Monday, August 1, 2011

Debt Deal -- the Progressives' Lament

The agreement last night between party leaders reported to "end" the debt ceiling crisis, but there may be more drama to come in the House, where there is going to be little enthusiasm on each side of the aisle for this deal. Passage is not assured. I especially wonder about House Democrats who will wonder what is in this deal for them, and, having watched the Tea Party faction win huge concessions through brinksmanship, may be eager to see what they can achieve through some recklessness themselves. I'll write more on the substance of the agreement later.

This morning, I'm inclined to reflect on a sliver of the extensive commentary out there: Paul Krugman's "The Centrist Cop Out," and Stanley Greenberg on "Tuning Out Democrats."

Krugman lambastes the media for its portrayal of this and other political crises as being attributable to both sides' unwillingness to compromise leading to "a pox on both houses" approach. He argues that this particular crisis was manufactured exclusively by extremist conservatives and that the end result is hardly the result of each side compromising, but rather a one sided victory for the faction that has acted so recklessly and been willing to inflict severe damage on all to achieve their objectives. The blame for our dysfunctional politics should be not be spread evenly across the political spectrum -- dysfunction is caused by conservatives as an intentional tactic, especially when a Democrat is in the White House.

Greenberg's analysis has similar themes, but is more sophisticated. His polling over the last decade have shown that Democratic policy positions are generally favored by majorities of the public. This theme has held true in this crisis as well as polls consistently showed support for the "balanced" approach of spending cuts and tax increases (on the wealthy). Yet, Democrats cannot consistently win elections because voters lack faith in the institution of government and see their policy positions as no more than empty promises. Erosion in confidence in government -- which is widespread across ideological spectrum -- is much more a problem for the political party that favors government-based solutions for social problems. Under these terms, the debt ceiling crisis was a double bonus for conservatives -- the terms of the debate were about cutting back on government (their policy preference) and the disgust with how Washington dealt with the crisis (which as Krugman pointed out was mostly of their making) further eroded faith in governmental institutions.

Krugman argues that the solution to progressive woes is stronger adherence to progressive policy solutions. The stimulus was too small, the health care law too weak, public spending is too low, we should borrow more to address unemployment, Obama is weak because he has been too willing to compromise and seek centrist solutions, his centrist entreaties will always lead the conservatives to move further to the right, and so on. Krugman thinks Obama should fight harder, bash the right, draw lines in the sand and stick to them.

Greenberg focuses more on process. Progressives need to take steps to increase faith in government and convince people that they are on their side. This means taking on the Washington establishment. Punishing elites who act irresponsibly. Taxing lobbyists. Placing fees on the sale of stocks and bonds to fund education and worker training. Reducing deficits by stopping special interest spending and closing tax loopholes.

Krugman is for the politics of confrontation. Greenberg is for politics of the "people over the powerful."

I'm with Greenberg. A recent study now shows political independents outnumbering Democrats for the first time. Obama has the sense to know that his standing with independents will plummet if he is seen as a bitter partisan. But his problem right now is that his luster as an outsider ready to take on the establishment has been tarnished since 2008. And over the past year he has been unable to break away from the rolling set of crises the Tea Party conservatives have been triggering on the budget. This is probably what made increasing the debt limit past the election Obama's highest priority in these negotiations. But he is hardly out of the woods. The fiscal year ends on September 30 and Congress has not enacted a single appropriations bill to fund the government beyond that date.

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