There has been a lot of talk since the recent developments of the debt ceiling debate, where Republicans, as some of us all predicted are not going to go against their pay masters (McConnell’s proposal and Boehner’s admission). This was obvious because the market/spreads on treasuries were not flipping out over this and because of common sense if one knows about who owns most of our debt. It’s not China, it's Wall Street and they would feel the fall. Now it looks like the president is still focused on the deficit and not the deal. This is not promising.
For all its talk of the importance of averting a debt default, the White House is signaling that major deficit reduction has become more than just a bargaining chip to bring Republicans aboard a debt deal.
Treasury Secretary Timothy Geithner opened Tuesday's meeting not by focusing on the perils of debt default, but instead with a "vivid" presentation on "what happens if you don't cut the deficit," according to a Democratic source familiar with the talks.
Geithner warned the group that ratings agencies are actively watching both the debt ceiling debate and the ability of Congress to turn around the nation's growing deficit and debt. He pointed to the economic unrest in Europe as evidence of what could happen in the United States if the White House and Congress don't tackle the deficit in a serious way.
Yeah those ratings agencies did a bang up job rating MBS/CDOs. Be very afraid. We'll be just like the Eurozone! Scurry Flee! I guess the President and his inept Treasury Secretary are going to show all of you first hand what is precisely wrong with this whole debate as well as their overall lack of knowledge when it comes to the federal budget and Treasury Department they are in charge of.
However, I mostly want to talk about their flawed framing and the Overton Window while referencing probably the most qualified psychologist/neuroscientist there is studying policy matters and his name is Drew Westen. If you don’t believe me, look at this piece he wrote in 2009 that basically predicts the outcome of the 2010 mid term election.
As the president's job performance numbers and ratings on his handling of virtually every domestic issue have fallen below 50 percent, the Democratic base has become demoralized, and Independents have gone from his source of strength to his Achilles Heel, it's time to reflect on why. The conventional wisdom from the White House is those "pesky leftists" -- those bloggers and Vermont Governors and Senators who keep wanting real health reform, real financial reform, immigration reform not preceded by a year or two of raids that leave children without parents, and all the other changes we were supposed to believe in.
Jobs? Watch for a $25 billion plan that makes good political theatre and that every economist I know says will move the unemployment rate from 10.0 percent to 9.95 percent. Not enough to save 30 seats in November. And not enough to save a generation of families from financial ruin and lower education, higher unemployment, and poorer health for the rest of their -- and their children's -- lives.
The problem with the president's strategic team is that they don't understand the difference between compromising on policy and compromising on core values. When it comes to policies, listen all you want to the Stones: "You can't always get what you want" (although it would be nice if the administration tried sometime). But on issues of principle -- like allowing regressive abortion amendments to be tacked onto a health care reform bill -- get some stones. Make your case to the American people, make it evocatively, and draw the line in the sand. That's how you earn people's respect. That's the only thing that will bring Independents back.
It's the same problem we've seen with messaging the deficit. Are deficits good -- we're supposed to deficit spend our way out of a severe recession, right? -- or bad -- they're a drag on the economy and stealing from the next generation. So which are they? How about telling the American people, at the very least, when they're good and when they're bad, not flipping back and forth in the same sentence between deficit spending and deficit reduction.
To be honest, I don't know what the president believes on anything, and I'm not alone among American voters. He introduced his recent job summit by saying that even in these times, the role of government should be limited. Really? That was a nicely nuanced reinforcement of the ideology of limited, ineffective government promulgated by Ronald Reagan and George W. Bush. Unfortunately, it runs against all the available data and everything Democrats have stood for since FDR.
This explains the dynamics as to what actually appeals to independents. Independents, if they are the key to electoral victory in 2012, actually like a leader who stands for something as opposed to compromising on core values as referenced. I’m not just saying this; we’re looking at proof of the foresight Drew Westen had that no one in the WH, DNC, or Congress had the insight to listen to or take heed. They paid for it electorally. As you can read this was written in 2009, and there was plenty of economic illiteracy about deficits in a jobs crisis even back then coming from the WH so tell me, where were the Independents we're supposed to see flocking in 2012?
I mean if that is what David Plouffe thinks is going to be the magic elixir that is going to disturb long standing election trends involving income equality and unemployment, where were they? This Independents Deficit Disorder is an electoral fallacy and even someone with the most magical Internet organizing powers will not be able to soundly make it a reality. Barack Obama may or may not win reelection (raising a billion dollars from big donors Chamber of Commerce/Goldman Sachs may help) and being an incumbent has its advantages still, but that’s really not the point.
The point is that we the people who elected Barack Obama really don’t win anything when we use rhetoric as if we’re the 3rd wing of the Republican party as referenced in Drew Westen’s latest piece.
So with nearly 15 million Americans unemployed and millions more working two and three jobs just to get by to feed their family, how are the Democrats saying they're going to solve the problems of ordinary people?
