Tuesday, February 15, 2011
Two approaches to Democratic budgetingPresident Obama has proposed his
Among the losers are some "things that I care deeply about," Mr. Obama added, including programs that he had expanded in the past: Home-heating aid to poor families and community-service block grants would be cut in half, and a multistate Great Lakes cleanup project would lose one-quarter of its money, compared with 2010.Joseph Stiglitz in his account of the Great Recession, including the early months of the Obama Administration, Freefall: America, Free Markets, and the Sinking of the World Economy (2010), characterized the President's initial approach to recovery as a conservative one, focused on bailing out banks and their executives from the consequences of their own greed, irresponsibility and bad judgment and mainly hoping that what Paul Krugman mockingly calls the "confidence fairy" to get the economy going again when businesspeople felt confident to invest more domestically.
Obama's new budget embraces a conservative approach even more explicitly, applying Herbert Hoover economics to a still-stagnant economy with high unemployment and no new boom or bubble in sight to quickly reduce it. Sure, the Republicans ideas - to the extent they are coherent at all - are worse. But that doesn't mean that Obama's approach is the right one for him to be taking, either economically or politically.
The economics are bad. The deficit is not a problem. And, with a few very eccentric exceptions, the Republicans don't care at all about deficits. As Dick Cheney expressed the near-universal wisdom in the Republican Party, "deficits don't matter." They showed this again in the Republicans' support for the tax subsidies for billionaires to which Obama unfortunately agreed in December. But the Republicans will happily use their non-existent worries about deficits to batter Democratic Presidents and programs. Robert Reich explains the awful politics of Obama's budget at his blog in The Obama Budget: And Why the Coming Debate Over Spending Cuts Has Nothing to Do With Reviving the Economy 02/13/2011
President Obama has chosen to fight fire with gasoline.
Krugman makes a similar point at his blog (The Great Abdication 02/14/2011) looking at the political message of Obama's budget:
What is Obama saying here?
State budgets operate in a very different context than the federal budgets. States basically have to balance their budgets every year.
But Jerry Brown's approach to the California budget crisis illustrates how an austerity budget - one forced by actual circumstances in California's case - can also be used to define the budget debate on progressive Democratic terms. As I've discussed here before, what Jerry Brown is trying to achieve this year in California is a process that not only cuts through the kinds of short-term gimmicks that Republican Gov. Arnold Schwarzenegger used and puts the state finances on a reasonably sustainable basis. In the process of doing so, beginning to delegitimize the scam the Republicans have been running here since 1978 of telling voters: "You can cut your taxes and restrict government spending and not suffer any bad consequences yourself."
Jerry Brown is using the budget fight to address real issues and also to challenge the Republican narrative on the role of government.
Barack Obama is reinforcing the Republican narrative on the role of government. It doesn't mean his approach is as bad as the Republicans'. It does mean he's not doing what a Democratic President should be doing. Especially with economic conditions for most people like they are.
Tags: barack obama, california politics, jerry brown, obama administration
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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