Gipper logic and deficit fever

Gipper logic and deficit fever

by digby


Politico ran this piece last Friday which I think is worth a little contemplation:

This March, I wrote a story with the now-ludicrous headline, "Barack Obama’s dilemma: When to declare recovery."

In it, Paul Begala reflected on something that was really on the Administration's mind:

“The hard part is now — you have nascent recovery, the economists say it’s headed in the right direction, but the country doesn’t feel it at all,” said former Clinton White House aide Paul Begala. “It’s a tough line, because you want to be a cheerleader but you don’t want to look like you’re out of touch.”

This reflected a real, bipartisan consensus -- though one that had begun to wane by Spring. Last September, none other than Mitt Romney boiled it down:

But he will do everything he can to get the economy going back again, and most likely -- at least in my view -- the economy will be coming back.

He will, you know, you can expect Vice President Biden to come out and say it was the President's great economic accomplishment that the economy has turned around, and of course, most of the people in this room will recognize it was in spite of much that was done in Washington that the economy has turned around. Recessions do end. The economy recovers. It always has. It always will.

That being said, however, they will take credit for the fact that things are getting better. That will help the President's reelection effort.

This isn't the campaign either Obama or most Republicans expected to run, and if they seem caught off guard, it's because they were.



Does anyone know why in the world everyone was so confident at that point? It seemed to me at the time to be wholly faith-based, as if recessions were on a schedule ordained by God. It led to the catastrophic political error of taking a sharp turn to deficit reduction. Here's Glen Thrush in Politico from a couple of days ago on that subject:

Obviously, Obama’s reasons for reluctantly embracing the deficit crusade last fall weren’t strictly political – the debt/deficit is huge and snowballing. But the shift in the political wind played a major role, as the president himself seemed to acknowledge in his Nov. 3, 2010 morning-after press conference:

“I’m sympathetic to folks who looked at it and said this is looking like potential overreach,” he told reporters, who wanted to know if he viewed the tea party’s electoral backlash as a repudiation of his stimulus spending.

“[T]here were a bunch of price tags that went with that,” said Obama, who struck a bipartisan tone weeks before he hit the House GOP buzz saw. “And so, even though these were emergency situations, people rightly said, gosh, we already have all this debt, we already have these big deficits; this is potentially going to compound it, and at what point are we going to get back to a situation where we’re doing what families all around the country do, which is make sure that if you spend something you know how to pay for it -- as opposed to racking up the credit card for the next generation.”

Being in the center seemed like a good idea at the time. It seems like a good idea ALL the time. In fairness, his West Wing advisers thought he simply had no other options if he wanted to have any leverage at all -- and they still dismiss suggestions that his decision to go deficit-first is at the root of their current woes.

But all this shifting around makes for less-than-coherent policy and messaging. Moreover, by accepting the whip-debt-now mantra of his GOP opponents, Obama may have fallen into the same trap that ensnared FDR in 1936, with few of the political advantages enjoyed by Roosevelt who was riding the greatest wave of popular progressive in the 20th century, which allowed him to overcome a 17 percent unemployment rate that year.


I don't happen to think the president "reluctantly" adopted deficit reduction--- he'd been planning to do it back when he was riding the wave of a huge mandate for change. And the reason they refuse to accept that it was the single worst decision of the term is simple rationalizing of what's turned out to be a major mistake.

But beyond that strategic cock-up was the apparent bipartisan belief that Obama's first term was following a sort of Gipper logic, by which it was assumed that there would be Morning in America, despite the fact that the actual economic details differed greatly from that time and they were facing rabid Republican extremists rather than fat and lethargic Democrats as Reagan had. Where that came from I still don't know.

In any case, there can be no doubt that those two strategic decisions -- assuming the economy was recovering on its own and emphasizing deficit reduction even in the face of evidence that it wasn't --- were huge error. But then the austerity error is in vogue all over the industrialized west, so perhaps someone just put something in the water at Aspen and Davos.

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