Deal with the devil

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Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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142 Responses

  1. Avatar Jaybird says:

    The good news about the deal is that the cuts are mostly backloaded.

    If past performance is any indication of future results, this sentence is functionally identical to a sentence that states “there are no cuts”.Report

    • Avatar MFarmer in reply to Jaybird says:

      Yes, no cuts. It’s hard to understand how intelligent people in the 21st century can’t comprehend that government spending is not the answer to recession. It’s mind-boggling. We’re digging a hole that many will never climb out of — young, educated people, especially, should know better. One day they’ll curse their ignorance.Report

      • Avatar patrick in reply to MFarmer says:

        Young, educated people will simply pack their bags and move to some other place where they can do business (while retaining their U.S. citizenship just in case). Expats will be big in the 2020s.

        It’s the established older fogies with children and binding ties to the locality that are going to have troubles.Report

        • Avatar 62across in reply to patrick says:

          Where are the young, educated people going to go that is less statist than the US?Report

          • Avatar North in reply to 62across says:

            Well, not to snark but at the rate the two nations are going Canada would represent one option. Mind you the Canadians have tight immigration regulations and are unabashedly multicultural.Report

          • Avatar Murali in reply to 62across says:

            Singapore is pretty good if you’re an expat. Except if you’re gay, then Singapore kind of sux. Gay marriage is not likely to be legalised soon, portraying gays as normal people is either completely cesonred or gets an R21 rating and the local culture is deeply homophobic. Otherwise, Singapore does a lot of smart economic policies.Report

            • Avatar 62across in reply to Murali says:

              Sorry, but I just don’t see an exodus of the young to Canada or Singapore.

              Singapore may be better for young businesspeople, but as you allude, the government and society are more authoritarian. The young and educated won’t give up their civil liberties for more an only modestly better business environment.

              And Canada is the land of socialized medicine, isn’t it? Regardless of current trends, that’s a lot of “statism” to overcome.Report

              • Avatar North in reply to 62across says:

                Well I don’t think it’d stop Americans from wanting to go in; you underestimate the allure of universal coverage at your peril; but it’s really quite moot. The Canadians don’t just let anyone in unless they’re skilled, a refugee in mortal peril or have a big bag o cash to invest.Report

              • Avatar tom van dyke in reply to North says:

                The Canadians don’t just let anyone in unless they’re skilled, a refugee in mortal peril or have a big bag o cash to invest.

                Now we get to the thick of it. And Lovely Lovely NZ [which would be speaking Japanese about now sans the US] turned away that skilled British nurse because she was fat and would theoretically be a burden on the health care system.

                Peeling back the onion on these social utopias yields a lot of surprises. Gotta say about the USA, what you see is what you get.Report

              • Avatar Murali in reply to tom van dyke says:

                By the time the Japanese were bombed, they were already running out of bullets and were stretched thin. They couldnt have lasted for much longer.Report

              • Avatar North in reply to tom van dyke says:

                Tom, old shoe, for a smart fellow you sometimes say the damndest things. Who called any of these countries social utopias?Report

              • Avatar tom van dyke in reply to North says:

                The US is often compared unfavorably to them.Report

              • Avatar 62across in reply to North says:

                Oh, I agree about the allure. But, ifounAmericans headed to Canada (and were allowed to enter) for the universal coverage, they wouldn’t be going for less statism, would they?

                The US, despite all the moaning to the contrary, represents the best environment for civil and economic liberties in combination in the world. That’s not to say we can’t strive to limit the reach of the state here, as it can be better. There just isn’t going to be an exodus of the young and educated to a libertarian utopia that doesn’t exist.Report

              • Avatar North in reply to 62across says:

                Weeeell…. technically Canada is less regulated than the US. It (along with new Zealand, Australia and Hong Kong) beats the US for economic freedom according to Heritage at least.Report

              • Avatar tom van dyke in reply to North says:

                ANZUS, Pax Americana. Canada gets a free ride, being cold, unoccupiable and worthless as a military target sitting next to Big Cousin America.

                Hong Kong is not a nation. It exists now only at the sufferance of the ChiComs as its free-market bagman.

                Singapore, we’re like fucking kidding, right, Brother Murali? I do appreciate you-them spending a bit more on defense than most Western-world parasites, although I bet it’s against shipping pirates, yr only national security concern. I cannot conceive of what other nation you might win a war with.

                Next.Report

              • Avatar Murali in reply to North says:

                @TVD

                although I bet it’s against shipping pirates, yr only national security concern. I cannot conceive of what other nation you might win a war with

                We are THE military power in the Southeast Asian Region. The whole purpose of us being conscripted is just so that:

                1. We cannot be simply invaded by our neighbours. Malaysia and Indonesia are our primary threats in the region. Soon after the merger with Malaysia, we were invaded by Indonesia during what we now call Confrantasi. Also

                2. We achieve self sufficiency in defence. WW2 basically woke us up. We couldnt rely on white men far away to give a shit about us when the going got tough.

                3. The Singapore Armed forces in addition to playing a key role in the defence of Singapore is also routinely involved in UN peacekeeping missions

                4. If either Malaysia or Indonesia were to renege on the various water agreements we have with them, we could quickly invade them to secure the relevant installations. Given that the only reason people would want to invade singapore is for its high performing economy, No one would want to nuke us or carpet bomb us.Report

              • Avatar James K in reply to North says:

                New Zealand hasn’t been part of ANZUS since the 1980s. In fact, we won’t even let your warships inside our borders (I’m neither condoning nor condemning that policy, merely pointing it out).

