Free Markets, Free People
As we watch the political theater that are these debt limit negotiations (and yes, I know the seriousness of all this, but this is political theater), it is interesting to watch the narratives being developed. On the left, the narrative they’re trying to push is the GOP is a bunch of intractable anti-tax zealots who don’t know how to say “yes”. On the right, the narrative seems to be … *sigh*, “no, we’re not.”
This is a game the GOP often plays – letting the other side frame the debate.
In fact, of the two sides, it is only the GOP that has actually put forward a plan. The president has certainly not put forward anything. He’s winging it. And Senate Democrats haven’t put up anything. They’ve simply refused to ratify the GOP plan (passed in the House – Cut, Cap and Balance (CCB)).
So who is the problem here? We have a GOP plan, we have no plan from Democrats or the White House. From them, all we have is grousing about the GOP plan and claims they won’t say yes to anything. Well, not true – they said “yes” to CCB, both in the House and the Senate. The only party that hasn’t said “yes” to it or anything is that of the Democrats.
Liberals say this is good for Obama because it shows GOP recalcitrance. Conservatives say that he has remained so committed to enormous tax increases that he tanked the very possibility of a deal. Time will tell, but it strikes me that the heated rhetoric he is using—”I didn’t get my phone call returned,” “I’ve been left at the altar,” “there’s nothing Republicans will say yes to”—does not suggest he, Obama, feels he has been handed a gift by Boehner and the GOP. He claims to have put $1.5 trillion in cuts on the table, plus $600 billion in entitlement reductions, in exchange for tax increases of the same size. He says Republicans said they would accept a dollar in higher taxes (or “revenue”) for every four dollars in cuts, which isn’t exactly saying “no’” to everything.
No, I’d say those who are saying “no” are Dems who want “increased revenues” and won’t take anything less than their version of that (and yeah, I’m not happy with the GOP talking about any sort of tax increase – but the claim here is that the revenues they’re agreeing too won’t come via tax increases per se, but tax reform.).
For their part, Republicans in the House passed their cut, cap and balance bill on Wednesday, and it included an increase in the debt ceiling, so even by his own account his criticisms of the GOP are not accurate.
Precisely. As Speaker Boehner said after the latest breakdown in negotiations:
“The House has passed its bill. We did our work. We passed our bill. The Senate hasn’t put a plan on the table. The president hasn’t put a plan on the table.”
If there’s a “no” contingent out there, it’s the bunch without a plan (except for raising taxes).
Ron Klain, former Chief of Staff for Joe Biden (and a Bloomberg View columnist) gives you a peek at the plan. Klain has a piece in Bloomberg where he puts the outline of what the administration needs to do to spin the car bailout properly if it hopes to make it a campaign positive. Klain’s suggestions are offered to form the basis of a narrative which will be polished and become a center-piece of the record of Barack Obama. The reason for beginning now is obviously an attempt to condition the public, which was very much against the bailout (and mostly remain so), to the supposed positive aspects of the takeover by government.
Of all the policy challenges I saw Obama tackle in my two years in the White House, none was more complex than turning around the U.S. auto industry. When the president took office, the industry was in free fall. Sales of cars and trucks, which had topped 17 million in 2006, fell to 10.6 million in 2009. Two of America’s three major automakers were insolvent, kept alive by weekly inflows of federal cash. U.S. automakers had an unsustainable cost structure, were badly trailing their foreign competitors in the production of fuel-efficient and electric vehicles, and seemed unable to make the hard choices needed to arrest their downward spiral.
The course the president chose was unexpected and risky. Most Americans remember that the administration decided to "bail out" the car companies — and indeed, the president did extend more loans and support to the industry. But he attached to the aid a series of controversial and painful conditions that ended business as usual in Detroit.
Call it “gutsy call II” if you will, but in reality, it is far from the picture that Klain ends up painting. Both the car companies were headed toward bankruptcy – a financial condition they had earned by their poor practices and sellouts to unions. Obama’s bailouts certainly ended “business as usual” for those two companies but not in a positive way.
