Obama’s Self-Destructive Optimism

August 8th, 2011 at 11:02 am | 45 Comments |

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A simple theory of why Obama didn’t come out fighting in 2009: he expected an economic turnaround in four years.

My co-bloggers John Sides and Josh Tucker responded yesterday to a recent newspaper article in which psychologist Drew Westen argues that Barack Obama made a mistake by making conciliatory noises rather than aggressive Wall-Street-blaming in his inauguration speech and after.

Westen argued that had Obama set up a narrative with clearly defined bad guys, he would’ve had more success in policy and public opinion.  John and Josh argue that (a) it’s results, not rhetoric, that sway public opinion, and (b) if anything, aggressive rhetoric just makes it harder to achieve the sorts of cross-party alliances that a president needs to have policy successes.

I have a slightly different reaction, in two parts:

1.  It’s probably unrealistic to suppose that Obama would have led off his presidency with a speech attacking Wall Street.  Obama is probably the last politician you’d expect to attack these guys.  First off, in 2008, Obama was the preferred candidate of Wall Street–they were a big source of his campaign contributions and he supported the bailout.  At the same time, I think many on Wall Street never really trusted Obama and were on the lookout for signs that he was really a left-wing redistributionist.

Someone on the left wing economically could attack Wall Street every day–he’d have nothing to lose–and a right-wing politician could slam Wall Street as well, they might recognize it as cheap talk.  But a president who is paid for by financial types who don’t fully trust him–he’s in the worst possible position to make that rhetorical move.

2.  More to the point, I don’t think that in January, 2009, Obama had any feeling he was in trouble.  For one thing, he’d spent the previous two years beating the odds and winning the presidency.  (Yes, a Democrat was favored in the general election, but Obama was only one of several Democrats running.)  As I and others have discussed many times, successful politicians have beaten the odds and so it is natural for them to be overconfident about future success.

But, getting back to the big issues facing the voters, I assume that Obama figured that the economy would bounce back in 4 years.  I suspect his model was Reagan in 1981-1984.  Who could imagine, back in 2009, that the economy would still be in the dumps in 2011?  Paul Krugman, maybe, but he wasn’t making policy.  (One big difference was that Reagan faced a Congress full of Republicans who wanted tax cuts and Democrats who wanted economic stimulus, and every step of legislative fighting led in the direction of economic expansion.  It didn’t work that way for Obama.)

If you accept the hypothesis that Obama came into office expecting an economic turnaround in four years, then everything makes sense.  Why would he attack Wall Street in his inaugural address?  No need to piss off the moneymen.  Why be partisan?  Better to pass moderate legislation with 70 or 80 votes in the Senate rather than fight to the death to get everything on the Democratic party’s wish list.  Long-term, the 2006 and 2008 elections gave a lot of people the impression that the Democrats would be in the driver’s seat for awhile, so there seemed to be no rush.

Arguably the best advice for Obama would’ve been the opposite of Westen’s.  Maybe he should’ve been more bipartisan from the start and done what it took to get those 70-80 Senate votes on key issues.  I don’t know.

The key to Westen’s and similar analyses is that Obama would be doing better now had there been a bigger, more effective stimulus package, and maybe Obama could’ve gotten there by more actively enlisting public opinion in early 2009.  This might well be correct, but I don’t think the Obama team had any sense that the economy was in such bad shape that this would be needed.  And if they didn’t feel that urgency, I can’t see them turning on their friends on Wall Street.

Originally Posted at The Monkey Cage

Recent Posts by Andrew Gelman



45 Comments so far ↓

  • Graychin

    Obama didn’t forsee that his political opponents would unite to deliberately sabotage the economy, maximizing the probablity of Obama’s defeat in 2012. No one else did either.

    It’s hard to believe, I know. But all we have to do to prove it is take Mitch McConnell at his word.

    • Nanotek

      + 1

      • Smargalicious

        -1

        Obama was simply exposed. He was not vetted before the election, and he proved that he was not suited for the job. Everyone knows that he only identifies with his core fatherless welfare constituency.

