbolic measures. What's the point of advocating for an unpopular symbolic measure instead of a popular one? I'm not saying the current course is good. When the only thing you can do about the economy is both unpopular and D.O.A. in Congress, there just aren't a lot of tools available.]- wkwami
August 19, 2011 at 12:51pm
Ah, when all else fails, trot out the Dr. Pangloss theory again: Everything is for the best in this the best of all possible worlds. I do not assume that any alternative is necessarily better. Rather, it is you who assume, and state unequivocally, that any alternative is definitely worse. It is you who suffer from the Alternate Strategy fallacy, but in reverse. I have ALWAYS been talking principally about Obama's political failure. I didn't "switch to it" after concluding that policy was hopeless. You, on the other hand, keep touting policy achievements as if they were they answer to political failure. I am not the slightest bit confused about the difference between policy and politics. I call attention to the almost total disconnect relentlessly. We don't need speculation to see what works, wkwami. We only have to observe. The Republicans, who were in an incredibly weak position when Obama took office, have advocated their crackpot positions relentlessly and been maximalist in negotiations. How has that worked? Have they been successful in negotiations when they have occurred, largely stymied the Democratic agenda, and extracted a huge political price for everything that the Democrats did achieve? Sure looks that way to me. Fortunately for them, they don't seem to have wrung their hands overmuch about being partisan or worried about Nate Silver.
- roidubouloi
August 19, 2011 at 1:06pm
Good article. I'd feel better about Obama giving a major jobs speech and, much more importantly, making it part of a broader policy/rhetorical push that includes his election campaign, if he hadn't dug himself into such a hole with his actions and words regarding the deficit. Equally, I'd have more confidence in him now if he hadn't done so much to undermine it already. Still...if he does manage to pivot in a powerful, persuasive way I'll give him credit for (hopefully) being better late than never. It's an incredibly long shot that he'd push a major stimulus bill through Congress, but at least he'd be able to make the campaign about jobs, what he'd do to revive them, and what the Republicans are doing to block them. I just hope it isn't too late. After all is said and done, next year's election will largely hinge on how people are feeling about the economy, how it affects them and if they see signs of improvement. Whomever the Republican nominee is, he or she could persuasively push people to simply try something different. So far, Obama hasn't given them a good reason to vote otherwise.
- Thunderroad
August 19, 2011 at 1:12pm
"That means first and foremost working with the party and seeing to its organization and health, both of which the so-called post-partisan president has considered beneath him." Talk softly and carry a big stick. In this case, the more he talks and acts post-partisan, the bigger his stick will get. Th more he comes across to voters as a conciliator, the easier it would be to get away with being partisan. You didn't get that,did you? Same reason an anti-tax Republican can party can pass tax increases without raising a lot of eyebrows, i.e. Reagan and H.W. Bush. Of course, folks like yourself aren't helping with your constant carping. Already, some Democrats are complaining about his partisan messaging over the past few days. "It also includes symbolic acts, such as proposing, and advocating for, the best proposals you can even though they may get shot down by the intransigent political opposition." So, you're simply being symbolic for the sake of being symbolic (by the way, the President has done some of these things, but in a more strategic manner). As Chait points out, if for example, a large stimulus has no chance of passing it is merely symbolic, but in the meantime people are suffering. I guess that is ok with you, you need more people to suffer in the hope that they will eventually throw out the other side and give your side everything it wants? It never occurs to you that, as with FDR during the Great Depression, the people simply are not be in favor of large stimulus spending and that doing things your way might actually result in much worse outcomes. Even FDR didn't buy into the strategy you claimed would have solved all our problems. He advocated cutting the deficit before later advocating for stimulus spending, which, according to Chait, FDR utterly failed at winning the public's support. http://www.tnr.com/blog/jonathan-chait/93323/drew-westens-nonsense [Did Roosevelt promise to support expansionary fiscal policy to combat the depression? Well, yes, but only after initially promising to cut the deficit. Westen strongly implies that Roosevelt persuaded Americans to understand the efficacy of government spending in order to combat mass unemployment. In fact, he utterly failed to convince Americans to support fiscal stimulus...]
- wkwami
August 19, 2011 at 1:45pm
"We don't need speculation to see what works, wkwami. We only have to observe." That's the problem with your either/or positions - your partisan rigidity blinds you to the middle ground. Of course we can speculate, but we can also observe, and more importantly, learn from our observations. If FDR failed to convince Americans to support large stimulus spending, that fact cannot be (Pan)glossed over and pretend it never happened. Your Peter Pan fantasies are not supported by any historical facts. FDR experienced the limits of political rhetoric just as surely as LBJ did. Obama is the wiser for understanding what those limitations were and adjusting his strategy by taking into consideration current political realities. This is the 21st century of Youtube, blogs, chat, email, twitter, facebook, etc., etc, where you can sneeze in Abbottabad, Pakistan, and it will be heard in Memphis, Tennessee; where an innocent bystander can unwittingly tweet a highly secret military operation to the entire world before even he realizes the significance of his tweet (http://www.businessinsider.com/sohaib-athar-2011-5). Don't you remember how Obama came to be President? You think FDR or LBJ could have topped him in 2008 with 20th century messaging? Ask Hillary! Wake up and join the 21st century for crying out loud.
