"Serious People" Part XXVI
Jamison Foser's column this week is must reading. I'd begun noticing the same thing --- that the coverage of the economic crisis, in particular the gravitation to "serious" people whose track record shows that they have always been wrong about everything, is shockingly like the run-up to the Iraq war. When I watched that horrifying Pete Peterson propaganda piece on CNN last week-end, I could hardly believe I was seeing it all unfold exactly the same way --- again.
There are differences, of course. Most importantly, President Obama is not a complete idiot. But the forces of the establishment are all coming together very quickly to restrict his range of movement and he appears to be at least somewhat inclined to appease them on some levels rather than using his popularity with the public to stop them before they get traction. It's possible that he can walk that tightrope, but it seems to me that if he's actually making it harder for himself by empowering them. It should be interesting to see how this unfolds. He's very good, so maybe he can change the parameters of the debate through sheer force of will.
But he will get no help from the media --- or the political establishment. Yesterday, we had a fairly typical gasbag roundtable on the president's proposed stimulus plan on Lou Dobbs. He seems to be developing a critique that Obama is practicing the politics of fear instead of the politics of hope. But his understanding of the economic problems, the causes and the proposed solutions is so confused, contradictory and just plain dumb that I understand why he (and his audience) would be afraid. And his guests were no better:
DOBBS: Well, joining me now, three of the best political analysts in the country, CNN contributors, all. Republican strategist, former White House political director, chairman of the Mike Huckabee presidential campaign, Ed Rollins.
Good to have you here, Ed.
Columnist of the "New York Daily New," host "Morning Show" WWRL, Errol Louis -- Errol.
And Democratic strategist, Robert Zimmerman, Democratic national committeeman.
Robert, good to have you here.
It looks like, what, with an extra $350 billion there's going to be a little discussion about what happens with money. This is another victory for a president-elect. You don't often have legislative victories for president-elects. The expectations, Robert, are soaring, here. How much of a problem are we going to have with soaring expectations?
ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Well, the problem is going to be how this president spends the money. The Democratic Congress wrote a bill, and to your credit, you pointed out the pitfalls and gave them fair warning. But it was a piece of legislation so poorly drafted, even Chris Dodd acknowledged it, they had to stiffen the bill. Maybe their backbones still, but this...
DOBBS: And Chris Dodd is still mad at me for making those observations.
ZIMMERMAN: But the point is, he recognizes the legislation had to change. But, here's what's significant. This bill passed with 46 Democrats and with six Republicans, and we talked last Friday about why the president's rhetoric was so intense. Obviously, he was trying to galvanize this Congress and this strategy worked.
DOBBS: When he Robert uses the word "intense," he's referring to my questions as to whether or not this is the rhetoric of fear, rather than rhetoric of hope. I'm curious to see whether or not this continues. Ed Henry, our White House correspondent, pointing out something that is concerning the staff of the president-elect right now because they have to have a balance. What are your thoughts?
ERROL LOUIS, NEW YORK DAILY NEWS: Well, I think the rhetoric of fear, maybe not fear that the economy will collapse if they don't do anything, but rather fear they will have severe political consequences. I was looking at today's numbers from Gallup, the approval ratings for the president-elect are in the stratosphere. I mean, he's -- you're talking about 78 percent, in some cases over 80 percent.
DOBBS: On issues, 60 percent on approval.
LOUIS: On how he's handled the transition, on his cabinet appointments, even though there have been a couple of bumps in the road, so I wouldn't...
DOBBS: I don't want to bring you down, here.
LOUIS: I wouldn't get in the way of a train like that, if I were a Republican at this point.
ED ROLLINS, REPUBLICAN STRATEGIST: Sometimes -- listen, Republicans are not relevant. I've said it over and over again, Errol, and you keep wanting to go there. It's now a Democrat game. And the other part of this is the Congress is still very unpopular. You look at any -- so they have to perform, and they have to spend the public's money in a way that clearly makes the economy move forward again. And I don't think anybody can guarantee that at this point in time.
DOBBS: Yeah, it's an interesting issue, because the Republicans are, I mean, talk about being marginalized, they have been marginalized to the point that it's absurd in some respects, but of their making.
But, the Democratic Party, we're talking about $825 billion as the Democratic leadership of Congress and this president-elect are, $350 billion in this bailout money additional. A $1.2 trillion budget deficit and the president-elect is talking about a fiscal responsibility summit in February? Is this colossal irony?
