Saturday, December 25, 2010

The Solitary Obama

Here's another article on the peculiar side of Obama, his unwillingness to reach out to anyone beyond his very close (and small) circle of family, friends, and advisors:
Advisers said a more accurate description is of someone simply self-reliant, lacking the insecurity gene that leads other politicians to crave constant attention and seek new acquaintances. "In his private time, he likes to be with his friends," another close White House adviser said. "Admittedly, it's a complaint you hear from fundraisers and reporters - that he doesn't schmooze. But he just doesn't like being with people who he doesn't necessarily know."

But there can be a downside to his cloistered approach: It does not give him ready access to political friendships that can prove helpful in a pinch or let him explore ideas with allies - or foes - outside the formal setting of meetings and phone calls. One Democrat who has been invited to the White House for several meetings said that at one encounter, Obama's appearance was so brief he did not even ask any of his supporters questions or advice.

Some lawmakers see it more as a sign of insularity, if not arrogance. "He doesn't suffer fools, and he thinks we're all fools," one senior Republican member of Congress said.

Several White House advisers said they expect that perception to start to change, in part from political necessity as the president forges new alliances with the Republican Congress...Yet in numerous interviews, donors and outside consultants, along with lawmakers in both parties, complained about what they described as Obama's arm's-length treatment. They did so on condition of anonymity in order to speak freely about the president's personality.

Obama rarely makes a spontaneous phone call, as President Bill Clinton would, or stays well past the dessert course because he is engrossed in conversation. His social encounters are highly scheduled, and to participants they sometimes feel forced unless they are also about work. "He's disdainful of things that make people feel connected to him," one Democratic leader said. "People want to feel like they have a relationship, and he stridently resists."

It is a characteristic that dates back to his early adulthood, at least. On the first page of his autobiography, "Dreams From My Father," Obama describes himself as a 21-year-old loner who was "prone to see other people as unnecessary distractions" and to avoid excessive social contact in his New York neighborhood.

"If the talk began to wander, or cross the border into familiarity, I would soon find reason to excuse myself," Obama wrote in the 1995 memoir. "I had grown too comfortable in my solitude, the safest place I knew."

The Republican lawmaker said Obama "always seems a little uncomfortable" in social settings, unlike his two predecessors.

This year's White House holiday party for members of Congress was no exception, he said. Where Vice President Biden was chatting up members - telling jokes and slapping his former congressional colleagues on the back - and Michelle Obama was "great with kids, and humoring politicians," her husband seemed less enthralled by having guests sidle up to him. In most cases, Obama spent only a moment or two with each at the photo line.

In fact, President George W. Bush was no more fond of cultivating donors or new friends than his successor is, and he tended to retire to the residence at an even earlier hour. But what Bush lacked in enthusiasm for late-night events he made up for in nicknames and jokes. Bush also knew how to win certain men's hearts: He assiduously cultivated Sen. Edward M. Kennedy, inviting his family for a movie at the White House, naming a Justice Department building for Kennedy's brother Robert and hosting a black-tie dinner in honor of his sister Eunice.

People who have worked with Obama acknowledged he is not - and will never be - the kind of jocular creature Bush was, nor overly social as Clinton was. If he is branching out now, either with donors or Republicans, it is to achieve specific goals rather than forge new but vague alliances.

Another veteran Democratic consultant who knows both presidents said that whether Obama relishes it or not, he should be nudged in a more expansive direction in the coming months. Onetime Clinton chief of staff Leon Panetta "walled off time for Clinton not to talk to people. Obama needs the opposite," she said.

Friday, December 24, 2010

Carl's Prediction for 2011

Carl's Predictions for 2011

1.  Jeb Bush will enter the primary race for the Republican Nomination for President and become the instant Republican front runner, gaining support from across the Republican establishment because of their fear of Sarah Palin and the Tea Party. 

2.  Cities and states across the nation will enter a state of severe fiscal emergency, leading to drastic layoffs, conflict over public employee pensions and health benefits, and, in some cases, bankrupcty and default, whatever that looks like for governments at that level.  This will make it totally clear to everyone that the nation has not entered a recovery from the economic crisis and will endanger the political position of Obama, because there is virtually nothing that can be done to resolve the crisis.

3.  The housing crisis will drag on, with no real resolution in sight, leading to increased desperation for middle- and working-class families, and financial problems for banks holding all those mortgages.

4.  After Obama begins to cooperate with the Republicans in Congress in an attempt to 'privatize' at least a part of Social Security, the progressive community will become increasingly shrill in their dismay with Obama, leading quite likely to a progressive challenge in the primaries (particularly if Jeb Bush enters the race on the other side).

5.  The Higher Education Bubble will become more obvious, as more and more colleges raise their tuition and fees, more and more students (rightly) resist taking on loans that they will have trouble paying back, fewer students decide to go to four-year colleges, and more and more colleges begin to falter financially and go bankrupt.

6.  In general, the economic condition of the average person will continue to deteriorate, even as the wealthy continue to enjoy unprecedented levels of prosperity and luxury.  Rising food prices and near record levels of unemployment, combined with the housing crisis and the governmental fiscal crisis, will jeopardize the ability of ordinary people to provide for their housing, food, transportation, health care, and education, let alone the little luxuries like vacations that Americans became used to in the last half century.  Pensions will continue to become things of the past, leading to increased poverty among the elderly, as many baby boomers retire without having made adequate provision for their retirement needs.

7.  It will start to become obvious that the next 'bubble' is health care, and that the cost of American health care is fast becoming unsustainable.  The question will be: how in the heck do we go about rationing health care in order to reduce costs.

8.  On the bright side, immigration will probably cease being the hot-button topic it has been, since the economic opportunities in America will stop looking so attractive to people south of the border.  To the contrary, there will be an increased effort to keep the intelligent and well-educated foreigners who have received Ph.D.s from American universities, in order to increase our R&D.  If Jeb Bush wins the Presidency, he will fashion an acceptable immigration package that will pass Congress.

"Neo-liberal, Unprincipled, Spineless Slimeball"

Krauthammer, as I showed in my last post, is almost glowing in his admiration for Obama recently, a very strange position for a rabid neo-conservative like him.  He makes an attempt to be critical, but it doesn't come across as very convincing, really.  What is one to make of this?

My guess is that Krauthammer is increasingly appreciative of Obama's foreign policy, which (especially in its Zionist aspect) is almost the totality of Krauthammer's concern.  Therefore, he is inclined to be supportive in his own kind of way.  Since Obama is getting so little love from the liberal-left, perhaps Krauthammer thinks that some strokes from his side with go a long way with Obama and make him more inclined toward the conservative cause.

Someone not so supportive of the President is Alexander Cockburn, the leftwing coeditor of Counterpunch and columnist for The Nation.  Suspicious of his intentions, Cockburn suspects that Social Security is going to be the target for Obama and the Republicans in the New Year.
Twenty years ago the supreme prize of the Social Security trust funds – the government pensions that changed the face of America in the mid-1930s - seemed far beyond Wall Street’s grasp. No Republican president could possibly prevail in such an enterprise. It would have to be an inside job by a Democrat. Clinton tried it, but the Lewinsky sex scandal narrowly aborted his bid.

If Obama can be identified with one historic mission on behalf of capital it is this – and though success is by no means guaranteed, it is closer than it has ever been.

This brings us to the upcoming 112th Congress, reflecting Republican gains in November, which will spend the evening of February 2 listening to Obama’s “bipartisan” agenda laid out in his State of the Union address.

The Politico website – reflecting informed political opinion in Washington DC - recently predicted that in this next address, “the teleprompter in chief is expected to announce cuts in Social Security.” As Robert Kuttner of Politico speculates: Obama’s rationale will be “to pre-empt an even more draconian set of budget cuts likely to be proposed by the incoming House Budget Committee chairman, Rep. Paul Ryan (R,Wisconsin), as a condition of extending the debt ceiling. This is expected to hit in April."

But surely for progressives, infuriated by the tax giveaway to the rich, and whose support Obama will be counting on for re-election in 2012, cuts in Social Security will be the last straw? Don’t bet on it. As political beasts of burden, progressives have backs that can sustain a virtually infinite number of straws.

Against the tax betrayal these middle-class progressives will tout the end of Don’t Ask, Don’t Tell. Identity politics will trump class politics, as has been the case for middle-class progressives for the past quarter-century.
Cockburn ends his anti-Obama diatribe in classic style:
As with Clinton, we have a opportunistic, neoliberal president without a shred of intellectual or moral principle. We have disconsolate liberals, and a press saying that Obama is showing admirable maturity in understanding what bipartisanship really means. Like Clinton, Obama is fortunate in having pwogs to his left only too happy to hail DADTell as the rationale for continuing to support this spineless slimeball.

