Tag: Washington Post

Categories
Criticism Economics Political Philosophy The Opinionsphere

The Government Role in a Capitalist Economy

[digg-reddit-me]Robert J. Samuelson does a pretty good job in his column from last week of illustrating the incoherence of “the Establishment’s view” of government’s role in capitalism.

He begins his article discussing the prescient observations of Joseph Schumpeter, a 20th century economist who predicted that capitalism “sowed the seeds of its own destruction.” He described Schumpeter’s understanding of capitalism:

[Capitalism’s] chief virtue was long-term – the capacity to increase wealth and living standards. But short-term politics would fixate on its flaws – instability, unemployment, inequality. Capitalist prosperity also created an oppositional class of “intellectuals” who would nurture popular discontents and disparage values (self-enrichment, risk-taking) necessary for economic success.

Samuelson observes that Schumpeter’s observations seem to get to the heart of capitalism – yet he says, their conclusion is wrong – because capitalism survived. It survived Samuelson observes because:

We have subordinated unrestrained profit-seeking to other values. “We’ve gradually taken into account the external effects (of business) and brought them under control,” says economist Robert Frank of Cornell University. External costs include: worker injuries from industrial accidents; monopoly power; financial manipulation; pollution.

Samuelson goes on:

Successful capitalism presupposes three conditions: first, the legitimacy of the profit motive – the ability to do well, even fabulously; second, widespread markets that mediate success and failure; and finally, a legal and political system that, aside from establishing property and contractual rights, also creates public acceptance. Note that the last condition modifies the first two, because government can – through taxes, laws and regulations – weaken the profit motive and interfere with markets…

Now we’re really getting somewhere. Capitalism, it seems, must not be a matter of pure natural forces. It is not “unrestrained profit-seeking” in Samuelson’s view – nor does it exclude government intervention, as legal and political structures must modify markets and profit-making in order to “create public acceptance.” That’s a bit of an odd formulation, as anything could be justified as being done in order to “create public acceptance.” Circuses, beheadings, propaganda, war, large-scale confiscation of property – whatever. What Samuelson must mean – although it has to be inferred – is that measures designed to “create public acceptance” can only go so far before the essence of capitalism is destroyed – as he warns is imminently possible in his concluding paragraph. There is only a “thin line” he explains between capitalism and socialism – because:

If companies need to be rescued from “the market,” why shouldn’t Washington permanently run the market? That’s a dangerous mindset.

To illustrate this dangerous mindset which is empowered by an equally dangerous populism, he points to interjections of the government into the economy in the past half-century that have not been for the good – that is, those interjections in which the benefits are concentrated and the costs are dispersed, for example, ethanol subsidies and the promotion of the advantages for politically-connected companies; and those interjections that have scapegoated various groups – such as the anti-bonus tax bill. This implies – if nothing else – a confusion on Samuelson’s part.

Political actions in which the benefits are concentrated and the costs are dispersed are – as George Will put it “the supreme law of the land.” They have been the main business of American government since shortly after it’s founding – from subsidies for railroads to the laws enabling the various cartels of the Gilded Age to the military-industrial complex to agriculture subsidies in general to the bailouts of various industries. Only a few presidents have ever taken on this “supreme law of the land” and decided to extract costs from the politically influential few for the good of the many – Teddy Roosevelt as he sought to bust the trusts; FDR as he re-wrote the social contract. Most other presidents have tried to have it both ways – to give the politically influential few what they want while also attempting to achieve some common good. This has often been the source of their failure. The populist scapegoating is an entirely different matter – and is generally fleeting and while distasteful does little real damage. 

Both of these have been part of American capitalism since the beginning. Yet for some reason, Samuelson believes that capitalism is more under siege today than in the past. He never makes the case why – except to point to distasteful and inefficient aspects of American capitalism that have been around since it’s inception. This is little reason to believe that either populist scapegoating or actions with concentrated benefits and dispersed costs have increased significantly. And Samuelson does not try to make that case. Rather, he reveals the same unease that the rest of “the Establishment” has with any significant change. 

