Opinion

The Great Debate

Washington’s long con

By Maureen Tkacik
The opinions expressed are her own.

There’s a scene in Ray Nagin’s Hurricane Katrina memoir from the Monday night after the storm in which twenty or thirty mysterious security guards, toting three guns apiece, suddenly descend upon the bombed out Hyatt city officials are using as a command center and commence measuring perimeters, laying down wires and barking orders. “We’re here to protect the mayor!” their apparent leader proclaims. “Everyone else leave!”

Nagin watches, “hallucination-like”, as his two preposterously outmanned bodyguards give the guards their best “Oh, hell no” glares, then politely asks the guards: “Who are you guys, and who sent you?” He has well-founded suspicions they are Blackwater mercenaries hired by the local business community, but the leader won’t divulge anything, so he and his staffers just keep asking the same questions of every guard they can corner, until the entire team suddenly vanishes en masse, “Ninja-like, as quickly and quietly as they arrived.”

Of the unnervingly frequent Bush Administration flashbacks I suffered reading Ron Suskind’s Confidence Men: Wall Street, Washington and the Education of a President, Nagin’s staredown of the elite hired guns is the one Obama never manages to repeat.

Instead the whole saga plays out like a more articulate slow-motion rehash of a memorable passage from an earlier Suskind book, in which an earlier inexperienced president in the afterglow of a crisis-fueled electoral victory listens to his economic advisers plot the next six months of tax breaks and “incentive package” announcements and finally asks, “What are we doing on compassion?”

(Silence.)

Confidence Men cover imageBut Bush was a quicker study than his successor. By the end of Bush’s 2002 meeting with his economic advisers he has mastered the narrative they are concocting: the “spin” that the economy is bad is not “credible” enough to warrant compassion, but it is saddled with uncertainty—a malaise he identifies on his very own without cue as resulting from the twin ills of “SEC overreach” and the threat of Saddam Hussein’s continued rule in Iraq. By contrast, it takes 355 pages for Obama to complete a parallel metamorphosis, from compassion-infused campaigner to unprompted producer of his own brand of Beltway antilogic, by which he informs his advisers in the fall of 2009 he has learned to stop worrying about unemployment rate, since its historical magnitude is merely a rosy indicator of “productivity gains in the economy.”

Why Obama needs a primary challenge

By Nicholas Wapshott
The opinions expressed are his own.

There is talk in the air of a Democratic challenge to Obama. Since the Tea Party won the battle of the debt ceiling, it has been solid bad news for the president, and his party is wondering whether he is capable – or even genuinely wants – a second term. It is all very well being the world’s coolest guy, but, when you are leader of a party losing rock solid safe seats and alienating the very independent voters who decide who lives in the White House, you may be  leaving it a bit late to turn the tide. In the latest teasing McClatchy-Maris poll, Obama is both facing defeat — Americans say they will vote against him by 49 percent to 36, with 52 percent to 38 predicting he will lose — but he would beat every GOP candidate currently on offer.

No sooner had James Carville shouted “Panic!” about the state of drift in the West Wing, and demanded that “a lot” of heads roll, than Al Gore’s nemesis, Ralph Nader, announced he was championing a Democratic primary challenge to Obama from half a dozen candidates, though Nader is not even a registered Democrat. According to the Washington Times, an unlikely bellwether of liberal thinking, “More than 45 Democrats are supporting the move, and the candidates will be experts in fields ranging from poverty to the military.”

Among the mavericks named to lead this progressive revolt are the Princeton professor who starred in The Matrix Reloaded movie, Cornel West, the Zen Buddhist priest and actor Peter Coyote, the singer of Anchorage, Michelle Shocked, and the Democrats’ answer to William F. Buckley Jr., Gore Vidal. Asked whether he would be a stalking horse, the usually immodest kamikaze presidential wannabe Dennis Kucinich said he would decline the chance to stand himself, but said, “I think he should [face a Democratic challenger]. It would make him a better president.”

Why the wealthy don’t object to Obama’s “class warfare”

By David Callahan
The opinions expressed are his own. 

Here in the egalitarian paradise of the United States, there is apparently nothing worse than “class warfare” – which is why Republicans are trying to affix this damning label to President Obama’s new plan to raise taxes on the rich. One hitch, though, is that the billionaire Warren Buffett is not alone in his willingness to pay higher taxes. Many other wealthy Americans are also ready to see their taxes go up. The battle over taxes, its turns out, is not just between the rich and everyone else; the upper class itself is divided on this issue. That is good news for Obama, who’ll need all the help he can get to enact deficit reduction that balances spending cuts with new revenue.

