I think today’s Krugman is Krugman at his very worst. A lot of progressives really do wait to see what he says before they make up their minds about whether something is good or bad, and he provides totally inadequate guidance based on idiotic principles. Krugman is good with numbers and terrible with politics, and that really shines through this morning. He explains that progressives have a bad taste in their mouths because they didn’t like the way the president negotiated, not because of the result he got. A hugely bipartisan deal in the Senate that actually raised taxes on the rich (on their income and their deductions, on their dividends, on their capital gains, and on their estates) while preserving tax cuts for students, the poor, and the middle class, without touching entitlements is not something we should feel badly about.
Disappointment that the president didn’t get everything he wanted should be tempered by the fact that he also gave up nothing near what he “offered” to give up. Arguing that he showed weakness by wanting a deal is foolish when what he really needs is a series of deals over the next two years with a very reluctant and frankly unhinged Republican Party. We need a lot more votes in the Senate where we get close to 90 votes, not less.
Krugman should stick to telling us how the economy works and leave the politics to the pros who keep winning battle after battle with the Republicans.
Basically, the President is a full-time class warrior and savvy mainstream media manipulator, and in the surprise of all surprises, the firebaggers (who claimed this is what they’ve always wanted) are still unhappy and calling him a pussy and a traitor.
Hmm. Mysteries abound. Just admit you don’t want successful leadership and wallow in cynicism and dysfunction. Either that, or you’re a bunch of fucking racists who can’t stand to see a black man successfully embody their most cherished political and policy viewpoints. There is no option c).
You’ll get to enjoy your fantasy world for all of two months. Of course, after the next capitulation you and BooMan will be back again to tell us that shot is really Belgian chocolate.
Did we read the same article?
I don’t get the sense of “disappointment” in Krugman’s piece.
His caveat regarding the new deadline in two months appears justified.
Krugman’s take is pretty much the same as everybody else’s who is really thinking this through. If it could be considered in isolation it would be a decent deal. But it’s daft to consider a mere two-month can-kicking in isolation.
I’m OK with Obama’s strategy on delaying the debt limit negotiations. The Republicans aren’t go to give in on that until the last minute at the earliest, and putting off a cliff deal for two months has substantial costs (very different from, say, a Jan 4 deal). Just the headache of everybody’s taxes being up in the air for two months is a big problem.
Obama’s plan for the debt limit is a good one – refuse any deal and put the blame on the Republicans. It could be very good theater for the Republicans to propose unpopular cuts and Obama to refuse them on principle. He has platinum coinage as a trump card anyway.
He does. It’s whether or not he uses it or gives it away.
Well, ask, the disappointment comes in the paragraph where he deducted points for style.
Have you done much negotiating? That’s a serious question. Do you understand how much the course of a future negotiation can be affected by how you reached a previous deal, because that tells your counterparty a lot about how the best deal from his standpoint can be extracted from you? “Style” is a pretty silly way of describing that.
Or hell, do you even play poker?
Do you realize that the GOP’s theories and positions are completely unpopular? And that every time the President talks about them on tv his approval goes up and theirs goes down?
Do you not realize that they don’t care and have no reason to care? Pretty much ALL of the remaining House Repubs are in completely safe seats. They only have to worry about Teabagger primary challenges. They don’t give a rat’s ass what anybody outside their crazed base thinks.
It is true that they don’t give a rat’s ass about what anybody outside their crazed base thinks. But then there is reality. The Democrats have learned how to take advantage of this dynamic. The entire 2012 campaign attests to that. The Republicans did not give a rat’s ass about what anybody else thought about their chances of winning. And yet, things did not work out quite the way they expected.
How does that apply to the present situation? This Obama deal has the effect of putting immense pressure on Boner and the House GOP. Now some of them, it is true, will not go along with any deal. But some of them — possibly enough of them — are in play, caught in a vise between public opinion and the senate GOP.