Winning the Triple Crown

Neo-conservative Charles Krauthhammer ungrudgingly gives Obama the highest marks for the lame-duck session of Congress:
Riding the lamest of ducks, President Obama just won the Triple Crown. He fulfilled (1) his most important economic priority, passage of Stimulus II, a.k.a. the tax cut deal (the perfect pre-re-election fiscal sugar high - the piper gets paid in 2013 and beyond); (2) his most important social policy objective, repeal of "don't ask, don't tell"; and (3) his most cherished (achievable) foreign policy goal, ratification of the New START treaty with Russia.

Politically, these are all synergistic. The bipartisan nature of the tax deal instantly repositioned Obama back to the center. And just when conventional wisdom decided the deal had caused irreparable alienation from his liberal base, Obama almost immediately won it back - by delivering one of the gay rights movement's most elusive and coveted breakthroughs.

The symbolism of the don't ask, don't tell repeal cannot be underestimated. It's not just that for the civil rights community, it represents a long-awaited extension of the historic arc - first blacks, then women, now gays. It was also Obama decisively transcending the triangulated trimming of Bill Clinton, who instituted don't ask, don't tell in the first place. Even more subtly and understatedly, the repeal represents the taming of the most conservative of the nation's institutions, the military, by a movement historically among the most avant-garde. Whatever your views, that is a cultural landmark.

Then came START, which was important for Obama not just because of the dearth of foreign policy achievements these past two years but because treaties, especially grand-sounding treaties on strategic arms, carry the aura of presidential authority and diplomatic mastery.

The great liberal ascendancy of 2008, destined to last 40 years (predicted James Carville), lasted less than two. Yet, the great Republican ascendancy of 2010 lasted less than two months. Republicans will enter the 112th Congress with larger numbers but no longer with the wind - the overwhelming Nov. 2 repudiation of Obama's social-democratic agenda - at their backs.

"Harry Reid has eaten our lunch," said Sen. Lindsey Graham, lamenting his side's "capitulation" in the lame-duck session. Yes, but it was less Harry than Barry. Obama came back with a vengeance. His string of lame-duck successes is a singular political achievement. Because of it, the epic battles of the 112th Congress begin on what would have seemed impossible just one month ago - a level playing field.

Thursday, December 23, 2010

Careful, Mr. President

I thought the very same thing as Dana Milbank in viewing Obama's last press conference:
But the man who faced reporters Tuesday afternoon in the Eisenhower Executive Office Building was treated by his questioners as a conquering colossus - and Obama didn't mind wearing those shoes.

"A lot of folks in this town predicted that, after the midterm elections, Washington would be headed for more partisanship and more gridlock," he said to a roomful of people who had predicted just that. "And instead, this has been a season of progress for the American people."

He bestowed superlatives on his accomplishments:

"The most productive post-election period we've had in decades."

"The most productive two years that we've had in generations."

"The most significant arms-control agreement in nearly two decades."

"The biggest upgrade of America's food-safety laws since the Great Depression."

"Al-Qaeda is more hunkered down than they have been since the original invasion of Afghanistan in 2001."

More! Most! Biggest! And when he wasn't praising his accomplishments, he was praising himself: "One thing I hope people have seen during this lame-duck, I am persistent. I am persistent. You know, if I believe in something strongly, I stay on it."

Careful, Mr. President.

The Bipartisanship of the Start Treaty

E. J. Dionne on the Start Treaty and its lessons:
The ratification of the New START treaty was a victory for common sense and the national interest. It was a defeat for a particularly acidic form of partisanship. Are there lessons for the future in how the treaty's ratification was achieved?

President Obama was unambiguous about the importance of this issue to him and relentless in both personal diplomacy with members of the Senate and in gathering impressive outside support. The endorsement of the treaty by secretaries of state of the past five Republican administrations was critical. It made it easier for Republican senators to vote yes, and it undercut the rationale for opposing the treaty offered by Sen. Jon Kyl (R-Ariz.) and his allies. Perhaps Obama's approach here can't work on every issue, but his uncompromising clarity, his willingness to lay his credibility on the line and his full-court press in bringing in outside partners could serve him well on other issues.

He also had in Sen. John Kerry, the chairman of the Foreign Relations Committee, a champion who did everything right when it came to managing the process. All of Kerry's best traits were on display here: his relentless work ethic, his methodical approach to directing the hearings on the treaty and the quiet passion he brings to the cause of arms control. Democrats would do well to figure out similarly appropriate matches of senators and House members to particular issues.

And maybe, just maybe, the list of Republicans willing to join with the Democratic majority on this question provides a roster for potential moderate and moderate-conservative allies on other matters in the next Congress. Ten of the 13 Republican senators who voted yes will be back next year: Lamar Alexander, Scott Brown, Thad Cochran, Susan Collins, Bob Corker, Johnny Isakson, Mike Johanns, Richard Lugar, Lisa Murkowski and Olympia Snowe. I am under no illusions that it will be easy for Republican senators to escape the ferocious pressure to stick with their party. But having declared their independence this time, perhaps it will be a bit easier the next.

Obama's Orphans

E. J. Dionne gives credit to the outgoing Democratic congressmen who passed so much legislation at great cost:
That so many other reforms have been virtually unheralded is another monument to the efforts of Obama's Orphans. Bills that in another Congress would have loomed large were passed with hardly a ripple in the media.

Consider: the new food-safety rules, the big repair in the student-loan program, stronger regulations on the credit-card industry, the creation of a financial consumer protection agency, an improved children's health-care program and a broad expansion of national service opportunities.

The startling achievements of this lame-duck session owed to the decision of Senate Majority Leader Harry Reid and outgoing House Speaker Nancy Pelosi to shun the counsel of those who said they should just pack it in after a bad election. If a certain amount of boldness had cost some of their colleagues at the polls in November, the same audacity would at least permit those on their way out to add to their record. They would use their majorities right to the end.

Our media and political systems are obsessed with presidents. We are also very tough on those who lose, in elections no less than in sports. As a result, end-of-year commentary will concentrate on how much stronger President Obama looks today than he did even a month ago, and on all he got done. The vanquished of 2010 will get barely a nod on their way to the rest of their lives.

But the president's accomplishments were possible only because a group of younger, largely unsung politicians - the infantry of political change - refused to think only about polls, politics and their personal ambitions. Obama's Orphans deserve to take a bow.

Refusing to Crackdown on the Banksters

Joe Klein writes:
This has been a terrific week for Congress, with the exception of the mean-spirited rejection of the Dream Act. But, as the great Joseph Stiglitz points out today, there was one area where Congress punted this year: cracking down on the speculators who gave us the financial collapse of 2008 and the Great Recession. Stiglitz identifies two serious evasions of responsibility: the failure to break up the big six "too-big-to-fail" banks in the financial reform package, and the continued aggrandizement of the wealthy in the tax-cut compromise package just passed. (I thought the President got the best possible deal, but I'm still appalled by the Republicans' hypocrisy in yapping about the need for budget discipline, while demanding more and greater tax breaks for people who don't need them.)

I'm sure it will be impossible to accomplish--I'm pretty sure the President will want no part of this, having struggled through financial reform last year--but I'd love to see that issue reopened. If we're going to escape the toxic, speculation-fueled economy of the past 30 years, we need to do two things: First, break up the big banks, while forbidding them from trafficking in gambling instruments like credit-default swaps. Second, and perhaps more important, change the incentive structure for smart young people emerging from business schools--making financial speculation less attractive and work in the productive economy moreso. The best way to do this would be to tax the private equity and hedge fund crowd the same way other wealthy Americans are, and second to tax financial transactions on a sliding scale--with higher rates for trafficking in instruments that have little to do with investment in companies that actually produce things.

Obama's Stunning Comeback

David Gergen analyzes the recent spate of year-end legislation:
What happened? One answer, I would submit, is that the president and his team found a better approach to governing: Instead of relying on the Democratic caucus in each chamber to deliver, they built up coalitions of their own that swayed public opinion in their direction and gave them leverage in Congress.

On the extension of tax breaks -- along with several other tax breaks the president wanted -- the White House cut a deal with Sen. Mitch McConnell and other Republicans. Liberal Democrats naturally cried foul, but the White House-GOP coalition sent a persuasive signal to the public that this was a reasonable compromise. Polls showed the public coming down in favor, and as night follows day, Congress voted the compromise into law. (Contrast how quickly the public turned against the health care reform when it was a Democrats-only bill.)

On "don't ask, don't tell," and on START, the White House had a different, but equally formidable, coalition that helped to turn the tide in the president's direction. The fact that Bob Gates -- one of the most respected defense chiefs in history -- and the chair of the Joint Chiefs, along with the poll of service members, came out in favor of repealing DADT made a huge difference in swaying both public opinion and Congress.

