Krugman: Tax Cut Memories

Krugman’s column below raises questions about Obama’s political foresight. There are a number of convoluted ways to put a favorable spin on what Obama said, mostly along the lines that this is a sophisticated political maneuver to expose Republican intransigence, and appeal to Obama’s new political base (“undecided”/”independent” voters).

Less charitable interpretations are:

  • Obama was naive
  • Obama got what he actually wanted: a crisis (see Naomi Klein’s book The Shock Doctrine) that “forces” us to  “reform entitlements”

I incline towards the last interpretation: that Obama represents sections of our ruling class who want to privatize the social safety net. Many have commented on the growing “financialization” of the US economy (we don’t do anything as financially unsophisticated as “making stuff” any more): my guess is that this is who Obama is speaking for.

Tax Cut Memories

from Paul Krugmanby By PAUL KRUGMAN

Obama, at his press conference last December, announcing his surrender to the GOP on tax cuts; the questioner was Marc Ambinder:

Q Mr. President, thank you. How do these negotiations affect negotiations or talks with Republicans about raising the debt limit? Because it would seem that they have a significant amount of leverage over the White House now, going in. Was there ever any attempt by the White House to include raising the debt limit as a part of this package?

THE PRESIDENT: When you say it would seem they’ll have a significant amount of leverage over the White House, what do you mean?

Q Just in the sense that they’ll say essentially we’re not going to raise the — we’re not going to agree to it unless the White House is able to or willing to agree to significant spending cuts across the board that probably go deeper and further than what you’re willing to do. I mean, what leverage would you have –

THE PRESIDENT: Look, here’s my expectation — and I’ll take John Boehner at his word — that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse, that that would not be a good thing to happen. And so I think that there will be significant discussions about the debt limit vote. That’s something that nobody ever likes to vote on. But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower.

And so my expectation is, is that we will have tough negotiations around the budget, but that ultimately we can arrive at a position that is keeping the government open, keeping Social Security checks going out, keeping veterans services being provided, but at the same time is prudent when it comes to taxpayer dollars.



This entry was posted in Deficit, Finance Capital, Health Care Reform, Medicare, Obama, Social Security. Bookmark the permalink.

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