Obama doesn’t have to offer a carrot, the stick is obvious and existential. Either they will vote with House Democrats or they will not. Talk about consequences of agreeing to a deal, in the former case, the Tea Party will be isolated, Norquist will be DOA, and the GOP stranglehold will be broken. In the latter case, there is no deal and we’re back where we were, with increased pressure on all GOP.
As for the debt ceiling, that’s another rat’s ass situation. The idea that the GOP can use that as a bargaining chip exists only within the bubble world of the Tea Party. The only rationale — complete bullshit of course, but the only rationale –for not raising the ceiling, is to keep down the national debt. Obama will point out, on national television, that failure to raise the debt ceiling means increasing the national debt. He can even give the figures. This makes the republican position not only extremely unpopular, but also nonsensical to anybody with an IQ higher than room temperature.
They took advantage of it in the Senate. Which is not the body that matters in this context. A Senator’s political reality is quite different from that of a Representative in a gerrymandered safe seat. Which is not to say that Repub Senators too haven’t learned to fear Teabagger primary challenges (with, as we’ve seen, very good reason).
do you realize it doesn’t matter to these people how popular they are. They have the votes to makes us all miserable, and popularity has nothing to do with it.
I do realize it doesn’t matter to these people how popular they are. What I don’t know — and I’m not sure if anybody does right now — is exactly how many of “these people” there actually are. It depends on the precise degree of insanity, the political makeup of their home district, etc.
Boner only needs to muster something like 40 or 45 GOP votes. Whether he can or he can’t, his ass is on the line either way.
So when you’re style is to get 70-90% of what you want, and you obviously won the negotiation, that’s a problem for future negotiations? I’m lost…
When your “style” is to demonstrate that there’s no self-drawn line in the sand you won’t cross, you make as well have “I can be rolled” tattooed on your forehead. Remember when Obama was dead-set against the exact kind of temporary Band-Aid, containing nothing about the debt limit, that he ended up negotiating? It really wasn’t that many days ago. I mean, it really wasn’t that many days ago.
Yes, you’re lost.
There was no brighter line in politics than “no new taxes ever” from the Republicans. If the deal passes, that line has been vaporized.
Please point out to me when in the last 20 years the republicans agreed to such large tax increases (or any tax increases). They lost big.
Given that the new baseline is after midnight last night, tell me what taxes Republicans are raising.
In that context it’s worth mentioning that Norquist likes this deal.
Your question makes sense by strict logic, but no one’s going to see it like that. The senate GOP agreed to extend Bush tax cuts for the middle class, but not for the wealthy. Both parties have always referred to failure to extend them as a tax hike on whatever portion of the taxpayers would be affected.
Besides, the House hasn’t agreed to anything yet.
I was wondering whether some of the other taxes – estate, capital gains, etc. could be considered raised by the agreement, even granting the strict logic of post-midnight passage.
Estate and capital gains – or are they just “reverting” to Clinton era type levels
But bear in mind that some of the best gamblers go around looking like they have “I am a sucker” tatooed on their forehead.
Negotiation is bluffing as well as signalling–and understanding what your real situation is.
That’s for sure.
I agree. Krugman’s column is not a slam on Obama and the Dems at all. After all, people and organizations who are on the progressive side of this fight have to be pushing Obama to the left; hell, the President has explicitly asked us to do just that. Consider the likelihood that GOP base voters are probably screaming at their Senators right now for voting to raise taxes. We need to be exhibiting private and public pressure on behalf of our goals as well. I believe Krugman is doing that extremely responsibly here.
Booman usually has a sophisticated understanding of this. If we remain strong advocates for everything we need in a deal and point out the problems with the inevitable compromise deal, then it strengthens Obama’s negotiating stance more than if we’re sitting back fat and happy.
I’ve grown to understand that many of the President’s statements of the “I’m putting things on the table that my base is unhappy about” sort are significantly different than hippee punching. He almost never says “I’m pissing my allies off, and their positions are unreasonable.” I’m not seeing Sister Soulja tactics from Barack.
