An insight to the Obama administration thinking about the economy:

From an interview at the Washington Post: (emp add)

Ezra Klein: My experience is that the very rich are open to higher taxes in the context of a deficit deal....But they don't like the idea that their money should be redistributed simply because they have too much of it....And so that's part of the tension: They don't like why Obama is raising their taxes. And they certainly don't like the lack of admiration he's showing while trying to do it. They see it as punishing their success.

Chrystia Freeland: I completely agree. I think Obama and the economists around him have a very sophisticated understanding of both globalization and the technology revolution and the impact they're having on the world economy and the way they're creating these winner-take-all spirals. The positive scenario, which I think is a bit pollyannaish, is all you need to do is improve the education system and change the skill set and all will be well. And even that takes a lot of investment and a lot of time. But there's actually the possibility that in order to have a healthy middle class, you're going to need to have a more redistributive society, at least for awhile.

If the Obama administration sees globalization contributing to winner-take-all and other pathologies, they are embarking on the wrong approach with redistribution. Their neo-liberal solution is to let the market work pretty much without restraint and at the end of the day provide financial assistance to the economic losers. This can, over time, lead to something called "pity charity liberalism" which is described as "[giving] some sort of ex post compensation for brute bad luck instead of giving workers agency or power". That is very bad politics, unsustainable, and wickedly hard to calculate.

A better approach would include measures to wall-off those elements of globalization that diminish domestic labor's economic power. One is tariffs. That puts the compensation up-front in the process, with industries paying workers higher wages because there is no outsourcing/imports escape hatch.

Regarding the "pollyannish" notion that all this country needs is a better educated workforce, that's been the common refrain for a couple of decades from people like Steve and Cokie Roberts, and has been show to be wildly off the mark as developing nations produce just as many skilled workers with which to compete.



posted by Quiddity at 11/29/2012 09:52:00 AM

The 2012 election two weeks later:

The re-election of Obama and the gain in Senate seats by Democrats has definitely shaken up conservatives. There have been many lamentations about how the country is headed for the toilet, that the voters were bribed - or stupid. And a casting around for a quick fix (e.g. immigration reform).

The Republican party, by so securely tying itself to a diminishing demographic, is in trouble.

Reading the remarks by prominent right wing bloggers and listening to various right wing radio hosts, they are, at least for now, totally unwilling to change their policies and politics. Yet it does seem as if their time is passing, if not already past.

They come off much like monarchists lamenting the end of the reign of Kaiser Wilhelm II of Germany.

There were monarchists for a few decades after World War I, but they eventually dwindled to almost zero and never had a chance of getting their way.

Unless the Republicans make a big move away from their current policy/demographic mix, they risk the same future.



posted by Quiddity at 11/21/2012 01:53:00 PM

The 2012 election aftermath:

It's still a little early to be making a full assessment, but the 2012 election seems to have really shocked Republicans and their conservative allies. Many of them are lamenting that the country is not center-right, as they had been led to believe, and is now center-left. Also, that the country is headed for severe decline with the "takers" now in control (and who will tax the "makers").

Much of that is due to the fact that the election was incorrectly declared to be "the most significant of our time" and that Obama was hell-bent on bringing socialism - or worse - to these shores. That's nuts, since Obama is in the mold of a centrist Democrat or moderate Republican. But that doesn't capture audiences and so the extreme portrayal won out.

A few days ago Peggy Noonan wrote that back in 2009, the Tea Party did Republicans a favor (!) by not starting a third party but this year they were a hindrance, what with candidates like Richard Mourdoch losing a safe senate seat in Indiana, and a general hostility to entitlements that many Americans support.

The Tea Party was, and remains, bad news for the Republicans. Instead of starting a third party, which might have faded away, the Tea Party contingent (which is very connected with what David Frum calls the "conservative entertainment complex") took over the Republican party. Or at least has parity with the establishment/business wing. Their extreme candidates have lost at least four senate seats in the last two years. They have cowed other Republicans who are scared of a primary challenge, like the ones that unseated Robert Bennett of Utah and Richard Lugar of Indiana. They are ideological and cannot compromise on anything. The recent talk that what they do is "constitutional", and by implication what others want to do is unconstitutional and hence invalid-on-first-principles shows the contempt for the democratic process. Their notion of bipartisanship was to have Democrats concede everything.

How much of this is a reaction to Obama, the man, is debatable. Racial animus does not appear to be the primary motivation, although there will always be Limbaugh and Drudge to use that angle on a subset of voters. But what is clear is that there was a last-gasp attempt to undo the New Deal and Great Society (the latter mainly civil rights and Medicare) while there was a chance. There was a chance this year, but it was always a bit of a long shot. And that effort failed.

It's not clear what will happen next. There is the usual big talk about shutting down businesses or leaving the country, but for most of the Tea Party crowd, that's not an option. Instead, they will be watching Hannity and others push for immigration reform and other intensely disliked policies. That will further alienate them and it wouldn't be a surprise to see that they retreat from politics for a decade or more.
posted by Quiddity at 11/12/2012 11:06:00 AM

The picture says more than the title:

Romney looks pretty worn out.


posted by Quiddity at 11/05/2012 09:21:00 PM

2012 Presidential election prediction:

These look like the reasonably secure states for both candidates. Not sure about New Hampshire or Virginia (shown as undecided in map)




posted by Quiddity at 11/05/2012 08:46:00 PM

From Romney's speech today:

You know that if the President is re-elected, he will still be unable to work with the people in Congress. ... The debt ceiling will come up again, and shutdown and default will be threatened, chilling the economy.

When cooperation is required for essential government activities, and one party refuses to cooperate and blames the other party for that failure, it is politically effective if nobody is aware of the details.

Two problems:

• The press doesn't do a good job of informing the public.
• A lot of the public gets their news from misleading sources (e.g. Fox News Channel).

posted by Quiddity at 11/02/2012 03:35:00 PM