Obama can win, but can he lead?
Just before Congress finally swerved to avoid the fiscal cliff, President Barack Obama staged a public appearance with supporters where he chided and mocked lawmakers for their long inaction.
“One thing we can count on with respect to this Congress is that if there is even one second left before you have to do what you’re supposed to do, they will use that last second,” he said.
It was a moment of old school politics. After losing the message war during much of his first term, Obama was sending his conservative opponents a clear signal.
Translation: I understand that in the new political order that exists in Washington, you have to fight to win, and winning means drawing blood.
Some pundits suggested that Mr. Obama was “spiking the football” and might have gone too far after skilfully out-maneuvering the GOP.
I don’t think so. I think the president was signalling clearly that the Mr. Nice Guy era — all that stuff about “fixing” Washington DC — is over.
The second term is going to be a brawl and the White House plans to keep Republicans on the ropes as long as possible.
Fair enough. Politics, after all, isn’t a game of bean-bag or flag football.
But as we’ve learned in recent years, it’s possible to win lots of fights in Washington without actually moving the country forward.
This “fiscal cliff” deal brought important symbolism, raising taxes on the country’s wealthiest citizens and beginning to dismantle the economic legacy of the Bush years. But it doesn’t address any of the actual problems that the country faces.
Massive deficits, out of control defense spending, entitlements and health care creaking under the weight of an aging population, eroding infrastructure, depression-level unemployment among blacks and Hispanics, a byzantine tax code, climate change.
As the country’s dominant politician — and, really, after this week’s debacle, Republicans hardly even have a leader or standard bearer worthy of the name — it will be up to Mr. Obama to set the direction for addressing all these problems.
Many of them are pressing enough that they can’t wait until 2016.
This is clearly a president at the top of his game, bolstered by the November election and by disarray among conservatives. But it’s lonely at the top.
To put the country back on track, Mr. Obama will almost certainly have to propose specific cuts and tax increases that will spark a much fiercer debate than we’ve seen this week.
He will likely find himself forced to win over hard-line liberals, who are already distrustful of this White House, while also taking on right-of-center lawmakers who have been his punching bag in recent weeks.
That’s the test that lies ahead for Mr. Obama.
He’s shown that he can deliver a world-class smackdown. Now he’ll have to prove that he can translate his new authority into actual reform and progress.
“beginning to dismantle the economic legacy of the Bush years”
When you make permanent the “bush tax cuts” for something like 96% of all Americans is it very accurate to say “dismantle”?
Snotty remarks and gloating are not leadership. Wouldn’t this be the time and place to try and unite the country with dynamic, powerful leadership, especially with one’s political opponents in disarray? He mocks Congress and runs back to his vacation. Some leadership.
Schmoozing is how you lead in Washington we will see how he does. He is a young guy compared to most presidents and the other young one (Kennedy) was a expert at the schmooze.
Also we did not “swerve”, we went over. Sounds like the stock market makes the deadlines. I hope this helps Americans rich and poor understand who runs the country.
All the issues Brian describes are not going to be fixed by Washington they are going to be fixed (maybe) by Americans. It is going to take lots of hard work and it is going to take lots of money. A strong economy is our only hope.
actually my anger would permit me to beat the snot out of the party on the ropes before i went back to my chores. that’s dangerous, so i choose to throw snotty comments in from the side.
It’s tough to lead when you have a group of saboteurs who have banded together in a pact to do everything they can to make you fail. IMO he should have given up on his attempts at bi-partisanship after the health-care battle and just gone to playing hardball.
Although there is a lot of yelling and screaming from some Democrats and most Republicans, in the end it was the practical courage of Mitch McConnell and John Boehner who did the right thing and got the job done.
Now for the balance of the work that needs to be done ASAP.
There will be cuts on spending. The fight will be over how much and where. In the end, no one will be happy but that is the nature of the beast.
As far as the debt ceiling is concerned, it will be raised. Wall Street and big business will demand it be raised. Here it will be mostly Republicans who will be screaming but as Dr. Phil would say, “Tough tinsel.”
Concerning the mess Congress has become, I offer this solution. Increase their terms from 2 to 4 years. The problem with the two year terms is that as soon as they are elected, they start campaigning for the next election. They are too concerned about getting reelected and thus are subject to too much outside pressure to legislate with intelligence.
You can complain all you want about the size of government but when you have a big country to govern, you need a big government to do it. When you complain about waste, odds are you are complaining about someone else getting the money while you still want yours.
Part of the cost of SS was solved by getting rid of the payroll tax holiday. The other portion can be easily solved by moving up the age some and slowing the rate of increase. Many older Americans are helping to solve the problem by continuing to work beyond the current retirement age.
