Obama v Progressives

 Obama could've changed everything. So says the left (including Krugman). If Obama had just started his presidency with strong speeches attacking Wall Street (like Roosevelt) and explaining the need for Keynesian economics, middle America would've rallied around the left agenda; the Democrats would've won a landslide in the midterms, and Congress would've passed enough job stimulus to pull us right out of the recession. The right would have been knocked on their collective asses. But ...

  • [#Krugman] himself couldn't convince the econ community to go Keynesian.
  • In three weeks, Obama passed, with far greater opposition, a [#stimulus] package 5 times larger (relative to GDP) than Roosevelt's.
  • [#Roosevelt] ran on an [#austerity] platform in 1932.
  • When elected, Roosevelt passed an austerity budget.
  • In his 1st [#fireside chat], Roosevelt [#rehabilitated the bankers].
  • He [#drastically weakened] Social Security to gain huge Republican support.
  • By executive order, he sent 110,000 Japanese to concentration camps.
  • He failed in his strongest persuasive attempt—to pack the supreme court.

But, pay no attention to these random facts, and instead, read Ezra Klein's brilliant and thoroughly-researched article on presidential attempts to use the bully pulpit.

Conclusion: Perhaps, if Obama had followed the left's Monday-morning quarterback strategy, everything would've come up roses. But debating whether it would've or wouldn't have is itself the problem. What is obvious is that we don't know, and Obama didn't know. He thought hard; he tried his best. He might've gotten it wrong, or the left, even with hindsight, may have it wrong—and there's plenty of evidence for that. Or we may all be wrong. The point is, we really don't know.

And, idle counter-factual speculation is no excuse for turning on your friends. And this, according to Jonathan Chait, is the difference between liberals and conservatives. Conservatives "assail the compromise but continue to praise the man." This is not just good strategy, it morally commendable. Progressives, on the other hand, convict their friends on the basis of unchecked hindsight or theories of how the world should work. I think these are an honest mistake, but they are deadly sins nonetheless. Progressives are simply positive that the one true path (e.g., the right speech) is completely obvious. And since it is, everyone can see it. Hence, anyone who chooses not to follow the true path must be from the dark side. (See Monte Python.)




[=Krugman]Krugman has his economics right, but for the first couple of years he was extremely naive about his ability to persuade. This is understandable. But, note that Obama did not adopt this naive view, and Krugman has been upset with him ever since for not joining in Krugman's attempt  to sell Keynes. Nonetheless, I think Krugman, as an op-ed writer, was right to take on this challenge.
[=austerity]"I accuse the present Administration of being the greatest spending Administration in peacetime in all American history."
[=stimulus]This stimulus was on top of equally large automatic stimulus—such as unemployment insurance—not present in the 30s.
[=Roosevelt]My point is <b>not</b> to criticize Roosevelt. He was a great president. But he was not Jesus Christ. He had heart, but he did not have a particularly progressive agenda. He wanted to save capitalism and he did — somewhat accidentally. His economic policies were weak. It was the deficit spending of World War II that saved the economy.
[=rehabilitated the bankers]The chat concerned only the banking crisis, and he mentions the bankers only once, near the end — "Some of our bankers had shown themselves either incompetent or dishonest in their handling of the people's funds. They had used the money entrusted to them in speculations and unwise loans. This was of course not true in the vast majority of our banks but it was true in enough of them to shock the people for a time into a sense of insecurity and to put them into a frame of mind where they did not differentiate, but seemed to assume that the acts of a comparative few had tainted them all. It was the Government's job to straighten out this situation..."
[=drastically weakened]Roosevelt had 335 votes to spare in the House and 70 in the Senate, and he gave away the store—just to win his huge bipartisan consensus. If you have any doubt about Obama, here's the comparison.
[=fireside chat]There were only 8 in his first 4 years.
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.


Too Bipartisan?

Does he cave in to Republicans? Is Obama too bipartisan. He does offer compromise and avoid divisive rhetoric, but there are two possibilities.

  1. He sincerely tries to make peace and compromise but stands his ground.
  2. He just has no backbone and needlessly caves in.

Progressives try to figure out which describes the real Obama by listening to his words. And, those don't sound tough, so they think he has no backbone. But what did Teddy say? "Speak softly but carry a big stick." There are two reasons to speak softly, (1) strategy and (2) weakness. Let's look beyond the surface to tell which is at play.

I say, there's a damn good chance—no a certainty—that Obama's bipartisanship is [#strategic], not weak. This doesn't mean he's deceptive. He really does think extremism is a bad thing, and he knows most American's agree. So sincerely trying for bipartisanship is good strategy—most American's are sick of extremism. It's also what Obama believes. But he knows that when the extreme right blocks all progress, his bipartisan stance (his strategy) [#pays off].

I say that's Obama's strategy (more or less), but how can I prove that? Strategies aren't public. It's simple. Compare Obama to Roosevelt, who progressives agree had a backbone and was not too bipartisan.

Who Caved In, Roosevelt or Obama?

Both have a signature piece of legislation: [#Social Security] for Roosevelt, and Affordable Health Care for Obama. Who caved in? How do we tell? If  you leave a lot of money on the table? You didn't bargain hard—you caved in.

In this case, money is votes. So let's check who left more votes on the table. If you passed the most progressive bill you could, that means that had you pushed any further, you would not have had the votes to pass it. But, if what you care about is bipartisan support, then you'll water down the bill to get as much support as possible from both parties. If you go for weak-kneed bipartisanship, we'll find lots of money votes left on the table. But not if you've got backbone.

