On this, the most holy night of John Boeher’s resignation announcement, we rejoice that the Republic is saved. Hear our joy by downloading the latest podcast from the podcast page.
pparently the fact that President Obama scheduled a speech to a joint session of Congress that coincided with a GOP debate and was informed by the Speaker of the House that the date was not acceptable has now worked its way into a full blown brouhaha. Perhaps the best summary and most breathless and silly conclusion comes from Tommy Christopher in Mediate:
The mainstream media, and even some in the liberal opinion media, have completely missed the point of President Obama’s dust-up with Speaker John Boehner over the date for Obama’s address before a joint session of Congress. MSM yakkers have advanced the “pox on both their houses” meme, while liberals like Ed Schultz accuse the President of “caving,” all ignoring the fact that Boehner has insulted and disrespected the office of the President of the United States, and should resign.
Of course, because we all know it is a deadly thing to insult the President of the United States, especially when you’re one of the leaders of a co-equal branch of government.
The sort of nonsense Christopher is pushing is interesting because it was so absent when the former president was in office. Insults from Speaker Pelosi and Majority Leader Reid were as common as their poor performance in office. In fact, Obama is a president and head of one of three co-equal branches of government. He’s not a dictator or a king, although given his style in the 3 years he’s been in office, those are roles he’d prefer.
Obama essentially tried to play a little politics with the date of his speech and steal the limelight from the GOP debate. However, in order to address a joint session of Congress, he had to have the permission of both the Speaker of the House and the Majority Leader in the Senate (and that should tell you all you need to about "co-equal"). The Senate was in the bag, Reid being perfectly amenable to the politics of the request. The Speaker, John Boehner, wasn’t. He quickly figured out the ploy and said, ‘no’.
Cue the whiners, complainers and drama queens. In fact Obama played politics and lost. End of story. He assumed he could push Boehner into doing something that was advantageous to him and detrimental to the GOP. He was wrong.
The resulting fallout is his problem and what looked like something that had a net potential positive for him politically has now turned into a net negative. Obama miscalculated and had his miscalculation handed back to him. Welcome to full contact politics.
But lets be clear about something. John Boehner acted within his rights as a co-equal leader of the government and member of his party in saying “no” to a request that was clearly unacceptable because of the politics involved. He insulted no one. If any “disrespect” was shown, it can just as easily be laid at the President’s feet with the claim that he deliberately scheduled his speech to coincide with the GOP debate in order to show them up.
Which day his speech is made is of little consequence in the big scheme of things, it’s what it will lay out that counts. But as usual, in the highly partisan atmosphere found in Washington DC, even the most routine politics is now framed as some sort of major confrontation requiring the heads of those who disagree with the president.
Obama tried some slick politics and ended up getting stung for it. For those like Christopher, get over it. He’s a president, not a king.
I offer the following:
President Obama, warning that time is running out to lift the federal debt ceiling, said Friday that a House GOP plan has “no chance of becoming law,” and he urged Senate Democrats and Republicans to come together on a “bipartisan compromise.”
Compromise? Where? This isn’t about compromise, this is about political timing. And apparently Obama is willing to see the default deadline pass because a short-term debt limit increase would put him at a political disadvantage next year (I don’t think he realizes what a default will do coupled with a dismal economy and high unemployment rate).
Meanwhile the Democrats still haven’t offered anything concrete. They seem content with the role of feces throwing monkeys. Perhaps they could dump the donkey and adopt that as their party symbol?
This isn’t leadership, it’s simply saying “no” without offering a viable alternative. But that’s nothing new with this president or the Democrats.
Apparently the responsibility to save the Republic’s financial ship has fallen to the First Mate, not the Captain. It appears that he and only he is required to come up with plans (this one Boehner is talking about now is the second after “Cap, Tax and Balance” was rejected by the Democratic Senate) so the Democrats and White House can reject them.
With Speaker Boehner lining up his second attempt (and this isn’t about whether or not the attempt is worthwhile, it’s about the narrative and reality) Sen. Democrats have again decided they’ll scuttle any plan he puts forward:
Fifty-three Democratic senators have signed a letter to House Speaker John A. Boehner saying they intend to vote against his plan for an increase in the debt ceiling, virtually assuring its defeat in the Senate even as the speaker lines up Republican votes to pass it in the House on Thursday.
Votes are not final until they are cast. But if the Democrats hold to their promise in the letter, Mr. Boehner’s plan for a six-month increase in borrowing authority will not make it to President Obama’s desk.
