The Spending “Freeze” Is By Far Obama’s Worst Politicial Decision To Date
Normally I don’t like to devote much time to punditry about political tactics because a) it’s almost always just a tempest in a million teapots and b) I like to preserve my naivete that the quality of policy ideas matters at all. Also I’m far too masochistic to debate short term issues that resolve quickly and far prefer talking about long term structural issues that will take decades to resolve.
That said, the second I read Obama’s “non-defense discretionary freeze” I knew it was the biggest tactical miscalculation he’s made in his presidency. It really is the worst of all worlds: it doesn’t do anything to address our real structural deficit thereby allowing an attack from deficit hawks and increasing economists of all stripes, makes “Keynesian” [in quotes because that's what they are proposing isn't at all what Keynes would today] economists apoplectic over a minor issue and is another slap in the face to the large anti-military industrial complex wing of the Democratic party. I’m not sure I could come up with a worse policy suggestion if I sat down and tried. Even hopping on one leg and trying would only get me within spitting distance.
Of course it’s so bad that officials had to come out and add “caveats” which were destined to make the politics even worse. Even staunch Obama defenders like Salon’s Joan Walsh are berating it as a “deeply cynical” move that either is such a bad lie it insults the intelligence of voters or is bad policy. Glenn Greenwald quickly sums up what will be a growing anti-military spending narrative (and rightly so). Brad DeLong brands Obama with the “Hoover” tag. Krugman states, “And it’s a betrayal of everything Obama’s supporters thought they were working for.”
An Economist blog post states in part:
So perhaps this is all about politics? Well, maybe, but there are two enormous problems with that. One is that the campaign trail version of Barack Obama railed against John McCain’s proposal for a spending freeze, rightly, as using a hatchet where a scalpel was needed. It’s unlikely that Mr Obama’s political opponents will let him forget that. The other is that this is a complete betrayal of the political ideal Mr Obama seemed to espouse from the beginning of his political career—the rejection of the argument by the lowest common denominator in favour of a more reasoned and argued approach. This is yet another move toward the infantilisation of the electorate; whatever the gamesmanship behind the proposal, Mr Obama has apparently concluded that the electorate can’t be expected to handle anything like a real description of the tough decisions which must be made. I sympathise with Mr Obama’s position—would that American voters were patient enough to hear and consider a detailed policy discussion on a complex issue—but it’s unreasonable to expect that Americans can be hoodwinked into major policy shifts.
So there you go: a token concession that drives supporters mad and opens up the attack it’s not a real step, or a cynical message with no chance of follow through that will plaster Obama as untrustworthy. The worst of it is that I realized this was going to happen literally within 30 seconds of reading the details, as apparently did every other person with a blog.
Either it’s unimaginable incompetence or there is something far worse in the pipe coming along and this is to just get people riled up.
21 Responses to “The Spending “Freeze” Is By Far Obama’s Worst Politicial Decision To Date”
Indies want emptiness and semiotics, they get it.
This SOTU is a fulcrum – Obama can either be irresponsibly responsible and noble to the point of ignobleness, or he can couple this symbolic concession to the reflexive and simpering Bayhs and WSJ editorials with extreme, unfailing commitment to the senate bill. Obama must stand up for meaning (even if it is “partisan”) or let the US slide further into a swamp of symbolism.
I'm sure they'll be some response that this too was a feeble attempt at partisan politics too:
“WASHINGTON (AP) – The Senate has rejected a plan backed by President Barack Obama to create a bipartisan task force to tackle the deficit this year.”
I suggest once again that the problem is not Obama, it is both sides of the aisle in Congress who would rather let Rome burn than address our very real financial problems.
Can somebody rationally explain why 60 votes could not be gathered to allow for a non-partisan commission to be formed to find ways to reduce our deficit? Is saving money as a group effort just too radical an idea?
“Indies want emptiness and semiotics, they get it.”
The far lefties are even now arguing among themselves about whether to be realistic or remain believers in “ponies and rainbows” (or unicorns, as critics on this site have accurately noted).
“Clap your hands, wish really hard, and everything will be wonderful.” Except, not necessarily.
* * *
“Either it’s unimaginable incompetence”
The elite kiddies have dressed up, are playing government again, are out of touch with the public and with the real world, and this is an attempt to show that they are more “responsible” after what they saw in Massachusetts.
“or there is something far worse in the pipe coming along”
Actually, I believe it's more practical and wiser to suspect this. We're being set up for more taxes.
First comes this. It looks “responsible” and demonstrates making “painful” decisions. Then comes more pushing for the bipartisan panel on deficit reduction, for which this initial demo itself is political cover. The panel is cover for the new taxes. It will examine the “need” to look at “tough choices,” as the DC fixtures in related interest groups are already muttering, that more taxes “have to be on the table, certainly.” (Don't neglect the coming misstatements of “sacrifice” and “duty” and more uses of “responsibility” as well as “contribution.”) The bipartisan panel (lopsided with Dem choices by ObamaCo) will “research” the problem and conclude more taxes are unpleasant, but of course necessary. This is the political cover needed for new taxes, higher current taxes, more taxes.
