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FDL Book Salon Welcomes Robert Kuttner, A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future

Welcome author Robert Kuttner, and host, Mark Thoma.

[As a courtesy to our guests, please keep comments to the book.  Please take other conversations to a previous thread. – bev]

A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future

It’s possible to give two very different interpretations of the Obama presidency so far. The first is a relatively positive interpretation. Proponents of this view argue that even though Obama has faced a united GOP willing and able to use filibusters to thwart initiatives, and even though he has had opposition within his own party to progressive initiatives, he has still managed to rack up an impressive list of achievements. Take health care as an example. The health care legislation wasn’t all that progressives wanted, not by a long shot. But the legislation is an impressive start and, importantly, it leaves the door open to further change. Though people forget, programs such as Social Security or Medicare weren’t perfect at first, but were improved substantially over time.

Proponents of this view also argue that a more aggressive posture would not have done any good, and it may have even been harmful. Taking the Republicans to task publicly and forcefully would have hardened the opposition and caused the few Republicans that have been cooperative to vote with their GOP colleagues rather than cross the line. Centrist Democrats who share many of the Republican concerns and worry about how support of such policies will affect their reelection chances might have been alienated as well.

Obama doesn’t have FDR’s filibuster proof majority, and he faces both a united GOP determined to thwart his success for political purposes and concerned centrists who are reluctant to support the progressive agenda. To make things worse, the narrative from the press has not been helpful. If a much more aggressive posture toward Republicans would get more votes, it might be worthwhile, but this type of leadership is not the change people were looking for when they voted for Obama.

The positive view asserts that despite all of this, Obama has been one of the most effective presidents ever in his first year and a half in office, and he has passed the most important progressive legislation since Johnson in the 1960s. A lesser president would have wilted, and it’s time to start giving him the credit he deserves.

The negative view, and this is the view taken in Robert Kuttner’s book, sees the last year and half very differently. An outline of the case is presented in the introduction to the book:

Obama’s inspirational eloquence, his call for transforming change, and his skill at the mechanics of retail politics suggested a president who could mobilize citizens as a necessary counterweight to the concentrated power of financial elites. … So the stage was set, seemingly, for a great ideological and political reversal, comparable to the Roosevelt revolution of 1933. Obama was poised to create a new majority coalition…

But … this hopeful scenario is not the way Barack Obama’s first year unfolded. Instead of making a radical break with Wall Street, he delivered a startling continuity with the ad hoc bank rescues of the Bush administration. … As populist anger rises, and the real economic pain of regular Americans contrasts with lavish Wall Street paydays, Obama and the Democrats are becoming targets of the rage rather than instruments of its remediation. …

So the stakes are immense. A rare opportunity for realignment and reform is being missed. … For progressives like me, Obama represented a chance to reclaim a tradition of enriched democracy, affirmative government, and social justice. If Obama does fail, he takes down our hopes with him.

This book is an exploration of why Obama did not rise to seize a Roosevelt moment. What happened to the audacity? What stunted the promise of sweeping reform? The book also asks: Was the path that Obama chose the only politically possible one? And what would it take for Obama to redeem his promise? Is there still time for him to recoup? The chapters that follow offer not just reportage, analysis, and criticism but some strategic ideas and a basis for hope. …

I agree with this interpretation, at least for the most part, and have often wondered where the leadership has been on issues such as financial reform. It’s been frustrating to watch the administration cave in every time there’s dissent from the right, but stand tough against dissent from the left. There doesn’t seem to be an urge to fight toe to toe and to take the case directly to the public in Reaganesque style as a means of putting pressure on legislators to support the administration’s policy initiatives. Instead, we get backroom deals that compromise away core principles. And all of this in the search of bipartisanship that turns out, in the end, to be nothing but Lucy and the football.

But the book is not all pessimism, it offers many prescriptive steps the administration could take to enact a more populist, progressive agenda. And perhaps the administration is listening. Today, Obama began taking Republicans to task and accentuating the differences between the parties in a way we haven’t seen since the campaign trail, just as the book calls for. Here’s a sample of quotes:

Obama Sharpens Attacks on GOP, CBS News: President Obama hit Republicans hard … in … fundraisers he’s appearing at today for Senate candidates.

“The other party spent a decade driving the economy into the they want the car keys back. They can’t have them back. They don’t know how to drive,” the president told a crowd…

“They don’t think in terms of representing ordinary folks. That’s not their orientation. So that’s the choice that we face in this election”…

“They are peddling that same snake oil that they’ve been peddling for years and somehow they think you will have forgotten that it didn’t work”…

We’ll see if this is a trend for the future, or just a brief poke in another direction before returning to the centrist path the administration has preferred up until now. And even if it is a new trend, it may be too late to reverse the emerging view that Obama has been too cozy with banks, health insurance companies, BP and so on and has not done enough for working class households and other traditional Democratic constituencies. But it is an encouraging sign.

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Mark Thoma

Mark Thoma

Mark A. Thoma is an associate professor of economics at the University of Oregon. He joined the UO faculty in 1987 and served as head of the economics department for five years. His research involves the effects that changes in monetary policy have on inflation, output, unemployment, interest rates and other macroeconomic variables, and he has conducted research in other areas, such as the relationship between the political party in power and macroeconomic outcomes. He received his doctorate from Washington State University.