E. J. Dionne Jr.

[digg-reddit-me]A thought-provoking essay by Liam Julian in the Hoover Institution’s Policy Review explores the relationship between Obama and Reinhold Niebuhr. The essay unsurprisingly concludes that Obama failed to learn the essential lesson of Niebuhr (unsurprising because it appears in the far-right Policy Review) – namely that:

[M]an must act forcefully but humbly and free from naïve expectations.

Julian explains the appeal of this Niebuhrianism as a kind of balancing act:

[Obama] is a liberal, as was Niebuhr, and idealism smolders within even the most sensible liberals. The point is not to suffocate the idealism but to control its flames…

The conservative Julian sees Obama flaming idealistically in his first few months in office because any liberalism is too much for him. But E. J. Dionne – like most liberals – sees Obama as constantly balancing opposites, attempting to control the risks associated with progress while not yielding to a reactionary politics:

That’s the Obama enigma: boldness wrapped in caution rooted in an ambivalent relationship to the status quo. This is why Obama will, by turns, challenge not only his entrenched adversaries but also his natural allies.

The Obama enigma is about balancing opposites. It is an idealistic pragmatism, a conservative liberalism. This constant balancing is inherent in every aspect of the Obama administration. As James Surowiecki observes in the New Yorker with regards to the banking crisis for example:

[T]he Administration is trying to do two things at once. In solving the current crisis, it’s partnering with Wall Street, using the existing system to try to stabilize the economy. But in thinking about the future it’s trying to use hostility to Wall Street to bring about serious changes in the system. This is quite a balancing act: let’s hope the Administration can pull it off.

The Master Plan Always Has Flaws

Daniel Drezner at Foreign Policy summarizes my feelings about Krugman in almost as complete a way as Evan Thomas did:

The fundamental question is whether Krugman is a brilliant hedgehog, an insecure pain in the ass, or – as frequently is the case – both at the same time.

One suspects that Krugman is at least part right – and that Obama and his team realize this. Obama’s response to the financial crisis has been significant – and more than any government response in history – but it is dwarfed by the scale of the crisis, as Krugman is fond of pointing out. Nicholas Lemann in the New Yorker tries to explain why Obama seems to be ignoring Krugman’s advice so far:

[Obama] has to address the crisis, and he is trying to add enough new controls to the system to prevent a repeat of it, but it looks as if his heart is with the big new programs in his budget and with his foreign-policy initiatives. Bank nationalization would drive the stock market down and increase theagita of people with 401(k) plans. Moderate Democrats in Congress would further soften in their support for the Administration’s legislation. The price of bank nationalization might be Obama’s super-ambitious plans in other realms, which, if history is a guide, are likely to pass only in this first year of his Presidency. If they do pass, he will have generated tax revenues from affluent people for social purposes far beyond those of the House’s tax on A.I.G. bonuses, and he will have significantly eased the distress of people who can’t get good health care or education. That is a lot to put at risk.

At the same time, Obama’s team seems to think that, to quote my post of yesterday:

[I]n the short term, the Geithner plans will work to restart the “old” economy. In this moment before that happens though, pressure from Europe and internal critics as well as a desire to avoid a repeat of this fiasco will enable enough forward-looking, gradualist regulation and legislation to correct the long-term problems with high finance.

E. J. Dionne Jr. in the Washington Post explains where the administration’s focus is:

Obama’s top budget officials seem confident that they can deal with this immediate difficulty. His larger challenge is to take on the politics of evasion promoted by those who would indefinitely delay health-care reform, energy conservation and the expansion of educational opportunities. Already, his lieutenants are signaling how he will cast the choice: between “taking on the country’s long-term challenges” or just “lowering our sights and muddling through,” as one senior aide put it.

If Geithner is responsible for fixing the current crisis, Peter Orszag is responsible for the long-term outlook – of balancing Obama’s plans to expand government’s role and stabilizing our deficit spending. As Jodi Kantor in the New York Times explained:

Mr. Orszag embodies the administration’s awkward fiscal policy positioning: big spending now, with a promise to scrub the budget of waste and a bet that economic recovery and changes to health care will gradually reduce the deficit.

A lot of pieces need to fall together for this to work. I have confidence in each piece of this plan – but together, the venture seems a bit bolder than is wise.

Perhaps this is a perfect moment in history for Obama’s plan – and Obama has the insight to see this; perhaps Obama is a master of politics who is able to get all of these items through; but it’s hard for me not to be discomfited by the manner in which everything is coming together.