                I’ll certainly stipulate though that the US Navy does a sterling job keep the open ocean safe. And no, it’s not fair that you guys pay for all of that, though your politicians seem content to do so in exchange for the status of the US being #1 military power in the world.Report

              • Avatar North in reply to North says:

                Utterly irrelevant to the question of economic freedom Tom. There’s nothing in the requirements of national defense that requires the US’s economy to be less free than her neighbors. Nor are the US’s western compatriots compelling her to spend more on the military than all the rest of the world combined. In fact I suspect that the US container port in LA probably does more to maintain peace in the Far East than the naval base does. Who is the big rising bugaboo that the US is defending the world against now? Russia? A vodka drenched Petro-state oligarchy more worried about holding on to her own Far East than she is threatening anyone else. China can’t start any significant trouble with the world; it’s only near unbridled trade that lets her continue uplifting their millions of peasants so that their government doesn’t get thrown out of power. Terrorists; a bunch of goat screwing medieval misanthropes aren’t capable of genuinely threatening anything no matter how many wars and TSA’s they succeed in bamboozling the right into creating.

                So that only leaves what, crab people?Report

              • Avatar tom van dyke in reply to North says:

                Mr. Murali, Singapore [pop 5 million] vs. Indonesia [pop 240 million]? I’m sure Singapore can punch above its weight, but that’s a big ask.

                As for the Brits abandoning Singapore to the Nipponese, yah. But they did leave a few stalwarts behind in Changi like James Clavell so he could write “King Rat.”

                As for the fat & happy beneficiaries of the Pax Americana, I stand pat. That there’s no immediate threat in this particular decade is a naive reading of history. No one can say how China might be behaving right now absent the World’s Only Superpower looking on.Report

              • Avatar wardsmith in reply to 62across says:

                Canada can afford their generous health care system because Alberta is supporting Canada with all that oil revenue. That’s also why the Canadian dollar is gaining constantly against the American dollar. It pays to be sitting on over 1.5 trillion bbls of oil as peak oil becomes more and more obvious to the world. Canada gets damn cold though…Report

              • Avatar North in reply to wardsmith says:

                Alberta (and elsewhere’s) oil is certainly a perk but Canada is not exclusively dependant on its oil industry. They’re an energy producing state but they’re hardly a petro-state; they have large thriving industries beyond oil (albeit a large number of those are also natural resource extraction of various types but hey you work with what you got).Report

              • Avatar Rufus F. in reply to North says:

                You know, I get that they have socialized medicine, but I don’t really get why American conservatives aren’t heaping at least a little bit of praise on Canada right now. After all, they’re pulling through the recession with a lot less pain than plenty of other countries right now at the same time as they’ve got a fairly popular and competent conservative government running the place, headed up by a guy who openly thinks of himself in terms of US conservatism. You’d think American conservatives would have something nice to say about that.Report

              • Avatar Jaybird in reply to Rufus F. says:

                They aren’t saying *BAD* things about Canada.

                Maybe that they suck at hockey compared to the Bruins…Report

              • Avatar North in reply to Rufus F. says:

                Nah, when the American right wing looks north they don’t usually have much to complain about. The Canadian right wing (which is roughly ideologically equivalent to blue dog democrats in the ‘States) has had a stellar couple of years.Report

              • Avatar tom van dyke in reply to Rufus F. says:

                True, but the Canadian left demonizes them just the same. Accompanied by a Photoshop of Stephen Harper and George W. Bush wearing robber masks:

                However, the biggest scam of the Conservative ‘low tax’ plan, is their suggestion that giving the wealthiest corporations more tax cuts, will create jobs and that the benefits will trickle down. A misguided and fraudulent assumption known as ‘Voodoo economics’.

                There is no trickling down only an upward gusher, where those who benefit the most from what this country has to offer, pay the least for it. ‘The Conservative’s case for corporate tax cuts is increasingly coming under duress after new analyses suggest companies have neither created jobs or invested with their windfall. The Tories are arguing lower corporate tax rates will create jobs and business investment, blasting both the Liberals and NDP for seeking to tax firms more.’

                They are big costs with no job creation.

                We are a country with one of the lowest corporate tax rates in the world, but one of the highest child poverty rates. There is something fundamentally wrong with that.

                Because while claiming to stand up for Canada, Stephen Harper and his cohorts are selling us out to corporations. Lock, stock and barrel.

                http://pushedleft.blogspot.com/2011/04/stephen-harpers-tax-plan-steals-from.htmlReport

  2. > My faith that anyone in Congress or the White House
    > realizes this has been greatly diminished.

    The actions of the political establishment, as enacted, are much more highly correlated with the perception of the outcome than the actual outcome.

    I expect many people in both Congress and the White House know much more about what the debt ceiling debate means relative to the recession than the common bloke does. But the common bloke is convinced that the deficit is a here-and-now problem.

    That makes it a here-and-now problem.Report

    • Isn’t it also something of a pressing issue because the ratings agencies say it is and that it could cost us our AAA rating?Report

      • The ratings agencies said it was when it became apparent that raising the debt limit ceiling was not a political given, yes?

        So once the process got far enough into the weeds, it did in fact become a here-and-now problem. But it had to get out into the weeds to begin with for the ratings agencies to get into the mix.Report

        • Obviously, with the debt ceiling raised, it’s not *as* pressing as it would otherwise be, but S&P is still looking at a downgrade on the basis that we missed the $4T mark.Report

          • Yeah, WT. The demagoguing of “default!” obscured that. Welcome to the morning after.Report

          • Avatar E.D. Kain in reply to Will Truman says:

            You know who I trust even less than Congress? The ratings agencies. I could honestly care less what the people who gave AAA ratings to subprime mortgage-backed securities say about the US debt.Report

            • That’s a good point, Mr. Kain. I read Japan’s debt was just downgraded, and the markets bought it up anyway. But I do think the ratings are an indication of things, although we need not let them dictate our actions.Report

            • Avatar Will Truman in reply to E.D. Kain says:

              Whatever their faults, ratings agencies have influence with the setting of interests rates. If we lose our AAA ratings, it won’t leave us unaffected because you don’t care what they think.