      • balconesfault

        +1

    • zanerbrainer

      I agree, but think Obama could have handled that opposition much better (partially covered in comments below). I think part of his problem is that he lets all arguments be played out on republican terms. They’re happily painting him as a socialist/muslim/anti-christ/fascist/wimpy/whatever, but what is his vision? How does he think the US should move forward?

      • Smargalicious

        Therein lies Obama.

        He has no plan other than to carry out his reparations agenda, which was stopped cold last November. He’s flundering and the nation is suffering…massive debt and unemployment…loss of world prestige….humiliating credit downgrade…he will be remembered as America’s biggest mistake.

        • zanerbrainer

          I don’t think it’s all that clear. You can’t deny that he inherited most of his problems. But i think that his handling of them since then has been really dismal. Somehow he has let a republican-led meltdown (medicare D, 2 unfunded wars, tax cuts, and deregulation) turn into a WEAK hand for the democrats! The ire behind the tea party movement could have been steered into a moderate, progressive movement to maximize effective government activities and do away with ineffective ones.

          I want Obama to own the best parts of the public programs and offer to work with anyone in congress to address the biggest liabilities. At the moment, he seems to be achieving the opposite.

        • Carney

          Medicare D has, uniquely for entitlements, come in below cost projections, in large part due to its voucher structure making seniors pay attention to price. It’s not responsible for our problems.

          Calling the wars “unfunded” wrongly implies that our past wars were customarily pay-as-you-go, and fully paid off by the war’s end. The truth is that ALL wars are “unfunded” that is paid for in large part with debt, from the Revolutionary War onward, with a long hangover of debt repayment in the peace afterwards.

    • paul_gs

      Nobody is deliberately sabotaging the economy and to say so is dishonest, almost as dishonest as labelling elected reps “terrorists”.

      The Tea Party is not my cup of tea, but the US’s credit downgrade is only surprising to anyone who hasn’t read a newspaper or surfed the net in the last 3 years.

      • Primrose

        The debt crisis was an entirely manufactured crisis so either we say the Tea Party are as stupid as dirt or they planned it. I’m open to either interpretation.

        And I know I’ll regret this, but what “reparations” agenda, Smarg? There was no such thing and you know it.

  • GrandBargainHunter

    I think Westen’s key point is not that Obama should have been “angry,” but that he should have constructed and repeated a much clearer narrative about what had just happened and what he was going to try to do to fix it. Instead of “welcoming hatred,” he could have talked about the role of government in holding people and institutions accountable. People needed/need a clear story to cling to through these difficult times, and the clearest story with the most emotional punch comes from the Tea Party. I still believe Obama could have harnessed some of that energy, or at least built a force to counter it. As things stand now, some of his most ardent supporters (like me) are pretty much demoralized and confused.

    • rbottoms

      Well we know how much America appreciates angry black men.

      • Smargalicious

        Indeed, bottomly. Why don’t you personally observe the score of millions of them in our urban areas? After all, your ilk subsidized their births and give them entitlements for doing nothing except prey on innocents. You won’t because you’re afraid of them.

        Were you like Obama who put his kids in private schools to avoid the violent fatherless welfare thugs (otherwise known as ‘Obama voters’??)? Har!

    • zanerbrainer

      Agreed. I have said many times recently – I disagreed with most of the Bush II’s views and priorities, but i could name them. Obama does not define and hammer a clear view and rationale for the decision that he’s supporting. He always seems to legitimize his opponents’ positions and negotiate on their turf rather than define his own argument for what path America should be on. Then he seems to largely lose each negotiation, but sound like he’s satisfied with it.

      I agree that R’s are going to unprecedented lengths to block everything he wants, but he’s supposed to be the eloquent, progressive president. How is it that he doesn’t beat the R’s on these issues? How does he spend all this time on the debt “crisis” instead of saying jobs are his focus? How does he let the R’s get away with filibustering the elimination of oil subsidies when they’re making record profits quarter after quarter? I like Obama, but I seriously don’t understand how he went from his campaign attitude to this sorry state.