START appeared all but dead until the president assembled a group of Republican heavyweights -- from George H.W. Bush and Kissinger to Baker and Shultz -- whose vocal support for the treaty reversed the momentum.

In each case, there were also Senate stalwarts -- Joe Lieberman and Susan Collins on DADT, John Kerry on START -- who delivered, too.

From my biased perspective, I also thought the president was more effective because he seemingly played these fights more from the background than the foreground. We heard about him each day making phone calls, bringing in votes, but we didn't see him so constantly at the podium. It worked!

The net result is that President Obama has regained his mojo much more quickly than anyone, including his closest advisers, might have imagined. Even Bill Clinton did not bounce back from his mid-term defeat so quickly.
If you ask me, the best metaphor would be a newbie boxer, all bloodied and beat up in the corner after nine punishing rounds, coming out for the final round of the match and simply letting loose with a flurry of punches that takes his opponent completely by surprise and K.O.'s him before he knows what has happened.  Nobody (least of all me) expected it, but it happened.  The newbee wins the match and the chance to fight again.

Or to use a different sports metaphor, the lame duck session was like the Philadelphia Eagles comeback over the New York Giants last Sunday.

At first, like so many, I was really upset that Obama seemed to be giving in to the Republicans on the tax-cut deal.  It appeared to be a fiscally irresponsible package as well (and still may be, ultimately), swelling the deficit as it does, as well as endangering Social Security with its 2% FICA tax cut. 

But what seems to have happened was that this deal was the explosive that cleared the log jam from other pieces of legislation that needed a bipartisan approach.  More centrist (or at least reasonable) Republicans began to break free from the prison cell of the Republican NO and became willing to vote for sensible, timely, centrist and popular legislation such as the repeal of DADT and the New Start treaty.

Any number of legislators should share the credit with Obama: Lieberman (of all people) on the DADT, John Kerry on the New Start treaty, and, though he's not a legislator, Jon Stewart on the 9/11 Health legislation (for having a dynamite interview with some 9/11 First Responders on his last show of the season on Thursday).

But I must admit that I share everyone's surprise and joy that the Senate was able to pass such a slew of needed and important legislation in the lame-duck session.  And Obama certainly gets a good deal of the credit.  It's a great Christmas gift to the nation from Washington!!

Sunday, December 19, 2010

Moderate Republicans Free to Vote Their True Preferences (At Least For a Couple of Days)

Jon Stewart may have helped pave the way for the 9/11 First Responders Health Bill that has been stalled in the Senate, by having a moving interview with four First Responders on his last Daily Show of the year.  Now, it looks like it may get the three Republican votes it needs.  Mark Kirk (of Illinois), along Murkowski, Collins, and Snow are voicing support for it.

The recent tax-deal looks like its broken the ice jam on the Republican side, freeing some of the more moderate Senators to vote their heart and true mind on some bills opposed by their leadership.  We've known that the Maine ladies were moderate, but it's been nice to see the new Senator from Illinois, Mark Kirk, coming along as well.  I preferred him over Obama's choice, the corrupt banker Alex Giannoulias, in the last election.  Kirk, an officer in the military, also voted for the repeal of DADT.

This may have been the best result of an otherwise troubling tax-deal.  Bipartisanship is busting out all over!

The Bitterest Man in Washington

We may have reached the high water mark of reform of this administration with the repeal of DADT yesterday in the Senate.  In the end, a center-left (and even a few conservatives like Lieberman) coalition of 57 Democrats and 8 Republicans voted to allow gays and lesbians to serve openly in the military.  To his credit, President Obama was working for this with a quite drawn-out-but-probably-necessary process, going through a study in the military to gain the support of most of the top leaders there, which, in turn, led to enough cover for the moderates of both parties to vote yes.  Ironically, it was probably a true conservative Independent stalwart who made this possible, Sen. Joe Lieberman, who came to it with quite a passion.

The Senator who probably made quite a fool of himself during the whole process was John McCain.  One wouldn't have thought this, given his more moderate views in the past, but it's true:
Saturday's debate on the repeal of the "don't-ask-don't-tell" policy was only half an hour old when the Arizona Republican burst onto the floor from the cloakroom, hiked up his pants and stalked over to his friend Joe Lieberman (I-Conn.) and Senate Majority Whip Dick Durbin (D-Ill.). Ignoring Sen. Jim Inhofe (R-Okla.), who had the floor, McCain hectored the men noisily for a few moments, waving his arms for emphasis.

When McCain finally stormed off, Durbin shook his head in exasperation and Lieberman smiled. A minute later, McCain returned - he had apparently remembered another element of his grievance - and resumed his harangue.

It turns out McCain's fury was stirred by a trifle - he had wanted more time for the debate, which the Democrats eventually gave him - but that was typical. It doesn't take much to set off McCain these days.

McCainologists in the Capitol speculate that on this and other issues he's driven less by policy consideration than by personal animosity. A decade ago, his antipathy toward President George W. Bush led him to seek common cause with Democrats to thwart a Republican president. Now his antipathy toward President Obama has made him a leading Republican hardliner.

On Saturday, McCain's rage was all the more striking because the general tone of the debate was tame. Republicans were mostly defensive, objecting not to the service of homosexuals in the military but to procedures and other technical matters. Sen. Saxby Chambliss (R-Ga.) said of the repeal: "Should it be done at some point in time? Maybe so, but in the middle of a military conflict is not the time to do it."

Such tactical arguments made it appear that the opponents were standing against the inevitable tide of history. Lieberman said the repeal would "advance the values that the founders of our country articulated in our original American documents."

In the end, McCain lost eight Republicans as the ban was easily overturned. This wasn't entirely surprising, because Defense Secretary Robert Gates (a Bush administration holdover) and Joint Chiefs Chairman Mike Mullen both argued passionately for repeal, and a Pentagon study forecast that a repeal would not bring significant harm.
Is it possible that having lost so many times to both Republicans and Democrats in his drive for the Presidency has simply pushed McCain over the edge? If so, I think it actually happened before this, when he foisted Sarah Palin upon the country two years ago, in what has got to be the worst political move EVER. He'd have probably won if he had picked someone more acceptable to the broad range of Americans.

"This is a very sad day," he said on the floor of the Senate.  Words he will probably live to regret.  Poor John McCain...the bitterest man in Washington.

No True Reform in Sight from 'No Labels'

Frank Rich pans the new 'independent' organization 'No Labels', for not getting to the heart of what ails 21st century America:
In its patronizing desire to instruct us on what is wrong with our politics, No Labels ends up being a damning indictment of just how alarmingly out of touch the mainstream political-media elite remains with the grievances that have driven Americans to cynicism and despair in the 21st century’s Gilded Age.

The marquee names on hand included Michael Bloomberg; Senate Democrats (Kirsten Gillibrand of New York, the incoming Joe Manchin of West Virginia); moderate Republicans drummed out of office by the Tea Party (Charlie Crist, Mike Castle); and no fewer than four MSNBC talking heads. Despite Bloomberg’s denials, some persist in speculating that No Labels is a stalking horse for a quixotic 2012 presidential run. At the very least the organization is a promotional hobby horse for MSNBC.

Yet what’s most disturbing about No Labels is that its centrist, no doubt well-intentioned leaders seem utterly clueless about why Americans of all labels are angry: the realization that both parties are bought off by special interests who game the system and stack it against the rest of us. Indeed, No Labels itself is another manifestation of this syndrome. Its two prime movers are a political consultant, Mark McKinnon, a veteran of the Bush and McCain campaigns known for slick salesmanship; and a fund-raiser, Nancy Jacobson, who, along with her husband, the pollster and corporate flack Mark Penn, helped brand the Hillary Clinton presidential campaign as a depository for special-interest contributions.

No less depressing is the No Labels veneration of Evan Bayh, the Democratic senator from Indiana who decided to retire this year rather than fight for another term. For months now, Bayh has been positioning himself as a sacrificial lamb to broken Washington; when he made the rounds plugging No Labels last week, he was greeted as a martyr on MSNBC. What goes unmentioned in the Bayh morality tale is that in quitting the Senate without a fight, he became part of the problem rather than the solution: his exit facilitated the election of a high-powered corporate lobbyist, Dan Coats, as his Republican successor. Then again, Bayh’s father — another former liberal Democratic senator — is also a lobbyist. (Evan Bayh has so far been mum about his own post-Senate career plans.)

This is exactly the kind of revolving-door synergy between corporate power and governance that turns off Americans left, right and, yes, center.

WHAT America needs is not another political organization with a toothless agenda and less-than-transparent finances. The country will not rest easy until there are brave leaders in both parties willing to reform the system that let perpetrators of the Great Recession escape while the rest of us got stuck with the wreckage.