              This was the case being made last week when the right was poo-pooing the agencies’ dire predictions on a default. It was true then. It’s true now.Report

              • Avatar E.D. Kain in reply to Will Truman says:

                Even so, the agencies are threatening this largely because of political shenanigans going on over the debt ceiling on the one hand, and the inability of our government to raise revenues on the other. Beyond that, the debt crisis is largely the result of the recession, and I doubt that ratings agencies would be tut-tutting over the debt if they felt like a good economic recovery plan was underway.Report

              • Avatar Will Truman in reply to E.D. Kain says:

                Maybe they wouldn’t, but we are in the situation that we are in. This isn’t an argument for slashing government over raising revenues. It’s mostly an argument against saying that concerns over the deficit are disingenuous or crazy.

                (Granted, I think that anybody complaining about the deficit while refusing to discuss raising taxes is being disingenuous or worse. But that’s something of a different matter.)Report

              • Avatar Robert Cheeks in reply to Will Truman says:

                Because of the nature of this gummint you MUST reduce spending before ever thinking of raising taxes. The idea of giving Barry even more money is disheartening.Report

              • Avatar Barry in reply to E.D. Kain says:

                E.D. Kain August 1, 2011 at 2:06 pm

                “Even so, the agencies are threatening this largely because of political shenanigans going on over the debt ceiling on the one hand, and the inability of our government to raise revenues on the other.”

                I don’t recall them threatening in this manner during the Bush II administration.

                In the end, they’re just like the Tea Party – purely a right-wing movement.Report

              • Avatar Kolohe in reply to Will Truman says:

                “Whatever their faults, ratings agencies have influence with the setting of interests rates. ”

                Not the US one, at least not on the first order. You use rating agencies to figure out if the debt from the Water Authority of Tulsa Oklahoma is better or worse than the School Bonds of Ames, Iowa, because the information asymmetry of small heterogeneous markets. The US Treasury market, in contrast, is huge, liquid, and all the information one can possibly know is out there for all to know. US Treasury rates are set by the market. Rating agency opinion is only going affect the stupid money.Report

              • Avatar wardsmith in reply to Kolohe says:

                @Kolohe, You could read my post in another thread on your “Us Treasury rates are set by the market”. In fact they are NOT set by the market, the auction is flawed and has been for years now. In real economics you can’t keep printing money and selling bonds without raising interest rates to attract the investors. But this isn’t real economics. I recommend looking into “quantitative easing” especially the informed discussion on same. And by informed discussion I’m thinking more WSJ than Mother Earth News.Report

              • Avatar Barry in reply to wardsmith says:

                “In real economics you can’t keep printing money and selling bonds without raising interest rates to attract the investors. ”

                It’s amazing how people can watch the real world, and still gstick with that glibertarian Econ 101 cartoon view of the world.Report

              • Avatar Mike Schilling in reply to Kolohe says:

                If we’ve learned anything over the past few years, it’s that the stupid money is all of it.Report

              • This is a very good point.

                It’s also why I think it’s important to let banks fail, when it comes to that. Money ain’t gonna smarten up any other way.Report

              • Avatar Robert Cheeks in reply to Jaybird says:

                JB, I agree, but I also think we should let union pension funds fail, car companies fail, and oh my, countries fail. We learn our lessons in our failures, then we must do the hard work and sacrifice of re-structuring.Report

              • Yes, but they should fail in an orderly fashion, with institutions like the FDIC to resolve matters with dispatch.Report

            • E.D.,

              We may not trust them, but we damn sure better pay attention to them. I don’t trust cops and muggers, either, but that doesn’t mean I won’t try to satisfy their demands.Report

            • Avatar James K in reply to E.D. Kain says:

              But the problem with the ratings agencies was their excessive optimism. When someone who is excessively optimistic starts looking at you askance, that’s the time to worry.Report

            • Avatar MFarmer in reply to E.D. Kain says:

              It’s those who loan us money you have to worry about. We should be facing the downturn, saving and allowing companies to begin investing in long-term, productive projects, but our myopic need to avoid economic pain will create much more pain later. If we had faced it properly years ago, we’d be in recovery already.Report

              • Avatar Barry in reply to MFarmer says:

                Again, please look at actual economics, not the sh*t put out by the people who got us into this mess. Big business is sitting on record levels of cash, and high profit levels. They aren’t investing due to miserable demand.Report

          • Avatar North in reply to Will Truman says:

            My prediction: S&P will be happy to ignore the 4T question now that the ceiling looks like it’s going to be raised.Report

      • Avatar Barry in reply to Will Truman says:

        As has been repeatedly pointed out by Krugman, the US borrows money at an insanely low rate. The real problem is that the top 50 people in each of the three ratings agencies are not currently breaking rocks in Federal prison.Report

      • Avatar North in reply to Will Truman says:

        One agency out of three Will. And frankly I’m heavily skeptical that even that one would downgrade now that the fracas looks like it’s over. Remember the downgrade threats were precipitated by the debt ceiling crisis. I don’t see those threats surviving the crisis.Report

        • Avatar Will Truman in reply to North says:

          Remember the downgrade threats were precipitated by the debt ceiling crisis. I don’t see those threats surviving the crisis.

          The talk predated the crisis, and the threat has survived the crisis. Just because the crisis was a *bigger* threat does not mean that the deficit has *ceased* to be a threat.

          http://www.cnbc.com/id/43968268Report

          • Avatar Michael Drew in reply to Will Truman says:

            The prior talk you speak of was isolated and few took it seriously. The threat of an across-the board downgrade in the near future was purely an outgrowth of this crisis caused by a combination of bad law and divided government, not remotely by the fundamentals. It is counterproductive for you to try to blur the distinction between the effects our fundamental debt problem may have on ratings agencies’ view of our credit, and that of crises like the one we just went through. It’s not remotely all of a piece.Report

            • And yet, with the crisis past, the talk continues. I’m not arguing that the threat posed by the deficit is remotely as serious or urgent as the threat posed by failing to lift the debt ceiling, but that doesn’t mean that it’s not a threat, nor does it mean that there is no urgency at all.

