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OMB head Peter Orszag is giving a press conference just now with Christina Romer, head of the Council of Economic Advisors, on the president’s Fiscal Year 2011 budget. Ms Romer explained the economic assumptions underlining the budget forecasts. She noted that expected fourth quarter-over-fourth quarter real GDP growth would be 3% in 2010, 4.3% in 2011 and 2012, and would average 3.8% in the five years thereafter. These figures are in line with Fed projections.
She then gave the unemployment forecast. At the end of 2010, the unemployment rate, according to the administration’s forecast, will be 9.8%. At the end of 2011, the rate will be at 8.9%. And at the end of 2012, after the next presidential election, the unemployment rate will be 7.9%.

As Kevin Drum says: good god.

For comparison’s sake, Canadian rates of unemployment, which begn a sharp fall towards the end of 2008 and continued falling, with some minor flucuations, throughout 2009 have already started to improve. And while stagnant through December (no real surprise there), are already at levels that the US isn’t forecasted to reach until the end of 2011.

That’s a lot of hurting for a lot of American families going on out there and I think it paints a pretty stark picture on a dance to which I’m quite late due to some wrestling and struggling I’ve been doing. It’s hard not to be angry when the majority of the population is facing economic hardship of that magnitude and the major corporations that in no small part caused that hardship are set to hand out record bonuses to their top executives. It also makes it a little hard to swallow the grim narrative that is health care reform when one looks at the degree of money spent and influence exerted by lobbyist that went into shaping the contours of the debate.

So while I understand the cries of joy sounded by free speech advocates over the Citizens United decision, I think you have to look at the decision from the context in which it was delivered: overwhelming and blatant use of resources and influence by monied interests to help shape a desired outcome and an economic disparity more stark and brutal than seen perhaps since the 1930s. One can understand why people might be upset about the idea of relaxing the rules to allow more corporate money enter a system that already seems already rigged to favour monied interests to a large degree.

A ways back at True/Slant, E.D. noted,

My take is essentially that the wailing and gnashing of teeth over this ruling is greatly overblown. No, this is not the end of American democracy as we know it. Yes, this is a victory for free speech. Big corporations already had the ability to get around the campaign finance regulations we had in place by forming PAC’s among other things. McCain-Feingold did absolutely nothing whatsoever to prevent this.

And Mark here at the League has described much of the liberal reaction to Citizens United as “hyperventilating”. But look, doing so is, again, to totally miss the context of the decision. This issue isn’t occurring in a vacuum of perfect legal purity, there are extenuating circumstances that have a bearing on how people perceive and interpret the possible impacts and reasons behind the decision.

I agree with Erik that this doesn’t hearken the end of American democracy and it is also true that monied interests already had a number of loopholes of which to advantage in terms of exerting political influence, but for anyting that Erik describes the decision as doing, it also further entrenches a fundamental problem with the political system in question at a time when people are a.) really and truly hurting in a significant fashion, b.) angry that they seem to be hurting due in large part to the actions of precisely those who are benefiting from this decision, c.) that very little seems to be taking place to address the hurt caused by those actions, and d.) much of what is taking place is only reinforcing the system that allowed that hurt to happen.

Call me crazy, but that seems like a reasonable case for being upset, victories of freedom of speech for entities that didn’t seem to be having many troubles in exerting their speech in a magnified way not withstanding. And look, I know I’m not sounding any new trumpets here, but I thought it was important to point that context out and how it plays into people’s reaction to Citizens United, especially in the light of the economic realities that people are facing as represented by those unemployment projections.

At the end of his piece, Drum says, “Our economy is going to stay fragile for a very long time. I sure hope our banking system can handle that. Our political system too.” Without forwarding heartless claims about the benefits of just letting everything meltdown, I have to wonder: given the current dysfunction of the American political system, is that something to which you really want to wish longevity?

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“If Obama’s efforts to create a viable regulatory framework in which individuals can buy private health insurance (a) pass congress, and (b) turn out to work well and be popular, then you can imagine a version of Ryan’s plan being put into place. But in the absence of that kind of reform, I just don’t see how you can do this, which is presumably why the implementation is delayed all the way to 2021 which helps Ryan avoid needing to think about implementation details.” ~ Matt Yglesias, writing about Rep. Paul Ryan’s alternative budget

I think Yglesias actually makes a pretty strong point here.  While I’m overall fairly sympathetic to Ryan’s budget – he does, after all, balance it (at least according to the CBO report [pdf]), something virtually no other politician is willing to even propose – I think there is a fundamental flaw with implementing a healthcare voucher program without first fixing the broken, dysfunctional health insurance market.  The exchanges created in Obamacare would be one way to do this. 

