Tuesday Morning Reads

Good Morning!

I’m tired of Republican Party Dysfunction. Let’s switch to the Democratic Party Brand for awhile.  This year’s State of the Union address will be interesting.  Will it turn out to be the first major Obama campaign speech of 2102?

Mr. Obama plans, in part, to deliver a “vision” speech. He told campaign supporters over the weekend that he’ll use his speech to discuss “the central mission we have as a country, and my central focus as president.”

“And that’s rebuilding an economy where hard work pays off and responsibility is rewarded – and an America where everybody gets a fair shot, everyone does their fair share, and everybody plays by the same set of rules,” he said.

If that sound familiar, it’s a refrain of remarks Mr. Obama delivered December 6th in Osawatomie, Kansas. Both the president and aides characterize the State of the Union as a “bookend” to the Kansas speech. It was a delineation of the political philosophy Mr. Obama brings to the job and is willing to defend against whichever Republican ends up as his rival later in the year.

Economic programs and objectives will dominate his speech. “I’m going to lay out a blueprint for an American economy that’s built to last,” said the president in a video email Saturday to campaign supporters. And Mr. Obama will cite the “four pillars” on which his blueprint for America will rest: manufacturing, engineering, worker skills and American values.

  • MANUFACTURING: According to “talking points” sent by the White House to its political defenders and surrogates, the president will call for “a new era of American manufacturing with more good jobs and more products stamped Made in the USA.
  • ENERGY: He will propose “a new era” for energy in the US – “fueled by homegrown & alternative energy sources.
  • WORKER SKILLS: He’ll put forward “new ideas” for education and training to take on “jobs of today and tomorrow.”
  • AMERICAN VALUES: The president will call for “a return to American Values of fairness for all and responsibility from all.”

We’ll be live blogging the SOTU tonight.  I’m suggesting we pitch nerf balls at the TV for every Teddy Roosevelt reference and drink on references to Republican belligerence.  What say you?

Here’s some pretty good indications of why the economy has been so slow and pokey recently.   Check out The New Yorker and “The Obama Memos”. It’s getting more pundit play than Suskind’s “Confidence Men”.  Pay close attention to the whacked advice from Larry Summers who suggested Obama not go very big on the first stimulus because they could just do more later.  Let’s just hope a rumored World Bank Presidency stays just that.  Imagine this man turned on the developing world.  However, there’s a lot more tidbits in there worth chewing on.  Like this one.

Neera Tanden was the policy director for Clinton’s campaign. When Clinton lost the Democratic race, Tanden became the director of domestic policy for Obama’s general-election campaign, and then a senior official working on health care in his Administration. She is now the president of the liberal Center for American Progress, perhaps the most important institution in Democratic politics. “It was a character attack,” Tanden said recently, speaking about the Obama campaign against Clinton. “I went over to Obama, I’m a big supporter of the President, but their campaign was entirely a character attack on Hillary as a liar and untrustworthy. It wasn’t an ‘issue contrast,’ it was entirely personal.” And, of course, it worked.

But back to La La Summers.

There was an obvious tension between the warning about the extent of the financial crisis, which would require large-scale spending, and the warning about the looming federal budget deficits, which would require fiscal restraint. The tension reflected the competing concerns of two of Obama’s advisers. Christina Romer, the incoming chairman of the Council of Economic Advisers, drafted the stimulus material. A Berkeley economist, she was new to government. She believed that she had persuaded Summers to raise the stimulus recommendation above the initial estimate, six hundred billion dollars, to something closer to eight hundred billion dollars, but she was frustrated that she wasn’t allowed to present an even larger option. When she had done so in earlier meetings, the incoming chief of staff, Rahm Emanuel, asked her, “What are you smoking?” She was warned that her credibility as an adviser would be damaged if she pushed beyond the consensus recommendation.

Peter Orszag, the incoming budget director, was a relentless advocate of fiscal restraint. He was well known in Washington policy circles as a deficit hawk. Orszag insisted that there were mechanical limits to how much money the government could spend effectively in two years. In the Summers memo, he contributed sections about historic deficits and the need to scale back campaign promises. The Romer-Orszag divide was the start of a rift inside the Administration that continued for the next two years.

