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Obama Met With "Liberal" Economists Just Before Lambasting the Left at His Tax Deal News Conference

I just heard that shortly before his official announcement of the tax cut deal with Republicans Obama met with a group of "liberal" economists. Joseph Stiglitz, Paul Krugman, Jeffrey Sachs, Alan Blinder and Robert Reich. With Obama at the meeting were Austan Goolsbee and Jared Bernstein. The meeting was apparently less about them sharing their views with him and more about him trying to sell the tax cut compromise to them.

Stiglitz is good but he tends to stay above the fray. He's not like Dean Baker in the trenches slogging it out every day. Krugman is Krugman, blame the Republicans and whimper at the Democrats. Sachs is or was a neoliberal and his record is spotty. Blinder is, like Krugman, another Princeton type. He's a Fed believer/monetarist although he recently has begun writing on wealth inequality. Better late than never, I suppose. And then there is Reich. He's a lightweight in economics but he's been good on jobs.

As for Jared Bernstein, the Administration's token "liberal", he's like some trained dog the Administration trots out in circumstances like these. They're trying to push Goolsbee into this role too, although he is very much one of the Chicago Boys.

Anyway, this was a fairly tame bunch, all in all. Obama's inability to sell the tax cuts even to them might explain why he was so dismissive of liberals later at the press conference.

Now, if that’s the standard by which we are measuring success or core principles, then let’s face it, we will never get anything done. People will have the satisfaction of having a purist position and no victories for the American people. And we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are


it means that in order to get stuff done, we’re going to compromise. This is why FDR, when he started Social Security, it only affected widows and orphans. You did not qualify.

On the other hand, maybe it was all about pre-emption. Sure, even these economists might criticize the deal but meeting with them might keep them from open rebellion against Obama and the Democrats. If you look at it that way, the strategy probably worked.

Now you could also read into Obama's remarks a certain irritation and defensiveness. I think all that was just Obama working the con, you know feeling just a little rightfully irritated and disappointed that there were these purists out there who objected to being stolen blind, again.

As we have said so many times, Obama is a conservative. This is the deal he wanted. The compromise talk was just so much kabuki for the rubes. This too seems to have worked. The media is busily selling the cuts and burnishing Obama's image. We will see how long the good feelings last. Something else we purists say is that reality bites, and when it does, kabuki loses its appeal.

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Submitted by jawbone on

Oooh, I'd love to read the transcript of that meeting.

Someone tell WH aides there's this group which will accept leaks and publish them on the internet.... Anonymity guaranteed, almost. WikiLeaks, yeah, that's it.

Krugman has not been mollified, it seems to me. Yummmm, brains!

caseyOR's picture
Submitted by caseyOR on

embarrassingly ill-informed. SS was not just for widows and orphans. It was for everyone. Well, truthfully, it was mostly for white people when it started as people of color disproportionately filled the jobs that were exempted from SS coverage.

Still, not just for widows and orphans.

Submitted by jawbone on

Historian David Woolner responds to Obama's claim:

The president may be correct when he states that a good many of the social-economic reforms we now take for granted were brought into being gradually. But his hasty characterization of Social Security as something that initially only helped “widows and orphans” is incorrect and doesn’t do it justice.

The Social Security Act remains one of the most important pieces of social legislation in American history. It was — like today’s health care reform bill — very controversial at the time it was passed, and it is true that many of its provisions were “grandfathered in.” But the decision to implement the act in stages had as much, if not more, to do with the practical challenges associated with putting it into practice as they did with politics. Moreover, the initial legislation was much broader in its impact than the president implied. It not only was designed to provide old age pensions to roughly 60 percent of the work force (and in 1935 only about 15 percent had any sort of pension), but also established our nation’s first national system of unemployment insurance and allocated federal funds to the states to provide immediate relief to the indigent elderly, grant aid to dependent children, and offer assistance to the blind and the handicapped. It also included modest sums for public health services. Old age benefits were to be awarded to a worker when he or she retired at the age of 65, paid for by payroll tax contributions that the worker made during his or her period of employment. Under the original legislation, these taxes would first be collected in 1937 and monthly benefits were set to begin in 1942 so as to allow time to build up the Social Security Trust Fund and provide a minimum period of participation for benefit qualification. Under an amendment passed in 1939, the start date for monthly benefits was changed to 1940. In the meantime, between 1937 and 1940, workers who contributed to the program but would not participate long enough to qualify for monthly benefits would receive a one-time lump-sum payment.
As President Obama tries to maneuver his agenda forward toward his “North Star”, he might do well to remind the American people that sometimes change comes about not merely through incremental steps, but also through the dramatic action and bold vision of a people and a government dedicated to the notion that together they can seize control of their destiny.

There's lots more in the "snip."

Our president seems to block on FDR's actual accomplishments....