Consider the following five-point statement of conservative economic principles from ABC's This Week a couple of Sundays ago, which concisely describes what conservatives believe the Obama administration should do to solve our nation's economic ills, and how the Democrats responded to it:
• Our effort now ... should be to get the private sector, to help them stand up and lead the recovery. The government is not the central driver of recovery.
• Now, we must live within our means.
• We've got to rely on government policies that are trying to leverage the private sector and give incentives to the private sector to be doing the growth. And ... so ... these tax cuts ... will continue over the rest of this year.
• Put in place this regulatory review in which all of the major agencies are going to go through, find any outmoded regulations, ones that are excessively costly for their benefits, find ways to streamline.
• The free-trade agreements, trying to increase exports, which are rising at 15 percent annual rates.
So there you have all the elements of the ineffectual conservative Republican response to a severe recession bordering on a Depression: let the private sector lead and the government step out of the way; cut the budget, exercise austerity, and "live within our means;" use tax cuts as the primary stimulus to get the economy moving again (because they worked so well under the Bush administration); eliminate excessive regulations on businesses, because we all know that excessive regulations are what threw us into the Great Recession and are what are hindering the business community's ability to create economic growth; and implement free-trade agreements so the sticky fingers of the invisible hand of capitalism can work its wonders across international borders, just as it has done for the millions of Americans who once had manufacturing jobs, but just don't understand the fine points of the theory of comparative advantage in economics (by which countries with the "comparative advantage" of having the 2/3 of the world's workers who are willing to work for less than $2/day get jobs as factories in the U.S. shut their doors).
Surely this was an easy target for a Democratic counter-attack. After all, this is Hoover economics, all of which has been thoroughly discredited, if not by the Great Depression, more recently by the Bush administration and the Great Recession that capped off that glorious eight-year period of economic growth during which we managed to double the national debt and crash the economy at the same time. So what was the Democrats' response?
Actually, that was the Democrats' response. This statement of conservative economic principles was actually from the Chairman of the president's Council of Economic Advisors, Austan Goolsby.
Consider the following statement about budget deficits, which began a message that beat a tough deficit-focused, budget-cutting message taken straight from the mouth of John Boehner with a large national sample by over 30 points with the general electorate and by an even larger margin with swing voters: "The best way to reduce the deficit is to put Americans back to work. There are 14 million Americans who've lost their jobs through no fault of their own, and they'd behappy to be paying taxes again instead of drawing unemployment insurance."
Put this way, there is nothing the other side can say that can beat this message. And that's on an issue -- budget deficits -- that's supposed to be the Achilles heel of Democrats and progressives.
What we have witnessed in the last several months is a phenomenon described in a classic book nearly 20 years ago by the political scientist John Zaller. What Zaller discovered is that public opinion tends to follow the lead of party leaders and pundits, as partisans turn to their own leaders and trusted sources for cues on what they should think and feel about the central questions of the day. Normally, when the two sides offer competing views, the 40-45 percent of voters on each side follow the lead of the "opinion leaders" on their side of the aisle.
But when leaders on one side are voicing a strong opinion -- in this case, the Republicans arguing that the sky is falling on the economy because of deficits, tax and spend liberalism, and over-regulation of business -- and the other side is either silent or echoing GOP talking points -- the average voter hears what sounds like a consensus and starts to mouth it.
Then pollsters start to pick up in their polls precisely the view they have been promulgating and elites have been putting into the minds and mouths of ordinary citizens, rendering elected officials all the more afraid of bucking what is now the conventional wisdom. And the result is a self-fulfilling prophecy.
The phenomenon described by political scientist John Zaller about public opinion is why this whole debt ceiling debate (which was not even a debate for any other president which also stresses why there is not a lot to celebrate unless celebrating not defaulting is some sort of victory) and the premise it is based on via conservative and neoliberal economic policies spells defeat from the get go. The word demand is not even part of the debate which is a shame, because that is what we need much more of and what our economy and working families actually need as Vox Frustrati states so elegantly.
To further illustrate this problem let me ask you a question; which one of these guys does the WH sound more like (leaving aside the fantasy gold oracle and Schiff’s major contradiction in this piece)?
Hint: It’s not the brilliant true Keynesian Galbraith and that is a huge problem despite the recent developments of this deal whatever it turns out to be. It’s funny since some critics of this administration are constantly accused of embracing the economics of Ron Paul, but on deficit stupidity, Ron Paul’s former 2008 campaign manager and the WH are spewing some of the same rhetoric and BS.
And the more leaders feed the public deficit fetishist BS, the more they get used to it and the more real solutions, real fiscal solutions that we need like spending are not even in the same room as the table, much less on the table.
We must begin to fight to have these solutions on the table and SS and Medicare off the table or the American people will continue to suffer.