- wkwami
August 19, 2011 at 2:03pm
"Shared dinner last night with a friend and a friend of his whom I had never met. The guy was a self-described "former" liberal Democrat from rural Pennsylvania who campaigned door-to-door for Obama in 2008 and now wouldn't vote for him. Feels completely betrayed. Not someone who was ever highly politically engaged like the people who spend time here, but someone who paid attention all his life. Maybe he just didn't understand Obama's strategy. First, Obama had to make him feel betrayed so that, later, he would realize Obama's genius and return to the fold." When you're faced with debating issues on facts, you resort to anecdotal stories to set up strawmen which you then proceed to knock down while pounding the podium with insightful comments like this... "Pathetic. Political nonsense. How to win by losing. You actually believe that it was necessary for Obama to make concession after concession, both rhetorically and in policy, in order to be able to demonstrate Republican instransigence?" What concessions did Obama make? Just yesterday, you finally had to admit, albeit convoluted, that "with these cuts and the expiration of the Bush tax cuts, the budget will be at or near balance. Then the Dems can insist that anything the Repugs want to spend money on be backed by tax increases. Of course, this depends on the Dems finally displaying some nerve." So am I to understand that Obama's so called policy concessions in the face of Republican intransigence, just happens to protect core Democratic programs while setting the stage for a better outcome coupled with a win at the polls? "The Republicans, who were in an incredibly weak position when Obama took office, have advocated their crackpot positions relentlessly and been maximalist in negotiations. How has that worked?" It has actually worked very well for the Republicans being that they passed healthcare over the objections of some Democrats, financial reform, and added couple of conservative SCOTUS appointments to boot. Their positions for privatizing Medicare and Medicaid, social Security, as well as convincing the public that an all cuts approach to deficit reductions is the best way to go. Oh yeah, the Republicans are on a roll. Democrats on the other hand are still trying to figure out how to repeal healthcare. Peter Pan is alive and well.
- wkwami
August 19, 2011 at 2:30pm
Roi, your relevant quote, which I forgot to add, is... "There is a Medicaid backstop for Medicare, and the automatic cuts are designed not to be program cuts, only payment cuts. Many will have room to supplement if need be", which suggests even while to criticize the President, you damn well know Obama protected core liberal programs. Yes. We. Can. Yet. You. Carp!
- wkwami
August 19, 2011 at 2:37pm
What gibberish. Obama is sinking, the Democratic party is sinking, good chance to lose the Senate, and you are declaring that everything is going according to the deep 21st century strategy that we are too 20th century or rigidly partisan to understand. He bashed the Ryan plan and it yielded dividends. He bashed Republican obstruction last week and that yields dividends. Was that 21st century or 20th one wonders? Obama's single greatest failure is to legitimize rhetorically the Republican narrative that spending is our biggest problem. Having done that, the likelihood that the public will think that Republicans are better suited than Democrats to implement the Republican agenda is high. Doesn't matter whether he achieved that with deep 21st century twittering or ancient 20th century television. FDR, who you seem to consider a political failure, was elected to four terms, albeit in the 20th century. This despite the fact that, according to you, he ran up against the limits of rhetoric. Obama bids fair to be a one-term president. FDR maintained the trust of the American people. They continued to believe that he was fighting for them even when things were not going well. What does anyone other than you believe about Obama? Tell us, do.
- roidubouloi
August 19, 2011 at 2:39pm
I carp because Obama is failure at his principal task, which is politics, not policy. Worse, he does not seem to put much effort into it. That the debt ceiling was ever even in play was his failure so the fact that he didn't get the worst possible deal is not praiseworthy. Politics comes first in a democracy. Lincoln explained that to you, courtesy of AFdiplomat, that "public sentiment" is of deeper importance than any particular policy achievement. But, hey, he was so 19th century. What did he know.