Since 2009, some economists have insisted that the stimulus was too small. White House defenders have responded that a larger stimulus would not have moved through Congress. But the Summers memo barely mentioned Congress, noting only that his recommendation of a stimulus above six hundred billion dollars was “an economic judgment that would need to be combined with political judgments about what is feasible.”

He offered the President four illustrative stimulus plans: $550 billion, $665 billion, $810 billion, and $890 billion. Obama was never offered the option of a stimulus package commensurate with the size of the hole in the economy––known by economists as the “output gap”––which was estimated at two trillion dollars during 2009 and 2010. Summers advised the President that a larger stimulus could actually make things worse. “An excessive recovery package could spook markets or the public and be counterproductive,” he wrote, and added that none of his recommendations “returns the unemployment rate to its normal, pre-recession level. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.”

Paul Krugman, a Times columnist and a Nobel Prize-winning economist who persistently supported a larger stimulus, told me that Summers’s assertion about market fears was a “bang my head on the table” argument. “He’s invoking the invisible bond vigilantes, basically saying that investors would be scared and drive up interest rates. That’s a major economic misjudgment.” Since the beginning of the crisis, the U.S. has borrowed more than five trillion dollars, and the interest rate on the ten-year Treasury bills is under two per cent. The markets that Summers warned Obama about have been calm.

I know this is an add source for me, but the AEI has “Eleven stunning revelations from Larry Summers” has a list of quotes from the actual memo.  That’s what I’m going to use here. First, stimulus projects were not picked based on their impact on the economy but on their ability to fulfill campaign promises.

The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary. …  The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.

Another stunner was this quote which blames banking regulators.  I suppose Wall Street was an innocent in all of this?

A significant cause of the current crisis lies in the failure of regulators to exercise vigorously the authority they already have.

Krugman had this to say about the memo in a post called “Larry and the Invisibles”.

The key thing I took away from the memo is that it does not read at all like the current story the administration gives for the inadequate size of the stimulus, which is that they knew it should be larger but had to face political reality.

Instead, the memo argues that a bigger stimulus would be counterproductive in economic terms, because of the “market reaction”. That is, Summers et al were afraid of the invisible bond vigilantes.

And to the extent that there is a political judgment, it’s all in the opposite direction: if the stimulus is too big, we’ll have trouble scaling it back, but if it’s too small, we can always go back to Congress for more. That was deeply naive — and I said so in real time.

Now, you can still argue that politics made a bigger stimulus impossible. But that’s not at all the argument being made internally within the administration at the time.

At this point, the shrill one goes all mushy and says that Obama has “toughened” up since then.  I guess we’ll see.

Right now, I’d say the country is between a Barrack and a hard right place.  What’s a voter to do with such a Hobson’s choice?

So, that’s what I’ve got to offer this morning.  What’s on your reading and blogging list today?

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40 Comments on “Tuesday Morning Reads”

  1. Pat Johnson says:

    I suppose I should – but I won’t – be watching the annual SOTU address. I never do since I can’t stand watching them clap and get to their feet at the end of every sentence. A 20 minute speech that takes 2 hours to deliver is a waste of time.

    It has nothing to do with which president delivers it, it’s that year after year it is the same “sop” that never sees the light of day but rouses the partisans to clap, clap, clap over nothing.

    “We can do better” and we never do. “We have a long way to go” but never move. Same old, same old crapola.

    And then having to watch Tangee Boehner overlooking Obama’s shoulder is another reason to tune out.

  2. Minkoff Minx says:

    FL Debate: Romney Combusts Newt’s Megalomania + Insecurity – Esquire

    “Influence peddler”?
    Damn, Willard, I didn’t see that one coming.
    I would have preferred “adulterous grifter,” but “influence peddler” ain’t bad. It’s the cleanest, hardest punch you’ve landed on N. Leroy Gingrich, Definer of Civilization’s Rules and Leader (Perhaps) of the Civilizing Forces. And you rocked him just a little there. His rhetoric went fuzzy and his eyes spun just a bit. In the ancient argot of the fight game, I’d say you had him on Queer Street, if I didn’t think that would set off another eruption from Rick Santorum.