              “Given that the prospective cuts under the deal lie still well below the $4 trillion figure which S&P had commented would be a “good down-payment,” then this issue is unlikely to recede substantially,” said [chief European economist at Barclays Capital Julian] Callow

              Like Callow, Danske Bank chief analyst Allan von Mehren believes a downgrade of US debt is now in the cards.

              This is an article written after the debt ceiling was raised.Report

              • Avatar patrick in reply to Will Truman says:

                Well, yes.

                Go far enough out in the weeds, and it takes a while to get back.

                Note: I’m totally on board with saying that national debt is a problem, don’t get me wrong. But it’s not the same sort of problem as it is being characterized as currently.

                As long as other sovereigns keep buying U.S. treasuries, it’s not a here-and-now crisis. And there’s no danger of that changing as long as default is off the table. There’s nothing else to buy.

                Put another way, if I’m China, I’m pissed that I have nothing to buy but U.S. treasuries. I’m certainly not going to buy Korean or Indian or even German bonds in quantity. We’re still the only game in town.Report

              • Avatar Joseph in reply to patrick says:

                Though if Germany didn’t share a currency with 2 countries that have all but defaulted already and 3 on the verge of doing so, German bonds would be a much better bet, I would think.Report

              • Avatar patrick in reply to Joseph says:

                Still don’t have enough volume. But yes, I like the German economy. Staid. Boring.

                Never really understood them hooking up with the Euro.Report

              • Avatar North in reply to Joseph says:

                Yeah, but much like the Canadians, the Brasilians, the Israelis and the Kiwiis I don’t see Germany with the bond capacity to absorb the demand. They’re frugal Germans after all, they don’t have that much debt to buy and interest rates don’t go negative on bonds.Report

              • Avatar Barry in reply to Will Truman says:

                “And yet, with the crisis past, the talk continues. ”

                Two things – first, somebody somewhere is always saying any given thing. A few people in the crowd don’t mean squat.

                Second, what are the market rates for US Treasuries?Report

          • Avatar North in reply to Will Truman says:

            Hey I’m not saying the current balance of accounts is good for the country’s long term rating or it’s anything else either but with the deficit fiasco we were talking about ratings downgrades right here, within the next half year; not a decade out.Report

            • Avatar Will Truman in reply to North says:

              There’s no telling when the S&P downgrade might happen, if it does. It may be sooner rather than later. They laid out two benchmarks and we missed one of them. I agree that the deficit is not as urgent as the ceiling was. But that doesn’t mean that there isn’t any urgency to it.

              Especially considering how constrained out budget-cutting is. When we’re talking about tomorrow’s cuts ten years in advance, it’s difficult for me to say that we shouldn’t worry about what might happen years from now. The solution takes years to implement.Report

              • Avatar patrick in reply to Will Truman says:

                That’s a fair point.Report

              • Avatar North in reply to Will Truman says:

                In principal I don’t disagree. In practice though I see several large and powerful factors leaning against a downgrade by S&P.

                -Ratings companies work for the bond issuers, not the bond purchasers (and yes lets not go into the conflict of interest there). So a downgrade would be, in a way, like McDonalds employees greeting every customer over 200lbs (arbitrarily chosen number) who came in the door as “fatty”. Not good for business.
                -Herd mentality: the other two ratings companies aren’t planning on downgrading. Now in a move like downgrading US debt that’s not something that most people would want to be standing out alone in the cold on. Risk taking isn’t really a Rating companies shtick.
                -Politics: If the US doesn’t honor its financial commitments you pretty much have to downgrade its debt or else what the hell are ratings companies for?? But if it does honor its debts and you down rate based on budgeting then, dingding, you’re involved in the nations politics. For a ratings company that is ~not~ a good place to be.
                -We don’t wanna! Remember that down rating the US would be really bad for everyone in the financial industry. Again if the US defaults you pretty much have to down rate or else what the hell? But if the US doesn’t flat out default then you’re pissing off all of your associates and all your other bond customers, remember ratings agencies get paid by bond issuers not bond buyers, for what is in essence a pretty risky move.
                -Relativity. As has been noised about a lot of other Western nations have been rolling their eyes about how the US is the only western country that can have a debt crisis just for the hell of it. Yes there’s a lot of debt but there’s also not much taxation, a lot of programs that could be under a gimlet eyed appraisal be considered optional and there is a titanic behemoth of an economy that rumbles away beneath that debt. The US ~could~ pay off its debt with much political pain but with little economic pain compared to, say, Greece which literally cannot pay its debts without rollovers no matter what it does. This isn’t to Pollyanna the US debt situation because it is serious business but the debt could be lowered quickly were a party willing to bite the bullet and commit suicide to do it.

                So those, just off the cuff, are all factors that I think will assure that S&P will stand pat in the near and mid term. Heck, if the current deal is implemented near the way it’s agreed, the wars continue to wind down and political gridlock causes the Bush tax cuts to sunset then the ratings companies would have ample reason to go back to fretting about real worrisome cases.Report

  3. Avatar North says:

    Not a particularly surprising cave by Obama, pretty much true to form for him all things considered. That said it looks like part of his motivation for giving in on this is that cuts were something he did personally think were a good idea. Still, I personally have the solace of voting for Hillary; I imagine a lot of Obamanaughts are finding today’s deal a particularly bitter draught.

    The defense cuts do offer some mild solace; the agonized shrieks of the defense hawks at this sudden threat to their sacred cow makes lovely music.Report

    • Avatar tom van dyke in reply to North says:

      The system worked. Elections matter. The result reflects the makeup of the legislature.Report

      • Avatar Chris in reply to tom van dyke says:

        Interesting. Which legislature is that?Report

        • Avatar tom van dyke in reply to Chris says:

          Both houses, one Dem. This is no GOP win. $20B in actual cuts [AP says no real cuts until 2014], another committee, probably buried taxes. Much ado.

