Tuesday, October 26, 2010

Krugman: The Narcissism Of Small Differences

Academic fights are so vicious, they say, because the stakes are so small. The narcissism of small differences, Freud said. But at times the stakes can be big, and the fighters can think they are still in the faculty club. It is a week before the congressional elections, Barack Obama is talking himself hoarse trying to rouse the Democratic base--especially impressionable young people, the un"likely" voters who made all the difference 2008--and Paul Krugman has decided this is a good time to stick it to Larry Summers just once more for good luck.

The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task... If you look back now at the economic forecast originally used to justify the Obama economic plan, what’s striking is that forecast’s optimism about the economy’s ability to heal itself... Even without their plan, Obama economists predicted, the unemployment rate would peak at 9 percent, then fall rapidly. Fiscal stimulus was needed only to mitigate the worst — as an “insurance package against catastrophic failure,” as Lawrence Summers, later the administration’s top economist, reportedly said in a memo to the president-elect... Could the administration have gotten a bigger stimulus through Congress? Even if it couldn’t, would it have been better off making the case for a bigger plan, rather than pretending that what it got was just right? We’ll never know.

This is not so, or at least not in the categorical way Krugman is presenting things. Summers argued often during the winter of 2009 that in matters of stimulus one never knew just how much was enough, but "the risk of doing too little is greater than doing too much." As for the Congress, Henry Waxman--one of the House's most progressive representatives, and no wimp--told NPR just last week that Rahm Emmanuel was right to propose what he did, that he had carefully counted the votes in the Senate and the package passed was the best the president could get.

What about the administration being "better off" just making the case for "bigger," even if smaller was the only bill possible? Actually, it did make that case, though in the middle of trying to come up with a plan to keep "toxic assets" from sinking the banks, keep people with crushing mortgages in their  homes, save the auto industry, reform financial markets, reboot relations with the Arab world, and prepare a universal healthcare package, all the while trying to reassure investors who--unfairly, but what could then be done?--were the under 10% of Americans who controlled over 80% of the country's wealth.

Ah, but Krugman seems to be implying, the case for a bigger stimulus should have been made more strongly anyway; that there was at least some kind of public relations victory possible, a chance to control "the narrative," even if a tangible legislative victory was impossible against Republican leaders determined to both sabotage Obama's engine and then complain about its breakdown. (People I admire make more sophisticated versions of this case: John Judis says the administration might have struck a more "populist" chord, though "confidence" seemed more the watchword early in the precarious winter of 2009, and the inherent populism of the healthcare plan never really caught on as planned; Rick Hetzberg is certainly right to wonder about why we didn't get more of Obama's "outside game," especially when one saw the effect he could have on a crowd when he drove healthcare through.)

Still, if the issue is control of the narrative, not substantial achievement, has the administration really been the worst of the problem? Sure, it would have been better to see more of Ed Rendell and less of Larry Summers (or David Axelrod, for that matter) on the talk shows in the spring of 2009. But would it also not have been better for progressive columnists not to have appeared on the cover of Newsweek charging the Obama administration, which was actually blunted by Republican legislative veto, with selling its soul to Goldman Sachs? Where was the real catnip for 24/7 cable, shock radio, Fox, and even MSNBC? Oh, and who, now, thinks it would have been a good idea to have nationalized the banks? Who thinks the fight over the "public option" was really worth embarrassing Obama over, night after night for two months? Who thinks people who've defected from Obama have been more interested in the bigger stimulus as narrative than in whether it was really stupid for a cop to have arrested Skip Gates?

Look, Krugman is may be right to dislike Summers, his views, shows of arrogance, connections. (For my sins, I edited Summers at HBR in 1988, when he was working for Dukakis, and could have lived without the experience.) But even on the substance, good people might disagree. The persistence of unemployment, jobless recoveries, etc., in the new economy is a crisis for all progressive economists, not just Summers; and Krugman can be cavalier about these things himself. Keynes did not have to digest manufacturing robotics, smart networks, global sourcing, and financial instruments moving at light speed. Neither did Paul Samuelson or his rivalrous students. It is still not clear just what state action will produce the kinds of sustainable jobs and wages Krugman takes for granted when he speaks about, say, the Japanese government acting against the liquidity traps of the 1990s. Nor can one speak about deficits by calmly comparing America's rate of debt to GDP today to that of America after WWII, when the US was the science and manufacturing powerhouse of the world, and the world needed one of everything.

This week of all weeks, Krugman might be defending Obama's quite consistent vision, showing some admiration for his narrative, the way Rick Hertzberg (who saw what happened to Jimmy Carter) regularly has; or be defending investments in green infrastructure, higher education, and scientific entrepreneurship the way that other Times columnist does; or defending Obama's most populist of plans, the one to reimpose higher taxes on the (very) rich, a plan Austan Goolsbee is spearheading--or is Goolsbee's connection University of Chicago economics department a problem, too?