The incoherence and of this worldview is clear. What is less obvious is why. The answer is a theme I have been coming to again and again in this blog: that the free market is not a natural phenomonen, but a creation of a society and government. Thus – we did not really “[subordinate] unrestrained profit-seeking to other values” as Samuelson suggests – rather the government created costs to balance the marketplace. If a company was polluting, it was damaging those around it just as much as if it had been stealing from them. By imposing costs, the government was not so much “subordinating unrestrained profit-seeking” to some other values – but preventing one party from stealing from another. So, the government enacted regulations to reduce that pollution – and exacted costs if companies did not follow those limits. The cap-and-trade legislation promises to be an even clearer interjection of the government in this manner. The government and the society of which the government is a part together create the circumstances in which a market can truly be free.

Capitalism – alone, without a society to provide a marketplace – is a meaningless concept. Pairing a capitalist economic model with a democratic state has become a long-term successful model for progress because the “seeds of destruction” that capitalism produces are mitigated and sometimes used by the democratic state to the confer legitimacy on the model. The problem with capitalism has proved to be not as much the “instability, unemployment, inequality” that Samuelson describes – but the concentration of power among a monied and politically-influential elite that has attempted to protect the status quo and their own interests at the expense of the legitimacy of capitalism itself. Once the concentration of power reaches a certain tipping point, the market becomes less free. Which is why the government must, from time to time, step in to allow some sort of balancing to take place and to create rules for the market which allow it to operate freely.

Samuelson is concerned that this means that Washington may take it upon itself to “permantly run the market.” In this he demonstrates his lack of understanding. The government – and the society at large – have always created the rules by which the market is run – have always sought to mitigate the damage wrought by robust competition and worse. What is different now is that once again the government failed to adequately police the market. Or alternately, you could argue that the government failed to ensure the market stayed free, allowing firms to become so big and powerful they posed a systematic risk. Either way, while it would be dangerous to have a government declaring it would “run the economy” – that is not the situation we are now facing. Samuelson’s unease seems more the result of a desire to protect the status quo than any real regard for or understanding of capitalism and free markets.

Categories
Barack Obama Politics The Opinionsphere

The Obama Doctrine

Richard Cohen in the Washington Post:

This is a tricky, auspicious moment for a young president. [Obama] is ending one century, beginning another. Concisely, he essentially laid out his approach to foreign policy in a blurb for a recently reissued book by the late theologian Reinhold Niebuhr. He wrote that he took away from Niebuhr’s works “the compelling idea that there’s serious evil in the world, and hardship and pain.” He added that “we should be humble and modest in our belief we can eliminate those things. But we shouldn’t use that as an excuse for cynicism and inaction.”

This, then, is the Obama Doctrine: wisely, to have none at all.

Categories
Criticism

The Specter of Suburban Contentment

Ron Charles in the Washington Post:

Here we have a generation of young adults away from home for the first time, free to enjoy the most experimental period of their lives, yet they’re choosing books like 13-year-old girls – or their parents. The only specter haunting the groves of American academe seems to be suburban contentment.

Charles does see signs of hope though – in the same place everyone seems to see hope these days, the tubes of the internet.

Categories
Barack Obama Politics

Piercing the White House Bubble

Eli Saslow in the Washington Post quotes White House scheduler Alyssa Mastromonaco who was perhaps unintentionally revealing in her formulation of people not to be kept waiting:

“Since we’ve gotten to the White House, the president has told us that there’s too much padding and things can be back to back because he needs to fit a lot into the day,” Mastromonaco said. “I still err with caution, because you don’t want someone like Secretary Clinton or a foreign leader waiting for 40 minutes. But he feels like ‘I’m here.’ And he wants to get things done.”

“Someone like Secretary Clinton or a foreign leader” – as opposed to a Cabinet Secretary or a foreign leader; or Tony Blair or Hillary Clinton. It makes it seem as if Obama’s staff is treating Hillary Clinton with a kind of distant respect rather than camraderie. 

The article later goes on to describe the steps which Obama takes to remain in contact with a somewhat normal life:

Younger staff members said Obama likes to be kept up on their gossip about weekend nights and new girlfriends and feels left out anytime he’s the last to know what’s going on in their lives. On Super Bowl Sunday, he invited a few dozen people to the White House for a party and implemented two rules: no talking about politics and no posed pictures. Instead, Obama instructed a personal photographer to follow him during the party and take candid shots of him chatting with his guests, which would be mailed to them later. Obama explained to a few congressmen in attendance that he wanted to feel like a part of the group, not apart from it.

