Tuesday, January 26, 2010

Freeze? Or Punching Hippies.

I opened the Times this morning and the first thing I saw was:

Obama Seeks Freeze on Many Domestic Programs

President Obama will call for a three-year freeze in spending on many domestic programs, in a move meant to signal seriousness about cutting the budget deficit.

My immediate response is unprintable. Suffice it to say it was not entirely unlike F*&k!!!!!!!! Then I saw this headline from TPM:

Obama Endorses Debt Panel Opposed By Progressives

Here's the problem. Even if these policies are actually good, in the superheated media environment of today, no one will know it. For example:
Sully: 1.2 Million Jobs
That's one estimate of the impact of the stimulus money most Americans think was a waste. Roger Ailes has been working hard, hasn't he?
Greg Sargent:
* Another reason Dems might consider passing a health bill: Remember how their long-ago surrender on gun control caused Republicans to abruptly cease and desist with their attacks over it?
John Cole:
according to the twitterati, Obama is foolishly proposing a three year freeze on non-security discretionary spending. I think I’m getting off easy by missing the freakout this will cause. I’m only getting cut into with sharp knives. Krugman and Atrios are going to EXPLODE.
I’m attempting not to freak out because (a) I don’t have details and (b) I suspect this initiative was deliberately leaked to progressive bloggers in an effort to get denounced by the left and I don’t want to give them the satisfaction.
Atrios: Giving Up
Chuck Toddler informs us that Obama, in SOTU, will push for 3 year non-defense discretionary spending freeze.

And then, I suppose, he'll "focus" on jobs. Message: Obama cares.

We are ruled by idiots.
Yglesias: Obama Budget to Call for Freeze in Non-Security Discretionary Spending

On an exciting phone call with progressive internet writers earlier this evening, a senior administration official outlined the Obama administration’s plan to call for a freeze in non-security discretionary spending spending starting with the Fiscal Year 2011 budget. Described as an effort to balance concern with a “massive GDP gap” in the short run and “very substantial budget deficits out over time,” the plan calls for the FY 2011 budget to be higher than the FY 2010 budget, but then for non-security discretionary spending to be held constant in FY 2012 and FY 2013. (Let me note right here that all of the reporters on the call, myself included, screwed up and forgot to seek clarification as to whether this is a nominal freeze or a real dollar freeze).

The freeze would not apply to the Department of Defense, the Department of Veterans Affairs, the Department of Homeland Security, or to the foreign operations budget of the State Department. The official emphasized that the freeze is not the only element of the administration’s plans for deficit reduction, just the only element he was prepared to discuss on this particular call. “This is only one component of an overall budget,” he said, “you’ll see other components on Monday.”

So is this an across-the-board freeze like we’ve heard Republicans call for? No, it’s “not a blunt across the board freeze.” Rather, some agencies will see their budgets go up and others will go down, producing an overall freeze effect. The senior official sought to portray this as not just a question of spending less money, but of getting our money’s worth—cutting (unspecified) ineffective programs and spending more on programs that work.

This of course leaves some serious unanswered questions about both specifics and political strategy. To try to game this out, let’s assume that Obama is really serious about tackling weak claims rather than weak claimants. That means you’ll see a proposal for drastic, politically unrealistic cuts in farm subsidies while keeping in place growing funding for useful things like community health centers. So what happens when that hits congress?

Scenario one is that self-proclaimed deficit hawks like Kent Conrad turn out to like farm subsidies, decline to implement those cuts, and pass a budget that doesn’t actually freeze spending. Then Obama gets to chide them, and say it’s not his fault congress is so spendy.

Scenario two is that self-proclaimed deficit hawks turn out to like farm subsidies, and Obama launches a big political crusade on behalf of his cuts, threatening to veto anything that doesn’t come close to the spirit of what he’s proposing. That would be . . . interesting.

Scenario three, the really troubling one, is that self-proclaimed deficit hawks turn out to like farm subsidies, and Obama draws a line in the sand over the concept of a freeze, while being flexible about the details. Under that scenario, the weak claims don’t get cut and instead the politically powerless need to bear the brunt of the burden of a tactical political gambit.

Last, though probably least likely (call it Scenario Q) the administration has actually tried to draw up what it thinks is a politically realistic list of spending cuts that doesn’t touch the most famously untouchable areas of the budget. I don’t even have any idea what that would look like.

