Monday, January 18, 2010

It's Complicated

There's a movie called "It's Complicated" that is currently getting a lot of Oscar ink.

It's a comedy, but the title sounds like it would be good for a subject that isn't a comedy — like, say, for example, the U.S. economy.

I've been reading Paul Krugman's column in today's New York Times. His subject is the second–year second–guessing of the Barack Obama administration, specifically the suggestion that Obama tried to do too much by taking on health care reform in his first year instead of focusing on the economy.

Krugman takes exception. "The Obama administration's troubles are the result not of excessive ambition, but of policy and political misjudgments," he writes. "The stimulus was too small; policy toward the banks wasn't tough enough; and Mr. Obama didn't do what Ronald Reagan, who also faced a poor economy early in his administration, did — namely, shelter himself from criticism with a narrative that placed the blame on previous administrations."

As Krugman explains, the stimulus has helped, but it wasn't big enough. Likewise, not taking a harder line on the banks "further entrenched the power of the very institutions that caused the crisis, even as it failed to revive lending."

That brings us to the Reagan example. Reagan, like Obama, inherited a bad economy, but unemployment, as Krugman puts it, "soared" when the 1981 tax cuts were enacted. "Reagan, however, had a ready answer for critics," Krugman writes, "everything going wrong was the result of the failed policies of the past. In effect, Reagan spent his first few years in office continuing to run against Jimmy Carter."

Well, Obama may not have been personally blaming Bush every time he opened his mouth in the last 12 months, but many of his supporters have permitted few opportunities to blame the previous administration get away. Most of the time, they can't wait to indulge in some finger pointing.

Why hasn't Obama been more vocal in his criticism of the Bush administration? "Maybe he still dreams of bridging the partisan divide," Krugman suggests, "maybe he fears the ire of pundits who consider blaming your predecessor for current problems uncouth — if you're a Democrat. (It's O.K. if you're a Republican.)"

Seems to me that last bit about Democrats and Republicans very conveniently ignores the fact that, depending on which party was in power, both Democrats and Republicans have played that game, and both have been criticized for it. It's like the argument some Democrats (and some publications, too, like the New York Times) have been making about how anti–democratic the filibuster is. They were both singing a different song when Democrats were in the minority.

To use a line that the adults seemed to be fond of repeating when I was growing up, it all depends on whose ox is being gored.

Well, the argument over whether it was wise to devote so much time and energy to health care reform may be moot in another 36 hours, when we know who Massachusetts' voters have elected as Ted Kennedy's successor in the Senate. Currently, the momentum appears to be with the Republican candidate, and, if he wins, the Democrats will no longer have 60 votes to block Republican filibusters.

That would leave Obama without the signature legislation he sought — and with an unemployment rate that could remain in double digits indefinitely. It would seem to be much better for Obama and the Democrats — from a purely political perspective — if they could enact health care legislation before a Republican can take Kennedy's seat — if the Republican is going to win. That, of course, remains hypothetical until such time as it becomes a reality.

"Passing such a bill won't be [Democrats'] political salvation," says Krugman, "but not passing a bill would surely be their political doom."

If the Democrat wins in Massachusetts tomorrow, that may buy some time for Obama and the Democrats. But they still need to act quickly if that legislation is going to be of any benefit to embattled Democrats seeking re–election. Most observers agree that Democrats will lose seats in Congress this year, and the loss of only one Senate seat will mean they can no longer block Republican filibusters.

If that is ultimately going to be the Democrats' fate, obviously they would prefer to wait until the end of the year before facing it instead of having to do so right now. But they may not have that luxury.

It's complicated.

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