I’m glad I stopped obsessing about the details of yesterday’s vote in the middle of the afternoon. I was getting ready to call my California Senators and demand they vote “No”, and then I came to terms with the fact that we didn’t even know what would be in the final package yet. In the end, I’m glad they voted for this, and am exceedingly grateful that Biden and Reid got almost the entire Republican caucus to vote for it too.
An example of the push from the right on this deal: Redstate is, unsurprisingly, screaming like stuck pigs. One of Erick “Erick” Erickson’s front-page pieces: “Tom Coburn, Ron Johnson, and Pat Toomey Should be Ashamed.”
Biden and Reid did a good job yesterday on the merits; getting GOP activists talking about primarying their own assholes is the gravy. This all makes me very happy.
The GOP will call this vote a “tax cut” when talking about their own vote.
They will call it a “tax hike” when talking about what Obama/Democrats did.
GOP Congressmembers and their supporters are often deluded, deluding liars. This is true. You’ve made an airtight case here.
Totally agree. This is the bad Krugman but its also his meal ticket to act like this at this point. remember in 2010 when he argued vociferously for stimulus and then when Obama achieved a huge amount of stimulus pretended like it was the worst thing for progressives ever because of the temporary low tax rates on high incomes which meant Obama had caved when really he had traded for important things. You could argue like some big deficit hawk that the most important thing was the tax cuts for the rich but then you’d have to ignore reality. That was true at the time and even more now in retrospect after Obama won reelection partly because of a better economy.
I don’t remember it that way.
remember in 2010 when he argued vociferously for stimulus and then when Obama achieved a huge amount of stimulus pretended like it was the worst thing for progressives ever because of the temporary low tax rates on high incomes which meant Obama had caved when really he had traded for important things.
Nope, don’t remember that at all. I remember in early 2009 when he argued for a lot more stimulus and a that the “stimulus” shouldn’t be pre-negotiated to favor GOP tax cuts. I remember in late 2009 when he pointed out that the economy was actually WORSE than what Larry Summers warned would happen without the stimulus, and that the Obama team was acting like all was neato-keano rather than arguing for more stimulus.
Your claimed argument about low rates on high incomes – I’m guessing – came when Obama caved yet again and extended the Bush tax cuts for two more years.
Krugman has said that he sees his role as a “gadfly” from the left, so I’m guessing he will never admit to being completely happy with any deal. While I love him some people do need to be reminded, though, that he’s not Speaking Truths from the Mountain, especially on politics.
Totally agree. Krugman is almost always wrong on the politics. I have to believe he is our real life Eeyore.
Krugman is a very long way from being the only member of the Democratic punditry to question the soundness of this deal. The same questions are being raised by Jared Bernstein, Noam Scheiber, and plenty of others.
Add Markos Moulitsas to that list. I believe he know a thing or two about politics.
I believe he doesn’t, given his beyond abysmal track record of backing winners electorally.
He’s their Cassandra and our Eeyore. It’s funny how that works.
Obama needs Krugman and progressives like him to demonstrate his policies and outcomes as moderate and centrist to the MSM. We give moderate GOPers a pass because we know they have to appease a rabid base, so why not Obama?
The real issue is whether Obama got a sufficient return on the political capital he expended. He can only be re-elected once, the the fiscal cliff was (to some extent) a once off where the Republicans had (stupidly) let themselves be tied down to a book balancing exercise which included massive military cuts and other cuts in corporate welfare which their donors absolutely hate
However if the debt ceiling issue keeps coming around every few months, the pressure to reduce “entitlement programs” will be ongoing. Has Obama done enough to demonstrate they are permanently off the table? Only time will tell. However it seems to me that the “fix the debt” paradigm remains paramount, when the real problem is huge inequality and lack of demand resulting in anemic economic growth, tax revenues, and hence debt.
Krugman’s abiding value is that he argues that the USA doesn’t have a structural debt problem at all – current deficits are due to anemic growth and will disappear when the economy recovers. We can all argue about negotiating styles, but ultimately, it is outcomes which matter, and the jury is still out on that.
