Plouffe Vs Sperling, Krugman etc
As I’m sure all Angry Bear readers know, there is a debate within the Obama administration on whether to try to maybe do something about unemployment. To recap Obama has been talking about reducing the deficit which might ideally have no effect (if the reductions were far enough in the future) or which would make the problem worse. There is a debate within the administration in which political advisors strongly recommend against advocating any sort of new stimulus and economists recommend trying to do something.
There seems to be general agreement that Congress won’t approve any effective policy, so the debate is over politics. The political advisors note that the public wants a balanced budget and predict that advocating any sort of stimulus would be politically costly. The economists argue that Obama can convince the majority of the public that they have been wrong for decades (as their parents and grandparents were before them).
I am an economist and I think that the economists such as Gene Sperling are dreaming.
My contribution, such as it is, is to note how widespread is the belief that it is politically useful to advocate unpopular policies which will not be implemented so no new evidence could possibly convince the vast majority of the public that they are wrong.
In this excellent post (click the link for the more than a nickle version of what is going on) the almost always reasonable Steve Benen writes
[Obama]’s generally unwilling to invest energy in a plan that can’t pass, regardless of the ancillary political benefits.
another round of stimulus … would fail miserably in Congress and most voters strongly disapprove of the idea anyway
having the debate positions Obama as the leader with the right vision,
The more Obama can make them own the results, while positioning himself as the leader fighting the good fight, the better off he’ll be politically.
Benen confidently asserts that by advocating a policy of which most voters strongly disapprove Obama will obtain “ancillary political benefits”, and concince voters that he is “right.”
Frankly, I think that’s crazy.
The “disapprove” was an indirect quote of the political advisors, but Benen does not contest the claim of fact which is, I think, un-contestable.
You propose policy for the country you have not the country you want. Political strategy based on the assumption that the US public will recognise that they are completely confused before the next election has failed again and again.
When was the last time it worked ?
Commenters who say I am wrong and do not provide such an example will be mocked in reply comments.
update: formatting corrected.
as christy romer might say, we are pretty darned f**ked…
Well, let’s face it.
Everything Obama’s done so far has gone so well . . . .
We need U.S. Grant, we got General McClellan.
People can’t eat vision.
can’t say you are wrong.
can’t say i understand your point.
Presidential candidates often advocate (promise) policies they cannot deliver, have no intention of delivering.
Obama could advocate a balanced budget and say he is going to balance it by raising taxes “on the rich.” that seems to be what the people say they want.
i am not sure they aren’t right. i think taxes need to be raised across the board because “tax the other guy” strikes me as morally shabby and bad politics, but i think the economists are wrong about taxes hurting the economy THIS time.
it’s not so much that Obama is campaigning on bad policy or unpopular policy, as that he “governs” on bad policy and says stupid things like “as long as the Republicans are threatening to shut down the government we might as well gut Social Security at the same time.”… as part of a Grand Bargain so we can all get along.
No you just have to be a little bit smarter than your average retarded ‘independent’ voter. They were close to the magic formula. The ‘jobs program has to be targeted to retrunning veterens and it has to tied to ‘the new energy eonomy’. Under that rubric, it is an ‘investment in the future’ and debt to our warriors and the sky is the limit. Failure in Congress is on them and you win the debate. They end up looking small and short sighted.
Everything policy wise that has been implimented with Obama negotiating away the more progressive idea’s is because the republicans have pushed the argument regardless of when the they believed the argument would be won to their favor.
At some point, if Obama wants more progressive policy (I’m not convinced he does) he will have to push the argument.
The issue is what one wants as a win. Is it bills passed or ideology moved?
As to the “independent” vote. If they are truly independent, then the only thing you have is to talk up your ideology, the logic flowing from it and the resultant policy proposed. You just have to do it in a folksey way. That “kitchen table” budget line that never mentions how much in debt one is when they look at their budget.
I agree with Coberly, polls changed to reduce the deficit when Obama started to say “yes we can” reduce the deficit.
As to people accepting they are confussed depends on the nature of the confusion. Or to put it as I have heard many times: given a choice between republican and republican light, they will alwasy vote republican.
To keep in the vein of “free market choice”, give the people a Madison Ave choice. That is what they get from the conservative mind.
The problem with Obama is he wants to set policy without doing the leg work of promoting an ideology. Remember this:
PRESIDENT OBAMA: …And, you know, I can make some really good arguments defending the Democratic position, and there are gonna be some people who just don’t agree with me. And that’s okay. And then we’ve got to figure out a way to compromise.
