Streetwise Professor

February 14, 2011

It Ain’t 1995

Filed under: Economics,History,Politics — The Professor @ 8:05 pm

The Obama administration released its budget proposal today.

To reprise an expression from the Reagan years that Democrats routinely used to greet every one of his budgets: DOA.

This is not a remotely serious proposal.   I don’t know what color the sky is on the planet where this was formulated, but it ain’t the same as what I see out my window.  There is no recognition whatsoever of the existential fiscal situation the country now faces.  “What, me worry?” doesn’t even come close to describing this.  No spending restraint whatsoever.  Projections of large tax increases and large revenue increases that will never–never–be realized.

The budget is chock-full of silliness, like a vast increase in funding for the Department of Education.  (Motto: “There’s No Problem We Can’t Make Worse With More Money!”)  Or especially the high speed rail boondoggle.  “High” is right.  The only thing that is missing in the administration salesmanship of this turkey is Robert Preston returning from the dead to perform a reprise of his role as the Music Man.  This is a con of the first order.

Apparently, the administration is attempting to reincarnate the budget showdown of 1995, in which Clinton regained his political balance by forcing a budget battle with the Gingrich-led Republicans.

If that’s indeed the case, it is typical Bourbon learned nothing-forgotten nothing reasoning.  The situation now is so different from from 1995.  So different.  Economically–not even close.  Orders of magnitude different–literally, when it comes to the deficit and debt.  Politically–again, not close.  Yes, there was a firestorm in 1994, but this pales in comparison to 2010, and what is happening now.  Clinton could do a passable imitation of a fiscal conservative–Obama isn’t even trying.  Clinton was blessed in the enemy lottery; Gingrich’s bombast, egotism and overreaching the election mandate played right into the President’s hands.  Today’s Republicans seem to have learned from Gingrich’s mistakes, and are not tied to a figure with historical pretensions and delusions of grandeur.  Fighting the last war is seldom a good idea, especially when conditions are so radically different.

Moreover, it is disappointing in the extreme that Obama is responding to such a serious situation by playing small-ball (but mega-dollar) politics, rather than exhibiting  real leadership.  Not that I’m surprised, but even given my very low expectations it is rather discouraging to see a good swathe of the political class–with Obama at its head–proceed as if this is just about their political fortunes, rather than about the nation’s future.  Many Republicans in the House and especially the Senate are not much better, but even there the business-as-usual types are getting some pushback and are responding.  And you should never expect leadership from the legislature in any event.  All Presidents–including this one–talk about leadership.  Not all of them exhibit it–this one most conspicuously, and most conspicuously now.

The contrast between the atmosphere in Washington, and in the White House in particular, and many of the states is stark and telling.  Newly elected governors like Ron Johnson Scott Walker in Wisconsin are manning up.  Texas is proceeding with dramatic, not to say draconian, budget cuts to close the fiscal gap.  And it’s not just Republicans.  Andrew Cuomo in New York is grabbing the bull by the horns.  Hell, even Jerry Brown in California is acting more like an adult than Obama.  When Jerry Brown appears more tethered to reality, you are truly out there.

Obama’s unrealism and Bourbonism means that he is unlikely to prevail in this budget battle, and that he will not be able to leverage it into a political gain.  But that’s cold comfort, for the time lost in this pointless contest is extremely costly.  The time for action is now, but time’s a wasting.  Rome is afire, and Obama is fiddling.  I needn’t tell you who is going to get burned.

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  1. Leaders tell people what they need to hear, but may not want to hear. Politicians tell people what they want to hear and hide from the people what they need to hear, but may not want to hear. Obama is a politician and not a leader. He simply doesn’t care about the fiscal situation, as the true costs of the explosion of deficit spending will not be realized until another occupant is in the White House. Obama is playing for a second term and to secure his place in history. He is worried about his interests, not the nation’s interests. By failing to enact meaningful spending reforms, he is seeking to insulate his constituents from economic reality and hold the budget together by forcing costs onto the backs of those he knows will never cote for him in 2012.

    Think back to Obama’s State of the Union speech. What were his policies and priorities? Pablum and platitudes were all he offered. “Winning the Future” is not a policy. It is not a vision of where we need to go as a nation. It is pablum for his constituents. No vision, no shared sacrifice, no goals, no harsh realities.

    That Obama is simply playing politics with his 2012 budget and not seeking to exert leadership needed to solve our nation’s problems shouldn’t surprise anyone. When has Obama EVER offered a clear vision for our nation and a concrete plan for leading us in that direction?

    Comment by Charles — February 15, 2011 @ 8:14 am

  2. The budget is intended to be a bomb that will explode in the Republicans faces and ensure Obama’s re election in 2012. What are you going to cut, you ruthless repubs?
    Education? Benefits, etc. The budget fight will drag on. The government will shut down. Since the Media is on Obama’s side, they will spin everything in his favor.
    We’ll see if this strategy plays out for the Dems?

    Comment by hayeksheroes — February 15, 2011 @ 8:17 am

  3. @Charles & Hayeksheroes: I agree that’s Obama’s strategy. I think that he isn’t paying attention to the fact that the situation now is radically different from 1995. He’s fighting that war, but things are way different now. I could be wrong, but I think that the country is far more scared now about the future than it was in 1995, and if anything these tricks are likely to backfire. I’m not certain that’s the case, but I am sure that it’s a far riskier strategy for Obama to employ than it was for Clinton.

    The ProfessorComment by The Professor — February 15, 2011 @ 9:15 am

  4. Well, we all know that Obama hasn’t cut enough, and he’s trying to drag this out, until the election. He needs to cut more spending. He’s taking our debt to an all time high, and has done nothing about it. He needs to cut more in my opinion.,


    Comment by Jonathan — February 15, 2011 @ 5:32 pm

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