Category: Barack Obama

Obama’s Power: Dems on deficit committee now want more than $1.5t in cuts

Originally posted at AMERICAblog

There is an emerging consensus amongst the Democrats who will serve on the deficit commission (aka Catfood Commission 2, Electric Class Warfare) that the mandate of $1.5 trillion in deficit cuts is insufficient.

Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they’ve been tasked with finding, in order to help offset some of those costs.“All of us would like to set as a target for ourselves even more than $1.5 trillion,” Rep. Chris Van Hollen (D-MD), who’s also the top House Democrat on the Budget Committee, told reporters at a Tuesday Capitol press conference.

For those not paying attention, President Obama (after Warren Buffett said it in his much-linked NYT op-ed) called for the deficit commission to go beyond $1.5 trillion in cuts. The Democrats on the commission, including liberals like Xavier Becerra, have moved to be where the President has been saying the commission should go. When Obama gives a speech tomorrow night (and a subsequent one in following days more specifically about deficit cuts), it will direct Congress as to where he thinks these cuts beyond $1.5 trillion should come from. Sadly, the answer seems to be Social Security, Medicare, and Medicaid.

David Dayen points out that this is a pretty clear rebuttal to the notion that the President is not capable of shaping the course of legislative and policy debates, especially with regard to Congress as a coequal branch of government.

If you listen to [Obama’s] public statements, he clearly wants this tax cut and spending cut agenda to go forward. And now, his Democratic colleagues on the Catfood Commission, even the putatively liberal ones like Xavier Becerra, are mimicking him. That’s because a President has a lot of influence and power.

Take this as a reminder that President Obama is not weak and certainly not dis-empowered from pursuing the agenda he wants to pursue.

Stoller: What Democrats can do about Obama

Matt Stoller in Salon:

Obama has ruined the Democratic Party.
…
So why isn’t there a legitimate primary challenger to Obama to make this case? Forty years ago, primaries were instituted in the Democratic Party as a response to party insiders having too much influence over nominations. These reforms were implemented before the prevalence of money in politics was as extreme as it is now. At this point, primary challenges are so expensive that a serious 2012 campaign would ironically require support of party insiders for viability. The party, inflexible as it was in 1968, is perhaps even more rigid today. As a result, no candidate has stepped up to challenge Obama in a primary, even though 32 percent of Democratic voters want one.

This is an institutional crisis for Democrats. The groups that fund and organize the party — an uneasy alliance of financiers, conservative technology interests, the telecommunications industry, healthcare industries, labor unions, feminists, elite foundations, African-American church networks, academic elites, liberals at groups like MoveOn, the ACLU and the blogosphere — are frustrated, but not one of them has broken from the pack. In remaining silent, they give their assent to the right-wing policy framework that first George W. Bush, and now Barack Obama, cemented in place. It will be nearly impossible to dislodge such a framework without starting within the Democratic Party itself.

Stoller’s emphasis on the role party insiders can play in taking action here is insightful. There is no need for acquiescence. Stoller suggests first that party leaders run as favored son candidates, sparking energy and discussion in different geographies that opens the door for a real discussion about the direction the base wants the party to go in and who we want to lead us there:

Harkin could run as a “favorite son” of Iowa, and encourage people in the caucuses to send a message to the party and to Obama by choosing him. Other candidates could then emerge in early primary and caucus states, as a way of repudiating Obama’s leadership. Candidates wouldn’t have to pretend to be running for president or be presidential quality; they could simply stand in as favorite sons or daughters of their own geographic area. This would immediately fire up a highly aggressive and needed debate about the direction of the Democratic Party and the country at large. It would build a new set of leaders, and elevate others who would like to distance themselves from the Obama policy agenda.

In a few months, we’ll know better if Obama still looks like a loser next year. If he does, that does not mean the Democratic Party must follow him down the path to oblivion.

He concludes:

Political parties need to be flexible enough to allow for new ideas to come into the process, or else third parties or civil disorder are inevitable. All it would take to provide this flexibility are well-known Democratic elders who understand that rank and file Democrats deserve a choice, and a few political insiders who realize that they can increase their own power by encouraging a robust debate. I don’t think this will happen. But just imagine if it did.