ZIMMERMAN: Well, it's also ultimately the reality of the situation, which is there's no question everyone recognizes the economic climate we're going to have to spend our way out this have crisis. And of course, the consequences of it could be inflation down the road that could be very dramatic and very severe.
DOBBS: I'm not an economist, but the idea we have to spend our way out of this crisis, that we have to create more debt to get out of a crisis created by debt...
Excuse me, let me just finish the sentence -- you're so aggressive tonight, Robert. A crisis created by debt and by spending, this is at best counter intuitive.
ROLLINS: But, the problem here is you can't create a whole bunch of public jobs, because there's no long lasting, there. I mean, Bill Clinton created 100,000 policemen, thought it would be solve crime. Two years later those cop's jobs were eliminated because the local communities couldn't pay it.
DOBBS: And the money went away.
ROLLINS: So, I think the key thing here is you can't substitute public spending only for capitalism. Capitalism may be on the ropes, but you've got to do something to create private jobs in addition to the public jobs, otherwise we're going to have a very soft economy.
LOUIS: The assumption is that will happen, this is intended to sort of bridge the gap and not let too much of the economy...
DOBBS: We're back with our panel. Ed Rollins, Errol Louis, Rob Zimmerman. All of this talk about money to build a bridge to what. We've got $8 trillion thrown at this economic crisis, we don't have any instinct from any one of our leaders -- the Treasury secretary, the Federal Reserve, the Congress of the United States or this president as to what that money has accomplished and what it was expected to accomplish.
The American people in the CNN Opinion Research Poll saying 86 percent say they know this isn't working, they're opposed to bailouts. This puts a real limit on the horizons for this administration if real results are not achieved with this money.
LOUIS: Well, I think that's why you saw the president doing something I had actually recommended in a column. I'd love to think he just read it and took my advice.
DOBBS: I'm sure he did, Errol.
LOUIS: Just go out on the road, stop in a factory, show people what the money's going to buy, that this isn't just a blank check written to a bunch of bankers to be used in some invisible non- accountable way, but that this is going to bring...
LOUIS: Well, that the recovery portion, the bailout, you know, that's one thing, but going forward, the big bill he's trying to move is his first piece of major legislation.
ZIMMERMAN: That was the first bailout, though, because the funds were used to go -- the funds were used for banks to buy other successful banks or banks were hoarding the money.
They weren't fact addressing the foreclosure crisis. People didn't see the results and that's the challenge, here.
DOBBS: Hank Paulson, Treasury Secretary Paulson basically used the money to bail out his buddies on Wall Street, and don't let anybody kid you.
ROLLINS: There's also this great myth, going back to the Great Depression, that all of the spend FDR did basically moved the economy back quickly. It was five, six years and it was the war, it was the buildup to the war and it was the war that got us out. We've had our war and at the end of the day, you know, we better have something that stimulates this economy...
DOBBS: Think about this. With all of the money being spent on the war in Iraq, war in Afghanistan, that is simulative spending, by any definition. The $8 trillion thrown at this crisis and we have yet to hear an official say this is what it's accomplished, what it's achieved. In fact, we heard the president-elect today say things may get worse before they gets better. That's an extraordinary position to be in.
You try to untangle that rats nest because I couldn't. Apparently, the 8 trillion dollar Iraq war failed to fix the recession so Obama needs to get the private sector to create more jobs because Bill Clinton's hundred thousand police jobs didn't solve the crime problem and the jobs were lost. Oh, and the New Deal was a bust and everybody hates bailouts.
This is a particularly ugly example of the economic ignorance among the punditocrisy, but there is very little I've heard that sounds remotely convincing from our side anywhere. That is why bringing up "entitlements" and the deficit is such a threat to any successful recovery --- it's something about which people have been throughly indoctrinated and they can easily understand it. Nobody has bothered to educate them about liberal economics in decades, so when they are confused they turn to familiar refrains about how the government screws everything up and how it should be run like a business and how taxes are too high etc. Even the professionals don't know how to make a convincing case for government action in a crisis and they really need to.
To that end, I would hope that members of the Democratic establishment at least read this article by Paul Krugman in the latest issue of Rolling Stone to familiarize themselves with the fundamental arguments for liberal economic policies in this time of crisis. It's not that complicated. And even if it were, there is absolutely no reason that every single "democratic strategist" who goes on TV should not be laying the blame for this mess at the feet of conservatism every time they get the chance. If they can't muster the affirmative argument for liberalism, the least they can do is make sure that the nonsense the Republicans have been spouting for years is repudiated. Allowing these lies about the New Deal and deficits and the need for government spending to go unchallenged is political malpractice.