- roidubouloi
August 19, 2011 at 2:42pm
"FDR, who you seem to consider a political failure, was elected to four terms, albeit in the 20th century." This is just another one of your non-nuance "black or white" perspectives. I consider FDR one of the greatest Presidents ever, but as successful as FDR was, even he had to reckon with the limits of political rhetoric at times. Cab you dig it, or is your absolutism getting in your way? "I carp because Obama is failure at his principal task, which is politics, not policy. Worse, he does not seem to put much effort into it. That the debt ceiling was ever even in play was his failure so the fact that he didn't get the worst possible deal is not praiseworthy." The debt ceiling was always in play, as long as it required the Congress to raise it. Past Presidents have dealt with the same issue. The difference was the Tea Party congress whom some commenters had repeatedly referred to as terrorists, among other things. All of a sudden they've become alter boys in your estimation, for the sole purpose of bashing Obama as usual. But why let facts get in the way? When all was said and done, the President practically got a clean debt ceiling raise through to 2013, merely giving up $20 billion in cuts out of a $14 trillion budget. Even then, none of these cuts impact core liberal programs as "there is a Medicaid backstop for Medicare, and the automatic cuts are designed not to be program cuts, only payment cuts. Many will have room to supplement if need be, and even with these cuts and the expiration of the Bush tax cuts, the budget will be at or near balance. Then the Dems can insist that anything the Repugs want to spend money on be backed by tax increases." Ha! if this is not praiseworthy, what is? Your problem seems to be that Obama doesn't spike the football and give the finger to the other side after each touchdown. "Lincoln explained that to you, courtesy of AFdiplomat, that "public sentiment" is of deeper importance than any particular policy achievement. But, hey, he was so 19th century. What did he know." And your point being...???? Other than setting up another strawman, what is the purpose of that statement? One can appreciate what Lincoln said, and still be able to acknowlge that there are rhetorical limits to swaying the public. It's that simple, except you can't grasp that, so you're reduced to drawing silly equivalences rather than debating the issue at hand on its merits. It is a fact that Lincoln was 19th century, but that doesn't translate into him not knowing anything. Strawman begone! "Obama's single greatest failure is to legitimize rhetorically the Republican narrative that spending is our biggest problem." Obama legitimized it? Whoaa! FDR was proposing cuts during his administration too. Was he legitimizing Republican rhetoric back then? And if Republicans are that good, why then haven't they legitimized tax cuts for the rich, privatizing SS and Medicare? You are living in a bubble, Roi. Yours is an echo-chamber of like minded people, though intelligent, yet completely tone-deaf to other viewpoints. I am only now beginning to understand what "libref" has been saying all along. Yikes... The Echo-Chamber Effect http://www.nytimes.com/roomfordebate/2011/04/21/barack-obama-and-the-psychology-of-the-birther-myth/the-echo-chamber-effect People exist in like-minded social cliques, clans, or clubs. Take the Internet: conservative political blogs tend overwhelmingly to link with other conservative political blogs; liberal blogs to other liberal blogs. This polarization makes for fertile soil for rumors. In my research, when Republicans and Democrats were put in separate groups and each group was asked to discuss a derogatory rumor about the other party (e.g., “Republicans are uneducated;” “Democrats give less to charity”) beliefs in these rumors polarized in predictable directions. When the discussion groups were mixed, this did not happen. Among like-minded people, it’s hard to come up with arguments that challenge the group consensus, which means group members keep hearing arguments only in one direction. When we hear a rumor denigrating someone in the opposing political party, we are far more likely to send it to friends — typically members of our own party -- whom we think would enjoy hearing that rumor. Yet most people are far less likely to challenge false rumors about the opposing party, because that might be considered a social faux pas among their friends. http://www.nytimes.com/roomfordebate/2011/04/21/barack-obama-and-the-psychology-of-the-birther-myth/the-echo-chamber-effect
- wkwami
August 19, 2011 at 4:00pm
wkwami. Your lack of knowledge of Kreynesian economics is appalling, but such ignorance does help you generate lengthy BS. Try reading a basic text in Macro economics. One by Mankiw will do. Then note that what he says in his text and what he advocates are 180 degrees apart. When it comes to data and theory versus ideology, ideology wins for Repubs every time.
- drofnats1
August 19, 2011 at 4:42pm
drofnats... and your point being???
- wkwami
August 19, 2011 at 4:49pm
wkwami: "By the way, if Krugman believed we needed a larger stimulus, why [didn't] he round up the votes for it? He'd have more credibility today if he could say they had the votes for a $2 trillion stimulus package, but the President didn't get on board." Let's unpack this a little. Back in late 2008, early 2009, Paul Krugman, an academic economist and newspaper columnist not a politician, asserts that the president's proposed stimulus package was too small by half and predicts that as a result the country will be plagued by lingering high unemployment and that the president's remaining political agenda would be seriously hampered in consequence. And now that those predictions have been born out to the letter we're supposed to discount Krugman because he didn't muster votes in Congress in support of his ideas, something that given that Krugman has no role in government is frankly impossible? You're showing your Panglossian colors here again. You do not assert that Obama's stimulus package was the right size, merely that it was the best deal that could have been obtained. You don't say so explicitly, but you have as much as admitted that Krugman was right on the merits. You're saying that Krugman was right about what SHOULD have been achieved but wrong about what COULD have been achieved. The thing is, wkwami, for you to assert that $800 billion in stimulus was the best that could have been achieved relies just as much on speculation as all the critiques of the president of which you are so dismissive. For you to support your contention that Obama's stimulus was the best possible stimulus, you must speculate about the impossibility of untried, Krugman-style stimulus packages. Could the votes have been found for a $1.5 trillion stimulus less heavily weighted towards tax cuts? We can't say. But we can't say that they COULDN'T have been found either--that would be pure speculation. And if we can't say that the votes could not have been found for a $1.5 trillion stimulus, we can't say that a $1.5 trillion stimulus was impossible and neither can we say that Obama's too-small $800 billion stimulus was the best that could have been achieved. One thing we can say with certainty is that Obama didn't try. Most people experienced in engineering or business or budgeting would say that when crafting a technology or a deal or a budget such as the stimulus that you first take an unbiased look at the requirements, that you get a realistic estimate of how much of the relevant factor--be it kilowatts or money or whatever--it is that you need to do the job, and that once you're confident in your estimate, you come in high, that in your opening discussions you ask for more, often a lot more, than you think you need. Either Obama got his estimate of the required stimulus terribly wrong or else he violated one of the most basic principles of human interaction and asked for less than what he thought he needed. Take your pick.
