Will Obama not only take us over the fiscal cliff but also keep us there?

9 Nov

Is it feasible/plausible that Obama will not only take us to the fiscal cliff, but also push us over it and then keep us there? That is, not negotiate any kind of deal with the Republicans at all, not before or after January 1? Unless you assume Obama doesn’t want cuts to entitlements — which I don’t assume; I believe he’s an austerian of Reactionary Keynesianism — think about what he gets if he allows the sequester to go through: higher tax rates, cuts to entitlements, and cuts to defense. That seems like classic New Democrat/Clinton goals. I recognize it would put the economy in danger of recession but Obama’s not up for reelection and modern Democratic presidents have shown remarkably little interest in the fate of congressional Democrats, particularly at mid-term election time, and in party-building more generally. So, I ask: will he take us over the cliff and then keep us there?

14 Responses to “Will Obama not only take us over the fiscal cliff but also keep us there?”

  1. Dene Karaus November 9, 2012 at 10:15 am #

    I don’t think there is any chance of his doing this by his actions. Only inaction by the House of Representatives could cause it. I think he’s smarter than most think, and cannot be pigeon-holed as an austerian of Reactionary Keynesianism. He understands the deeply interconnected financial and government worlds, and has no desire to allow a foolish “inaction solution” to take effect.

  2. jonnybutter November 9, 2012 at 11:51 am #

    I kind of agree with Dene, although I don’t think it’s his *intelligence* that’s being questioned here. The threat to let us go over the cliff isn’t credible if he’s not willing to actually do it, but I can’t believe it’s his first, or second, (or third, probably) choice. He has real leverage at the moment. Obama may be an integral part (since he is the pres) of some bad conventional wisdom in DC (austerity, education policy), but I think he’s less stupid and more humane than that CW (not a gigantic compliment!). Please, hold your fire about his civil liberties record (awful), Latin American policy (awful), etc. I KNOW.

    I also don’t think Obama necessarily exactly = Clinton, political economy-wise, because a.) they are different people and b.) the times are different. The Reagan Revolution has practically been BEGGING to be put out of its misery for several years, but our fabulous Democrats, true to form, haven’t had the nerve to do that nor to take responsibility. After this election, I get the feeling (which is all it is) that even the andante timoroso dems, who Obama represents all too well, might be ready to consider having a series of meetings about a course of action designed to begin the process of putting steps into place, which….

    In other words, they might be ready to exercise power again, which doesn’t necessarily mean making big cuts in social welfare progs. The economy is starting to grow again, and revenue is going to come flooding in, one way or another. I expect betrayal, but not Clintonian betrayal. my 2c.

  3. Benedict@Large November 9, 2012 at 12:50 pm #

    Truth is, Obama is a lawyer, and doesn’t know jack-squat about economics. This might not be obvious to most, but to the trained economics ear, it’s blisteringly apparent. He trips up trying to explain even the most basic ideas, and of late has learned not to even try.

    Whatever happens now then will be whatever he gets told to do by his most trusted advisor, Timmy Geithner, and Timmy comes loaded up with ridiculous notions of the Austrian School (although I doubt that Timmy is even sophisticated enough to actually identify himself with a school.)

    So if you want to know what Obama will do, simply ask the Austrians what they would do. Obama won’t do exact what they say, but he’ll probably do some vulgar variant of it that will please absolutely no one.

    • Dene Karaus November 9, 2012 at 12:59 pm #

      With this analysis, you pretend to be some sort of economic expert. Even trained economists are questionably expert at anything, as, unlike physicists, or Medical Doctors, they seldom agree on much of anything. To pretend to know that the President “doesn’t know jack-squat about economics” is horribly pretentious, and exposes your lack of standing to make such a claim.

  4. jonnybutter November 9, 2012 at 4:51 pm #

    Above all – above lawyering or economics – BO is a politician. A practical politician can be WAY worse than average sometimes, but they can also be surprisingly better than you expect now and then. That is to say, politics trumps all – economics, the law, being rational on a national scale.

    Do the freshwater economists ‘know nothing about economics’? On the contrary, they have PhDs in it! Doesn’t seem to help, does it?

    My own intuition is that BO is more or less quintessentially American in temperament: slow to anger – and frankly, slow to learn or pivot – but once he does get angry, or pivot, or learn or whatever: watch out. I am not saying that he’ll be some wild ‘liberal’ now – the guy is a centrist all the way and always was. But he has been on the front line of a sort of farce civil war for years (sometimes as McClellan?!), and he’s finally in a position of strength. I would guess he wants to do better than the sequester (although you have to admit that it might be an astonishing rare opportunity to finally cut the Pentagon’s budget in a serious way).

    • Bill Murray November 9, 2012 at 8:25 pm #

      but he already pivoted once towards the deficit and austerity. A second pivot is more difficult than the first

    • chris9059 November 12, 2012 at 3:27 pm #

      “…he’s finally in a position of strength”

      I would suggest he was in a position of strength after the 2008 election and he chose to do very little with it. In the wake of the financial crisis he had the opportunity to use public anger to fundamentally reform the the financial sector. He chose instead to shovel money at the very criminals who caused the crisis while refusing to hold them accountable for either their past crimes or the bailout he was giving them.