So here's how the two laws went down in Congress

Money Votes Left on the Table
  Senate  House
  Republican Democratic Republican Democratic
Roosevelt:   16 9 81 70
Obama:   0 0 0 3

In other words Roosevelt could have had 16 Republicans and 9 Democrats defect in the Senate and still passed Social Security. In other words, Obama left nothing on the table, and Roosevelt left behind a record-breaking number of votes. The House passed it 365 to 30, and the Senate, 76 to 6.

So what didn't Roosevelt have the backbone to fight for? What did he give up by going for all-out bipartisan passage? Most women and minorities were not covered because agricultural, domestic, and government workers, many teachers, and nurses, and hospital, library, and social workers were not covered. On top of that, benefits were paltry (this was later fixed), they were long-delayed in the middle of the depression, and it was financed with a regressive tax.

Obama fought hard and strategically for health care, because he cares about the poor. The conservatives understand this perfectly. Why progressives can't see it is a mystery. But saying Obama has no spine (as my progressive friends say) and holding up Roosevelt for comparison is more than a little unkind. It's delusional. In spite of this, I won't make the mistake they make. Their intentions are are good; they're not closet Republicans, and they haven't gone over to the dark side. They just suffer from that age liberal depression which has dogged Roosevelt and every other Democratic president.

"The greatest fraud this country has ever known. An amusing and charming fellow but a man entirely without a conscience.... Roosevelt was the perfect politician." —H.L. Mencken, The New York Sun, 5 June 1946.



[=Social Security]The actual votes are available here. Republicans voted for the bill 81 to 15 in the House and 16 to 5 in the Senate. Now, that's bipartisan.
[=strategic]I'm not saying his strategy always works, or is the right strategy. But there's a big difference between saying your teammate has a bad strategy and saying he's really playing for the other team. No one makes this mistake in sports, business or the military, but in politics and religion people often accuse others on their side of being traitors. This is a terrible mistake.
[=pays off]Ezra Klein reports data showing that take a public position generally reduces a presidents chances of getting his way.
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.


The Economy

Obama inherited and economy in the worst free fall in 80 years. In three weeks he passed a stimulus bill as much as Bush spent on the Iraq war. It may well have prevented a full-scale depression.

Conservatives would have preferred spending cuts, government layoffs and cancellations of private-sector contracts (see US Economy). But this section is about progressive complaints.

Jonathan Chait brilliantly takes on the political reality that the left forgets:

  • Before Obama, Pelosi's House Democrats proposed a smaller stimulus.
  • The deficit was headed past $1 trillion, before the stimulus.
  • It was considered "huge," "massive," and "sticker shock"-ing.
  • Progressives him max out the stimulus and pass all their other programs.

What Krugman really said when the stimulus bill was passed.

  • Nov. 10, 2008, Krugman suggests a $600B stimulus.
  • Dec. 16, 2008, Obama is presented with two plans $550B and $890 billion and told that over $1,000B is completely out of the question due to politics.
  • Jan. 6, 2009, Krugman estimate's Obama's $775B stimulus will lower the peak unemployment rate from 9% to 7.3%
  • Jan. 20, Obama takes office and the House passes the stimulus bill on Jan. 28.
  • Feb. 4, Krugman complains that Obama compromised and all House Republicans still voted against the House bill.
  • Feb. 6, Krugman realizes that the bill needs one Republican vote to avoid a filibuster. He commends Obama for warning of catastrophe. 
  • Feb. 7, Krugman says "So the original $800 billion plan was too small, ... The plan should have been at least 50% larger."
  • Feb. 17, Obama signs the stimulus bill.
  • Feb. 25, Krugman says "The stimulus bill is OK, though not big enough."
  • Get the full story here

Buy the time the House had passed the bill, Krugman appeared to believe, based on his reaction to the Romer-Bernstein graph (below), that with the stimulus, unemployment would peak at around 8% and that by 2012 election, it would be under 6% and heading down fairly quickly. He though Romer was a bit too pessimistic about the effect of the stimulus, but between Jan. 6 and 10th he because more pessimistic then her regarding the peak unemployment without the stimulus. In fact unemployment peaked at 10%.


Obama's Stimulus


The New York Times, September 2, 2011

This has been the summer that liberal discontent with Obama has finally crystallized. The frustration has been simmering for a while — through centrist appointments, bank bailouts and the defeat of the public option, to name a few examples. But it has taken the debt-ceiling standoff and the threat of a double-dip recession to create a leftist critique of the president that stuck.

Obama’s image as a weakling and sellout on domestic issues now centers on his alleged resistance, from the very first days of his presidency, to do whatever was necessary to heal the economy. “The truly decisive move that broke the arc of history,” wrote the Emory professor Drew Westen in this newspaper, “was his handling of the stimulus.” Just as the conservative repudiation of George W. Bush boiled down to “he spent too much,” the liberal repudiation of Obama has settled on “he didn’t spend enough.”

There’s truth in that. President Obama underestimated the depth of the crisis in 2009 and left himself with bad options in the event the economy failed to recover as quickly as he hoped. And yet the wave of criticism from the left over the stimulus is fundamentally flawed: it ignores the real choices Obama faced (and the progressive decisions he made) and wishes away any constraints upon his power.