One of the consistent memes is that had Obama not acted, GM and Chrysler would have gotten the equivalent of a death sentence by having to go into bankruptcy. By death sentence I mean the administration and its bailout supporters imply millions would have been thrown out of work and those two companies would have forever disappeared.
Uh, no. As Jim Manzi at NRO explains:
First, in the event of a bankruptcy, you don’t burn down the factories, erase all the source code on all the hard disks, make it illegal to use the brand name Chevrolet, and execute all of the employees. Others take ownership of the assets, and the employees go on with their lives. Some of these assets will be put to use generating revenues, profits, and taxes, and some of these former employees will get jobs or start businesses, and generate revenues, profits, and taxes. In order to measure the effect of the bailout over, say, five or ten years, you have to compare the actual taxes collected to what would happened over this same period in the counterfactual case where the bankruptcy was allowed to proceed. What owners would have bought the factories and IP assets, and what would they have done with them? What businesses would the former employees have started? Who would have moved to Arizona and retired? What new industry clusters will evolve in Arizona because of this transfer of people?
And what would have come out of the bankruptcy? Leaner companies better equipped to address the market and turn a profit. What wouldn’t have come out of the bankruptcy are the level of union pensions and benefits the administration preserved. Obama, through his bailout and modified bankruptcy made sure those were weren’t destroyed. Consequently you have pretty much the same conditions that existed prior to the bailout still in existence today with the added twist of more union control.
GM, for instance, just before it announced it had “paid off” its government loans, lost 3.4 billion dollars. Hans Bader, of the Competitive Enterprise Institute destroys the myth of GM’s loan payback with an extensive investigation into the real story. It is a story of known falsehoods being tacitly approved by the White House and the Treasury Department because the administration was desperate for some good news at the time. The Chrysler loan payback, as I noted recently, is of the same stripe. More smoke and mirrors from the “transparent” administration.
But back to the bailouts and the reasons. The defense offered for the bailout is this:
The White House report said the money invested in GM and Chrysler ultimately saved the government tens of billions of dollars in direct and indirect costs, including the cost of unemployment insurance and lost tax receipts that the government would have incurred had the big Detroit auto makers collapsed.
Again, that assumes nothing comes out of any bankruptcy proceedings. Nothing. And, as Jim Manzi of NRO explains above, that’s simply not how it works. It is an assumption without any real world foundation. We’re talking a zero sum assumption by the administration where no assets are bought, no one goes back to work, everyone is unemployed and no one can find a job. That’s just not the way bankruptcies (or the real world) work.
Second, some of the profit GM makes today would have been made by other companies that picked up some of the slack if the company lost market share after a bankruptcy. They would pay taxes on these profits, and as far as government receipts are concerned, money is money. How would auto industry structure evolve over time given whatever changes happened to the assets currently owned by the legal entity GM, or the employees currently paid by it?
Anybody who tells you they can answer all of these questions reliably is full of it.
Indeed. Again, the White House and its cronies must push the black and white version of this to make it saleable. If they can’t make you believe in their “either/or” scenario, then they can’t sell the lie. They’re banking on a large degree of economic ignorance to sell this. But they know that if they rely on the fact and figures they’re going to end up on the wrong side of the argument. So Klain says, break out the smoke and mirrors once again – sell it on emotion:
First, tell the story with fewer numbers and more emotion; less prose and more poetry. Rescuing the auto industry isn’t just a matter of saving jobs and factories — it means preserving a uniquely American manufacturing tradition. Cars are more American than apple pie or hot dogs (which, unlike the automobile, were both invented in Europe). We couldn’t have won World War II without this "arsenal of democracy"; as Walter Reuther famously said, "England’s battles were won on the playing fields of Eton, but America’s were won on the assembly lines of Detroit." The president needs to jujitsu Republican critics who accuse him of failing to understand American exceptionalism by pointing out his success in saving this exceptionally American industry.
