Even before yesterday's election in Massachusetts, progressives have been split between those who see the Obama administration as a pretty good thing, doing the best one could hope for in difficult circumstances, and those who think they are either political cowards or what would be genuine liberal Republicans if we had such a thing.
On a mailing list I belong to, Nathan Newman posted a strong defense of the Obama record. I think it misses the point. With his kind permission, I'm posting first his text, then a second version interspersed with my responses. (For fairness, I wanted to give readers the full flavor of his argument before I responded to it.)
Here's the bulk of Newman's original posting, responding to the suggestion that Obama had failed to deliver for his electors:
• Obama passed the largest social spending bill in history in the form of the recovery plan last year, directing $300 billion into health care and education spending, along with tens of billions of dollars into food stamps, housing aid, unemployment insurance, and child care.
• Billions were directed into mass transit, weatherization and other conservation programs through the same bill.
• Millions of children have health care because of the SCHIP bill that was also passed.
• CAFÉ standards were raised for the first time in decades—with a 35mpg standard adopted
• Lily Leadbetter and Equal Pay laws passed to fight pay discrimination
• Pro-labor executive orders promoted project labor agreements and helped unionized contract workers
• 2 million acres of land were protected against oil and gas drilling
• Strengthened state authority and restricting federal preemption to protect state consumer, environmental and labor laws
• Reversed Bush ban on stem cell research and on funding overseas family planning clinicsThis is just a summary but these are solid achievements, less than what some might want but hardly “fucking us over.” The reality is that this is the first recession ever where we have provided health care insurance for the unemployed, where unemployment insurance was expanded to cover a higher percentage of the unemployed, and other aid to them was expanded in such a significant way. Notably, in December the NY Times found that 61% of the unemployed approved Obama’s handling of his job, quite a bit higher than the general population. But then, the unemployed are seeing first hand the help they’re getting due to Obama’s actions.
People are free to want more but we saw nothing like this during Clinton’s or Carter’s Presidency—and the Great Society was delivered in the middle of an economic boom. So you basically have to go back to FDR to find this level of social and economic legislation enacted in the middle of a recession.
Yes, Obama hasn’t delivered FDR-level political accomplishments, at least not yet. But that hardly justifies the animosity some people seem to have adopted.
And here's Newman again, this time interspersed with my reply:
• Obama passed the largest social spending bill in history in the form of the recovery plan last year, directing $300 billion into health care and education spending, along with tens of billions of dollars into food stamps, housing aid, unemployment insurance, and child care.
It was too small. 1 out of 5 men are unemployed. And we knew it was too small when he proposed it. It was pre-compromised: he didn't fight for more.
•Billions were directed into mass transit, weatherization and other conservation programs through the same bill.
Very little has trickled down yet. And by the way, that's approximately equal to the cost of one year of Bush's tax cuts for the richest 5% — which have not been repealed.
•Millions of children have health care because of the SCHIP bill that was also passed.
A win. But not one the middle class notices.
•CAFÉ standards were raised for the first time in decades—with a 35mpg standard adopted
When does that take effect? 2020? Yawn.
•Lily Leadbetter and Equal Pay laws passed to fight pay discrimination
Back to the status quo ante (before Supreme Court). An important (and relatively uncontroversial) change – because this had been the rule previously.
•Pro-labor executive orders promoted project labor agreements and helped unionized contract workers
How many workers have actually gotten jobs from this? Not many.
•2 million acres of land were protected against oil and gas drilling
•Strengthened state authority and restricting federal preemption to protect state consumer, environmental and labor laws
Way below the radar.
•Reversed Bush ban on stem cell research and on funding overseas family planning clinics
Payoffs are either abroad, or far in the future.
This is just a summary but these are solid achievements, less than what some might want but hardly “fucking us over.”
Almost nothing there for the middle class. Very little for the poor except SCHIP
The reality is that this is the first recession ever where we have provided health care insurance for the unemployed, where unemployment insurance was expanded to cover a higher percentage of the unemployed, and other aid to them was expanded in such a significant way. Notably, in December the NY Times found that 61% of the unemployed approved Obama’s handling of his job, quite a bit higher than the general population. But then, the unemployed are seeing first hand the help they’re getting due to Obama’s actions.
Much better than nothing — but jobs would be much better. Where's that big new public works infrastructure push to fix bridges? Nowhere visible. Do you see any signs anywhere in your neighborhood about a federal works project? I sure don't see any here.
People are free to want more but we saw nothing like this during Clinton’s or Carter’s Presidency—and the Great Society was delivered in the middle of an economic boom. So you basically have to go back to FDR to find this level of social and economic legislation enacted in the middle of a recession.