“We heard that in your caucus you said the Senate will support your bill,” the senators say in the letter. “We are writing to tell you that we will not support it, and give you the reasons why.”
In the letter, the senators argue that a short-term extension of the debt ceiling would “put America at risk” and “could be nearly as disastrous as a default.”
The Senate Democrats, like the president, have offered nothing in terms of a plan (heck, why would they offer a plan when they’ve never even acted on a budget for two years). Instead we get this – who again is the party who won’t say “yes”? And, as is obvious, the primary reason, hidden in this rhetoric, is not that a “short-term extension” of the debt ceiling would put “America at risk”, but that it would put Obama and the Democrats at risk politically since they’d have to act again prior to the 2012 election. The compromise they’re seeking here has nothing to do with the debt ceiling. It is mainly to have any extension of the debt ceiling at least fall on the other side of November 2012.
That said, again it should be emphasized that the only group among the players in this political theater who’ve actually offered anything of substance that can actually be scored by the CBO is the GOP.
That brings us to an interesting exchange between Ed Henry of Fox News and that huckster the White House uses as a front man, Jay Carney. This one followed a similar exchange the day before between NBC’s Chuck Todd and Carney:
Henry asked at the briefing when Obama’s plan might be submitted to the Congressional Budget Office.
"Ed, I understand, we can do this again, OK?" Carney said. "Has the speaker of the House shown you the positions he took in detail in the negotiations that were designed actually to achieve a compromise, as opposed to having a show vote?"
"We put forward a budget, we put forward a framework," Carney said.
Questions about Obama’s plan — where is it, what’s on it — are proving tricky for the White House, because the omission is suddenly getting traction.
"Both leaders, the senior-most Republican in the land, third in line, OK? A powerful figure with great authority sat on a room with the president of the United States and worked out a detailed compromise," Carney said.
"It is the nature of these kinds of difficult things that you do that in a way so that you agree on the tough choices, you come out together and announce them, and you begin to make the argument," he said. "A hard argument from each person to his party, that this is what we need to do for the sake of the country."
Carney’s explanation was once again that these deals have to be worked out in secret. But Henry pressed on — why not have a senator take up Obama’s detailed plan and introduce it as a bill?
"We are six days away," Henry said.
"Chuck — I mean Ed, you know, the speaker walked away from this deal," Carney said.
"You say it’s a great deal so put it out there," Henry said. "Let the American people – "
"I think I’ve answered the question," Carney said. "I mean, I know you’re creating a thing here for Fox…"
Henry, who hardly pulled punches when he sat a few seats over for CNN, chided Carney, "That’s not what I’m doing. You know better than that."
Note the final attempt to distract from the main point that there is no White House plan. Also note that Carney tries to lecture Henry about how the process works (apparently in secret with the WH offering only “frameworks”) and Henry rebutting with how it really works (a Senator takes the “framework” one supposes, puts it in writing and introduces it). Carney is reduced to taking a shot at Fox as a distraction from the fact that the White House still has not offered a plan.
Meanwhile the president is again seen as a spectator in the process:
Having already deployed the heavy weapons from the presidential arsenal, including a national address on Monday night and a veto threat, Mr. Obama is in danger of seeming a spectator at one of the most critical moments of his presidency. Having been unable to get the grand bargain he wanted — a debt limit increase and up to $4 trillion in debt-reduction through spending cuts and taxes — Mr. Obama’s challenge now is to reassert himself in a way that produces the next-best outcome, or at least one that does no harm to his re-election hopes.
Of course the New York Times piece claims that Obama’s “plan” is much more popular among the public than the Boehner plan. But again, there is no plan.
What the Times talks about is Obama’s $4 Trillion dollar “Grand Bargain” in which he essentially stated he’d trade some entitlement cuts for about $2 trillion in increased taxes. In the middle of a recession. And that’s popular? Only among the elite media and members of the public that don’t really know the details of his offer. The public has not endorsed raising taxes that I know of and certainly not to the extent Obama wanted.
So here we sit, six days away, the Speaker already on notice from Senate Dems that his bill will be DOA there, Harry Reid’s attempt yet to find its way to paper and Jay Carney trying to divert attention from the fact that there really is no White House plan and that’s not really as important as the supposed intransigence of Republicans and Fox trying to “create a thing”.
