Don’t let Obama’s weakness become his strength

For all the talk about Republican intransigence and House Speaker John Boehner’s weakness in corralling the more conservative members of his caucus, it’s President Obama’s inability or unwillingness to reign in left wing Democrats in Congress that is the impediment to the basic predicates for a fiscal cliff agreement, and indeed hopes for a larger ‘grand bargain’ to deal with the government’s structural deficit. CNN reminds us:

Boehner and the president met in person on Monday, but sources familiar with the talks indicate that the framework under discussion is what Republicans are pushing to get to agreement, but it’s unclear whether the make up of the $2 trillion framework could get support from Democrats.

Democratic sources tell CNN part of the issue now is that the trillion in spending cuts comes from some changes to entitlement programs such as reforms to Medicare – along with a discussion of raising the eligibility age. These Democratic sources say it is unclear if those Medicare changes could pass the House or Senate, because they may be too deep for many Democrats.

Whether it’s his silence when the Senate Majority leader hurls McCarthy-ite accusations at the Republican Presidential Nominee, or ignores the law by simply refusing to pass an annual federal budget for three years running, the President’s glaring double standard toward partisans in Congress has long undermined his concurrent attempts to position himself as an above-the-fray mediator of Washington’s partisan fights. Yet it is his assumption of that position which gives the President the confidence to risk going over the fiscal cliff in a bid for enhanced leverage.

At some point – say, now – Republicans must resist upping their offer (according to CNN, they’re offering both rate hikes and to forego leverage points over the next year by raising the debt ceiling through the end of 2013) and leave the President to do his own work, i.e. deliver his party, or risk losing whatever leverage he’s accumulated. Keith Hennessy, Director of the National Economic Council under George W. Bush, persuasively argues that President Obama is an unsophisticated and/or ineffective negotiator. It will be ironic, but in keeping with the President’s unrivaled political luck, if despite all his other weaknesses, his weakness in dealing with congressional Democrats becomes his trump card in second term standoffs with Republicans. To snuff out that dynamic before it takes root, House Republicans need to signal that further movement from their side is unlikely, and Senate Republicans should signal that they intend to hold the line. This would shift focus to the President’s role in ensuring that worst case scenarios are avoided. If the President continues to lack the skill or will to deal with recalcitrant Democrats, that’s something that should be exposed to, not hidden, from public view.

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Of course Robert Griffin III is a Republican

ESPN’s Robert Parker asks the question, and he’s clearly not happy that he even has to ask. So, is RG3 a ‘right-winger’? Was Jack Kemp a Buffalo Bill? The guy doesn’t whine, takes responsibility, doesn’t blame his teammates, wouldn’t sulk if someone else was getting more playing time than him, etc. Why wouldn’t he be a Republican? Andrew Luck probably is too. And Russell Wilson. Actually, can we think of an NFL signal caller who isn’t?

We know Matt Hassellbeck’s sister-in-law is the Republican on ‘The View’.

Peyton Manning? Come on, Republican. Eli Manning? Apathetic between election cycles, sure, but he always makes it to the polls. Last couple of elections, he’s even run a pretty mean carpool.

Tony Romo, Joe Flacco, Phillip Rivers, even Tom Brady (even though Gisele made him switch his voter registration). All those guys are Republicans.

Aaron Rodgers, for sure, in the stealth Wisconsin mold of Scott Walker and Paul Ryan.

And Matthew Stafford once told a girl in college he was voting for Obama, but even she didn’t believe him.

Are there any good quarterbacks in the NFL who aren’t Republican? Can you be a good quarterback if you’re Democrat? Heath Shuler, the former Congressman from North Carolina, is the only one who comes to mind, and he was not good (not good at all). Ryan Fitzpatrick went to Harvard, but he’s got that beard. Mark Sanchez maybe? Neil O’Donnell? I don’t know, just throwing names out there.

Guy Benson over at HotAir has more on the controversy over the controversy caused by the speculation that Robert Griffin may be a Republican even though he’s black. You can’t make this stuff up.

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Obama has a funny way of looking at things

Judging by his remarks on the debt ceiling last Wednesday at the Business Roundtable’s quarterly meeting in Washington, D.C.:

So I want to send a very clear message to people here: We are not going to play that game next year. If Congress in any way suggests that they’re going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation — which, by the way, we had never done in our history until we did it last year — I will not play that game.