Bump, set, spike. We're probably being set up to be slammed, and hard.
I think across the board major tax increases are unlikely. Once the states and cities get done there won't be any money left to extract from the middle class.
“Once the states and cities get done there won't be any money left to extract from the middle class.”
Mikkel, I believe you're too naive. Since when has Washington conceived, much less respected, limits?
Don't forget, too, the growth of Washington at the expense of states and localities, and federal assumption (actually, usurpation) of what are properly state and local government functions (if government rather than private, at all).
(Related to this: One health care takeover, a.k.a. “reform,” incrementalist strategic move I listed in past months was 100% federal assumption of Medicaid, incorporating it into Medicare.)
I just don't see how the political cost/benefit works out. It's now becoming consensus that at best we are going to have our own lost decade with 2% GDP/year growth at best. That means the deficit should drop to around $1 trillion over the next few years but then climb back up to near $2 trillion by the end of the decade, using Obama's 10 year budget at least. It also means that states/cities will have to raise $100 billion+ a year (potentially far more as mandatory pension contributions grow and grow).
In order to make a good dent in the deficit they'd have to raise taxes by $500 billion to $1 trillion a year. Good luck doing that. Since Europe and Japan are in even worse shape I see it far more likely that all government debt just blows up across the globe until there is either a hyperinflationary or deflationary collapse. I still think the latter is far more likely, as all it requires is enough protests to force writedowns and eventually partial government default. That's what debtor nations did during the Great Depression and they didn't fare too badly…heck the decline in GDP in 2009 was worse in Britain than during the worst of the Depression.
If they try to raise taxes it'll cause such hell that the people in charge will look back at those times for emulation.
Last week, when Obama said we're going to continue to detain certain terrorist suspects indefinitely without trial, I was deeply disillusioned. Now, I'm pissed. I was actually hoping for something that didn't look like a 3rd Bush term.
You just have a system that is marginally less socialist than the evil ones here in Europe.
However, because of some general flaws of your nation's collective culture and polity, you happen to have the most ineffective and inhumane socialist health-care system. In short, you've already lost. What you are fighting for now is to keep the laughable inefficiency, in order to spite left-wingers. How's your nose taking the divorce from your face?
mikkel
complaining about the political tactics of this debt problem is like criticizing the tune Nero played as Rome burns.
Why not say something about the wrong headed, short sighted, crisis inducing, responsibility ignoring, special interest loving, members of Congress that are part and parcel to this problem?
The problem Obama has in leading is he is trying to herd cats. Everyone of these fools mouths the words of deficit reduction, but none are willing to let their little kingdom be threatened by cost savings.
“Why not say something about the wrong headed, short sighted, crisis inducing, responsibility ignoring, special interest loving, members of Congress that are part and parcel to this problem?”
What about them? They're going to keep doing that unless there is a determined and clear alternative vision by a strong leader that targets individuals specifically.
How is a spending freeze or really anything remotely resembling cutting spending ANYTHING like a 3rd Bush term? The Republicans got us in this giant budget mess.
mikkel
“What about them? They're going to keep doing that unless there is a determined and clear alternative vision by a strong leader that targets individuals specifically.”
I'd like to think that would be possible, but I'm afraid “calling out” individuals is naive. Today, 47 Senators decided to vote no to the idea of a debt reduction Commission being formed. Are you saying Obama should list these Senators in his speech this week? I'd personally like it, but that won't change their votes. The interesting thing about this Commission was that it was sponsored by a Republican. This isn't about politics, it's about cowardliness.
Obama said he'd rather be a good one term president instead of a mediocre 2 term one. That's great, but without Congress, he is fundamentally powerless. Where are the tea baggers of this issue? Is reducing costs only important if it's Democrats trying to implement policy?
Bush pushed the medicare prescription drug benefit as an unfunded mandate. Lets end that right now. Do you hear anyone willing to play the fiscal responsibility card along anything other than partisan grounds?
It's finally and slowly dawning on the rubes who put Obama in office that they screwed up big time. And a lot of them are saying hurtful things about him as a result. Perhaps Progressives are doing this to avoid having to confront their own mistakes.
For example Talk Left features the following headline: “It's Official: Obama is an idiot”
If Progressives think that President Obama is severely mentally deficient, shouldn't they be asking what that says about their own judgment? After all, he didn't vote himself into office.
I don't think your “reasons” for whaling on Obama since 2008 comport with their “reasoning” for calling him an idiot.
But, you are you.
It's an ugly future when you think about it:
“at best we are going to have our own lost decade with 2% GDP/year growth at best”
Yep, the Japanese example hasn't ended just because we haven't been hearing of deflation every day currently.