The most common hallmark of the left’s magical thinking is a failure to recognize that Congress is a separate, coequal branch of government consisting of members whose goals may differ from the president’s. Congressional Republicans pursued a strategy of denying Obama support for any major element of his agenda, on the correct assumption that this would make it less popular and help the party win the 2010 elections. Only for roughly four months during Obama’s term did Democrats have the 60 Senate votes they needed to overcome a filibuster. Moreover, Republican opposition has proved immune even to persistent and successful attempts by Obama to mobilize public opinion. Americans overwhelmingly favor deficit reduction that includes both spending and taxes and favor higher taxes on the rich in particular. Obama even made a series of crusading speeches on this theme. The result? Nada.

That kind of analysis, however, just feels wrong to liberals, who remember Bush steamrolling his agenda through Congress with no such complaints about obstructionism. Salon’s Glenn Greenwald recently invoked “the panoply of domestic legislation — including Bush tax cuts, No Child Left Behind and the Medicare Part D prescription drug entitlement — that Bush pushed through Congress in his first term.”

Yes, Bush passed his tax cuts — by using a method called reconciliation, which can avoid a filibuster but can be used only on budget issues. On No Child Left Behind and Medicare, he cut deals expanding government, which the right-wing equivalents of Greenwald denounced as a massive sellout. Bush did have one episode where he tried to force through a major domestic reform against a Senate filibuster: his crusade to privatize Social Security. Just as liberals urge Obama to do today, Bush barnstormed the country, pounding his message and pressuring Democrats, whom he cast as obstructionists. The result? Nada, beyond the collapse of Bush’s popularity.

Perhaps the oddest feature of the liberal indictment of Obama is its conclusion that Obama should have focused all his political capital on economic recovery. “He could likely have passed many small follow-up stimulative laws in 2009,” Jon Walker of the popular blog Firedoglake wrote last month. “Instead, he pivoted away from the economic crisis because he wrongly ignored those who warned the crisis was going to get worse.”

It’s worth recalling that several weeks before Obama proposed an $800 billion stimulus, House Democrats had floated a $500 billion stimulus. (Oddly, this never resulted in liberals portraying Nancy Pelosi as a congenitally timid right-wing enabler.) At the time, Obama’s $800 billion stimulus was seen by Congress, pundits and business leaders — that is to say, just about everybody who mattered — as mind-bogglingly large. News reports invariably described it as “huge,” “massive” or other terms suggesting it was unrealistically large, even kind of pornographic. The favored cliché used to describe the reaction in Congress was “sticker shock.”

Compounding the problem, Obama proposed his stimulus shortly after the Congressional Budget Office predicted deficits topping a trillion dollars. Even before Obama took office, and for months afterward, “everybody who mattered” insisted that the crisis required Obama to scale back the domestic initiatives he campaigned on, especially health care reform, but also cap-and-trade, financial regulation and so on. Colin Powell, a reliable barometer of elite opinion, warned in July of 2009: “I think one of the cautions that has to be given to the president — and I’ve talked to some of his people about this — is that you can’t have so many things on the table that you can’t absorb it all. And we can’t pay for it all.”

Rather than deploy every ounce of his leverage to force moderate Republicans, whose votes he needed, to swallow a larger stimulus than they wanted, Obama clearly husbanded some of his political capital. Why? Because in the position of choosing between the agenda he came into office hoping to enact and the short-term imperative of economic rescue, he picked the former. At the time, this was the course liberals wanted and centrists opposed.

On two subsequent occasions, Obama faced this same choice. Last December, he could have refused to extend any of the Bush tax cuts on income over $250,000. Republicans vowed to let all the tax cuts expire if he did so. If Obama let this happen, it would have almost fully solved the long-term deficit problem, while at the same time setting back the recovery by raising taxes on middle-class and low-income workers. Obama decided to make a deal, extending all the Bush tax cuts and also securing a progressive payroll tax cut and an extension of unemployment benefits, both forms of stimulus that Republicans would never have allowed without an extension of upper-bracket tax cuts in return.

There is a decent argument that the president should have refused this deal. But if you make that argument, you have to accept the likelihood that nearly a million fewer jobs would have been created and that we would have been at risk of a double-dip recession back then. Yet the liberal critics most exercised about Obama’s failure to secure more stimulus were, for the most part, enraged when he did exactly that. Take Robert Reich, the former secretary of labor under President Clinton. Last November, Reich pleaded for an extension of unemployment benefits, calling the plight of the jobless our “single newest and biggest social problem.” When Obama made his bargain, Reich called it “an abomination,” complaining that “the bits and pieces the president got in return” — including the unemployment benefits previously deemed vital — amounted to “peanuts.”

And then, this summer, Obama let the G.O.P. hold the debt-ceiling vote hostage to extract spending cuts. I think he should have called the Republicans’ bluff and let them accept the risk of a financial meltdown. But the reason Obama chose to cut a deal is that calling their bluff might have resulted in catastrophe. And Obama made a point of back-loading the G.O.P.’s budget cuts so as not to contract the economy. He may have chosen wrongly, but he chose exactly the priorities liberals now insist he ignored — favoring economic recovery over long-term goals.

Liberal critics of Obama, just like conservative critics of Republican presidents, generally want both maximal partisan conflict and maximal legislative achievement. In the real world, those two things are often at odds. Hence the allure of magical thinking.

Jonathan Chait is a senior editor for The New Republic.