What Yglesias does not point out, however, is that Ryan’s budget proposal also puts an end to the tax exemption for employee benefits.  Simply coupling this tax reform with the ability to purchase insurance across state lines creates an entirely new health insurance market.  Suddenly people on the individual market are given the same tax preference as people who receive their insurance from an employer.  Health insurance drifts away from employers and becomes personal and portable.  People wouldn’t lose coverage when they left their jobs.  Meanwhile, insurers would lose their long-held local and state monopolies and be forced to compete nationally, driving down costs both through added competitive pressures and by the better bargaining powers that these large, national firms would have, with their much larger, national cost-sharing pools.

Of course, the hard questions in healthcare will center around two inextricably linked concepts – pre-existing conditions clauses, and individual mandates.  Almost all modern democracies have some form of universal coverage, and the only way that it has been achieved with any semblance of a free market has been by doing away with pre-existing conditions clauses and implementing some sort of individual mandate.  If the former is done without the latter, nobody would buy insurance until they were sick – defeating the purpose (and the viability) of insurance to begin with.

Other alternatives exist, of course.  My personal preference is a model along the lines of Singapore’s healthcare system, which mandates health savings accounts and then picks up the tab on any costs above a certain flat percentage of income.  This puts healthcare directly in the hands of the consumer (cutting out insurance companies altogether) and provides them with catastrophic coverage if something should go wrong.  Furthermore, by placing costs and transactions directly in the consumers hands, it keeps costs from skyrocketing.  The mandated savings would be flat, but the catastrophic coverage functions progressively, covering less and less as income rises.

Either way, before any privatization of Medicare and Medicaid can occur, the private insurance market must be transformed.  Paul Ryan has shown true grit in crafting a budget that is actually balanced, but the possibility of backlash to cuts in entitlements is very real if the systemic problems in our healthcare system aren’t taken care of first.  Both Yglesias and Ezra Klein see this budget as a sort of draconian rationing of benefits for seniors and poorer Americans. If the insurance market could actually be fixed, however, then the system of vouchers which Ryan proposes would be adequate and possibly even better alternatives to the status quo.

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“My approach here is we really must do something this year,” said Lieberman, who has been co-sponsoring cap-and-trade bills since 2001. “The two problems of American energy dependence and global warming will only get worse. We’ve just got to do the most we can. I’m not being rigid or ideological about it. So anybody who wants to try to make the problem better, it’s worth considering.”

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Scott writes:

This is politics as usual, painful though it is to level that claim. And though I’m well aware of the danger in making predictions about politics, I think this announcement, more than the Brown victory, may be the moment to which people look back and see the place where the Obama dream died.

And in comment #3 (to that same post), North writes:

A lot of it is hinging on his State of the Union. If he manages to pull something remarkable and hit it out of the park then he may well turn things around. A lot of this will depend on what he decides to do leadership wise; if he tries to turn budget hawk and decides to let his HRC croak completely his base is going to revolt. If he can force HRC through and then starts clamping down on the budget I guess he might be able to thread the needle.

Now, I didn’t quote those passages to call those gentlemen out, just to note their language.  Obama can (has to?) “force health care reform through….” and, of course, “the Obama dream.”

As somewhat of a side note, it might be worth noting the Canadian pedigree of both dudes (it also might not).  As an American living in Canada, this is one aspect of American politics I can never seem to get across to non-Americans (in this case Canadians, but others as well):  that we have a presidential, not a prime ministerial, system.

The President really has no influence on domestic policy.  Presidents at best might be popular figures who become mouthpieces and/or salesmen for a policy that is already bubbling up from below the political ground.  But they rarely dictate policy.  Clinton failed to reform health care by trying to force a proposal through Congress.  Obama has (possibly?) failed to reform health care by letting Congress lead. Or perhaps neither failed, and it’s Congress who stalled out both times, as it’s the legislature’s job to formulate domestic policy, not the President’s.

Sure, presidents get to appoint various department heads at places like the EPA, Justice, etc. and will choose people who they think will bring their style, tenor, outlook and so on to the job.  And it makes some difference, I suppose, but there’s no real gap between appointments from members of the same party.  I mean, if Hillary Clinton were President, I would guess that the Justice Department, The EPA, and Homeland Security would have pretty similar outlooks.