That is a man who holds no convictions as to social structure, morals and resulting policy. He is a lawyer and does not go beyond the deal. He is my english professor teaching Sci Fi as Lit who taught how to understand the structure of the book and totally avoided any discussion regarding social commentary being made by the author.
Cue the tax holiday on repatriated earnings.
Its’ Grand Bargainese for “Taking Action On Jobs!”
The only losers in the plan would be the unemployed, not that they really matter.
Obama can’t show his true colors….or he will not win a second term. He has governed way Left of where he ran in the 2008 election, but isn’t going to be able to go much further until he wins a second term.
The American people roundly reject the Progressive Agenda, that is why the Left is now crying that it appears Obama is not a Left as they prefer. I suspect Obama will basically run his re-election as a Republican…just as he did in 2008….and if he wins, swing back hard to the Left as he finishes the system off as we know it.
I don’t think Obama has much of a chance of winning in 2012 though…..He has been exposed….and it has been pretty ugly!
Coberly you said it, he ” governs ” on bad policy.
Yes, 60 minutes show, first article taxed about overseas tax havens. Only by the end it was the big bad tax rate here in the US that had all that corporate money “trapped” (yes the word was trapped) out side the US and the corps just could not bring it home. Not that the US is home.
They showed a town of about 25K people with 33K businesses calling it home.
You have nothing to back up your belief that his “true colors” are not how he is actually governing. In my book, you are what you do; if Obama is running and governing as a “Republican”, then that’s what he is … not what he is in your mind.
What you have not explained in this main post is what you recommend that President Obama should do with regards to improving employment and the economy in general. Should the President release an updated written economic recovery plan, as weak as it may be? Should the President stick to running for re-election without an updated economic plan? Should the President continue to throw out his handful of soundbites?
What are you recommending that President Obama should and should not do regarding the current employment and economic situations facing the United States of America?
“I suspect Obama will basically run his re-election as a Republican”
Which would be fitting, since that’s basically how he’s run his administration.
Seriously. If you think he’s a leftist, you’re either not paying attentnion, or you’re sufficiently delusional that you think Eisenhower was a Communist.
how well has the obamacare gone,
“Obama is running and governing as a ‘Republican.'”
He hasn’t…that’s the point.
There is nothing that he has done that has been acceptable to the Republican Party base.
What exactly has been Republican about his administration?
There are two things I can think of:
1.) Killed Bin Laden
2.) Didn’t let the Tax Cuts expire
Well, well, well, MG, Obama announced this PM that he will have a detailed economic plan by early September. We’ll see.
Hmm, there is a difference between Republican pre-2008 and post-2008.
I would say we need “slow-trot” General George Thomas rather than Grant
Yeah. How about that…
there aren’t eight people in America who would know what you are talking about. even i am not sure.
Promoting a policy that may not be possible with the current congress will help Obama politically. The democratic base, the union member you know the people who go door to door, make phone calls and are the backbone of the presidents party support stimulus. It would be in the same vein as Repubs talking about their social issues or privatizing everything. it plays with the base and that is what drives a campaign. You ask for evidence yet your argument is a bit “twitty” and the thought of being mocked by a man of your stature isn’t much of a deterrent.
Thomas, who had a good record up to that point, was defending Nashville from Confederate forces lead by John Bell Hood. Lincoln and Grant were unhappy with Thomas for not moving as soon against Hood as they wanted and were just about to relieve him, when Thomas… who had been telling them he would move when he was ready… moved. The result was the complete destruction of Hood’s army.
Some say Thomas was a better strategist than either Grant or Sherman… but what this has to do with Obama I can’t say.
since you seem unable to appreciate irony, you probably won’t understand that obamacare… even if i don’t like aspects of it myself… has not done nearly so badly as the insane right paints it.
there is a difference between “Republican” and the Republican Party base. The Republican Party base consists entirely of people who don’t have the mental resources to resist the propaganda fed them on their daily radio and tv shows. the tragedy of the Republican Party is that after they began winning elections on the basis of that propaganda found themselves electing people who believe it, or who are so depraved they will use the advantage it gives them to destroy the country.
you wouldn’t have noticed, but Obama’s persistent efforts to undercut and sell out Social Security counts as “Republican” these days, though Eisenhower knew that the people who hated Social Security were “stupid.” The “stimulus” was designed along Republican lines… tax cuts and subsidies to big business.
