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Yesterday, Bob Reich had a post about the "Debt Scare" that he posits is undermining the president's agenda. Now, I'm a Reich fan and no debt scare-er myself, but I think Bob's post was a little off target. While he's right to point the finger at conservatives, the Pete Peterson Institute, and the cold hands of Bob Rubin, I have no idea why he's singled out the New York Times and the Center for American Progress as villains. For one, he refers to some slides from CAP that he doesn't link to or explain, so it's unclear why they are problematic. And two, Leonhardt's article actually bolsters the arguments for Obama's agenda. But before I get into that, here's Reich's concluding paragraph:
Why are the ostensibly liberal Center for American Progress and New York Times participating in the Debt Scare right now? Is it possible that among the President’s top economic advisers and top ranking members the Fed are people who agree more with conservative Republicans and Wall Streeters on this issue than with the president? Is it conceivable that they are quietly encouraging the Debt Scare even in traditionally liberal precincts, in order to reduce support in the Democratic base for what Obama wants to accomplish? Hmmm.That seems downright paranoid. Especially since most of CAP's economic policy messaging seems positioned to the left of the president -- see cramdown and banks, for instance -- and you can't really conflate the entire Times with one writer's article. What about that article? For starters, the main point of Leonhardt's piece is that Obama's policies are the smallest overall contributor to the current deficit -- hardly evidence to undermine them. His final paragraphs is a bit of (more or less fair) pox-on-both-your-houses on the political promises of deficit hawks, but Leonhardt never suggests that the stimulus was a bad idea, or that Obama shouldn't do health care reform, or even that it won't contribute to deficit reduction. It's hardly scary to suggest that we will have to raise taxes in the future (something most clear-thinking progressives should be hoping for, in any case) or that entitlement programs could become a little less generous (progressives obviously don't agree with this, but it is not unreasonable to consider changes in areas like Social Security age requirements as a way of dealing with Social Security, which I hasten to add will be fine for the coming decades). It all comes down to what now seems like an age-old debate over the influence of Obama's supposedly "conservative" advisers. It's true that they are heirs of the Clinton approach that Reich fought as Secretary of Labor in the early nineties. But that was a different time, and it's hard to conclude from the president's actions thus far -- the stimulus, health care reform's progress, the historic budget, S-CHIP expansion -- that he's pursuing a Clintonian economic policy. That's not to discount the disappointments on the financial markets, bankruptcy modifications, Employee Free Choice and the like, but it's clear the good outweighs the bad, certainly on the issues of deficits and debt. This post reminds me of the panic that surrounded Obama's White House meeting on entitlements, which was initially met with dark warnings that the president was planning on attacking social security but everyone quickly realized that the effort was focused on health care reform. There are people out there who are saying nonsense about the federal debt, but they're not at the Center for American Progress or, so far as we know, in the current administration.
-- Tim Fernholz
