What Obama Wants

[웃 910]

July 7, 2011

What Obama Wants

By PAUL KRUGMAN

On Thursday, President Obama met with Republicans to discuss a debt deal. We don’t know exactly what was proposed, but news reports before the meeting suggested that Mr. Obama is offering huge spending cuts, possibly including cuts to Social Security and an end to Medicare’s status as a program available in full to all Americans, regardless of income. Obviously, the details matter a lot, but progressives, and Democrats in general, are understandably very worried. Should they be? In a word, yes.

Now, this might just be theater: Mr. Obama may be pulling an anti-Corleone, making Republicans an offer they can’t accept. The reports say that the Obama plan also involves significant new revenues, a notion that remains anathema to the Republican base. So the goal may be to paint the G.O.P. into a corner, making Republicans look like intransigent extremists — which they are.

But let’s be frank. It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.

One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.

In his brief remarks after Thursday’s meeting, by the way, Mr. Obama seemed to reiterate the Herbert Hooveresque view that deficit reduction is what we need to “grow the economy.”

People have asked me why the president’s economic advisers aren’t telling him not to believe in the confidence fairy — that is, not to believe the assertion, popular on the right but overwhelmingly refuted by the evidence, that slashing spending in the face of a depressed economy will magically create jobs. My answer is, what economic advisers? Almost all the high-profile economists who joined the Obama administration early on have either left or are leaving.

Nor have they been replaced. As The Wall Street Journal recently noted, there are a “stunning” number of vacancies in important economic posts. So who’s defining the administration’s economic views?

Some of what we’re hearing is presumably coming from the political team, whose members seem to believe that a move toward Republican positions, reminiscent of former President Bill Clinton’s “triangulation” in the 1990s, is the key to Mr. Obama’s re-election. And Mr. Clinton did, indeed, rebound from a big defeat in the 1994 midterms to win big two years later. But some of us think that the rebound had less to do with his rhetorical move to the center than with the five million jobs the economy added over those two years — an achievement not likely to be repeated this time, especially not in the face of harsh spending cuts.

Anyway, I don’t believe that it’s all political calculation. Watching Mr. Obama and listening to his recent statements, it’s hard not to get the impression that he is now turning for advice to people who really believe that the deficit, not unemployment, is the top issue facing America right now, and who also believe that the great bulk of deficit reduction should come from spending cuts. It’s worth noting that even Republicans weren’t suggesting cuts to Social Security; this is something Mr. Obama and those he listens to apparently want for its own sake.

Which raises the big question: If a debt deal does emerge, and it overwhelmingly reflects conservative priorities and ideology, should Democrats in Congress vote for it?

Mr. Obama’s people will no doubt argue that their fellow party members should trust him, that whatever deal emerges was the best he could get. But it’s hard to see why a president who has gone out of his way to echo Republican rhetoric and endorse false conservative views deserves that kind of trust.

http://www.nytimes.com/2011/07/08/opinion/08krugman.html?_r=1&pagewanted=print

[scandal 951]

Krugman is right about one thing. Obama's calculations at this point are political and not economically-ideological. I don't find that surprising. We have gridlock in Washington and need pragmatic compromise to get a deal. Krugman is an academic, I respect him and he's right about stimulus, and unemployment being a bigger problem than debt reduction at the moment. However what he's missing is the 400lb gorilla in the room - there's a ticking time bomb called the Debt Ceiling that trumps all else, and needs a political compromise immediately before all hell breaks loose. That (and re-election next year, naturally) explain the Obama-Boehner dynamic that's occurring. As usual, David Brooks sums up what's going on perfectly. This is from tonight's Newshour segment (with the Ruth Marcus bits artfully edited out).

http://www.pbs.org/newshour/bb/politics/july-dec11/bandm_07-08.html

DAVID BROOKS: Well, let's put it this way. It's higher than it has been in about five years.

And so I think, if Boehner and Obama were in the room, they would have a deal already. And I think they have made...

JIM LEHRER: You really believe the two of them are in -- look in synch?

DAVID BROOKS: The two of them would have a deal, right. They would have a deal.

And I think they have made significant progress in private. Now, there are a couple of things that are holding them back, and which should make us a little more pessimistic. One, can they get Republicans to sign on to this deal? Boehner is clearly...

JIM LEHRER: You're talking about the Tea Party Republicans or all Republicans?

DAVID BROOKS: Right.

Well, the question is how big a chunk the Tea Party is, or what we might call the Michele Bachmann rejectionists...

JIM LEHRER: OK.

DAVID BROOKS: ... that I'm -- they're going to vote against the debt ceiling raising no matter what, they're going to vote against a tax increase no matter what.

How big are they? Then how big are the rejectionists on the left? And then how many tricks are they trying to play off against each other, Obama and Boehner? There is some tricking going on.

Nonetheless, I have to say, for those of us who have been waiting for the leaders of the two parties to have serious negotiations about big things, that is happening now. And, overall, I think it's excellent news.

JIM LEHRER: Wow.

.....

JIM LEHRER: How do you explain that? What -- what has happened to make Obama and Boehner -- beyond just being golf partners?

(LAUGHTER)

DAVID BROOKS: Two things. One, I think they both seriously think the country has a problem, a deficit problem.

JIM LEHRER: OK. They agree that the debt limit, too, is a problem.

DAVID BROOKS: They agree, right.

And, third, incumbents have mutual incentives. The party of the incumbents wants to get reelected. If Obama cuts a deal, he's very likely to get reelected. If Boehner changes the trajectory of spending, he can say, we came to Washington. We did it.

And so, secretly, what's going on here is that Obama is really sticking the knife in Nancy Pelosi, making it unlikely that she's going to get -- get the speakership. And Boehner, if he cuts a deal, is hurting Mitt Romney or whoever the Republican nominee is.

And so the party of the incumbents are sticking together and hurting the party of the outs.