We’re being led by idiots folks. Well, that’s not true – the president isn’t leading at all. Never has and I think after almost 3 years it should be obvious we shouldn’t expect leadership from him (btw, the White House comms folks should pass along that petulant pressers where he whines about his inability to reach a compromise and speeches in which he attempts to shift the blame do not impress people that he’s much of a leader).
Debt limit talks — DC Math and political theater mask the lack of seriousness concerning out-of-control spending
Speaker of the House Boehner’s plan for deficit and debt reduction was shown to be an exercise in “DC Math”. The CBO scored the proposal and determined that the 1.2 trillion “savings” over 10 years actually cut only $1 billion in actual spending next year.
The first installment of $900 billion is contingent on enacting 10 year caps on annual appropriations which the leadership had hoped would save well over $1 trillion. But CBO late Tuesday came back with a report showing the legislation would reduce deficits by $850 billion when measured against the agency’s most current projections for spending.
Yeah, I think we want significantly deeper cuts in spending than that. And of course, keep in mind most Democrats were even opposed to that.
But at least Boehner actually had a plan CBO could score. From Jim Geraghty’s “Morning Jolt” we learn of this conversation in the White House press room (Weekly Standard):
[Chuck] Todd asked Carney about the White House’s reluctance to release its plan to deal with the national debt and raising the debt ceiling. Carney acknowledged the White House was playing games. "We’re showing a lot of leg," he said. When Todd pressed for details — "Why not just release it?" — Carney seemed surprised. "You need it written down?"
What a difference two years makes. In the spring of 2009, with Republicans in the minority in the House of Representatives, the White House and its Democratic allies were demanding specifics. The House GOP had to produce an alternative budget, the White House demanded, in order to show that they were serious about governing.
Geraghty also points to a wonderful rant by Guy Benson over at Townhall concerning the demand for an actual plan:
Yes, actually, we do need "something printed." Since his unmitigated failure of a budget was unanimously defeated in the Senate, this president has refused to offer a specific plan of his own on virtually anything at all. Instead, he talks about "visions" and "contours" and "frameworks" — and tries to blame his opponents when his poor leadership is exposed. Over the last five days, the president has (a)undermined a bargain with John Boehner by introducing an unacceptable eleventh-hour condition, (b) rejected "out of hand" a bipartisan compromise that he found to be politically unpalatable, and (c) delivered a speech that painted his opponents as the intractable extremists. In light of this behavior, it’s entirely reasonable for Americans to wonder what, precisely, Barack Obama’s proposed solution might be. Today, the White House dismissively waived off that question as a GOP talking point and condescendingly inquired if the journalist who dared to ask it was capable of taking notes.
I’ll close with an unsolicited word of advice, and a friendly reminder from the CBO director. The advice: When you’re already plumbing new depths of unpopularity, dialing up your arrogance isn’t a winning strategy. Even David Brooks finds it unseemly.
By the way, Harry Reid’s plan is purported to show about $2 trillion plus in savings by assuming the wars we’re involved in will cost hundreds of billions a year for 10 years, knowing full well that those wars are wrapping up and wrapping up soon (well except for Libya which seems to have shifted from “weeks not months” to “months not years” at this point).
In other words the usual nonsense from Washington DC. Math tricks which say to anyone who is on to them, “these guys aren’t serious”.
I think we all know what would be the number one story today had we been this close to having this happen on the last president’s watch.
At issue: The 1973 War Powers Act, which says if the president does not get congressional authorization 60 days after military action, the mission must stop within 30 days.
The president formally notified Congress about the mission in Libya with a letter on March 21, which makes Friday the 60-day deadline.
See, here’s how this works … Congress makes the laws and the President signs them into being. Everyone is obliged to follow them. And that includes the President. However, that’s not the case, or so it seems, with Libya. Today is the last day of the 60 grace period for the President to get Congressional authorization and there has been no move to accomplish that. Apparently the administration believes they’re above the law.
The irony, of course, is that it was Mr. Bush who was continually accused of waging an illegal war. Yet it has been the last two Democratic presidents who are guilty of doing so:
But it is virtually unprecedented for a president to continue a mission beyond 60 days without a resolution from Congress.
"Make no mistake: Obama is breaking new ground, moving decisively beyond his predecessors," Yale law professors Bruce Ackerman and Oona Hathaway wrote this week in the Washington Post.
The only thing that comes close is President Clinton’s military effort in Kosovo.
He failed to get congressional approval before the 60-day deadline was up. His administration argued that Congress had effectively authorized the mission by approving money for it, and the Kosovo conflict lasted 78 days.
