Hitting The Wall
by digby
According to the latest Gallup poll, the president is facing a rather serious loss of support on the economy:
The latest Gallup Poll has President Obama experiencing some pretty harsh disapproval ratings among the American people on some key issues.
The president has 40% approval on the economy and 56% disapproval.
Obviously, the question is why and one assumes that the main reason is that unemployment is still very high and people are starting to get a bit panicked that it's not coming back right away. (I'm guessing that the spectacle of wealthy bankers complaining about people objecting to their ostentatious display of greed isn't making that any better.) So, where does that leave the Democrats and how can we predict they will respond?
I think a lot depends upon this election in Massachusetts, frankly. If Martha Coakley loses, it will be very bad for progressives. Worse than we can imagine. After the so-called lessons of Virginia and New Jersey, there will be no fighting back the perception that the party is in big trouble, regardless of whether it's true --- and it's hard to argue at that point that it isn't. Sadly, the lesson that will be taken from losing Ted Kennedy's seat to a right wing Republican is not that the Democrats have been too liberal, I guarantee it. What will follow will likely be a sharp turn to the right.
So, job one is to make sure that Senator Playmate is defeated. If you live in Massachusetts, and I know I have readers there, please do what you can to get out the vote. The consequences are quite dire if Coakley loses.
Of course, that won't close the book unless her win "beats expectations" which is the way the stupid beltway game is played. So, winning will probably not be enough to completely foreclose the administration and the Democratic leadership deciding that they have delivered as much as they can to the base ( I know ...) and that it's time to tack to the right to secure the center. It's ironic, but predictable, which is why so many of us wanted desperately for Obama to burn some political capital on serious liberal initiatives in his first year. Once that's over, you rarely get another chance.
But what's done is done and now liberals are faced with fighting back a conspicuous move to the right on economics at a time when they already feel chafed and unsatisfied, a move which I think most of us believe will not only fail politically, but could be devastating economically. I suspect the focus is going to shift to deficit reduction, which they believe they can cleverly combine with anger at the banks by packaging it as a gimmick like this:
President Obama will try to recoup for taxpayers as much as $120 billion of the money spent to bail out the financial system, most likely through a tax on large banks, administration and Congressional officials said Monday.
The general idea is to devise a levy that would help reduce the budget deficit, which is now at a level not seen since World War II, and would also discourage the kinds of excessive risk-taking among financial institutions that led to a near collapse of Wall Street in 2008, the officials said.
Most people don't seem to think this will actually reduce excessive risk taking in the least, but I'm guessing that's not really what it's about anyway.
This, on the other hand, is something they've been talking about since they took office and will obviously now use to show their economic "seriousness" to a country that has been indoctinated in the mistaken belief that deficits are the cause of their ongoing economic woes:
Vice President Joseph R. Biden Jr. will begin talks this week with leading lawmakers about creating a bipartisan budget commission, an idea that has long languished in Congress but could become central to the Obama administration’s promise to reduce annual deficits.
The aim is to reach an agreement that could be a fallback if, as many expect, the Senate next Wednesday rejects a commission proposal from Senators Kent Conrad of North Dakota and Judd Gregg of New Hampshire, the Democratic chairman and the senior Republican, respectively, on the Budget Committee. They want a panel to recommend budget cuts in time for Congress to vote after the November elections.
Yet the same partisan divisions that keep elected officials from cutting spending and raising taxes enough to rein in deficits are also at play in the debate over a panel to make those decisions and force action.
[...]
Mr. Biden is taking the lead in trying to broker a compromise because of his relationships in the Senate, where he served for 36 years. The Treasury secretary, Timothy F. Geithner, and Peter R. Orszag, the budget director, also are participating in the talks with Mr. Conrad and with Representative Steny H. Hoyer of Maryland, the House Democratic leader.
The commission itself doesn't seem to be much of a threat at the moment, but it's part of a long term effort to keep deficits front and center of the national economic debate, which has the effect of limiting government action. And it's a fool's game as the Democrats should have realized --- as soon as they did the hard work of balancing the budget during the Clinton years, the Republicans came along and cut the shit out of taxes for the wealthy. Dick Cheney explained how Republicans really see the issue: " deficits don't matter." That isn't stopping them from using it to beat Democrats over the head with them, however. That's how they roll. And since democrats don't seem to be inclined to do anything about something that's so obviously politically rigged, you have to asume they are fine with it.
I assume there is going to be some other conspicuous wingnut bait as well, perhaps on national security. It could be a change of heart on Guantanamo or more likely, they may use their plan to ask for yet another war funding supplemental (despite promising to end them all together) as an ostentatious show of solidarity with the right. Maybe the immigration fight, although it would be a terrible mistake long term to go right on that one.
And then, there's always the good old culture war. A little more gay bashing or women trashing is always a fallback.
In any case, I think we've probably seen the outer reaches of liberal governance in the Obama administration. There's not likely to be anything more ambitious short of a return to recession and higher unemployment, (which is unfortunately possible, but not something any decent person could hope for.) Other than that, we are entering into the election season with a president and congress on the defensive with their poll numbers falling. Since their imaginations sees to be limited to things like a temporary taxes on unpopular banks to pay down the deficit while playing up the novel idea to create a bipartisan commission to ... pay down the deficit, I'm fairly sure that's where we're heading. Feel the magic.
Seriously, if you live in Massachusetts, do get yourself out to vote for Martha Coakley and volunteer to help if you can. A loss will be so devastating that I'm afraid the Democrats will end up calling to invade Yemen and institute shoot to kill orders for illegal immigrants if they don't win this race. They will panic, bet on it.
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