Krugman on Obama

Background Notes on Krugman's critique of the Stimulus

  • 11/8/2008. Krugman notes FDR's "Net stimulus of around 3 percent of GDP — not much, when you’ve got a 42 percent output gap."
  • 11/10/2008. Krugman concludes the stimulus should be "at least  4% of GDP, or $600B."
  • 11/24/2008. Krugman: "with 3-plus percent (I hope) on the table in the US. Relative to GDP."
  • 12/16/2009. Key meeting to explain economy and stimulus to Obama. A that time Stiglitz had suggesting $1T, and Romer had analyzed 3 cases $600B, $800B and $1.2T. She believe that a bit over $1.2T was required to completely neutralize the recession. "The memo to Obama, however, detailed only two packages: a five-hundred-and-fifty-billion-dollar stimulus and an eight-hundred-and-ninety-billion-dollar stimulus. Summers did not include Romer’s $1.2-trillion projection. The memo argued that the stimulus should not be used to fill the entire output gap; rather, it was “an insurance package against catastrophic failure.” At the meeting, according to one participant, “there was no serious discussion to going above a trillion dollars.”

    There were sound arguments why the $1.2-trillion figure was too high. First, Emanuel and the legislative-affairs team thought that it would be impossible to move legislation of that size, and dismissed the idea out of hand. Congress was “a big constraint,” Axelrod said. “If we asked for $1.2 trillion, it probably would have created such a case of sticker shock that the system would have locked up there.”

  • 1/6/2009. Krugman analyzes a $775B stimulus with $300B in tax cuts and estimates: "Suppose that we’re looking at an economy that, absent stimulus, would have an average unemployment rate of 9 percent over the next two years; this plan would cut that to 7.3 percent, which would be a help but could easily be spun by critics as a failure."
  • 1/6/2009. Krugman reports that Wall Street estimates that unemployment could peak at 8.4% in 2010 even with the stimulus.
  • 1/7/2009. CBO estimates 9% peak unemployment (without the stimulus), which Krugman considers "too optimistic." He notes that the Stimulus amounts to 3% of GDP compared to an 8% output gap, but he normally assumes a multiplier of 1.5 on stimulus so 3% would close a 4.5% gap.
  • 1/10/2009. Romer & Bernstein come out with a graph showing unemployment peaking at 9% without the stimulus and earlier at 8% with the stimulus. He considers their estimate of the stimulus effect " a bit more pessimistic than mine" but their estimate of the 9% no-stimulus peak "a lot more optimistic than I am."
  • 1/20/2009. Obama takes office.
  • 1/28/2009. The House passes the stimulus bill.
  • 2/4/2009. "when Obama finally introduced his economic plan he immediately began negotiating with himself, preemptively offering concessions to the GOP, which voted against the plan anyway."
  • 2/4/2009.  Krugman "The Obama team today ... seem[s] to have become suddenly aware that there’s a real risk that the stimulus plan will either fail to pass, or be emasculated to the point that it doesn’t come close to doing the job. Obama himself has warned of catastrophe if we fail to act, and — finally!– denounced the tax-cut philosophy."
  • 2/6/2009.  Krugman: ""Shouldn’t Obama have made a much bigger plan, say $1.3 trillion, his opening gambit? If he had, he could have conceded to the centrists by cutting it to $1.2 trillion, and still have had a plan with a good chance of really controlling this slump."
  • 2/7/2009. Krugman: "So the original $800 billion plan was too small, ... The plan should have been at least 50% larger." "Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan."
  • 2/9/2009. Senate votes for cloture 61-36, with 3 Republicans voting for it and 60 required.
  • 2/8/2009. "I’ve gone through the CBO numbers a bit more carefully; they’re projecting a $2.9 trillion shortfall over the next three years. There’s just no way $780 billion, much of it used unproductively, will do the job."
  • 2/17/2009. Obama signs the stimulus bill (ARRA).
  • 2/26/2009. "The stimulus bill is OK, though not big enough."
  • 7/9/2010. " it looks as if top advisers convinced themselves that even in the absence of stimulus the slump would be nasty, brutish, but not too long. "   "And by the winter of 2008-2009, it was obvious that this was the Big One — which, if the aftermath of previous major crises was any guide, would be followed by multiple years of high unemployment."   "the now infamous Romer-Bernstein chart"
Krugman makes two criticisms of Obama:
  1. Obama should have known much more stimulus was needed.
  2. He should have known that he would not get a second chance.
Then he proves #1 like so:  He should have know, because I knew and said so. I did the econ and graphs and it was obvious.
Well, yes K did say so, and it was obvious .,. to him. But ...
Krugman has found it impossible to make it obvious to most economists and he is feeling extremely isolated and dejected because of this.
( I don't blame him.) Moreover he even failed to persuade Christy Romer -- although she was more on his side than the rest of the WH.
Krugman shows the " the now infamous Romer-Bernstein chart" here and her estimate of 1.2 Trillion was not passed on to Obama,
and Krugman thinks 1.2 was still much too small. Now, what the Romer-Bernstein chart shows is that with the actual stimulus passed,
that unemployment would peak at 8% (less than now and that no it would be at 6% and dropping fast -- ideal for the election.
So this is what Obama saw and he saw it from Christy -- an economist highly approved by Krugman.
Moreover, the standard wisdom was that passing more than a $1 trillion stimulus was not feasible. This is quite plausible.
Also remember that because of automatic stimulus like unemployment insurance and also because of bailout money,
the US had already added about 1.5 trillion per year in deficit spending (to the pre-recession level $0.5 Trillion rate).
So no, Obama did not follow Krugman, and he did not go to the public and press for Krugman's $3 Trillion stimulus bill,
but think what he did do.
On top of a deficit that was running at $2 Trillion a year (in fact more at that time), In just three weeks, Obama passed a stimulus that was slightly
larger than $800 Billion ($0.8Trillion) after being presented with a choice between $500 and $800B by his econ advisers.
In 3 weeks he spent more on stimulus than W spent on the Iraq war in 6 years.
Compare this to Roosevelt who came in and passed an austerity budget !  Or compare it to any other president.
No one had every tried anything like that. Or compare to Roosevelt in '38 when he made the same mistake again -- more anti-stimulus.
And Roosevelt's WPA etc. was much smaller, even relative to the small US economy then, than Obama's stimulus,
and it was not on top of huge automatic stimulus and bail out. Look at the US deficit under Roosevelt here. It does nothing until WWII.
Roosevelt never tried Keynesian econ, he just stumbled into WWII. Before that he help some of the unemployed,
but was careful not to help those most in need because he was afraid he would not be able to get them off the doll.
But was not trying to spend money to get the economy going -- he never  understood that.
Now Krugman wanted Obama to get on his bully pulpit and explain why $3 Trillion was needed -- i.e. to explain Keyensian econ to the public.
But Krugman cannot even get mainstream economists (not the ideologues, the normal ones) to buy this after 3 years of yelling and screaming.
So read Klein about why the bully pulpit is not so magical.
So Krugman is miserable and sore that Obama didn't see he was THE ONE with the right answer and help him sell it.
Now, I agree, Krugman did have the right answer, and I'm glad he's screaming, but Obama did better than anyone has ever done,
and did go for a strong Keynesian policy, and did it incredibly fast. And it did make a difference.
Now on Krugman's criticism #2. After repeating that many times, he finally refined it to say that
Obama should have known that he could not go back for more unless the first round made a noticeable difference.
And this is a more reasonable position.
But no one, not even Krugman, was telling Obama that $800 B would not make a noticeable difference.
Yes, people should have known -- it's always impossible to prove you did better than what would have happened,
but people thought you could track the job creation and prove it that way.
So, by Krugman's newer, calmer reasoning, it was not obvious at the time,
that Obama could not go back for more.
So the bottom line is: This is not a nice world. Most people don't want to take big risks to help the unemployed,
so it's extremely hard to do that.
But Obama did take a big risk; he did try; he went $50 more ($850) than his top experts recommended,
and he didn't hesitate -- he acted quickly and decisively. Perhaps he could have gotten more -- 1.5 Iraq wars -- 
or perhaps he just would have gotten bogged down. I'm sure there is no way he could have satisfied K.
No he's not perfect, but I say we should count our blessing. 