I think this is exactly right. I’m really not afraid of the consequences of a primary. I don’t think something that 32% of Democratic voters want is fringe – it’s a legitimate idea, and one has achieved that legitimacy without a single party insider, media figure, or liberal leader advocating for it. If a primary challenger were able to emerge and beat Obama from the left, that person would offer voters a real choice of vision for how to right the economy and rebuild the middle class. If primary challengers emerged, but failed to knock Obama off of the top of the ticket, then at least the base had a choice in opposition and made it with their vote.

One element Stoller doesn’t address is that Obama’s poll numbers are weak now. There’s a very real chance that no only will he have taken the Democratic Party far to the right, but that he’s not even going to win reelection, ensuring four to eight years of Republican rule (which may well be similar to what we have, but without the whimsy). But there is recent history of the Democratic Party forcing an incumbent to not run for reelection due to poor polling: the 2010 Senate race in Connecticut, where poor polling lead the administration and party leadership to not only encourage Chris Dodd to not run again, but were recruiting an alternative candidate while Dodd was still running. Dodd did what was probably best for the party and stepped down in a timely fashion and Democrats were able to hold the seat. While there may or may not emerge primary challengers to Obama, there also may need to be a discussion not about his candidacy on ideological grounds, but his candidacy on electability grounds. I don’t expect that there will be this degree of critical introspection within the administration, but if there ways, very interesting things could happen that might not otherwise be possible.

Stoller on Schneiderman & Obama

Matt Stoller has been consistently writing thoughtful analysis about the Obama administration and what’s happening in American political life, but this piece at Naked Capitalism is undoubtedly one of his sharpest pieces of writing, pulling together a number of different threads of analysis around what we’re seeing out of New York’s Attorney General, Eric Schneiderman. Stoller pushes the analysis (bold in its rarity) that Schneiderman, like Obama and any other politician, is doing what he wants to do.

In all the absurdly stupid punditry, the simple application of free will to our elected officials goes missing. Yeah, Obama got money from Wall Street. But Obama is choosing to pursue a policy of foreclosures and bank bailouts not because of any grand corporate scheme. He just wants to. He thinks it’s the right thing to do, and he’s doing it. If you don’t think it’s the right thing to do, then you shouldn’t be disappointed in him any more than you might have been disappointed in Bush. Obama is not trying to do the opposite of what he’s doing, he’s not repeatedly suckered by Republicans, and he isn’t naive or stupid. Obama is simply doing what he thinks is right. So is Eric Schneiderman. So is Tom Miller. So are any number of elected officials out there.

In positions of power, the best expression I heard is that “up there the air is thin”. That is, you have enormous latitude, if you want to use it. Power can be wielded creatively and effectively on behalf of whatever it is the wielder wants. Now of course there are constraints, plenty of them. Smart politicians spend their time working to maximize the constraints they want to impose and weakening the ones they want to overcome. But the basic Reaganite liberal argument defending supplication towards Obama these days is that Obama is “disappointing”. In this line of thought, powerful corporate interests and Republicans are preventing him from enacting what his real agenda would be were he unfettered by this mean machine. Eric Schneiderman, who is in a far less powerful position as New York Attorney General, shows that this is utter hogwash. Obama is who he is, and anyone who thinks otherwise is selling something.

The rest of the piece is really sharp and definitely worth reading. There aren’t many people consistently putting out clear-minded analysis of the Obama administration and political dynamics in America today, but Matt is one of them.

Draft Duncan Black

Duncan Black:

I understand the difficulties of getting things done, of Republican obstructionism, of Democrats who also, too, suck, but ultimately such excuses don’t matter. Results do. If I were the one in charge of this pop stand, I’d direct my economics team to come up with the “If I were a prime minister instead of a president, this is what we would do” plan. And if all they came up with was minor tax breaks for hiring, “patent reform,” and “trade deals,” I’d, you know, fire them.

That would be great, if Duncan were in charge. But he isn’t. Unless this is Duncan raising a trial balloon for him to be drafted as a presidential candidate, I’m not sure what the point is. Barack Obama wants “minor tax breaks for hiring, “patent reform,” and “trade deals” so he isn’t going to fire the people who bring him these ideas.