- AaronW
August 19, 2011 at 5:36pm
Talk about straw men, wkwami. Have I ever suggested that one merely has to employ suitable rhetoric and, like magic, one wins whatever one wants? Of course not. If for no other reason than that it is a contest. The other side is doing its best to advance its frame and message. But I have repeatedly said that, if you do not contest, you are certain to lose. That is Obama. He declines to contest with the Republicans rhetorically. Hence, he has lost the public. Is it certain that if he had contested skillfully he would have retained public support? No. But he would have had a damned sight better chance if he had tried, and if he had marshaled the Democratic party to join with him in a concerted effort. That is how politics is played. You want to claim that Obama does not contest rhetorically with the Republicans because he has some deep 21st strategy, Mandela-like, jiu-jitsu like, of sucking the Republicans into an untenable position from which he will deliver, Zeus-like, the telling blow. Fine. Go ahead. I find that utterly ridiculous, to the point where it is not worth arguing. As for rhetorically legitimizing the Republican narrative that the deficit is our biggest problem, that is EXACTLY what he has done, repeatedly. Did Roosevelt mistakenly do the same? He did. And the country paid for it. But surely you are not trying to suggest that if the public buys into the Republican frame of spending being the principal problem we face -- and by their lights the root of the recession although that is objectively ridiculous -- that the public is looking back to the mid-30s and Roosevelt and not to Obama? Or are you? You seem in any case not to understand than when the opposition validates your position, concedes your frame, you have already won a major victory, because then the "debate" is overwhelmingly likely to go your way. It is not within the reach of the Republicans unilaterally to validate their frame. They may win the framing battle, but they have to win it. Unless, that is, the Democrats concede it, which is precisely what Obama has done, handing them a major political victory that they have been exploiting and will continue to exploit. Now Obama has to "pivot" to jobs and fight from a much weaker position against the idea that he himself has helped establish in the public mind that deficits and spending are the problem rather than the solution. Do we expect much of anything from this, from dealing yourself a terrible hand and then trying to fight from way behind? No one should. The debt ceiling was in play because Obama forgot to make it a condition of his tax cut extension deal. We don't know exactly why. Sheer stupidity? I doubt that. The best explanation is that he was so convinced of his own skills as a negotiator, based on who knows what, certainly not any evidence, that he thought it was an opportunity to force the Republicans to accept the principle of revenue increases alongside spending cuts -- his "grand bargain." In other words, it was a gambit on Obama's part, leaving a piece vulnerable on the board to be taken in the belief that this would draw the opposition into a worse position. In the event, it failed because they smelled out the fact that he was not prepared to go the distance. Regardless of the specifics, which the public will not much notice, he ended up validating their position about spending rather than forcing them to validate his about revenues. According to you, anyone who does not accept the wisdom of your analysis that Obama is possessed of a deep 21st century strategy that we cannot understand is locked into an echo chamber inhabited solely by like-minded individuals. One might ask how your views, the ones you are incapable of defending other than by appeal to Obama's mysterious powers, are not the result your being captive of some group consensus. Are you godlike, standing above and outside the opinions and view of others unlike us poor mortals? But, what's the point of asking. Your argument that you, uniquely, are not susceptible to the opinions or others is as nuts as your claim that what everyone else but you says about reality is purely speculative. Forget all that nonsense. Just look at the situation as it is and tell us again how Obama is really winning although it looks increasingly like not only he but the Democratic party are losing. As for libref, if you have to look for succor there, then you are not just a True Believer, impervious to the multitude of facts that are discordant with your chosen reality, you are a fool.
- roidubouloi
August 19, 2011 at 6:53pm
I really love your comparing my critique of Obama's political failures to being a "birther." What the hell is wrong with you, wkwami? Are you so unstrung by the discovery that people don't fall down in awe at what you imagine to be your compelling arguments that the best you can do is resort to ridiculous slurs? There is a fairly respectable body of political opinion from a respectable group of people who cover a range of opinion on the left that Obama has done a poor job politically and that the Democratic party is paying for it. You may not agree, but that hardly makes the critics into a bunch of know-nothing birthers any more than you are magically rendered someone of keen strategic political insight. Only in your own mind.
- roidubouloi
August 19, 2011 at 7:02pm
AaronW beat me to the punch in his good summary of the stance Krugman took at the outset of the Obama Administration. Krugman nailed it back then. It's one of several reasons why I put a lot of stock in Krugman's assessment of the situation today...not that he's at alone among economists in emphasizing that we need a jobs-spurring stimulus. If I recall correctly, Krugman also said around the same time that even if Obama could only get an $800 billion stimulus, Obama should at least have made the point that $800 billion was much better than nothing but that it could well prove inadequate--correctly pinning a good deal of responsibility on the Republicans in the process. He'd have a lot more credibility now when, lo and behold, it has proven inadequate. Instead, whether due to wishful thinking or poor economic advice, he declared it sufficient. Having said all this, I'm tremendously sympathetic to the situation Obama faced when he came into office, assuming responsibility for cleaning up the multiple messes Bush left behind. And while I don't agree, I can understand his spending his first year or so trying to be above the fray, calling for compromise, etc. But this political strategy has left him in the position of not telling the country the truth about what got us into this fix. I'll grant that, as wkwami correctly pointed out, Clinton and Rubin contributed to this situation, but not nearly to the same degree as 30 years of Reaganism and eight years of the Bush fiasco. Obama has talked about shared political responsibility all too often and shied away from pinning it where it belongs all too much. And that untruthful pattern has continued into the present, up to and including recent talk about Congress and "our politics" being at fault. So...policy that could best be called inadequate, and a political strategy that may well prove counterproductive.