Various wealthy Americans have praised the President’s tax plan since it was unveiled Monday. “It’s time for millionaires – like me and the ones in Congress – to step up to the plate and start paying their fair share,” said Guy Saperstein, a wealthy lawyer who is part of a group called Patriotic Millionaires for Fiscal Strength. Dallas Mavericks owner Mark Cuban, not exactly known for his noblesse oblige, chimed in, writing on his blog right after Obama’s speech that paying taxes is the most “patriotic thing you can do.”

Obama’s call for higher taxes on the rich is not new. He pledged repeatedly to raise taxes on high earners during his 2008 run for President – and won the vote of these same Americans, those making over $200,000, by a comfortable margin.

The case for Obama’s jobs program

By Betsey Stevenson
The opinions expressed are her own.

What should we make of the President’s new jobs plan? Ignore the politics — will it pass? — and focus on the economics: If it does, will it get Americans back to work?

The centerpiece is a series of sharp payroll tax cuts. The usual problem with payroll taxes is that they largely subsidize existing workers. But this plan — three separate payroll tax cuts — is different.

The first tax cut is the most innovative: No payroll taxes at all for firms increasing their wage bill. In economics, all the action is at the margin. If we want people to do more at the margin — hire more people — then the incentives to do so should be targeted at the margin. We will get much more bang-for-our-buck by giving the biggest tax breaks to the hiring of extra workers.

The jobs proposal ignores economics

By David Callahan
The opinions expressed are his own.

It’s a cruel fact for millions of unemployed Americans that the jobs plan President Obama unveiled last night will never be fully enacted by Congress. What’s even crueler, though, is that the least effective elements of the plan have the best chance of passage. New direct federal spending, the most powerful form of stimulus, is widely considered DOA on Capitol Hill – while weaker tax cut options will get a real hearing.

That’s not how things would go if mainstream economists were calling the shots. Economics is not an exact science, but economists do have pretty good models to predict what “fiscal policy multipliers” will be most effective at stimulating growth and new hiring. Just last month, for example, the chief economist for Moody’s Analytics Mark Zandi released an analysis of stimulus measures work. Zandi advised John McCain in 2008 and is anything but a committed liberal. But his study, supported by the full weight of Moody’s modeling expertise, clearly shows that spending is the best form of stimulus.

The single most effective form of stimulus, the study found, are increased outlays for food stamps — which create $1.71 in economic activity for each dollar in federal spending. The other top two boosters are spending on unemployment benefits and infrastructure. Earlier studies, including by the Congressional Budget Office, have found largely the same thing.

How would Keynes advise Obama on jobs?

By Nicholas Wapshott
The opinions expressed are his own.

It’s still the economy, stupid. So if Obama wants to keep his job – and we must assume he does, though he doesn’t seem to be enjoying himself much — he must boost the economy and get the jobless back to work. No president since 1948 has been elected with a jobless figure higher than 7.2 per cent, so with unemployment currently running at 9.1 per cent, he looks headed for certain defeat.

Add the pivotal fact that two of his core groups of supporters, blacks and hispanics, suffer disproportionately from joblessness, at 16.2 per cent and 11.6 per cent respectively, and the president’s prospects look even dimmer. With the White House admitting there is little chance unemployment will fall before the election next year, the president needs some good advice on how to get people back to work, and fast.

What would John Maynard Keynes tell Obama? He once advised Franklin Roosevelt on how to cure unemployment, but he didn’t make much headway. “I saw your friend Keynes,” FDR told his Labor Secretary Frances Perkins. “He left a whole rigmarole of figures.” In turn, Keynes told Perkins he had “supposed the president was more literate, economically speaking.”

Obama at the electoral tipping point

By Cliff Young and Chris Jackson
The opinions expressed are their own.

The Obama administration finds itself between a rock and a hard place.  On one side, an emboldened Republican Party smells blood, with their largely successful (politically speaking) full court press on the debt issue and dominance of the news cycle.  On the other, the economic news—both domestically and internationally—has been depressing at best, and downright scary at worst.

