Do liberals really agree with the president on everything but financial reform?
Ezra has an interesting post up about how the Summers nomination was foiled because liberals don't trust the Obama administration when it comes to financial regulation. He says that on most matters, like health care, the stimulus and the fiscal cliff, liberals and the president mostly agree on the substance and differ over the tactics, but on this they have a fundamental disagreement on principle.
It's a good post and well worth reading. But I disagree with the premise that financial regulation is the only area on which liberals and the administration disagree on principle. The problem is that people know the president does not believe in strong financial regulations and they don't trust that he agrees with them on those other issues either. After all, the same people who promote a hands off approach to the banks and Wall Street also oppose direct government participation in health care (the public option), were opposed to more stimulus and, most importantly, they are the ones who have relentlessly demagogued the deficit, a project to which the president enthusiastically signed on as early as February 23, 2009, one month into his first term:
President Obama pledged Monday to cut the nation's $1.3 trillion deficit in half by the end of his first term.
Here's what was happening as he said all that:
He identified exploding health-care costs as the chief culprit behind rising federal deficits during a bipartisan "fiscal responsibility summit" convened to discuss ways to restore fiscal stability without deepening the recession.
Meeting with the congressional leadership of both parties, as well as a range of business, academic, financial and labor leaders, Obama warned that the country cannot continue its current rate of deficit spending without facing dire economic consequences.
"I refuse to leave our children with a debt they cannot repay," he said in remarks opening the one-day summit at the White House. "We cannot and will not sustain deficits like these without end. ... We cannot simply spend as we please."
The country, Obama argued, is already starting to face the consequences of greater deficit spending, noting that roughly one in 10 taxpayer dollars in 2008 went toward paying $250 billion in interest on the national debt.
Why was he pounding on deficit reduction at a time like that? It's not hard to conclude that the president believes in the whole Wall Street enchilada, not just the financial regulation piece. He's been talking that talk from the very beginning.
It is a matter of liberal Village conventional wisdom that President Obama had the best of intentions but was blocked by Republicans and anyway, the executive branch is not very powerful so depending on him to advance a progressive agenda is a silly form of celebrity worship. The less charitable believe he is a bad strategist who was simply outmaneuvered. And there's something to all of that. But the fact remains that our government adopted a sort of soft austerity combined with an industry friendly private sector health insurance reform during the worst recession in over half a century. And it is also a fact that the president was promoting that program from the earliest days of his presidency, while still in the midst of a delirious honeymoon. To me, that speaks of someone who has a strong set of beliefs on these issues. And they aren't particularly liberal.
It's not surprising that liberals wouldn't have a lot of trust in the economic judgment of someone who convened a "fiscal responsibility summit" at a time of mass unemployment, is it?