      • balconesfault

        He always seems to legitimize his opponents’ positions

        This cuts to the heart of it. Obama keeps believing that if he treats his opponents with respect, that they will return that respect.

        After all – we’re all Americans, and we all want a prosperous America, right?

        Well, he faces political opposition which will only interpret respect as weakness.

        Obama is in a bind – if America wants hyperpartisan politics and talk-radio rhetoric from their politicians, he’s not the sort to deliver it. And while America SAYS they don’t want those things … they keep giving power to those who embrace them.

        • zanerbrainer

          I agree, hyper-partisan rhetoric clearly works. But i was expecting Obama to use his mojo to rise above that. He doesn’t need to become the polar opposite in terms of partisan hyperbole, but to be the person insisting on facts, context, and constantly refocusing our attention on what will make the country recover and thrive. He goes halfway (respectful, conciliatory, calm) but doesn’t actually seem to have a backbone underneath that. The halfway position looks the most vulnerable.

        • JimBob

          Hussein is a typical leftist politician. He is out the Barney Frank School of Demagoguery

        • Primrose

          Once again, if you are actually interested in rational discussion, please try to use people’s correct names, as they use them. We all slip up in the regard occasionally but you never use Mr. Obama’s name in a way that indicates generalized respect.

          This is exactly the kind of bad habit that leads to troubled people shooting children and thinking they are heroes. Your refusal to adopt the habits of civil discussion leads me to think that your OK with that. And if you are OK with that, then nothing you say is worth listening to because you are morally bankrupt.

  • pnwguy

    Graychin:

    And I thought Hillary would have been endlessly pummeled by Republicans. But I’ve never seen such obstinate opposition in my lifetime. Democrats will argue for their interests, but they will ultimately compromise with Republican presidents. The current GOP wants only scorched earth right now.

    On top of that, if this analysis is correct, Obama and the rest of us didn’t get an accurate picture of the depth things had sunk.

    http://www.economist.com/blogs/freeexchange/2011/08/fiscal-policy

  • some-guy

    And if frogs had wings they wouldn’t bump their ass a hoppin’. This hardly rises to the level of fatal flaw.

    Graychin’s comment is much more to the point. Mistakes in judgement can be corrected, unless there is someone actively trying to prevent you from correcting them. As long as the goal of the Republican Party is to destroy Obama, the economy is screwed.

  • Primrose

    I agree with graychin and all. The Republicans had a scorched earth policy. It was largely because of race. And narratives like this article only reward them for it.

    I also take issue with the NY times article because I think the most irresponsible thing Mr. Obama could have done was to slam Wall Street. They were already scared and they are a deeply emotional bunch that make the market take a dive every time a democrat wins. The economy would hardly have been served by precipitating a deeper crash.

    I think Mr. Obama deliberately dialed back so that everyone could relax and feel they had a steady, non-radical person at the helm.

    And then came Death Panel summer, and the Teahadists. My question is, if the first summer after the crash we hadn’t suffered through hate-apalooza, would we all be in such a dour mood? If we had survived the recession without it turning worse, had joined forces as a country to solve pressing issues like healthcare, we might be feeling in good spirits. People would still be paying down the debt, housing would not be a jumping but we would be confident and business would hire when it needed to instead of sitting on cash.

    No, the crash of confidence had as much to do with Sarah Palin’s barbarian politics and Beckian prophets of doom as Mr. Obama. I know they will wiggle out of accountability for their actions but that doesn’t change the truth.

  • abg

    In January 2009, when Obama and his advisers were formulating policy, economists said that, in the final quarter of 2008, the U.S. economy contracted at an annualized rate of 3.8 percent. We now know, however, that the actual rate of contraction was 8 .9 percent. The White House was working from inadequate data, to say the least. In truth, could the federal government have created a stimulus large enough to counteract so karge a contraction?

    • Chris Balsz

      Before I blame Obama for failing to push through the solution to the Great Recession, I think we have to have a clear idea what that solution should have been.
      Given the level of error in Washington, it’s hard to see how anything given consideration in 2009 would have worked.