Still, whenever Obama hosts, his guests must first submit their Social Security numbers, birth dates, addresses and cities of birth to the Secret Service – a screening process for which Obama has sometimes felt compelled to apologize.

Categories
Election 2012 Jindal The Opinionsphere

Jindal 2012 (cont.)

Michael Gerson in the Washington Post reveals both Bobby Jindal’s greatest asset as a politician and his greatest weakness. The strength is Jindal’s religiousity – which is Catholic but in a way that is unusually endearing to evangelicals, the Republican base:

In Louisiana, Jindal is the darling of evangelical and charismatic churches, where he often tells his conversion story. One Louisiana Republican official has commented, “People think of Bobby Jindal as one of us.” Consider that a moment. In some of the most conservative Protestant communities, in one of the most conservative states in America, Piyush “Bobby” Jindal, a strong Catholic with parents from Punjab, is considered “one of us.”

In passing, Gerson mentions that sometimes it might seem that Jindal lacks, “a lack of human connection and organizing vision.”

The “lack of human connection” is main complaint against Jindal. He’s seen as cold, calculating, and unempathetic – indifferent to those hurt by the policies he advocates.

Categories
Barack Obama Domestic issues Economics Financial Crisis Green Energy Health care Politics The Opinionsphere

The Larger Narrative

[digg-reddit-me]David Brooks:

The crisis was labeled an economic crisis, but it was really a psychological crisis.

Republican pollster David Winston:

[Obama]’s going to have to fit other issues into the larger narrative of the economy.

Michael D. Shear and Paul Kane in the Washington Post:

Whichever side proves to be right, the sharp, partisan lines over the stimulus bill make it plain that both parties intend to exact a political cost over last week’s votes. And their leaders are looking to history for inspiration as they consider how to maneuver in the weeks and months ahead…

Republicans have made it clear that they intend to try to shift the economic debate toward concern about the federal deficit.

Obama is now completing the three-step jig he planned from the beginning, with his address to Congress tonight focused on the Grand Bargain needed to shore up our economy for the forseeable future.

The first step of this jig was supposed to be easy, nonpartisan, and uncontroversial – a spending and tax cutting bill to stimulate the economy. The second step was supposed to be harder but still nonpartisan – dealing with the mortgage and banking messes. In both cases, Obama has approached these problems as a mechanic trying to figure out what has gone wrong and taking whatever steps are necessary to fix it. Just as a mechanic does not make moral judgments about springs and gears but focuses instead on doing what is necessary to get the machine working again, so Obama approached the economy. Most Americans appreciate this, as polls show that while many dislike the specific measures he has had to take, they approve of the job he is doing. The question was: how to get growth started again – greedy bankers and lying loan applicants and wasteful consumers all are being bailed out – because the problems they have caused are “gumming up the works.” And the consumers at least are being encouraged to continue in their spendthrift ways – at least for now, as Dana Milbank explained:

[Ben Bernanke] even indulged in a bit of economist humor when talking about the paradox of encouraging people to spend even though overspending caused the problem: “Somebody once called this the Augustinian principle, which says something like, ‘Let me be moral, but not quite yet.’ “

The third step is more complicated and politically fraught – as Obama seeks to tackle the third-rail of American politics – Social Security; and at the same time, health care reform; and deficit reduction; and tax reform; and possibly climate change legislation. Obama argues that this economic crisis – and the borrowing to stimulate us out of the economic crisis – have created a “fierce urgency of now” – and that all these issues must be tackled at once. 

John Harwood of The New York Times spoke with Senator Judd Gregg about this:

To protect America’s currency and its borrowing capacity, Mr. Gregg said in an interview, “the world has to be told that we’re going to be fiscally disciplined in the out years.”

Efforts to tame long-run entitlement spending may find more Republican support than Mr. Obama achieved on the stimulus. “He has extremely fertile ground in the Senate,” Mr. Gregg said, crediting the president’s early outreach and “courageous position of saying the can’s been kicked down the road long enough.”

Yet despite the bipartisan consensus that these issues must be tackled, here is where the real disagreements should be. Contra George F. Will who argued constantly that the stimulus bill and banking and mortgage bailouts should be opposed by Republicans and supported by Democrats on based their principles, the initial stimulus and other emergency measures should only have raised principled objections from those with an unflagging belief in the free market – which describes only a minority of Republicans. These measures violate the ideologies of both parties – as big business is bailed out and the market is intervened in. There were issues to be raised as to what the most effective methods of dealing with the crisis were – but to oppose measures wholesale as the Republicans did – indicates a lack of seriousness.