The only real power the executive has in terms of domestic policy is through institutions like The Treasury Department, appointing a Fed Chairman, and the like.  Here Obama I think is definitely in for some well deserved criticism, but either way it’s much less influence and power than we normally assume a president holds.  American presidents have essentially unlimited, near- monarchical power when it comes to foreign policy.  There Obama has done exactly what he said he was going to do.  But I haven’t lost any sense of the Obama Dream, mainly because I never really bought into any dream in the first place.  At least with regard to domestic policy–since Presidents in my book have basically no power in that regard.  Whether they should or not is a different question, but the reality is they don’t.  I voted for Obama solely based on his foreign policy outlook, which – while far from perfect (from my view) – was vastly superior to John McCain’s.

Which leads to what I think is the rather ignorant focus by Democrats on this spending freeze idea.  It’s particularly ignorant because this is occurring in the same week it has become manifestly clear how to pass the most important piece of legislation (from the Democratic point of view) since the 1960s: Namely, have the House pass the Senate HRC bill plus the so-called “sidecar” amendments from the Senate via reconciliation.

In other words, if you are a Democrat (or in favor of health care reofrm), why the hell do you care what Obama is doing or talking about with regard to spending freezes and his State of the Union address?  It doesn’t matter one friggin’ bit.  All the Democrats should worry about now is passing the health care bill.  They should eat, sleep, drink, and think of nothing else except how to pass that bill.  

The Democrats are going to take a hit, actually a series of them, in the 2010 midterm elections.  My guess would be that will either officially lose the House or de facto lose the House through losing enough seats that their progressive wing won’t be able to get the votes it needs from its more centrist wing in order to pass liberal legislation.

Let’s get real, my recollection is that Obama said he had three major domestic priorities (as if his priorities mattered…but anyway here they are):  health care, climate-energy bill, and education reform.   He also discussed a middle class tax (which already has gone through).

Of those three, the climate bill has never really had a chance and at this point is certainly dead.  Education reform who knows?  The Economy has taken all the oxygen in the room, so it’s way down the list now.  Health care was the only one that really ever had a chance (in a 1st term anyway) of passing.

Democrats have no sense of the long game.  If you are going to take your hits, at least get something for it.  While I don’t think the Senate Health Bill is the greatest thing ever written, I believe it’s certainly a major advance over the current state of affairs.  And over the long haul, Democrats (as e.g. with Civil Rights legislation, Medicare) will gain a huge number of voters for passing the legislation.  They are going to take a short term hit, no doubt, but this is their only chance.  If they don’t pass the Senate bill, nothing will get passed.

Democrats have no sense of the long game because they aren’t Democrats.  By that I mean, there is one united party known as The Democrats.

And this is the second reason why Obama is not a Prime Minster.  He’s not the head of a united party.  He’s the elected President from a party consisting of a series of interest groups whose relationship has always been fractured.

Arguably a Republican as President (on domestic policy) is a Prime Minister since he is the head of a united party.  Bush didn’t really push the domestic agenda that he signed into law: e.g. tax cuts.  Those come from the party apparatus.  If a Republican is President while the Dems hold one or both houses of Congress (e.g. Reagan), then they make the deals they have to . Just as Clinton did and just as Obama will when the Republicans (as I think probably likely at this point) take over one/both of Congressional houses.

But when a Democrat is President with a Democratic majority in both Houses, The President is definitely not a Prime Minister.  In this regard, Fareed Zakaria has it exactly backwards–Obama is acting exactly (on domestic issues) like a President and not a Prime Minister.  Particularly since Obama is a Democrat with a Democratic Congress.  His actions (on domestic policy) are essentially pre-written, given the constraints.

Remember as I always say, there are only two things you ever need to study in a Presidential candidate:  biography (particularly political biography) and policy statements.  The one thing you NEVER EVER EVER put any emphasis on nor trust in are: Campaign Slogans, Media Image, and the (ugh) Brand.

That unholy Presidential Trinity is a damned if you, damned if you don’t.  You can’t get elected without them, especially in this media age; you can’t effectively govern once you’ve made them.

I’ve sometimes been called rather cynical in my political outlook, but the way I look at it, I never put extra faith (beyond what’s institutionally reasonable) in Presidents.  Hence I never get disillusioned.  I don’t have let down experiences either.  My anger is always focused on Congress and The Two Parties.  They I think constantly let down the population and fail to lead.  Though in the end I also hold to the adage that the people get the government they deserve.  And given my outlook on the US political class, you can only imagine how abysmally low is my opinion of the US population.

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Let me start by saying that I mostly agree with Jamelle when he says that”

There is almost nothing in recent political history to suggest that the Republican Party is anything but hostile to health care reform.  And if not hostile, then indifferent.  Republicans had nearly four years of uninterrupted dominance with which to tackle health care reform, and neither President Bush nor congressional Republicans proposed anything. 