You have to love the fact that even Klain doesn’t believe his own nonsense, but has no problem advising the president to use it. Note too that Klain seems not to remember that one of the reasons that GM and Chrysler were on the ropes had to do with the American public choosing competitive foreign cars over the American cars from those two companies (and with the VOLT, we see GM again in the same condition. But he feels if he wraps it all in emotions and not facts (a variation on “hope an change” that worked so well in 2008), they can fool enough voters into accepting the narrative or at least, not caring about it.
Second, equally emphasize the pain that was imposed as a condition of support, and the hard and unpopular choices the president made. It was a plan of “shared sacrifice,” in which executives were fired, workers lost jobs, benefits and pay were cut, and dealers were shut down. The story of the tough choices the president made along the way must be told to convince the public that this wasn’t a handout.
Of course, this plays into the part of the narrative in which you must believe their “either/or” scenario – that is had the government not acted, millions of jobs would have just vaporized. Of course, what Klain describes above would most likely have been the result of normal bankruptcy proceedings minus the $50 plus billion government money injected into GM. They don’t what that known though. And, naturally, they don’t want any speculation about what would have emerged, how many jobs would that would have entailed, etc.
If you start down that road and use the history of bankruptcies and the emergence of companies from that situation as a basis, you’ll have a very difficult time swallowing the administration’s story. So avoid those facts at all costs and concentrate on “emotion” and “pain”.
Finally – Klain advises the White House to crank up the propaganda:
Third, let the people of the auto communities tell their own stories — encouraging homegrown viral videos and other uses of social and new media. This is a lesson I learned the hard way during the 18 months I was part of the White House team that struggled to explain the benefits of the Recovery Act. We used visits by the president and vice president, videos posted on WhiteHouse.gov, as well as endless statistics and charts and maps and graphics on Recovery.gov — and yet nothing got the job done. Finally, two ice-cream shop owners made an iPhone video that told the story better than we ever had, by showing how a single small business loan rippled across their area to create jobs in countless other businesses.
The White House needs a similar personal narrative to tell the auto rescue story, or it will risk being denied a return to Victory Lane in 2012.
So there is the plan – “emotion, pain and propaganda” – that Klain claims the administration should use to sell something that is about as un-American as the internment of Japanese/American civilians during WWII. The most interesting part, of course, is Klain understands that if they get into the specifics of this “deal” and the facts come out, it ends up looking like a very poor decision. And Klain knows that the opposition, once it finally settles on a candidate and its own narrative, is going to seize on this subject as a part of their attack on the Obama record.
He instinctively knows that any chance of blunting that, or making it a non-issue, requires that the administration’s narrative be out there actively being pushed now and that it has to be spun properly for it to work.
How do you counter this? With facts. And the facts are aplenty. There is no shortage of factual information that can gut these arguments and show them for what they are – emotion and propaganda. The opposition also has to use “American exceptionalism” in its proper way and point to the fact that the administration misusing “exceptionalism” in its version.
And that doesn’t even start to get to the really long-run considerations of what effects this has on rule of law and moral hazard (or if you want to make the case for the bailout, social solidarity and degradation of the working class).
One of the things America prides itself on is “rule of law”. That is a large part of our exceptionalism. We also founded a country that attempts to avoid the moral hazards that abound in this sort of a situation. We are and for the most part always have been a meritocracy. You get what you earn. We don’t buy into exceptions because they’re “too big to fail”. We understand that freedom means the freedom to fail and we don’t bail out –selectively- failures. We don’t throw good money after bad, and we certainly don’t expect our government to interfere in that process.
Bains, a long time commenter here at QandO, and someone who I enjoy reading, put out a rather lengthy comment on the post about the CBS News poll that showed the majority rejected the narrative that heated political rhetoric caused the Tucson shooting. I thought I’d give the bains comment some further visibility because it has some tasty parts that I think deserve discussion. Here’s the comment in its entirety:
I’m noticing something else at play here. A theory of mine that recent events support, perhaps even validate. This will be long so please bear with me.