Our political leaders seem more inclined to hasten the next bust — and perhaps cash in on it — than prevent it. Massachusetts Republicans can’t be blamed if they react with anger, not civility, to The Boston Globe’s new revelations that Scott Brown raked in off-the-charts donations from the finance industry while toiling to weaken the financial regulatory bill. Democrats are equally entitled to be outraged that Obama’s former budget director, Peter Orszag, has followed the egregious example of his mentor, Robert Rubin, by moving from the White House to a job at Citigroup — and only four months after leaving government service.

As The Times reported, Citi is now marketing all-new lines of loosey-goosey credit cards to debt-prone Americans much as it stoked the proliferation of no-money-down mortgages during Rubin’s tenure in the housing bubble. It can do so with impunity, since the incoming chairman of the House Financial Services Committee, Spencer Bachus, has already guaranteed institutions like Citi a pass. As Bachus’s instantly notorious pronouncement had it, “My view is that Washington and the regulators are there to serve the banks.”

In truth, this congressman’s view has been the prevailing view in Washington under both parties since the Reagan administration. If No Labels is the best our centrist political establishment can come up with to address the ills eating away at America, its culture is as bankrupt as Citigroup would be if taxpayers had been allowed to let it fail.
I am sad to hear this. I was hoping that a 'third party' centrist movement might address the very political issues cited by Frank Rich. But the name 'Evan Bayh' doesn't impress me much...he's always come across to me as a corporate toady.

Friday, December 17, 2010

Obama Channels Woodrow Wilson

Bush speech-writer Michael Gerson argues something unusual about President Obama:
Rather than explaining the economic benefits of the bill and taking quiet credit for a moment of bipartisanship, Obama launched into an assault on partners and opponents. Republicans are "hostage-takers" who worship the "Holy Grail" of trickle-down economics. Liberal opponents are "sanctimonious," preferring their own purity to the interests of the poor. The president did not just attack the policy positions of nearly everyone in the political class. He publicly questioned their motives.

It is difficult to imagine the president's advisers sitting in the Oval Office and urging this approach: "Mr. President, the best course here would be to savage likely supporters of the bill and to embitter your political base. This will show just how principled you are, in contrast to the corruption and fanaticism all around you." There can be little doubt this communications strategy was Obama's own.

It is the president's favorite rhetorical pose: the hectorer in chief. He is alternately defiant, defensive, exasperated, resentful, harsh, scolding, prickly. He is both the smartest kid in class and the schoolyard bully.

There are many problems with this mode of presidential communication, but mainly its supreme self-regard. The tax deal, in Obama's presentation, was not about the economy or the country. It was about him. It was about the absurd concessions he was forced to make, the absurd opposition he was forced to endure, the universally insufficient deference to his wisdom....

The ineffectiveness of Obama's political and communications staff may be part of the problem - and the administration is now hinting at significant White House personnel changes in the new year. But an alternative explanation was on display this week. Perhaps Democrats did not elect another Franklin Roosevelt or John Kennedy but another Woodrow Wilson - a politician sabotaged by his sense of superiority.

In the tax debate, Obama has proved a quarrelsome ally and a dismissive foe, generally dismayed by the grubby realities of politics. He doesn't suffer fools gladly. Unfortunately, he seems to put just about everyone who disagrees with him in that category.
It's interesting that Gerson should compare Obama to President Wilson, because I've just been reading one of the classic histories of the Wilson administration by Arthur Link, and several times I was struck by the similarity of what I was reading to this President. Here's one example:
There was, however, a less happy side to the Wilsonian character. Except for Colonel House, the group [the Cabinet and inner White House circle] did not always enjoy satisfactory personal relations with their chief. Several of them bitterly resented Wilson's aloofness, his social sang-froid. Worse still, practically all of them knew that when really vital questions were involved, Wilson did not want their advice unless it complemented his own thought or prejudice....Personally, Wilson had changed little over the past ten years, except that advancing age had sharpened his traits of personality. He was still as much as ever intrigued by ideas and bored by details. A scholar rather than an intellectual, fascinated by ideas that had practical uses but not given to speculative thinking, intensive but restricted in his reading, Wilson's absorption with public affairs after 1910 demanded all his time and meager physical resources.
And then there was the complaint about Wilson's turning away from the 'progressive movement' of the day, on which he had run.  After a few minor progressive legislative victories (akin to Obama's health insurance reform), Wilson turned away from progressivism.  Uber-progressive Herbert Croly of the New Republic magazine, who had been a key ally of Republican but progressive Theodore Roosevelt, wrote critically of President Wilson at that point:

"How can a man of his shrewd and masculine intelligence possibly delude himself into believing the extravagant claims which he makes on behalf of the Democratic legislative achievement?...How many
sincere progressives follow him in believing that his legislation has made the future clear and bright with the promise of best things?....Any man of President Wilson's intellectual equipement who seriously asserts that the fundamental wrongs of a modern society can be easily and quickly righted as a consequence of a few laws...casts suspicion either upon his own sincerity or upon his grasp of the realities of modern social and industrial life.  Mr. Wilson's sincereity is above suspicion, but he is a dangerous and unsound thinker upon contemporary political and social problems.  He has not only...'a single-track mind,' but a mind which is fully convinced of of the everlasting righteousness of its own performances and which surrounds this conviction with a halo of shimmering rhetoric.  He deceives himself with these phrases, but he should not be allowed to deceive progressive popular opinion."
Wilson biographer Arthur Link concludes:
Croly's analysis of the superficial character of Wilson's progressivism was essentially correct.  There is little evidence that Wilson had any deep comprehension of the far-reaching social and economic tensions of the time....To try to portray such a man as an ardent social reformer is to defy the plain record. (Woodrow Wilson and the Progressive Era, pages 32-33, 79-80)

Thursday, December 16, 2010

Holbrooke and Obama on the War in Afghanistan

I had always thought that Richard Holbrooke was a 'hawk' in foreign policy, such that he supported, for example, Obama's Afghanistan 'surge'.  Wrong.

What I've learned in several articles published since Holbrooke's recent death is how much Holbrooke disagreed with Obama's military buildup in Afghanistan. Here's the first:
According to White House insiders, Holbrooke was an outspoken critic of Obama’s Afghan strategy, as it was being developed in advance of last year’s West Point speech. The much-discussed policy of a troop surge followed by a hasty withdrawal seemed ill-considered to the veteran diplomat, who cut his foreign policy teeth on the catastrophe of Vietnam.

“It can’t work,” he is reported to have said of the White House plan. Holbrooke was opposed to an escalation of the war without a clear exit strategy, something that he said loudly and repeatedly.

According to “Obama’s Wars,” Bob Woodward’s detailed account of the debates surrounding Obama’s Afghanistan policy, this earned him the impatience and even the distrust of the White House incumbent.

“Holbrooke believed that [the policy group] had not acknowledged a central truth: The war — or the American role in the war — would not end in military victory,” wrote Woodward. Holbrooke, he added, believed in reconciliation — a genuine outreach to the other side.
And then here's another, this one by terrrorism expert, Peter Bergen:
This [the military getting everything it wanted] was quite surprising, given the misgivings that so many of Obama’s key advisers had about ramping up American forces and efforts in Afghanistan. Lieutenant General Douglas Lute, the point person at the National Security Council for Afghanistan under both Bush and Obama, is quoted as saying that “I can’t tell you that the prospect here for success is very high.” Biden consistently took the view that “the war was politically unsustainable,” while his national security advisor Antony Blinken opined that “I don’t know if they can ever pull this off.” Obama's top counterterrorism advisor, John Brennan, thought that countries such as Yemen and Somalia were potentially more of a threat to the United States: “Afghanistan was a small piece of real estate … his worry was the rest of the world”. Rahm Emmanuel termed the war “political flypaper.” Of the president’s national security team, on the civilian side only Robert Gates and Hillary Clinton seemed to embrace wholeheartedly a large increase of American forces in Afghanistan. It is hard to recall another American war in which so many of the president’s top advisers were so ambivalent about approving a substantial escalation of forces.

More serious than what the key players told Woodward or one of his sources about their misgivings about the war—and, in fairness, who wouldn’t have misgivings about the outcome of something as complex as the war in Afghanistan?—were the official dissents about the evolving Afghan strategy filed by Karl Eikenberry, the U.S. ambassador to Afghanistan. Those dissents carried special weight as Eikenberry had served two tours in Afghanistan as a senior military officer, including as commanding general in 2006: he could hardly be considered a critic of the Pentagon, and he had also spent three years living in Afghanistan. In the first of two stinging cables that he filed to Clinton in November 2009, Eikenberry described Karzai as “not an adequate strategic partner” and raised serious questions about the abilities of the Afghan army and police to grow in size and efficacy. In his next cable, Eikenberry poured considerable cold water on McChrystal’s counterinsurgency plan, which he pointed out was not matched by a similar effort on the civilian side, and would cost a great deal, while it had scant chance of success if the Taliban continued to have a safe haven in Pakistan. Instead of sending a sizable new contingent of American soldiers, Eikenberry made the anodyne recommendation to appoint a “panel of civilian and military experts to examine the Afghanistan-Pakistan strategy.”
According to both articles, here's the talley of civilian leaders in the Adminstration opposed to the surge in Afghanistan: Vice-President Biden, Afghan Ambassador Eickenberry, John Brennan (Obama's anti-terrorism advisor), Lt. Gen. Lute (Obama's NSC Afghanistan advisor), and master diplomat Richard Holbrooke.