Cornel West on MLK, Obama

A very powerful op-ed from Dr. Cornel West in today’s NY Times. No punches pulled:

The age of Obama has fallen tragically short of fulfilling King’s prophetic legacy. Instead of articulating a radical democratic vision and fighting for homeowners, workers and poor people in the form of mortgage relief, jobs and investment in education, infrastructure and housing, the administration gave us bailouts for banks, record profits for Wall Street and giant budget cuts on the backs of the vulnerable.

There are other powerful hits on the Obama administration, but I actually like where West is going more:

King’s response to our crisis can be put in one word: revolution. A revolution in our priorities, a re-evaluation of our values, a reinvigoration of our public life and a fundamental transformation of our way of thinking and living that promotes a transfer of power from oligarchs and plutocrats to everyday people and ordinary citizens.

In concrete terms, this means support for progressive politicians like Senator Bernard Sanders of Vermont and Mark Ridley-Thomas, a Los Angeles County supervisor; extensive community and media organizing; civil disobedience; and life and death confrontations with the powers that be. Like King, we need to put on our cemetery clothes and be coffin-ready for the next great democratic battle.

Dean Baker on Obama, SS & Class War

Economist Dean Baker writes about why Obama wants to cut Social Security. It’s a good read, in that it’s terrifying and depressing, but heavily based in facts. Baker closes with this incredibly important analysis of class warfare in the United States and who the economy is actually working for:

This brings up the fundamental point. The country has been and is getting richer. The reason that most people do not feel better off is that most of the money has gone to those at the top. Part of the reason is that they have been distracted by nonsense about the crushing burden of Social Security, so they have not paid attention to the policies that put more money in the pockets of the rich. Unfortunately, at the moment, President Obama seems to be working with the distracters.

I’d just say that talking about “the crushing burden of Social Security” isn’t about providing a distraction, though it certainly is that. That conversation and the actual goal of reducing Social Security is in itself an act of class warfare. Social Security is a key program that keeps old people from being in poverty. Taking it away or reducing it will drive more people into poverty. Destroying Social Security is one of the ultimate goals of the wealthy elites’ class warfare.

The assault on Eric Schneiderman continues

Last week I wrote about the smear campaign that’s revving up against New York Attorney General Eric Schneiderman. Now Schneiderman is facing intense pressure from the Obama administration to drop his objections to a bad settlement with Wall Street around the foreclosure crisis. Gretchen Morgenson reports:

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.

Not surprising, the large banks, which are eager to reach a settlement, have grown increasingly frustrated with Mr. Schneiderman. Bank officials recently discussed asking Mr. Donovan for help in changing the attorney general’s mind, according to a person briefed on those talks.

In an interview on Friday, Mr. Donovan defended his discussions with the attorney general, saying they were motivated by a desire to speed up help for troubled homeowners. But he said he had not spoken to bank officials or their representatives about trying to persuade Mr. Schneiderman to get on board with the deal. [Emphasis added]

The amount of stomach-turning, nausea-inducing  crap in this one passage is hard to handle. The Obama administration – through HUD and the DoJ – is pressuring New York’s top law enforcement official to stop doing his job. The banking industry asked the Obama administration for this pressure and the Obama administration has complied. Not only is the administration pressuring Schnedierman’s office, they’re pressuring consumer groups to pressure Schneiderman’s office on behalf of the bankers. And then Donovan is justifying it with the transparently false line that it’s, in fact, about “a desire to speed up help for troubled homeowners.”

The current figure being bandied about in the 50 state attorney general settlement talks with the banks is in the range of $20-25 billion. If Donovan and the Obama administration wanted to “speed up help for troubled homeowners” they could instantly unleash the approximately $40 billion the Federal government has sitting unused from the HAMP program and the Hardest Hit Fund. But they don’t want to speed help to troubled homeowners, as Atrios points out, because they’ve had years to do this and still haven’t done it.

The only rival to Donovan in terms of hair-pulling absurdity is Katheryn Wylde of the NY Federal Reserve board and Partnership for Charlotte New York City:

Characterizing her conversation with Mr. Schneiderman that day as “not unpleasant,” Ms. Wylde said in an interview on Thursday that she had told the attorney general “it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.”