Last week in a paper for CAP, Michael Linden criticized undue emphasis on discretionary spending freezes as a solution to fiscal problems:

Freezing discretionary spending, the spending that Congress reappropriates every year, at current levels will similarly yield only very small budgetary savings. The federal government spent a bit more than $625 billion on non-defense discretionary programs in 2009. The Congressional Budget Office projects that, in five years, the federal government will spend about $660 billion on the same programs. Freezing non-defense discretionary spending at current levels would therefore only produce a total savings of $35 billion in 2015. That year, the budget deficit is expected to be around $760 billion. Saving $35 billion would solve less than 5 percent of the problem. There may be some savings to be found in non-defense discretionary programs, but a spending freeze would accomplish extremely little in the way of measurable deficit reduction.

The official emphasized that there’s more to the administration’s plans that this freeze proposal, though what that might be will have to wait. Suffice it to say that I’m very skeptical of this approach. I’m attempting not to freak out because (a) I don’t have details and (b) I suspect this initiative was deliberately leaked to progressive bloggers in an effort to get denounced by the left and I don’t want to give them the satisfaction.

A very good and timely interview.
White House explains spending freeze
Jan. 25: Rachel Maddow talks with White House economic advisor Jared Bernstein about the breaking news that President Barack Obama will announce a "non-security" spending freeze in his State of the Union address later this week.

Visit msnbc.com for breaking news, world news, and news about the economy

Amato (C&L): If you never bash Bush, how can there be a Bush-bashing strategy?
Jonathan Martin reports in The Politico that the Bush-bashing policy has not worked for the Democrats so they are abandoning it.

After three consecutive losses in statewide races, some top Democrats are questioning a tactic aimed at boosting the party’s candidates in each of those contests: Bush-bashing.

Running as much against the Bush White House as he was running against Sen. John McCain, Barack Obama easily carried Virginia, New Jersey and Massachusetts in 2008.

Bashing Bush in local races will not help if it doesn't emanate from the White House. Axelrod never made it a priority to attack conservatism and George Bush or Ronald Reagan and the country was primed for it. They did mention that Obama inherited this mess from Bush, but they missed a monumental chance to shake conservative principles for years to come, had Barack Obama actually attacked not just Bush but conservatism and called it (rightly so) a complete failure, beginning from the day he decided to run for president.

And then he could have pilloried them the entire time, both in the campaign and even after he took office. Reagan blamed liberals and big government constantly for his early failures, and it worked for him. Bush followed suit and bashed Clinton, but for some reason they didn't find it appealing.

The country witnessed a complete meltdown under George Bush except for the very wealthy, but if you never make the case on a national level, Americans will soon forget about him and blame the person that is in charge because their lives are no better. In reality, it takes years to dig out of the kind of economic collapse we just witnessed, if at all.

Democrats said that invoking Bush’s name doesn’t have the same impact now, in part for a fairly obvious reason: He’s not in charge anymore.

And the anger toward the political establishment that helped lift Obama and so many Democratic candidates in 2008 has now been transferred to the party in power.

If President Obama and his staff had made Bush bashing -- and calling out conservatism -- a priority, it would have been a potent weapon, because they had the truth on their side. Instead, it was another lost opportunity and now it falls to bloggers to make the case that conservatism is an ideology that doesn't succeed. It's never worked, and it never will work. Conservatives like to forget that Ronald Reagan raised taxes because he had to. If he didn't he would have been a single-term president.

Yglesias: Reframing Public Ignorance

I think the right way to interpret the news that most Americans think the stimulus money has been wasted rather than helping them is pretty obvious. Most people don’t know a lot of macroeconomic theory, most people don’t pay a lot of attention to politics, and most people recognize that the unemployment rate is ridiculously high. Ergo, they’ve decided the money was wasted.

Joe Klein has a good piece laying out the truth but I also think it’s a textbook example of how not to talk about gaps in the public’s knowledge of policy disputes. Calling the country “too dumb to thrive” or wondering if we’ve become “a nation of dodos” is way too harsh. It also opens the door for basic observations about public ignorance to be caricatured as elites sneering at the common man.