In the private and public sector, the problem of pensions could be solved by raising the age at which you can start drawing on a pension.
Because Americans are living longer and generally are in better health, we have probably reached the point or soon will where the idea of retirement is becoming a bit out of date. Again, tough tinsel.
The role of the opposition is to oppose. The only role that SOME not all, Republicans are going to have will be logging their dissent from the sideline and maybe that is OK, maybe that is part of our system. A significant minority of the country disagrees with this President’s plans, almost across the board, their voices in a Democracy need to be represented. However they will not be part of the plan or solution moving forward unless they want to compromise on some things.
Lets face it; debt reduction is not going to happen in any real way particularly given his latest deal.
James,
Why do you call oppposition sabotage? Which President didn’t face opposition? Maybe, it’s just more blaming everything on one’s opponents.
Brian Mann: “I don’t think so. I think the president was signalling clearly that the Mr. Nice Guy era — all that stuff about “fixing” Washington DC — is over.”
I agree. President Obama is clearly willing to act like a dictator, unashamedly.
In order to pull this off, he must say one thing, and do the other.
He has found that a majority of voters believe what he says, not what he does.
I call it sabotage when they for a “let’s make him fail” pact before he’s even warmed the chair in the Oval Office. I call it sabotage when they walk away from ideas they originally proposed because he adopted them. It became very clear in the health care wrangling that their objectives were to make him fail no matter what the cost to the country.
The behavior on the budget is similar. The reason he’s getting what he wants on taxes is that he played hard ball so that if they hurt him, they’d be hurting themselves worse.
As for the original question, “can he lead” here’s another perspective on the the deficit in relation to that question http://www.cnn.com/2013/01/02/opinion/baker-fiscal-cliff/index.html.
Yeah, and Bush had complete cooperation from the Dems the whole 8 years he was in. I remember it clearly….or not.
Look, we just got a 41-1 new tax v new cut bill. Almost $4 trillion more added to the deficit. Taxes are going to increase for 77% of working households. Does anyone see a light at the end of the tunnel? The Republicans (please Brian, they are not at all conservative!) are in disarray and dying. Obama and the Senate can pretty much do what they want which is spend. How long can that last guys? There’s no money left.
Obama promised me (yes, me personally in many emails) that he was going to raise the tax rate for those making over $250,000. Fail!
That aside, I don’t see it as a big smack-down to make note of the fact that stuff doesn’t get down until it absolutely has to, and often later than that. Is there no one else here who was ever disappointed in not getting a snow day because you were sure there would be one the next day so you didn’t do your homework?
I work on a lot of projects in the supposedly super-efficient private sector and it is pretty rare for any project to be done before it absolutely has to be.
The payroll tax relief was a bad idea from the get-go because contributions to SS and Medicare were already falling short of outlays due to the high unemployment. It lead people to expect that it could continue that way and it can’t without ending SS and Medicare. It provided some stimulus to the economy but it was the wrong way to do it.
Bottom line: At some point everyone is going to have to pay more taxes. We can’t cut enough to both balance the budget and pay of the debt we’ve racked up any more than someone who has maxed out their credit cards can pay them off by taking a lower paying job. That’s just arithmetic. So we start with those who can afford it, the rich and those who are working.
The next year is going to be really ugly. Just wait for the “debt ceiling” to be raised again. That will be hardball at its finest.
James, we have not really maxed out the credit card. The next fight is over adding yet another credit card to the pile. If we had “maxed out the card” we might be in better shape. Politicians are like spoiled children they know we will give in at the last minute in a few months and give them another credit card.
“It’s tough to lead when you have a group of saboteurs who have banded together in a pact to do everything they can to make you fail. IMO he should have given up on his attempts at bi-partisanship after the health-care battle and just gone to playing hardball.”
Those pesky checks and balances! I wouldn’t really call the House of Representatives a “group of saboteurs”? Didn’t they get elected?
Paul, the way Republicans have been acting for the last four years goes way beyond the notion of checks and balances, and I think you know it. And yes, they got elected, quite a few of them by newly gerrymandered districts. Gerrymandering creates “representatives” that don’t truly represent the wishes of a rationally defined region, whether Republican or Democratic.
Speaking of which, does anyone have any idea why the courts have failed to address gerrymandering?
A true leader leads by example. He/she gets down in the gutter with the destitute. A true leader sacrifices. A true leader lives for others.
The country is in a crisis and instead of calling it what it is, our president likes to blame and scold and talk down from his pedestal. The chasm is becoming deeper and broader between elitists and the common man.
