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September 03, 2011 8:40 AM The right and wrong side of a consensus

By Steve Benen

I haven’t paid too much attention lately to the cable-news chatter, but Josh Marshall noted yesterday some of the recent talk about President Obama’s upcoming economic speech.

If you listen to the establishment press the president’s speech will determine whether the president listens to “liberals” and ditches the move toward economic austerity or “moderates” and Republicans and sticks to budget cutting.

Really? That’s what the establishment press has been telling mainstream news consumers lately?

It’s important to realize how wrong this kind of media coverage is.

Economists and the financial industry want policymakers to boost the economy. The bond market wants the government to be aggressive in creating jobs. Wells Fargo lowered its growth projections recently, and said conditions will get worse “without policy intervention.” The conservative Financial Times argued the other day, “In broad terms, the needed elements are plain: further short-term stimulus combined with credible longer-term fiscal restraint.”

The pushback against the Republican austerity agenda is arguably even more intense. Jamison Foser explained recently:

J.P. Morgan says “fiscal tightening” will worsen the “negative feedback loop” hindering economic growth. Greg Ip notes, “A shift toward fiscal and monetary austerity in the United States in 1937 helped prolong the depression. Fiscal tightening helped push Japan back into recession in 1997.” Jared Bernstein argues for more stimulus. Larry Summers, too. Bruce Bartlett, a policy advisor to Ronald Reagan and Jack Kemp, writes, “the important thing is for policy makers to stop obsessing about debt and focus instead on raising aggregate demand.”

And this doesn’t even include warnings from the Federal Reserve and the Congressional Budget Office that aggressive spending cuts would weaken an already fragile economy.

We’re approaching an economic consensus among those who know what they’re talking about. If President Obama pushes an ambitious jobs agenda, he’ll be siding with economists, the financial industry, business leaders, and even the Fed, not just those rascally “liberals.” Republicans won’t like it, and apparently the establishment media won’t either, but that’s the reality of the situation.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

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  • c u n d gulag on September 03, 2011 8:44 AM:

    "We’re approaching an economic consensus among those who know what they’re talking about."

    Uhm, Steve, wouldn't that by definition exclude the chatterboxes and magpies in the MSM?

    They get paid to talk, not to know what the f*ck they're talking about.

  • sjw on September 03, 2011 8:55 AM:

    What seems clear to me now is that the upcoming jobs speech is Obama's make-or-break moment with his base: if he "goes long," there will be a collective sigh of relief from that base and many people in it will probably hang on; if he goes "short," however, Obama will find his base all but gone. And should the latter eventuality prevail, all I will be able to say is, "wow did he earn it."

  • Brenna on September 03, 2011 8:56 AM:

    I just posted a comment on your first story about how Political is reporting that Obama is about to tackle deficit cutting next. He'll further explain what he and Boehner had been discussing behind closed doors. You all remember: 4-1 cuts.

    I honestly don't know who our president is and what his values are. We're in scary territory right now, with the possibility of a President Perry.

    We deserve better than what we're getting. I don't buy into the guilt the republicans are selling that the middle and poor class aren't contributing enough. That's BS. And for Obama to be pissing away our futures by cutting into entitlements ticks me off. Shared sacrifice. Riiight!

  • Bostonian in Brooklyn o on September 03, 2011 9:04 AM:

    If it is true that J.P.Morgan does not know the difference between a negative feedback loop (a regulator - generally a good thing) and a positive feed back loop (increases produce more increases - good if it is increasing a good thing - bad if it is increasing a bad thin.) then I weep for my nation.

  • Live Free or Die on September 03, 2011 9:04 AM:

    From downthread:

    I think Obama is a good man, but his advisers really are bad. We talk about how Republicans are sabotaging the economy for political gain. I think that one of his advisers is really a Republican and is sabotaging the WH from within. How else to explain the unexplainable. Someone is telling him, "You know what Mr. President, all you have to do is give the Republican exactly what they want, and it will take the issue off of the table". But then all it does is piss off his base and independents and embolden Republicans. I think we need to check how Tim Geinter voted over the past decade. Did he even vote for Obama? Someone from within is sabotaging Obama.

  • Anonymous on September 03, 2011 9:10 AM:

    I expect Obama to:

    1) Lay out a very big jobs program
    2) Not use the word bipartisan. Instead of saying this has bipartisan support, he could say this was a republican idea, so I expect them to vote for their own idea.
    3)Say the word Republican repeatedly.
    4)Go on the road in Republican districts to show the shitty infrastructure that needs to be replaced.

    Am I being naive?

  • berttheclock on September 03, 2011 9:14 AM:

    Meanwhile, right wing so-called "economists" keep flooding the cable shows, such as Robert Samuelson and his ilk. Yesterday, while spending a few moments surfing, I caught a comment from some "economist" out of Kansas City. Beach was on Bloomberg, where, he implied "Obamacare" caused the stoppage of jobs. His comment was to the effect, "Well, before Obamacare passed, the economy was creating jobs, but, following that bill, job creation, for some reason, stopped".

    @Ron Byers, have you ever heard of this guy? Supposedly, he gives advice to two KC law firms.

  • j on September 03, 2011 9:16 AM:

    Live free or die =
    Every day I am the opinion that the stupid dems who could not bother to vote during the mid-terms are as much to blame for what is happening as anyone. Notice how the jobs were slowly coming back before the mid-terms and afterward everything went to pot, the repubs are drunk with power and that is all they care about. I wonder if in the next election the dems will be fed up and stay home - then the repubs will control all branches, house, senate, white house and the supreme court - not to mention state government.