  • Oldskool

    It’s in his DNA to be conciliatory, pragmatic and strategic. He knows better than to lob grenades and alienate independents. And besides, he’d look like Shrub when he tried to sound intelligent, he never could pull it off.

  • ottovbvs

    I never pay too much attention to pop psychology particularly when it’s delivered from some remote point that has no connection with the subject. There’s probably something in the belief that Obama thought the economy would have been in better shape by now but I don’t see that it had a lot of impact on his conduct of affairs. The largest possible stimulus that could be passed was around $800 billion and even if he’d have wanted a bigger one there was no way it was going to pass. Within the parameters of the legislation passed both with the stimulus and TARP the admin were as creative as they could be (eg. bailing out the auto industry which has proved a huge achievement). Obama’s governing style is basically low key so ATTACKING elements of the American polity was never going to be his approach. Despite the fact his appros are around 48% in that latest NYT poll I’ve little doubt his support remains intact even if grudgingly so on the far left. Basically he’s trusted not to do anything stupid. I don’t think the country feels this way about the Republicans either generally or individually and this is why he’s not really in trouble and will almost certainly be re-elected.

  • jamesj

    A simple theory of why Obama didn’t come out fighting in 2009: no rational person could have predicted the level of utter depravity that the Republican party would sink to since Obama entered office.

  • Steven Kopits

    Obama has strongly egalitarian tendencies. Egalitarianism does not appear to be on the median voter boundary, which seems to run between the Republicans and the Tea Party. That is where the agreed debt ceiling deal settled, no?

    As for the economy, we’re in the middle of an oil shock. See “Oil: What Price can America Afford?” for the reason for thinking so.

    Or read just the last paragraph in this article: http://www.aspousa.org/index.php/2011/04/pick-one-spr-or-recession/

    Since April, we have anticipated a recession by the end of summer, as this is consistent with the historical record for the oil consumption burden at recent levels. If so, it is very difficult to see Obama re-elected unless the recession is very short; and even then, I think it would be a stretch.

    A more interesting case is that of Senate Democrats. These voted against Alaska and other oil initiatives. Will they survive? If they hope to, they’d better get on the oil bandwagon pretty fast. But all in all, it seems more likely the Republicans /Tea Party will take the House, Senate and White House in 2012. If that happens, expect the pillars of the New Deal to also come into play.

  • Elvis Elvisberg

    First off, thanks for this fine post. You’re offering a thoughtful, semi-provisional, honest assessment of where we are. It’s blogging at its best!

    a president who is paid for by financial types who don’t fully trust him–he’s in the worst possible position to make that rhetorical move.

    That seems to me very astute.

    Thomas Ferguson had an interesting interview after the midterms last year: http://www.newdeal20.org/2010/11/12/money-and-the-midterms-are-the-parties-over-interview-with-thomas-ferguson-26869/

    the American people will not accept the policies that leaders in both parties prefer. In 2006 and 2008, the population voted no-confidence in the Republicans on the war and the economy. They have just now presented the Democrats with another resounding a no-confidence vote. What makes the current situation intractable is the fundamental reason for these serial failures. It’s obvious: big money dominates both major parties. The Obama campaign’s dependence on money and personnel from the financial sector was clear to anyone who looked, even before he won the nomination, promoted Geithner, brought Summers back, and reappointed Bernanke.

    Arguably the best advice for Obama would’ve been the opposite of Westen’s. Maybe he should’ve been more bipartisan from the start and done what it took to get those 70-80 Senate votes on key issues.

    Well, but that is what he did. He went for a too-low stimulus, then bargained away more of it to Senate “moderates”; then he went ahead with the health insurance reform plan that was a slight departure from what he’d campaigned on, and was based on ideas from the Heritage Foundation.

    The root of our problems is that the Republican Party has no policy views, and is therefore pleased to engage in brinkmanship rather than engaging in conventional bargaining & compromise.

    • ottovbvs

      “Well, but that is what he did. He went for a too-low stimulus”

      This is simply wrong as a matter of history. The roughly 800 billion stimulus passed with two votes to spare I think it was. He could have proposed a trillion bucks or two trillion of stimulus and it wouldn’t have made a dimes worth of difference to what he could pass. You’re glossing over congressional math.