The Obama administration doesn’t have that option with Libya, because the Pentagon is using existing money. Congress never specifically funded the mission.
Now, the administration is trying to figure out what to do.
“Now?” Now the administration is “trying to figure out what to do”? And “what to do” is fairly straight forward – seek congressional approval for the continuation of the “kinetic event” or whatever it is we’re calling it this week, or stop our involvement.
Rep. Brad Sherman, D-California, tells CNN he believes Obama is trying to "bring democracy to Libya while shredding the Constitution of the United States."
"He cannot continue what he is doing in Libya without congressional authorization. When a president defiantly violates the law, that really undercuts our efforts to urge other countries to have the rule of law," Sherman said.
Sen. Rand Paul, R-Kentucky, concurs.
"You could say, ‘Well, we have a good president, he’ll do the right thing.’ Well, someday you may have a president who does the wrong thing, and that’s why you have rules, because you can never count on people being good people," Paul told CNN.
Indeed. The process and rules are only there for the little people I guess. The President appears to believe he is above the law.
Finally, where’s the Congressional leadership on this? Why isn’t Ms. Pelosi and Mr. Reid both banging the drum loudly and persistently while calling the president “incompetent” ? After all, only an incompetent would just now be trying to figure out what to do, no? And tomorrow will they declare the war “illegal” like it actually will be?
And where are McConnell and Boehner?
Time to elevate this and get a little bit of a firestorm going boys. If it were your side, you can trust that Pelosi and Reid wouldn’t be dawdling in their offices, they’d be attacking the lawlessness of the presidency.
Where are you, Congressional “leaders?”
One bit of advice I’ve been consistently throwing out there for the incoming GOP House majority is to act on those things that lead to less spending and smaller less costly government. If they sit back and complain that even if they pass these things the Senate will vote it down or, if by chance, it gets past the Senate, President Obama will veto it, they’re gone in 2012.
So I was rather pleased to see that they intend to do exactly that in a POLITICO article today:
On some level, their plans may create a sense of organized chaos on the House floor — picture dozens of votes on dozens of federal program cuts and likely gridlock on spending bills. And don’t forget that a lot of these efforts will die with a Democratic-led Senate and a Democrat in the White House.
But the intent is to force debate as much as to actually legislate — and make Old Guard Republicans and Democrats uncomfortable with a new way of thinking about the size and scope of government.
For every action, however, there is an equal and opposite reaction. And, per POLITICO, that opposite reaction is going to come from the “Old Guard” Republicans and Democrats who feel they’ve earned their power via seniority and don’t want to see it threatened or disrupted.
Insiders who have made a living under the old system are sure to push back, and many fear that Rep. John Boehner (R-Ohio) may not understand what he is doing.
“John should talk with the professional appropriators about the complexities, rather than talk off the top of his head. His plans would take a huge amount of the House’s time, but what would it accomplish?” said a dubious former House Republican member of the Appropriations Committee who spoke on condition of anonymity.
A former Democratic appropriator also was skeptical about describing prospective changes at that committee, which has a strong tradition of producing 12 bills every year from 12 subcommittees run by 12 very powerful Appropriations “cardinals.”
“On the practical side, it has to be nuts. Given the difficulty in passing the current bills, adding these changes would be a dream world. … There could be a revolt by members, who will want to get home and campaign.”
What is Boehner’s heresy?
The plans include slicing and dicing appropriations bills into dozens of smaller, bite-size pieces — making it easier to kill or slash unpopular agencies. Other proposals include statutory spending caps, weekly votes on spending cuts and other reforms to ensure spending bills aren’t sneakily passed under special rules.
Yup … real change comes hard. The “cardinals” want their power to be undiminished. There’s a shock. So let’s attempt to answer the question of the “dubious former House Republican member of the Appropriations Committee” shall we?
What would it accomplish?
Well, let’s see – one, if it took more time, it would be more time spent on bringing sanity to the appropriations process – a vital job of the House – and less time celebrating such things as the Smackover Arkansas junior league squash team’s championship or recognizing National Skunk Ranchers day.
Secondly, it would take a serious look at the appropriations process in detail. Understandable, “bite-size pieces” that one can wrap their head around and vote down if the spending can’t be justified vs. huge omnibus bills so large and complex that it is difficult for anyone to understand what they’re voting for.
Third, as the paragraph states, doing it that way would “ensure spending bills aren’t sneakily passed under special rules.” Or said another way – actual debate would be encouraged, not avoided.
