Dreams of my President

Congressional Republicans are insisting that the pending economic stimulus package contain much bigger tax cuts, but tax cuts have been very ineffective at creating jobs and boosting consumer spending, according to this Economic Policy Institute report. Mark Thoma says the Republicans don't really care about stimulus but have ulterior motives.

They already screwed this up once, the initial tax cut stimulus package put into place last spring was too small and poorly targeted, it had all sorts of problems all in the name of appeasing this same group [free market fundamentalists] - and here they are trying to muck up the process once again, to hold jobs hostage while they try to get tax cuts in place, even though something like 40% of the package is already devoted to tax cuts. Camel, tent, nose. I think it's time to stand up and say no, sorry, you lost the election, and not by just a little bit. You had your chance and look where we ended up - with a terrible economy, huge holes in the budget making it much harder to respond to the downturn, a financial sector wrecked by your anti-government, self-regulation philosophy, what is it about the past several years that would lead us to have any confidence at all you have the slightest clue how to manage a well-running economy instead of driving it into a ditch, let alone heal one that is broken. 

I have a dream.

Jared Bernstein (who recently moved from EPI to the White House and is certainly familiar with these data and the implications for future policy) is not the only Administration economic policy advisor who can make this case in devastating detail, and (remember, this is a dream) they all do make the case. Even dreamier, Obama has immersed himself in these and related economic policy details. (It's a little fuzzy, but he seems to be wearing a Bill Clinton suit and eating pizza with economists at 0100; there's a VW Beetle in the White House driveway—is somebody watching a DVD of Dave while I'm trying to sleep?)

Cut to the Cabinet Room the next day: Obama is meeting with a bipartisan group of Congressional leaders. Larry Summers and other economic policy team members are in the chairs along the wall. Rep. John Boehner, two chairs to the right of the President, is speaking.

Boehner: "House Republicans cannot support this economic stimulus package unless there are more big tax cuts in it. We're willing to tolerate some government spending in the interest of bipartisan compromise, but only tax cuts can get the economy moving again."

Obama: "I understand you believe that only tax cuts stimulate the economy, but why should anybody else believe what you believe? All the real-world evidence is to the contrary. The tax rebates a year ago were very inefficient as stimulus. Nobody estimates that more than half of the money was promptly spent. Some estimates are that 2/3 or more was used by taxpayers to pay down debt or add to savings. Do you have analyses that support a different conclusion?"

Boehner: "Blah, blah, blah."

Obama: "I will support any idea, from any person or party, that has a solid potential to raise middle class incomes or otherwise rescue the economy from sinking into a deep recession. The argument you just made seems based on a flimsy and discredited theory and didn't persuade me, but I would like to offer you, and anybody else in the room, to have your economic experts meet with my economic team and present your real-world evidence that a particular kind of tax cut will help us do that. I trust them to fairly report to me what they heard, and that your advisors will fairly report to you my advisors' views. Then, we should meet and discuss this again. I'm a very pragmatic guy, and if you persuade me that your tax cut proposals will work better for the middle class and economic recovery than what's on the table, I'll support them even if it annoys my colleagues on the other side of the room."

Boehner: "Blah, blah, blah."

Obama: "If, after the dialog I have suggested, I continue to believe your proposals are intended to support a different agenda and will not benefit the middle class and the economy as much as what's on the table, I'll go to the American people to help you reap and suffer the political consequences of your position. It would be good for America to have a Congressional consensus and to have us all share credit for rescuing the economy. Nevertheless, I am determined to implement a practical, pragmatic policy that works for middle class Americans, and I will do that even if I have only a one vote margin in each house. What I'm offering you is an opportunity—much more opportunity than my predecessor ever gave you—to have a continuing dialog about what's good for America and to influence policy if you have facts and reason on your side. I'm not offering to meet you halfway on your demands. The old economic paradigm has failed, and an overwhelming majority of Americans understand that. Those who cling too long to the old ideology will be humiliated in public opinion and held accountable in the voting booths."

Fade to dog licking my face.

Update on Tuesday, January 27, 2009 at 06:42PM by Skeptic

What Obama seems to be doing is not inconsistent with the dream.

