Having rather heartily endorsed the cliff deal yesterday (see directly below), I now feel compelled to consider the opposing case. In political terms, I think there's no doubt Obama "won." But let's think about more from a policy perspective.
I taped a radio interview yesterday evening with Joshua Holland, the host of AlterNet's radio show and a fine fellow, and he challenged me on yesterday's column. He caught me a tad off guard, damn him, by talking actual substance! He pointed to a post by Brad Plumer on Wonkblog at The Washington Post in which Plumer noted that the terms of the deal in fact add up to more austerity than England and Spain:
A back-of-the-envelope calculation suggests Congress has enacted around $304 billion in tax hikes and spending cuts for the coming year, an austerity package that comes to about 1.9 percent of GDP. (That’s merely the size of the cuts and taxes; it’s not necessarily the effect on growth.)
This includes the expiration of the payroll tax cut, which will raise about $125 billion this year. It includes $50 billion in scheduled cuts to discretionary spending from the caps in the 2011 Budget Control Act, as well as $24 billion in new Obamacare taxes and $27 billion in new high-income taxes. It also includes about $78 billion from the now-delayed sequester cuts — assuming that these either take effect or are swapped with other cuts.
As Plumer acknowledges, it's hard to compare this to other countries because there's no consistent baseline scenario. Even so, it's interesting to chew on, and concerning.
Obama did a good job in these negotiations within the box, shall we say. His list of wins is a lot longer than the Republicans' is within that box. But what he doesn't do enough of on economic questions in particular is try to take the conversation outside the box.
This is going to be tremendously important in the next two months. Republicans are going to define the upcoming debate as getting government spending under control, which always polls well. They're going to have certain stupid centrist groups that obsess about the debt on their side. It can be hard in a context like that to explain to people that there's such a thing as good government spending, that without some public-sector investment, the economy will stall.
Obama and most Democrats tend to make a fairness/compassion argument against domestic spending cuts the GOP wants: "I'm not going to balance the budget on the backs of working poor people" and so on. That, too, polls well, so maybe it's the right thing.
But he really should make a macroeconomic argument as well. I'd think that might be possible by using the European case: "They chose austerity and they're stuck in neutral over there." It can't hurt for people to see a Democratic president saying we should not emulate Europe, which leaves the GOP saying we should. A nice switch!
On Sunday's 'Meet the Press,' Senator Mitch McConnell didn't mince words when criticizing President Obama's administration for the IRS scandal. 'The president demonizes his opponents,' said McConnell. 'The nanny state is here to tell us all what to do, and if we start criticizing, you get targeted.'
For such a diverse city, the L.A. City Council is a depressing bastion of likeminded men.