“states/cities will have to raise $100 billion+ a year (potentially far more as mandatory pension contributions grow and grow)”
I still lament the failure of our hypocritical federal government not to subject itself to Generally Accepted Accounting Principles (GAAP) and require a balance sheet and income statement, with no games to be played with “on-budget” and “off-budget” classifications of expenditures, and to account fully for all the future liabilities.
Eventually government employee retirement expenses will face reconciliation. Taxpayers and non-gov retirees aren't going to tolerate struggling while being on the lower of an effective two-tier system with government retirees enjoying good and often excessive pensions and benefits. The “sacred promise” nonsense is just that, as with Social Security, and sooner or later correction will become necessary. Along with general reductions, there will probably be (overdue) consolidation and associated reductions that remedy the abuses of double- and triple-dipping (or worse). Separate pensions of $30,000 and $40,000 annually, for example, could and probably should become a single pension of around $50,000.
Social Security will also have to be reformed, eventually. Who knows how it will end up, perhaps as extreme (as commonly viewed nowadays, though incorrectly) as a flat, small fixed (the same) amount of benefits for everybody.
“Since Europe and Japan are in even worse shape I see it far more likely that all government debt just blows up across the globe until there is either a hyperinflationary or deflationary collapse. I still think the latter is far more likely, as all it requires is enough protests to force writedowns and eventually partial government default.”
There's also inflation undertaken specifically to monetize some of the debt, even if this won't be admitted.
That's in addition to inflation to meet expenditures nominally, as well as to continue to buy votes.
All during a mass asset sell-off in the USA and UK to privately finance retirements — a big bear market.
The year 2020 (as a benchmark, possibly pivotal year of convenience, historically) and the decade of the 2020s (and the 2030s) is probably going to be awfully ugly in a number of ways.
And yes, Europe and Japan are in worse shape (for various reasons already), and their relative worsening stands to be even greater in the future.
“What you are fighting for now is to keep the laughable inefficiency, in order to spite left-wingers.”
I understand, now that my mind has been read aloud. [chuckle] “Inefficiency” or “impurity” is the problem.
“If they try to raise taxes it'll cause such hell that the people in charge will look back at those times for emulation.”
They're trying to raise taxes. I already smelled this in Obama's partial “spending freeze” gimmick, and already, even more with his muttering about the bipartisan deficit reduction panel — political cover for raising taxes by including some Republicans among those finding the need for more taxes. (The panel would be stacked with Dems but would include Republicans as well.) There are DC fixtures who have formed a coalition that already has been on C-SPAN harping at the need to face “tough choices,” and I've heard Pete Domineici repeat numerous times (almost compulsively, or obscessively) that more taxes “are on the table.” (Where's that table? I'm already sick of hearing about it, want to make it into firewood.)
It's already so popular with, and being pushed by, these people, that the political sites already are responding to it:
http://blog.heritage.org/2010/01/26/the-domenic…
I even smell more political cover here, possibly, relying on these people outside Congress to make the unpleasant statements so Congress isn't associated as much directly with such statements.
The bipartisan deficit-reduction panel idea has been rejected by the Senate.
Here's a pair of articles on the new private(?) panel that has been formed. “More taxes” [scowl]
http://blogs.wsj.com/washwire/2010/01/25/ex-sen…
(I'm not the only one who smells additional political cover.)
“The timing of the group’s formation is coincidental, organizers said. Yet the outside group, including prominent Democrats and Republicans, could provide pressure and political cover for the parallel effort by the administration and Congressional leaders to consider both unpopular spending cuts and tax increases.”
http://www.nytimes.com/2010/01/25/us/politics/2…
“The Republicans got us in this giant budget mess.”
[burying head in hands]
Exactly how were they supposed to prevent the Dems from doing whatever they wanted this past year?
Just how would you have responded to any effective opposition the GOP would have managed to constitute?
“The problem Obama has in leading is he is trying to herd cats.”
It's worse than that: Washington has grown incredibly over-sized (the “super-sizing” and “obesity crisis” that activists honestly and correctly should be assailing or decrying). Its power and influence have long been nightmarishly excessive. Accompanying that is a stasis or permanence (the term “stasis” I use because I think about the related near-medieval viewpoint many who like permanent Big Government have about it, including Republicans infected with this disease) that includes the phenomenon we all know well, the incumbency problem (Americans want term limits!).
These people in Congress and others circulating around the DC world “inside the Beltway” are well-established and (as I've said before) have seen multiple Presidents come and then go. Lay aside the shallow bogus complaints about excessive Presidential power when Republicans are in the White House, or whining about Presidential ineffectiveness when legislation isn't being passed fast enough. (The problem this past year has been rushing to pass bad legislation, not lack of “progress” [sic].) It's to be expected that the DC Establishment, all the regular “fixtures” there in DC, have most of the power. Members of Congressional staffs of long-termers or “lifers” in DC (many of whom are long-termers or “lifers” themselves; it's disgusting) may at times truly have more power or clout than any President.
Those are often Big Cats that Obama is trying to herd, in other words.
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