Sputtering Sputnik

Among the items from the President's State of the Union speech that drew attention was his reference to our "Sputnik moment." Here is how Slate's Fred Kaplan noted it:

"This is our generation's Sputnik moment," Obama said. As a result, we need to fund "a level of research and development we haven't seen since the height of the space race," with particularly strong investments in biomedicine, information technology, and clean-energy technology. In the same section of the speech, he likened this funding effort to "the Apollo Project," which later put a man on the moon.

Kaplan goes on to fault Obama for advocating renewed investment while at the same time calling for a spending freeze, certainly a contradiction. I wonder if OMB employs any Zen Buddhist analysts. Regardless, the Sputnik reference fell flat for three other reasons.

Since I wasn't alive at the time, I'll just stipulate from the outset that news of the Russian success really was a shock and that Americans genuinely felt the scales fall from their eyes about where they were relative to the Soviets.

I suppose Obama's remark was about the Chinese, but has there really been a Chinese analog to Sputnik? Have the Chinese done something that we haven't? Something that we are incapable of? The answer on all counts is no, at least for now.

Second, with the hindsight of history we know the Soviet experiment failed. They lost. We won. Sputnik was something of a high water mark. Again, it may have seemed incredibly important at the time but since it never ushered in the golden age of Soviet-style Marxism, I'm not sure invoking Sputnik accomplishes the rhetorical heavy-lifting the President was attempting.

Finally, the Sputnik reference implies that we need to go back and do things the way they were done in the Kennedy and Johnson era. Here is how Kaplan ends his Slate article:

But if the U.S. economy is going to do big things—and Obama said, twice, near the end of his speech, "We do big things"—they often don't get there without a spurt of government funding.

This strikes me as spoken by someone who already thinks government spending is a good idea. The examples of innovation Kaplan sites like the Internet and microchips did grow out of government work, true. But that's not quite the same thing as they never would have happened without the government, is it?

Even if we concede that this is the case, how confident can we be that a new round of government investment will yield similar results? Technology, politics, culture, population are all different than they were in 1960. I'd say there is a very good chance that a New New Frontier could easily turn out to be much less than advertised.

Obama's invocation of Sputnik, for me, just reiterates this fixation so many on the left have with the post-war boom years. The idea that we can somehow turn the clock back to that perceived better time is utterly uncompelling. The fact that the "Sputnik moment" turn of phrase has fallen flat may reflect this.

Congressional Democrats Go (G. W.) Bush League

Over at One Wisconsin Now, Scott has a post up excoriating Rep. Paul Ryan. The proximate reason for Ryan's thrashing is the Republican response to the Obama budget. A response which didn't actually contain any numbers, as Scott points out.

Congressional Democrats have come out with a budget response of their own and, curiously, it also is missing some numbers. $250 billion to be precise. Here is Reuter's on the missing digits:

Obama has requested in his budget $250 billion to add to the $700 billion widely-criticized financial bailout fund. But the chairmen of both the House of Representatives and Senate Budget Committees refused to include it in their budget plans. [snip]

Both congressional budget committees quickly jettisoned it, giving them an easy way to cut massive red ink from their budget plans for the few years.

The Bush administration preferred to treat the cost for the war in Iraq in much the same way, outside of the budget.

Spending which is reasonably predictable and can be estimated, even roughly, should not be omitted from the budget.

Maybe the Democrats know something we don't. Namely, that the worst is behind us and no more bailouts will be necessary; Or perhaps they have decided to take a stand and flatly refuse the next time some failed corporation comes to the Hill looking for a handout.

I doubt either of these are the case and this missing $250 billion will come up again before too long. It is more likely that Reuter's has it right that this seemed like an easy way for Democrats to massage the budget numbers and pat themselves on the back for fiscal responsibility.

This omission is really too bad. Congressional Democrats have followed Obama in so many other ways, including many on the budget, drawing the line at this seems a bit absurd.

Congressional Democrats would do well to remember that if you follow someone over a cliff, you can't stop ten feet before you hit the ground. You follow them the all the way down.

Spending Will Continue Until Morale Approves!

..........and maybe even after that time.

Blinded with AIG-rage it seems much of America missed the Congressional Budget Office's new analysis of the economic outlook including consideration of President Obama's 'New Era' budget outline.

From the CBO Director's blog:

Largely as a result of the enactment of recent legislation and the continuing turmoil in financial markets, CBO’s baseline projections of the deficit have risen by more than $400 billion in both 2009 and 2010 and by smaller amounts thereafter...CBO now estimates that the deficit will total almost $1.7 trillion (12 percent of GDP) this year and $1.1 trillion (8 percent of GDP) next year—the largest deficits as a share of GDP since 1945.

Then a little bit of hopeful news. The CBO reports that assuming current laws and policies remain in place:

Deficits would shrink to about 2 percent of GDP by 2012 and remain in that vicinity through 2019.

And:

Outlays are projected to decline from 27.4 percent of GDP in 2009 to about 22 percent in 2012.