I think “hostile” is too strong, but indifferent is probably about right.  Certainly, health care reform is a very low priority for the GOP and to the extent it’s a priority at all, it’s only because it’s so front and center an issue for Dems and liberals. 

Saying something is almost universally a low priority for Republican politicians, however, is not the same as saying that all Republican politicians will be reflexively opposed to any health care reform at all.  It has, for instance, become cliche amongst liberals to say that the McCain health care proposal was worthless and a joke.  Yet the primary difference between that proposal and Wyden-Bennett, which is popular with economists and many movement liberals, solely has to do with the amount of regulation of the individual market – not exactly an irreconcilable chasm. 

My key disagreement with Jamelle comes from this paragraph, however:

Last year, Democrats offered Republicans the chance to make their mark on health care reform.  Yes, it would happen within a liberal framework, but Democrats were more than willing to compromise and scale down if it meant GOP support.  Republicans were repeatedly offered the opportunity to alter the bill to their liking; if Republicans wanted market-friendly reforms, they could have gotten them.  If Republicans wanted something modest and limited, Democrats probably would have delivered.  But they didn’t.  Despite that, Democrats produced and passed a bill that is moderate and bipartisan in everything but name.   

(My emphasis).

The disagreement I have here is that it makes the assumption that altering the scope of a major proposal rather than adjusting its framework is an inherently worthwile effort at bi-partisanship.  In some cases, that may well be true, to be sure.  But it’s not true when the principal objection from the opposing party’s base is the framework itself, which is precisely what the objection has been here almost from Day One. 

That’s not to say that all Republicans would necessarily oppose all health care reforms within a framework acceptable to most liberals.  However, with the huge majorities the Dems had last year, they seemingly calculated that they could pass a major health care reform bill that would be acceptable, if possibly inadequate, to all elements of their large and diverse coalition.  Ths was an understandable calculation – if you can pass health care reform with virtually no support from the opposition party, and thus maintain cohesion within your own party, then there’s really no reason to alter the framework to obtain opposing party votes for any reason other than getting some extra political cover.  Still, the Dem coalition is large and unwieldy, and to get every element of the coalition to go along with a huge reform like health care requires that the possible frameworks for any reform will be a very small set indeed.  In fact, as we eventually saw with the uproar over the deals necessary to push through the Senate bill, that set of possible frameworks may well have even been close to a null set.

The result of all this was that as long as the Dems felt they could pass health care reform of some type with little or no Republican support, there was no reason to compromise or seek to compromise on anything other than the size or scope of the package.  Adjusting the framework was simply impossible if the Dems wanted to maintain any kind of intraparty cohesion. 

The problem is that any framework on such a complicated policy question that is developed to be acceptable to all key elements of one massive and unwieldy political coalition will of necessity be an unacceptable framework to all or virtually all elements of the other political coalition.  Although I think our coalitions are more arbitrary than we generally acknowlege, they still exist for a reason.

In short, although Jamelle is correct in saying that the health care reform bill is “already pretty moderate,” that is far different from saying that it is in any way “conservative” in the sense of “potentially acceptable in principle to a key element of the American Right.”  Expecting that one could get a key element of the modern Right to go along with a reform that moves along an unacceptable vector merely by diminishing the length of that vector is akin to expecting a died-in-the-wool anti-war liberal to go along with the Iraq War by reducing the number of troops being sent and bombs being dropped.  It’s just not going to happen. 

Addendum: I think the following illustration pretty neatly sums up my point (with a nod to Jaybird): Democrats have been insisting that that our health care system’s problems are caused by A and B and that the way to solve those problems is with some negotiable degree of X and Y.  But Republicans, to the extent they are willing to acknowledge the problem at all, are insistent that those problems are caused or exacerbated by the levels of X and Y that are already in the system, or that adding X and Y will only create new problems without solving old ones.  If that is true, then under no circumstance will you ever get a Republican to go along with a policy that uses X and Y as its principle mechanism, even if you minimize the amount of X and Y used.  But that’s a far cry from saying that all Republicans will be unwilling to agree to something that relies on any one of mechanisms C-W, even if this is true of many or most Republicans.

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The first thought arose from reading the following quote by Andrew Sprung, linked to by Andrew Sullivan, about Webb’s comments around health care reform following Scott Brown’s win,

We have one party that has not got the brains to govern. Will we now learn for certain that we have another party that hasn’t got the guts?

It doesn’t strike me as entirely fair to suggest that this failure to recapture Kennedy’s seat and the potential failure of health care reform is due to Democrats being “gutless”. Rather, I think what it points to is the fact that the Democratic Party is a deeply divided institution and those divisions lie along significant fault lines of principle about what it means to be a “liberal” today.