  • walt on September 03, 2011 9:19 AM:

    Maureen Dowd generally drives me crazy but she has pretty much nailed Obama as someone too stubborn and proud to change. His bipartisan methodology creates nothing but ill-will with his base and rather ferocious glee among the other party's base. Will he learn? Can he learn? So far, the answer appears to be no.

    Let's stop blaming Obama's bad choices on his advisers. Obama is not a child. He is responsible for those choices and for choosing the people around him.

    The MSM is an integral part of America's Culture of Stupid. These boot-licking jackals who smugly intone that Americans want austerity for themselves and tax cuts for the rich are courtiers of a decadent empire. Mock them acidly with every breath you have. They're destroying this nation.

  • Live Free or Die on September 03, 2011 9:25 AM:

    @j:

    I'm trying to give the brotha the benefit of the doubt. Something is up with him, but I do not understand. Are there any shrinks in the house that can analyze what is going on?

  • Dredd on September 03, 2011 9:55 AM:

    There seems to be a consensus that invading Libya was error, but the demonization of Libyan government is ok.

    Would the fact that they have free education through the University level, free health care, interest free loans, $50,000 given to each newly married couple, free land and crop material for farmers, and automatic deposits into citizen bank accounts when "the people's oil" was sold?

    At least that is the way it was before the invasion of "an oppressed people".

  • The American People on September 03, 2011 10:00 AM:

    If President Obama pushes an ambitious jobs agenda, he’ll be siding with economists, the financial industry, business leaders, and even the Fed, not just those rascally “liberals.”

    Yeah, but he won't be with The American People!!

  • Harun Magnuson on September 03, 2011 10:30 AM:

    President Obama is timid with no apparent guiding principles. I will write in Nancy Pelosi’s name at our state’s primary and vote for the Green candidate in the national election. I cannot, in good conscious, support or vote for this man again.

  • Moonlight on September 03, 2011 11:04 AM:

    Don't worry. The establishment press will oppose economic austerity once President Perry is in the White House.

  • MNRD on September 03, 2011 2:32 PM:

    Harum, can't you see that there will be a depression in America if the Republicans prevail in 2012? Eight years of GWB led directly to the greatest financial crisis since the Great Depression. The Republican Party has become MORE fanatical and extreme since Bush left office - culminating in the debt ceiling hostage-taking maneuver that caused extensive damage to the global economy and a historic downgrading of the US credit rating. The Republicans are PROUD of the results of their hostage-taking maneuver and have loudly PROMISED TO CONTINUE that kind of behavior. I mean, can't you connect the dots? How can you possibly believe that a Republican victory in 2012 could have any other outcome than a severe depression? How will your "good conscience" be doing when your loved ones are going through a depression with 20% unemployment? Will you still believe then that it was a good decision to withhold your vote?

  • Doug on September 03, 2011 6:55 PM:

    My personal belief is that President Obama WON'T "go long". It might cheer up the whiners, at least until he fails to get it through Congress, but it carries the very big drawback of re-labeling Democrats as "big spenders" with absolutely NOTHING to show for it.
    The Infrastructure Bank, school rehabs, extending UI benefits, THOSE are definite job-creators (or job-maintainers) and, by not being massive, easily supportable by Democrats/liberals/progressives AND, most importantly, independents.
    In any sensible world President Obama would have the full support of the first three automatically. Any disappointments in his perceived "failures" should only increase our determination to elect MORE and BETTER Democrats to Congress, and throughout the states, to provide the "troops", aka known as "votes", Obama, Reid and Pelosi need behind them.
    I firmly believe what many decry as a wasted search for the "bi-artisan" fairy, has actually been the President demonstrating to the "independents" that the problem in DC isn't HIM or the Democrats, it's the Republican/Teabaggers. If independents, who hold the difference between winning and losing for ANY party in a general election, want that to change, they need to vote Democratic. President Obama is, I believe, going after that support by showing that he is responsible, open to valid arguments and not doctrinaire. Completely opposite, in fact, to Republican/Teabaggers.
    The "nice" thing about all of this, of course, is that the Republican/Teabaggers will continue to provide plenty of evidence that they're not only incompetent, but hypocrites as well. Ryan and his "Plan" that doesn't even add up. Boehner and his "So be it" in regards to unemployment. Cantor holding disaster relief hostage.
    Every little bit helps...

  • kindness on September 03, 2011 9:05 PM:

    The Village, the talking heads, the MSM are all wired for Republican control of the power structures.

    Without saying it they are doing everything they can to bring that Republican control back. It's obvious but you don't ever hear a 'serious' and 'respectable' person mention it.

    I don't think the game is rigged. just their end of it.

  • steve on September 03, 2011 10:37 PM:

    "Harun Magnuson on September 03, 2011 10:30 AM:

    President Obama is timid with no apparent guiding principles. I will write in Nancy Pelosi�s name at our state�s primary and vote for the Green candidate in the national election. I cannot, in good conscious, support or vote for this man again."

    the software accidentally deleted your last paragraph:

    "I don't understand that voting liberal third party in a winner-take all system benefits the GOP. I will blindly stick to my principles, ignoring the consequence that I'm making it more likely Rick Perry is my next president. Because I'm too dumb to know how bad that would be. Or, getting things completely backwards, I think this will push the Dems to be more liberal in the future."

  • impartial on September 05, 2011 10:26 AM:

    Meanwhile, Rahm, who probably still calls the shots, is back home in Chicago, busting unions, laying off workers and privatizing the city's services. Sound familiar to anyone?

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