[emphasis added]

He seems to think that demanding a higher credit limit constitutes a ‘negotiation’ and that Republicans’ refusal to acquiesce means they are responsible for tying things up, more so than the government is for hitting its borrowing limit within ever shorter intervals of time. That’s absurd on an abstract level, and it conflicts with the history of how we got from a (disturbingly) mundane debt ceiling increase request in summer of 2011 to the grand bargain discussions the two sides are having today. In fact, it was Republicans who initiated the cooperative process that has brought the country closer than it’s ever been to enacting a comprehensive solution to structural budget problems that will result in catastrophe if left alone. They essentially sat the President down after they resoundingly won the House of Representatives and he requested an extra trillion or so in borrowing authority, and said, ‘Hey, we need to talk. We can’t go on like this…’

In contrast, it’s the Democrats, led by Obama, who mocked the idea of dealing with the problem (spending and debt) and not just the symptom (insufficient credit to service the government’s past borrowing). And now, 16 months later, it’s Democrats who want to renege on agreed-upon spending cuts that were the result of the bipartisan Super Committee process, and, while they are at it, carve up (or ‘decouple’) the Bush tax cuts so that their apportionment finally matches the Democrats’ rhetoric on the issue. (Universal Bush tax cuts and a selective continuation of those lower rates by Obama will bring reality up to speed with longstanding ‘Bush tax hikes for the rich’ and ‘Obama tax cuts for the middle class’ talking points). The moniker ‘fiscal cliff’ is simply a way to lift up these cynical moves to something approaching patriotic duty.

In reality, Obama’s bizarre remark on ‘negotiation’ shows that continued White House unreasonableness after a mixed outcome in the November elections is the primary obstacle to a grand bargain, or indeed significant progress on any other big issue in the next four years. For members of Congress in both parties, remembering that is the only imperative.

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White House Aide: More Polarization Now Than During Civil War

To be fair, it’s not clear from Chuck Todd’s recounting how much the “very smart White House aide” knows about that interesting period of history, 1861-1865, and its various successions, proclamations, military battles, and constitutional amendments. (There was also that shooting at Ford’s Theater.) Still, comparing on-going fiscal cliff negotiations to the ‘end of slavery’ is breathtakingly cynical, not to mention wholly counterproductive.

Sounds like classic Stef Cutter, Obama’s former Deputy Campaign Manager. As it happens, Cutter is the newest conscriptee in the effort to bamboozle the American people during the lame duck session of Congress, according to MSNBC’s reporting this morning. Ultimately, it doesn’t matter who Chuck Todd spoke with. If that’s the caliber and tact of people working in the White House then perhaps what Obama needs most is not a different House of Representatives from the one elected in 2010, and again in 2012, but rather a new inner circle.

It’s another way of saying that Democrats must decide what they’re about–governing by compromise or using reckless brinksmanship to push a mandate that doesn’t exist. Ron Fournier made this point in the National Journal the day after the election. “If the president begins his second term under any delusion that voters rubber-stamped his agenda on Tuesday night, he is doomed to fail.”

If Senate Democrats find the prospect of facing voters in 2014 with unemployment at 9.1 percent unappealing, they should talk to their man in the White House about re-upping the compromise from the 2010 lame duck before more fissures within the caucus surface publicly. The applicable history lesson for their party is Lincoln’s ante bellum line, “a house divided against itself cannot stand.” That is, assuming the White House has heard of it.

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Four More Years, Starting from the Top

As Thomas Friedman’s latest brainwave reminds us, ‘four more years of the same’ isn’t just a fading echo from the Romney campaign; these days it’s also a handy approach to writing for the New York Times. While most of the political world is focused on the fiscal cliff, Friedman is focused on another round of fiscal stimulus. He’s quite taken with the amount of money we could put towards ultra high-speed internet networks like the one in Chattanooga, Tennessee, though he’s unwilling to admit the true cost, and intent on distorting our sense of the benefits. He concludes his column with a proposition:

[Chattanooga’s] network was fully completed thanks to $111 million in stimulus money. Imagine that we get a grand bargain in Washington that also includes a stimulus of just $20 billion to bring the 200 biggest urban areas in America up to Chattanooga’s standard. You’d see a “melt-up” in the U.S. economy.

First, the math. Friedman uses Chattanooga’s stimulus grant amount as a proxy for the average cost of extending the network to each of 200 cities. This is a bogus assumption, meant to downplay Friedman’s expensive ambitions. We don’t have to scour municipal accounts; just read the rest of Friedman’s column. A few paragraphs earlier, there’s this:

[Chattanooga passed] a $229 million bond issue to build a world-class fiber-optic grid

In yet a different paragraph, Friedman suggests the bond issue occurred in 1997. (no word on maturity or interest rate)

In summary, the $111 M stimulus grant only covered the cost of finishing the network (making it “fully completed”, to quote Friedman). Commencing the project cost no less than $229 M. Total project cost: $340 M. Using this more accurate number as the average cost for the top 200 cities, the cost of Friedman’s project adjusts to $70B – several times larger than the $20B he claims.

Then there’s Friedman’s ‘fallacy of composition’, which amounts to an even greater deception. In short, even if the benefits for Chattanooga exceed $340 million, they aren’t widely replicable. Indeed, attempts to replicate them in other cities could undermine the success of Chattanooga’s project. The greatest benefit for Chattanooga is in becoming a destination for companies drawn from around the country, or for start-ups that would have been started elsewhere; essentially a shifting of jobs to Chattanooga from the places where they would exist otherwise. If similar networks are built in other cities, this ‘destination effect’ becomes weaker. If enough are built – even a fraction of the 200 Friedman wants – the effect disappears completely.