The fact of the matter, however, is that most people don’t know much about most things. I know a lot about US politics and policy debates and the NBA. I know less about the NFL, indie rock, various TV shows, etc. I know very little about contemporary literary fiction or soccer or plumbing or automobile repair or legitimate theater or chemistry or firearms or fashion or any number of other topics that lots of people seem extremely well-informed about. The simple fact of the matter is that there’s only so much time in the day and everyone can only know about so many things. I write about politics and policy debates for a living so I’d really better know a lot about it. Plenty of people who don’t deal with these issues professionally find them interesting, which is great. But plenty of other people don’t find them interesting and consequently they don’t know much about it. That’s not the same as them being “dodos.”

The problem isn’t that we need people to turn into utopian citizens, Stakhanovites of deliberative democracy eager to sink their teeth into every issue. The problem is that we need elected officials and political operatives who are willing to take responsibility for the idea that they will be judged first and foremost on the basis of outcomes. You don’t need an economic policy that people approve of, you need an economic policy that produces results people approve of—i.e., growth and jobs. You wouldn’t fix the toilet by polling people about what they think you should do, you would ask someone who knows how to fix toilets.

Sully: Big Babyism

Listen to an enraged Independent:

I believed that Obama would try to level the playing field between big business and small, between thieves and honest business people, between greed and moderation. Instead, he bailed out the most wicked and left the rest of us fail.

I watched with horror as Obama followed Bush's lead in bailing out banks, auto makers, insurance companies, all of those companies deemed "too big to fail." What does that mean? My small company got thrown under the bus and my savings were ravaged - perhaps Wall Street is using them for bonuses this year.

Not to mention President Obama is recklessly spending our country's future into oblivion. It was clear after just 90 days what a mistake I'd made. My taxes have gone up and my quality of life has gone down.

If this is the basis for revolt, what can one say?

If Obama and Bush had refused to bail out the banks, does this small business owner believe she'd be in business at all? Is she demanding - in a conservative outlet - that the federal government bail out all small businesses in trouble? Or what? Who "threw" her small business under which bus? And then the usual reckless spending schtick - when basic economics will tell you that drastically tightening your belt in a recession that might have been as bad as the 1930s would not exactly have helped small business.

What you have here is big babyism. After the worst downturn in memory, bequeathed a massive and growing debt, two failing wars, a financial sector threatening to bring down the entire economy, Obama has betrayed this person by preventing a Second Great Depression.

We will hear more of these non-sequiturs; the 24-hour news cycle prevents any memory past the last six months; the easy, lazy meme of Obama-the-lefty will be pressed home by FNC/RNC and the MSM will grab onto it because it's a narrative they can understand and that helps insulate them from charges of bias. That none of this has any direct relationship with economic and political reality is barely relevant.

Sully: Big Babyism, Ctd
Many readers have noted that in that "enraged Independent piece", the writer claims that her taxes have gone up. A simple challenge to RealClearPolitics: can the writer show which taxes of hers went up? Could RCP clarify?
Sully: Big Babyism, Ctd

A reader writes:

Like the RCP writer, I too am a small business owner that felt the effects of the downturn in the recession. Business ground to a halt in January/February…..we were still getting paid for some contracts that were ending, but by February, no more money was coming. I endured 3 months without a paycheck from my business, my only income coming from the part-time job that I’ve held the last few years to help keep my head above water month to month (thanks Self Employment tax!). Luckily, my parents helped me out as well, and I was able to eat, and pay for basic services.

By the end of February, I saw the writing on the wall, and started looking for jobs. 3 months and 3 interviews later, I got lucky enough to land a position with a large publishing company. During the 3 months, I defaulted on my mortgage, and dug an ever deepening hole of debt, one that I’ve been trying to get out of for the last 3 years. Thanks to the legislation passed to help homeowners in trouble, I was able to modify my mortgage and keep my condo.

During the whole ordeal, I realized the place my business held in the hierarchy of the economy. An interactive marketing company, employing a handful of people, and using freelancers to get most projects completed. I’m not GM, whose end-product is dependent on hundreds of companies supplying all of the individual pieces of that product. I’m not Bank of America, AIG, or any other behemoth bank with billions invested in this economy. I’m small fish, and wasn’t expecting a bailout.

In the end, I had to bail myself out……ditch the pride….and find something new that would pay the bills. In the face of an economy that I can’t control, I waved my white flag. It was the responsible thing to do.

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