or Powell's or me• • •
"Mike and Jon, Jon and Mike—I've known them both for years, and, clearly, one of them is very funny. As for the other: truly one of the great hangers-on of our time."—Steve Bodow, head writer, The Daily Show
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"Who can really judge what's funny? If humor is a subjective medium, then can there be something that is really and truly hilarious? Me. This book."—Daniel Handler, author, Adverbs, and personal representative of Lemony Snicket
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"The good news: I thought Our Kampf was consistently hilarious. The bad news: I’m the guy who wrote Monkeybone."—Sam Hamm, screenwriter, Batman, Batman Returns, and Homecoming
July 16, 2011
If Only the Czar Knew
This is tough for me, because I was hating on Larry Summers before hating Larry Summers was cool. But I'm going to defend him about something important. That's just how honest I am.
One of the stories that appears to have developed on liberal blugs is that some of Obama's economists believed that a stimulus package of over $1.3 trillion was needed—but Larry Summers prevented this news from getting to the president. And here we are in 2011 with a hideous economy that may be getting worse, and it's Larry Summers' fault. This seems to be based mostly on this New Yorker article from October, 2009:
The urtext of economic policymaking in the Obama White House is a fifty-seven-page memo to the President, prepared in late November and early December of last year, by Summers... On Tuesday, December 16, 2008, as five inches of snow fell on Chicago, Obama’s top advisers gathered in his transition headquarters to discuss the memo....The most important question facing Obama that day was how large the stimulus should be. Since the election, as the economy continued to worsen, the consensus among economists kept rising...[Christine] Romer’s analysis, deeply informed by her work on the Depression, suggested that the package should probably be more than $1.2 trillion. The memo to Obama, however, detailed only two packages: a five-hundred-and-fifty-billion-dollar stimulus and an eight-hundred-and-ninety-billion-dollar stimulus. Summers did not include Romer’s $1.2-trillion projection.
Paul Krugman has mentioned this several times and been understandably pissed off:
Christy Romer was on the right side of that debate; but her views didn’t even get shown to the president.
But if you go back and look, it's clear Obama was well aware many economists wanted a much larger stimulus bill. Here's a story from January 5, 2009:
President-elect Barack Obama said economists are suggesting a U.S. stimulus may have to be as large as $1.3 trillion, Senate Majority Leader Harry Reid said. Obama “has indicated that there’s at least 20 economists that he’s talked with, and all but one of those believe it should be from $800 billion to $1.2 trillion or $1.3 trillion,” Reid said after meeting with Obama on Capitol Hill.
Then two days later on January 7, Obama held a press conference:
TAPPER: Your team has talked about the stimulus package being $675 to $775 billion. But at the same time...you're going to distribute a memo in which economists say it should be between $800 billion and $1.3 trillion. How do you reconcile that difference...?OBAMA: Well, we are still in consultation with members of Congress about the final size of the package. We expect that it will be on the high end of our estimates, but [it] will not be as high as some economists have recommended because of the constraints and concerns we have about the existing deficit.
The same day Obama was interviewed on CNBC:
MR. HARWOOD: Tomorrow you're going to give a speech and talk about your economic stimulus package...It looks like it's going to be at the high end of your range, around $775 billion. If it's correct that, as your aides have said, the danger is doing too little rather than too much...why stop at $775 billion? Why not go to the 1.2 trillion (dollars) that some economists have recommended?PRESIDENT-ELECT OBAMA: ...We've seen ranges from 800 to 1.3 trillion, and our attitude was that, given the legislative process, if we start towards the low end of that, we'll see how it develops....
MR. HARWOOD: So it's going to get bigger.
PRESIDENT-ELECT OBAMA: Well, we don't know yet.
And on January 16, four days before Obama was inaugurated, the Washington Post published an article about a long interview with him:
Obama repeated his assurance that there is "near-unanimity" among economists that government spending will help restore jobs in the short term, adding that some estimates of necessary stimulus now reach $1.3 trillion.
So it's obvious Obama knew what his economists were saying. He had all the information he needed. You can't pin this one on my dear friend Larry Summers.
The stimulus bill ended up at $787 billion, and because of the way it was designed, with much less bang for the buck than was possible. Thank you, Barack "No One Cares Less Than Me About Whether I'm Reelected" Obama.
P.S. I haven't followed this closely, so it's possible I missed something important about it.
—Jonathan Schwarz
Posted at July 16, 2011 09:22 PMok i'll mount a defense cuz i feel bad how i came to read this so it's my penance.
my defense is…
IF they had spent a whole $trillion on attackable keynesian shovel-leaning projects, it would have burnt up the political capital earned from the opposition's disintegration of the wealth of the nation, THEREBY impeding the passage of health, environment, and finance regs, such as they were.
how's that.