Submitted by jawbone on

Thomas Ferguson looks at the basis for Obama's thinking:

"We didn't actually, I think, do what Franklin Delano Roosevelt did, which was basically wait for six months until the thing had gotten so bad that it became an easier sell politically because we thought that was irresponsible. We had to act quickly." - President Obama

Sometimes a chance remark trains a searchlight on aspects of the historical record that would otherwise be shrouded in Stygian blackness for a generation. So I think it was yesterday when in the Huffington Post, Leo J. Hindery, Jr. quoted from a transcript of President Obama's remarks to a group of liberal bloggers who were querying his handling of the financial crisis.

Many readers responded in shocked disbelief: The president can't mean what he said. He must have misspoken -- he can't really be claiming that Roosevelt sat on his hands, deliberately letting the Depression get worse and worse.

Perhaps it was just a slip. But in 2010, even slips can be revealing -- and this one comes from a definite part of the political spectrum. The president was repeating a canard that goes back to the circle of die hards around President Herbert Hoover as he exited the White House in a cloud of bitterness in 1933. In recent years, as a vast campaign against the memory of the New Deal has gathered steam, such claims have gone mainstream. For example, take the carefully hedged version recently put forward by Amity Shlaes in her study of the New Deal, "The Forgotten Man": "But Roosevelt was not interested in cooperation. We will never know all his motives, but it was clear that a crisis now could only strengthen his mandate for action come inauguration in March."

We are unlikely ever to know for sure. But as President Obama took office, the Council on Foreign Relations was cranking up a remarkably one-sided conference purporting to be a "Second Look at the Great Depression and the New Deal." Ms. Shlaes was a prominent participant, as was the Council's co-chair, one Robert Rubin, whose myriad protégés thronged the Obama Treasury and economic councils.

Whether our highly intellectual president picked up the idea by reading it or hearing somebody else say it, it was, and is, in the air. And you can be sure that his words will now be rattling around for years to come and likely cited as proof of Franklin D. Roosevelt's "irresponsibility." (My emphasis)

What follows is the real story. And it involved FDR recognizing when the Republicans of his day were trying to trap him into implementing their policies.

Really, Obama just gets his FDR history wrong - blocking? He gets it wrong in ways which are self-justifying and which indicate his conservative bent.

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Submitted by beowulf on

if this were the Rubin who was his mentor

I can't believe a President of either party would insult Franklin Roosevelt. Seriously, Reagan never did it, nor did Nixon.

Submitted by Randall Kohn on

The fact that he felt free to insult FDR may indicate a Village consensus that we are withoujt recourse no matter what they do to us.

Submitted by lambert on

Anyhow, Versailles is always wrong about everything. So it's a good sign, no? In a strange sort of way.

Submitted by lambert on

Versailles is full of liars and fraudsters who would rather lie than tell the truth, and even if there's no benefit to them doing it, they do it anyhow, for fun.

Submitted by Schmoo on

Your paragraph describing the "economistical" players was spot on.

The one portrayal I would disagree with is Reich - he is very inaccurate at times. Far too often he has the view of things that someone gets only by staying inside the Ivory Tower. About a year ago, he stated that no one except those in the home health care business ever faced competition from South of the Border workers. I have no idea why he would think that - he lives in California, for Pete's sake.

Does he honestly think that the fact that there are no longer any Caucasian plumbers, masons, landscapers, carpenters, etc in many areas is because white people don't want what were once good paying jobs?

But all the other portrayals summed it up perfectly.

CMike's picture
Submitted by CMike on

A while back I wrote up something, which ended up too long to post anywhere, about President Obama's erroneous claims in that press conference. I"ll leave out the first part of what I said regarding Obama's reflections about Social Security as those have been smacked down all ready in this thread. But I will include some background on that other program Obama also does not know much about and I'll paste some related speech excerpts which provide a contrast between Obama's general political views and those of two other Democrats. From the 12/07/10 Obama Press Conference:

...[I]t’s a big, diverse country and people have a lot of complicated positions, it means that in order to get stuff done, we’re going to compromise. This is why FDR, when he started Social Security, it only affected widows and orphans. You did not qualify. And yet now it is something that really helps a lot of people. When Medicare was started, it was a small program. It grew.

Under the criteria that you just set out, each of those were betrayals of some abstract ideal. This country was founded on compromise. I couldn’t go through the front door at this country’s founding. And if we were really thinking about ideal positions, we wouldn’t have a union.

...[H]ere is an entry from a time line that was posted on the internet long before the president's press conference but it is useful in correcting the president's claim that Medicare "started" as a "small program" and suggests what might be a point of confusion for the president:

1965--Medicare and Medicaid were enacted as Title XVIII and Title XIX of the Social Security Act, extending health coverage to almost all Americans age 65 or over (e.g., those receiving retirement benefits from Social Security or the Railroad Retirement Board), and providing health care services to low-income children deprived of parental support, their caretaker relatives, the elderly, the blind, and individuals with disabilities. Seniors were the population group most likely to be living in poverty; about one-half had health insurance coverage.

