A Colossal Failure of the American Political System
A First Dark Age of Macroeconomics…

Krugman and the Firebaggers: Hippie Punching Department

Paul Krugman notes:

Hippie Punching: Via Greg Sargent, I learn that some people in the Obama campaign really, really dislike people like me, who complain when the president gives in to GOP blackmail. Well, at least they’re paying attention. I would say this: on one side you have the GOP, which responds to completely crazed Tea Party demands by doing all it can to assure the hard right that it’s on its side. On the other, you have the Democratic establishment or at least part thereof, which responds to complaints from its own base that it’s going too easy on the crazies by lashing out at the base, with a bit of bearded-professor bashing on the side. Way to strengthen your bargaining position, guys.

What is important, I think, is not New Mexico Obama for America State Director Ray Sandoval but rather the more general evolution of thought and message coming from inside the Obama bunker.

Back at the end of 2008, our questions (at least my questions) were: "What if the downturn is bigger than we currently think it will be? What if worries about a jobless recovery and the absence of labor-market mean-reversion turn out to be true? What if--as has happened in the past--this financial crisis turns into sovereign crises and the world economy gets hit by additional shocks? Then your polices will not be bold enough. What is Plan B?" And the answers were all along the lines of:

  1. You are a pessimist. We are already doing unprecedented things to stabilize the economy--and odds are that in a year we will be worrying about inflation and unwinding the stimulus rather than about unemployment.
  2. Obama is genuinely post-partisan, and won't have anything like the trouble Clinton had negotiating with Republicans: our policies will evolve as the situation evolves.

Back in the late summer of 2009, our questions (or at least my questions) were: "You aren't getting any cooperation from Republicans--they appear to have doubled down on the Gingrich-Dole strategy that you win the next election by making the Democratic President a failure. The economy really needs more stimulus. What are you going to do? Isn't it time to use the President's powers more aggressively--to use Fed appointment powers and the Treasury's TARP authority and Reconciliation to do major stimulus?" And the answers were:

  1. We are doing all that we can.
  2. This is really hard.
  3. Things will probably still work out all right.
  4. If worst comes to worst, we will trade long-run budget balance via a spending cut-heavy package of long-run spending cuts and tax increases for short-term stimulus to get us out of the short-term unemployment mess.
  5. Hippie punching.

By the late summer of 2010, our questions (or at least my questions) were: "You are in a total war with the Republican Party. They aren't giving you anything. It is time to seriously push the envelope of executive authority to put policies in place that will reduce unemployment." And the answers were:

  1. The best policy is to achieve long-run fiscal discipline so that the confidence fairy will show up.
  2. Hippie punching.

And now it is the late summer of 2011. Our big question still is: how is Obama going to use executive branch authority to reduce unemployment? There are lots of options: adjourn congress and do some recess appointments to get the Federal Reserve more engaged in actually pursuing its dual mandate, quantitative easing via the Treasury Department, shifting Fannie Mae and Freddie Mac from their do-nothing position by giving them a microeconomic stabilization mission, talking about how a weak dollar is in America's interest.

And this time what I am hearing back is only:

  1. Hippie punching.

It is difficult to read this in any way but as a group of people inside a bunker who (1) have been wrong about the situation, (2) are scared to use the powers they have to try to make things better, and (3) really do not like being reminded that they were wrong about the situation.

That seems to me to mean that the Obama administration right now has one and only one macroeconomic policy idea: hope that the country gets lucky.

Other comments: Steve M.:

No More Mister Nice Blog: Being the Kicked Dog: There's a lot of chatter right now about Ray Sandoval, the New Mexico state director for Obama for America, who, in an e-mail to supporters, recommmended a blog post that bashes Paul Krugman and the "Firebagger lefty blogosphere," in the course of defending Obama. What amuses me is this reaction from Ezra Klein:

Paul Krugman is one op-ed columnist. FireDogLake is one Web site. They have readers. But they are not the state of Ohio. Time and again, however, we see evidence that they have gotten deep inside the White House's head. In letters, in offhand comments, in outbursts at press conferences, in my personal reporting, members of the Obama administration and members of the Obama reelection campaign will let slip that they are dwelling and worrying over these arguments. They may not agree with them. They may not think they're fair, or sophisticated, or useful. But they're thinking about them. And if you're the "professional left," that's exactly what you want….

Oh, please. I'm looking for evidence that the administration is taking the arguments of its left-wing critics seriously. I'm not seeing it. What I'm seeing is the administration getting hammered from all sides, but mostly from the right, and not really being willing to take on the right. And you know -- what do you do when your boss chews you out every day at work? You go home and, as soon as the dog does something to annoy you, you kick the dog. Well, the right is Obama's boss. And Krugman and FDL and "the professional left" are the dog. Lefty critics are the annoyers the White House isn't afraid of. I'd love to think the lashing out at the left is a sign that lefty critics have gotten to the administration, but I think it's just a case of punching down

And Tbogg:

Tag’em and Bag’em: [I]t is a sad fact of life that there are some many within the Obama White House who see the liberal base as someone you call up every four years for a quickie ---- and then don’t return their calls or respond to their texts for another four years. Some of these people are (or were) major players like Rahm or William Daley and others are like  OFA’s New Mexico State Director Ray Sandoval who plays the role of Guy Fleegman in our current drama.

I’ve said before that I believe  Obama’s advisers are to blame for this sad state of affairs. Obama strikes me as the kind of guy who doesn’t like to lose, who goes for the sure thing. He seems to be sitting on his slim lead figuring that he can beat the least damaged clown to tumble out of the Republican clown car, and his people are no doubt encouraging this belief and, for all I know, they may be right. But I don’t know if the country can survive another year plus of half measures and less-than-they-seem proposals….

ersonally I haven’t  given up hope for Barack Obama even though he has shown little inclination for bold gestures. I’ll still vote for him for no better reason than the fact that the alternatives range from abominable to “are you ----ing kidding?”.

So all I can do is hope that he can change.

The fact that this makes me feel like a battered wife has not escaped my notice…