In 2008 I was in an argument with my father. I was lamenting that if only the media did its job, the nation might have a better idea of just who Barack Obama was, and where he wanted to take this nation. As with many of my friends, and evidently a good number of voters, he would have none of my criticism. Pop was, and still is, mired in a hatred of George W Bush. As such, he entirely missed the point I was trying to make. When news media becomes an advocate for a person, or a position, or a policy, we can not trust that media. It is not just that they are no longer ‘objective’; no, they have become willing disseminators of propaganda. Most here know this.
In a fit, I said that his reliance upon the MSM would come back to bite. All the blowback to the partisan blame-naming that we have seen over the past several days is a good indication of that “bite”.
No, it is not that the MSM is heavily biased leftward (they are). Rather, that those who have studiously ignored, and many have denied, this bent have seriously damaged their own cause. When one agrees with an author, or commenter, or pundit’s point of view, it is quite easy not to call them out on the inaccuracies they use in promoting their cause. And for forty years, the major media outlets have rarely been taken to task for their inaccuracies. That the narrative was acceptable was/is all that is important – facts be damned. And for a long time, this worked: Bork was Borked, Gingrich shut down the government, Limbaugh was responsible for the OKCity bombing, Reagan and Bush’s support of Israel caused 9-11, Humans cause global warming, and evil corporations (supported entirely and only by the right) caused all of our economic woes.
Instead of saying “wait a minute MSM, what proof do you have to make that statement” far too many folks nodded in agreement. Not because of a compelling argument, but because of an overwhelming agreement with how the conclusion could change the course of politics. Bork et al were/are bad solely because their views were/are in opposition to the enlightened, and therefore, brilliant judgments of the political “vanguard” – the Left.
Now what this has led to is a media, and the political left ill-suited to make compelling arguments. All this time, they have been living in an intellectually cloistered tabernacle, only hearing praise for all their illogical and un-provable prognostications. All their “brilliant” arguments are merely juvenile and facile, applauded only because they “proved” the proper position (approved by the ‘right’ cocktail circuits in the ‘right’ locations with the ‘right’ dignitaries approving).
Pundits of this ilk, say Paul Krugman and many others, have been living in a world of masturbatory bliss. Egos massaged, they willingly shelve any intellectual acumen for further gratification. They proudly spout the approved line, support the approved policy, advocate the approved politician, fighting evil in the name of (party approved) decency and Nobility. Hell, a Nobel Prize proves they must be brilliant (and Noble)! But therein lies the (nasty sandpaper) rub. There will come a time when they will not be able to hide their intellectual inadequacies behind a screaming choir.
This is why we see, I surmise, Krugman, his hosting broadsheet, and so many others, going off the deep end regarding the shooting in Tucson. They are loosing their grip on the narrative, and are petulantly lashing out at those who are more and more willing to reject not just the politically motivated narrative, but also those who mindlessly foist that narrative.
Bains’ theory is similar to the thoughts I’ve had (although I’d hesitate to call mine a theory, so ill formed are those thoughts at this moment) about the state of the media. I think bains raises some interesting points. As my brother has said to me, the internet’s democratization of publishing and commentary is as “important as Gutenberg’s invention of moveable type”. The more I observe what is happening, the more I agree. Bains takes that a step further to point out the impact and implications that “invention” is having.
Gutenberg took the Bible away from those who controlled it’s narrative at the time – the Church. It was the beginning of the end of the Church’s power. No longer were they the sole possessors of the written word or the narrative. Now many, many more could directly possess what only the wealthy church could previously possess (since Bibles at the time were all hand made and hideously expensive) and they were also able to offer their own (and competing) interpretations as well.
For a few centuries, the “media” has been – in some form or another – pretty much the sole provider of “news”. It chose the topics, it chose how they were treated and it chose how they were presented, followed up and talked about. Or, as bains points out, they controlled the narrative.
