The Narrative: Obama's Fatal Error (For Congressional Dems) On The Inadequate Stimulus

The Atlantic's Josh Green:

The faltering recovery and the credibility this has cost the the White House will probably lose the Democrats one or both houses of Congress, making the insufficiency of the stimulus easily the most consequential error for an administration that has done a lot right.

[. . .] The White House insists that it could not have gotten a larger stimulus through Congress, a debatable claim. But by twice neglecting to try, it has staked its fortunes on a policy that has visibly fallen short on the issue of greatest concern, the economy. Because of the divide between the experts and the strategists, nothing is happening. Given the weak state of the economy, the White House cannot claim that the stimulus it settled for has sufficed. Unwilling to call for another one, it is left to look on silently and helplessly.

No, this is not original insight, but it is important as evidence of creating the (truthful) narrative that it was Obama's failure to be progressively bold on the stimulus that has doomed the Dems. For the record, the inadequacy of the stimulus was an issue in real time, as this January 7, 2009 John Harwood interview with then President-elect Obama makes clear:

HARWOOD: If it's correct that, as your aides have said, the danger is doing too little rather than doing too much [. . .] why stop at $775 billion? Why not go to the $1.2 trillion that some economists have recommended? Is that because you think that the political figure of a trillion dollars is too politically charged to get over? Is it because you think more spending would be pork rather than stimulus? Or do you think you've figured out exactly the right amount of stimulus that's needed?

Pres.-elect OBAMA: [. . .] We've seen ranges from 800 to 1.3 trillion and our attitude was that given the legislative process, if we start towards the low end of that, we'll see how it develops.

(Emphasis supplied.) This failure is on the White House and its centrists. This political debacle is theirs.

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    So Dems loose Congress (5.00 / 1) (#4)
    by Saul on Fri Sep 03, 2010 at 10:29:14 AM EST
    and Rep control Congress.  What will the Rep do to stimulate the economy?  Anybody

    Also if Dems loose Congress and Rep rule it does that cinch that Obama is a one term President?

    Looks like the economy will control all political victories or defeats IMO

    Unemployment officially rose again (5.00 / 2) (#6)
    by Cream City on Fri Sep 03, 2010 at 10:51:45 AM EST
    to 9.6% in August, as just announced this morning.

    Yes, it looks like the economy will control all political victories or defeats. . . .


    It won't stimulate the (5.00 / 4) (#9)
    by brodie on Fri Sep 03, 2010 at 11:00:10 AM EST
    economy, though Rs will claim otherwise, but of course they'll call for more tax cuts for the upper-income few and for corporations, plus an end to what they call the "death tax."  What else?  More de-regulation of industry with labor standards more in line with countries like China and Mexico (Rs will argue they need laxer labor standards to avoid further massive job outsourcing).

    That plus investigations of the Obama admin all over the place, enough pseudo-scandal mongering to make the uninformed think there must be some there there.  Then the decision sometime in 2012 about whether to take it to the level of a formal impeachment inquiry, as in 1998.  

    Rs might think, well if we could just package impeachment a little more palatably to the public -- no cranky old Henry Hydes or off-putting hypocrites like Newt Gingrich, but put a more presentable face on it with more likable pols who nonetheless will crack the whip.  

    Ds will hope they would overreach, as in 1998, while the economy has turned around.  Bill Clinton saved himself in 1996 and 1998 with a solid economy plus just being a likable flawed pol who made an all-too human blunder.  Obama doesn't have quite Bill's likability quotient.


    Nor (5.00 / 1) (#10)
    by Ga6thDem on Fri Sep 03, 2010 at 01:06:54 PM EST
    does he have the fight in him that Bill did or does. I can imagine Obama begging them not to impeach him.

    "IT'S THE ECONOMY STUPID" (5.00 / 2) (#12)
    by norris morris on Fri Sep 03, 2010 at 06:54:11 PM EST
    OBAMA'S lack of insight and experience are all part of his disconnect.

     Just look at the noncommittal biege brown taupe of his newly decorated Oval Office complete with vanity carpet that tells the story of a narcissist who doesn't understand or feel the job of an in touch President.

    It was always and will always be the economy. Not understanding its urgent importance has been a fatal flaw. Obama has wasted his popularity and promise by ignoring his changey hopey message and showing his tin ear for  Americans faced with long term unemployment and bankruptcy.