Frank, how can entitlement cuts be off the table when Obama keeps bringing them to the table? Didn’t you see “Meet The Press”, Sunday? Obama repeatedly said he would cut SS for a Grand Bargain, but not for a two month extension. And what else does he have to offer now that the Bush cuts are permanent?
The Bush cuts are not permanent, they expired
The Senate just voted to make them permanent! It’s not an extension, it’s permanent.
I don’t get US TV(how culturally deprived is that?!) but have gotten the impression that Obama waving the SS inducement is a bit like the the Republicans talking about closing loopholes without being prepared to enumerate what they will actually do and so can always blame Obama for any actual loophole closures afterwards.
I suspect Obama would agree to permanent SS cuts in return for a permanent debt ceiling “solution” and would hate to think he would agree to make permanent concessions for a merely temporary debt ceiling extension. Temporary SS savings are as meaningless from a GOP point of view as a temporary debt ceiling extension is from a Dem viewpoint so I hope he insists , at the very least, that any cuts are as temporary as any debt extension. If the economy recovers, the deficit problem resolves itself in any case and so any SS cuts should be reversed at that stage.
I have argued elsewhere that the whole debt ceiling fiasco is all an accounting scam in any case, and that Obama should use his Minting authority to mint Trillion $ coins to (retroactively) pay for the Afghan/Iraqi wars, but appreciate that, politically speaking , that is probably a very last option he can take to save his Government and which might trigger SCOTUS challenges or even impeachment proceedings.
But the bottom line, economically speaking – and here I agree with Krugman and Modern Monetary Theorists – is that the US economy has a demand side problem, a liquidity trap problem, an unemployment problem, a household debt problem, and a gross inequality problem and GOP austerity policies is the very last thing it needs at this time. Obama will ultimately be judged on results – and must thus press for optimum economic policies regardless of the totally false “fix the debt” framing of the dominant narrative.
So after President Obama said that on meet the press, Senate Republicans wanted that as a get on Monday. Somehow the GOP demand got leaked to the press (mmmmm) and within a couple of hours they took it off the table.
And that was just the chained-CPI proposal. Seems the elephants got a little tickle from that third rail of US politics.
I’m a bit surprised not to see more progressives enraged about fighting the debt ceiling and the sequester AT THE SAME TIME. To put it simply, it’s kind of inevitable that liberals will have to make some concessions over the sequester given the inherent asymmetry (neither Obama nor the GOP wants military spending cuts). Obama has been promising that he wouldn’t make any concessions over the debt ceiling. But now that he’ll be fighting both issues at the same time, when Obama makes a concession, there’s a question of what he’s conceding to. If he conceding to the sequester or the debt ceiling?
This means that progressives lose twice over–the GOP can claim victory in a debt ceiling fight (thus more debt ceiling fights in the future), Obama can concede whatever he decides to concede without having to admit that he conceded over the debt ceiling.
I read the end of Krugman’s piece as essentially withholding judgement until the debt ceiling negotiations play out:
Did I miss something?
Yes. You missed the urge to pigeonhole Krugman as a political naif when he’s disappointed in Obama.
Krugman’s occasional accolades for Obama are pretty naive, too.
Three things remain the same:
Unless your criticism of this deal is based on those three facts, you’re in a fantasy world, and you’re making a fool of yourself. It’s $41 of revenue that the Dems wanted for every $1 in cuts the GOP wanted, and you think Obama is the one who caved and lost?
Have a goddamn seat.
Technically, by that logic, Obama got #DIV!0 in revenue in 2011. I’m guessing you weren’t calling that a cave back then though…
Misguided or not, this certainly is true:
The gist of Krugman’s argument is that on the two points of progressive disaster–direct cuts to the social safety net or starving-the-beast cuts to revenue–neither or those happened. That seems a reasonable opinion to me about the policy aspects of the deal.
I don’t see how it gets to your goal of breaking the back of the GOP. Although the wingnuttosphere that breaks onto Yahoo, the NYT, and WaPo, are fuming in the same terms that a portion of the progressive blogosphere is. I would love to see a right-left distribution diagram of the frequency of the word “sellout” today.