The PROBLEM is that it's nowhere on the scale of what FDR did (modulo bailouts) — and yet that is what the times require. We need FDR. We have … Nelson Rockefeller?
Yes, Obama hasn’t delivered FDR-level political accomplishments, at least not yet. But that hardly justifies the animosity some people seem to have adopted.
It's not simply the failure to deliver. It's the failure to show any DESIRE to deliver them. For someone who was such a great campaign speaker to fail to make the public case, repeatedly, for the big programs — not the crippled stimulus, with all the tax breaks, or the health care plan that contracted HillaryCare disease — failing to have a simple progressive (or populist) narrative that people could rally behind.
Without that big, public, bet-your-Presidency commitment, it all looks pretty half-hearted at best, Republican Lite at worst.
Talk about fiddling while Rome burns…
You ARE aware that Obama just had his butt handed to him by proxie – for like the third time this year – right? You ARE aware that as soon as it happened, even the Dem leadership in Congress suddenly started playing nice (as if that comes from any motivation OTHER than fear for their jobs)? You HAVE noticed that some of the centrist Dems now feel emboldened enough to actually speak out against the Dem leadership and the Administration haven’t you? You have noted how quickly the Dems in Washington, particularly in the White House, tossed Martha Coakley under the bus and blamed HER for her loss, thus desperately distancing themselves from her (as if ANYTHING she ever said, wasn’t just a clear statement of Democratic policy, and as if she really should have campaigned more in a SOLID Democratic state with 12% Republicans and 46 years of Kennedy incumbancy behind her. If anything NOT campaigning is exactly what you do in that sort of situation.)
You don’t even have to address that: After $787B in stimulus (plus other expenditures), no real jobs have been created, the economy is still in the tank, unemployment has skyrocketed, Gitmo still exists, we are still in two wars, and people are trying harder and harder to kill us while we are trying harder and harder to buy them ice cream if they just agree to stop punching at us.
You can wonder about the fine points of tweaking Obama policies if that’s how you see things, but even your leaders in Washington know that’s not the point anymore. You can count on three MORE years of lame duck Congress, passing trivially important legislation while putting off your hopes and dreams, just so they can save their jobs past this November, when many will lose it.
The good part about this election in Mass is that it stopped healthcare, the bad part is it will stop everything else as well. Gee, Thanks Obama…
I’m sorry, maybe I was being a little harsh in potraying you as a lone fiddle player, oblivious, but lonely… The GOOD news is, you are not alone in your fiddling!
http://www.nytimes.com/2010/01/21/opinion/21thur1.html?ref=opinion
The critical part (since you have papers to grade):
“There are many theories about the import of Scott Browns upset victory in the race for Edward Kennedys former Senate seat. To our minds, it is not remotely a verdict on Mr. Obamas presidency, nor does it amount to a national referendum on health care reform even though it has upended the effort to pass a reform bill, which Mr. Obama made the centerpiece of his first year.”
Considering that Mr. Brown ran nearly ENTIRELY on a platform of stopping the healthcare vote, and considering that he even signed autographs with “41” thus CONFIRMING his exact intent and desire, it’s a little hard to even fathom how anyone can think this election has nothing to do with Obama and a rejection of his goals.
(As I write this, Pelosi has announced that healthcare is effectively dead for now – more signals that we now have a lame duck Congress.)
So go ahead and keep thinking that tweaking Obama’s plan to be even more ambitious is a good plan. You will have a full orchestra together in no time!
The public (and politicians) react better to strength than weakness.
This post made me vomit in my mouth for a half-an-hour.
Increasing government spending, handouts, welfarism, and corportocracy isn’t working and bankrupting our country? What’s the solution? Let’s do more of it!
Unbelievable.
i AM NOT INPRESSED WITH ANYTHING HE HAS DONE. NOTHING WILL EVER GET BETTER TILL THEY BRING OUR JOBS BACK. YOU DONT SEE NO KNEW JOBS BEING CREATED. WE WERE SOLD OUT. AND WHILE OTHER COUNTRIES NEED HELP AMERICA SHOULD TAKE CARE OF THERE ON FIRST. THEY LET THERE ON BE HOMELESS, EVICTED, UNEMPLOYED WITH NO HOPE IN SITE. I JUST WANT A JOB
Hey lady, government DOES NOT CREATE JOBS! How can a business create new jobs when they are being choked by unemployment payments, having their investment abilities restricted, are being penalized by “carbon taxes”, had the minimum wage raised beneath them, threats of a payroll tax to pay for “healthcare”, being held hostage by unions, etc, etc, etc.