I used to live far enough from Palatka Florida that I noticed the stink of the paper mill when I drove through it. the people who lived there didn’t notice it, or they said “it smells like money to me.”
You have been living in the stink of Republican “ideas” so long, you don’t notice them when someone you have labled “Liberal” smells just like them.
i think you are being a bit hard on robert. but i could cite examples of Republicans running on policies that the public was not yet ready to accept. after a few years of hearing the same lies, the public began to believe them.
can you imagine the effect of hearing the truth repeated year after year?
[that last was directed to Robert. Jewett seems to understand the point already.]
SW is right. it’s not the essence of the policy it’s what you call it. A policy called “stimulus” cannot be sold now. Call it a “jobs program” (actually public works, training, support for teachers’ salaries, or anything that can sell) and finance it by taxes on the rich. It probably won’t get through Congress, but can be used for bashing GOP.
sounds reasonable to me. but this morning I heard the obama plan… extend the payroll tax holiday and give a tax break to companies to hire returning veterans.
in other words gut social security and cut taxes.
side note to Darren
“obama can’t show his true colors.”
actually it’s pretty hard to hide your true colors when you are President of the United States.
It hasn’t been implemented yet…what are you talking about? The President and the Democrats had so much confidence in it they made sure it wasn’t fully implemented unitl the were all out of office.
“sell out Social Security counts as “Republican” these days”
BullShit…let’s see some evidenece!
“The “stimulus” was designed along Republican lines… tax cuts and subsidies to big business.”
BullShit…no real taxes cuts. Mainly incentives and breaks, and it made up a tiny portion of the Stimulus. Republicans were competely shut out of the debate over the Stimulus….you’re a flat out liar!
and you are an idiot. you wouldn’t know bullshit if you ate a plate of it at a Republican fund raiser.
The “stimulus” was designed along Republican lines…
You are either a liar, or do very poor research. Only 3 out of 217 Republicans in the House and Senate voted for the Stimulus.
yes, that’s my point. it hasn’t been implemented yet, but all Republicans are sure it’s a disaster. take rich for example.
neither. but unlike you i can think. the stimulus being designed on republican lines has nothing to do with whether the republicans voted for it. the republicans do not vote for republican policies. they vote against Obama.
This should be remembered as one of the main posts that Robert Waldmann abandoned, never responding to any of the Angry Bear participants.
Far for the course…
Democrats did what had to be done to get the bill passed in spite of Republican obstruction.
Also many of them will certainly still be in office in 2014 as they are Senators whose terms end in January 2005. Notably they alllll voted for the bill.
I try not to make predictions, but I am willing to bet that Republicans will denounce Democrats for touching the reform and that some group like tea partiers will protest demanding that the Democrats keep their government hands off of our health insurance subsidies and regulatory reforms.
Compared to what Ronald Reagan said about Medicare, Republicans endorsed Obamacare.
Oh and the executive who first signed a bill basically similar to the PPACA is (or was recently) number one in polls of Republican Presidential hopefuls.
I thought I was clear. Presidential candidates rarely advocate policies which are opposed by the vast majority of the public and which they can’t implement. Most of our confused fellow citizens oppose another big stimulus. I am sure it would be good policy, but it won’t happen and advocating it is bad politics.
My view is that Obama should advocate things which are popular such as higher taxes on rich people, extending the payroll tax holidy and punishing bankers by all legal means.
But, if I understand correctly, Sperling says he should avocate another big stimulus. I agree with Sperling that this policy, if implemented, would be better for the country than eg tormenting bankers. But most of the country disagrees with us.
When you can’t do it *and* most people will be angry with you for trying to do it, don’t do it.
I don’t understand how you could have read my post and then brought up a proposal to soak the rich as if you had reason to bbelieve I oppose making such a proposal. I have been advocating that proposal (and policy) for 19 years now.
I think a better approach is to advocate progressive tax cuts (extend payroll tax holidy or bring back the making work pay tax cut or, better, demand both). This is OK polic — not as good as spending increases in GDP bang for the debt buck but OK. It is also popular (people like to get checks in the mail). Finally the fact that Republicans oppose tax cuts except for tax cuts for rich people should be known and knowledge of that fact will damage the Republican party severely.
Notably, Obama is doing just what I would advise.
Campaign on tax cuts for the poor and working class and not on spending increases. It isn’t quite as good policy, but it is much better politics.
I should have written my proposal in my post MG. Sorry. I advocate 3 things.