    The GOP will clean their clock and Democrats seem destined to lose Congress.  Will Obama be a one term President?  I think so.  


    The flip side of this is that the policies (5.00 / 5) (#16)
    by Anne on Fri Sep 03, 2010 at 08:07:30 PM EST
    advanced were actually the policies Obama wanted, hopey-changey-sparkle-pony rhetoric notwithstanding, and that where his, ahem, "brilliant" political instincts failed him was in not understanding that, while the policies would make even more wealthy the savvy businessmen he so admires, and would see oceans of cash flowing into campaign PACs, it would beome near impossible to keep Dems in office because those policies have hurt the average person - the ones whose votes are required in order to keep this whole goat rodeo going.

    The guy who put together the Cat Food Commission is not someone who cares much for those who have the least, which tells quite the tale - for me - about his economic policies and what they are intended to accomplish.


    My, my, my (none / 0) (#14)
    by christinep on Fri Sep 03, 2010 at 07:00:12 PM EST
    What happens in 2012 is impossible to predict at this point...not even Steven Hawking.

    You're right (5.00 / 1) (#17)
    by Warren Terrer on Fri Sep 03, 2010 at 08:47:32 PM EST
    Obama could suddenly turn around and become a good president, fight back and win in 2012, instead of being the failure that he is today. You never know, do you?

    Obama has been a good President (none / 0) (#20)
    by Politalkix on Sat Sep 04, 2010 at 04:36:44 PM EST
    Better than anyone I have seen so far!

    You must be ... (5.00 / 3) (#21)
    by Yman on Sat Sep 04, 2010 at 09:40:03 PM EST
    ... extremely young.

    Not young enough (none / 0) (#22)
    by Politalkix on Sat Sep 04, 2010 at 09:48:00 PM EST
    to be BSed by older folks in this site.

    What makes you think ... (5.00 / 2) (#23)
    by Yman on Sun Sep 05, 2010 at 08:05:33 AM EST
    ... they're older?

    They're probably just smarter ...


    Many of them mentioned their age or age groups (none / 0) (#25)
    by Politalkix on Sun Sep 05, 2010 at 09:41:46 AM EST
    in various threads.

    Takes care of the "age" part (none / 0) (#26)
    by Yman on Sun Sep 05, 2010 at 10:20:07 AM EST
    Well, ... for "many" of them.

    Older is usually (none / 0) (#33)
    by cal1942 on Mon Oct 25, 2010 at 11:56:42 PM EST

    GOP plan: stimulus (none / 0) (#11)
    by souvarine on Fri Sep 03, 2010 at 01:32:28 PM EST
    According to Mike Pence, GOP conference chairman, they will go for across-the-board stimulus, deficits be damned:
    So the first thing that we will do is try to preserve the tax relief of 2001 and 2003 for all Americans -- for all small businesses and family farmers. But we also want to look at the kind of across-the-board tax relief, the kind of tax relief that will encourage capital formation, to get this economy moving again.

    So the Republican plan is large Keynesian, debt-financed stimulus, if through inefficient tax cuts. What is the Democratic plan? According to Obama, a smaller, less effective version of the same.

    I vote Democratic, but on the economics the Republicans are making the better argument here, and they are showing that they grasp the scope of our economic problems. There are better solutions, but no party is proposing them.


    That's NOT Keynesian (none / 0) (#34)
    by cal1942 on Tue Oct 26, 2010 at 12:00:32 AM EST
    Keynesian is spending money.

    Tax cuts and spending are two different things.

    Both will produce deficits but not all deficits are created equal.

    Spending is vastly more effective than cutting taxes.


    spending or tax cuts (none / 0) (#35)
    by beowulf on Tue Oct 26, 2010 at 11:59:43 AM EST
    In the 1940s and 1950s there was a distinctive made btween "liberal Keynesian", new spending programs and "conservative Keynesian", tax cuts.  Either one will do the trick if its of sufficient size though politically its easier to vote for a tax cut than a new spending program.  

    Since the FICA payroll taxes are terribly regressive (start at dollar one of wage income, the Social Security portion stops at $106k), a payroll tax holiday would put $900 billion a year back into the economy with teh vast majority of it going to families earning under $106,000.  If I had my druthers, I'd tie to the U3 unemployment rate, multiply U3 by 10 and subtract from FICA taxes due.  So if unemployment is 9.6%, cut FICA taxes by 96%. That way as the economy improves, the payroll tax holiday is slowly lifted. For example, if the DOL changes the monthly U3 rate to say, 8.9%, Tsy reduces the tax holiday reduction to 89% at the same time.