Who was in favor? Robert Gates and the Pentagon, according to those articles.  (And Hillary Clinton, according to one, though I'm a little skeptical on that, given that Holbrooke was Clinton's foreign policy advisor and probably would have been Secretary of State in a Hillary Clinton administration.)

Interesting. So, how's it going, Mr. President?  Funny, I thought you said we'd be seriously withdrawing in 2011?  Now it's 2014.  I didn't believe it when you said 2011, anyway, so I'm not surprised.  But one thing is true: this will give you more chances to get on your 'commander's jacket' and fly over there in Air Force One, which you like so much.  Especially now that you and your base are 'at odds' over things, and you might just prefer to be out of Washington.

I guess every 'great' President's got to have their war.  Herbert Hoover (and Presidents like him) never got a monument, because he didn't have a nice war to run.  And, God forbid, Jimmy Carter failed miserably because he didn't take on the Iranians.  But Washington (Revolutionary War), Lincoln (Civil War), Roosevelt (WWII), now they're the 'great' ones, because they presided over wars.  That's what gets a nice monument in Washington when you're dead.

The Weeper of the House

Gail Collins on 'the weeper of the House', cryin' John Boehner:
O.K. About Boehner. Many of us first noticed his tendency toward tears when he appeared on election night to celebrate his party’s taking control of the House. He had hardly gotten in front of the microphone before things got watery.

“I spent my whole life chasing (sob) the American dream,” he told the cameras. “Put myself through school, working every rotten job there was ...”

The American Dream has had such a bad year. During the campaign, it was tossed around by billionaire candidates who insisted on telling groups of underprivileged children that they, too, could someday own a mega-yacht or run a slimy but extremely profitable health care corporation.

Now, John Boehner is blaming the Dream for making him howl like an abandoned puppy. It’s what my friend Rebecca Traister calls “Boehner doing Masterpiece Theater on the hard life of John Boehner.”
I used to cry once in a while in the pulpit, so I'm not against men crying.  But isn't his crying a bit self-centered? It's really all about him, his aspirations, his career, his 'tough' childhood. That's my gripe with it.

Wednesday, December 15, 2010

The Estate (aka 'Death') Tax Explained

Like so many, I've been sadly ignorant over the years about many economic issues, including on the estate (aka 'death') tax.  Ezra Klein, one of God's gifts to us, explains in very simple terms  the estate tax on his blog:
The basic insight behind the estate tax is that wealth concentration is a problem. That was true in 1916, when the tax was enacted, and it's true today, when it's being neutered. As Ray Madoff explains, the going theory came from Louis Brandeis, who said, “We can have concentrated wealth in the hands of a few or we can have democracy, but we can’t have both.” Andrew Carnegie himself testified in favor the estate tax's creation.

The way it works is simple enough. There's an exemption level beneath which estates are not taxed, and a tax rate that applies to every dollar the estate is worth above the exemption. In 2001, we had a $675,000 exemption and a 55 percent tax rate. So if you were inheriting an estate worth $700,000, you had to pay a 55 percent tax on that final $25,000. The estate tax's levels, however, have been changing because the Bush tax cuts -- as you can see in the table on the right -- have been phasing it out. In 2002, it was $1 million, and 50 percent. By 2009, the exemption was up to $3.5 million, and the rate down to 45 percent. And in 2010, the estate tax was repealed.

But not for long. If no action is taken, it returns in 2011 with an exemption of $1 million and a rate of 55 percent. If that seems like weird tax policy -- a single year in which death carried a huge tax break -- it is. But it was never about tax policy. It was a political strategy: Republicans wagered that Democrats wouldn't be able to bring the estate tax back after it had expired.

The dominant alternative to the estate tax's return -- which had support from both Republicans and, sadly, Democrats -- was the Lincoln-Kyl bill: A $5 million exemption with a 35 percent rate. This is the language that has been included in the tax deal.

So how much does this cost? With a $1 million exemption and a 55 percent rate -- in other words, what will happen if we do nothing -- the estate tax would raise about $700 billion over the next 10 years. The Lincoln-Kyl version would raise less than $300 billion. And the compromise most Democrats have coalesced around -- which was the 2009 level, with a $3.5 million exemption and a 45 percent rate -- would've brought in a bit less than $400 billion.

It's important to keep in mind the cramped space of this debate: If the tax goes back to its scheduled levels, it'll tax 2 percent of estates, If the Lincoln-Kyl levels are put in place, it'll tax 0.25 percent of estates. But the difference between the hundreds of billions the tax could raise and the miniscule number of estates it would affect explains the immense energy Republicans and some Democrats (notably Blanche Lincoln, who has traditionally raked in campaign money from the Walton family) give to the issue. In a report called "Spending Millions to Save Billions," Public Citizen and United for a Fair Economy estimated that a handful of the country's richest families had spent more than $400 million lobbying for the tax's repeal -- and of they were successful, they stood to save more than $70 billion.

For the rich, fighting the estate tax is simple a good investment. And it looks like it's paying off.

Tuesday, December 14, 2010

Two Economies: Big Money vs. Average Worker

In response to Michael Gerson's column, I talked below about the big picture economic issues.   Robert Reich continues along that line here:
America's two economies are getting wider apart.

The Big Money economy is booming. According to a new Commerce Department report, third-quarter profits of American businesses rose at an annual record-breaking $1.659 trillion -- besting even the boom year of 2006 (in nominal dollars). Profits have soared for seven consecutive quarters now, matching or beating their fastest pace in history.

Executive pay is linked to profits, so top pay is soaring as well.

Higher profits are also translating into the nice gains in the stock market, which is a boon to everyone with lots of financial assets.

And Wall Street is back. Bonuses on the Street are expected to rise about 5 percent this year, according to a survey by compensation consultants Johnson Associates Inc..

But nothing is trickling down to the Average Worker economy. Job growth is still anemic. At October's rate of only 50,000 new private-sector jobs, unemployment won't get down to pre-recession levels for twenty years. And almost half of October's new jobs were in temporary help.

Meanwhile, the median wage is barely rising, adjusted for inflation. And the value of the major asset of most Americans- - their homes -- continues to drop.
So why is this happening?
Two reasons. First, big profits are coming from overseas sales of goods and services made abroad, not here. The world's fastest-growing markets are China and India, whose inhabitants are eager to buy "American" products, and just as eager to work for the American companies that sell them. The U.S. market is barely moving.

Increasingly, American corporations are able to extract healthy gains from their global operations without adding much in the United States except executive talent.

Second, American businesses are boosting productivity by having U.S. employees do more work for less pay. According to the Bureau of Labor Statistics, between the third quarter of 2009 and the third quarter of 2010, productivity rose 2.5 percent, output increased 4.1 percent, the number of hours worked was up 1.6 percent, and unit labor costs dropped by 1.9 percent.

In other words, American workers are losing even more bargaining power as a sizable chunk of corporate profit goes into software and digital equipment that can do what people used to do -- but more cheaply.
I don't believe that there are any easy answer to this. But, unlike Gerson, I don't think that the fundamental solution lies in family, education and other important cultural issues, as important as those are. If an engineering graduate from NC State can't find a job because the manufacturing has moved offshore, then that has nothing to do with that person's family or marriage or education.

The Washington Conversation

Peter Goodman, writing on the Huffington Post, answers Michael Gerson's arguments quite well:
Oh, to live in Washington, where the annoyances of external reality are so conveniently ignored and The Conversation can be changed like an un-liked song on the national iPod.

Was it not just a couple of weeks ago that The Conversation was all about the supposed five-alarm emergency of the federal budget deficit and the hellish consequences that surely awaited the continuation of profligate spending? Never mind. The political establishment decided to tack another $900 billion on the federal tab to stave off an apparently more dire crisis: the prospect that tax cuts lavished on people wealthy enough to worry about mooring charges might soon expire.

Now, the only talk that seems capable of sustaining the Conversation is whether tax cuts for the richest will be extended again two years forward, and how this will play for those determined to become President.