Of course, Obama was not elected to keep current laws and policies in place. His mandate was for change. The CBO analysis of the Obama budget proposal is an avalanche of negative economic news:

As estimated by CBO and the Joint Committee on Taxation, the President’s proposals would add $4.8 trillion to the baseline deficits over the 2010–2019 period. CBO projects that if those proposals were enacted, the deficit would total $1.8 trillion (13 percent of GDP) in 2009 and $1.4 trillion (10 percent of GDP) in 2010.

I would love to give Obama the benefit of the doubt, but the problem is that I doubt the benefits of his budget plan.

These numbers are not from Rush Limbaugh or some other right wing bogey man. These are from the Congressional Budget Office, and under every measure cited, we appear to be worse off under the Obama budget.

Deficits under current law, about 2% of GDP for the years 2012-2019. Under Obama, 4-6%.

Cumulative deficit for 2010-2019 under current law, $4.4 trillion. Under Obama, $9.3 trillion.

Debt held by the public in 2019 under current law, 56% of GDP. Under Obama, 82%.

Note carefully! These are figures for 2010 and beyond. This is not the short-term deficit spending that may be necessary to address the current crisis. These figures are the result of new, higher levels of permanent government spending.

The Obama budget promised to signal a new era and on that note it certainly has delivered. The only responsible thing to do, however, is oppose it.

The Bush-Obama Plan

During the election, the Obama campaign made a strenuous effort to connect John McCain and President George W. Bush in the minds of voters. This was smart politics - Bush was, and remains, tremendously unpopular.

I wouldn't be surprised if a large number of voters in the last election voted for Barack Obama because they believed that McCain represented a continuation of Bush policies and Obama represented a break with those policies.

Well, if these same people examine the Obama plan to handle the so-called toxic assets on bank balance sheets, they have to be asking themselves whether they didn't accidentally confuse exactly which candidate it was that represented a continuation of Bush policies.

When it comes to adressing the banking cirisis the Obama approach is identical to the Bush approach. Here is the New York times from March 20th on the plan:

The plan to be announced next week involves three separate approaches. In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.

In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.

In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Securities Loan Facility, a joint venture with the Federal Reserve.

The goal of the plan is to leverage the dwindling resources of the Treasury Department’s bailout program with money from private investors to buy up as many of those toxic assets as possible and free the banks to resume more normal lending.

But the details have been treacherously difficult, politically and financially, and some of the big decisions are the same as those that bedeviled the Treasury Department under President George W. Bush last year.

Sound familiar? This was the approach taken last fall by then-Secretary Paulson. I guess since Geithner was closely involved in the plan from his position at the New York Fed, no one should really be surprised at the nearly seamless transition. Someone might want to let Obama know that the plan was too difficult for Bush and Paulson to implement and nothing came of it other than the catatonic nature of the economy over the last six months.

I have yet to see anything from Obama and Geithner that would lead me to believe that they would be any better at making this plan work.

It is quite possible that Obama defense policies, carried out by Bush-appointed Robert Gates, differ more from the previous administration than does the Obama response to the financial crisis, which is crafted and implemented entirely by Obama appointees.

Liberal advocay group Move On has a website called the Bush-McCain challenge which was intended to demonstrate and reinforce the similarities of those two men, in order to prevent McCain from being elected.

If they haven't already, some smart Republican activist should start their own version of this game, the BushBama Banking Bailout.

Omnibus 2009 & Obama

With little fanfare, President Obama recently signed the omnibus spending bill for fiscal year 2009. This is the bill that has become infamous of late for containing about 9000 earmarks. These are those specific spending measures inserted into bills by members of Congress which are considered 'vital spending' by their recipients and 'pork' by everybody else.

Thus, a president that pledged to go through the budget line by line during the campaign has now made these earmarked projects the law of the land. At least spokesman Robert Gibbs admitted that Obama had not read the entire bill when asked if that was the case.

Many of the administration's surrogates had been making the rounds last week offering the excuse that this bill represented 'old business' as the reason why the president was going to sign it. This excuse is utterly uncompelling coming from a president that ran with 'change' as the explicit theme of his campaign.

After all, weren't Guantanomo Bay and Bush's stem cell funding ban 'old business'? The president didn't seem to think there was any reason to maintain these two items from the previous administration, so why keep this spending bill?

With his budget, health care and energy reform, and other legislative priorities of his own coming up, I can understand why Obama would choose to avoid a fight with Congress over a bill that he could at least partially blame on his predecessor (only partially, though, he did sign it into law).

The fact of the matter is that members of Congress wanted this bill to become law, including all of the earmarks. In some sense that makes this spending bill nothing more than a payoff to the Congress. And now that Obama has delivered on this, he will no doubt expect the Congress to return the favor in the near future.

I am not so naive to think that this state of affairs isn't how things normally work in Washington, but it would be nice if we could drop the pretense and see this bill for what it is. The sooner we in the United States close the rhetoric vs. reality gap, the better.

A Tale of Two Critiques

Two recent columns critiquing President Obama strike remarkably similar themes despite the fact that one addresses foreign policy and the other domestic policy.