Health Care Act

Bernard Avishai, 

It is hard to read Remedy and Reaction, Paul Starr’s remarkable chronicle of the hundred-year effort to legislate universal health insurance in the United States, without recalling Robert Gibbs’s tortured quip that Democrats who’ve denounced the Obama White House for having knuckled under to Republican principles or intimidation “ought to be drug-tested.” Nobody with a sense of history—that is, nobody who reads Starr’s book—could doubt how sensible and brave was the president’s effort to drive the Patient Protection and Affordable Care Act of 2010 through Congress. Nobody with a feel for the present moment should doubt how imminent is the threat to the act, how urgent it is for progressive Democrats to rally around Obama—and without all the condescending qualifications that “independents,” who flock away from allegedly weak or incompetent leaders, interpret as contempt.

Starr, who teaches at Princeton and, with Robert Kuttner and Robert Reich, founded The American Prospect, has written 300-plus pages of tightly woven policy description, narrative and polemic. ... Starr learned his lessons the hard way. He closely advised the Clintons on health strategy in the early 1990s (he still knows and has debriefed key Congressional staffers). The centerpiece of Remedy and Reaction is a long section, full of illuminating asides, on the frustration of the Clintons’ plans. Starr shows that, even as Bill Clinton submitted his bill to Congress, some 70 percent of voters subscribed to the principles embodied in the legislation he proposed. Yet the bill didn’t come close to being enacted.

Obama’s actions were cannier than Clinton’s, but they also amounted to a profile in courage. When Obama came into office, Starr explains, only 11 percent of Americans thought reform would have a “negative personal impact,” but by August 2009 this segment of the population was trending to 31 percent. Both Rahm Emanuel and Joe Biden were urging retreat. Starr writes, “Obama not only resolved to go ahead; in September and again in the new year, the president took charge of the effort to steady the health-care initiative and prevent it from careening off the tracks.” Nor was the final bill anything less than what might reasonably have been expected, filling as it did the negative space left by four generations of government programs and serial compromises. Starting with clean sheets of paper was never realistic when one-sixth of the economy was at stake.

Starr’s great fear is repeal of the Affordable Care Act, which would not only deny healthcare to more than 30 million people but would cast doubt on whether “Americans will ever be able to hold their fears in check and summon the elementary decency toward the sick that characterizes other democracies.” Obamacare, in short, was healthcare reform’s best—and last—shot, and it would be unconscionable for liberals to remain cavalier about its defense, or Obama’s, for that matter. It’s past time to discard the misguided assumption that in a better economy, or with more of “a fighter” in the White House, something like a Canadian-style single-payer system might have been (or might sometime fairly soon be) enacted.


The story begins with the Progressive Era, when proposals for government-sponsored healthcare were heavily influenced by, of all things, Otto von Bismarck’s sly welfare legacy: the chancellor of Germany had introduced health insurance in 1883 as a way of co-opting proletarian leaders. Soon came the Coolidge-to-Hoover retrenchment. FDR’s New Deal never seriously mooted universal healthcare—more on this presently—but the Truman administration did, proposing a single-payer scheme modeled after Social Security. This went down to defeat. ... The Kennedy and Johnson administrations finally delivered Medicare and Medicaid. ...