1966--Medicare was implemented on July 1, serving more than 19 million individuals. Medicaid funding was available to States starting January 1, 1966; the program was phased-in by States over a several year period.

Take a moment, if you will, to read the remarks of two other presidents discussing the beginning of the Medicare program. Here are some of the comments Harry Truman made at the 1965 signing ceremony for the Medicare law where Truman, himself, received the first Medicare card:

...This is an important hour for the Nation, for those of our citizens who have completed their tour of duty and have moved to the sidelines. These are the days that we are trying to celebrate for them. These people are our prideful responsibility and they are entitled, among other benefits, to the best medical protection available.

Not one of these, our citizens, should ever be abandoned to the indignity of charity. Charity is indignity when you have to have it. But we don't want these people to have anything to do with charity and we don't want them to have any idea of hopeless despair.

Mr. President, I am glad to have lived this long and to witness today the signing of the Medicare bill which puts this Nation right where it needs to be, to be right...

And here are a few of the remarks the then sitting president, Lyndon Johnson, gave at the same ceremony:

Many men can make many proposals. Many men can draft many laws. But few have the piercing and humane eye which can see beyond the words to the people that they touch. Few can see past the speeches and the political battles to the doctor over there that is tending the infirm, and to the hospital that is receiving those in anguish, or feel in their heart painful wrath at the injustice which denies the miracle of healing to the old and to the poor.

And fewer still have the courage to stake reputation, and position, and the effort of a lifetime upon such a cause when there are so few that share it.

But it is just such men who illuminate the life and the history of a nation. And so, President Harry Truman, it is in tribute not to you, but to the America that you represent, that we have come here to pay our love and our respects to you today....

There are more than 18 million Americans over the age of 65. Most of them have low incomes. Most of them are threatened by illness and medical expenses that they cannot afford.

And through this new law, Mr. President, every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age.

This insurance will help pay for care in hospitals, in skilled nursing homes, or in the home. And under a separate plan it will help meet the fees of the doctors.

Now here is how the plan will affect you....

[edit--I leave this out but, in my mind, Johnson's discussion of the benefits are worth reading through in the original text, found at the link, for various reasons.]

In 1935 when the man that both of us loved so much, Franklin Delano Roosevelt, signed the Social Security Act, he said it was, and I quote him, "a cornerstone in a structure which is being built but it is by no means complete."

Well, perhaps no single act in the entire administration of the beloved
Franklin D. Roosevelt really did more to win him the illustrious place in history that he has as did the laying of that cornerstone....

But it all started really with the man from Independence. And so, as it is fitting that we should, we have come back here to his home to complete what he began....

But there is another tradition that we share today. It calls upon us never to be indifferent toward despair. It commands us never to turn away from helplessness. It directs us never to ignore or to spurn those who suffer untended in a land that is bursting with abundance....

And this is not just our tradition--or the tradition of the Democratic Party--or even the tradition of the Nation. It is as old as the day it was first commanded: "Thou shalt open thine hand wide unto thy brother, to thy poor, to thy needy, in thy land."

CMike's picture
Submitted by CMike on

And to be fair, that might have been more on the lines of a slip of the tongue.

I had tried to figure out how President Obama could have botched a discussion of the two signature programs of the modern Democratic Party. I left out my take on what Obama had said at that press conference about the origins of Social Security in my comment here but the best I could come up with in his defense about that was:

...Originally, the first year of eligibility [for Old Age Insurance benefits] was to be 1942 for those who were to pay into the system the system in each of the years 1937, '38, '39, '40 and '41. The program was later updated to make provision for those who earned $2000 after 1936 but retired at age 65 before paying into the system for five years and, as a result, the first monthly Old Age benefit check went to Ida May Fuller in January of 1940.

It is true that the Social Security Act of 1935 did provide for some revenue sharing with the states for programs targeting children in need beginning in 1936. Perhaps that's what President Obama was referring to when he said when FDR "started Social Security it only affected...orphans."

I have to admit, though I'm not all that impressed with Obama to begin with, I was amazed he said what he said about the origins of Social Security and Medicare.

Submitted by hipparchia on

that's the question i always ask myself whenever a politician or pundit opens their mouth [or fires up their keyboard]. and while i think your framing the democrats [including obama] aren't weak, it's what they truly want makes the most sense overall, i've never been impressed with obama's intellect myself.

DCblogger's picture
Submitted by DCblogger on

what a perfect description of Obama. He is like Adrian Fenty with nukes.

someone needs to tell the precious that going from 6.1% unemployment to 9.6% is not getting stuff done.