          Hey, it’s split gov’t. The best the Tea Party managed was to arrest the ballooning of spending. This little piece of political theater just set the stage for Nov 2012.Report

          • Avatar Stillwater in reply to tom van dyke says:

            Tom,

            This is no GOP win

            I agree with you on that. Policy-wise, it moves things in their direction – tho I think lots of Dems wanted to move it in that direction as well – but it was no victory. It’s easier for the GOP to sell the deal as a victory, tho, so it is pretty clearly a political win. But once the details of the actual deal trickle down to the Teaparty base there will be rending of garments and gnashing of teeth.Report

            • Agree, Mr. Stillwater. To sell it as a win might attract the middle, who vote for winners. But keeping the Tea Party engaged for 2012 might be more valuable. The lesson here is that the GOP has a slice of the legislative pie, but not big enough to do any more than slow spending increases.

              Conversely, the Dems should sell it as a win, to keep their base and dispel the losing-streak image. And when the autopsy’s finished, I expect to find that the any concessions to the GOP will be illusory.Report

              • Avatar Chris in reply to tom van dyke says:

                Except there is a huge concession: revenue. The one thing the Dems said they wouldn’t compromise is revenue. I haven’t seen anything to suggest that this deal contains an revenue. Sure, the supercommittee could increase revenue, but I expect the Dems to lay down again in that fight, too.Report

              • Avatar North in reply to Chris says:

                Possibly, but if one accepts that Obama and the dems are going to lay down on everything then revenue and anything else the left or center left would like goes out the window.Report

              • Avatar Stillwater in reply to North says:

                Exactly. There will be a revenue fight. But the structure of the deal is pretty good for Dems, poor for the GOP: if no deal is made and the trigger pulls, then all cuts/no revenue but 50% of the target is defense with Medicaid and SS exempt. So the GOP has huge incentive to deal, which means revenue. Plus the Bush tax cuts give the Dems added leverage.Report

      • Avatar Barry in reply to tom van dyke says:

        That’s odd. I don’t remember you or any Republican saying that between November, 2006 and November, 2010.Report

  4. Nate Silver’s take on the politics is pretty accurate, I’d say.Report

  5. Noticeably, Krugman doesn’t mention any of those supposed innumerable historical examples. Also, noticeably, he never manages to provide many historical examples of stimulus actually working.Report

  6. Question to the Left: Has Obama lost his base? If not, how close is it to happening?Report

    • Avatar Jesse Ewiak in reply to Mike at The Big Stick says:

      Among the Internet/DailyKos/etc. crowd? Sure. It’s about 1/3 ‘this is as good as possible’, 1/3 ‘this proves Obama was always a secret corporatist, we need to primary him’, 1/3 being upset Obama can’t negotiate his way out of a paper bag.

      But, among actual Democrats? I’ll have to see. Recent polling has him around an 80% approval rating among Democrats, which is around the historical average for a Democratic president.Report

    • Avatar Stillwater in reply to Mike at The Big Stick says:

      There is a lot of disagreement on the left as to what constitutes the base, with moderates and progressives claiming that distinction. In the end, I’d bet that the moderates look at this bill as exactly what it is: a moderate compromise on important issues (especially given the way it went down), and keep supporting both Obama and Dems. The progressives, on the other hand, were rebelling shortly after Obama beat Hillary, definitely rebelling when the ACA didn’t include a PO, and went into hysteria when the upper-end Bush cuts didn’t expire. He lost them a long time ago, and this deal is just a confirmation of what they already believed: that Obama is worse than Bush. They’ll shout loudly about primarying him out principle DAMMIT! but it will amount to nothing. Who knows if they’ll show up at the polls next cycle. I’d like to say who cares.Report

    • Mike, my own two cents: Has Obama lost his voting base? No.
      Has he lost some of the most politically engaged activists? Yes perhaps but considering the state of his opponents right now it’s hard to say that they’d ever consider actually abandoning him. Entheusiasm might be a problem but on the other hand hate is stronger than love and they might turn out in droves just to vote against Obama’s opponents.
      But really what it boils down to is that the left base in the Democratic party simply doesn’t command the party the way the base does in the GOP. Obama can neglect them pretty safely now that he’s President.Report

      • Avatar Robert Cheeks in reply to North says:

        North, but then the question is, how does Obama pull with the independents who voted for him in droves in 08′? And, the one attribute of the Tea Party Revolution is that it is making more and more of the inhabitants of fly-over country aware of Barry’s profligate spending and the effects on the economy.Report

        • Avatar North in reply to Robert Cheeks says:

          Hard to say Bob. The GOP and Tea Party hasn’t won any great laurels with independent and moderate voters with their behavior in this affair either. One could try and claim Obama is a big spender; conversely the polls say that people consider a lot of the big spending projects he has on his plate Bush legacy items. On the other hand he will be signing a bill that is marketed to cut spending and the one thing he’s managed to do right in this entire mess is brand himself a compromiser against the Tea Party’s shall we say steadfastness? Considering the particularly short length of moderates memories, though, I’d probably say it’s a wash and will depend more on what happens for the rest of the time running up to the election.Report

    • Avatar trizzlor in reply to Mike at The Big Stick says:

      Depends on how you define the base. I would argue that the way Obama has handled this deal – constant emphasis on compromise, a few rhetorical dings at the GOP, a final deal that both fringe groups are unhappy with – is exactly how you keep the average Democrat voter.

      Can I imagine a Democratic activist sitting out in 2012 because of this? Sure. But if there’s anything in the deal that would cause a moderate Democrat to do so, I don’t see it.Report

    • Avatar 62across in reply to Mike at The Big Stick says:

      The base and activists are very upset now and could be considered lost for the moment. However, in 2012, all that needs be said is that Scalia, Kennedy and Ginsburg will all turn 80 yrs old (or more) during the next Presidential administration. That will be all that is needed to win back an empassioned base.Report

    • Avatar patrick in reply to Mike at The Big Stick says:

      I would rephrase the other guys’ answers thus:

      If Obama was running against Hillary in a primary right now, today, with a sitting GOP President, he likely would not come close to beating her in said primary.