Update on Monday, February 2, 2009 at 09:24AM by Skeptic

Consistent with the dream, Obama is using his massive email database to tell supporters he's reaching out to Republicans on the stimulus package and urging them to hold house parties and otherwise to build support for the package.

The economic crisis is growing more serious every day, and the time for action has come. Last week, the House of Representatives passed the American Recovery and Reinvestment Act, which will jumpstart our economy and put more than 3 million people back to work. I hope to sign the recovery plan into law in the next few weeks. But I need your help to spread the word and build support. It's not enough for this bill to simply pass Congress. Americans need to know how it will affect their lives -- they need to know that help is on the way and that this administration is investing in economic growth and stability. Governor Tim Kaine has agreed to record a video outlining the recovery plan and answering questions about what it means for your community. You can submit your questions online and then invite your friends, family, and neighbors to watch the video with you at an Economic Recovery House Meeting. Join thousands of people across the country by hosting or attending an Economic Recovery House Meeting this weekend. The stakes are too high to allow partisan politics to get in the way. That's why I've consulted with Republicans as well as Democrats to put together a plan that will address the crisis we face. I've also taken steps to ensure an unprecedented level of transparency and accountability. Once it's passed, you will be able to see how every penny in this plan is being spent. You can help restore confidence in our economy by making sure your friends, family, and neighbors understand how the recovery plan will impact your community. Sign up to host or attend an Economic Recovery House Meeting and submit your question for the video now: http://my.barackobama.com/recovery Our ability to come together as a nation in difficult times has never been more important. I know I can rely on your spirit and resolve as we lead our country to recovery. Thank you, President Barack Obama P.S. -- If you can't host or attend an Economic Recovery House Meeting, you can still submit your questions for Governor Kaine and then share the video with your friends and family this weekend. Learn more here: http://my.barackobama.com/recovery

Update on Thursday, February 5, 2009 at 08:45AM by Skeptic

The dream is coming true. Obama is taking his policy differences with the Congressional Republicans to the American people in this Washington Post op ed.

In recent days, there have been misguided criticisms of this plan that echo the failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems; that we can meet our enormous tests with half-steps and piecemeal measures; that we can ignore fundamental challenges such as energy independence and the high cost of health care and still expect our economy and our country to thrive.

I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change. They know that we have tried it those ways for too long.

Update on Friday, February 6, 2009 at 08:48AM by Skeptic

Paul Krugman thought the talking-with-the-Republicans part of the dream was a mistake, but he agrees Obama needs to make his policy arguments to the public.

So what should Mr. Obama do? Count me among those who think that the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh. What matters now, however, is what he does next.

It’s time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation’s future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.

Update on Tuesday, February 17, 2009 at 08:45AM by Skeptic

It seems President Obama may be having the same dream. Bob Herbert reports this interview:

He said that the fact that he’d been rebuffed so far in his quest for bipartisanship would not stop him from reaching out for Republican support.

“Going forward,” he said, “each and every time we’ve got an initiative, I’m going to go to both Democrats and Republicans and I’m going to say, ‘Here’s my best argument for why we need to do this. I want to listen to your counterarguments. If you’ve got better ideas, present them. We will incorporate them into any plans that we make, and we are willing to compromise on certain issues that are important to one side or the other in order to get stuff done.’ ”

When I asked him if there was any reason to believe that the G.O.P. had made a good-faith effort at bipartisanship, given the fact that only three Republicans voted for the stimulus plan in the Senate and none in the House, he said he did not want to question the motives or sincerity of those who opposed the plan.

But he made a point of adding, “Now, I have to say that given that they were running the show for a pretty long time prior to me getting there, and that their theory was tested pretty thoroughly and it’s landed us in the situation where we’ve got over a trillion-dollars’ worth of debt and the biggest economic crisis since the Great Depression, I think I have a better argument in terms of economic thinking.”

He also made it clear that he won’t let his desire for bipartisanship undermine important initiatives. “I’m an eternal optimist,” he said. “That doesn’t mean I’m a sap.”