But the bottom line is not who “won” today, but whether the economy actually recovers and grows rapidly enough to reduce the debt and unemployment problems created by the recession. Krugman’s problem is that he is an economist whose focus is on the medium/long term performance of the economy – which will ultimately determine whether Obama’s second term is deemed a “success”. Ultimately he could care less about negotiating kabuki – except insofar a negotiating outcomes effect the economy. It’s the economy, stupid, not some prize for being smarter than your negotiating opponent.
Bumped but I’m not sure why it’s a “problem” that Krugman is a long-term economic thinker/planner.
There’s not much long term economic planning evident in congress– instead what we have is theater (distraction), damage control, and maintaining the status quo.
You’re right. “problem” should have been in inverted commas, as it was in my mind!
Obama and the Democrats have accomplished, time and time again, incremental wins that benefit the economy and the poor and middle class in particular. No, we do not have Medicare for all, but we have way more people now covered that would have been ignored or hurt intentionally by Republican backward-assholes. He is lowering the deficit and getting no recognition for it. He is not invading countries to “win their hearts and minds”, a lot fewer people get killed by precision rifle shots (drones) than by carpet bombing. He has lowered greenhouse gas emissions, Republicans would have oil fields blazing (again). Give this president and the Democrats credit for each battle that we have won. Anyone who analyzes this with classic negotiating criteria is clueless. Obama has mastered the head fake.
Yeah, it really stinks when a respected economist doesn’t line up with the democrat’s practice of continuing to lower the bar.
I’m not sure what there is to celebrate with this “deal” since it’s mostly about preserving the status quo– and pathetically, we’re about to (again) fight the phony debt ceiling battle, with the GOP again demanding cuts to “entitlements”; required to get their vote to increase the debt ceiling. and this is coming immediately.
Thus the notion “entitlements” are safe as a result of this deal is a farce.
I guess some are overlooking the fact taxes are not being raised on people making over $250K a year, obviously a recent Obama campaign promise, and as a result of this and the deal overall, we’re not getting anywhere near the new revenue Obama initially wanted.
throw in the fact actual cuts to the defense budget probably won’t happen– and thus the feeble excuse “we can’t afford infrastructure spending” will continue, I don’t see what actual progress is being made.
Yes.
Am I the only one who noticed that Superpole has to include assumed entitlement cuts and an assumed elimination of the military cuts in order to argue that the deal was bad?
we’re not getting anywhere near the new revenue Obama initially wanted.
Shifting the cutoff from $250k to $450k ends up reducing federal revenues by $20 billion a year. You really have to want to be furious to consider that meaningful.
somebody needs to be in the room with Obama when he “negotiates” with Boehner and keeps backing up and ceding ground like he was doing. maybe Biden?
Obama did not win this round, Biden did.
Here’s what I posted over on Balloon-Juice yesterday:
I think most of his disappointment is about “what might have been” – he knows things could be much better if we had a sensible opposition (and had fewer Democrats who voted with the crazies). He doesn’t like negotiating with crazies. He’s trying to push Obama to fight harder because he genuinely thinks that would improve the results. But I think he continues to underestimates Obama on the politics of what’s possible now.
So, I study PK for the economics and shake my head a little on his view of the political path forward. He’s an important voice, but not infallible. I’m glad he’s on our side.
FWIW.
Cheers,
Scott.
Ditto Robert Reich. Great on economics, great on policy – just a guy on politics.
I was just thinking the same thing.
So negotiation essentially pissed away all of the expected deficit savings that was the target of the President and Congress — $4 trillion over 10 years.
No better evidence that this was a political exercise for the GOP if the House approves it.
Pretty much neutral against GDP.
Two steps forward, one step backward. Or something like that.
This deal will accomplish a lot, but it will not accomplish everything.
Raising the cutoff for a marginal rate hike from 250K and 450K does not make a whole lot of difference in terms of revenue for reducing the national debt.