      People bought a lot on the “Hope & Change” spec.

      But his Presidential record can’t hurt his pre-Presidential candidacy and his running for a second term won’t be judged on the same merits.Report

      • Avatar North in reply to patrick says:

        Elegantly put. If the primary voters and especially the activists in 2008 could talk to their 2011 selves Hillary would have won the nomination in a landslide. But there’s no way in Hades that Obama’s base would even consider abandoning him now; they have the lesson of Carter before them and there ain’t no Kennedy equivalents talking about primarying Obama.Report

        • Avatar Rufus F. in reply to North says:

          I don’t understand why the bases have become so important to American politics anyway. Most likely the Democratic base will vote for whoever they put up and the Republican base will vote for whoever they put up. Just like always. What’s important is the much larger middle. Will they vote for Obama? Well, Americans don’t like voting for wimps. So, if the Republicans put up someone who is not a wimp and who can make a friggin decision (ergo NOT Romney), I think they’ll take it.Report

          • Avatar Jaybird in reply to Rufus F. says:

            Oooh! Oooh! I have an answer!

            While an energized base is no guarantee to win an election, a depressed base of the opposition is as close to a guarantee as you’re going to get.

            The base is the group of folks who gets out there and claps at the rallies, the base is the group of folks who tells their friends “you know, you really ought to vote for Michael Weiner. I’ve seen his pictures and he’s a stand-up guy.” The base is the group of folks who mans the phone bank, who drives the GOTV van, and (most importantly) shows up at the polls.

            Independents forget. If you can make the other guy’s base forget? Forgetaboutit.Report

          • Avatar North in reply to Rufus F. says:

            Sorry Rufus, Jaybird is correct. The base alone can’t win the election for you, but its depressed absence can very easily lose one for you no matter where the independants lean. Obama has been playing with fire with his endless compromising deal but it could pay off; his base may not love him like they used to but they really dislike his opponents. Also while the most high information portion of Obama’s base is pretty crabby with him right now the low info Demo base remains overwhelmingly approving of him so the man isn’t doomed yet.Report

            • Avatar Rufus F. in reply to North says:

              Fair enough. But the thing with his base thinking the opposition are “Galtian overlords trying to wreck the country” or whatever it is- I can’t see them turning around and voting Republican, and if I had to bet money on this one, I’d go with them voting Obama to save us from the other base who they really hate. But the moderate voters? It’s hard for me to see them pulling the lever for the guy who keeps getting his ass kicked. Americans are pretty unforgiving when it comes to lovable losers.Report

              • Avatar North in reply to Rufus F. says:

                Oh it’s no a choice for them between voting Dem and voting GOP Rufus. It’s a choice between voting Dem and not voting (or throwing their vote away on the Green party). Also when you lose an engaged Dem base voter you’re probably also losing several moderate voters that he would otherwise persuade to vote for you via his/her activity.Report

          • Avatar 62across in reply to Rufus F. says:

            The Right is going to find “Obama’s a wimp” is a very hard case to make to the larger middle. (The left may scream it, but that would only matter if someone was to primary him and that ain’t gonna happen.) The Republicans won’t be able to claim Obama is strong-arming the nation into a socialist hell-hole and still call him a wimp. They’ll go with the dangerous radical angle.Report

            • Avatar Rufus F. in reply to 62across says:

              I’ve always said the right picked entirely the wrong angle to attack him on. Obama acts like a boring middle American bank manager- attack him on spinelessness and being ineffectual. Say that we need a leader instead of a middle manager. But don’t pretend that he’s Che Guevara- it just makes you look delusional.Report

              • Avatar Jaybird in reply to Rufus F. says:

                Ironically, that particular attack may work better than they hope.

                Rightwingnut: “Obama is a left-wing looooooooooooooon!”

                Leftwingnut: “Are you crazy? He sold us out on health care! He sold us out on Iraq! He sold us out on Afghanistan! He sold us out on MMJ! He sold us out on DOMA! He sold us out on Cap and Trade! He sold us out!!!!”

                (Which of these two guys is more likely to show up on election day loaded for bear on account of their particular team?)Report

              • Avatar Rufus F. in reply to Jaybird says:

                Sure, but it could easily tip over the other way. Granted nobody doubts the Republican base is going to be revved up about the next election. And nobody doubts the Democratic base is nonplussed about Obama. But if the GOP comes on with “We’re going to save America from the radical left-wing Marxist agenda that Obama has rammed through and betrayed the country!!!” it’s entirely likely the Democratic base gets freaked out enough by that to come out against them in force. And, let’s be honest, there probably is a reason that the Republicans are scared shitless by their base in a way the Democrats are not.Report

              • Avatar Jaybird in reply to Rufus F. says:

                I think it’s more likely that it’ll be a battle of the depressed bases.

                Rightwingnut: “Obama is a left-wing looooooooooooooon! And that’s why I’m going to vote for (insert name in all caps here)!”

                Give me a name that deserves to be in all caps.

                Just one.Report

              • Avatar 62across in reply to Jaybird says:

                There’s the rub.

                BACHMANN – how does that work?Report

              • Avatar North in reply to Jaybird says:

                Well sure, but then you lose the entire middle en masse.Report

              • Avatar greginak in reply to Rufus F. says:

                Are you suggesting you believe many conservatives had a choice about whether to see O as The Other or not?Report

              • Avatar 62across in reply to greginak says:

                Sorry, greg, but I can’t tell if this is snark.

                Of course conservatives had a choice in how they chose to deal with Obama.

                Though the Hope and Change message was trumpeted and the left embraced it, Obama made very clear during the campaign his interest in working across the aisle. “We can agree without being disagreeable” was prominent in every stump speech. The campaign brought out testimonial after testimonial from people of the right who had successfully partnered with Obama in Illinois and at Harvard. The bills he co-sponsored with Coburn and Lugar were front and center. The right has not seen in recent history (if ever) a Democratic President so disposed to seek common ground with them. And when the right chose nihilism as the way to respond to Obama, they ensured they were never again see such a partner.