The real debate should come now as we decide the shape of things to come and address the moral and political and long-term issues instead of the emergency measures taken to attempt to stimulate the economy.

But in this challenge is an opportunity, as Richard Florida explained in The Atlantic:

The Stanford economist Paul Romer famously said, “A crisis is a terrible thing to waste.” The United States, whatever its flaws, has seldom wasted its crises in the past. On the contrary, it has used them, time and again, to reinvent itself, clearing away the old and making way for the new. Throughout U.S. history, adaptability has been perhaps the best and most quintessential of American attributes. Over the course of the 19th century’s Long Depression, the country remade itself from an agricultural power into an industrial one. After the Great Depression, it discovered a new way of living, working, and producing, which contributed to an unprecedented period of mass prosperity. At critical moments, Americans have always looked forward, not back, and surprised the world with our resilience. Can we do it again?

David Brooks writes with both concern and a carefully measured dose of hope:

[Obama’s] aides are unrolling a rapid string of plans: to create three million jobs, to redesign the health care system, to save the auto industry, to revive the housing industry, to reinvent the energy sector, to revitalize the banks, to reform the schools — and to do it all while cutting the deficit in half.

If ever this kind of domestic revolution were possible, this is the time and these are the people to do it. The crisis demands a large response. The people around Obama are smart and sober. Their plans are bold but seem supple and chastened by a realistic sensibility.

Brooks is still concerned about how this may turn out. As are we all. 

With tonight’s speech, Obama will begin to craete his legacy – beyond fixing the problems accrued during Bush’s tenure. He will begin to, at long last, deal with the stability issues raised by the combination of FDR’s New Deal revision of the social contract and Reagan’s counter-revolution, as he sets a fiscally sane course for the future. In the midst of this crisis, if Obama is to be the leader we need him to be, he needs to see the opportunity to re-write the social contract and create a more stable economic, financial, and international system. Tonight is his chance to make that case. 

Here’s hope it is not wasted.

Categories
Law National Security The Bush Legacy The War on Terrorism

Congressman Pete King Wants Club Med Investigated For Human Rights Violations Just Like Guantanamo

[digg-reddit-me]He must have had a bad experience with Club Med. 

Military.com reports that:

Rep. Peter King, R-N.Y., who led a group of congressmen to Guantanamo, told the New York Post the facility was like a Club Med for terrorists.

Club Med? The most reasonable explanation is that Congressman Pete King (my congressman and likely 2010 Republican Senate candidate) was treated very badly at this resort chain, and I’ve contacted Club Med inquiring about this. If Pete King is saying that Club Med is like Guantanamo, he is apparently alleging that they have treated their guests similar to how the prisoners at Guantanamo were treated. So, what types of things happen at Club Med, according to Pete King? Here’s a few examples:

Captives at Guantánamo Bay were chained hand and foot in a fetal position to the floor for 18 hours or more, urinating and defecating on themselves, an FBI report has revealed.

The Guardian.

Spc. Sean D. Baker, 38, was assaulted in January 2003 [at Guantanamo Bay] after he volunteered to wear an orange jumpsuit and portray an uncooperative detainee. Baker said the MPs, who were told that he was an unruly detainee who had assaulted an American sergeant, inflicted a beating that resulted in a traumatic brain injury…

[Pentagon] officials conceded that he was treated for injuries suffered when a five-man MP “internal reaction force” choked him, slammed his head several times against a concrete floor and sprayed him with pepper gas…

As he was being choked and beaten, Baker said, he screamed a code word, “red,” and shouted: “I’m a U.S. soldier! I’m a U.S. soldier!” He said the beating continued until the jumpsuit was yanked down during the struggle, revealing his military uniform.

The Los Angeles Times.

The top Bush administration official in charge of deciding whether to bring Guantanamo Bay detainees to trial has concluded that the U.S. military tortured a Saudi national who allegedly planned to participate in the Sept. 11, 2001, attacks, interrogating him with techniques that included sustained isolation, sleep deprivation, nudity and prolonged exposure to cold, leaving him in a “life-threatening condition.”

