Monday, August 22, 2011

Yesterday's Enterprise*

Matt Yglesias makes three really important points today in responding to Ezra Klein's pessimistic musing about whether Barack Obama could have enacted and implemented better economic policies (see, too, Kevin Drum's catalog of pessimism). The first point is that, yes, Obama could have done some things better. I'd say that most of the things he could have done would have helped around the margins...but you never know; had his policy actions and choices been flawless, perhaps all of those "around the margins" might have added up to enough to get the economy zipping along by now. In particular, Yglesias cites fed appointments and the possibility of some sort of triggered extra stimulus. What I'd add is that I suspect that somewhere along the line, perhaps best in fall 2009, they perhaps could have squeezed through Congress a long and short term scheme for stabilizing state budgets.

I do think, in Klein's defense, that the mistakes were mostly of the "around the margins" variety. Most of the things that people talk about, such as a $2T stimulus bill in fall 2009, just weren't going to happen no matter what Obama wanted. One certainly can claim that was a preventable error, but the error in this case was made by folks such as Ben Nelson and Susan Collins, not by Barack Obama. Not only should their actions be attributed to them, and not the president, but I find it very difficult to imagine what exactly he could have done to change their basic political orientation.

I'd also emphasize that it's really easy to picture real policy disaster. What if the Obama stimulus dies in the Senate, just as Bill Clinton's 1993 stimulus bill did?

Anyway, the other two points are really the best thing about Yglesias's post. One is that it's certainly understandable, albeit regrettable, that Obama and his team made mistakes; the second is that policy errors should not be read to imply true motivations. Absolutely true in both cases, and very important to remember.

*Should I have gone with "All Our Yesterdays"? Needed something like that in response to Yglesais's "Imagining Better Yesterdays," and I figured I could use "Enterprise" because it's about the economy. Right? Although if I had gone the other way, I could have worked in a Mariette Hartley reference.


  1. Where No Man Has Gone Before

    Barack Time

  2. I like "All Our Yesterdays," because it's a parable of how America will look under Tea Party rule -- inquisitions and witchcraft trials if we're lucky, living in caves if we're not. That is, until the whole planet melts.

  3. Wish I was better with remembering titles of episodes...but, with wikipedia as my guide, I'd say there's a good collection of references here, in both the post and the comments.

  4. I accept the general argument advanced above, but would add the following caution: it is only as legitimate as the assumption that the legislative constraints of the current Senate were not possibly in play.

    Here is a counterfactual: Obama, having run on a "change Washington" stance calls up Sen. Reid after the election and says: "find me 50 votes to change the rules on day one to effectively neuter the filibuster and the secret hold - that'll be the jab. Also, brush off the cobwebs of any campaign finance or other good government bills you have lining the garbage can and introduce that right after - that'll be the left hook that'll give us the ability to say we're cleaning out the garbage in Washington and making things run smooth."

    Now, there are good reasons to expect that such a move would not have been succesful - I know this. Individual Senators love having that power and the caucus is probably fearful of losing influence when out of power.

    But let's say Reid gets fifty votes together to pass that on day one - EVERYTHING becomes easier to pass over night and you likely can go bigger on some things.

    You not only get a bigger first stimulus but you probably get a couple of more bills down the line. The first stimulus can be made more public (as Yglesias talks about), although it's possible the administration, with its love of 'nudge' behavioral economics might balk at that.

    You likely get a health care bill that more aggressively tackles health care spending in the long term enabling the administration to make the case for more short-run stimulus.

    You get a clean debt limit passed in late 2010 - no downgrade just yet (although perhaps if the GOP gets control...).

    It's possible you get a stronger financial regulations bill.

    You in all likelihood get immigration reform (preventing some dissatisfaction in the Latino community that likely robbed the Democrats of some votes in 2010 that they could have used).

    It's possible you get a climate change bill that includes a carbon tax or cap and trade.

    Those are just the bills that were passed, or almost passed, that I can think of; there are likely more.

    Now, it's possible, given the type of recession we are in currently, caused by a severe financial crisis, that this doesn't staunch the bleeding and the Democrats still lose the House and perhaps even the Senate. But I would argue, a small feat given my ideological predispositions, that the public policy passed would have improved and the overall financial picture would have worked out at least slightly better in the short and long turn.

    Again, this is dependent upon the assumption that Reid could find a majority on day one to pass rules reform. Maybe that's not the case - but it has to be considered in the above story.

  5. @ Josh R. - I've seen others make this argument but I just don't see how it would work. Obama was elected at a time of extraordinary economic danger to the country, where it seemed to many as if the economy might plunge into a depression any day. I don't see how he could make his first order of business Senate rules reform. It would have been difficult if not impossible to pass (as you acknowledge). Failure would have crippled the Administration right out of the gate. I can't see how a President facing the environment Obama was could have spent weeks on this, & it would have taken weeks to get Senate Dems to give up the filibuster.

  6. >I can't see how a President facing the environment Obama was could have spent weeks on this, & it would have taken weeks to get Senate Dems to give up the filibuster.

    Also, this counterfactual, like many others by Obama's progressive critics, rests almost entirely on hindsight. Were these critics making the same points at the time the stimulus was being crafted? I know Krugman advocated a much bigger stimulus from the get-go, but I don't think he or anyone else ever proposed any specific plan on how to get their preferred legislation through the 111th Congress. And no, suggesting that Obama should use the bully pulpit or arm-twisting or backdoor deals to pressure every recalcitrant member of Congress into compliance isn't a "plan." The Obama Admin was doing those things anyway, and I don't recall that any of his critics from the left proposed any substantive ways in which he could have done those things more effectively. Only now, years later, after seeing the disappointing (but tangible) recovery, are these critics attempting an I-told-you-so by conjuring away the limitations of our political system which they largely ignored before.