                It’s a damn shame. As someone who believes that most of the solutions to the country’s woes lie somewhere in between the left and right extremes, I voted for Obama based on this willingness to collaborate. And Obama has delivered pretty much as expected. (I believe the Grand Bargain that he floated with Boehner was his preferred course.) Frankly, I think the Republicans will come to regret they let this historic opportunity to accomplish good centrist governance pass.

                If the trajectory of the economy is even slightly positive next Fall, Obama will be re-elected by the larger middle that poll after poll shows sees him as the reasonable one in the Washington circus. Especially if one of the more “unreasonable” Republican candidates is their nominee. The partnering opportunity, though, is dead.

                (Note: when I say Obama is performing as expected, I am speaking of domestic policy. With Libya and the continuing security state crap, I don’t know what the hell is going on.)Report

              • Avatar greginak in reply to 62across says:

                I agree with your perception of O and his willingness to cooperate with R’s. Snark?? Only a little. I think many conservatives have essentially no cognitive options other then to see any D, especially a one who looks a bit different, as fundamentally bad, wrong, un-american and illegitimate. Sad but true since O would, i believe, love to work in a bi-partisan manner.Report

        • Avatar patrick in reply to North says:

          Note: most of the things that (left) people are irritated at Obama for, today, are likely the same things that they’d be irritated at Hillary for, today. They’d expect it more from Hillary, and thus be less irritated overall. I don’t see much practical substantive difference – at least in principle – between the two, really.

          Although it’s an interesting thought experiment in practice. Would Hillary have put full force behind health care reform, in an attempt to rectify her perceived failure the first time around? Or would she have avoided it and put something else front and center as her main policy agenda? Would financial reform have become, “I’m fixing Bill’s mistake”?

          Such is the realm of speculative fiction.Report

          • Avatar Stillwater in reply to patrick says:

            I’m not sure Hillary would win if there was a vote today. On a flat vote, I still see Obama winning. His approvals are still at 80-ish% for Democrats. And the firebaggery aimed his way is mostly from Hillary supporters still holding a grudge.Report

          • Avatar North in reply to patrick says:

            The Hillary counterfactuals are ultimately pointless, I agree but I cannot in my wildest imagination believe that Hillary would have spent her first year as President chasing the GOP around the table and letting them play out her honeymoon the way Obama did. She’d have had neither the patience with the GOP he had, nor the rhetoric that he had to live up to, nor the nievete that he presumably had when he ignored their declarations that they intended to defeat him no matter what he proposed.
            If you give her even four or five more months a lot of the cascading problems that befell Obama two years in could very plausibly be moderated or eliminated by her theoretically having more time to govern productively.Report

            • Avatar Jesse Ewiak in reply to North says:

              Yeah, the only argument from Hillary boosters I can agree with is, “she would’ve gone in knowing the GOP wants to destroy her.”

              But, she would’ve picked largely the same cabinet with few exceptions. Oh, and either sites like the National Review would be wishing that the “calm and sober” Barack Obama would’ve been elected or DailyKos would be ramping up for a Hillary/Obama rematch in 2012. Or both.Report

            • Avatar Jaybird in reply to North says:

              Hillary would not have had quite the coattails that Obama did.

              Now, she would have picked up tons of seats in the House and Senate rather than tons and tons of seats… which means that the health care debate would have gone down differently.

              Which means that 2010 would have gone down differently.Report

              • Avatar Jesse Ewiak in reply to Jaybird says:

                Eh, the only real close Senate seats I can see changing based on Obama’s coattails is _maybe_ Alaska and Minnesota. Every other Senate seat gain by the DNC was a big enough pickup that Clinton winning by a percentage point or two less most likely wouldn’t have mattered.

                But I agree, alternate history gets weird quickly and it’s sort of silly to go down that road unless you’re writing a story.Report

  7. Avatar Barry says:

    Almost by definition, one can’t lose the base. IIRC Bush the Lesser had a 37% approval rating by the time that he slid out of office, and McCain picked up 47% of the vote (showing that all of the so-called ‘Tea Party’ frauds were voting for the GOP candidate).Report

    • Avatar Art Deco in reply to Barry says:

      Frauds?

      And what sort of ‘TEA party’ was there in early November, 2008?Report

      • Avatar Barry in reply to Art Deco says:

        That’s the point. We didn’t see massive rallies until 2009. The Tea Party is a bunch of Republicans who pulled the same old same old sh*t.Report

        • Avatar Jaybird in reply to Barry says:

          Would you compare them to the anti-war protesters?Report

            • Avatar Jaybird in reply to Chris says:

              They certainly seem to have disappeared the moment Obama got elected… even though we’ve started dropping Nobel Peace Bombs on Libya!

              Maybe there are just as many protests as when Dumbya was president and the Republican-Media Conspiracy are refusing to cover them.Report

              • Avatar Chris in reply to Jaybird says:

                There are two kinds of war protesters. The first kind protests every war. These people are not Democrats, hate Democrats and Republicans (and libertarians, and pretty much everyone else: they’re leftists of the sort that you might have found in Madrid in July, 1936. They were protesting the war in Afghanistan on the day we started bombing. The second type is moderate left (progressives, say) and center-left, mostly Democrat, and they only protest the big stuff. Iraq, yes, Afghanistan no, Kosovo no, and Libya no. I doubt they’d be protesting, at least in any kind of numbers, even if McCain were president (though the arguments about executive authority and the war powers act would be made by different people, of course).Report

              • Avatar Jaybird in reply to Chris says:

                If you’re more than happy enough to accept a “threshold” argument when it comes to wars and associated war protests, why so incredulous when it comes to the difference between Bush’s and Obama’s spending?