And frankly, I like this idea as well – for the “detailed look” and context it would bring to the process:
Perhaps the most dramatic change is Boehner’s planned Appropriations Committee overhaul to require funding on a department-by-department basis, first reported by POLITICO on Wednesday. His proposal would subdivide the dozen current appropriations bills so that funding for each major federal agency would require a separate House vote.
Size and complexity are the enemy of good legislation and certainly sane appropriations.
“The [suggested] changes may be easier to follow and make more sense” than the existing practices, said Tom Schatz, president of Citizens Against Government Waste. “As long as members can make a case for or against a particular program, they will have the basis for objective decisions.”
Precisely. And an objective process in which to identify and eliminate waste, fraud, abuse, parts of agencies (redundant) or entire agencies (unproductive bureaucracies)if the case could be made (and it can – the question is whether it will). But this sort of process at least is a step in the right direction of bringing fiscal sanity back to the appropriations process if it can be introduced and followed.
Of course we’re talking politics and vested interests here so you never know. And, of course, the GOP members must “buy into” the new process to make it work. That, of course is a leadership problem, and it will be among Boehner’s first tests if he and his leadership group truly hope to change the way the House does business and enact measures that will indeed reduce spending and dial back government’s size and cost.
Before we proceed today, let’s take note of a couple of things.
One, President Obama has made an executive decision to freeze federal payrolls for 2 years at a savings of $5 billion over those two years. Good for him. Of course the left is outraged, disingenuously claiming this will adversely effect jobs and the economy. Hardly.
While that money won’t be available to be spent by federal employees, it won’t be borrowed either. Or, it won’t be taken from the pockets of taxpayers who can now spend it directly on creating jobs or buying goods.
"Saving" the money doesn’t make it disappear, it simply means federal employees won’t be spending it (those who earned it will) or we don’t add $5 billion to the deficits of those 2 years.
Bigger political question? Is this actually an act of triangulation? Are we seeing this as the first indicator of an administration attempting to move to the center by getting out in front of the GOP on something? Doing this before the big bi-partisan meet today between Obama and the GOP gives Obama the advantage of saying "OK, I’ve done something to reduce the deficit, what about you" (to which the GOP can say "earmarks"). Whether this is a political anomaly, just gimmickry or an actual move toward the center remain to be seen.
And two, on the GOP side, and in front of the meeting today, John Boehner and Mitch McConnell got their talking points out in an op/ed in the Washington Post. In sum they say the overwhelming message from the election says focus on jobs and the economy.
Perhaps the most important paragraph in the piece was this:
Despite what some Democrats in Congress have suggested, voters did not signal they wanted more cooperation on the Democrats’ big-government policies that most Americans oppose. On the contrary, they want both parties to work together on policies that will help create the conditions for private-sector job growth. They want us to stop the spending binge, cut the deficit and send a clear message on taxes and regulations so small businesses can start hiring again.
I think that’s mostly right. Cooperation for cooperation’s sake isn’t what is being demanded. Cooperation with a focus on jobs and the economy is. And it is also clear, as Boehner and McConnell state, that the American public wants some sort of workable plan to stop the huge deficit spending and to settle the business climate to the point that corporations and small businesses feel confident enough in it to begin hiring and expanding again. That means settling any number of outstanding issues like proposed tax increases.
Bottom line? Don’t expect much cooperation from either side on things like energy, immigration, health care and the like except at the very margins. However, there seems to be some signaling from Obama that he may be interested in more substantial cooperation when it comes to the jobs, economy and government spending/taxation. If so, it would mean that Obama has set his cap for reelection in 2012 and believes that this is the route to accomplishing that (engage the GOP, give a little here and there, do high profile things like freeze government worker pay, and hope the economy and unemployment improve fairly significantly in the next 2 years so he can claim credit).
My guess is he now realizes that his agenda items are DOA. But I also think he’s satisfied that what he has managed to get passed (ObamaCare and the like) is probably pretty safe from GOP meddling. So he’s defining the area in which he’ll work and essentially demanding the GOP cooperate. It will be difficult for the GOP to refuse that.
It is going to be interesting to watch the two sides maneuver over the next two years. In ‘94 much the same sort of situation existed. Bill Clinton was deemed irrelevant. He came roaring back via smart politics and GOP mistakes to be reelected easily.
We’ve already talked about the new narrative the left is trying to impose – the “GOP in charge” narrative, in which the GOP will be tagged with every failure of government even though Democrats still control the Senate and Executive branch. But that won’t matter if the GOP House moves aggressively to do what Boehner and McConnell outline in their op/ed. Make Democratic Senators defeat GOP House legislation. And if it manages to get through the Senate, make Obama veto it.
