"Alas, Charles, I'm afraid your stance on the Obama administration is not only to the right of many US liberals sympathetic to unions and social movements, but also to the right of a goodly number of conservative pundits, economists, and investors who could care less about what his chronic capitulation to congressional Republican demagogy means for the fortunes of the Democratic party, but who care much about its consequences for the system."
Begin forwarded message:
> From: Marv Gandall <marvgand at gmail.com>
> Date: July 12, 2011 5:36:47 PM EDT
> To: lbo-talk at lbo-talk.org
> Subject: Re: [lbo-talk] Krugman: "The question then is why."
>
>
> On 2011-07-12, at 3:50 PM, c b wrote:
>
>> ... I don't agree
>> with your line that Obama's actions as President are responsible for
>> the failures of liberals to vote enough for Dems in 2110 It is the
>> liberals and progressives' own fault. Now the situation is worse, and
>> Obama has to compromise even further to the right.
>>
>> The budget fight negotiations now going on here should be examined
>> more closely here…
>
> Alas, Charles, I'm afraid your stance on the Obama administration is not only to the right of many US liberals sympathetic to unions and social movements but also to the right of a goodly number of conservative pundits, economists, and investors who could care less what the his chronic capitulation to congressional Republican demagogy means for the fortunes of the Democratic party, but who care much about its consequences for the system.
>
> Financial Times columnist Clive Crook, for example, examined the budget negotiations more closely two days ago and did not conclude, as you do, that Obama needs to "compromise even further to the right". To the contrary:
>
> "Until recently Treasury officials had believed that the big fiscal issues could not be resolved with the debt-ceiling clock running down.
>
> "After standing aside for months, Mr Obama took the opposite approach: nothing short of a grand bargain would work. He even promised to veto a stopgap measure.
>
> "Liberal Democrats were stunned, because savings of more than $4,000bn cannot be found without changing Social Security and Medicare, which the party wants to keep off-limits. Mr Obama was offering these programmes up for cuts.
>
> "In return, he demanded movement from Republicans on revenues. This appeased few Democrats, much as they want to see taxes rise as part of a long-term budget solution, because the president was ready to settle for a ratio of three dollars of spending cuts for every dollar of extra revenue. These are proportions that a moderate Republican might prefer, if there were any such thing as a moderate Republican.
>
> "Many Democrats concluded that Mr Obama was preparing to reward the enemy, yet again, for its obduracy. With no shred of intellectual justification, and controlling just one house of Congress, the Republicans say, 'No tax increases, ever' – and Mr Obama, instead of resisting, moves three-quarters of the way toward their position. Merely for the sake of appearing to take charge, he all but surrenders."
>
> See: http://www.ft.com/intl/cms/s/0/6ce92636-ab1a-11e0-b4d8-00144feabdc0.html#axzz1Rq5RnvVx
>
> The same worry about Obama's failure to respond appropriately to current economic conditions is apparent also in an article in today's New York Times Economix blog by Bruce Bartlett entitled "Are We About to Repeat the Mistakes of 1937?", referring to New Deal fiscal and monetary tightening which plunged the shaky US recovery back into recession. Bartlett is also no liberal, having served in the Reagan administration and as an advisor to Jack Kemp and Ron Paul.
>
> See: http://economix.blogs.nytimes.com/2011/07/12/are-we-about-to-repeat-the-mistakes-of-1937/
>
> Other conservative commentators like Martin Feldstein, also an old Reaganite, and Gregory Mankiw have struck similar notes.
>
> As have well-known investors like Barton Biggs, Bill Gross, and George Soros.
>
> On July 1, Biggs told the Wall Street Journal that the Obama administration promised but failed to deliver on a "massive public works program":
>
> "On the final day of the Federal Reserve's bond-buying program, Mr. Biggs dismissed a further round of the so-called quantitative easing as a possible solution. It was meant to lower borrowing costs and simulate investment.
>
> "Instead, Mr. Biggs, former chief global strategist for U.S. investment banking powerhouse Morgan Stanley, demanded the U.S. government temporarily return to ideas used in the Great Depression as a way to get the country back to higher growth.
>
> " 'What the U.S. really needs is a massive infrastructure program … similar to the WPA back in the 1930s,' he says.
>
> "The plan would be to employ some of the many unemployed people, jump start the economy, as well as help catch up with Asia, which is building state-of-the-art infrastructure from new mechanized port facilities to high-speed trains."
>
> See: http://online.wsj.com/article/SB10001424052702304584004576419783681867012.html
>
> Back in January, bond investor Gross called for the same program:
>
> "...the solution isn't to create paper. It is to create goods and services the rest of the world wants to have. The Obama administration has failed miserably in that regard...
>
> "We need to focus on employment and investment in manufacturing goods and services. You don't do that by incenting businesses with tax breaks and accelerated depreciation, because they fail to observe the final demand for their products and the ability to earn an acceptable return. Cash sits on their balance sheets.
>
> "You do it with massive infrastructure programs such as the construction of high-speed rail lines. China has several hundred. We need infrastructure repaired in the U.S., as well, but so far the administration doesn't seem to want to go there. It wants to placate business with tax advantages and higher after-tax profits."
>
> See: http://online.barrons.com/article/SB50001424052970204555504576075983972474462.html?mod=BOL_twm_ls#articleTabs_panel_article=1