    Wow (none / 0) (#36)
    by cal1942 on Tue Oct 26, 2010 at 01:30:18 PM EST
    Calling something Keynesian doesn't make it so.

    Tax cuts are the least effective was to rev up the economy.  The revenue for spending is lost and the money from cuts doesn't necessarily get spent in the economy.  Direct spending into the economy has great immediate effect.

    Insofar as reducing FICA at low income levels uis concerned the money, for the most pasrt, is spent but again not all of it.

    Impact, immediate impact, is crucial.


    The smart move (5.00 / 2) (#5)
    by Warren Terrer on Fri Sep 03, 2010 at 10:40:37 AM EST
    would have been to demand a stimulus package far bigger than $1.2 trillion (say $1.75 trillion), insisting that nothing less would suffice, then 'reluctantly' negotiate it downward to 1.2. Obama is a poor negotiator and, sad to say, an inadequate president.

    Smart Move? (none / 0) (#13)
    by norris morris on Fri Sep 03, 2010 at 06:56:03 PM EST
     I agree the inadequacy is obvious.

    Let's not doom the Dems (5.00 / 1) (#18)
    by Lora on Sat Sep 04, 2010 at 02:43:57 PM EST
    Pretty soon (if not already), the way the media and bloggers have it, it will be a given fact that the Dems lost the 2010 elections -- before any elections have taken place.

    While that may be true, it is not a given.  Let's not contribute to their reported demise.  Shall we wait and see what the election results bring?

    We aren't the ones who are contributing to (5.00 / 7) (#19)
    by Anne on Sat Sep 04, 2010 at 04:10:27 PM EST
    the Dems' demise; they've managed that all on their own.  I mean, it's not like they haven't been hearing from the people about what they need to do in order to garner our support.  Phone calls, faxes, e-mails - how much more do they need?

    This is the path the Dems have chosen, and choices, as we know, have consequences.  Bad decision after bad decision should not be rewarded with votes and a return to a job they aren't performing for our benefit.

    And yet, that's what we're hearing now: how can we salvage the election and keep these people in the majority?  Why?  Because the other guys are worse?  Oh, joy - medocrity meets insanity.

    And we lose no matter what.


    Which would you rather have to dodge? (5.00 / 1) (#27)
    by Lora on Sun Sep 05, 2010 at 10:27:25 AM EST
    Trickles, streams, and small rivers, or torrents?

    I agree, we both lose.  The Dems are sadly disappointing, over and over and over again.  Given their history, however, I have little doubt that the Repubs would be a magnitude worse.  (Not several magnitudes, mind you, but at least one magnitude.)

    This is enough to make me want to fight for Dems over Repubs.

    ...the Dems' demise; they've managed that all on their own.

    Here I must disagree.  The Dem's ills, plentiful though they are, have been exaggerated, twisted, magnified, and portrayed as Hitleresque; their "demise" has been prematurely announced as a fact by the corporate-loving and hence Republican-backed Mouth Piece Media.  Sadly the so-called liberal set seem to have bought into it and have not always distinguished between true failings of the Dems and trumped-up accusations orchestrated by the Rabid Right.

    As to their so-called demise -- what do you call a prediction presented as a fact?  Why do we believe it?  Psyops 101, I should say.


    So, it all comes back to (5.00 / 2) (#28)
    by Anne on Sun Sep 05, 2010 at 01:36:11 PM EST
    "the other guys are worse," a metric that ensures that we will continue to cycle downward in the quality of the governance we get.

    How inspiring a campaign strategy that is, eh?

    The "so-called liberal set" are, perhaps, the least susceptible to right-wing messaging, and, quite possibly the ones with their eyes open the widest; blaming the Dems' fall from grace on right-wing media seems like the last refuge of someone in deep denial.  I mean, the right-wing and Republican-leaning media are still tryting to demonize Obama as a liberal, for heaven's sake - as a liberal, I can assure you that I haven't bought that one - but there are still some Obama fans who think he is - so who's being deluded, really?