Posted by: hapa at July 16, 2011 11:01 PMBarack "No One Cares Less Than Me About Whether I'm Reelected" Obama.
Nice try, Jon, but he cares about that too much. He seems to care about that so much that it's hard for me to distinguish betweeen his approach and Clinton's triangulation.
Posted by: N E at July 17, 2011 06:42 AMMr Schwarz, I want to forget about "Barack "No One Cares Less Than Me About Whether I'm Reelected" Obama ( said with his finger crossed behind his back--raising $2.5M in one evening is not fooling anyone ) and Larry Summers, his chat with Charlie Rose ( last 5 minutes ) http://www.charlierose.com/view/interview/11777 would make you think he had recommended and still does a huge govt infusion of money in creating jobs! How people lie?!
Rather, I want to thank you for the great video you have posted now at ATR.....
"Watch Me" from Disney Channel's "Shake It Up"
I'd much rather watch that than a politician telling lies.
"P.S. I haven't followed this closely, so it's possible I missed something important about it."
Your humility is very much admired. If you had followed it more closely, I would have been overwhelmed!
Posted by: Rupa Shah at July 17, 2011 10:07 AMwao..just congratulation...really i like you to much you are perfect .
Posted by: donna at July 17, 2011 10:50 AMhapa wrote, "THEREBY impeding the passage of health, environment, and finance regs..."
Problem with that view is that the fin regs are really weak.
Posted by: liberal at July 17, 2011 11:18 AMThe debt ceiling debate gives us all the evidence we need (if more was needed) that dismantling the new deal isn't collateral damage but the intended victim of Obama's policies. Because Obama could easily call the Repubs' bluff on the debt ceiling and win without a single spending cut (bankers wouldn't tolerate a default.) But it's crucial for him to make you believe he has a losing hand, for how else could he then justify doing what he always wanted to do in the first place. In fact, that's always been Obama's MO: in order to do A, claim you want to do B and then invent a bunch of "constraints" that force you to do A.
Posted by: bobs at July 17, 2011 11:42 AMLarry Summers' current reality......
"Larry Summers: More Stimulus Needed For Jobs Crisis "
http://www.huffingtonpost.com/2011/06/13/larry-summers-op-ed-stimulus-jobs_n_875804.html
Posted by: Rupa Shah at July 17, 2011 11:51 AMObama bet that the Congress would increase the size of it because they'd want their own pet projects and pork. That's typically what happens with bills in Congress. He bet wrong, and he lost.
Also, see Nate Silver's "The Price is Right" piece:
http://www.fivethirtyeight.com/2009/01/obamas-price-is-right-negotiating.html
Posted by: ceebee at July 17, 2011 12:26 PMThis is why Ioz used to say Obama was the Black Ronald Reagan (the teflon president). It all just slides off.
Posted by: rob payne at July 17, 2011 01:14 PMWhere did Obama get the following idea?...
"OBAMA: Well, we are still in consultation with members of Congress about the final size of the package. We expect that it will be on the high end of our estimates, but [it] will not be as high as some economists have recommended BECAUSE OF THE CONSTRAINTS AND CONCERNS we have about the existing deficit." [Emphasis added]
My gut tells me that was Summers coaching Obama on "political realities"! ..and remember he did not put Romer's recommendation in the memo!
So we got a half-baked non-keynesian stimulus that is now being used to discredit keynesian-based theories because "Stimulus doesn't work!"
Super,peachy,keen!
Posted by: SanDiegoSam at July 17, 2011 02:00 PM"IF they had spent a whole $trillion on attackable keynesian shovel-leaning projects, it would have burnt up the political capital earned from the opposition's disintegration of the wealth of the nation, THEREBY impeding the passage of health, environment, and finance regs, such as they were.
how's that."
Fail. The Republicans were and are going to oppose anything Obama tries to do because he's the one trying to do it, regardless of the merits. The public doesn't track developments in enough detail to notice. There is no such thing as political capital.
Posted by: Grizzled at July 17, 2011 06:44 PMObama nixes Elizabeth Warren. Surprise, surprise. But here's my favorite comment (on Krugman's blog):
"Yes it is sad as Ms. Warren was the best possible candidate. But cut the President some slack. I like to think he made the change not for political realities but, once again, defer to the opposition only to box them in on their rigid ideology. "
Yep, to box them in!!!
Reminds me of the execution scene in Woody Allen's "Love and Death"
("They're cutting it pretty close...")
Posted by: bobs at July 17, 2011 07:31 PMThird Party, Folks.
THE VERY DAY YOU start it will be UNCORRUPTED. Be dilligent and keep it that way. Perhaps WE will find a candidate that's more than an empty suit, spewing empty words and lies.