Obama claimed that the difference between ‘94 and ‘10 midterms was “you’ve got me”. That led to the worst “shellacking” in recent memory and much worse that ‘94. Another difference between ‘94 and ‘10 is the new media. If the GOP sticks with its guns, makes every attempt to carry out what it said is the people’s message and is thwarted by the Democrats, that story will actually be told.
It will indeed be interesting to see how the big meeting goes today. I don’t expect much in terms of substance, but if Boehner and McConnell are smart they’ll essentially relay their op/ed message to Obama and then stand back and see how he chooses to react.
For the moment, popular sentiment is on the side of the GOP. They need to retain it by actually doing something. If they don’t and the left succeeds in painting them in a negative way, 2012 could see the backlash from hell, 4 more years of Obama and possible Congressional gains by Democrats.
Well, not really, but that pretty much describes metaphorically how often Paul Krugman and I agree on things. But today, Krugman, wondering what Ben Bernanke of the Fed is going to say today in his big speech believes it will probably be more of the same. Albeit, we’re in a recovery, more slowly than we’d like and things will soon get better. Krugman isn’t buying it (and neither am I. If this is a recovery, I’d hate to see a recession). :
Unfortunately, that’s not true: this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact.
Krugman also zeros in on the main problem that those policy makers should focus on:
The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead.
In fact, the GDP number for this past quarter is 1.6%. That’s revised sharply downward from the original 2.4% reported and touted by Democrats recently. That, as Krugman points out, isn’t a good number when you are looking at unemployment.
Krugman then chastises those who are pumping sunshine up our skirts when the real economic news doesn’t warrant it – like the President and VP. Bernanke and Geithner:
Why are people who know better sugar-coating economic reality? The answer, I’m sorry to say, is that it’s all about evading responsibility.
Ya think! Gee wish I’d been saying that for, oh, I don’t know, 18 months. For 12 of that it was Bush’s fault. For the past 6, it’s been all sunshine, roses and “recovery summer”. In effect, although not at all as blatantly, Krugman is validating John Boehner’s call to fire Obama’s economic team. Because it is clear that the policy makers haven’t a clue of how to fix this mess.
At this point in his op-ed, Krugman reverts to his old self – a hack. After talking about evading responsibility, he goes for the “obstructive Republicans” canard.
And when he finally gets around to saying what he’d do, as you might suppose, it is spend more money that we don’t have.
Addressing the Fed he says:
The Fed has a number of options. It can buy more long-term and private debt; it can push down long-term interest rates by announcing its intention to keep short-term rates low; it can raise its medium-term target for inflation, making it less attractive for businesses to simply sit on their cash. Nobody can be sure how well these measures would work, but it’s better to try something that might not work than to make excuses while workers suffer.
In layman’s terms he’s saying let inflation loose and buy more debt (borrow). He then covers his rear by saying “hey, it may not work, but it is better than doing nothing”.
I’m not at all sure that’s the case. In fact, my guess is if you let the inflation dragon out of the cage, you’ll never recapture it until it has ravaged the economy. All that money that’s been pumped into the economy has to be wrung out at some point. And there are no painless ways to do that of which I’m aware.
As for the administration his advice is as follows:
The administration has less freedom of action, since it can’t get legislation past the Republican blockade. But it still has options. It can revamp its deeply unsuccessful attempt to aid troubled homeowners. It can use Fannie Mae and Freddie Mac, the government-sponsored lenders, to engineer mortgage refinancing that puts money in the hands of American families — yes, Republicans will howl, but they’re doing that anyway. It can finally get serious about confronting China over its currency manipulation: how many times do the Chinese have to promise to change their policies, then renege, before the administration decides that it’s time to act?
Sure, let’s hand even more money to the two financial black holes – Freddie and Fanny – that have already sucked down half a trillion dollars we don’t have trying to shore up their loses and return them to solvency. Republicans have every reason to howl about Freddie and Fannie. If Krugman were anything but a hack, he’d have to admit that.
And if he thinks the Chinese – who are actually in a real recovery – are going to stomp on their economic progress to fix ours, he’s dreaming. Both proposals are absurd on their face. But then when it comes to actual solutions, I’ve come to expect that from him.
However, at least in the first part of his column, he and I were in pretty much perfect agreement. I need to go take a bath now.