      • dakinikat says:

        Gingrich must be one of those dark creatures that feeds on human evil energy. Perhaps some kind of demented incubus.

      • northwestrain says:

        Well he isn’t human — so he has to be some sort of evil demon.

        Lots of demon kind to choose from. Also selling his soul to evil paymasters. Newtie has the same wasted look as Cheney (wives also have a similar look). Anyone see auras?

    • Pat Johnson says:

      What I noticed was that with a “subdued crowd” unable to applaud his every snide comment, Newt seemed a little “off” without his usual “schtick”.

      The whole thing boils down to two seriously flawed men seeking to unseat another seriously flawed man and not one of the three draws any inspiration.

      Newtie is not “the champion debater” they claim him to be since he is “lost” without the Roman Coliseum of blood thirsty apes that he depends upon for support.

      He rises to the “applause” and without it he comes across as just another, less than extraordinary politician without much meat on his bones.

      Mitt may be boring. Santorum unexceptional. But Newt, without the immediate reaction of the crowd is empty.

      • Minkoff Minx says:

        Agree with you wholeheartedly Pat.

      • dakinikat says:

        I think they call that demagoguery.

      • Allie says:

        Interesting! I didn’t watch, but that confirms my belief that it is his fiery style that attracts the Fox News crowd. Mitt is way too milk-toasty for them.

        Those family values right-wingers sure seem to be angry, mean people…

      • ralphb says:

        I watched a piece of the debate in replay and Newtie would pause for what looked like a scripted audience applause reaction. He didn’t seem to know how to go on without it.

        Since he gains more from debates than anyone else, I think he should be allowed to sit them out and watch his numbers fall while Willard attacks an empty podium. Wouldn’t last long.

      • peggysue22 says:

        It certainly warms the cockles of my heart to know Uncle Newt is standing for the First Amendment rights of future debate audiences. He refuses to participate unless the audience is allowed to urge the Eye of the Newt’s passions, put him into performance mode, so that he can be transformed into the true Snake Oil Salesman he truly is. Obama is going to be dethroned as the Great Bamboozler. Sorry, Uncle Newt has the title hands down.

        Btw, I agree–the debate organizers ought to call the ego-maniac’s bluff. Then we’ll see Uncle Newt go into that good night because he literally feeds off the attention, the audience’s rowdy affirmation.

        Even I cannot believe the Big Ugly is this big, this ugly. Yowsa! What a year.

  3. Fannie says:

    We know Obama and the obots trashed Hillary just for the hell of it. And that was perfectly ok, until PUMA stepped up, and scared the schitt out of them, for christsake don’t say nothing negative about Obama or your head was coming off with a big coconut knife from Hawaii.

    It was a big mistake for them to suggest women voting for Hillary were very shallow, when we knew it was she who had the “experience” to lead this country. They lowered themselves, and we are here, with much respect for Hillary.

    • ralphb says:

      The Obama campaign did not trash Hillary “just for the hell of it”. They attacked character because it was their only way to combat her superior experience and competence. They sure as hell couldn’t run a campaign based on Obama’s experience, now could they?

      I hate to say this but “pols will be pols” and successful politicians will do whatever it takes to win. That’s just the way it is, whether we like it or not.

  4. The Rock says:

    We’ll be live blogging the SOTU tonight. I’m suggesting we pitch nerf balls at the TV for every Teddy Roosevelt reference and drink on references to Republican belligerence. What say you?

    AYE!

    Hillary 2012

  5. bostonboomer says:

    Thank you so much for writing about the Obama memos, Dak. I plan to dig into that story today. Larry Summers should get up tonight at the SOTU and make a public apology to every single American.

    • peggysue22 says:

      And Summers is being seriously considered to head the World Bank. Oh, Lordy! We just keep shifting the board with these morally bankrupt players.