The first comes via a post over at Lakeshore Laments which comments on a column by Robert Kagan that appeared in the Washington Post. Kagan makes the point that much of the Obama foreign policy so far is really just a continuation of policies that began under Bush, but they are being touted as part of the change that Obama promised to bring to government.

Kagan goes on to argue that the administration is able to make the case that their actions thus far represent change only because the press corps accepts these claims uncritically. As Kevin over at Lakeshore points out however, Kagan's critique is somewhat diminished by his reputation as an advocate of the war in Iraq. No such problem exists as far as I know for the author of the second critique, economics writer Robert Samuelson.

Samuelson's column that appeared at Real Clear Politics on Monday is entitled "Obama is a Great Pretender," and focuses on Obama's domestic policy initiatives, particularly his budget and the stimulus. I wouldn't say that Samuelson is known as a partisan, but as the title suggests, his criticism is absolutely withering. It begins:

To those who believe that Barack Obama is a different kind of politician -- more honest, more courageous -- please don't examine his administration's budget. If you do, you may sadly conclude that he resembles presidents stretching back to John Kennedy in one crucial respect. He won't tax voters for all the government services they want. That's the main reason we've run budget deficits in 43 of the past 48 years.

Obama is a great pretender. He repeatedly says he's doing things that he isn't, trusting his powerful rhetoric to obscure the difference. He has made "responsibility" a personal theme; the budget's cover line is "A New Era of Responsibility." He says the budget begins "making the tough choices necessary to restore fiscal discipline." It doesn't.

Samuelson goes on from there to describe how a truly responsible budget might treat issues such as taxation, entitlements, defense spending and farm subsidies. He also takes Obama to task for the lack of bipartisan support his proposals have found thus far. Stating that Obama has pursued positions that invite rather than avoid opposition.

As he closes, Samuelson strikes some of the same themes that Kagan did - the lack of real change and a complicit media:

Obama thinks he can ignore these blatant inconsistencies. Like many smart people, he believes he can talk his way around problems. Maybe. He's helped by much of the media, who seem so enthralled with him that they don't see glaring contradictions. During the campaign, Obama said he would change Washington's petty partisanship; he also advocated a highly partisan agenda. Both claims could not be true. The media barely noticed; the same obliviousness persists. But Obama still runs a risk: that his overworked rhetoric loses its power and boomerangs on him.

I'll save the fashion report on the emperor here, but suffice it to say that both commentators note a striking disconnect rhetoric and reality. A condition that is at the very least ignored, and at the worst actually aided, by the nation's media.

Maybe it is too much to ask of one man to change an entire nation's politics, but is it too much to ask him to stop telling us that he is doing just that? Probably. After all, the President is a politician. But it is definitely not too much to ask our nation's reporters and editors to approach a president, even one they have great personal affection for, with a more skeptical eye.

The Victor Belongs To The Spoils

It's hard to watch or listen to the news lately without wondering why anyone would want to be President. It's not just the global economic meltdown, but other events as well that have a way of imposing themselves on us without our consent. For many of us, these global events seem to have little affect on our day to day lives. For others, such as the President-elect, these events loom quite a bit larger.

I'm not quite sure that it is correct to say that the average American should be less concerned with what is happening in Gaza than Barack Obama. It seems like that should be the case, but perhaps that is the problem. Perhaps we should be aware and engaged when it comes to events across the globe. It is clear, however, that most Americans are no longer either willing or able to do the work that it takes to be informed and have thoughtful positions on a wide range of issues. This is a fact that has consequences each time American voters return to the polls to choose their leaders.

Without a width and breadth of knowledge regarding world and national events and conditions it is unlikely that voters can choose leaders that are equipped to face the challenges of their terms. In fact, it may be the case that voters are perpetually choosing candidates based on their ability to deal with events in the recent past, rather than those they are likely to face in the near future. This is analogous to the way many investors buy stocks that have risen recently and sell those that have fallen. There is no quicker way to insure ruin in your portfolio then buying high and selling low.

Regardless of how the George W. Bush presidency turned out, can anyone honestly say they voted for him in 2000 because of his ability to confront the threat of global Islamic fundamentalist terrorism? Of course not. Wasn't W the candidate that couldn't come up with Pakistani President Pervez Musharraf's name in an interview during the campaign?

By the same token, many Americans may have voted for Barack Obama based on what they thought was his ability to deal with greed on Wall St., decay in Detroit, and gridlock in Washington. Recent events though may replace these challenges with war in Gaza, massacre in Mumbai, and Russian aggression in Georgia.

During what is undoubtedly a long and tiring Presidential campaign, just what is it that the candidates believe they are vying for? The title of this post is not a typographical error or the result of tortured syntax (though no doubt there is no small portion of that in this blog). Rather it is a comment on what it means to own or be owned and serves as the epigraph of a Fitzgerald novel. A version of it has been making the rounds in the wake of the financial crisis namely that if you owe the bank $100 that is your problem. But if you owe the bank $100 million, that is the bank's problem.

While I certainly did not vote for Mr. Obama, I can only hope that his abilities serve him well over the next four years and that he is able to take ownership of his circumstances rather than have his circumstances own him, and, by extension, us.