Seriously. Use your brain.
Actually, government can create jobs. Recall the Great Depression? The WPA? Whether or not governments can create jobs in normal times, they surely can when there is a capital/investment crisis like there is today.
Economic conditions are similar now: monetary policy has nothing left to do as real interest rates are about zero. This is a Keynsian moment.
If we are going to invoke brains, let’s start by reading Keynes’s General Theory, shall we?
Bring back Bill Clinton! The center left (as defined in the US) is the sweet spot of American politics. Balanced budgets, controlled spending, civil liberties, funding for science and development; these are the things that make our country prosperous. Governing should not be about now, it should be about laying the foundation for tomorrow.
We are in this mess because the previous administration didn’t get it. They increased government spending, as well as the size and scope of government, more than any administration since LBJ! Now, in a time of economic crisis, we do not have the wiggle room to stimulate the economy without creating huge government debt.
Unfortunately, the current administration is doing more of the same, just that they are increasing the size and scope of the government in a different way than W did. STOP IT!
I may have to vote for a Ron Paul type next time just in the hopes that the unbridled growth of government is slowed.
“Actually, government can create jobs. Recall the Great Depression? The WPA?”
Hey dumb-dumb look up this little thing called “The Broken Window Fallacy”. How do you think that FDR created those jobs? Oh, that’s right, a 90% capital gains tax, price fixing, and pretty much destroying the economy of the country until we were “lucky enough” to be dragged into World War II to “recover our economy” (plus fully fueling the Military Industrial Complex that has spread into having military bases in 130 countries around the world and… oh right, pre-emptive military strikes). By the way, the economy didn’t return to pre-Great Depression levels until AFTER the majority of FDR’s policies were removed in the 1950s.
Or maybe you’re cool with people dying in the street or the elderly eating cat food. At least we had those “jobs”.
There’s this thing called History. It’s pretty cool. You may want to learn it sometime.
Have you ever read your precious Keynes? Let’s think about this for a second rationally. The best economic practices are to promote consumer spending so that we can raise GDP. If consumer spending isn’t high enough (based on… what? No one really knows), then it’s the Government’s job to step in an cure all ailes.
Now, let’s see the reality of the matter… People have enormous amounts of personal debt. When they’ve decided, “holy shit! I’m in debt up to my ears, I need to be more responsibile and cut back on spending.” The government then steps in, and either through taxation (pretty fucked up) or inflation (super fucked up), attempts to make up the difference.
In the meantime, businesses and people that are suffering from heavy taxation and their money being devalued by inflation start to turn back their spending EVEN MORE and busiensses, because of no investment (which is caused by Investment, i.e. savings, which for a Keynesian is a bad thing because they’re not spending), start closing down — all the while the Federal Reserve is pumping more and more blank money into the system that is further shutting it down.
Man, Keynes really knows his shit. Wait, i mean, Keynes really knows shit.
How about you try reading an economic theory that makes sense, like Austrian Economics, i.e. Murray Rothbard and Ludwig von Mises. Or that one guy, you may have heard of him, Adam Smith.
Either, 1, the government borrows the money. Since real interest rates are near zero, this isn’t as costly or as unwise as usual. More people working increases tax revenues, making it easier to pay back than it otherwise would be. The borrowing doesn’t do the crowding out of private investment that you would usually fear or expect, because it’s a feature of a mega-recession and/or depression that too many people holding money are unwilling to invest.
Or, 2, the government prints money. Normally that is inflationary, and thus normally not a great thing to do. But because of the recession/depression being deflationary, this is not the problem it usually is.
And that is why the (Depression-era) ‘treasury view’ and or Austrian account you allude to and oversimplify is considered by many many economists, including conservatives like Richard Posner, to be inapplicable to current (somewhat exceptional) conditions.
PS. Why is it that the people who disagree with me so often lack the courage of their convictions and will not sign their names? Is it because they know what they are writing is not defensible?
“Actually, government can create jobs.”
That’s your problem in a nutshell – right there. You apparently HONESTLY believe that taking money out of the private sector, and spending it in Government, somehow multiplies it by 2!
Look, if I have a small business that employs people at 35K. And you (Government) decide to tax 35K out of me so that you can create a Government job, you have really created absolutely nothing. The only way Government can create ANYTHING is by taking it away from the private sector. That’s it. The private sector is the only actual source of wealth – all Government can do to “create”wealth for itself is take it away from somebody else. That’s it.