    Dems have had the majority since 2007, and what have they chosen to do with it?  Dems have had the presidency for over 18 months, with a majority Congress, and what have they chosen to do with that power?

    A year and a half with no comprehensive jobs policy, and now the word is...tax cuts; how transformational.  Republicans will love it, even if they don't or won't vote for it.

    But, not to worry - as long as we can return the mediocre-to-piss-poor Dems to their jobs, we can all sleep at night knowing we've been saved from the insane.

    It's so good to have standards.


    We could say that (none / 0) (#29)
    by christinep on Sun Sep 05, 2010 at 03:43:13 PM EST
    we are all living a delusion. But, in the meantime.... I agree with Lora, given that we are (in some places) in the throes of a self-fulfilling prophecy.
    The question of "facts:" As in a case, the different sides see the "facts" differently. Even outside the confines of a case, a few "facts" are particularly fascinating. The matter of time, for example. R. McIver in "The Challenge of the Passing Years" philosophized about how people experience "time."  He observed a tendency to experience "time" as flying by, moving quickly when we enjoy/relish/have a positive experience with a given timeframe. The perception of "time," dragging, being too long, moving slowly, etc. often fits a timeframe about which we feel negatively (OR when we are wanting time to move because we are anticipating something so strongly, as we did  before school let out for the summer or when we awaited Christmas in winter.) What I'm meandering to is that my experience of time in the matter of the period from Presidential inauguration to today is quite different than what you are suggesting yours is. The process of digging ourselves out of the Bushian hole bequeathed as recently as early 2009 takes "time."
    In the past several weeks, former President Clinton has made a straightforward request to his audiences on behalf of Democrats: After referring to the recent challenges facing us all, he said...given us 2 more years, and if we don't come through with what we said we would do, then kick us out. Looking at shaping an economic turnaround from Bush's bequest, it makes sense to me to give a President a full term to do it.

    And the alternative is...? (none / 0) (#30)
    by Lora on Sun Sep 05, 2010 at 04:43:57 PM EST
    We are ALL susceptible to right-wing messaging because it is all-pervasive and everywhere.  We have to actively expose and reject it, else it seeps into the so-called liberal message as well.

    The other guys ARE worse, actually.

    I am very, very far from thrilled with the lesser of the two evils.  Who else would you suggest, and how would you propose to get this improvement elected?

    I do not "blame the Dem's fall from grace on right-wing media."  I agree, they have fallen far on their own.  However, the right-wingnuts are running with everything they can to attack the weak Dems to the point where they hope like hel* that the fed-up angry unemployed voters will blame ALL their troubles on the Dems and look to the Repubs to save them (see Yahoo news quote below).

    We should hold all the Dems' feet to the fire for the plentiful errors they have made.  Let's just not use those talking points spread by the right-wing media to do it.  And let's not state as fact a prediction that they will lose in November (see Robert Gibbs below).

    I just googled "Democrats November" and the first 5 hits are:

    "Dems' prospects threatened by economic woes - Yahoo! News"
    Begins: COLUMBUS, Ohio - Frustrated, discouraged and just plain mad, a lot of people who have lost jobs -- or know someone who has -- now want to see the names of Democrats on pink slips.

    "Robert Gibbs stokes Democrats' November anxiety - Jonathan Allen"
    Begins: "Robert Gibbs says he merely "stated the obvious" in predicting Republicans could win control of the House in November."

    "LFTC - Democrats: November Massacre?"
    Begins: "Are Democrats facing a possible historic massacre come November?
    Politics maven Michael Barone reads the numbers and sees real trouble looming for Democrats."

    "Vice President Biden Says Democrats Won't Lose Congress - ABC News"
    Begins: "Vice President Joe Biden had a warning for Republicans who say they got "their groove back" heading into the November election. On ABC's "This Week" Biden admitted Democrats will lose seats but added, "It won't be that bad."

    "HughHewitt.com Blog : Hugh Hewitt : The Democrats' November Death Wish"
    Begins: " 'Republican candidates now hold a 10-point lead over Democrats on the generic Congressional ballot,' according to the most recent Rasmussen Report survey of likely voters."

    Why rally round the troops?  Why work on a new strategy, better message, better legislative plan?  They're all lame ducks now, according to everyone except Joe Biden (and who can take him seriously?).  Hey, they're LOSERS.  Why even bother to vote?