- Thunderroad
August 19, 2011 at 7:06pm
Clinton, Rubin and Summers bear a lot of responsibility for the financial debacle due to their de-regulatory zeal. But that doesn't relieve Obama of any political responsibility for cultivating public opinion, without cease, from the moment he walked into the Oval Office. Everyone knew we were in a mess. It didn't matter so much that Obama talk about who was responsible as that he talk about what was responsible, including policies that date to Clinton, and what needed to be done to right the situation. Then he would have been in a position to compromise if need be while still explaining that it is the current Republicans, not Bush, who are standing in the way of recovery. Of course, hiring Summers and Geithner was a major misstep right off the bat that made it doubly difficult for Obama to do that.
- roidubouloi
August 19, 2011 at 7:20pm
"Let's unpack this a little. Back in late 2008, early 2009, Paul Krugman, an academic economist and newspaper columnist not a politician, asserts that the president's proposed stimulus package was too small by half and predicts that as a result the country will be plagued by lingering high unemployment and that the president's remaining political agenda would be seriously hampered in consequence. And now that those predictions have been born out to the letter we're supposed to discount Krugman because he didn't muster votes in Congress in support of his ideas, something that given that Krugman has no role in government is frankly impossible? " I love this! Let me break it down for you... Once again, you start off with something that's true, and then you go on these rhetorical flights of fancy. It is true that Krugman is an academic economist and a newspaper coulmnist. It is also true that Krugman advocated for a 2 trillion stimulus. That's about all we have for facts. Now comes the assumption, upon assumptions upon assumptions. We're supposed to believe that had Obama just asked for and advocated for a 2 trillion dollars, he'd have gotten it or maybe close to it. Not explained is where the votes would come from to pass the 2 trillion stimulus. We are to assume that it is a self evident truth it would have passed had Obama just asked for it. Krugman could easily have put that question to rest by setting up an interest group to lobby the liberal majority that supposedly controlled Congress waiting to be led to the liberal promised land, and rounded up the necessary votes (votes he clearly seem to think were there for the asking). But we're to believe that there's supposed to be a helplessness specific to academic economists and newspaper columnists that made it impossible for Krugman to put his convictions where his mouth was. Since he didn't carry his own water, we'll never know. "And now that those predictions have been born out to the letter we're supposed to discount Krugman because he didn't muster votes in Congress in support of his ideas, something that given that Krugman has no role in government is frankly impossible? " Absolutely! First of all, there is no way to prove Krugman's predictions would have been born out because we don't know whether a $2 Trillion or $1.5 Trillion would have worked either. What we do know is that Krugman did not advocate for, nor provide any path to passing the stimulus he he claims would have done the trick. And the claim that Krugman has no role in government is rather laughable - interest groups with no role in government lobby Congress and influence legislation all the time. Why not Krugman? Those who can't do, teach. For the sake of argument, had a larger stimulus passed and the results had turned out to be less than optimal, you'd be singing a completely different tune now. So let's stop pretending Krugman's predictions have been borne out. "You do not assert that Obama's stimulus package was the right size, merely that it was the best deal that could have been obtained. You don't say so explicitly, but you have as much as admitted that Krugman was right on the merits. You're saying that Krugman was right about what SHOULD have been achieved but wrong about what COULD have been achieved. " I believed that both Krugman and Summers/Geithner were eminently qualified to determine what was needed. They differed on the size of the stimulus, but I placed more faith in Summers/Geithner because they were on the inside, and would presumably have a better sense of the problem. There was also the added issue of the votes to pass the stimulus, and in my opinion, Summers/Geithner's stimulus had both the merit and the support to pass it, while Krguman's had merit, but no evidence of the support to pass it, and Krugman never lobbied Congress to garner support or votes. Krugman COULD have been right but we'll never know, and that is hardly the self-evidence truth you make it out to be. "Could the votes have been found for a $1.5 trillion stimulus less heavily weighted towards tax cuts? We can't say. But we can't say that they COULDN'T have been found either--that would be pure speculation. And if we can't say that the votes could not have been found for a $1.5 trillion stimulus, we can't say that a $1.5 trillion stimulus was impossible and neither can we say that Obama's too-small $800 billion stimulus was the best that could have been achieved." This is too easy to refute. There is no speculation here because we know the votes couldn't be found for the $1.5 trillion since Krugman never lobbied for them. Are you somehow suggesting that Krugman had the votes and simply chose to defer to the administration against his better judgment? We also know that Summers/Geithner based the ir stimulus on the merits, and the administration lobbied for it. It wouldn't make sense for the administration to lobby for Krugman's number if they didn't believe in it, unless you want me to believe Summers/Geithner acted in bad faith by intentionally going small based solely on what they could pass as opposed to what they believed to be the right size. "One thing we can say with certainty is that Obama didn't try." Why would Obama advocate for something else other than what his economic team is advising him to do?