If Friedman had cited Las Vegas for why every state should legalize gambling and build high end hotel-casinos, the fallacy would be obvious. It’s less obvious here because, unlike having a casino within easy driving distance, having higher speed internet access does actually tend to improve productivity of the existing workforce, creating at least a few jobs that would not exist otherwise anywhere in the system. It’s easy to conflate this very modest productivity effect, which actually is widely replicable, with the substantially larger ‘destination effect’, which lasts only so long as your city is both the first, and the only mover. Buying Freidman’s pitch requires conflating these distinct types of benefits, or simply assuming that they account for roughly equal parts of the aggregate benefits experienced in Chattanooga.

In short, Friedman is taking his readers, and American tax payers, for dupes. Truth is, most of the benefit comes from the destination effect, with only a small fraction coming from the tiny upticks in productivity associated with a faster internet connection. We learned this when, in 2011, the left ‘debunked’ the Texas miracle under the economic stewardship of Rick Perry. The left explained how low tax rates and measured regulation only makes sense as way to steal businesses from Democratic states. As national policy, it just won’t work–they assured us. Yet, Friedman wants us to follow the lead of . . . the Mayor of Chattanooga? Of course, Chattanooga is located in a conservative state, one with levels of taxing and regulation comparable to Texas, one presumes.

Adjusting for the fallacy of composition and off-budget accounting, which we do by assuming that 10 percent of the total benefit comes from productivity gains and multiplying the $111 million stimulus price tag by three to mimic the Chattanooga project’s true cost, we see that Friedman implicitly overstates the expected return on investment (ROI) by a factor of 30! And that assuming the true ROI is positive. Although more optimistic assumptions on productivity gain would make Friedman’s exaggerations appear slightly smaller, it’s more likely that his ‘new Neal Deal’ is net negative proposition for most every city – say, 190 of the top 200 – and thus a huge net negative for the country as a whole.

And this is before you adjust ROI for interest payments, since a new stimulus would be funded with borrowed money. Even if the promise to repay is a lie, and therefore the cost of borrowing illusory, the ‘investment’ loses nearly all its potential benefit once it moves from anecdote to nationwide model. On that level, it becomes a make-work internet arms race where the whole nation comes out behind – perhaps Chattanooga included, depending on how long their internet advantage lasts. (It should last a while, considering the 15-year lead time.)

The productivity gains, such as they are, may increase inequality. This has been the general experience with the spread of information technology over the past twenty years. In theory, these technologies increased productivity across society. In practice, certain people increased their productivity more than others, while the managerial and executive classes were best able to leverage these gains for personal benefit. Continued marginal advances in technology should bring more of the same. And since the aggregate effect falls well short of what Friedman’s fallacy suggests, universal high-speed internet is unlikely to produce enough new jobs to justify increasing inequality.

And then there’s the rhetorical questions: didn’t we have a $800 billion stimulus in 2009? And if this idea is so great, how come it accounted for only $111 million of those expenditures? Perhaps the entire $70 billion tab couldn’t be met, but a mere 0.15 percent suggests low confidence. And are there other projects from the stimulus that deserve a 700 fold funding increase during Obama’s second term? One can imagine the numbers adding up quick.

Most importantly, is more stimulus the Democrats’ big new idea? A Times column is the place for fresh thinking, should such a thing exist on the left. If Friedman is any guide, Obama’s updated approach is to super-size the underwhelming policies of the last four years. But as the fallacy of composition counsels, sometimes less is more.

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L’Affaire Petraeus

The theories about links to Benghazi are out there and they offer the simplest explanation (behind, you know, taking the resignation at face value). But, if Petraeus wanted to distance himself from a Democratic administration ahead of a 2016 White House run, and make potentially damaging private information public on his own terms, and early enough to make it ‘old news’ when it came time to formally announce his candidacy, would this be a good way to do it? (Assuming, the affair was something that he thinks would come out sooner or later.) Is there a good way to do something like that?

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The Race Gap

No one wants to say it, but the gap in the election was not gender, but race. The proof? According to exit polls being cited by CNN, white women threw their support behind Romney more heavily than did men of all races (56-44 vs. 52-45). Some of this is generational; young people are easily seduced by cheap left-wing romanticism, and the largest minority in the country (latinos) skew younger than any other group. Nonetheless, the question is not What’s the Matter with Kansas? as much as ‘what’s the matter with BET and Univision?’ With the Supreme Court primed to rule on affirmative action in 2013, the race question is likely to come more to the fore of the national conversation.

Update: As Guy Benson points out at Hot Air, Romney won white voters ages 18-29 by seven percentage points, according to exit polls. There’s really no way around it: if you had to pick a single determinative factor, clearly it was race, not gender or generation. What does this say about the political wisdom of amnesty, or how ‘amnesty’ could be defined to make it acceptable to both Republicans and conservatives? At what point does attempting to curry favor with Latino voters by creating, say, five million more of them become self-defeating, or just plain counterproductive, from an electoral standpoint? I’ve been thinking about this for a while, dating back to 2010 and the mass hyperventilation around Arizona’s SB 1070. Probably time to devote a full post to the calculus surrounding the immigration issue.

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