Hang on folks. This is going to be a rough year.
Politically I think the fights will continue.
However I don’t think this is going to be an ugly year. The economy is picking up we are working out of the housing crisis, unemployment is falling, sometimes good things will happen in spite of the politics in Washington.
I would pass bills to get rid of all of these fake crises moments, the fiscal cliff, the debt ceiling etc. all of them are imposed on ourselves by Congress and could simply be done away with. The debt won’t be done away with but as long as we can pay the tab we are fine on the debt. I think its way to high and impacting our productivity over the long run, but on a year in year out basis, the solutions seem worse than the cure.
Gerrymandering and the like have been around since the dawn of the nation. In fact in many respects politics is much less corrupt now than ever. Sure there have been periods in history where more back scratching is in order. This is one of those times. There are just more people blogging about it than in the past.
Mervel, what we need to watch is not debt but debt to GDP. And compare that to our competitors. The post war era of US domination based on the head start we got since we didn’t have to re-build our country like many of our competitors is over. The old rules we have been following for the last 75 years are changing. We have to readjust. Things are different.
According to the IMF:
“The World Bank and the IMF hold that “a country can be said to achieve external debt sustainability if it can meet its current and future external debt service obligations in full, without recourse to debt rescheduling or the accumulation of arrears and without compromising growth.” According to these two institutions, external debt sustainability can be obtained by a country “by bringing the net present value (NPV) of external public debt down to about 150 percent of a country’s exports or 250 percent of a country’s revenues.””
We have a lot of work to do.
Paul – yes we have a lot of work to do, but there is no reason (rational) that we cant get our finances under control over the next 10 years or so. A lot hinges on getting the economy back on track, which as Mervel points out is starting to look much better. We are not in a crisis. We were in one in 2008- 2009.
“…the fiscal cliff, the debt ceiling etc. all of them are imposed on ourselves by Congress and could simply be done away with.”
…over the dead bodies of a substantial number of lawmakers.
“To put the country back on track, Mr. Obama will almost certainly have to propose specific cuts and tax increases that will spark a much fiercer debate than we’ve seen this week.”
I think if the president, on the heels of these tax increases, puts forward some serious spending cuts and follows through with them he will go along way toward appeasing his critics in the house. Walker, that might bring some “normalcy”. But even when the president talks about revenue he usually pairs that with the “investments” that will come from those new revenues. It is just in his nature. It is like the scorpion on the back of the frog.
http://allaboutfrogs.org/stories/scorpion.html
Pete I might agree but it seems that a “crisis” mode is required for any action?
Here is one from Eric Cantor that Politifact rates as true. Actually according to the SSA we are closer to 11,000 a day rather than the 10,000 he claims that we will add to the rolls:
http://www.politifact.com/virginia/statements/2011/may/04/eric-cantor/rep-eric-cantor-says-10000-baby-boomers-day-are-be/
Things are changing very quickly. 2013 marks an important milestone in the discussion.
Sorry I meant Peter.
Higher taxes, one way or another, for everyone, no debt reduction, no spending cuts. No help for America, from Democrats or Republicans. I’m sick of them all. There’s not a real leader among them.
“Speaking of which, does anyone have any idea why the courts have failed to address gerrymandering?”
because judges are elected officials.
” we have not really maxed out the credit card. The next fight is over adding yet another credit card to the pile.”
i feel it’s more like our credit limit on the same card will be raised. and to me that feels different than getting more cards. not the same.
our biggest asset is from a world view America is still perceived as hardworking salt of the earth people who by sheer will and sweat will honor their debt.
if we rock that faith we’re doomed.
“Speaking of which, does anyone have any idea why the courts have failed to address gerrymandering?”
http://redistricting.lls.edu/cases.php
There have been many challenges, most of which have been dismissed. I guess you should add the Courts to the conspiracy.
“because judges are elected officials.”
Not the Federal judges who would end up with such a case.
Also, the parallel between the nation’s debt and a family’s debt is weak, unless you’re talking about a family that has a mint in its basement. Oh, yeah, and one that can borrow money at incredibly low interest rates.
“i feel it’s more like our credit limit on the same card will be raised. and to me that feels different than getting more cards. not the same.”
Fair enough. We raise the credit limit. More credit is more credit. More debt is more debt. When they come to collect they don’t care if it is on two cards or ten.
Like I said the issue is debt to GDP when it gets to where we are the word doesn’t care how hard we work. Look above at the World Bank and IMF definitions of credit worthiness. The international community does not consider the US to be very credit worthy anymore.