Actually, Ms. Wylde, no, they’re not. Wall Street is Wall Street. Main Street is Main Street. And corporations are not people. Sadly it’s hard to imagine Shaun Donovan or anyone else driving this in the Obama administration disagreeing with Wylde.

Not shockingly, I’m not the online one writing online who’s furious about this reporting on the administration’s efforts to squash investigations into foreclosure fraud.

Yves Smith:

Yet rather than address real, serious problems, senior administration officials are instead devoting time and effort to orchestrating a faux grass roots campaign to con a state AG into thinking his supporters are deserting him because he has dared challenge the supremacy of the banks.

Marcy Wheeler:

You see, the Administration has an “immediate opportunity to help a huge number of borrowers stay in their homes,” without any action from Eric Schneiderman. They have a way to do so more swiftly, in such a way the servicers actually would be held accountable. It would involve offering refis with principal reductions to all the underwater homeowners whose loans are owned by Fannie and Freddie. That would not only help a huge number of borrowers stay in their home, but it would be massive stimulus.

But instead they’re sending Donovan to pressure Schneiderman to pursue a measure that would benefit far fewer homeowners and probably take more time, while putting the last nail in the coffin of the rule of law in this country.

Phillip Anderson:

Did you see what [Donovan] tried to do right there? It’s called lying. It’s complete and utter bullshit. The Obama administration’s desire for Schneiderman to, well, stop doing his job, isn’t to further the interests of distressed homeowners at all. It’s all about giving the banksters yet another “get out of jail free” card.
…
Eric Schneiderman was elected to do a job, an extremely important one, serving the public’s interest and he’s doing a mighty fine job of it so far. If anything, the enemies he’s making, as illustrated above, show just how well he’s performing in that position. At a time when our US Attorney General, the AGs of states around the country as well as the federal agencies like the SEC and other instituions that are supposed to be representing the public’s interest seem to be AWOL or simply indifferent to those interests, Schneiderman is one of the few public officials anywhere that seems to actually want to do anything to hold anyone, anyone at all, accountable.

I can’t really recall a single piece of news that made me as hopping mad as this piece by Morgenson did. It’s not that this was really news. I knew that the Obama administration and Wall Street banks would try to pressure Schneiderman and other AGs to not investigate foreclosure fraud. But the fact that the administration and its surrogates are so openly admitting that they don’t want their to be investigation is just stunning. It’s probably better, as David Dayen points out, that this is out in the open. It helps draw the battle lines with greater clarity.

On one side Eric Schneiderman and other AGs like Beau Biden, Catherine Mastos, and a few others are fighting for homeowners and the American public. On the other side, Shaun Donovan, Katheryn Wylde, and other Obama administration figures are fighting on behalf of huge Wall Street banks. Now that that’s clear, I suggest you do what Yves Smith and Phil Anderson suggested and thank Eric Schneiderman for his leadership:

If you are a New York resident, I hope you’ll call (800 771-7755 or 212 416-8000) or e-mail Schneiderman and thank him for standing up to the corruption of the banks and their enablers in the Administration. I think he will appreciate the show of support.

House progressives blast Obama

Originally posted at AMERICAblog.

The relationships between progressive House Democrats and the administration seems somewhat strained. Jim McGovern (MA-3):

“We need to get the focus back on jobs,” said McGovern. “Here we are at the end of August, and Congress hasn’t done anything about jobs.”McGovern voted “no” on the debt ceiling compromise, calling is “a catastrophe” that disagreed with both President Obama and the American people’s stance on revenues.

“I didn’t run for Congress to dismantle the New Deal,” said McGovern.

The Massachusetts Rep is a loyal supporter of the president, but feels that the current political climate in the country calls for bolder leadership.

Oregon Rep. Peter DeFazio (OR-4)is only slightly less pointed in his criticism of President Obama.

“I believe Oregon is very much in play. I mean we are one of the harder hit states in the union, particularly my part of the state. I’ve just done six town hall meetings, have seven to go but people are shaking their heads and saying ‘I don’t know if I’d vote for him again.’” Defazio said.Asked if he was surprised, the congressman shrugged.

