Monday, May 16, 2011

I don't disagree with Paul Krugman on many issues but I tend to disagree on the question of Obama's spine.

I am an Obot and I know it. Also Krugman is demanding because he knows that some of his readers work in the White House. Still he slid over a well know fact in this column.

Six months ago President Obama faced a hostage situation. Republicans threatened to block an extension of middle-class tax cuts unless Mr. Obama gave in and extended tax cuts for the rich too. And the president essentially folded, giving the G.O.P. everything it wanted.

That wasn't the most recent hostage taking. There was another hostage situation in which Republicans threatened not to extend the continuing resolution. The next day reaction to the deal was that Obama didn't just fold, he folded over backwards. The reason is the headline cut in nominal spending (compared to the standard $0.00 in continuing resolutions) was even larger than the Republican leadership originally proposed.

Then someone read the fine print and discovered that the vast majority of the cuts were fake. That to get the headline number and the headlines, the Republicans accepted cuts to budget for the completed Census (the Obama administration brought in the numbers on time and under budget) and elimination of authorized spending which had already been indirectly blocked by another bill.

Even with the tax cave, Obama got something in exchange for giving Republicans tax cuts for the rich -- extra tax cuts for the non-rich. Since Krugman's concern about the fiscal 2011 deficit (and mine) is that it is too small, this was a good outcome, because it is stimulating the economy. Spending increases work better and tax cuts for the non rich work much better than tax cuts for the rich, but the final deal was better than the Republican proposal.

Skipping to the last paragraph, Krugman quotes only one side in a controversy "According to Harry Reid, the Senate majority leader, Mr. Obama has told Democrats not to draw any “line in the sand” in debt negotiations. " This is true. It is also true that according the Sherrod Brown, Obama declared in the same private meeting that he was holding firm.

One might wonder if reports on the meeting tell us more about Reid and Brown than about Obama. Treating Reid as Obama's press secretary is eccentric. It is standard practice to make it always all about the President. Brown's claim received little publicity (I read it somewhere on the web -- oh I see at a rival newspaper). But, technically, Obama is Obama and Reid is Reid.

By the way, I am also a Reidbot, but they are different people.

Update: Correction. Above I suggested that the apparent Obama cave on the continuing resolution was mostly smoke and mirrors, because "the vast majority of the cuts were fake." I was wrong wrong wrong. Turns out that about 108% of the cuts were fake, that is more than all of them. More than 100% is not "the vast majority." I apologize for my error. I do wonder why Krugman neglected to mention that Obama totally Pwned the Republicans.

1 comment:

Anonymous said...

The Tax Cut "cave" also included Unemployment Comp extension for this yr. along with the one yr. Payroll tax cut. Everyone always forgets one or two of these. Unfortunately, most progressive columnists loathe the prez & have their own version of the "facts."