  7. Obama did what he wanted to do, with Democrats controlling both houses for his first two years, and still controlling one house of Congress even now. He got his policies in place, he passed his agenda, and he moved some big legislation.

    And we are living in the result, a new normal that has been locked in since 2009, and we face a real chance of slipping into a double-dip recession.

    President Obama has been a failure- the Democrats made a big mistake by picking him as their nominee over Clinton. He needs to go.

  8. Conservative Teacher,

    Welcome. I don't see how you could possibly say that "Obama did what he wanted to do," given that plans he said he wanted were blocked in the Senate multiple times. Presidents never get exactly what they want, and rarely even come close (see, for example, my post on Bush from last week).

  9. On the filibuster,

    I agree with CTH here, with a caveat. It's not impossible that the Democrats could have reined in some of the extreme uses of the filibuster if they had moved immediately after the election to counter McConnell's insistence that it was a 60 vote Senate, and then moved increasingly through 2009 to pound on the issue and to threaten unilateral reform. If Reid didn't have the votes, he's no worse off for bluffing, and if he did then he might well have been able to get back at least to Clinton-era levels of filibuster.

    Still no immigration bill (I don't know if they could have cleared the House on that one), and probably no climate bill, but perhaps stuff like the (once) routine extension of unemployment benefits and Dodd-Frank would have gone much smoother, and perhaps that gets state & local aid through.

  10. The Belly reference in the other post is going to be hard to top, especially as it was mixed with the 'Dogs not barking' theme we see here.

  11. This is an interesting discussion, because there seems to be a universal assumption that the quality of a President is a function of the amount of legislation passed; sort of a Presidency-as-Chief-Majority-Leader.

    Another way to think of the Presidency is as the Chief-PMO-Executive, that is, the role primarily responsible for triaging government entities to make the system function effectively, and meanwhile to defend the Oval Office from the unprecedented number of people who want something from it. Think Truman and the Buck Stopping Here.

    Bush was terrible at this gatekeeping job, probably for the passivity and indifference Jonathan outlined earlier. I don't see Obama as being that much better; perhaps in Obama's case the 'nonthreatening' mask that the numinous negro wears is not the best one to have an Oval Office that is appropriately forceful.

    Note that Obama's liberal defenders place blame for staggeringly dysfunctional government at unusually crazy Republican members of Congress. That may be, but while the sheep sometimes go crazy because of a contagious fever, sometimes its a result of the powerlessness of the shepherd.

    I don't know how far I would push this argument; though it does seem to be worthy as a part of this conversation. Perhaps this explains why Republican Presidencies tend to be perceived somewhat more effectively than Democratic ones: liberals are generally conciliatory, while we conservatives are often assholes. If you've ever worked with a highly effective PMO office in a large organization, you know those guys often function well to a large extent because a big part of the organization thinks they are assholes.

  12. A perhaps better way to advance the above argument: think about "The Audacity of Hope", at the beginning of which Obama, or his ghostwriter, heaped effusive, almost uncomfortable, praise on Reagan.

    This was designed of course to make Obama, a newcomer on the political scene, seem modern and postpartisan. Now imagine you were a feverish new Republican member of Congress, worshipping at the altar of St. Ronnie.

    Would you fear a Reagan-loving President of the opposite party?

    The left has come a long way from LBJ, in respect of head-banging Presidential assholishness.

  13. I've never been convinced more of Obama's people on the FOMC would have made any practical difference. He reappointed Bernanke and the new people Obama has gotten on the FOMC have supported Bernanke, so Bernanke has gotten his way. It isn't really possible for Bernanke to even MORE get his way, so I don't understand how more Obama people would have made a practical difference. I think commentators like Yglesias might be using a model in which the FOMC gravitates to the average views of its members (or something like that), but we know from prior members of the FOMC that isn't really how it works. Now if you want to argue Obama should have appointed someone besides Bernanke to be Chairman, that's a different argument.

    The idea of contingent stimulus of various kinds is an interesting one, but I don't really see any reason to believe it would have been easy to get meaningful contingent stimulus through the Senate in 2009. As I have gone through before, the conservative Democrats didn't want a big bill, and unfortunately a lot of them represented states where economic distress wasn't particular high at the time (and indeed never got particularly high).

    Contingent stimulus doesn't really solve that problem--it would be nice if people viewed contingent stimulus as adding nothing to the stimulus bill, but there is no way the stimulus opponents would have let that slide, and in fact I think they would have more luck arguing for treating the contingent amount as a non-contingent amount. Meanwhile, I don't see how contingent stimulus would be more appealing to the Senators from low-distress states.

    Of course I'm sure Obama made mistakes--no one is infallible--but it is interesting to me that even with the full benefit of hindsight, people can't come up with really convincing scenarios about what Obama could have done better that would have made a big difference. I think that is because the conservative Democrats in Congress set the limits on what could be done, and I think it is likely that Obama got pretty close to as much as anyone could have gotten out of Congress. Which I take to be Bernstein's point, minus the bit about stabilizing state budgets (which I really don't see flying with enough of the conservative Democrats in low-distress jurisdictions).

  14. Looking at policy is sidestepping the issue.

    The job of a politician is to smile at you while he is picking your pocket, and you're happy about it.

    Obama doesn't get that. He picks your pocket and doesn't make you feel good about it. That is the error, which then translates into not very motivated democrats in the midterms and into the general. Combine that with a weak economy and you've got trouble.

    Lke many children from bad families, Obama doesn't want conflict. That is great, except you sometimes need conflict to keep your base entertained. Arguing about policy outcomes keeps the focus away from that initial mistake.


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