I don't get why you're giving Summers a pass, here. It's not like he did the right thing - he felt no need to advocate for what apparently most economists felt was the better position.
Also, to hapa:
IF they had spent a whole $trillion on attackable keynesian shovel-leaning projects, it would have burnt up the political capital earned from the opposition's disintegration of the wealth of the nation, THEREBY impeding the passage of health, environment, and finance regs, such as they were.
If they had spent enough and their keynesian shovel-leaning projects had worked, they would have gotten enough political capital from an economic recovery that the opposition's carping wouldn't have mattered. This way, they didn't fix the economy, and got hammered for spending anyway. Seems like poor politics.
Posted by: saurabh at July 18, 2011 12:49 AM"they didn't fix the economy, and got hammered for spending anyway"
Just exactly right.
And, as this was the eminently predictable and predicted outcome, there is no way to escape asking whether "fixing the economy" (contextually, having a much lower unemployment rate) was really that important to Obama & crew.
I think there's just about no evidence to support the view that there is any real concern about folks being out of work.
Posted by: Earth at July 18, 2011 07:29 AMI've always wondered about this. That New Yorker story really created a myth... that a sinister Larry Summers hid important economic advice from Christine Romer to the President.
As if Romer was never in any meeting where she could just, you know, TELL the president what she thought.
Highly unlikely.
The president screwed up, and the best possible interpretation of his actions is that, once again, he is an awful negotiator. I mean, just look at that quote...
"We've seen ranges from 800 to 1.3 trillion, and our attitude was that, given the legislative process, if we start towards the low end of that, we'll see how it develops"
START TOWARDS THE LOW END! Why can't this man realize that when you are negotiating you start at the HIGH END of what you want, knowing that people are going to negotiate DOWNWARDS. I mean, in that statement, he cited 800 billion as the low end... and look at what happened. It went lower.
The guy just doesn't know HOW to be president. That's the most favorable interpretation of his actions.
Posted by: Joe at July 18, 2011 09:07 AM>start at the HIGH END of what you want, knowing that people are going to negotiate DOWNWARDS.
Didn't we all learn this on a playground in grade school? Is this what Harvard does to a person?
Posted by: Paul Avery at July 18, 2011 11:40 AMObama is just fighting for what HE wants to do.
Which is to OUTDO St. Ronnie in undermining, if not gutting, the great accomplishments of the Democratic Party, SocSec, Medicare, Medicaid.
Obama said he admired Reagan because St. Ronnie was "transformtional"; Obama aspires to be even more transformational.
By transforming our social safety nets into pivate insurance.
It's a Corporatist thing. And it's what his base wants him to do (base as in who provides the big donations).
He does not work for us.
Posted by: jawbone at July 18, 2011 12:46 PMi wrote a thing to respond to saurabh & grizzled and it ran long so i did it up bigger. http://pludk.wordpress.com/2011/07/18/devils-advocacy-on-the-stimulus-that-couldve-been/
Posted by: hapa at July 18, 2011 01:12 PMI need to make a correction, the quote about the Black Reagan came originaly from Dennis Perrin not Mr. Ioz. Apologies to Dennis.
Posted by: rob payne at July 18, 2011 01:49 PM{Reagan - melanin = Obama} x we're fucked.
Posted by: demize! at July 18, 2011 01:50 PM{Reagan - melanin = Obama} x we're fucked.
Posted by: demize! at July 18, 2011 01:52 PMPosted twice and still put - instead of +. But Reagan - melanin would be an interesting sight.
Posted by: demize! at July 18, 2011 01:58 PMAlso, I'm pretty sure Obama thinks St. Ronnie is a better economist than anyone on the left.
Right is right...because Obama is a conservative.
Posted by: jawbone at July 18, 2011 03:17 PMI have to wonder why Obama didn't call on the Amazing Randy to wave a magic wand and stop Democrats from questioning the huge deficit spending.
Posted by: jay at July 18, 2011 03:43 PMLove to Ski? Moving to Arizona? Rent an Apartment in One of These 3 Cities Near Ski Resorts
Posted by: Arizona for Rent at July 19, 2011 12:00 AMArizona for rent, Federal Gov't for sale...at fire sale prices!
(Who's the Amazing Randy?)
Posted by: Fifi LaRue at July 19, 2011 12:58 AMbobs wrote, "Because Obama could easily call the Repubs' bluff on the debt ceiling and win without a single spending cut (bankers wouldn't tolerate a default.)"
Well, I agree (and I think Matt Yglesias agrees), but this claim really will drive the O-bots up the wall.
Posted by: liberal at July 19, 2011 09:28 PM
