In Defense of Obama--Again

In a past post I expressed bafflement at the left-wing disillusionment with Obama. These days, I’m not only baffled, I’m getting upset. There is an emerging narrative in left-leaning circles that Obama is spineless, in league with big corporations (particularly Wall St.), and afraid to stand up to the war hawks. This attitude would be forgivable if it had any relation to the truth. But it doesn’t.

THE ECONOMY

False narrative: Obama and Bernanke don’t care enough about jobs and are overly worried about the deficit. We need a second “jobs” stimulus and an explicit policy of higher inflation to get us out of this economic slump. We can’t worry about deficits right now until America gets back to work.

Reality: after the first stimulus successfully stopped the economic meltdown (success for Obama!), now is, in fact, the right time to start worrying about our debt. Sustainable job growth in America depends on the re-balancing of the world economy: Americans need to save more, consume less, and make more stuff that the world wants to buy, while the Chinese needs to buy less of our debt and consume more of our goods. This transition will run smoothly only if the Chinese agree to devalue their currency in relation to the dollar. But the Chinese will do this only if they believe America is serious about cutting back on its debt. That’s the bargain. If the Chinese lose faith in our ability to cut our debt, there are only two possible outcomes: a Chinese-American trade war (instigated by the U.S. because the Chinese will refuse to devalue their currently) or a U.S. dollar currency crisis (instigated by the Chinese who will stop buying our bonds). Both of these would be disastrous for the world economy.

Also, inflation as an explicit policy prescription is totally insane: inflation punishes most the one group of people we should be most eager to help—that is, middle class savers. And it is most kind on those who know how to handle money, who also happen to be the same folks liberals want most to punish--that is, Wall St.

REGULATION

False narrative: Obama bailed out the banks and now is too chicken to regulate their bonuses. The financial regulatory package making its way through Congress will be watered down so much as to be virtually worthless. Even the Democrats are in bed with Wall St.

Reality: Barney Frank, who is leading the charge against bonuses and fighting very hard for more financial regulation, is a rock star. Watch how Ed Shultz, a proud member of the putting-Obama’s-feet-to-the-fire club, doesn’t listen to a word Frank says about what he and Congress is doing about bonuses. Read this Barney Frank speech, which lays out his plans for financial regulation. He may not get everything he wants in the end, but there is no doubting his determination and the soundness of his thinking. Regulation will happen.

HEALTH CARE

False narrative: Obama failed to step up to the plate when we needed him, he compromised away the public option because of pressure from corporations, and now the bill will only enrich insurance companies and won’t even insure everyone in America. The bill may be so bad, we might be better off with the status quo.

Reality: the public option is decidedly not dead yet, Obama is in favor of said public option, and regardless of whether or not a public option is in the final bill, the reform will be a big step forward when compared with the status quo. At the least there will be no more penalties for pre-existing conditions and many more people will get coverage, with insurance for lower income folks subsidized by increased taxes on upper income folks. It won’t be a dream bill, but getting a dream bill was always pie-in-the-sky.

AFGHANISTAN

False narrative: Obama is escalating the war and is too chicken to stand up to the warmongers.

Reality: despite painting himself into a corner with his hawkish talk on Afghanistan leading up to the election in 2008, Obama, I believe, is trying to wriggle his way out of this growing quagmire. He rejected all of the options for escalation, with explicit instructions to include a clear “end-game” in all future proposals. Obama is increasingly worried about the cost of an open-ended, never-ending war in Afghanistan. The reality in Afghanistan is grim, but Obama is thinking clearly about the issue and should be commended for that.


I admit that on the issues of cap-and-trade and Israel-Palestine Obama does look to have genuinely failed us. That said, it’s clear that on both those issues Obama’s heart is in the right place. If he gets a second term there is hope for the future on these tough issues, too. Patience, my friends, patience.

In a future post I will speculate on why liberals are so pissed at Obama when it seems so obvious (to me, at least) that we should be happy with him.