The largest holder of US debt is not overseas but here in the US. China has been selling US treasuries over this past year. They may not be that confident that we can honor that debt. Europe has been buying so that is good. But they are also much more likely to need to sell their treasury bonds than a country like China with a booming economy.
No one is making a parallel between “family” debt. If you don’t like the credit card analogy use any debt or credit terms you like it doesn’t change anything. It works either way. Two other differences would also be that the US can also borrow money at low rates with insufficient revenue and less than perfect credit. Good luck doing that at your local bank these days. So yes if someone did make the analogy it is silly.
Paul – two things about the debt (and yes I agree that we need to call something a crisis to do anything – unfortunately). We are very credit worthy. People pay us to lend us money (sometimes). And, when times are bad and we can borrow at very low rates, it is better for our economy to borrow (to pay back later) than to throw everyone out of a job. That makes the deficit worse as a percentage of GDP since GDP goes way down.
Peter I agree with you mostly. But our credit worthiness is slipping. I do not think it would be wise to let that get to a crisis level (even if only perceived). I did not suggest throwing everyone out of a job, not sure where you got that? In fact I suggest we throw some folks into a job even if it is a lower rate that we are used to and some folks working in some sectors have to make sacrifices to do that. We have to adjust to the realities of a global competitive market we live in. We no longer live in the historical anomaly that was the post war US. The world has caught up and now they are nearing a position to pass us. I wish we could count on the “good graces” of the rest of the world but we can’t.
The thing that does not make sense to me is the actions of the credit markets themselves. The US Government is able to borrow money at very low rates right now even as indicators of our creditworthiness decline. The inverse should be happening if there was a concern among lenders that we had a debt problem. The markets are sending the signal, at least right now, that the US’s debt is fine and in fact in much better shape than many other countries who are being forced to pay more for their credit.
I agree with Paul that times have changed and that this debt is impacting our long run productivity, but at least for the near term future it does not seem to be a crises.
Taxes were the easy part, just raise taxes on a tiny percentage of the population, sounds good to me and most people would agree. Spending is the real difficult part as those spending cuts will indeed impact all of us.
“China has been selling US treasuries over this past year…”
Not according to Bloomberg: “China has increased its holdings this year, as the American economy stalled and Europe’s sovereign-debt crisis deepened. (
China’s U.S. Debt Holdings Aren’t Threat, Pentagon Says)
The same source says “China decreased its Treasury holdings last year with little apparent impact in the market.” (emphasis added)
“But our credit worthiness is slipping.”
Yes, but why? The chief reason appears to Congressional gridlock and their willingness to play chicken with the economy.
“Not the Federal judges who would end up with such a case.”
yes they would END UP with the case after it went through the lower courts, wich don’t see the need to address it, according to the statement.
so untill its challenged and decided by the elected judges, the feds don’t count.
it’s like a chicken and egg thing….
“The international community does not consider the US to be very credit worthy anymore.”
I disagree, but that is where we are headed by threatening our bound rating.
congress, not the people (unemployed people, housing disaster people, hurricane disaster people)
congress threatened and ultimately lowered our rating by their innaction last year.
ill take the hit for the family analogy since i made the jump to the salt of the earth b.s.
we should be glad that the world sees a clear difference between our citizenry and D.C.
my point is they do and they have more faith in ‘us’ than D.C.
2c, if the elected judges uphold a redistricting plan that is, in fact, flawed, it would assuredly be appealed to the Federal level.
We are still more credit worthy than anyone else. In the cases of Spain, Greece, Ireland, UK etc., when they cut spending way back, many more people lost their jobs – not just government jobs. The economy got a lot worse. Then tax collection went down, welfare expenditures went up, GDP went down, and debt as a percentage of GDP went up. We dont want that to happen to us.
Latvia seems to have made austerity work (article today) but it took 4 years of pain.
Walker,
We are now at a level of debt-GDP that would raise concern or has raised concern in the past. That ratio combined with our political inability to do anything about it would seem to indicate a problem with credit worthiness. In addition our bond rating has slipped.
But the markets I think are giving us the answer and the answer is that we are a good credit investment, meaning we will pay our debt payments and it is a positive for the long run view of our economy.
I am optimistic for 2013 it could be so much better if we didn’t have these continual crises moments, now we another cliff style debate coming up, this one on the debt ceiling…again.