Given this dreary backdrop, the common wisdom among pundits and politicos is that Obama has been winged and is beatable in 2012.  Pundits offer varied reasons for this new found pessimism in Obama.

Some cite the dangers of a weakening economy on voters’ mood for “more of the same.”  Indeed, history suggests that no post-WWII president has won reelection when the unemployment rate was above 7.2 percent—bad news for Obama since unemployment looks to remain above 8.5 percent over the next year. Others stress Obama moving too far to the left with a “big government” agenda, while others say Obama has alienated his base by giving in too readily to Republican demands.  Underlining all these critiques are warnings of a Carter-esque “crisis of confidence” scenario where voters lose faith in Obama’s leadership.

Should Obama mimic David Cameron’s austerity?

By Nicholas Wapshott
The opinions expressed are his own.

In medieval times, a key member of a monarch’s retinue was the food taster, a hapless fellow who ate what his master was about to eat. If the taster survived, the food was deemed safe for the king’s consumption. President Obama has a taster of sorts in David Cameron, the British prime minister, who has embarked upon an economic experiment that echoes the recipe of wholesale public spending cuts and tax hikes needed if both sides in Congress are to agree to raising the federal government debt ceiling. How the British economy is faring offers Obama an idea of what a similarly radical policy of cutting and taxing here would mean to the American economy.

Cameron’s election in May 2010 coincided with the start of the Greek debt crisis. The Bank of England governor Mervyn King warned him that the public debt in the UK was so large that Britain, too, might see its lending become impossibly expensive, so Cameron decided that there was no time to lose in putting the fiscal books in order. He decided to slash public spending by 25 per cent over four years and immediately raise value added tax on goods and services from 17.5 to 20 per cent. Such a radical remedy found favor with the rump of British Conservatives who felt that Margaret Thatcher’s free-market, small government, “sound money” policies of the Eighties had not been pressed to their limit. In turn, Thatcher’s prescription to reduce the size of the state derived from her favorite thinker Friedrich Hayek, the author of “The Road to Serfdom,” who believed like many Tea Party supporters that government intervention inevitably leads to tyranny.

Cameron’s experiment in applying a radical cure to the British economy caught the attention of a number of conservatives here, among them George W. Bush’s speechwriter Michael Gerson, who wrote in the Washington Post, “If Cameron’s approach works — dramatically cutting deficits without stalling economic growth — it will be an obvious, powerful example for America.” “If only the Obama administration and the U.S. Congress had been so courageous. Instead, they are choosing to put off these big decisions,” moaned Matthew Bishop, New York bureau chief of the Economist, in a piece co-authored with Michael Green in the Wall Street Journal. Even Treasury Secretary Tim Geithner thought the British experiment worth trying. “I am very impressed, as one man’s view looking from a distance, at the basic strategy [Cameron] has adopted,” Geithner told the BBC.

Ireland could use a little audacity of hope

By Marian Harkin

The opinions expressed are her own.

Barack Obama’s infectious hope will help replenish the spirits of the beleaguered Irish people as we strive to emerge from recession, but more significantly his invoking our small nation’s educational and entrepreneurial talents help to show us the way forward.

A once-in-a-generation economic crisis might seem like an odd time for Ireland to issue back-to-back invitations to Queen Elizabeth II and U.S. President Obama, but as the sun shone through the rain cloud, illuminating the President as he visited his ancestral home in Moneygall Co. Offaly, it seemed a masterstroke, for it is precisely an injection of Obama-esque audacious hope and “yes we can” positivity that Ireland needs to kickstart our long road to recovery.

One week ago as her Majesty Queen Elizabeth II bowed her head before a Memorial to Ireland’s Republican dead, the message rang out to the high heavens – we work as equals and we can live in peace, and that peace can be the foundation upon which growth and prosperity is restored to this small island north and south.

from Bernd Debusmann:

Who is the superpower, America or Israel?

On February 18, the United States vetoed a U.N. Security Council resolution on Israeli settlements in occupied Palestinian territories. The vote raises a question: Who dominates in the alliance between America and Israel?

Judging from the extent to which one partner defies the will of the other, decade after decade, the world's only superpower is the weaker partner. When push comes to shove, American presidents tend to bow to Israeli wishes. Barack Obama is no exception, or he would not have instructed his ambassador at the United Nations to vote against a policy he himself stated clearly in the summer of 2009.

"The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop," he said in a much-lauded speech in Cairo.

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