- wkwami
August 19, 2011 at 8:38pm
"As for libref, if you have to look for succor there, then you are not just a True Believer, impervious to the multitude of facts that are discordant with your chosen reality, you are a fool." See, you keep proving libref'spoint over and over and over.
- wkwami
August 19, 2011 at 8:49pm
I agree with Mr. Cohn's ideas, but I would add another critical element: Presidential Audacity. The way to demonstrate that audacity is by taking two critical steps without waiting for Congressional approval. First, the President ought to order Jack Lew to gather up every federal dollar - including defense dollars - that does not critically need to be spent by the end of this fiscal year and immediately reprogram those dollars into quick hit road and bridge repair projects, including projects in Red America. The President ought to visit projects each week, so the American people can see their dollars being put to work. Even at this point in the fiscal year, there are certainly tens of billions of dollars to be had. Second, the President ought to direct Treasury to establish a temporary lending facility for States that wish to use it to tide them over until their economies recover to pre-recession unemployment rates. At that point, the loans will be repaid over time at Treasury marketable securities rates-- or less if they establish robust rainy day funds. The Republicans will surely bitch and moan and make threats about these moves, but let them do so. Indeed, this strategy requires them to do so. They may argue that Obama doesn't have legal authority, but he clearly has the authority to Reprogram funds, except for a Congressional veto that will never happen. As to the Treasury lending facility authority, I'm sure that some creative lawyering would work fine. From a political standpoint, the easy response is, "If we could bail out the banks that caused the crisis, we sure as Hell can help tide over the states that have been devastated by it."
- CABChi
August 19, 2011 at 9:49pm
"Not explained is where the votes would come from to pass the 2 trillion stimulus." I didn't have to explain where the votes would come from. I merely pointed out the speculative nature of your contention that the votes could not have been obtained. You like to discount critics' assertions that Obama could have done better in this or that way on the basis that they are "pure speculation." I merely pointed you to the obvious truth that your assertion that Obama could NOT have done better is also pure speculation. "This is too easy to refute. There is no speculation here because we know the votes couldn't be found for the $1.5 trillion since Krugman never lobbied for them." What does this even mean? Krugman is not in a position to lobby for votes. Krugman is not in government. But even if we ignore this bit of weirdness on your part and rework the above quoted statement to reflect the reality that it was President Obama, not Paul Krugman, who was in a position to lobby for votes and failed to do so, your statement makes no sense. The fact that votes were not lobbied for and therefore were not obtained has no bearing on whether or not votes could have been obtained had they been lobbied for. Could Obama have obtained votes for a $1.5 trillion stimulus had he lobbied for them? I do not know, but neither do I--or you--know that he could not have obtained them. Thus your contention that he could not have obtained the needed votes is speculative. "I believed that both Krugman and Summers/Geithner were eminently qualified to determine what was needed. They differed on the size of the stimulus, but I placed more faith in Summers/Geithner because they were on the inside, and would presumably have a better sense of the problem." Okay. Fair enough. But what to you say about the relative quality of Krugman's and Summers'/Geitner's assessments? Do you still believe that Summers and Geitner were right and Krugman was wrong? And if Summers and Geitner and thence Obama were wrong, should they not be criticized for their error?
- AaronW
August 19, 2011 at 10:07pm
http://www.usbig.net/whatisbig.php The U.S. Basic Income Guarantee Network I suggest to TNR that they assign an intern at least to start exploring the above web site and the idea of an automated work-guaranteed income society. I have no connection with the organization linked above. I just came across it while searching for someone who has done work on this topic. Employment as we have known it is in the earliest stages of its death throes. Much of what we need to keep society running, activities producing goods and services, are gradually becoming tasks that can be automated. At the moment, we are only experiencing the tip of this iceberg, but gradually as robotics, artificial intelligence, and similar capabilities develop, the need for most humans to do “work” as we have known it, will gradually disappear. Work will either become a highly specialized task for the most sophisticated members of our species, or an avocation desired for aesthetic and self-fulfillment reasons. Even so, the problem of employment is not just a matter of being in a recession. The problem is not going to go away, no matter how much the economy “improves.” The huge problem is that we have not even (for the most part) to think about how to manage and develop these capabilities in a wholesome and useful way and how we can establish links so that most of us (the people whose labor is little needed) get to “share” in the ownership of the automated means of production. I have just come across a web site hugely devoted to this idea and how it may be implemented. I have not had a chance to read much of it yet, or evaluate if it represents intelligent and useful analysis, but it at least is addressing the problem. I would suspect that development of this approach would be more likely to begin in societies and economies such as the Scandinavian ones with the (relative) homogeneity and devotion to social welfare combined with some practical skills and experience with market economies. However, the capital and scale of activity needed to start implementing an automated-guaranteed income society may need a society with massive resources such as the United States economy. However, we are so hide-bound by last century thinking and economic paradigms, it hardly seems possible to get going here.