“We tortured [Mohammed al-]Qahtani,” said Susan J. Crawford, in her first interview since being named convening authority of military commissions…

Bob Woodward in the Washington Post.

The International Committee of the Red Cross has charged in confidential reports to the United States government that the American military has intentionally used psychological and sometimes physical coercion “tantamount to torture” on prisoners at Guantánamo Bay, Cuba.

The New York Times.

Then there’s the fact that Khadr claims to have confessed under torture. Videos of him weeping during an interrogation surfaced last year and served only to remind the world that he was a teenager confined at Guantanamo among “the worst of the worst.” Khadr was allegedly shackled in stress positions until he urinated on himself, then covered with pine solvent and used as a “human mop” to clean his own urine. He was beaten, nearly suffocated, beset by attack dogs, and threatened with rape. In May 2008, the Supreme Court of Canada ruled in Canada v. Khadr that the detention of Khadr at Guantanamo Bay “constituted a clear violation of fundamental human rights protected by international law…” We need to start to make amends for the fact that children in our custody were tortured.

Dahlia Lithwick in Slate.

Mohammed al-Qahtani, detainee No. 063, was forced to wear a bra. He had a thong placed on his head. He was massaged by a female interrogator who straddled him like a lap dancer. He was told that his mother and sisters were whores. He was told that other detainees knew he was gay. He was forced to dance with a male interrogator. He was strip-searched in front of women. He was led on a leash and forced to perform dog tricks. He was doused with water. He was prevented from praying. He was forced to watch as an interrogator squatted over his Koran.

That much is known. These details were among the findings of the U.S. Army’s investigation of al-Qahtani’s aggressive interrogation at Guantanamo Bay, Cuba…

[Later h]e was interrogated for 18 to 20 hours per day [using coercive rather than sexually humiliating methods, including waterboarding, stress positions, sleep deprivation, and extreme temperatures], for 48 of the next 54 days, according to an Army investigative report. On Dec. 7, 2002, he had to be revived at the detainee hospital when his heart rate fell to 35 beats per minute, according to a log of the interrogation published by Time magazine. Then the interrogation continued.

FBI agents at Guantanamo joined the opposition. A Nov. 27 FBI “legal analysis,” since reported by Newsweek, labeled several parts of the plan as “coercive interrogation techniques which are not permitted by the U.S. Constitution.” It also warned that several of the proposed tactics could constitute torture, depending on how a judge viewed the intent of the interrogator.

MSNBC.

Clearly, if Club Med is anything like Guantanamo is, it should be investigated for torture, prisoner abuse, child abuse, and various violations of international treaties. I’m awaiting a response from Morgan E. Painvin, Club Med’s listed press contact, as to whether Pete King has any substantiation for his apparent allegations of torture and human rights abuses at Club Med.

An alternate and plausible explanation would be that Pete King has been involved in sadomasochism for too long and that it has warped his sense of pleasure and pain. Of course, it’s brave of a suburban politician to admit such a fetish. So I must commend him for his honesty if this is his way of coming out.

I’m not sure I can think of any other reasonable explanations for this statement by Congressman King without calling him delusional, a liar, incredibly ignorant, or a propagandist.

[Photo licensed under Creative Commons courtesy of Ed your don.]

Categories
Foreign Policy Mexico National Security

The War on Drugs is Making Us Less Safe: Mexico

[digg-reddit-me]Following up on the continuing crisis in Mexico, William Booth of the Washington Post quotes the Economy Secretary Gerardo Ruiz Mateos who said that the cartels were becoming so powerful that “unless they were confronted, ‘the next president of the republic would be a narco-trafficker.’ ” President Felipe Calderon defended the use of the Mexican army “to confront this evil” of the drug cartels. The crisis seems to be escalating:

Turf battles involving the drug traffickers, who are fighting the army, police and one another in order to secure billion-dollar smuggling routes into the United States, took the lives of more than 6,000 people in Mexico last year. The pace of killing has continued in 2009, with more than 650 dead, most in the violent border cities of Ciudad Juarez and Tijuana.

With 650 people dead due to Drug War violence in Mexico in 2009, it is outpacing Iraq’s casualties in it’s seemingly deesclating conflict which is reported to have 296 deaths this year by IraqBodyCount.org.