That’s big power. And for the most part, they had no competition except within their own industry. So people like Krugman, et al, became used to having their opinion accepted as “the” opinion and were able to push whatever narrative their ideology demanded as the “common wisdom”.
But there was a true revolution brewing that they missed completely. As Al Gore’s internet stood up in the mid to late ‘90s a challenge developed to the “official narratives” that were then considered conventional wisdom. No longer were the keepers of the narrative unchallenged. The first thing I remember – and this was before blogs or just as blogs were beginning to develop – was the “Tailwind” scandal where CNN’s Peter Arness was brought down over a lie that US troops used poison gas in Cambodia (I believe – this is from memory).
Then came Rathergate, when blogs came into their own and destroyed the story a major news organization was pushing as true and accurate. It wasn’t.
Since then and with the rise of the democratized press, bains theory seems to describe well what has and is happening. Krugman seems to me to be the perfect example of the establishment media’s reaction to the situation.
Certainly there have been vast changes in the media itself. The rise of radio then television. The death of “appointment TV” with the rise of cable news. Etc. But all of those still had an insular media in charge of the narrative and able, for the most part, to do what bains describes.
Not anymore – with the bar to entry lowered so that anyone with an internet account can challenge the big boys and their narrative the monopoly on information deemed “news” is over. The decision as to what is or isn’t “news” is not something the traditional media can dictate anymore. Proof of that are the many stories essentially ignored by the traditional media, kept alive in the blogosphere and finally and reluctantly covered by the MSM.
Anyway, seemed a great topic for discussion – go for it.
Andrew Sullivan today in a post entitled “Obama’s Lost Narrative”:
Nyhan goes after the Democrats for baseless attacks against the US Chamber of Commerce. It is very depressing to see them descend to this kind of stuff. What they need are not tactics and resentment, which is what we’re seeing. What we need is a narrative of recovery and reform from Obama. He has the record, and he has made a couple of great speeches. But this distracts.
He’s “made a couple of great speeches”. That’s no longer a positive. In fact, most have come to conclude that’s about all he can do. However, on whole, Sullivan is right. He should be more like Reagan than Nixon and he’s letting his inner Nixon show as he pushes this baseless and hypocritical attack on the Chamber of Commerce.
At a time he should be acting like a leader, he’s been reduced to a petty politician. Or maybe that’s what he always was.
My view, and I’ll say it again. Campaign on ending the long-term debt. Campaign on being the man who can bring America together to solve its long-term fiscal crisis. Call the GOP out on its fiscal record and its current refusal to specify what they’ll cut. Remind people of the debt commission. Remind people we need to cut spending and raise taxes. Be the adult in the room. With a megaphone.
To be the “adult in the room”, you have to have been the adult in the room. You can’t suddenly decide now is the time to act like one. Again, an aspect of leadership lost on the current White House occupant.
I mentioned last week that there was a narrative building which could be quite detrimental to the Obama administration. That narrative started with the British press, in a snit about the treatment of British PM Gordon Brown during a visit to the White House, noting that the administration seemed “overwhelmed”. Supporters claimed that was normal for a new administration, and besides, this one had been handed a very difficult crisis as they came into power, one that would test the abilities of even the most seasoned of administrations. But that didn’t stop the narrative from continuing to form. Then we saw others, even among supporters, begin to wonder. Camille Paglia and Howard Fineman were concerned that things seemed “not quite right” even after 50 days. Was this new administration in over its head? Even Paul Krugman carefully mentioned that those things which needed to be addressed immediately weren’t getting the attention they needed or deserved.
A feeling of uneasiness seemed to be settling over even the Obama supporters. Yesterday, Michael Goodwin, hardly someone who would be identified as a rightwinger, wondered out loud if there may indeed be something to the building narrative:
Not long ago, after a string of especially bad days for the Obama administration, a veteran Democratic pol approached me with a pained look on his face and asked, “Do you think they know what they’re doing?”