- skahn
August 19, 2011 at 10:51pm
Your "refutations" as you like to think of them, wkwami, are complete nonsense, illogical drivel. By your nutty arguments, Obama can never have made any mistake because it is unknowable whether things would have been better had he done otherwise. But, remarkably, it is not unknowable, somehow, but rather self-evident that things would have been worse had he done otherwise. This is precisely the argument of Dr. Pangloss: "Everything is for the best in this the best of all possible worlds." libref, on the other hand, has no point other than one as utterly illogical as yours. According to libref, no one can make a valid criticism of Obama because no one would make a better president than Obama. You do recognize yourself in that tortured logic, don't you?
- roidubouloi
August 19, 2011 at 10:55pm
In case that was too tough for you to understand, wkwami, let me help you. Libref says that no one can make a valid criticism of Obama unless he could do the job of president better than Obama can. Lib's point is illogical, but you carry it to unimaginable heights of absurdity. According to you, no one can make a valid criticism of Obama unless, notwithstanding the fact that he is not the president and Obama is, he actually went out and did Obama's job as president better than Obama did it and thereby demonstrated beyond doubt that Obama could have done a better job. Don't you feel foolish saying such preposterous things out loud? They would make even Pangloss blush.
- roidubouloi
August 19, 2011 at 11:03pm
What is NOT pure speculation is that bif BHO had made eliminating the Senate filibuster job#1 in February of 2009, he could have easily passed an adequate stimulus bill (assuming he didn't believe his own BS that it was adequate.-- which is what you are all assuming). Eliminating the filibuster was then easily possible. It takes, however, an effective politician to do so-- which BHO is not. He looks good compared to the idiot current opposition. Not so good compared to Carter or even Nixon.
- drofnats1
August 20, 2011 at 9:59am
I don't agree with that last comment, drofnats. While there were enough Democrats to have eliminated the filibuster, not all of them were willing. Many of the old Senate hands in both parties support the filibuster because they are more interested in their personal power than in institutional function. It might, however, have been modified to eliminate private holds and to require anyone filibustering actually to stand up and talk indefinitely. It might also have been modified to require only 60% of members present for cloture, which would have kept the minority party on the floor at all times, a heavy burden. Due to rule changes, it has become painless to filibuster and hence a de facto 60 vote requirement.
- roidubouloi
August 20, 2011 at 12:00pm
"What does this even mean? Krugman is not in a position to lobby for votes. Krugman is not in government. But even if we ignore this bit of weirdness on your part and rework the above quoted statement to reflect the reality that it was President Obama, not Paul Krugman, who was in a position to lobby for votes and failed to do so, your statement makes no sense. The fact that votes were not lobbied for and therefore were not obtained has no bearing on whether or not votes could have been obtained had they been lobbied for. Could Obama have obtained votes for a $1.5 trillion stimulus had he lobbied for them? I do not know, but neither do I--or you--know that he could not have obtained them. Thus your contention that he could not have obtained the needed votes is speculative." It means a few mojitos got in the way on Friday evening. LOL. We all speculate, that is not the issue. The problem arises when we present speculation as fact. The claim that Krugman was right about his stimulus, or that his predictions were borne out is pure speculation mixed with outright lies, and is easily refuted (I mangled this in my earlier response). You seem to be assuming that just because the 800 billion did not achieve optimal results, somehow that proves Krugman's 1.5 trillion stimulus would have worked. Not considered is the possibility that it would have an even worse outcome (because bigger has to be better??). Secondly, you say we'll never know whether the votes were there because Obama never asked for it. Krugman could easily have cleared this up by taking on this votes issue directly. Are we to believe that Krugman knew the votes were there for a 1.5 - 2 trillion stimulus, but kept it a secret? Also, it is a rather weak excuse to suggest that Krugman could not influence legislation because he is not in government. Grover Norquist sure doesn't seem to have any problem influencing legislation even though he is also not in government. Furthermore... "But what to you say about the relative quality of Krugman's and Summers'/Geitner's assessments? Do you still believe that Summers and Geitner were right and Krugman was wrong? And if Summers and Geitner and thence Obama were wrong, should they not be criticized for their error?" Knowing what we know now, I think the administration' did the best they could, with a less than optimal outcome to show for it, while Krugman's assessment is at best, inconclusive (he has the luxury of refining his position, in hindsight, from the comfort of his Ivory Tower and the NYTimes). Going by Nate Silver's alternate strategy theory, the likelihood of Krugman's assessment producing a better outcome is just as possible as producing an even worse outcome than Obama's. Luckily for us, Ezra Klein took a stab at it...