“Not at all,” DeFazio said. “One guy asked me, ‘Give me 25 words what he’s about and what he’s done for me.’ I’m like, ‘It could have been worse.’”

Burn.

George W. Obama?

David Bromwich of TomDispatch has a long, thoughtful piece about the many disturbing places where the Obama administration has either directly continued or expanded upon policies with regard to war, surveillance, and government fealty to private corporations that were once considered unspeakably bad unto evil or unAmerican. While they policies have not improved with age under a Democratic President, it’s important that people pay attention to these things. What was outrageous eight or even three years ago is now unremarkable and accepted. This is a terrifying development and one which speaks to how truly damaging the Obama presidency has been.

The Bromwich piece is very long and worth a read, but I’ll highlight a passage that Glenn Greenwald has also highlighted:

The usual turn from unsatisfying wars abroad to happier domestic conditions, however, no longer seems tenable. In these August days, Americans are rubbing their eyes, still wondering what has befallen us with the president’s “debt deal” — a shifting of tectonic plates beneath the economy of a sort Dick Cheney might have dreamed of, but which Barack Obama and the House Republicans together brought to fruition. A redistribution of wealth and power more than three decades in the making has now been carved into the system and given the stamp of permanence. Only a Democratic president, and only one associated in the public mind (however wrongly) with the fortunes of the poor, could have accomplished such a reversal with such sickening completeness.

Greenwald responds:

Economic suffering and anxiety — and anger over it and the flamboyant prosperity of the elites who caused it — is only going to worsen. So, too, will the refusal of the Western citizenry to meekly accept their predicament. As that happens, who it is who controls the Internet and the flow of information and communications takes on greater importance. Those who are devoted to preserving the current system of prerogatives certainly know that, and that is what explains this obsession with expanding the Surveillance State and secrecy powers, maintaining control over the dissemination of information, and harshly punishing those who threaten it. That’s also why there are few conflicts, if there are any, of greater import than this one.

I think this is spot-on. There is a confluence of activism happening – from historically oppressed people or communities joining with young people and workers, all joining with and being aided by highly informed and capable technological activists like Anonymous and WikiLeaks. The continuity of policies from Bush to Obama has meant that things which could have gotten better are either staying the same or being made drastically worse. There’s no way to say that all of this is happening in a vacuum, with a sanguine and approving public. Instead, people are informed and they’re angry. What that means will be seen, but I certainly wouldn’t presume that the US will escape the sort of public protests that we’ve seen throughout Europe, especially if the administration, Congress, and the elites they serve continue to preserve or enhance Bush-era policies.

Doom Loop, or Political Elites Missing the Point

Paul Krugman describes what he calls the Doom Loop – the process wherein political elites are radically (and potentially deliberately) misinterpreting signals from financial markets to enact destructive policies.

1. US debt is downgraded, sparking demands for more ill-advised fiscal austerity

2. Fears that this austerity will depress the economy send stocks down

3. Politicians and pundits declare that worries about US solvency are the culprit, even though interest rates have actually plunged

4. This leads to calls for even more ill-advised austerity, which sends us back to #2

Krugman points out that this loop and the people who are giving it energy are “impervious to evidence.”

Ben White of Politico noted in his daily tip sheet today essentially the same phenomenon:

Moving between NYC and DC as I do it can be jarring at times to hear politicians in Washington talking endlessly about markets demanding that the U.S. focus on spending and deficit and debt reduction. Then I come back to New York and such talk is simply laughed at given rock-bottom Treasury yields and the commonly held (and correct) view that the U.S. does not have much of a debt problem, certainly not in the near term. But it has a MASSIVE and potentially disastrous growth problem.

That’s why traders often mute the TV (or start cursing) when President Obama begins talking about super committees and shared sacrifice and tax hikes. To be fair, they mute GOP leadership as well. It’s hard to recall a time when the debate and rhetoric in Washington seemed more completely disconnected from what is actually going on in markets and the economy.

There’s a disconnect, to be sure. But it’s driven by ideology. People who believe that austerity should happen and that austerity is the only tool in their tool chest will seek out and find reasons for austerity to be deployed, regardless of whether they are right or not.