1) tax cuts for the non rich — extension of the payroll tax holiday plus bring back the making work pay tax credit (at the original $1,000 per family not 800).
2) Make HAMP less horrible and continue it (help for homeowners).
3) say deficit won’t increase because of an increased tax on the super rich.
Obama has already done 1 and 2. He won’t do 3 (that would be class war) but it is really unimportant. The point of that is to reassure the three people who really care about the deficit. It isn’t what the economy needs right now.
OK 4) not cutting off unemployment insurance for people unemployed more than 27 months but less than 99 is necessary and so he has to try even if it might not be popular.
5) Also call for bringing back TANF advantage (help for welfare recipients to find jobs). Probably won’t happen and might not be popular but has to be tried.
Now I think optimal policy would consist instead of sending money to state and local government (so they don’t have to lay workers off) and some infrastructure spending. But advocating this is politically costly and it won’t get done so it is paying a pilitical cost for nothing, so I don’t think Obama should admit that he agrees with me (and Sperling).
I am participating in a debate without knowing what the actual real live debaters said. I just assume that Sperling wasn’t talking about htat. A key part of your proposal is “financed by taxes on the rich.” That doesn’t make Keynesian sense (higher taxes on the rich are very slightly bad for aggregate demand). But it makes political sense. If I thought the proposal was to soak the rich and … then I would be enthusiastic. That’s good politics. But I am confident that that is not what Sperling advocated. At the link you will find him arguing that the deficit doesn’t matter politically. That does not correspond to “financed by taxes on the rich” but to “financed by selling more bonds.” I agree with Sperling that it is less good to raise taxes on the rich now than in normal times. I suspect he agrees with me that, even now, it is good policy. But I think it is clear that he is *not* advocating a jobs program “financed by taxes on the rich.” I’m all for advocating higher taxes on the rich.
I’m not sure about “public works, training or support for teachers’ salaries.” I suspect that support for public works is low. I’m pretty sure that support for training has been low for decades. Support for teachers’ salaries was the least popular part of the ARRA (stimulus).
I think I read hints the claim that the public can be convinced by “framing” I demanded that any such claim come with a historical example. I note that I have not read the trace of a hint of any reference to history (or any reference to any evidence about public opinion) so far in this thread
You are totally wrong Coberly. The payroll tax holiday has no effect on social security. The current law requires the lost revenues to be made up by the Treasury. The social security trust fund is not affected at all by the payroll tax holiday.
Now I don’t trust the trust fund either. It won’t defend social security from the Republicans. However I assert that the payroll tax holidy has nothing whatever to do with guttin social security. I also think that if you had bothered to check the facts before commenting you would not have made your claim.
To prevent Social Security from losing tax revenue, Congress mandated that revenues be transferred from the general fund to the Social Security trust funds to make up for the tax reduction”
That was the second hit on my first google search elapsed time less than one minute. I guess you must be really really busy.
I looked for evidence on opinions about stimulus spending among union members. I didn’t find it. I did find this Gallup poll in which people are asked about support for cutting spending, cutting taxes, raising taxes on rich people and more stimulus spending..
5% supported “more stimulus spending.” Union membership is, unfortunately, very low in the USA, but 5% is less than half of union members (support among self described Demcorats was 9%).
I think my view that a proposal to cut taxes for the non rich and raise taxes on the rich is likely to be more popular than your proposal to increase stimulus spending.
OK now put up or shut up. You can
1. Admit you made a claim of fact without bothering to look at any evidence
2. present evidence which supports your claim and tends to balance the evidence which I found in a few minutes
3. Join Corev in the ignore bin. No problem. It just means I will try not to read anything you write ever again.
“never ” is a strong word MG. I made no promise about promptness.
Update: [some rudeness deleted]
By the way Corev is the one and only commenter in my ignore bin (I don’t read his comments). I worry that he might have company soon.
we do be having trouble understanding each other. i think you are wrong about Presidents advocating policies… but there is probably some special definition of “can’t implement” that i don’t understand.
others here have pointed out that you can advocate a stimulus without calling it that and the public will say “yes, that’s what we need to do.” certainly if you call a stimulus a tax cut, the public will vote for it. only i say that’s the wrong kind of stimulus for these particular times.
extending the payroll tax cut is a bad policy, and O should not advocate it even if the people think it’s a great idea.
advocating higher taxes “on the rich” may or may not be a political winner. my guess is that the money of the rich will find a way to beat that policy whatever “the people want.”