The question caught me off guard because the man is a well-known Obama supporter. As we talked, I quickly realized his asking suggested his own considerable doubts.
Yes, it’s early, but an eerily familiar feeling is spreading across party lines and seeping into the national conversation. It’s a nagging doubt about the competency of the White House.
As I said then, when I first brought it up, this is a narrative that if it becomes established, then becomes “conventional wisdom”. Speaking of “eerie”, this is very similar to the narrative that developed and established itself about Jimmy Carter. Goodwin goes on:
The tag of incompetence is powerful precisely because it is a nondenominational rebuke, even when it yields a partisan result. It became the strongest argument against the GOP hammerlock on Washington and, over two elections, gave Democrats their turn at total control.
But already feelings of doubt are rising again. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid were never held in high regard, so doubts about their motives and abilities are not surprising.
What matters more is the growing concern about Obama and his team. The longest campaign in presidential history is being followed by a very short honeymoon.
Polls show that most people like Obama, but they increasingly don’t like his policies. The vast spending hikes and plans for more are provoking the most concern, with 82% telling a Gallup survey they are worried about the deficit and 69% worried about the rapid growth of government under Obama. Most expect their own taxes will go up as a result, despite the President’s promises to the contrary.
Goodwin is right – the GOP sits on the sidelines for exactly the same reason that the Obama administration and Democrats should be concerned about this building narrative. Voters questioned their competence. And, of course, Democrats hammered the issue. Reid, Pelosi and the Democratic presidential candidates all talked about George Bush’s incompetence, and, by extension, the competence of the GOP. The shoe is now on the other foot and the same charges are beginning to be made about Obama and the Democrats. Warren Buffet has chimed in with criticism. The Treasury Secretary is a Saturday Night Live punching bag. The nomination process has been a disaster.
And it isn’t just the circumstances of a difficult situation which is making this seem worse than it is. No, there’s much more to it than that as Goodwin points out in his conclusion:
Which brings us to the heart of the matter: the doubts about Obama himself. His famous eloquence is wearing thin through daily exposure and because his actions are often disconnected from his words. His lack of administrative experience is showing.
His promises and policies contradict each other often enough that evidence of hypocrisy is ceasing to be news. Remember the pledges about bipartisanship and high ethics? They’re so last year.
The beat goes on. Last week, Obama brazenly gave a speech about earmark reform just after he quietly signed a $410 billion spending bill that had about 9,000 earmarks in it. He denounced Bush’s habit of disregarding pieces of laws he didn’t like, so-called signing statements, then issued one himself.
And in an absolute jaw-dropper, he told business leaders, “I don’t like the idea of spending more government money, nor am I interested in expanding government’s role.”
No wonder Americans are confused. Our President is, too.
Confusion and contradiction are not what people expect from strong leadership. It is what they expect from weak leaders. Obama, to this point, has exerted little leadership. He let himself get rolled by Congress on the “stimulus” bill, eventually becoming a front man trying to excuse their excesses and trying to spin the enormous social spending as economic stimulus. He was again pushed forward to pretend that the omnibus spending bill was “last year’s business” and the earmarks were Bush’s fault. Even the most rabid of supporters have had difficulty swallowing that bit of nonsense. Goodwin is right, what the nation and world is presently seeing from this administration is not the stuff of confidence and competence. It is, instead, precisely what those who actually looked at his previous accomplishments or lack thereof said we should expect – an eloquent and likable young man with no executive experience, no leadership experience and precious little legislative experience who appears overwhelmed by the job. The contradictions and confusion are a result of being pulled hither and yon by competing interests among his advisors and Congress as they try to convince him to back their agenda.
There are no timeouts in the job he’s won. Running off to Chicago for a 4 day Valentine weekend doesn’t slow or stop the world or the events always in motion from continuing to unfold. There’s a reason we usually don’t elect legislators to the presidency. And that’s probably even more true about inexperienced ones.
Unless something drastic happens in which the Obama administration is able to blunt and change the building narrative, watch for it to continue to grow.