How can we generate quality jobs by the million and prevent more homeowners from sliding into foreclosure? How can we arrest the long-running breakdown in American middle class life? These are fragments of a narrative long since discarded as politically infertile. They no longer fit into the format of the Sunday talk shows, where the only real question is who won the week, because no one is even trying to win on these points. Not this week. Not any week. The unemployment rate remains snagged at nearly 10 percent and 6.3 million people have been officially out of work for six months and longer, but the Conversation has moved on.

Refusing To Face the Economic Facts of Life

WaPo columnist Michael Gerson, criticizing Senator Bernie Sanders for his 'simplistic' view of economic inequality, argues that social mobility--not economic equality-- is the key to a healthy capitalistic society:
Economic redistribution can meet some basic needs. We provide food stamps to relieve hunger or vouchers to make housing more affordable. But social equality is not achieved through redistributing cash. "Our research," argue Isabel Sawhill and Ron Haskins of the Brookings Institution, "shows that if you want to avoid poverty and join the middle class in the United States, you need to complete high school (at a minimum), work full time and marry before you have children. If you do all three, your chances of being poor fall from 12 percent to 2 percent."

So the main reasons for inequality are failing schools, depressed and dysfunctional communities and fragmented families. For the most part, inequality does not result from a lack of consumption by the poor but from a lack of social capital and opportunity. Addressing these challenges is more complex than fiddling with the top tax rate.

This does not release conservatives from responsibility because the distribution of social capital and opportunity is dramatically unequal. Economic inequality can be justified as the reward for greater effort - so long as there is also social mobility. In the absence of mobility, capitalism becomes a caste system. And this is what America, in violation of its self-image, threatens to become. The United States has less upward economic mobility among lower-income families than Canada, Finland or Sweden. Americans who are born into the middle class have a roughly equal chance of ascending or descending the economic ladder. But Americans born poor are likely to stay on its lowest rungs.

Addressing the actual causes of inequality should be common ground for the center-left and center-right - and politically appealing to American voters, who are generally more concerned about opportunity than income equality. A mobility agenda might include measures to discourage teen pregnancy; increase the rewards for work; encourage wealth-building and entrepreneurship; reform preschool programs; improve infant and child health; increase teacher quality; and increase high school graduation rates and college attendance among the poor. Children of low-income parents who gain a college degree triple their chance of earning $85,000 a year or more. If America had the same fraction of single-parent families as it had in 1970, the child poverty rate would be about 30 percent lower.
Really, who could disagree with Gerson's narrower point, that the cultural factors helping people rise from poverty into the middle class--and vice versa--are important and need to be supported.

But it seems to me that Gerson is missing the forest for the trees here.  What has happened over the last 30 years in America economically has very little to do with social mobility of this kind.  Rather, it is the the larger economic forces that issued in the Great Recession of 2008 that need to be addressed. 

Among these are: the loss of our manufacturing/industrial base and the resulting loss of blue-color jobs; the financialization and accompanying securitization of our economy, with huge economic rewards going to the largely unproductive financial sector; the various economic bubbles that have wreaked havoc on our economy and society; the accumulation of vast amounts of public and private debt; the waging of hugely expensive wars around the world, increasing the debt and the militarization of our society; the swelling income and wealth inequality at the expense of the middle class; and so on. 

These are the facts that most conservatives and neo-liberals have yet to confront.  These are the facts that are riling our politics and dimming the hopes of our future.

Second Thoughts on the Tax Deal

Ezra Klein writes concerning the second thoughts about the tax deal on the conservative side:
I listed some of the conservative critics of the tax deal in Wonkbook today (Rush Limbaugh, Sarah Palin, the Tea Party Patriots, Charles Krauthammer), but Playbook shows their ranks are growing: Mitt Romney has an op-ed in USA Today saying the tax deal gives "President Obama ... reason to celebrate. The deal delivers short-term economic stimulus, and it does so at the very time he wants it most, before the 2012 elections." He's joined by Rep. Darrell Issa, who says the compromise is "an incomplete effort that fails to create a permanent tax structure giving businesses the kind of long-term predictability needed to support investment, economic growth and job creation."

With Palin, Romney, Limbaugh and the largest tea party group on the same side of this, I'd bet there are plenty of elected Republicans looking to bail. What they need is an excuse. If the House Democrats manage to make any real changes to the deal, they'll have one -- and so will John Boehner and Mitch McConnell.
So if this is so good for Obama and the Democrats, why wouldn't I support it?

Because it feels like the same old, short-term political calculus that really accomplishes nothing good for the long-term for the country. Do something just because it gives a short-term boost for Obama's reelection?  Increase the already-astronomical national debt levels long-term just to give Obama a political boost?  Obama hasn't been that good.

Famous Last Words

Before he died, diplomat Richard Holbrooke had a final request:
As Mr. Holbrooke was sedated for surgery, family members said, his final words were to his Pakistani surgeon: "You've got to stop this war in Afghanistan."
Agreed.  RIP, Richard Holbrooke.  You've earned your rest.

Christmas Trees and Judaism

In this interesting article in Slate, one Jew writes to another about why she should not succumb to the  Christmas tree:
To start out, we should agree that the argument over Christmas trees is not a theological one, for Christians or for Jews. Christianity does not require pre-Christmas tree decoration, a tradition with obscure origins but definitely with no connection to Jesus. Meanwhile, lots of Jews feel icky about Christmas trees, but only the very religious make a theological case against them. They would cite the principle of marit ayin, "in sight of the eye," according to which some things that are technically kosher should still be avoided, so as not to mislead people. (Entering a church, for example, could give the wrong idea. Some rabbis say eating "fake crab" in sushi rolls is impermissible, because it could cause an ignorant observer to think eating crab is OK.) But most Jews don't know from marit ayin.

So our discussion is not about religion, exactly. And indeed I have other reasons for barring Christmas trees from passing o'er the threshold of Oppenheimer Manor. To begin, one of the great things about America is difference, and we Jews are part of that difference. I would even say that we, like other tiny minority groups, have a calling to be different.

This is not immediately apparent to children, who are rightly charmed by all that is amazing about mainstream Christmas culture: carols, baroque and classical music, Miracle on 34th Street, Rudolph, mufflers and sweaters and rosy-cheeked ice-skating wintertime shiksas like Thereal McCoy in Portnoy's Complaint. Menorahs are OK, but it is hard to deny the power of the full, multifaceted Christmas-season experience.

Yet how much blander America would be if the broad, largely secular, and increasingly materialistic Christmas season were everyone's tradition. If Muslims, Jews, the Amish, the Hindus, and all the rest of us sideshow communities just went all Christmas-tree, Americans would be so much more homogeneous—like Sweden, but with less paternity leave.

Gospel of the Middle Class

David Brooks gravitates to the big idea.  This time it's the 'middle class', America's new path forward:
What is the core feature of the converging world? It is the rise of a gigantic global middle class.

In 2000, the World Bank classified 430 million people as middle class. By 2030, there will be about 1.5 billion. In India alone, the ranks of the middle class will swell from 50 million to 583 million.

To be middle class is to have money to spend on non-necessities. But it also involves a shift in values. Middle-class parents have fewer kids but spend more time and money cultivating each one. They often adopt the bourgeois values — emphasizing industry, prudence, ambition, neatness, order, moderation and continual self-improvement. They teach their children to lead different lives from their own, and as Karl Marx was among the first to observe, unleash a relentless spirit of improvement and openness that alters every ancient institution.

Last year, the Pew Research Center surveyed the global middle class and found that middle-class people are more likely than their poorer countrymen to value democracy, free speech and an objective judiciary. They were more likely to embrace religious pluralism and say that you don’t have to believe in God to be good.

Over the next few decades, a lot of people are going to get rich selling education, self-help and mobility tools to the surging global bourgeoisie. The United States has a distinct role to play in this world.

American culture was built on the notion of bourgeois dignity. We’ve always been lacking in aristocratic grace and we’ve never had much proletarian consciousness, but America did produce Ben Franklin, one of the original spokesmen of middle-class values. It did produce Horatio Alger, who told stories about poor boys and girls who rose to middle-class respectability. It does produce a nonstop flow of self-help leaders, from Dale Carnegie to Oprah Winfrey. It did produce the suburbs and a new sort of middle-class dream.

Americans could well become the champions of the gospel of middle-class dignity. The U.S. could become the crossroads nation for those who aspire to join the middle and upper-middle class, attracting students, immigrants and entrepreneurs.

To do this, we’d have to do a better job of celebrating and defining middle-class values. We’d have to do a better job of nurturing our own middle class. We’d have to have the American business class doing what it does best: catering to every nook and cranny of the middle-class lifestyle. And we’d have to emphasize that capitalism didn’t create the American bourgeoisie. It was the social context undergirding capitalism — the community clubs, the professional societies, the religious charities and Little Leagues.

For centuries, people have ridiculed American culture for being tepid, materialistic and middle class. But Ben Franklin’s ideas won in the end. The middle-class century could be another American century.