used to be politicians understood that you run on “what the people want” and then you govern on what the people need, with only a little ordinary graft. now we are governed by lunatics who either believe what they are telling “the people” or are still working on a complete and total revolution that puts all power into their hands for a thousand years.
i certainly don’t see where i suggested you opposed soaking the rich. but just to be clear, i think we need to raise taxes on the rich to pay for what we have already bought (that is, bring the deficit down to at least where it is no longer a political factor). but “soak the rich” will not win as a political slogan, and I think it is necessary that the poor and poor suffering middle class have their taxes raised also, in solidarity. just for the moral exercise.
when i was as poor as it was possible to be in this country i would not have noticed a 3% increase in my taxes… if it wasn’t shouted about… and over the next seventy five years the workers will need to pay an extra 2% (their share) payroll tax if they are going to have an honest retirement… fortunately their incomes will have doubled by then, so they won’t notice it… unless it is shouted about.
the payroll tax cut is theft from the workers retirement fund. it’s the man in the suit saying “you look like a smart young feller to me” why don’t you dip into your savings (or your grandmother’s savings) and run out to walmart and buy that new weed eater you’ve been lusting after).
the man in the suit owns walmart. and at the end of the day he will have your money in return for a plastic weed eater he bought in china cheap, made by organ donors, and you will have to work for him, cheap, when you are seventy five because you will have spent your retirement savings.
and if the government borrows money to make the Trust Fund whole, the Big Liars can run around claiming, “see, Social Security does increase the deficit, just like we always said, even when it didn’t.”
but it’s not Social Security increasng the deficit, it’s the payroll tax holiday that is increasing the deficit. and that’s why they wanted it.
to fool the foolish.
tax cuts for the still working “not rich” is bad policy. those people are getting by. if you want stimulus raise their taxes a small amount and use the money to create jobs, or at least extend unemployment benefits to people who have NO income.
The payroll tax holiday is a crime. It is a stealth attack against Social Security.
Instead of an “increased tax on the super rich” a modest, progressive, tax increase across the board will reduce the deficit..without spooking the horses.
the constant moaning by “liberals” to “tax the rich” but “don’t tax me” is morally offensive and politically stupid, and not even good economics.
now i think you are being too hard on jewett. that makes me sad because both of you are more or less on my side, though you are wrong, in my opinion, on the details.
what polls say is not too useful if you take them as “absolute” indicators of anything except the current state of the propaganda war.
you won’t get much in the way of references from me. back in the day i could find references for either side of any issue. so i’ll stick with trying to make my points by sheer rhetoric, and an occasional modest appeal to simple arithmetic.
i have no doubt you are right as to what the people say they want. since that’s what’s got us here, i think it is time to start educating the people as to what the truth is, and what they need.
raising their own taxes would be a healthy beginning, and would give them the moral standing to raise the taxes of the rich “progressively” but not “excessively.”
and certainly anyone who supports the payroll tax cut hasn’t been paying attention to… dare i say it… references to coberly at angry bear.
as for higher taxes on the rich being slightly bad for aggregate demand… could be. but as anyone who ever read chapter one of economics 101 text.. economics is about choices. we can choose to reduce aggregate demand if we have some other purpose we want more.
nor is it clear that in the present situation where the rich are neither consuming nor investing “enough” that taxing their idle money and putting it to work in government projects would reduce aggregate demand.
we could for example demand more leisure.
since we wouldn’t be paying for it, it would show up as reduced GDP and all the economists would go crazy, as would the people whose income depends on the people “demanding” more and more of the things money can buy.
there are some people who think this looks like a form of insanity. or cancer.
I know the facts about Social Security far better than you do. And given the absurd arrogance of your replies, which I have been trying to be kind about.. far better than you ever will.
I am not sure if you have read where i pointed out that the purpose of the payroll tax holiday was to create a situation where the Big Liars could claim that SS does add to the deficit. But it’s beginning to look like you wouldn’t have thought about that if you did.
feel free to ignore me. it will be easier on both of us if you do.
Republican obstruction? Republican were completely shut out of the debate…remember?
“the executive who first signed a bill basically similar to the PPACA”
Sorry Pal……Romney had a series of vetos after his basic plan was added on to and modified. The Democrat controlled legislature overrode his vetos. You can claim it’s RomneyCare but the facts do not support that, and there is very little similarity to what Romney tried to do compared to what we ended up with in ObamaCare.