01 August 2011

Obama and the Debt Deal

One of the problems of a polarized world is that it removes the possibility of a shared reality. In such a world, each side decides what reality is and stick to it no matter what evidence is shown to them to question their belief in their version of reality.

Obama has been a conservative President. Yet, the right successfully branded him a Marxist and the left continues to claim that all his Cheney-Bush policies were part of an 11-dimensional chess game.

To me this is odd: even before his election, during the Democratic primaries, a good friend asked me if I thought he would make a good president and I said that he might but he would be a lot more conservative than Hilary Clinton. My interlocutor was not convinced because in her mind Hillary and Bill were interchangeable, and as Bill was a fairly moderate Democrat, she assumed Hillary would be too. Whereas just a simple comparison of their early national health insurance policies could have shown easily where each stood. And Obama stood next to Mitch Romney.

Since then, as Greenwald painstakingly documented once again, he did very little that can be held out as being different from what Bush-Cheney would have done.  Yet, this last deal is still being seen as him surrendering to Republicans. It is not. He is convinced that economy would be better off if the safety net brought in by the New Deal can be eliminated or weakened sufficiently. This has been the conservative objective supported by their relentless meta-discourse about how markets functioned perfectly with fewer distortions. And Obama is a believer.

People on the left are still trying to portray this as "poor Obama who had no choice facing crazy teahadists" and some kind of strategic move to force Congress to own up to its constitutional role but I cannot see how anyone could find this argument convincing.

If Obama was a liberal, he would have campaigned against those "crazy teahadists" by relentlessly pointing out the glaring contradictions in their position: he would have shown how they aim to hurt the poor, the middle class and working people in general and how their intransigence hides a defense of a Galtian utopia. He would have made a stand against the Republican meta-discourse about taxes, free markets, government spending etc. He didn't because he believes in those same principles.

If he was a conservative Democrat who wanted to win against those "crazy teahadists" he could have
 First of all, he could and should have demanded an increase in the debt ceiling back in December. When asked why he didn’t, he replied that he was sure that Republicans would act responsibly. Great call.
And even now, the Obama administration could have resorted to legal maneuvering to sidestep the debt ceiling, using any of several options. In ordinary circumstances, this might have been an extreme step. But faced with the reality of what is happening, namely raw extortion on the part of a party that, after all, only controls one house of Congress, it would have been totally justifiable.
At the very least, Mr. Obama could have used the possibility of a legal end run to strengthen his bargaining position. Instead, however, he ruled all such options out from the beginning.        
He did none of these things.

Obama's advisers are probably thinking that all of this will ensure his reelection. They assume that given the defense spending trigger in the debt ceiling deal, Eisenhower's military industrial complex will push Republicans to compromise. They also assume that the corporate media will adopt a new narrative that will favor Obama going into election. On top of that, they know that they will get even more money from Wall Street

These assumptions might be true. But they will not get him reelected. More money and favorable media narrative are very helpful in normal times. These are not normal times. The right, that is, people who believe in Bachmann, cannot be swayed by a changing media narrative. They can find any kind of scandals about her or her homophobic husband, evangelical Christians will not care. In fact, the more they are attacked, the more support she will garner from these people. Add to that my argument that, to these people, Obama's presidency is like a Jew being the last Chancellor of Weimar Republic and you know that he has no hope to get any support from the right.

As for the left, they may not vote for Bachmann or be afraid of her as the White House hopes, but with very high and chronic unemployment, many of them will simply not vote. Trade unions who are the main group to canvass and to push for "get out to vote" will not be out there in full force. Even if they were, they will not find many takers.

There is no way a sitting president can be reelected with almost 10 percent unemployment and with a chronically stagnating economy.

Moreover, with this last move, Obama made sure that the Republicans who control the House will continue to extract even more concessions from him, all of which designed to kill any signs of economic recovery before elections. To quote the late Ann Richards, stick a fork in him, he is done.

When I first heard about Hillary Clinton wanting the World Bank job, to replace the dreadful Robert Zoellick, I thought that this was unlikely. I thought that she was in the middle of orchestrating a major shift in the Middle East and she would not leave that job undone. I still think that there is such a grand plan but now I worry that it will end disastrously, as all the balls that are currently in the air will land all over the place with no one to push them.

I also realize why she wants out. Being overshadowed by a conservative man a second time around must be difficult for such a bright and talented woman.

I hope she gets the WB job. She is a lot more progressive than people think and maybe she will have a positive influence on the Bank, the kind DSK had on IMF.

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