I think Obama will concentrate on executive administrative reductions for the most part, and continuing efforts to improve the general economy.
It redistributes sources of revenue. And if the doc-fix is permanent, brings it into the budget rather than being assumed away until the last hours of budget negotiation. And insures that the economy can grow somewhat increasing revenues from increased incomes.
Against that, there is the loss of $500 billion of military spending cuts over 10 years.
I was under the impression that the doc fix was just for one year, but maybe I have that wrong.
Oh, forget that! The proof of the pudding is in the tasting.
Re:
For most of the Bush years it was 45+% with an exclusion of around $2 million. Now Obama has a “win” with a 40% rate and exclusion of $5 million?
It could only be seen as raising the estate tax by looking at how it worked in 2011 and 2012. But get this, that was Obama’s policy when he agreed to a two-year extension of the cuts in late 2010. So we are actually seeing the estate tax be raised from Obama’s low number, but reduced from Bush’s formula.
on a straight up or down on the Senate bill but will amend it.
The problem is the Senate is gone for the session, so it doesn’t look like we have a deal after all.
Nobody could have predicted that Lucy would pull the football away again.
The problem is that “Lucy” gets sacked with the loss since the House Republicans will the the only reason why everyone’s taxes are going up.
For the 100th time, they don’t care. They answer only to their crazy primary voters.
You seem to think that’s locked in stone when we all know that politics doesn’t work that way. Things change and often in bursts.
The deal with the new Congress will be less what we want if there is a deal at all. We’ll just have to work hard to reach more of those that are only kinda crazy.
Generalities like yours mean squat against the specific realities of safe gerrymandered districts and tea party primary challenges. As we’re seeing with this debacle.
I highly recommend you accomodate to the polite tone of this blog. (and If all you have is ad hominem, you don’t have much)
You clearly don’t know what “ad hominem” means. Which, like the comment to which you replied, is a statement of my opinion about the objective world and not an attack on anybody.
actually I do know what ad hominem means, as pretty much anyone on this site can tell you
http://philosophy.lander.edu/logic/person.html
because when the Tea Party wins a primary that means we can never win that seat
Do think the Tea Party will be happy with the tax hikes that are happening if they do nothing? If they’re going to primary for a deal, they’ll primary for that too.
BooMan, I’m assuming you’re one of the “pros who keep winning battle after battle with the Republicans. If you’re telling us we should leave the politics to you and not listen to Paul Krugman, well … I’m going to disagree with your assessment.
.
I don’t think Krugman is so off, but the proof will be what happens after the Teabaggers sink this deal. If Obama is a poker player, he can sit back and let the deadenders stew in their own juices for a few days.
I say let it snow. In a few days the Dems will put up a tax cut for the bottom 98%, will extend unemployment, and the Republicans can vote against a tax cut. What’s left of the Tea Partiers in the House can take credit for the crashing market (times two, if they’re still intransigent when the debt ceiling hits).
Or Obama can offer his neck to the wolves.
Look, to people like Booman and Joe from Lowell Barak Obama is the MOST PROGRESSIVE PRESIDENT EVER and except for nitpicks can DO NO WRONG.
So when Krugman points out that the deal isn’t very good – and that Obama’s previous deals weren’t that good – well we can predict that Boo and Joe will kick up a fuss.
But that doesn’t change the reality about the deals being sub-par – no matter how many times you post that list of Obama accomplishments that starts with Lily Ledbetter and write that. Nor does it change the fact that Obama has offered publically and on multiple occasion to slash the progressive crown jewels of Social Security and Medicare. And you can claim that this was just 11th dimension chess and Obama knew that the GOP wouldn’t accept – sorry, he offered.
And you can keep talking about how you “keep winning battle after battle with the Republicans”. Yeah, like 2010.
Oh, I’m sorry. I remember now. 2010 was the fault of all the Democratic blog commenters who weren’t thrilled with Obama’s performance. Wasn’t Obama’s fault – he was great – just the damn voters didn’t get that.