Can I ask how those of you that think everything is peachy keen think we’re going to get out of this? The latest U6 number is 14.4%, almost 1% better than in 2011, but nowhere near the historical average of something in the 7-8% range. Meanwhile we have 47 million people on food stamps, almost 9 million on Federal Disability, 12 million unemployed. The value of the dollar is dropping like a rock in real world terms. The Fed is now reportedly the single largest holder of US national debt, but if you look into it further you find our gov’t borrows from itself through a, frankly, devious set of rules that would be patently illegal for a private company to even try to do. So almost a third of our gov’t debt is owed to our gov’t, IOW- we’ve floated a criminally large number of checks. Or to use the credit card analogy, we just keep transferring balances from one card to another without ever paying the interest on the last card, much less on the principal. There’s an even larger problem in the mix- There is about $9.8 trillion in currency floating around in paper, coin and electrons. The Treasury’s gold reserves are worth about $440 billion. Less than 5% of our currency is backed, the rest is promises, smoke and mirrors. Consider also that our dollars rating on world currency markets is based on it’s value compared to other currency values. Other than Lebanon (!!!) most other nations don’t have much actual physical backing to their currency either. So the value of the fiat dollar is based on it’s performance on relation to other fiat currencies! IOW, the only reason our dollar has the value it does in because other people have trusted us to pay off our debt. That’s changing, rapidly. And the more money we print, the larger our debt grows, the less trust is displayed. China and Japan stopped trading in US dollars in October. Russia is now accepting Chinese Yuan for oil rather than US dollars. China and Russia have begun an economic war with us, and we’re helpless to fight it! Here’s an excerpt that spells it out far better than I can from the Examiner- “These duo actions by the two most powerful adversaries of the U.S. economy and empire, have now joined in to make a move to attack the primary economic stronghold that keeps America as the most powerful economic superpower. Once the majority of the world begins to bypass the dollar, and purchase oil in other currencies, then the full weight of our debt and diminished manufacturing structure will come crashing down on the American people.
This new agreement between Russia and China also has serious ramifications in regards to Iran, and the rest of the Middle East. No longer will U.S. sanctions against Iran have a measurable affect, as the rogue nation can simply choose to sell its oil to China, and receive Yuan in return, and use that currency to trade for the necessary resources it needs to sustain its economy and nuclear programs.”
Now you can all sit there and feel all warm and toasty about a 1% drop in UE figures and rumors of the economy picking up. Me, I’m siting here wondering whats’ holding this magic cloud aloft. Smoke and mirrors don’t make a real good foundation.
So, convince me, please!
The Examiner?! Lindsey Williams??!! Natty Bumpo???!!! What, no Glenn Beck?
Some positive points:
1) Oil. The US is about to become a net exporter of oil and one of the largest oil producers in the world, unemployment in oil producing states with the shale boom is usually below 5%, and the state coffers are fine.
2) The Rest of the World is much worse off than we are, thus we will get capital and we can still maintain our debt.
3) The debt will take care of itself, either we start paying it off with reduction policies or the markets will demand higher rates, which means less government spending on everything else and more on debt payments, so be it.
4) Technology, people with math, science and engineering training are doing fine there is very little unemployment among this group. Technology will become more determinative.
5) Free markets, we still have great markets and great economic freedom, which is a competitive edge.
Defense spending is the most obvious place to start cutting, and even fairly conservative cuts will yield enormous savings. That said, just today, before the discussion even began, our own Bill Owens cautioned that military cuts might impact our local economy around Fort Drum. We’re all for cuts, but apparently not in our own back yard.
“instead of calling it what it is, our president likes to blame and scold ”
That IS calling it what it is. It was the fault of the GOP and they deserved to be scolded. You can argue whether he should have done that or not, but you certainly can not say he didn’t call it what it was.
“Russia is now accepting Chinese Yuan for oil rather than US dollars. China and Russia have begun an economic war with us, and we’re helpless to fight it! ”
“This new agreement between Russia and China also has serious ramifications in regards to Iran, and the rest of the Middle East. No longer will U.S. sanctions against Iran have a measurable affect, as the rogue nation can simply choose to sell its oil to China, and receive Yuan in return, and use that currency to trade for the necessary resources it needs to sustain its economy and nuclear programs.”
Wow! Rancid, please calm down. I’m worried for your health here!
We have problems, sure. But our problems are pretty manageable. As the economy turns back up even at a very slow level our economic difficulties will look less troublesome. Russia, on the other hand is in pretty desperate shape, masked only by their ability to sell oil and raw materials. China may hold lots of our debt but they are also dependent on us for a huge portion of their economy.
We may not be what we were a decade ago but we are still in pretty good shape. Our debt position is quite manageable. We are not talking about nuclear annihilation here; we are just talking about money. It’s all just money!! Tell all your high minded, freedom loving friends to chip in a years worth of labor over a ten year period and we’d have it paid off.