Where I part with the left

Here's where I differ with Krugman & Friends:

[G]iven [Obama's] evident antsiness to cut a deal in this case, how credible is his promise to hang tough over the debt ceiling, which is a much brighter red line? He may say that he absolutely, positively won’t negotiate over the ceiling — but nothing in his past behavior makes that believable.

For many progressives there's an unwarranted conflation of Obama's first and upcoming second term, whereas Now, to my way of thinking, begins an entirely new era. Obama's "antsiness" to cut what many regarded as questionable deals in the past was invariably endowed by a cautious, rational, pragmatic motivation. I never faulted him, for example, for shaving the stimulus, or maintaining the private health-insurance aspect of ObamaCare, or, in late 2010, extending the Bush tax cuts. All, to my mind, were not only perfectly reasonable but perfectly advisable compromises for a first-term presidency--notwithstanding the left's angry howls.

The cliff deal, however, marked a new era, one in which the president owned more political capital then he ever had before, or ever will have again. And in view of that, this deal was a bad start. As Krugman notes: Obama "gave every indication of being more or less desperate to cut a deal before the year ended — even though going over the fiscal cliff was not at all a drop-dead moment, since we could have gone weeks or months without much real economic damage."

And bad starts make me nervous--especially, bad starts in a president's fifth year, against the same, familiar foe.

Comments

[japa21]

Disagree with Krugman re being able to go weeks or months without any economic impact. A lot of people live paycheck to paycheck. The extra taken out due to the ending of the payroll tax oliday will impact them, but not as much as the higher income tax would. For those families, it would be an immediate impact.

There are approximately 4-5 million people affected by the extension of UI which have been even more badly hurt if nothing had been done.

If one wants to look at the larger picture, perhaps no major impact would have been felt for weeks or months, but at the more personal level, it would have been major.

And there is absolutely no reason to believe that, post cliff jump, the GOP would have done anything to mitigate those circumstances except introduce tax cuts with a much higher cut off level, which, if accepted by the Dems, would have been worse than what was gotten, and if not would have killed them come next election time.

Was it a perfect deal? No. Could it have been better? I certainly don't know and I doubt if Krugman knows either.

And since most of Obama's caves in the past have, in retrospect, looked pretty good, to automatically think the future will result in a cave which is bad is quite premature.

[Turgidson]

The deal we got seems OK to me. No cuts to social insurance (why can't we call it that, rather than accept the term "entitlements," which is meant to conflate SS and Medicare with welfare?"). Tax rates going up for most of the people Obama discussed as a campaign plank. Unemployment extended, and other smaller but valuable goodies.

As I've been saying, I still think offering up chained CPI was a big mistake for the sake of negotiating precedent and because SS should not have even come up in these discussions. And while I can stomach moving off the $250k line, I think holding firm on that until a later juncture could have procured a better deal.

So, I'm OK with the deal while sharing pm's concerns about the way it all unfolded and what it means going forward. We shall see.

[closerange]

The president really wanted a deal before the cliff because for every day over the cliff, the closer the economy gets to a 2nd recession and the more his advantage dissipates.

The president will be blamed for any economic downturn whether it is his fault or not, so it is really short sighted to think he would hold the upper hand for more that a few weeks after going over the cliff.

[Turgidson]

This isn't even close to a perfect analogy, but I sort of liken what Obama's been doing since the 2010 elections to poker.

After the teabaggers swept in, Obama was playing with a fairly short stack and mostly card-dead. He had to make a bunch of tactical folds, taking the occasional small pot to stay in the game, knowing a big hand awaited (the election). He won it, basically doubling up.

I understand that the people cheering for a prolonged cliff jump are being short-sighted and myopic. But I do think Obama had a limited window to play big stack poker and push the GOP around, and he more or less passed up the opportunity. He won the pot, but in the sense that he had a full house and didn't extract value for it.

But he's smarter than me. So I am hopeful he's playing it better than it looks from my view.

[Arthur]

http://rudepundit.blogspot.com/2013/01/fiscal-cliff-leaping-hopeful-politics.html

[Peter G]

If Krugman is right about the fact that the fiscal cliff was no big deal how could he conclude this was a bad deal. Surely the president's advisers know what Krugman knows. If they do then creating a sense of impending disaster seems to have earned the president a rather decent return on investment. Did it cost him any of his recently acquired political capital. Not really. If anything it seems to have added more.

I'm watching the Republicans as they do the tour of the punditry talking about the coming debt ceiling being all about cuts to spending. The operating theory seems to be that the president got what he wanted and now it's their turn to get what they want. One must not notice that the majority of the Republican house caucus voted against the bill. You can't claim credit for what you voted against can you?

[Turgidson]

"You can't claim credit for what you voted against can you?"

These are Republicans we're talking about here. If they think there is political advantage to claiming credit for something they voted against, they'll damn well claim credit.

Paul Ryan just did the mirror image of this when he ran against the Medicare savings he put in his own budget. Romney did it on basically everything. They'll do it again if it suits them.

[Janicket]

@Turgidson: "As I've been saying, I still think offering up chained CPI was a big mistake for the sake of negotiating precedent and because SS should not have even come up in these discussions."

This is not true; it was the other side that first wanted the chained CPI. I quote joe from Lowell at Booman Tribune:

http://www.boomantribune.com/story/2013/1/2/93230/97405#34

The Republicans did put the Chained CPI on the table. Not Obama, Boehner.

This was widely reported back at the beginning of December. The NYT ran a big graphic showing the two sides' opening offers. Boehner's included Chained CPI for Social Security COLAs; Obama's did not.

This is a remarkably widespread misunderstanding, and I can't understand why.

http://www.politicususa.com/bernie-sanders-rips-john-boehner-calling-cuts-disabled-veterans-benefits.html