A Lot of Really Upset Democrats

As the NYT's reports, the Democratic anger with Obama was not just taxes:
As House Democrats met privately to weigh the tax deal negotiated by the White House, an angry chant spontaneously rolled across the room.

“Just say no, just say no,” rebellious lawmakers cried. Vulgar words were aimed at President Obama. Incensed members spoiled for a fight.

The fury coursing through the meeting last Thursday in the basement of the Capitol was just the latest manifestation of the foul mood of House and Senate Democrats as they suffer through the final days of the 111th Congress, watching their power ebb while scores of them cast their last votes.

Many are having difficulty adjusting to their abruptly changed circumstances just two years after a triumphant inauguration of a new president who sealed Democratic hegemony over Washington. Deepening the wound is the fact that Democrats are still in charge, yet the White House struck its tax deal mainly with Senate Republicans.

And, incredulous Democrats say, the administration made a bad bargain even as it left fellow Democrats out of the loop.

“People are just baffled that the administration couldn’t cut a better deal,” said Representative Chris Van Hollen, a Maryland Democrat and party leader who says the White House got taken in the tax talks.

Other Democrats and party strategists say the antipathy goes much deeper than simple unrest over the proposal to extend lower tax rates to the most affluent Americans and give up on a core Democratic belief.

House Democrats in particular feel betrayed. From their perspective, they took extraordinarily tough votes in 2009 and 2010 to advance the new president’s sweeping agenda and suffered accordingly in the election. Then he immediately turned around and did business with Republicans before those defeated in November had even vacated their Washington apartments.

While Democrats held on to the Senate, the sentiment is not much different across the Rotunda, though Democratic senators appear more resigned to the compromise on taxes.

Particularly galling to Senate Democrats who have fumed privately en masse is that through Vice President Joseph R. Biden Jr., the White House made its deal with Senator Mitch McConnell of Kentucky, the Republican leader who has tied Democrats in knots for two years with his determined resistance to most legislation. In effect, they see the agreement as rewarding Mr. McConnell’s recalcitrance.

Adding insult to injury, some Congressional Democrats suggest, the White House was not completely upfront with them about how far along negotiations were with the Republicans last Monday in the hours before the deal was announced. Democrats said they had been under the impression that the parameters were not firmly set and that they could still influence the outcome. Yet within a few hours, Mr. Obama appeared in public to lay out the framework of a done deal.

Rank-and-file Democrats now believe a set of ultimately irrelevant negotiations was taking place with a bipartisan cast of House members and senators while more important talks were going on between the White House and Senate Republicans.

One top Democratic leader said that the party was no stranger to losing and that it had managed to cope with defeats like that of Senator John Kerry to President George W. Bush in 2004. But it was not as if they were being tossed from the White House. And they felt then that the party was on the rise.

But at the moment, a resurrection of Congressional Democrats seems distant, the idea of recapturing the House in two years is a long shot, and the party is bracing for serious electoral trouble in the 2012 Senate races.

And this year’s loss involves relinquishing something very big — the hard-won control of the House. Clearly, it hurts.

“We only had it for four years,” one senior Democrat lamented. “It took so long to get it back, and now it is all gone.”
Talk about running over your own wounded and dying.  As I have said recently, this kind of behavior on Obama's part is engendering tremendous ill-will among his own party and base.  No wonder he picked the mafioso (metaphorically speaking) Rahm Emmanuel as his chief of staff.  Apparently, that's the way Obama thinks as well.

No Labels

As reported in the NYT:
On Sunday, Mayor Michael R. Bloomberg flatly ruled out an independent run for president in 2012. On Monday, he appeared at the national unveiling in New York of No Labels, a group that aspires to build a grass-roots movement for political independents and independent-minded voters in both parties, and talked again about loosening the grip of both parties on the political process.

If Mr. Bloomberg’s denial is Shermanesque, then his behavior seems more Perot-like.

It’s possible that Mr. Bloomberg is discouraging his supporters because he really has closed the door on a presidential run. It’s also possible, though, that he understands something about the modern political culture that many of those speculating about the purpose of No Labels do not — that an independent not only no longer needs to spend time encouraging the formation of a party organization to run for president, but he’s also probably better off without one.

Monday, December 13, 2010

Greedy Wall Street Bankers Are Afraid of This Man (And It Is Not Obama)

Now THIS is going to be amazing, reported in the NYT:
After years of blocking him from a leadership position, Mr. Paul’s fellow Republicans have named him chairman of the House subcommittee on domestic monetary policy, which oversees the Federal Reserve as well as the currency and the valuation of the dollar.

Mr. Paul has strong views on those issues. He has written a book called “End the Fed”; he embraces Austrian economic thought, which holds that the government has no role in regulating the economy; and he advocates a return to the gold standard.

Many of the new Republicans in the next Congress campaigned on precisely the issues that Mr. Paul has been talking about for 40 years: forbidding Congress from any action not explicitly authorized in the Constitution, eliminating entire federal departments as unconstitutional and checking the power of the Fed.

Republicans had blocked Mr. Paul from leading the monetary policy panel once before, and banking executives reportedly urged them to do so again. But Republicans on Capitol Hill increasingly recognize that Mr. Paul has a following — among his supporters from 2008 and within the Tea Party, which helped the Republicans recapture the House majority by picking up Mr. Paul’s longstanding and highly vocal opposition to the federal debt.


Ross Douthet writes in the Times about Senator Coburn:
There is a conceit, especially popular among the press corps, that the salvation of America depends exclusively on self-described moderates and centrists. If there’s a path out of gridlock and insolvency, this theory goes, it can’t be charted by consistent conservatives or liberals. Instead, the nation needs the leadership of ideologically flexible, politically ambidextrous mavericks: Democrats like Evan Bayh, perhaps, and Republicans like Susan Collins, with President Michael Bloomberg waiting to sign whatever compromises they devise.

This vision doesn’t leave much room for a figure like Tom Coburn, Oklahoma’s junior Republican senator. Coburn came to Washington as a congressman in 1994, and distinguished himself by remaining incorruptibly right-wing while many Republican revolutionaries accustomed themselves to the perks of governing. Since his 2004 election to the Senate, he’s remained a conservative’s conservative, equally resolute in his opposition to earmarks, Obamacare and abortion.

But in the last two years, Coburn has also proved himself braver than many of his colleagues, more creative on public policy, and more intellectually honest about the consequences of popular legislation. His example suggests that America may be saved from fiscal ruin, not by politicians who trim their sails at every opportunity, but by lawmakers with stiff backbones and unwavering convictions.

In the health care debate, for instance, it was Coburn who co-sponsored (with the ubiquitous Paul Ryan in the House) the only significant conservative alternative to the Democratic bill. Their Patients’ Choice Act, which would have replaced the tax deduction for employer-provided health care with a universal credit, was arguably a more “extreme” proposal than the milquetoast reforms Republicans rallied around instead. But it was also a more serious proposal, with a real chance of reducing costs and expanding insurance, instead of just shoring up the status quo.

Then came the financial reform debate, in which Republicans accused Democrats of perpetuating “too big to fail,” but offered counterproposals that often looked like business as usual for the financial industry. Coburn, again, was less conventional: He was one of only three Republican senators to vote for an amendment proposed by two Democrats, Ohio’s Sherrod Brown and Delaware’s Ted Kaufman, that would have taken the “extreme” step of capping the size of America’s largest banks.
Several things that Ross writes here strikes a chord with me, but not primarily about Coburn (although it's good to know that too). Obama touts his health insurance reform as a 'signiture piece of legislation', but most of the criticisms I read about it say that it does little to lower cost, which is our biggest problem down the road.

Likewise with the banks, Obama's monstrous bailout of the banks left them basically uncontrolled and still 'too big to fail', in fact bigger than ever, making record profits and bonuses, but with the same 'moral hazard' about financial risk taking.

And this latest taxcut deal has the same smell about it, a short-term solution that doesn't address the longer term problem, but helps gets Obama reelected (which is Krauthammer's--and not only Krauthammer's--criticism).

I suppose you can defend any of these policies at the time as necessary and pragmatic, and indeed that's exactly what has happened.  But the health care conundrum has not been resolved (not even close, despite the bragging), the banks are a complete disgrace, and this tax deal sounds just like what Clinton did in the 90's with NAFTA and a bunch of other things (it's no surprise Obama turned him loose in the White House Press Room).

In my heart of hearts, give me the principled and honest Browns, Kaufmans, Feingolds, and (according to Douthet) Coburns any day, over the status-quo oriented, deal-making Obamas. I'm sorry, but that's where I've come to in two years.

Crazy Weather Map

Biggest Stimulus in History

Republican/neo-con Charles Krauthammer of the WaPo had an interesting take on the tax deal:
Barack Obama won the great tax-cut showdown of 2010 - and House Democrats don't have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years - which just happen to be the two years of the run-up to the next presidential election. This is a defeat?