Who knows what will really happen on Tuesday. But we know that it will be followed by another Tuesday in 2012, and I don't see the broadcast media getting any more Morrowish by then, or the flocking of "independents" any less steered by who seems hot and what seems cool. Telling people you admire a president actually matters. A big piece of the narrative held against Obama is that liberals "always think they're better than ya'." I suspect Obama is now thinking this piece may be sadly true, and that we'll get, yet again, only the president we deserve.


Potter said...

Krugman: Could the administration have gotten a bigger stimulus through Congress? Even if it couldn’t, would it have been better off making the case for a bigger plan, rather than pretending that what it got was just right? We’ll never know.

Obama turned away from the fight for what he said he wanted and believed in, what those who voted for him were enthused about changing. When we needed him to show personal strength he appeared to have, for him to use the bully pulpit, to take his case to the American people directly, to work the Congress, we instead got calculation and capitulation, dealing and excuses.

People see the results.

Obama not only is being vilified by the right in the cheapest way, but he has lost his base of support, his credibility. The left is luke warm, and some feel betrayed. He appears a weak leader of his own party. The middle road, the practical road has had it's costs. Arrows fly from both sides. Yet the advice we hear from the pundits is that Obama has to be more centrist the perception being that he is far left, a socialist. Obama keeps trying to disprove this.

I don't think we will get a Sarah Palin president, but any reasonable Republican nominee against Obama might make him work very hard to keep his office for another term he will be so unpopular with both sides. Obama will not be blameless. People want credibility. Even if the results can't be fully achieved they want to know that there was a leader that fought the "good fight".

A friend who has read your criticism of Krugman asks if we perhaps should have spent the last two years uncritically lauding everything Obama did, even though it was inadequate and has led us to disaster. ( I am thinking of criticism on a slew of issues including war not only the state of economy ).

Bernard Avishai said...

Potter, Obama said that we were the people we were waiting for. Alas. One did not have to laud uncritically everything Obama did. But one could have spent a little time thinking about his conundrum, the thing called the filibuster, and not accuse him of bad faith. The bully pulpit was not going to work against Republicans and Blue Dogs. We should have honored his achievements--what you call "the results--which people actually cannot see when it is easier to wish for a savior. We let him down, and are still letting him down.

Potter said...

To Bernard Avishai- I cannot tell you how much I appreciate your views on Israel.

First please-I would vote for Obama in 2012 given my probable choices. I am voting in this election. We have a wonderful congressman to re-elect- a real maverick, JIm McGovern.

Obama asked us, when he was campaigning, to hold his feet to the fire. That we are doing.

We elected him, we believed him. And we desperately needed not an ordinary president either for these times. This was a chance to turn a country that was “out of itself” around from the Bush years – at least to begin that process. Instead the feeling is that we are basically on the same Bush course in many ways- and in some cases worse: deporting more illegal aliens, prosecuting a dumb war on terrorism in Afghanistan; keeping state secrets, rendition, Guantanamo. Income disparity is worse, judges not nominated, not appointed. If the filibuster was the roadblock nothing was done- not the nuclear option threat that republicans used- not pushing for an actual filibuster so we ALL could know who the obstructionists were. Instead they were appeased, pacified.

Sarah Palin asks : “how’s that hopey changey thing workin’ for ya?” And it’s a knife stuck in. Some truth. It's not working.

Drew Western on Huffpost (in December 2009 and still valid) says the obvious:

Somehow the president has managed to turn a base of new and progressive voters he himself energized like no one else could in 2008 into the likely stay-at-home voters of 2010, souring an entire generation of young people to the political process. It isn't hard for them to see that the winners seem to be the same no matter who the voters select (Wall Street, big oil, big Pharma, the insurance industry).

And tells why:

“What's costing the president are three things: a laissez faire style of leadership that appears weak and removed to everyday Americans, a failure to articulate and defend any coherent ideological position on virtually anything, and a widespread perception that he cares more about special interests like bank, credit card, oil and coal, and health and pharmaceutical companies than he does about the people they are shafting.”

Says it better than I can here too:

Leadership means heading into the eye of the storm and bringing the vessel of state home safely, not going as far inland as you can because it's uncomfortable on the high seas. This president has a particular aversion to battling back gusting winds from his starboard side (the right, for the nautically challenged) and tends to give in to them. He just can't tolerate conflict, and the result is that he refuses to lead.

I am going to wind up quoting the whole article so it’s here if you will please:

Leadership, Obama Style, and the Looming Losses in 2010: Pretty Speeches, Compromised Values, and the Quest for the Lowest Common Denominator

Potter said...

part two:

The “we” that is so critical about the specifics you call “the narcissism of small differences” is a very small sliver of those who no longer have the enthusiasm that they once had. The majority of those , dare I say, are those of the middle class who were maybe also independents, those who took a chance with Obama.