In retrospect, the saddest chapter was the ridiculously damaging Jimmy Carter–Ted Kennedy fight over universal coverage (Carter opposed it), which roiled Congress and paved the way for Reagan’s reactionary “revolution,” after which single-payer would never be seriously considered again. Then came the Clintons’ letdown, though one triumph was the launch of the State Children’s Health Insurance Program (or S-CHIP) in 1997, sponsored by Kennedy and Orrin Hatch. ...


The bottom line for voters, Starr explains, was that healthcare reform became practicable only as a guardian of, well, the bottom line. Premiums kept rising: overall expenditures jumped from about 9 percent of GDP in 1980 to about 14 percent in 1992 and 17 percent today. This frightening increase in the cost of care might seem to suggest an emerging conflict of interest between young and old (though the young worry about their parents, after all). What the increase really created, Starr shows, was a natural alliance in favor of “bending the cost curve” down while keeping the benefits up. Meanwhile, the expansion of “managed care” in Medicaid’s network allowed most voters to feel, vaguely and incorrectly, that the indigent would not be abandoned.

A third counterforce is regional lobbying. Starr reminds us at the start of his book that “every dollar spent on health care is also a dollar that someone earns from health care.” During the Clinton push, Florida legislators backed away from reform when the insurance industry mounted a TV campaign to convince seniors that Medicare benefits might be cut. And was there ever any point in trying to persuade Joe Lieberman, “the senator from Aetna,” to allow people over 55 to buy into Medicare? Nancy Pelosi’s staff told Starr that health industry lobbyists from states in which Medicare payment schedules were lowest are the ones who really killed the “public option,” because the only conceivable plan of this kind would rely on Medicare to establish rates of compensation, and even Democratic representatives refused to appear to be forcing the short end of the stick on their state’s providers. ...

Given that “cost containment” became the game, and esoteric opinions about the numbers qualified one to play it, most voters were easily swayed by the claims and doubts of industry lobbyists presented as experts. Which is why it would have been irresponsible for Obama to try to pass reform without first lining up groups like the AMA, the drug companies and the hospital industry—all of which stood to gain new “customers” under the plan—in order to generate the kind of headlines that imply consensus.


Obama’s only real point of disagreement with Hillary, which he eventually conceded, had been about mandating that all citizens—including healthy, employed young people who think they are immortal—buy insurance. Obama had first proposed a mandate only for parents to insure their children; by July 2008 he said simply, “I kind of think Hillary was right,” and that was that. (The mandate, of course, was crucial to the act’s balance sheet, though it launched the raft of lawsuits that the Supreme Court will begin hearing in March.) Given the history that Starr so lucidly recounts, it’s clear that America’s healthcare reform was bound to look, at best, more like Switzerland’s mixed, complicated system, also based on private sector insurers, than like England’s simple, unified one, in which doctors are essentially government employees. Nor, once Obama assumed office, was he going to make the mistake of excluding the heads of key Congressional committees from writing the legislation within the parameters described. If they wrote it, they’d own it. He also succeeded where Bill Clinton had failed, lining up the hospital and drug industries—too discreetly for some critics—in advance of the Congressional push.

Through the summer of 2009, Obama waited for Senator Max Baucus, chair of the Finance Committee—an ally of House Blue Dogs from the conservative state of Montana—to try to bring around Olympia Snowe, one of Maine’s two moderate Republican senators. Baucus failed; there is no point rehearsing the sad story Starr tells. But did this mean Obama was deluded by his own rhetoric of bipartisanship and could have gotten a better deal had he been more combative? Not at all. Starr shows that Obama’s real goal was “bipartisanship in one party,” the not-monolithic Democratic Party. He worked with Blue Dog sympathizers in the Senate like Baucus (and Kent Conrad of North Dakota, Ben Nelson of Nebraska, etc.) to woo Snowe and the few other Republican moderates, not because he expected to gain Republicans but because he feared losing Democrats. If the reputations of moderate senators did not become inextricably bound with the health reform effort, they’d be able to walk away and face no censure from their voters.

What emerges most vividly from reading Starr is how reckless it was for critics to charge Obama with not making his own views clear enough, or losing control of the narrative, because he resolved to leave to Congress—within an agreed timetable—the work of filling in the details. Yes, the schedule did slip a few months as Baucus worked his committee, but a few months in a century-long effort was a trivial delay. And it would have been widely recognized as such but for the righteous indignation Obama endured during his first spring in office, when anger over the bailouts was white-hot, and his administration’s determination to regulate rather than nationalize the banks (remember Tim Geithner’s “stress tests”?) gave critics, especially on the left, an opening to depict the president as a creature of Wall Street—catnip for the nascent Tea Party, as it turned out.

Starr shows that when the details of the health legislation finally came out, including proposals to stipulate new Medicare standards of care, talk of “death panels” inflamed latent anxieties about government interfering with personal choices. The left was also incensed by the deal the White House had cut with Big Pharma prohibiting, as part of the legislation, direct negotiations with Medicare over prescription drug prices and excluding medicines imported from Canada. (The industry group PhRMA agreed, in return, to find $80 billion in discounts to Medicare, and to pay for an ad campaign supporting the legislation.) Starr adds that, although this was not publicly known at the time, the health insurance industry wrote an $86.2 million check to the Chamber of Commerce to mount a campaign against the legislation. “If Obama and the Democrats had been in a stronger position politically,” he writes, “they could have insisted on stronger cost containment and avoided making as large concessions to PhRMA and the hospitals as they did.” But sixty Senate votes meant everything. “Reform needed interest group allies: there would be no way to pass it if the entire health-care industry went into all-out opposition.”