Categories
Barack Obama Economics Financial Crisis Politics The Opinionsphere

The Back of Obama’s Hand

Obama has clearly been trying to stay above the fray in this debate over the stimulus bill. He set guidelines as to what he wanted in the bill and let Congress fight over the specifics. He wanted a bill:

  • in which 75% of the spending would occur within two years; 
  • that would focus on long-term projects such as infrastructure, health care, and educational improvements and on short-term stability measures dealing with unemployment; 
  • that would have little to no “pork”; 
  • that would include significant tax cuts; and 
  • that would be ready to pass as soon as possible – by last week.

But as E. J. Dionne of the Washington Post explained:

The president has been willing to give House and Senate Democrats substantial leeway in crafting their proposals because he knows that both will end up being broadly to his liking. He can influence the final outcome when the two houses work out their differences next month.

The administration did intervene, however, to chip away at a few small but politically troublesome expenditures…

Dionne is referring to the items the Republicans voiced displeasure over (with press releases and coordinated apperances on cable news shows). Obama pressed the Democrats in Congress to remove the items (including state funding for contraception and STD prevention and a museum of the mob in Las Vegas). The Republicans wanted tax cuts – and Obama obliged with over 35% of the cost of the stimulus going to tax cuts. A number of other Republican proposals have been incorporated into the bill from Chuck Grassley’s Alternative Minimum Tax fix to Arlen Specter’s additional funding for the National Institute of Health to Eric Cantor’s proposal to place the bill on the internet. 

The Republicans who have been criticizing the bill have praised the popular President Obama’s outreach and tried to place the blame on the unpopular House Democrats. The talking point is that Obama is too timid to stand up to the House Democrats who are foisting this awful bill upon us. This seems to me to be a misleading interpretation of the above events designed to undercut Obama politically. From what I can see and from what I read – the Democrats, and especially Obama, are making a good faith effort to make sure this bill has bipartisan support. They are incorporating Republican suggestions and principles; they are involving them in some, though not all discussions of the bill. Even if there is truth to the complaints of House Republicans that they are being frozen out of the House’s deliberations, their input is clearly being taken into account by Obama who has presssed the House Democrats to make changes suggested by the House Republicans. The Senate bill seems to be even more reflective of Republican concerns, with 78% of it’s spending projected to be done by 2010.

Which is why the unanimous opposition of the House Republicans is disappointing. It is best explained, it seems, by politics, as the AFP described the dynamic at work:

[I]f Obama’s stimulus works and revives the reeling economy, they would be unlikely to get any credit even if they voted for it – by opposing the measure they can at least expect some political gain if it fails.

But the battle of whether the Republicans are being true to their ideals or merely obstructionist hasn’t yet been resolved. The Republicans have been dominating the media coverage while the Democrats have hung back. They have been expressing their criticism of the stimulus plan in partisan terms – bringing up culture war issues related to sexual morality, calling the bill a mere sop to Democratic interest groups, and failing to acknowledge the significant concessions that have been made. Rush Limbaugh – as part of his continuing quest to hijack the Republican Party – wrote an op-ed for the Wall Street Journal full of his usual misinformation: exaggerating the cost of the bill; downplaying the tax cuts within the bill (when his real objection is to who these tax cuts are going to); and most of all claiming that it was an example of Democratic policies being forced down the throat of an America who wants a bipartisan approach – like the one Rush Limbaugh is offering.

There are major changes that should be made to this bill – the most pragmatic and popular one being to eliminate the portions of the bill extending past 2010 and keeping those provisions for other legislation. But by necessity, out of a need for quick action, this bill will be far from perfect – utilizing existing programs rather than creating more appropriate and effective ones. Obama should ensure that the Senate Democrats make this change to the bill, which is already an improvement over the House bill in that 78% of it’s monies will be disbursed within two years.

But regardless of whether this bill is the right bill or not, Obama will soon face a choice. The Republicans seem to be interpreting Obama’s civility and openness to dialogue as weakness. They do not seem to realize where they are headed. Voting against tax cuts. Voting against a stimulus measure. Obstructing the government from acting in the midst of a crisis. Obama will likely continue to reach out for the rest of this week, making obsequious efforts to woo Senate Republicans to his side. Given the dynamics that are dominating in Washington, I find it difficult to believe they will give in, although some might. (The question would become, did Obama get enough Republicans.) As described above, most Republicans have far more to gain by being obstructionist – especially if they are misinterpreting Obama’s attempts at biparisanship as weakness – and think there will be no consequences.

