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The Long Game and the Planting of the Flag: Ideology in the Obama Age

After a series of long articles and books assessing the economic policy of Obama’s first term, we’re now getting the reviews of those articles and books. Rich Yeselson, for example, has a story in the American Prospect looking at Noam Scheiber’s The Escape Artists, about the without-a-net policymaking from the Administration during the financial crisis. I thought this was a decent sketch of the leading economic policy players:

Scheiber astutely identifies different strains in the Rubin genealogy. Geithner represented the “restorationist” Rubinite, adopting Rubin’s personal mannerisms and his concern about deficits. Like Obama, Geithner had been raised for a time abroad, and Obama was taken with his dedication to public service and modest demeanor. Scheiber observes that Geithner worried about the banks more than former banking officials in the administration, who knew they would manage just fine. Summers, director of the White House National Economic Council and Rubin’s successor at the Treasury, was in turn a “reformist” Rubinite, unwedded to obsessing over the deficit during a massive recession. Orszag, the team’s primary deficit hawk and director of the Office of Management and Budget, had also entered Rubin’s orbit as a young Clinton White House economist. “Orszag’s power,” Scheiber writes, “came from the harmony between his worldview and the president’s. Both men were fierce anti-partisans; both shunned ideology.” Orszag thought there were practical limitations to how much the government could spend, and that much of the stimulus would inevitably be rolled into the long-term deficit. While the country was still losing 350,000 jobs per month in May 2009, Obama asked Orszag to write him a secret “fiscal crisis” memo.

Scheiber’s book then goes on to chronicle the stumbles of these and other White House figures, including the scotching of a memo that would have provided a realistic account of what was needed to actually fill the demand gap, the continued bargaining in good faith with bad-faith actors like Senator Chuck Grassley and other Republicans, and the pivot to the deficit in 2010 and 2011, well before the economy had any time to heal and a pointless exercise in any respect, since the Republicans were totally unwilling to deal.

Now, you could take the position that these missteps ended up working out for the best. The endless attempts to compromise with Republicans allowed the President to paint them as unyielding and invested in his defeat, which has served him well in some fights. A depression was averted (to get to a depression would have taken years of bad policymaking, but whatever), the economy has returned to a modest recovery, and core programs have so far been protected. I don’t know that I agree with all of this, but that’s the general argument.

The problem is that two years were spent wasting time to get to this point, two years of suffering on the part of millions of people. But there’s more than that. In a brilliant piece, Rick Perlstein explains why this Obama way of governing invites eventual Republican victories:

Even if Obamaism works on its own terms – that is, if Sullivan is right that Obama’s presidency is precisely on course – it can’t stop Republicans from wrecking the country. Instead, it may end up abetting them.

To understand why, let’s look at Ronald Reagan. Barack Obama has famously cited him as a role model for how transformative a president can be. Well, what did he transform, and how did he do it? Here’s how: He planted an ideological flag. From the start, he relentlessly identified America’s malaise with a villain, one that had a name, or two names – liberalism, the Democratic Party – and a face – that of James Earl Carter. Reagan’s argument was, on its face, absurd. For all Carter’s stumbles as president, the economic crisis he inherited had been incubated under two Republican presidents, Nixon and Ford (see this historical masterpiece for an account of Nixon’s role in wrecking the economy), and via a war in Vietnam that Reagan had supported and celebrated. What’s more, to arrest the economy’s slide, Jimmy Carter did something rather heroic and self-sacrificing, well summarized here: He appointed Paul Volcker as Federal Reserve chairman with a mandate to squeeze the money supply, which induced the recession that helped defeat Carter – as Carter knew it might – but which also slayed the inflation dragon and, by 1983-84, long after Carter had lost to Reagan, saved the economy.

In office, Reagan, on the level of policy, endorsed Carter’s economics by reappointing Volcker. But on the level of politics, in one of the greatest acts of broad-gauged mendacity in presidential history, he blamed Carter for the economic failure, tied that failure to liberal ideology and its supposed embrace of “big government” (Carter in fact took on big government), and gave conservatism credit for every success.

Indeed, today I hear that Democrats are constrained because Reagan won the battle over perception of government, a direct result of planting the flag and presenting an ideological alternative. Barack Obama has not done that. He’s operated in a patchwork fashion, aligning policies to desired results without an overarching vision until just recently. As Perlstein said, “in a media environment based on the ideology of “balance,” in which anything one of the parties insists upon must be given equal weight to whatever the other party says back, the party that plants its ideological flag further from the center makes the center move.” This is about a long game well into the future.

Digby writes that “the country no longer has any sense of what liberalism stands for.” Maybe it’s a collection of policies that individuals favor at any given moment. Maybe it’s this lurch back toward fairness that we’ve seen in the President’s speeches, helped along by an Occupy movement that made such a narrative clear. But it doesn’t get a lot of attention from the leading lights. Democrats are happy to force a conversation about birth control but that does make a previously uncontroversial subject suddenly controversial – paving the ground for the day that conservatives can win back power in Washington.

Perlstein concludes:

Right-wing change relies on leadership like that – Democrats who don’t plant a flag, who refuse to render the bad guys “controversial,’ and who never stake their claim on apparently “insane” ideas of their own – like proposals to pass a federal law desegregating public accommodations.

And resolute sanity? It can help manage a country just fine. It just cannot change it much. For that, Obama can’t just try to play chess. He has to tell us the direction he wants the country to go.

Or at least, somebody should.

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David Dayen

David Dayen