* * *

Nevertheless, Obama pushed back hard. He called a press conference for July 22, laid out the elements of the plan as best he could and said of the insurers: “Right now, at the time when everybody’s getting hammered, they’re making record profits and premiums are going up.” Starr—tactful to a fault this time—neglects to add that the real news made at the press conference was Obama’s offhand remark that Cambridge police had acted “stupidly” in arresting Harvard professor Henry Louis Gates in his own home. The remark was true, but it put Obama on a kind of probation because it gestured toward the incipient gulf between the young, black, brainy president and lunch-pail whites like Sgt. James Crowley (the arresting officer), people who had first backed Hillary and then, like “Joe the Plumber,” went in large numbers for John McCain.

Ironically, working-class voters stood to gain much more predictable medical coverage from healthcare reform, because pre-existing conditions and unemployment would no longer interrupt it. But the Gates incident reinforced how hard it would be for Obama to overcome latent suspicions that his healthcare plan was a new kind of affirmative action program or a new bailout for losers, foisted on ordinary people by a patronizing elite shuttling between Harvard Yard and Goldman Sachs. Obama finally stemmed the tide against the bill with a landmark speech to Congress in September, Starr recalls. But much damage had already been done. Months later, the Democratic nominee for Ted Kennedy’s seat, Martha Coakley, campaigned ineptly, as if the healthcare proposal pending in the Senate, for which her vote would be crucial, did not exist. The loss of the Massachusetts Senate seat required Obama to hit the road and to embrace a tactical maneuver by which the House simply adopted the Senate bill.

Criticism of the Obama administration gained momentum through 2009, and even became strangely vogue among economists and columnists who were widely thought to be on the president’s side. It was in this context that voices who had lionized Obama—from seasoned pragmatists like Robert Reich (who blurbs Starr’s book) to MoveOn.org—spoke of the “public option” as the holy grail, and of Obama as its perfidious guardian. Perhaps it was the magical word “public,” or the vague sense that Obama, having worked to salvage banks and restructure the car companies, was now protecting the profits of insurance companies. Perhaps it was the way this insinuation was magnified by the charge that the members of Obama’s economic team were mostly disciples of Robert Rubin, thus to blame for deregulating investment banking and causing the financial crisis in the first place. Perhaps it was the way Obama’s half-heartedness about a public plan, which he knew the Senate would never give him, suggested timidity. In any case, Obama’s left critics now lambasted him. Former DNC chair Howard Dean declared in November 2009 that without the public option “this bill is worthless and should be defeated”—not grounds for drug testing, perhaps, but possibly for prescribing some Xanax.

The bill eventually passed, but it had become advantageous on the right, and fashionable on the left, to hold Obama responsible for failing to bring unemployment down to pre-recession levels in just twelve months.  ... For the first African-American president, surely the cruelest charge from the left was that in pursuing healthcare the way he did, he had wasted an “FDR moment.”  ... Indeed, FDR’s entire reform strategy depended on holding together a coalition that required him to ignore, if not pander to, the grotesque racism of the South. He got Social Security (and other bills) passed by appealing to immediate and universal pocketbook interests, and with a larger Senate majority, which reserved the filibuster mainly for civil rights; to appease Southern Democrats, he agreed to exclude domestic servants and farm laborers (e.g., sharecroppers) from the initial Social Security program.


Dean supposed that the proposed public option would compete with private insurers on the exchanges and cause the costs of premiums to fall. But would they have? Dean was right that a public option keyed to Medicare rates would have saved the government considerable money—$110 billion over ten years, according to the Congressional Budget Office (CBO). But, again, states where Medicare payments were low killed the idea. Pelosi was stymied. Without Medicare as the basis, any imaginable public plan would not have been cheaper than private plans.


This last point, of course, is the timely one. Starr is priming us for the 2012 election, ...It would be a shame, Starr warns, if the president who husbanded this once-in-a-lifetime legislation to victory is beaten by a Republican claiming the need for “leadership” in the White House—a double shame if misinformed Democrats, nursing their “disappointment,” continue to help make that need seem plausible.


National Security Policy Is Foiled by Congressional Politics and Bureaucratic Infighting 

Carol Rosenberg, Foreign Affairs


The last two prisoners to leave the U.S. detention center at Guantánamo Bay were dead. ... each was an "indefinite detainee," categorized by the Obama administration's 2009 Guantánamo Review Task Force as someone against whom the United States had no evidence to convict of a war crime but had concluded was too dangerous to let go. Today, this category of detainees makes up 46 of the last 171 captives held at Guantánamo. The only guaranteed route out of Guantánamo these days for a detainee, it seems, is in a body bag.

The responsibility lies not so much with the White House but with Congress, which has thwarted President Barack Obama's plans to close the detention center, which the Bush administration opened on January 11, 2002 with 20 captives.

Congress has used its spending oversight authority both to forbid the White House from financing trials of Guantánamo captives on U.S. soil and to block the acquisition of a state prison in Illinois to hold captives currently held in Cuba who would not be put on trial -- a sort of Guantánamo North. The current defense bill now before Congress not only reinforces these restrictions but moves to mandate military detention for most future al Qaeda cases unless the president signs a waiver. The White House withdrew a veto threat on the eve of likely passage Wednesday, saying the latest language gives the executive enough wiggle room to avoid military custody.


