Relevant and even prescient commentary on news, politics and the economy.

What Once was Naivete is Now Idiocy

Update: Brad DeLong appears to confirm that Obama’s inner circle would be best served by being placed in a circular firing squad, given live ammo, and being told to “do what is right.”

The plethora of disingenuous claims that Barack Obama “won” with the McConnell-Obama “compromise” are legend. See, for instance, the idiocy of Andrew Sullivan (of which Andrew Samwick is too generous when he describes it as “poor political tactics“; see also Brad DeLong), and the Administration’s disingenuous “what ‘we’ won” chart.

The big question was how this is supposed to stimulate the economy. Those of us who argued that it would do damage noted that it was the first move.

Obama has so far played (as I noted earlier): 1 g4 e5

Now, Mark Thoma discovers that he really does intend 2 f3 and then will wait for the Republican’s next move:

The second part, now being teed up by the White House and key Senate Democrats, is a scheme for the president to embrace much of the Bowles-Simpson plan — including cuts in Social Security. This is to be unveiled, according to well-placed sources, in the president’s State of the Union address.

followed soon by what may be the stupidest serious paragraph ever written by someone who isn’t Donald Luskin:

White House strategists believe this can also give Obama “credit” for getting serious about deficit reduction — now more urgent with the nearly $900 billion increase in the deficit via the tax cut deal.

We have always heard that the first Black President would be subject to an increased threat of assassination. Only now do we discover that he intends to commit seppuku.

The optimistic version of his chances for re-election now appears to be the case presented by “Norman” in comments to my previous post (slightly edited for clarity):

If “O” continues his so called compromise—giving in to whatever the right wants—doesn’t pull a LBJ and gets the nod in 2012, the Repubs nominate Sarah [Palin], then it’s quite possible he could win again. Only this time, the Republicans would be a deciding factor in the win. Why? Because they know he will cave on just about everything they ask for.

The only quibble there may be the “just about.”

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Can Either James Kwak or Mark Thoma Build This Model?

Update: Brad DeLong looks at the data and suggests that the problem may be that the current President is as innumerate as the previous one.

Mark Thoma quotes James Kwak:

So no, I don’t think Obama is abandoning his principles for political advantage; I think these are his principles. And while I’m upset at him, I’m upset at him for being wrong on the policy level, not for abandoning anything or selling out…I always thought Obama was a moderate who looked like a progressive.

I’m with Kwak on that; it’s one of the reasons I supported the relatively-more-progressive Hillary through the primaries.*

Where I’m less sanguine is the base from which Mark let him start:

Obama is certainly in a decent position politically, and I would bet on him to be reelected comfortably in 2012.

In 1996, Bill Clinton had the advantage of Bob Dole—the 1996 equivalent of Newt Gingrich—being his opponent. Dole had been a known quantity to voters for over a decade (“Do you want Grits and Fritz or a Ford Dole?”) who supported Clarence Thomas, talked about Hideo Nomo of the Brooklyn Dodgers, and fell off the front of a stage—and still garnered more than 40% of the vote, losing the popular vote by only slightly more votes than Ross Perot won. And that was after the advantage of a virtually-uncontested primary, which Mr. Obama may not enjoy.**

Kwak later backtracks a bit:

I think two years would be enough time for labor markets to recover if we could expect policy supporting employment along the way. But we are likely to get just the opposite, deficit cutting measures and other policies that work against employment and hence work against electoral success for the Democrats. Toss in a compromise on Social Security that angers the Democratic base, a possibility that cannot be dismissed as Obama follows up on what appears to be a successful move to the center, and the future does not look as bright. Obama may think he is playing the game well now, but the game is far from over.

This is at least far more accurate than the declaration that Obama won when his opening g4 was followed by the Republican’s e5. And Thoma follows up with his expectation of Obama’s next move being f3:

That would put an end to any stimulus due to the tax compromise. Stimulating the economy was never the intent of the GOP when they agreed to the tax compromise, it was all about the estate tax and tax cuts for the wealthy. They will do what they can to decrease government spending over the next two years, starting in January, and if they are successful it will reverse any benefit the economy might have received from the compromise.