Note also that the attitude from the WH has been that those so critical on the left, the once rabid enthusiastic base, are an annoyance. You are asking those critics to “spend a little time thinking" when, of all the groups, that is all that they have been doing, thinking of not only the obstacles but the way that could have been taken to try, at least, to get through them. They don"t see that effort.

Those are issues that people, not just the harsh critics on the left, are upset about and they are hardly small differences either, not to them. People care passionately about those differences that Obama has so casually ( seemingly) compromised away without much, or, any fight. The public option, for instance, was broadly popular. It was brushed away. Single-payer health care never got that far.

Democrats are poised to possibly lose in historic numbers- and maybe none of this could be prevented because of the economy- but Obama and Democrats would have been much better off having shown some spine during the last couple of years. Obama is, after all, the leader of his party- supposedly. But he has been above it all, waiting for things to just work out- somehow- without getting his hands dirty. So yes there was formidable opposition/obstruction from Republicans and the Tea Party and it caught the attention of the media. Obama shied and compromised away, avoiding confronting and addressing head on until this last moment now when he gets out on the trail and the lifting is now too heavy.

All along we needed a strong president, not a compromising one that would do anything for bi-partisanship or a deal.

The loss of the left, the far left sliver, is not what will make the difference in this election. Maybe or probably the state of the economy will be decisive, but also it has to be the loss of that middle, the loss of Obama's connection to those people. He has not asked them to stop and think about what he has been up against nor allowed it to be evident that he had a vision that he fought for for them even if he lost the battle.

Jack said...

Early on, during the Presidential campaign, there was a description of Obama (in the NY Times I think) that explained his reverence for the Chicago style of conciliation in regards to political negotiations. Obama has described repeatedly his desire for "consensus" with the Republicans. His presidency might be better described as naive. Dean Baker seems to have a more accurate take on the situation,

Mitchell J. Freedman said...

I'm with the commenters.

But I must say something else: Obama does not believe what Krugman and Robert Reich believe. That is their--and my--frustration. Obama is too close to the University of Chicago law profs who are in turn too close to that university's economics department.

There are plenty of shovel ready job programs, contra to Obama, starting with the tunnel project in NY/NJ.

Putting people to work would have been concrete--pun intended--and would have done a lot to stop the cynicism the administration engendered.

I have been calling Obama and Co. "Weimar Democrats" to call attention to this weakness on the part of Obama in the face of the irrational hatred on the Right.

Mark C said...

I agree absolutely with Bernard Avishai here. First of all, Obama was NEVER a far left guy. Didn’t anyone read his “Audacity” book? He has always considered it of utmost importance to understand the other side and work with them - that, in fact, is what I always considered to be what he meant by CHANGE, and why I became a big supporter of his. Civil debate and compromise is something that this country has moved against in this bi-polar (and I mean that politically as well as emotionally) country we live in. I can't for the life of me understand what transformation it is that people think could have been made in two years, given our nation's politics. I have a vague recollection of a time two years ago when it was uncertain whether our country’s financial system would even survive. We now have high unemployment to be sure, but things are working, and moving in the right direction without question. We have a national health plan, our combat troops are out of Iraq, there is a wall street reform package that would not allow unregulated derivative gambling to ruin the system again, we have what looks to be a very effective consumer protection agency, and on and on. Not bad for a couple years.

I think Krugman's Nobel has turned him into a Nader-like self righteous crusader. Don't misunderstand - I like and admire Krugman and his take on the economic history of the country, especially the cause and effects of income inequality, but he has the luxury, as do all pundits and critics, of being purely ideological without having to navigate the real political waters that Obama has to operate in.

Peter D said...

There is a saying "If you settle for less than you deserve, you'll get less than what you settle for". This is precisely the problem with Obama and his wasted opportunity.
I could re-hash about the crisis that was allowed to be wasted etc. when Obama did have all the advantage in the world, but I would like to draw your attention to the fact that some Obama policies are in fact worse than Bush's.
You repeated point that criticism of Obama from the left somehow made him more vulnerable to criticism from the right is absurd. Besides, nobody on the right pressured Obama to authorize assassinations of American citizens without trial, to fight for tyrannical detention without trial in Bagram etc. Nobody on the right pressured him to lend support to an a-priory losing candidate in Arkansas primary (the same one who was repeatedly derailing what Obama claimed to be his health care agenda). Nobody on the right pressured his administration to minimize and deny (to this day) the full extent of the damage from the BP spill.
Obama is unfortunately not a progressive guy. He is still infinitely more preferable to the loony right, but no amount of Bernard's apologia will make up for the disappointment that he is.

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