                I could make a distinction between them that I’m sure would seem pretty arbitrary to you, if you’d like.Report

              • Avatar Chris in reply to Jaybird says:

                If you find that distinction arbitrary, then you haven’t spent any time with war protesters.

                But spending isn’t an issue for me. I see a difference between war protesters and tea partiers because tea partiers started pretty much the day Obama was inaugurated, because it’s not really about spending (and even if it is, it’s only about Democratic spending), whereas war protesters may only dislike Republican wars (though see Vietnam), but Obama hasn’t had a big enough one to bring out the Iraq war protesters yet. If he invades a country or starts a really big bombing campaign, and if he does so pretty much unilaterally, get back to me.Report

              • Avatar Chris in reply to Jaybird says:

                And yes, I protested Kosovo and Afghanistan and Iraq. I haven’t protested Libya, because I’m too cynical now.Report

              • Avatar patrick in reply to Chris says:

                Cynical and tired are two different things.Report

              • Avatar Chris in reply to patrick says:

                True. It’s probably some combination of both. That, and disgusted.Report

  8. Avatar Francis says:

    This was a monster win … for Obama. No extension of Bush tax cuts, no cuts in Medicare services, the trigger includes defense cuts, and the Rs have to vote FOR raising the cap. This will play out exactly like last Spring, when the CBO looked at the cuts Boehner got, and scored it as pocket change. The Dems are starting to learn the R playbook: never be satisfied, scream bloody murder at the slightest compromise, and never stop working the press.

    Yes, the two parties are made up of Statists. So? That’s what people want. Voting is going on right now, watch the Tea Party vanish.Report

    • Avatar MFarmer in reply to Francis says:

      “Yes, the two parties are made up of Statists. So? That’s what people want. Voting is going on right now, watch the Tea Party vanish.”

      We’ll see what the people want in 2012. Never before have the pundits known so little about what the people want, yet make the claim so often. I don’t know what the “people” want, but I have a feeling that more government intervention is not something most are clamoring for. If they do want a statist system, then they should be as happy as hogs in slop.Report

      • Avatar patrick in reply to MFarmer says:

        I don’t think a win for the Democrats will be a win for statism.

        I think a win for the Democrats (which I still think is likely) will be predicated on lots of other things, most of which are tied to preferring one brand of statism to the other.Report

        • Avatar MFarmer in reply to patrick says:

          I think you’re underestimating an anti-statist uprising. I could be wrong, but I don’t think so. I’ve been paying close attention, and I haven’t seen this much awareness, regarding the flaws of statism, in my lifetime. The polls showing complete disgust with government and politicians are vindicating my observations. The polls showing that people don’t want entitlements cut are based on people paying into the system for years and expecting government to live up to the promises of a program which was forced on them. The most patronzing aspect of statism lately has been criticism and ridicule of people who demand that entitlements be honored after some have paid into the stystem for 20 to 30 years, as if the people who’ve paid in should have known all along that government has been running a scam. Even if they should have known, and even if they do know, they still should put the vice on government to come clean and admit the programs are a ponzi scheme and the people have been conned.Report

          • Avatar patrick in reply to MFarmer says:

            I agree that anti-statism is on the rise, Mike, I just don’t see it as coming through in the way you think it will.

            The anti-statists are the young. They have the energy to vote with their feet and lack the ties to hold them here. The young also are capricious, those who don’t engage enough rapidly fall back on bloviating and not doing anything.

            I don’t see a critical mass engaging enough to make anything happen. But I could be wrong.Report

  9. Avatar Francis says:

    What ponzi scheme? This is an incredibly wealthy country with a lower tax burden than any other large industrial country, and with a huge military budget. (the lower tax burden is attributable in part to the fact that we’re stupid enough to have a partly-socialized and therefore very expensive health care system when you count both public and private dollars.). It’s simply not true that our safety net is unaffordable. (And, btw, just how well received was the Ryan Medicare privatization idea? DOA is a fair characterization. Anti-statist? Ha)Report

    • Avatar Murali in reply to Francis says:

      is an incredibly wealthy country with a lower tax burden than any other large industrial country, and with a huge military budget.

      There aren’t really any other large countries with such a large military budget.

      This is kind of like telling your only daughter that she is your favourite daughter.

      Lets leave aside the military budget for now. Both america and singapore have very similar military budgets (as percentage of GDP) 4.7% vs 4.3%. However america collects 26.9% of its GDP in tax revenue while Singapore makes do with 14%, which is basically half of USA’s tax burden. That means that there is still a lot of room for improvement in terms of domestic spending efficiency. Even Singapore has room for improvement in terms of spending money efficiently.Report

      • Avatar LauraNo in reply to Murali says:

        “That means that there is still a lot of room for improvement in terms of domestic spending efficiency.”
        Huh? Are you thinking that living in Singapore is exactly like living in the US? I’m pretty sure I would not like the situation I found myself in if that were the case. Not to mention we might well have a vastly different amount of debt as a percentage of GDP. We might have room to cut spending to their levels, sure. If we destroy lives. Oh, and why Singapore? Why not Norway? Or Saudi Arabia?Report

      • Avatar Anderson in reply to Murali says:

        You sure that stat that America’s revenue is 26.9% of GDP is correct? If I recall correctly, revenue is somewhere around 14-15% because of diminished tax reciepts from the recession (normally would be closer to 18%.) Meanwhile, we spend around 23-24% of GDP currently…Partly because of stimulative spending, but mostly from higher entitlement costs, higher defense budgets over the 2000s, ever-rising healthcare costs, etc…So that spending figure doesn’t look like it’s going down anytime soon, barring incredible economic growth and/or an (equally unlikely)huge push to slash entitlements…. (Check it:http://www.politifact.com/virginia/statements/2011/apr/22/mark-warner/mark-warner-says-federal-spending-near-all-time-hi/)Report

      • Avatar Jesse Ewiak in reply to Murali says:

        Does that 14% include the 20% of pay that Singapore mandates it’s citizens stashes away?Report

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