Given that we all agree on the likely next two years, it would be nice to see an economic model from either Mark or James Kwak that justifies the expectation that Obama is in a position “to be reelected comfortably in 2012.”

At the very least, I want to offer to bet with Mr. Kwak, at even odds, with proceeds to go to the charity of the winner’s choice. Here’s my choice.

*The other being that she would know from the start that she was hated, and be ready for bear at the outset. (As an aside: sorry, Scott, but hiring Mark Penn, while a mistake, is not a revelation of policy preferences. Or, if you want to argue it is, tell us what replacing Howard Dean and the 50-State Strategy with Tim Kaine and Suborning Democrats such as Sibelius and Napolitano into the Administration is.)

**I say this not only because I would like to see him challenged—his doing a Specter in 2011 is about the only hope for my grandchildren—but also because it makes sense to prepare the field for 2016 and beyond. It would be dumber of the Democrats not to have someone challenge him in the primary, leaving only HRC and Joe Biden as probably 2016 candidates, than it would be to unite behind him in the hope that Republicans nominate someone who is unelectable a la Dole in 1996.

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I Tend to Describe this as "Unwarranted Optimism"

The Shrill One (tm – Brad DeLong) as Optimist:

The result, then, will be high unemployment leading into the 2010 elections, and corresponding Democratic losses. These losses will be worse because Obama, by pursuing a uniformly pro-banker policy without even a gesture to popular anger over the bailouts, has ceded populist energy to the right and demoralized the movement that brought him to power.

Despite all this, the midterms probably won’t give Republicans the majority in the House. But the losses will be big enough to deny Obama a working majority for any major initiatives in the rest of his first term. (My guess is that he’ll be reelected thanks to the true awfulness of the Republican nominee). Since Republicans are dead set against any of the things I think could help pull the economy out of its rut, this means more economic stagnation.

Can anyone point to any evidence of either of the bolded statements being likely to be true? (I’ll pre-emptively conceed that the Republican nominee may well be awful—probably a 75% probability, since the current Best Case Scenario is Mittens. But adjust you expectations by what you would have expected the Democratic Party nominee to be in late 2005.

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Nails: The 2012 Republican candidate for President?

From Lenny Dyksytra’s letter to friends about his bankruptcy filing yesterday:

William McKinley filed for protection while serving as Ohio’s governor in 1893. He was in debt to the tune of $130,000 (an insurmountable sum in those days!) before some friends eventually helped to bail him out. Three years later, he occupied a desk in the Oval Office. [emphasis mine]

That seems much clearer than declaring you’re “not a quitter” while wearing hip-waders while your lawyer claims your multimillion dollar book deal (and private fortune) aren’t enough to deal with the cost of ethics charges against you.

Also, Jim Cramer may want to avoid Lenny for a while:

Ulysses S. Grant went bankrupt after leaving office when a partner in an investment-banking venture swindled him. (I can certainly identify with this one.) [emphasis mine]

Good thing Dykstra doesn’t pretend to be an investment advisor.

Oh. Well, at least no one ever sang his praises in the mass media, right?

Oops.

Dykstra in 2012, on a platform of Fiscal Responsibility. “Returning to the Glory of the McKinley Era.”

Seems as likely to work as anything else.

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Strangely, CATO missed the AZ, IN, and MS budget crises

CATO was making much hay a few days ago about budget problems in California, New York, and New Jersey, which can be explained, respectively, by the Governor’s veto of an Assembly-passed budget a few months ago, the decline in tax revenues from financial services firms and continuing loss of upstate industry, and underfunded pension obligations whose origins date back to Christie’s cocaine-inspired budgets of the mid-1990s.

Strangely (via Dr. Black), they missed the crises in a few other states, most especially including the state governed by Republic hero Mitch Daniels:

Republican Gov. Mitch Daniels has warned residents that most of the state’s services — including its parks, the Bureau of Motor Vehicles and state-regulated casinos — would be shuttered unless a budget is passed today.

Closing down the casinos? Now that is extreme.

Mitch Daniels, doing for my old home state what he did for the country.

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