A Case Against the Tax Cuts

Fareed Zakaria isn't so sure about the Obama tax-cut deal:
This is the wrong time to raise taxes, say the politicians. The economy is fragile, say the economists. The recovery is halting, say the pundits. In a few years, they all affirm, we will need to get our fiscal house in order. Of course, just a few years ago, the economy was doing fine, and Washington decided it wasn't the moment to worry about the deficit. Instead, over the past decade, we cut taxes, added a massive entitlement program (prescription drugs for the elderly) and spent trillions on two wars. Somehow, no matter what the economic clock says, it's never time in Washington to cut spending or raise taxes. Call it manana economics.

The best one can say about President Obama's compromise plan with Congress is that it will do some short-term good - at long-term cost. The only parts of the plan likely to have a significant effect in stimulating the economy are the extensions of unemployment insurance, cuts in payroll taxes and, perhaps, tax credits for businesses ("perhaps" because they are temporary and thus would only bring forward investments). To get these measures, worth about $250 billion, Obama agreed to an extension of the Bush tax cuts that will cost around $750 billion, and eventually much more since the tax cuts are now more likely to become permanent. It makes the original stimulus plan of 2008 look stunningly efficient.

The first act of the newly empowered Republican Party has been to add a trillion dollars to the deficit. Republicans have now fully embraced the Keynesian arguments that they routinely denounced. John Maynard Keynes argued that when private demand weakens, the government should pick up the slack. He advocated either of two paths: government spending or tax cuts. Republicans have simply chosen the latter course.

So when will we get serious about our fiscal mess? In 2020 or 2030, when the needed spending cuts and tax hikes get much larger? If we cannot inflict a little pain now, who will impose a lot of pain later? Does anyone believe that Washington will one day develop the political courage it now lacks? And what if, while we are getting around to doing something, countries get nervous about lending us money and interest rates rise?

I understand the politics of compromise and the politics of reelection, and this deal makes sense on both grounds. It doesn't make much sense for the long-term growth of the American economy. What Washington is trying to do is reignite the consumption bubble - hoping to get Americans to spend money and take out loans. This plan, presidential adviser Lawrence Summers tells us, will get the economy to "escape velocity." It's an intriguing theory.

The basic problem in the U.S. economy is that for a generation now, we have been consuming more and saving and investing less. Consumption ranged from 60 to 65 percent of gross domestic product for decades; then it started moving up in the early 1980s, reaching 70 percent of GDP in 2001, where it has stayed ever since. More spending has not been triggered by rising incomes but entirely by an expansion of credit - the underlying cause of the crash of 2008. And yet our solution to our problems is to expand credit and consumption.

A Case For the Tax Cuts

Andrew Sullivan endorses the Obama tax-cut deal:
In what appears to be an almost epic attempt at political suicide, some Democrats appear so exercized by the very idea that the very rich should continue to enjoy the tax rates of the Bush era that they are willing to push their president, and their own political prospects, over the cliff.

I made my case pretty clear soon after the deal was struck. It was staggering to me how many tangible concessions Obama was able to get for one symbolic give. The GOP got to protect the very rich to the tune of $120 billion for two years. In return, Obama got the $360 billion tax cut for the middle class he wanted, plus $450 billion on extended unemployment benefits, the pay-roll tax cut and EITC and college tuition funding. In the process, he got the GOP to endorse a huge fiscal stimulus for Obama as he runs for re-election - a stimulus that could, according to Morgan Stanley, push economic growth to as much as 4 percent next year. That might be an overshoot - but it's surely salient that no one thinks the package won't boost growth at all.

Charles Krauthammer gets it: "Barack Obama won the great tax-cut showdown of 2010 - and House Democrats don't have a clue that he did."

Bill Clinton gets it. The markets get it. The only question is: why doesn't the House move swiftly to pass this as-good-as-it-will-get deal, and then move forward on START, DADT and the DREAM Act? A week is a long time in politics. Two weeks - which the Democrats could give themselves if they want - could turn a coup into a year-end triumph for the president and this party.

Saturday, December 11, 2010

Betraying Liberalism

Chris Hedges, former war correspondent for the NYT, has written a new book, The Death of the Liberal Class.  Here's an interview with Laura Flanders (not for the faint of heart):

Enemy of Reform

The American Left would seem to be on the warpath against Obama and his administration.  Some examples:
As an Irish-American, I ask myself, Which of the two is the greater Judas to his nation: the Irish prime minister, Brian Cowen, or the American president, Barack Obama?

Both of them are carrying out the same mission– plunging the bulk of the citizenry of their nations into debt peonage, so that bankers and the rich can prosper.

There’s no need to choose, though in terms of sheer magnitude of the disaster, Obama would carry the prize. No one has described his sellout on taxes last week better than Michael Hudson who turned in an acrid resume of Obama’s “compromise” on this site last Wednesday. The highlights:

“Monday’s deal to re-instate the Bush era tax cuts for two more years sets up a 1-2-3 punch…enabling the Republicans to legislate the cuts in perpetuity in 2012 – an estimated $4 trillion to the rich over time….

“To ‘save the dollar’ the Republicans will propose to replace progressive income taxation with a uniform flat tax (the old Steve Forbes plan) falling on wage earners, not on wealth or on finance, insurance or real estate income. A VAT will be added as an excise tax to push up consumer prices.

“Third, the tax giveaway includes a $120 billion reduction in Social Security contributions by labor – reducing the FICA wage withholding from 6.2 per cent to 4.2 per cent. Obama has ingeniously designed the plan to dovetail neatly into his Bowles-Simpson commission pressing to reduce Social Security as a step toward its ultimate privatization and subsequent wipeout grab by Wall Street….

“The bottom line is that after the prolonged tax giveaway exacerbates the federal budget deficit – along with the balance-of-payments deficit – we can expect the next Republican or Democratic administration to step in and ‘save’ the country from economic emergency by scaling back Social Security while turning its funding over, Pinochet-style, to Wall Street money managers to loot as they did in Chile….

“Welcome to debt peonage. This is worse than what was meant by a double-dip recession. It will be with us much longer.” --Alexander Cockburn
And, from an open letter, signed by a long-list of left-liberal writers:
With the Obama administration beginning its third year, it is by now painfully obvious that the predictions of even the most sober Obama supporters were overly optimistic. Rather than an ally, the administration has shown itself to be an implacable enemy of reform.

It has advanced repeated assaults on the New Deal safety net (including the previously sacrosanct Social Security trust fund), jettisoned any hope for substantive health care reform, attacked civil rights and environmental protections, and expanded a massive bailout further enriching an already bloated financial services and insurance industry. It has continued the occupation of Iraq and and expanded the war in Afghanistan as well as our government's covert and overt wars in South Asia and across the globe.
Along the way, the Obama administration, which referred to us on the left as “f***ing retarded” individuals who required “drug testing,” stepped up the prosecution of federal war crime whistleblowers, and unleashed the FBI on those protesting the escalation of an insane war.

Obama’s recent announcement of a federal worker pay freeze is cynical, mean-spirited “deficit-reduction theater”. Slashing Bush’s plutocratic tax cuts would have made a much more significant contribution to deficit reduction but all signs are that the “progressive” president will cave to Republican demands for the preservation of George W. Bush’s tax breaks for the wealthy Few. Instead Obama’s tax cut plan would raise taxes for the poorest people in our country
I finish with Jeff Cohen from the Huffington Post:
It was a stunning spectacle yesterday afternoon when former President Clinton took the podium from President Obama in the White House briefing room to help shove the Obama-GOP tax deal down the throats of Democratic activists and Congress members.

It was a fitting spectacle too (carried live on CNN) -- since Bill Clinton paved the way in teaching how a Democratic president can win battles through the votes not of his own party but the Republicans.

Remember NAFTA, the trade deal loved by big business and Republicans -- and opposed by Democratic constituencies like unions, environmentalists and consumer advocates? Clinton passed NAFTA with the votes of nearly 80 percent of GOP senators and almost 70 percent of House Republicans. Meanwhile, House Democrats opposed NAFTA by more than 3 to 2.

More than a year ago, I warned ("Get Ready for the Obama/GOP Alliance") that Obama would follow Clinton's lead in winning some of his biggest fights by allying with the GOP against his own base.

Following a long period of White House lecturing and name-calling ("the professional left," "f**king retarded") aimed at the activists who put him in the Oval Office, Obama has again shafted his base and broken a promise, this time on tax breaks for the rich.
Obama got a lot of their votes last time. I don't think there is a snowball's chance in hell that it will happen again, even if they see him as a 'lesser evil.' They will vote for a third-party candidate, which it seems almost surely there will be.