The bigger problem is one of friction. Government can’t create jobs in a 1:1 ratio (like my above example) because it ALWAYS costs more to take money out of the private sector and redeploy it in Government. Always. Government is not a perpetual motion machine! Even absolute best case scenario – it will still costs money just for the funds transfer – over the entiure economy, that adds up quick. In the REAL world, Government workers earn on average far more than private sector workers and have better bennies than most. So you potentially cost far more than one job for every Government job you create.
Seriously, look up the broken window fallacy, read some Bastiat, or Hazlett. Don’t take MY word for it.
Hint: If what you think is true, it would make sense for Government to create jobs by hiring people to go out with crowbars to break windows. In other words, just purely CREATE jobs. Good luck with that.
Oh, and if your thesis is that the “probblem” today is that money isn’t being SPENT to create jobs in the private sector, so the solution is to tax it out of there so that it CAN be used to create jobs (essentially the WPA solution), then you are still not getting it.
Investors are skittish right now, not because they are greedy, or don’t WANT to create jobs, or even CAN’T create jobs. They are skittish because investment (which leads to jobs) is premised on a little thing we like to call “risk.” A low risk for investment is one that is preferred – by that I don’t mean low in return, but low in the chance that it will change greatly over time.
In other words, if you, as an investor, choose to take a risk on a 15% payoff (fairly risky), you do so with the understanding that that 15% number isn’t suddenly going to become -15% the day after your money is in it. What causes that? Uncertainty. What causes THAT? One really big source is not knowing what the Government is going to do from moment to moment. Not knowing whether Obama is going to suddenly get it in his head to add a huge TAX onto moving money around.
The fact that this administration is economically clueless creates exactly the kind of uncertainty that makes any decent investor start thinking twice. Hence, job loss due to dropping investment.
So if you think that taking even MORE money out of the private sector, running it through the Government’s magical friction machine, and “creating” a single Government job for the price of two or three or more in the private sector, all while ENCOURAGING more job loss and less investment, is a great plan… No wonder you teach school so you can’t harm the actual world.
I don’t understand what is going on here. Do you even read the comments you write the angry responses to?
Where in the above does it say anything about raising taxes (now) to pay for the spending? The whole point of Keynesian responses to a liquidity or investment crisis is that you DO NOT raise taxes to pay for the government spending. You run a deficit — you raise taxes later, to the extent you need to, when the economy is doing better. Paying for the government spending now would of course defeat the purpose which is to stimulate the economy; that is why all the GOP yodels about evil deficits (a new religion all of a sudden) are so completely wrongheaded. There is a time in the business cycle when we should run a surplus (when things are booming) and a time when we should run a deficit (now). Or, you can take the view we should aim for balance, modulo long term investments (eg roads, bridges, that provide benefits over time), plus run deficits in a rare crisis such as this one and then pay it back later. Yes, the taxes later act as a drag (later), but even so the overall effect is a much higher GDP than if you didn’t act now, pay later.
But, anyway, I give up. I have better things to do than try to teach Macro 101 to the uninterested.
First off: Who is angry? Certainly not me. I’m far too amazed at watching the Dems fall apart before our eyes to be angry about much of anything. The only thing that makes me angry, if anyting does, is that now we’ll have to wait another three years for the next chance to get anything done. After the last dozen years of so of Congressional inactivity, I’m surprised ANYTHING functions any more.
Second: To teach me Macro 101, you’d first have to evidence actually clearly knowing anything about economics that you didn’t read in an econ textbook sometime back in the 70’s, which hasn’t happened yet. The econ skills you display over and over again here are of the typical “I took a course once, so now I understand it all – but I’ve never really see any of it action” variety. (understandable for someone who has been an academic all their life, so don’t get all bent out of shape about it)
Third: I agree, YOU didn’t say anything about raising taxes. Unfortunately, YOU are not the one that gets to decide that. The folks in Washington have already raised some types of taxes and are openly talking about raising others and imposing new ones. Just this week in fact. I suppose you’ve missed that in all your grading. Taxes have and are going up, chum. Whether you think it’s a good idea or not. And they don’t need your permission and they don’t need to have your particular understanding of Keynes.
Or did you think that taxes haven’t gone up until you receive a letter from the IRS saying that YOU personally will be paying more taxes than you did before?
Lighten up Froomkin, don’t take this stuff so personally. If you’re going to bother addressing subjects more important than the Jay Leno Show on your blog, you might come across some opposition to your thinking. Unless you don’t want that, in which case just let us know. I’ll buy you a beer if we ever meet.