Sunday, July 31, 2011

What Was He Thinking?

Every time I have thought President Obama was on the verge of making an unwise decision, I have assumed that since he is privy to a lot of information I don’t have that I should trust his judgment. But now, on the verge of an epic defeat that may very well harm his reelection prospects, I realize that he is as fallible as all human beings and quite capable of making foolish decisions.

Before I outline why his handling of the debt-ceiling debate has been a complete debacle, let me be clear that I do not share the general view that Obama has betrayed progressives and liberals. Obama always campaigned as someone on the center-left, and much more on the center than on the left.

Recall that his healthcare proposal was the most conservative of the three major Democratic candidates; it didn’t even include an individual mandate. Many liberals oppose his escalation of the Afghanistan War, but he promised to do exactly that multiple times during the campaign. And never once did Obama come out in support of gay marriage despite the obvious parallels with the Civil Rights movement that he so often referenced.

Up until now Obama’s governance style and legislative accomplishments have been remarkably consistent with his campaign promises (those on the right who characterize him as some sort of Marxist are simply delusional).

After the 2010 midterms Obama found himself in extremely challenging political territory. Most current members of the Republican Party have in effect become economic terrorists, willing to sink the U.S. economy in order to promote their extremist agenda (in a rational world their behavior would be characterized as treasonous). And the general level of ignorance promulgated by the media regarding economic fundamentals is at an all time high. In this atmosphere reason is in short supply.

This is where Presidential leadership comes in. The GDP numbers released last Friday were abysmal and indicate that we are on the verge of a double-dip recession. And the reason the situation is so dire is as simple as basic arithmetic: GDP=C+I+G+NX. Consumption has plummeted due to huge losses in wealth and income from the recession, and people are saving a lot more of the income they do have; investment is down because businesses do not see increased demand on the horizon (and they are sitting on record amounts of cash); net exports are doing okay but because the rest of the world is in such bad shape the value of the dollar has not fallen sharply enough to make our goods much more competitive. That leaves government spending as basically the only thing standing in the way of falling GDP.

The revised numbers from 2008-09 show that the recession was even worse than previously thought, with the economy contracting by almost 9% at the nadir. The 2009 stimulus package helped to bring the GDP back from this trough to positive territory, but as it winds down the economy is once again sputtering. This is not rocket science, and yet it is almost unanimously believed that the stimulus failed. This is akin to complaining that water doesn’t put out fires if you use a bucket to put out a burning building.

With joblessness still near record highs for the past 50 years, we are now on the eve of enacting a draconian austerity package as part of what was once a routine debt-ceiling vote. This unprecedented capitulation to the most extremist elements of the rightwing will not only further embolden them, but further weaken the economy and prolong our economic misery. Not only was Obama unable to wrangle any tax increases out of the deal, he didn’t even manage an extra dime of stimulus for anything, not infrastructure, green energy, jobs training, a new payroll tax cut, nothing.

What is even more shocking is that the President at one point offered to make cuts to both Social Security and Medicare as part of a $4 trillion dollar reduction package. He wanted to reduce the rate of increase in Social Security payments and raise the retirement age for Medicare to 67. These are both horribly regressive policies that would save little money, and weaken the Democratic position as defenders of the social safety nets. Social Security isn’t even contributing to the deficit, and as Obama knows it is rising medical costs that must be tackled, not reductions in Medicare eligibility (if anything, Medicare’s lowered overhead costs argue for lowering the age of eligibility).

So what was Obama thinking?

No one knows for sure and we will likely have to wait for years after the end of his presidency (which may well be in 2012) to get the full story. From everything I have read, it appears that Obama vastly underestimated the intransigence of the Republican Party, and in his desire to be the “compromiser in chief” was willing to embrace bad ideas as in order to win over so-called independent voters.

Like many Obama supporters I oscillate between profound disappointment, frustration, and anger. I feel that the President has sacrificed key Democratic principles for nothing. I never expected him to be a fierce partisan or a far-left progressive, but in my mind he has crossed a line.

One last note for those who are thinking of not supporting Obama in 2012; let me remind you that the next President will almost certainly have the opportunity to replace two additional liberal Supreme Court Justices, the fate of the Bush tax cuts hangs in the balance at the end of 2012, and the main provisions of the new healthcare law come into effect in 2014. Come 2016 I’ll be the first to support a true progressive candidate, but no matter how much Obama has let us down, we should support his reelection for the good of the country. That’s what true patriots do; they put country first.

Jason Scorse

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