    That's the message, as I see it.  Plays right into the THEIR hands.


    The best strategy would be (5.00 / 2) (#31)
    by Anne on Sun Sep 05, 2010 at 10:48:02 PM EST
    actual good governance, as in "look at the good we did," rather than developing a better message and better optics - otherwise known as "smoke and mirrors."

    The problem the Dems have now is that, when the GOP attacks, smoke and mirrors is about all they have to counter with - and it remains to be seen whether that's enough.  The bigger question, it seems to me, is why are we willing for that to be enough?  

    How do you propose to hold Dems' feet to the fire when they have thus far proven to be impervious to the voice of the people?  Keep voting for them?  Ooh, that will really put the pressure on, huh?

    If people don't vote, I think it will be in large part because they no longer believe it matters: no one's listening to them, no one's hearing what it is we need and expect from them, so what does it matter?  And that may well play into the GOP's hands, but why is it up to us to rescue these Dems-that-don't-give-a-damn-about-us?

    And, once rescued, then what?  What is it that makes them sit up and pay attention?

    There are only two things that matter to politicians: money and votes.  Money they can get from their BFF-special interests clique, but they still need votes from us.  "I agree they aren't doing a great job, but I am still going to vote for them" plays right into their hands: they can do a crappy job, and still get your vote, so that means they don't have to do better, or do anything different, because you are always going to fall into line, always going to let fear set your standards for you, and they are free to continue treating you like you don't matter.

    I don't believe most of the nation tunes into politics to the extent those of us here do; hell most people who are eligible to vote don't even register to do so.  But those who do vote know that life has not gotten better or easier since the Dems took over, reality has not lived up to the promise, and it is the reality that will bite the Dems in the butt in November, not "messaging."  

    I hope the candidates you have to choose from in November are Dems who are worth sending back to DC; there are still some who know what it means to represent the people who elected them.  But there are so many who don't get that, who haven't heard what their constituents want, and being marginally better than their GOP opponent just isn't enough, and won't get us better government.


    I don't disagree (5.00 / 0) (#32)
    by Lora on Mon Sep 06, 2010 at 01:06:12 PM EST
    How do we do it differently?  I would say to campaign and vote for progressive Dems, if such a thing still exists anymore.  I'd be delighted to give my vote to a viable independent candidate as well.

    Somehow I think that striving for something is better than just giving up.  Call me foolishly optimistic...


    Wouldn't (none / 0) (#1)
    by Ga6thDem on Fri Sep 03, 2010 at 09:55:33 AM EST
    you say Obama's economic team and Obama more so than the centrists in general?

    Too bad they never read this blog (or if they do, they don't listen to your advise) on the madman theory of political bargaining. Or maybe they think anyone who blogs is a DFH?

    True. Reading here for the last few days (5.00 / 3) (#3)
    by Cream City on Fri Sep 03, 2010 at 10:00:26 AM EST
    I keep thinking that BTD is not blowing his horn sufficiently on how he and others here called out the stimulus bill as too little at the time, too.

    I owe it to this blog to have been awakened to it then as well as being able to anticipate and monitor the result.


    But, as I recall, someone in the WH (5.00 / 2) (#7)
    by oculus on Fri Sep 03, 2010 at 10:52:41 AM EST
    sd. the admin. will only "listen" to Krugman if they think he is correct. Lesser mortals don't have a chance.  

    Listening? (none / 0) (#15)
    by norris morris on Fri Sep 03, 2010 at 07:30:52 PM EST
    The White House may listen to Krugman, but as far as enacting Krugman's economic philosophy, the tin ear trumps.

    the irony (none / 0) (#2)
    by ruffian on Fri Sep 03, 2010 at 09:58:13 AM EST
    The faltering recovery and the credibility this has cost the the White House will probably lose the Democrats one or both houses of Congress, making the insufficiency of the stimulus easily the most consequential error for an administration that has done a lot right.

    This is true even though most of the people that will be voting against the Dems in November did not want a big stimulus any more than the WH did. They are all wrong about what would have (or will in the future) helped the economy. Obama in the WH and the conservatives in Congress will be very happy together while the rest of us flail about.

    So the GOP takes over in Congress (none / 0) (#8)
    by oculus on Fri Sep 03, 2010 at 10:54:58 AM EST
    and the rich still don't have to pay their fair share of taxes.