To some degree, it seems like the country was waiting for the great liberal wave to sweep over it, bringing with it reform and goodness and prosperity from the wretched ways of Bush and Cheney. And, in fact and contra to what I have argued in the past, I think that is what the country probably needed. People like Paul Krugman and the League’s own former Freddie deBoer were right in suggesting that the stimulus actually didn’t go far enough, Erik was right in suggesting that the tepid approach to the banks and financial institutions didn’t cut deep enough, and Mark was right that health care reform wasn’t spearheaded strongly enough.

But I find it hard to escape the fact that Democrats were never poised to offer that sweeping change. The Democratic Party of 2009 is simply not the same as FDR’s Democratic Party of 1933, no matter how many analogies to The Great Depression the political chattering class made. There is a not significant proportion of the Party that fundamentally disagrees with the idea of sweeping liberal reforms that might have shored up increased confidence and strength in the Party. Ben Nelson and Jay Rockefeller are very different liberals and to think that they would be able to come together to offer a strong and united front of reform for the country just doesn’t seem particularly realistic. In fact, realistically speaking, they belong in different parties, but that’s not the state of play on the ground.

It seems to me, as has been noted, that those systemic divisions, aggravated by the dust kicking, fist shaking, garment rending of Republicans and conservatives, that hampered the Democrats from truly reforming the country, not gutlessness.

My second thought wends its way back to Barack Obama. I know that Andrew himself doesn’t want to lay any blame on the President’s door step and believes that the hopes of country rest upon Obama’s shoulders,

I know now more than ever before why I could never be a Democrat and feel it vital to defeat the current Republican nihilism. Which leaves me with Obama. This is a critical moment. How he responds will be everything. I think there is a response and that, oddly enough, his chances of re-election in 2012 just rose. He must not return to Clintonism. He must reignite the center around him. More thoughts on how he can forthcoming.

I’m having a harder time with both those issues. Following from the thought above, it is precisely because Obama isn’t what Republicans and conservatives have endeavored to label him — an unabashed liberal — that he has, from the outset, not been the guy to lead the kind of sweeping reform that I am increasingly coming around to the idea that the country needed. Campaign slogans aside, Obama is and always has been a cautious pragmatist, sweeping and passionate reform isn’t his bailiwick, it doesn’t wear well on him.

My own abiding support for Obama was based in no small measure on precisely the kind of unifying, consensus building, beyond the politics of yore messaging that underwrites Andrew’s continued beliefs. I continue to deeply admire all of those traits in Obama, but I’m no longer sure they were the right traits for this time in American politics.

I’m increasingly of the opinion that that, given the substantial divisions in the Party and the seeming kamikaze trajectory of Republicans, that Democrats needed a very hard nosed President, someone who was ruthless, would take no guff, could rally the troops, and was prepared to come in and do some heavy lifting from day one. I think a quick gut check will tell you that Barack Obama is not that kind of President.

In terms of the reform analysis above, the obvious candidate would have been John Edwards and while I don’t know how hard nosed and heavy lifting John Edwards is or would have been, I do know that he never stood a chance in the primaries. The candidate who did stand a chance, who is unfailingly hard nosed, can be utterly  ruthless, does not take any guff, is capable of rallying the troops,  and, I think, would have done some heavy lifting from day one was Hillary Clinton — who is, it is worth noting, doing an almost textbook perfect job in Secretary of State right now.

Am I throwing Obama under the bus by saying that? I don’t think so.

Barack Obama is an incredibly smart and talented politician, he has a nuance and analysis to him that is almost unmatched, he is, in many regards, the President of the future. But what I am saying is that I’m beginning to consider the idea that being the President of the future, doesn’t make you the President of the present. The current state of Democrats is causing me to consider how that is the case and how Hillary Clinton, someone I made a conscious and active (as active as a Canadian can get with US politics) decision not to support, might have resulted in a different and better outcome all around.

Part of the heavy lifting and hard nosed approach that I think this point in US politics requires is a clearing of debris, of hammering through issues, of making some gains in some key areas no matter the fervor so that someone like Barack Obama can emerge out of the rubble. But Obama can’t be the guy that both shakes things up and puts them back together. It isn’t practical strtegically speaking and he isn’t a shaker tempermentally speaking. And so the message that it wasn’t the right time for a Barack Obama presidency may well have been spot on, not in terms of whether Obama himself was ready — I believe he is and was — but in whether the country was ready, which it increasingly appears it wasn’t.

None of this is definitive and so should not be taken as such, it is as much me thinking out loud as anything. And it feels weird to say, but as a die-hard Obama supporter in the election to the Clinton supporters out there: you might have been right and we might have been wrong.

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