Tuesday, November 08, 2011

Making excuses for Obama

Ezra Klein is viewed as being close to the White House, i.e., he often provides friendly coverage for White House arguments. I'd like to think for the Democratic Party's sake that the arguments he makes in Obama's Flunking Economy: The Real Cause New York Review of Books are not ones being encouraged by the White House (11/24/2011 issue; accessed 11/05/2011)

Ezra's argument is one that is by definition answerable only with a hypothetical. The Obama record, he says, is the best record possible, the best he or anyone could have done. Arguing that he could have accomplished more of his own nominal goals is by definition a hypothetical.

But people make judgments like that all the time about political leaders. And the comparisons are not entirely hypothetical. How many times did we hear Bush supporters during the period 2001-6 complaining that they couldn't do what they wanted to do because they didn't have 60 votes in the Senate? When they got tired of Senate Democrats filibustering their most egregious judicial nominees, the Republicans were simply going to abolish the filibuster rule in the middle of the Senate session for judicial nominees and jam them through on a Party-line Republican vote. That didn't happen only because the Democrats, in an all-too-typical deal, folded and gave the Republicans most of what they wanted.

Here's how Ezra deals with that issue:

But in general, the fundamental constraints on the administration’s leaders have not been economic or conceptual, but political. They know they need to act. But they can’t act, or at least they can’t act at the scale necessary to really change the economic situation. Republicans won’t let them. Between 2009 and 2011, Senate Republicans launched more filibusters than we had seen in the 1950s, 1960s, and 1970s combined. Democrats had sixty votes for a short period of time, but with Senators Ben Nelson and Joe Lieberman included in that total, they never had easy control of the Senate, whose minority leader, Mitch McConnell, said in October 2010, "The single most important thing we want to achieve is for President Obama to be a one-term president." [my emphasis]
Ezra has heard about something John Kennedy's Administration did about antidemocratic House rules. But he doesn't mention the more relevant and far more recent 2005 confrontation over the filibuster, resolved through the "Gang of 14" Democratic surrender to the Republicans:

Another option would have been to mount a frontal assault on the filibuster, much as John F. Kennedy’s administration began by launching a frontal assault on the House Rules Committee, which was bottling up civil rights legislation.

I don’t consider this plausible. For one thing, the White House understandably wanted to use its political capital on policies that would be understandable and tangible to Americans rather than on a divisive set of procedural reforms. For another, it would have been very difficult for a candidate who had come to power promising a new era of postpartisanship to begin his presidency by ripping minority protections out of the United States Senate. And finally, there is no evidence that Democratic senators, many of whom quite like the power that the filibuster gives them, would have gone along with the plan.
What could they do? Why, Obama is only the President of the United States, it's not like he has a lot of power or anything. Sure, he can join a war in Libya on his own, assassinate American citizens on his own word, make unprecedented claims for Executive secrecy. But raise a stink over Republican Senators blocking vital programs? Oh, golly, that would be way to much to expect!

Whether it's coming from the White House or it's mainly Ezra's excuse-making, it sounds pitiful. This kind of thing looks weak because it is. It's a big part of what has disappointed and discouraged Democrats these last three years or so. It has dismayed independent voters, especially on the debt ceiling fiasco this year. And it has emboldened the Republicans to continue their obstructionist course, because it's clearly working to their advantage.

This kind of excuse just reaffirms in voters' minds that the Democrats are weaker than the Republicans and Obama is a weak President. This in turn plays into the Republicans' routine charge against Democratic President that they are weak and ineffective.

The biggest whopper in the piece is this:

But if the White House couldn’t go through Congress, perhaps it could have done a better job going around it. A major omission in [
Ron] Suskind’s book—which is also a major omission in political punditry more generally—is that it makes little mention of the Federal Reserve. But the Fed is arguably more powerful than Congress when it comes to setting economic policy, and it is certainly more powerful than the president. [my emphasis]
He goes on to explain that Fed Chairman Ben Bernanke, who Obama (in this telling) had every reason to regard as superman of economic recovery, was disappointing after Obama re-appointed him:

Of course, the most straightforward path to energizing the Fed isn’t adding two new members to its Board of Governors, but replacing its chairman. And the White House had an opportunity to do so in 2010, when Ben Bernanke’s term expired. Instead, Obama chose to renominate Bernanke. The thinking was that Bernanke had pursued an extraordinary set of activist policies during the worst of the crisis — he probably deserves more credit than any single person for preventing a second Great Depression — and he was respected in the institution and by the markets. Reappointing him would thus help with confidence and ensure that the White House had an able partner if the economy turned south again.

But Bernanke has been much more cautious in accelerating the recovery than he was in combating the initial crisis. When the financial markets were collapsing, he went far beyond the traditional limits of the Fed to support the financial markets, purchase depressed assets, and inject liquidity directly into the banking system. But he has not been nearly as aggressive in his efforts to support the recovery. The second round of quantitative easing could have been much bigger. The Fed’s commitment to employment—even at the cost of modest inflation—could have been communicated directly to the markets. Unorthodox policies, such as targeting a specific level of nominal GDP growth, have been left untried.

At this point, even quite mainstream voices have come to worry over Bernanke’s apparent timidity. [my emphasis]
Even after the bumbling indifference of former Fed money god Alan Greenspan, Ezra seems to buy into the mystical image of the Federal Reserve Chairman as the Highest of High Priests of Finance, gifted with mysterious powers that we mere mortals can only admire from afar.

This is just plain ridiculous. As Paul Krugman has been explaining for years now, the Federal Reserve has very limited ability to stimulate the economy in depression condition like we have now, because interest rates are up against the zero bound, i.e., that can't really go any lower. And in fact, the Fed's "quantitative easing" attempts expanded the money supply as expected, but with negligible effects on the real economy.

Some traditional Keynesians like John Kenneth Galbraith doubted whether the Fed had even the powers generally attributed to it in managing recessions during even normal times. I'm inclined to that Galbraithian view myself; but that's another story.

Ezra's article also doesn't discuss the basically conservative elements in Obama's outlook that has also led to disappointments for Democrats: his deal with the health-insurance lobby to make sure the public option he nominally supported in health care reform didn't pass; his commitment to light regulation of the financial industry; his appalling desire for a Grand Bargain that would severely cut Social Security and Medicare benefits in exchange for an easily-reversed increase in taxes on the wealthy.

This is pitiful excuse-making for what progressive Democrats see as the failures of the Obama Administration.

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