The Obama Administration

Stop the Madness

Flickr/K.P. Tripathi

The sequester has failed. I say that because it was intended as a deterrent, not as something that was ever supposed to actually go into effect. So because it has gone into effect, it has failed. What should we do now? The answer is simple—not easy, but simple. We have to end this madness, this string of manufactured crises that hamstring the economy and cause enormous amounts of genuine human suffering. Enough is enough. So Congress has to do three things:

Automatic Stabilizers: There When Congress Isn't

Flickr/JMazzolaa

As we approach sequestration today the dominant narrative continues to be that the huge run-up in the deficit since the Great Recession has been our greatest political—perhaps even a moral—failure. But it isn’t a failure. This is exactly how the system was designed to work if the economy ever saw a downturn on the scale of the 2008 financial crisis.  The deficit is collapsing through the same planned process. As the economy recovers, it is falling quickly, down to 7 percent in 2012, and an estimated 5.3 percent in 2013. 

Dear White House, You'll Regret This

Olivier Douliery/AP Images

The latest dust-up in the descent of Bob Woodward from fearless investigative reporter to manipulative media celebrity began with his contention in a Washington Post column that President Obama, by asking for revenue increases as part of a deal to defer the sequester, was “moving the goal posts” from the 2011 budget deal (in which Obama got thoroughly hosed by the Republicans).

Falling into Woodward's Den of Iniquity

Flickr/Miguel Ariel Contreras Drake-McLaughlin

When I got to my computer this morning and saw how many people were blathering about Bob Woodward, a wave of despair washed over me. First, because this is the kind of stupid argument from which we thought we could get something of a reprieve once the campaign ended, and second, because Bob Woodward himself, and the deference with which he is treated, just make me depressed.

It's not that Woodward isn't a good reporter, of a sort. But Watergate was pretty much the last time his reporting enhanced public understanding in a really meaningful way. Woodward's modus operandi since then has been to approach powerful people and convince them to tell their side of major events through him. Knowing that if they don't, someone else will and they might come out looking bad, many of them give him their spin in great detail, which his books then pass on to a wide readership. They aren't so much a record of events as a record of events as the people who talked to Bob Woodward would like us to see them. Nobody has done more than Woodward to elevate insiderism, the belief among many journalists that what matters isn't the effect government has on people's lives, but who said what to whom when, that if you can get the Secretary of State to tell you what he said to the National Security Advisor while they were at the urinals in the bathroom down the hall from the Oval Office, then you're a hero of democracy.

I'm not saying there's no value in that kind of reporting—we do want to know what policy makers are thinking, how they interact with each other, and so on. The mistake is to think it's the only thing that matters. And I think that explains why Woodward is now finding himself at odds with the White House.

The Five Most Terrifying Things about the Sequester

AP Photo/J. Scott Applewhite

The latest fiscal showdown concerns the “sequester”—across the board cuts to (almost entirely) discretionary spending that will total just over $1 trillion in the next decade, and which are set to take effect on March 1. What should those who have better things to do with their life than follow fiscal policy debates know about the sequester? 

The Sequestering of Barack Obama

AP Photo/Susan Walsh

President Obama has miscalculated both the tactical politics of the sequester and the depressive economic impact of budget cuts on the rest of his presidency. The sequester will cut economic growth in half this year. But it’s now clear, one way or another, that we will get cuts in the $85 billion range that the sequester mandates this fiscal year. All that remains are the details.

Trading The Blame Game for The Bully Pulpit

Flickr/Neon Tommy

The White House apparently believes the best way to strengthen its hand in the upcoming “sequester” showdown with Republicans is to tell Americans how awful the spending cuts will be and blame Republicans for them.

It won’t work. These tactical messages are getting in the way of the larger truth, which the president must hammer home: The Republicans’ austerity and trickle-down economics are dangerous, bald-faced lies.

Yes, the pending spending cuts will hurt. But even if some Americans begin to feel the pain when the cuts go into effect Friday, most won’t feel it for weeks or months, if ever.

Threat versus "Threat"

The second entry in our series on how to fix the Pentagon budget

flickr/zennie62

AP Photo

Fix the Economy, Not the Deficit

AP Photo/Charles Dharapak

It’s hard to be happy about the prospect of the sequester—the huge, automatics cuts to domestic spending set to take place if lawmakers can't reach a long-term budget deal—going into effect at the end of the week. Not only will it will mean substantial cuts to important programs; it will be a further drag on an already weak economy, shaving 0.6 percentage points off our growth rate. The end of the payroll tax cut, which expired on January 1, has already pushed it down to around 2.0, but the sequester cuts will depress it below the rate needed to keep pace with those entering the labor market. As a result, we are likely to see a modest increase in unemployment over the course of the year if the cuts are left in place.

What We'll Be Talking about in 2016

AP Photo/Mark Hirsch

Yes, pundits of all stripes are already starting to handicap the presidential fields for 2016. Yes, that’s a long time from now …  although we are under three years to the Iowa Caucuses, and probably just about two years from the first debates, so it’s not all that long. More to the point: as long as the candidates are running—and they are—there’s no reason to pretend the contest hasn’t started yet.

Republican Rationality on Medicaid

Rick Scott, who surprised everyone and did the right thing. (Flickr/Gage Skidmore)

Florida governor Rick Scott, with his skeletal frame, shiny bald pate, 9-figure fortune possibly obtained at least partially through Medicare fraud, and love of humiliating poor people, resembles nothing so much as a comic-book villain. So it was something of a surprise when he announced yesterday that he is reversing his previous position and will allow poor Floridians to receive Medicaid coverage as provided for in the Affordable Care Act. It isn't hard to explain why: the federal government is paying 100 percent of the cost of new enrollees in the first few years, and nearly all the cost thereafter, meaning for a small investment on the state's part it gets a healthier, happier, more productive citizenry. Only a truly despicable politician would turn it down, preferring to see their constituents go without health insurance than get it from the government, as I've argued (OK, "raged" is more like it) before.

After the Supreme Court said it its Obamacare decision that states could opt out of the Medicaid expansion, some people were more optimistic than I was, arguing that though Republican governors might shake their fist at Barack Obama for a while, eventually the Medicaid money would be too difficult to turn down. It's looking like I was wrong and they were right; Scott follows Republican governors in states like Ohio and Michigan in announcing that they'll accept the expansion, and though there are still some holdouts (most notably Rick Perry of Texas, which has more uninsured than any other state), the dominoes are starting to fall.

So what does this tell us? It turns out that even the most ideological politicians respond rationally to the incentives they're presented with—maybe not all the time, but much of the time.

Still More BS

AP Photo/Alex Brandon

We all do things that we regret. President Obama must surely regret that he ever listened to the extreme deficit hawks back in early 2010, when he appointed the Bowles-Simpson Commission, the fiscal zombie that just won’t die.

The commission is long defunct. The recommendations of its majority report never became law (because that required a super-majority). But the dreams and schemes of B-S have become the gold standard of deflationists everywhere. The test of budgetary soundness is: does it meet the recommendations of Bowles and Simpson?

Senate Tested, Iran Approved?

AP Photo/J. Scott Applewhite, File

It’s become difficult to keep track of the all the ridiculous charges that have been thrown at Secretary of Defense nominee Chuck Hagel over the past few months, but surely one of the most absurd is the idea that the government of Iran “endorsed” his nomination.

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