  6. ralphb says:

    Leave it to the Irish to transform the often tedious, daily struggle for justice into poetry for us all. h/t Rachel Maddow

    “An ordinary, beautiful life” …

    • peggysue22 says:

      Wow! Sing it, Ireland. Your voice is for your own, for us, everywhere. Stirs my Irish American blood! The Welsh part, too!

      That’s a keeper, ralph.

  7. dakinikat says:

    Lord, even a WSJ op ed writer has it right.

    http://online.wsj.com/article/SB10001424052970203806504577178594236642420.html

    Above all, it doesn’t matter that Americans are generally eager to send Mr. Obama packing. All they need is to be reasonably sure that the alternative won’t be another fiasco. But they can’t be reasonably sure, so it’s going to be four more years of the disappointment you already know.

    Is this the best they can do?

    As for the current GOP field, it’s like confronting a terminal diagnosis. There may be an apparent range of treatments: conventional (Romney), experimental (Gingrich), homeopathic (Paul) or prayerful (Santorum). But none will avail you in the end. Just try to exit laughing.

    That’s my theory for why South Carolina gave Newt Gingrich his big primary win on Saturday: Voters instinctively prefer the idea of an entertaining Newt-Obama contest—the aspiring Caesar versus the failed Redeemer—over a dreary Mitt-Obama one. The problem is that voters also know that Gaius Gingrich is liable to deliver his prime-time speeches in purple toga while holding tight to darling Messalina’s—sorry, Callista’s—bejeweled fingers. A primary ballot for Mr. Gingrich is a vote for an entertaining election, not a Republican in the White House.

  8. ralphb says:

    ABC: Sharp Swings in Political Popularity as the Wild Ride of 2012 Continues

    Unfavorable views of Mitt Romney have soared, doubts about Newt Gingrich remain widespread and Barack Obama has advanced to his highest personal popularity in more than a year — all in advance of the State of the Union address in which Obama makes his case for a second term.

    GOP food fight looks like it’s helping Obama.

    • ralphb says:

      Ouch!

      The sharpest shifts have been among independents. Unfavorable opinions of Romney have soared by 17 points in this group since Jan. 8, to 51 percent; favorable opinions have dropped by 18 points among independents in the same period, to just 23 percent. Gingrich, for his part, has lost 11 points among independents since December, to 22 percent favorability. Obama, by contrast, gets a 51 percent favorable rating from independents.

  9. peggysue22 says:

    Ahhhh, Obama. The lesser of all evils. But evil nonetheless.

    Bread and circuses time. I’m predicting Obama will pull out his populist act tonight, another round of conjuring up Teddy Roosevelt. Meanwhile he’s working behind the scenes [so far unsuccessfully] to strike a sweetheart deal with the banks on the housing debacle.

    So good to know the Rule of Law is held in such high regard–for the peons, that is. Not the well-heeled thieves who stuff reelection coffers.

  10. ralphb says:

    Tax lawyers question Gingrich’s 2010 return

    GOP presidential contender Newt Gingrich used a popular tax strategy that enabled him to avoid paying Medicare tax on most of his 2010 income, three tax lawyers told USA TODAY.

    After reviewing the 2010 federal tax return Gingrich released last week, the tax experts said he may have left himself open to an IRS challenge.

    “That could be the type of return that would be flagged for an audit,” said one of the experts, Robert McKenzie, a tax attorney at the Arnstein & Lehr law firm in Chicago.

    The experts, who also included Bryan Skarlatos, of Kostelanetz & Fink in New York, and Martin Press, of the Gunster law firm in Fort Lauderdale, said it would be difficult to pinpoint the amount of Medicare tax that went unpaid without additional financial detail. But they estimated it could amount to tens of thousands of dollars.

    This is simply hilarious. It’s always fun to see someone hoist with their own petard.

  11. What happened to Dak’s post? It was there & now it isn’t.

    Have ya’ll seen last night’s Daily Show? http://www.thedailyshow.com/watch/mon-january-23-2012/indecision-2012—the-gingrich-who-stole-south-carolina?xrs=share_copy