- wkwami
August 22, 2011 at 1:13am
Roi: Your "refutations" as you like to think of them, wkwami, are complete nonsense, illogical drivel. By your nutty arguments, Obama can never have made any mistake because it is unknowable whether things would have been better had he done otherwise. But, remarkably, it is not unknowable, somehow, but rather self-evident that things would have been worse had he done otherwise... In case that was too tough for you to understand, wkwami, let me help you. Libref says that no one can make a valid criticism of Obama unless he could do the job of president better than Obama can. Lib's point is illogical, but you carry it to unimaginable heights of absurdity. According to you, no one can make a valid criticism of Obama unless, notwithstanding the fact that he is not the president and Obama is, he actually went out and did Obama's job as president better than Obama did it and thereby demonstrated beyond doubt that Obama could have done a better job. Don't you feel foolish saying such preposterous things out loud? They would make even Pangloss blush." Roi, no one is saying Obama cannot be criticized. I've never interpreted Libref's position so narrowly as you have. In a nutshell Obama's critics ought not make sweeping proclamations that are unsupported by any sort of reality or facts. That is what he says. The link below links to a blog that delves into this at length. He addresses many of the issues we debate on TNR, including Obama's compromising, channeling Truman, the stimulus, debt ceiling, Bush tax cuts, supposed cuts to Social Security and Medicare. It's worth reading the whole thing. Enjoy... More Politics 101: Obama is SMARTER Than Us! http://pleasecutthecrap.typepad.com/main/2011/08/more-politics-101-obama-is-smarter-than-us.html Barack Obama could very well be the most brilliant politician of our day. He knows what’s up far better than we do. To NOT defer to his judgment except in extreme circumstances is much like hiring a mechanic to repair your car and then telling him how (s)he should rebuild your carburetor. Put simply, if you think you can do it better, then do it. Otherwise, shut the hell up, because you sound stupid when you criticize an expert... http://pleasecutthecrap.typepad.com/main/2011/08/more-politics-101-obama-is-smarter-than-us.html
- wkwami
August 22, 2011 at 1:54am
That would be "Obama is SMARTER Than We!" Yeah, sure. No one can criticize Obama but any criticism that can be made necessarily posits an alternative course of events, hence it is speculative, hence it is not legitimate criticism. Your argument, wkwami, remains that anyone who levies a criticism must first prove the unprovable, or do the undoable (actually go into political life and successfully do what the president of the United States did not). In lib's version, the critic must first establish that he or she would make a better president than Obama. If you didn't understand that to be what lib says, repeatedly, than you are not reading very carefully. The newest iteration, courtesy of the article you link, is: 1. In every instance, Obama achieved the best achievable outcome (your very own Dr. Pangloss argument -- everything is for the best in this the best of all possible worlds). 2. Obama is so much smarter than everyone else that we are simply unable to understand his deep strategy. 3. All of Obama's rhetorical gestures in the direction of the Republican narrative have only succeeded in making the Republicans look bad. Hence, they are all to the good. Unfortunately for this little fairy tale, politics remains more important than policy, although the two certainly bear on one another. See, again, Lincoln on the subject of the overriding importance of "public sentiment." Thus, Obama's deep, deep strategy is not only incomprehensible to many of us at TNR, but incomprehensible to the voters. Although the author can insist that all of this is making the Republicans look bad, their electoral gains and the increasing jeopardy of Obama's re-election strongly suggest otherwise, that it is the Democrats who are losing ground as far as public perception rather than the Republicans. Of course, if you believe that political rhetoric and symbolism are of only marginal importance, that the state of the world completely determines the political outcome, and that, per above, the current state of the world is the best that could have been achieved and Obama has achieved it, then this is indeed the best of all possible worlds. But, is it speculative that this is the best of all possible worlds? Does one need to advance any argument, invoke any evidence for this claim, or is it the necessary presumption only to be abandoned if, as cannot possibly occur, it can be proven that this is not in fact the best of all possible worlds? You are running in the same circles, wkwami. The policies adopted might have been the best achievable, but they are plainly insufficient (although of course there is no way of PROVING that alternative policies would have had a better outcome, despite the fact that we have a very good theoretical justification for government spending on the same order of magnitude as the missing private demand). The Democrats took an incredible beating last November. The presidency and the Senate are in jeopardy. Your argument amounts to the claim that we are losing the least possible ground and that it is up to anyone who claims otherwise to demonstrate, although any demonstration is perforce impossible as there are no do-overs for reality. If you have persuaded yourself with this, god bless.
- roidubouloi
August 22, 2011 at 2:08pm
Roi, I agree that some of the policy outcomes are clearly less than optimal. But I also think that the criticism is over the top, and sometimes has little merit. Given the stakes, we should all be working together to ensure a Democratic victory, which will enable us consolidate our gains. I just don't see how flaying Obama constantly helps, even if you think he is wrong.
- wkwami
August 22, 2011 at 2:43pm
Depends on whether anyone in the White House is listening. If their assumptions inside the bubble about what is or is not working politically are flat-out wrong, then maybe they need to hear the criticism.
- roidubouloi
August 22, 2011 at 3:07pm
Hmmm. So, Summers/Geitner advocate for $800 stimulus and assert that it will be enough to stimulate jobs growth and get unemployment down to a healthy 5-6% while Krugman predicts that it isn't anywhere near enough to fix the jobs problem and that without more stimulus we'll have unemployment north of 9% for 3 or more years, he predicts, moreover, that such high unemployment will complicate Obama's political position and will cost him votes in the 2010 midterms. Wkwami, do you accept that it is part of an economic advisor's job to make accurate predictions? And are you willing to acknowledge that Krugman's predictions have proven more accurate than Summers's and Geithner's? And if Summers and Geithner were shading their recommendations based on their perceptions of political feasibility, isn't that fairly negligent?
- AaronW
August 22, 2011 at 11:37pm