      • Elvis Elvisberg

        You’re assuming that the “centrists” in the Senate have rational preferences, and that they would never have approved of a nickel more than what they did. I disagree.

        I think that if the administration had floated a number more in line with what conventional economic calculations suggested (see: http://www.talkleft.com/story/2009/2/13/8018/65962) , then the “centrists” would have been pleased to nibble that number down randomly, as they did to the $800b number.

        • ottovbvs

          “You’re assuming that the “centrists” in the Senate have rational preferences, and that they would never have approved of a nickel more than what they did. I disagree.”

          This is purely your personal opinionating based on zero evidence of Republican cooperation as far as I can see. The actual FACT is that $800 billion barely sqeaked through. Perhaps you’d like to give me a list of those Republican senators who were going to vote for a much higher figure?

        • Frumplestiltskin

          Specter most likely would have, he saw the writing on the wall then with regards to Toomey, and Specter would have made 60. I also agree with Elvis that if Obama made a full court press for more he would have gotten it. But I also acknowledge that counter-factual history is only a mental exercise and nothing but.

  • paul_gs

    I”m going to be a contrarian and say I like Obama’s optimism. I don’t believe a President who is excessively negative and partisan would be of value to the US at this time.

    During the debt ceiling discussions, Democrats should have been able to outmaneurver the Tea Baggers. That Democrats have instead become paralyzed with fear in responding to the Tea Party is still a surprise to me.

    • Oldskool

      Crazy people get a wide berth. Which was the intent all along.

      • paul_gs

        Dems have to be able to do better then that Oldskool. You confirm my original point, Dems are afraid of the Tea Baggers. Politically, that means Dems are very easy to intimidate.

        • ottovbvs

          You obviously didn’t bother reading that link I provided. The tea baggers didn’t frighten anyone other than the broad electorate as the post debt ceiling polls demonstrated. I’m not going to bother linking to them since factual data doesn’t seem to figure in your world view.

    • ottovbvs

      You might want to take a look at the small print of the debt ceiling deal. In fact Obama got most of what he wanted and didn’t concede much despite the wailing on the left. Don’t take my word for it, here’s a economically literate conservative at NRO via the Economist.

      http://www.economist.com/blogs/democracyinamerica/2011/08/deficit-reduction

    • anniemargret

      I beg to differ. I say it’s the establishment GOP that is scared to death of the T.P. Democrats prefer they just keep on hollerin and yellin and screaming their insanities. The more insane they sound, the more sane America will agree that the GOP is not fit to govern.

  • On Deciding . . . Better 3.0 : The President, Luck, and Regression to the Mean

    [...] Case in point? Barack Obama. From Andrew Gelman writing at Frum Forum [...]

  • Saladdin

    Maybe he should’ve been more bipartisan from the start and done what it took to get those 70-80 Senate votes on key issues. I don’t know.

    You’re kidding, right? What kind of legislation would’ve received 70-80 Senate votes? I cannot imagine what it would’ve taken.

    That said, Westen’s main argument lies in stimulus and it’s failure. Westen is plainly wrong. The stimulus worked, just not for long enough. Tax cuts had to be in the package as there were only 59 democratic Senators (Franken was still contested), so no chance to override a filibuster. That’s why there was so much unnecessary garbage in the bill (tax cuts, NIH funding for Specter).

    David Weigel explains better than I could.

    http://www.slate.com/blogs/weigel/2011/08/08/passion_is_no_ordinary_word.html

    • JimBob

      Anyone that thinks the stimulus worked is a few bricks short of a full load.

      • Saladdin

        Anyone who thinks it hasn’t has been watching too much FOX news and reading too many heritage talking points.

  • Jim_M

    Barack Hussein Obama is done…over and out.

    Don’t get your panties in a bunch girls but I hate this DO NOTHING presidency. As phony as a 2009 Nobel Peace Prize. An unremarkable Chicago mob puppet.

    Where’s your vision Care-Bear? What’s your plan? Leadership?….anyone?

    Bueller……