      • jonnybutter November 12, 2012 at 3:45 pm #

        Obama is culpable but so is the Dem party as a whole, because Obama must represent the party to some extent. It doesn’t excuse BO, but he shares guilt. Also, he owed Wall Street in 2008. Not so much now.

    • I'm with stupid November 23, 2012 at 3:55 pm #

      What is meant by a centrist? Is a centrist half way between a fascist & a communist, which has always seemed to me a reasonable spectrum to use?

      I assume that is not what you meant, but what do you mean?

      I see nothing centrist about Obama on that scale or one that might range from, say, Kucinich to the current Republican party. Economically, Obama seems a corporatist, helping the banksters at every turn, not even considering starting his health plan negotiation with single payer, and giving away the game about 75% going into any negotiations on taxes or the safety net.

      so, please define terms.

      Thanks.

  5. Sko November 14, 2012 at 6:25 pm #

    Just want to point out that the mechanics of the fiscal cliff are quite a bit different than they’re generally portrayed. “Going over the cliff” doesn’t mean massive spending cuts the day it happens (obviously) and as such a deal could in theory be worked out over the next several months if necessary, with stop gap measures imposed to keep the various departments more or less at normal operating capacity. What really matters here is that the bush tax cuts do, in fact, expire all at once. Once the bush cuts are gone getting them back is a much harder sell than simply keeping them around going forward. The current “fiscal cliff” debacle isn’t so much about austerity and entitlement cuts as much as it is about keeping the rich’s tax rates low.

  6. Theo November 19, 2012 at 9:24 am #

    I tend to agree with Robin. Read James Gilligan’s book, Why Some Politicians Are More Dangerous Than Others, Polity Press, 2011, for a lucid analysis of economic indicators obtained when a Republican vs. a Democratic president was in office from 1900 onward. With the exception of Eisenhower, who fully accepted the premises of the New Deal, and Carter, who was extremely conservative, all Democratic presidents since 1900 have brought about better economic conditions for Americans, due to the reversals of recessions/depressions and higher unemployment existing in Republican administrations. For both parties, the level of inflation was nearly the same, yet the Republicans used that inflation as a means to reduce the welfare of the middle class and the poor and to enrich the rich.

    The figures he uncovers for Democratic presidents are a mirrored reversal of those existing in Republican administrations. Better economic conditions resulted in a complete reversal in suicides and homicides that Republican presidents produced in their time in office. He demonstrates causality in his text.. Larry Bartels, as you know, also shows in a recent book that Americans were better off under the Democrats.

    Obama shows every indication of following in the footsteps of Republican presidents in the realm of the economy, tragically for America, just as he has done so terribly in the realm of foreign policy. The figures he has uncovered were, he says, “hiding in plain site,” and it is remarkable that the Democrats haven’t made use of them, but then again Third Way Democrats such as Clinton and Obama (and Carter also as a conservative), have so often been in the long run just as dangerous for Americans as the Republicans with respect to cementing in place the programs of the Right wing.

    Gilligan is Clinical Professor of Psychiatry at New York University, was a member of the faculty for many years of Harvard Medical School, and served as Director of Mental Health Services for Massachusetts prisons and prison mental hospital.

    The characters of today’s Republicans and Obama are marked by a lack of empathy and irony, as Robin brought out in his most recent comment. His is more nuanced than theirs, and he does tweak this or that program, but eventually we wind up in the same place. He believes fiercely in austerity, favors the rich, and seems to have contempt for all the others.

  7. Redtexture November 29, 2012 at 5:30 pm #

    First, off, it is not a cliff. More like a ramp. With exits.
    The instantly increased tax rate, can be easily and retroactively rescinded. Big whoop.

    Not so undo-able are staff reductions in force, or alternatively, closed offices and work not accomplished and similar human-resources whipsawing that may occur because of mandatory budget reductions. Delayed purchases, grants, and contracts of a commercial sort can be revived, recognizing that there is a human-factors aspect there too, for the reduction in force at outside-of-federal-government entities because of suspended contracts, programs and grants.

    It’s likely that everybody at the federal leadership level gets to maneuver to “win”, on their own terms, with house Republicans, for example, never having to vote to raise taxes–they will joyfully vote to reduce taxes, after the automatic tax hike. Big whoop.

    The “cliff” is a cliff in the minds of those who believe in inapt and inapplicable metaphors.

    • Redtexture December 21, 2012 at 1:27 pm #

      With the failure of House Speaker Boehner’s plan “B” to receive enough votes from his caucus, for an increase on taxes of those with over a million dollars of income, and the House Speaker’s withdrawing it from the agenda for a floor vote, we can see that the Republican House is incapable of voting for a tax increase.

      Can they vote for a tax reduction after the automatic tax rise? Hmm.

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