Congress has made it nearly impossible to transfer captives elsewhere. Legislation passed since Obama took office has created a series of roadblocks that mean that only a federal court order or a national security waiver issued by Secretary of Defense Leon Panetta could trump Congress and permit the release of a detainee to another country.

Neither is likely: U.S. District Court judges are not ruling in favor of captives in the dozens of unlawful detention suits winding their way from Cuba to the federal court in Washington. And on the occasions when those judges have ruled for detainees, the U.S. Court of Appeals has consistently overruled them in an ever-widening definition of who can be held as an affiliate of al Qaeda or the Taliban.

Meanwhile, Defense Department General Counsel Jeh Johnson, the Pentagon's top lawyer, believes that Congress crafted the transfer waivers a year ago in such a way that Panetta (and Robert Gates before him) would be ill-advised to sign them. (In essence, the Secretary of Defense is supposed to guarantee that the detainee would never in the future engage in violence against any American citizen or U.S. interest.)

In a strange twist of history, Congress, through its control of government funds, is now imposing curbs on the very executive powers that the Bush administration invoked to establish the camps at Guantánamo in the first place. Much of its intransigence is driven by the politics of fear: what if, for example, a captive is acquitted in a civilian trial because the judge bars evidence obtained by the military without benefit of counsel? When will another freed Guantánamo detainee attack a U.S. target or interest, such as when Abdullah al Ajami, who was transferred to Kuwait in 2005, blew himself up in a truck bomb attack in Iraq in 2008?

In the face of such public and political pressure -- especially from Congress -- Obama administration officials have waffled at several key moments. For example, Holder changed his mind on where to try five alleged 9/11 plotters at Guantánamo, including Khalid Sheikh Mohammed. In November 2009, Holder announced that the trial would be held in a civilian courtroom in Manhattan; then, in April 2011, following strong resistance from congressional representatives and New York politicians, the White House abandoned this plan and instead announced that Pentagon prosecutors would bring a trial by military commission.

Resettling in the United States those captives cleared for release has also become taboo. Soon after taking over in 2009, the Obama administration was considering resettling Guantánamo captives from China's Uighur Muslim minority, whom the Bush administration had readied for release. (They were to be hosted by Uighur-Americans in Virginia.) But then, in the face of congressional objections, the White House lost its nerve. The United States instead scattered the Uighurs to Bermuda, Switzerland, and even the Pacific island nation of Palau; five more Uighurs remain at Guantánamo.

Factors besides Congress also contributed to the current Guantánamo stalemate. First, the Defense Intelligence Agency concluded that at least a fourth of the detainees the United States has released from Guantánamo were confirmed or suspected of later engaging in terrorism or insurgent activity. Opponents of closing Guantánamo immediately seized on these figures. (For its part, the Obama administration noted that most of those on the recidivist list were transferred before Obama took office, when the Bush-era Pentagon approved some 500 releases. Officials took fault with these big-batch transfers and claimed that the Obama administration's individually fashioned, case-by-case system for release would yield better results.)

Second, over the past couple years a powerful al Qaeda offshoot has taken hold in Yemen, the very country where the Obama administration had planned to transfer many detainees. Sending dozens of suspected terrorists back to a country besieged by a growing terrorist threat is hardly good politics or security policy.

Lastly, Obama's executive order to close Guantánamo was undone by the burdensome bureaucracy of the task force, which sought to sort each captive's Bush-era file. Each detainee's case file contained competing and often contradictory assessments from the Defense Intelligence Agency, the Pentagon's Office of Military Commissions, the Department of Justice, and myriad other offices, bogging down the review process. Time ran out before the task force could settle on a master plan to move the detainees out of Guantánamo in time for Obama's one-year deadline.


Guantánamo has largely faded from public attention. There is little reason to expect it to emerge as an issue in the upcoming presidential campaign season beyond the usual finger-pointing and slogans: Obama may blame Congress for cornering him into keeping the captives at Guantánamo rather than moving them somewhere else, and his opponents will no doubt argue that, by virtue of his wanting to close the facility in the first place, Obama is soft on terrorism. ("My view is we ought to double it," Mitt Romney said about Guantánamo in a 2007 debate.)

Meanwhile, the detention center enters its eleventh year on January 11. Guantánamo is arguably the most expensive prison camp on earth, with a staff of 1,850 U.S. troops and civilians managing a compound that contains 171 captives, at a cost of $800,000 a year per detainee. Of those 171 prisoners, just six are facing Pentagon tribunals that may start a year from now after pretrial hearings and discovery. Guantánamo today is the place that Obama cannot close.

Stats & Predictions

  The extreme left hates Obama and will likely end his presidency in favor of a Republican president (predicted, 12/30/2011). Surprisingly, their mistake has been to underestimate the power of corporations and of the extreme right.

  On a scale of 1=very liberal to 5=very conservative, independents rate Obama at 2.5 compared with themselves at 3.2. They see him as 0.7 too liberal. They rate Romney at 3.4, which is 0.2 too conservative. So now the extreme "left" wants Obama to move further to left, and promises to support him if he does. That's asking him to commit political suicide. They are just not strong enough to undo the damage such a shift would cause. And they have proved that. Unlike the T Party, they have elected almost no one to Congress.



Some reading to understand why the left may cost Obama the election:


  Republican strategy against Obama, call him a flip-flopper xlnk.gif