My bet – and my advice if it were needed – would be for Obama to make a final private plea for Republican support later this week. Then, if it fails, to schedule a speech this coming weekend in one of his more vulnerable opponents’ states. He should make clear that this bill is not perfect – but that decisive action in the midst of this crisis is important. He should make clear that bipartisanship is not unilateral disarmament. He can only work with those who will unclench their partisan fists and are willing to get down to the work of governing. He should make it clear that this bill is not our only response to the crisis – that we will likely need to do more – to reform the banking and mortgage industries; to continue to create liquidity in the credit markets. He should make clear that this stimulus bill is only one part of his overall plan. Shortly after this speech, he should sent out an email to his supporters asking them to write their Congressmen and Senators and ask the Obama movement to prove it’s continued political worth.

In short, he should give a brief demonstration of the consequences of crossing Obama – he must show his opponents the back of his hand. It may not be civil – but politics cannot be civil without respect. Perhaps it is time for Obama to demonstrate his ability to change the debate in Washington – and in the country.

Categories
Barack Obama Criticism Economics Financial Crisis Liberalism Libertarianism Politics The Opinionsphere

What’s Wrong With the Stimulus Plan

[digg-reddit-me]Aside from the partisan power play that seems to be motivating most of the Republican opposition to the stimulus plan, there are a number of fair-minded criticisms.

First, the plan lacks the Obama touch – the deft promise to cut those programs that don’t work and to make sure the ones that are around still do work, the libertarian paternalistic designs of Cass Sunstein, the nimble government program that does not coerce but merely offers opportunity. Of course, there is a sensible reason for this. The stimulus is needed right now – and it will take time to design new programs with this balancing between libertarian principles and liberal ends in mind. So, Obama has decided that this stimulus package must work within existing programs – which Republicans have used as an excuse to attack those programs.

Second, there is not a clear exit strategy. Many of these spending measures and tax breaks are supposed to be emergency measures that the government will only maintain during this crisis – but new spending and cuts in taxes both are hard to roll back. The idea that taxes are hard to raise is, of course, the basis of the “Starve the Beast” strategy that conservatives adopted (as described by George Will):

For years, many conservatives advocated a “starve the beast” approach to limiting government. They supported any tax cut, of any size, at any time, for any purpose, assuming that, deprived of revenue, government spending would stop growing.

But they found out that spending was also hard to cut:

But spending continued, and government borrowing encouraged government’s growth by making big government cheap: People were given $1 worth of government but were charged less than that, the balance being shifted, through debt, to future generations.

Obama’s stimulus plan involves both increasing spending and cutting taxes. The question is – can we then raise taxes and cut spending after this is over? Obama has clearly indicated he intends to – and to shore up America’s long-term fiscal solvency by dealing with entitlement spending too. If he is able to pull off this Grand Bargain, then he will belong in the rank of the best presidents. If he is not, then this temporary increase could have disasterous effects.

Third, by trying to act so quickly, there will inevitably be unintended consequences. To avoid as many of these as possible, the bill should be cleaner and its provisions should work faster.

Fourth, as Robert Samuelson wrote in the Washington Post:

As it turns out, President Obama didn’t make the tough choices on the stimulus package. He could have either used the program mainly (a) to bolster the economy or (b) to advance a larger political agenda, from energy efficiency to school renovation…There were tough choices to be made – and Obama ducked them.

This bill is something of a muddle so far, in part because of the need for speed, and in part because Obama has let the House and Senate Democrats craft the bill, waiting to give his input until the conference in which the bills passed by the House and Senate will be reconciled.

Fifth, the bill offers both short term stimulus measures and downpayments on longer term (and worthy) projects. A stimulus bill should only include spending in the short term. The 75% goal Obama has set is too low. Every dime in the stimulus package should be out by the end of 2010. Kay Bailey Hutchinson ably stuck to this point in her Meet the Press appearance this past Sunday. Her confident demeanor and obvious grasp of policy made me wonder what had led John McCain to bypass her in choosing his Vice Presidential nominee. 

In short, most of the bills problems seem to come from the speed with which it is being forced out. This is a tradeoff Obama seems to be willing to make – as this bill is intended primarily to demonstrate that stimulus is coming and the problem is being taken seriously.