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Jeff Madrick

Jeff Madrick

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The Tragedy of Defensive Politics

Posted: 04/ 8/11 03:17 PM ET

A New York Times story today is titled, "On Budget Dispute, Obama Casts Himself as Mediator in Chief." To me this is chilling, if obvious. He has long been the mediator, as if he were a Sunday morning talk show host. The attitude that he must always appear calm, always work toward compromise and avoid at all costs appearing to be a rabble-rouser, is now taking an enormous toll.

Like today's media, he gives equal time to the opposition. Now we have someone representing the anti-gravity point of view, says the allegedly objective talk show host. Tell us, why do you believe gravity is a myth? Obama wants to compromise with the anti-gravity extremists rather than calling them out in a loud and angry voice, calling them what they really are.

Many of his supporters lament that Obama took the presidency in the face of a daunting agenda, from wars to a credit crisis. The truth is something of the opposite. All these were extraordinary opportunities. He could have come down hard on the banks, but he didn't. He could have wound down the war in Afghanistan, but he didn't. He could have closed Guantanamo, as he said he would, but he didn't. And on. He could have won the people's backing for real reform, a new day in America. He didn't even fully stick up for his original Obamacare program.

Has it been all bad? No. He did get the stimulus passed in early 2009. We do have something of a universal health care system, if one full of potential potholes. He has at least avoided a gung-ho American chauvinism about Egypt and Iraq.

But the so-called unprecedented number of hurdles were, as I say, the perfect opportunities to get angry, to tell Americans who was really undermining their dreams and security -- the perfect opportunity to get Americans angry at those who harm them.

Why didn't he get angry over the lightweight and damaging Paul Ryan proposals, which so many in the media called courageous? Why isn't he attacking Republicans hard for even the threat of closing the government?

He has chosen the mediator path. This has always been his way. But the new element is the election campaign. He is playing defensive politics, and America is suffering badly as a result. Better I compromise than chance alienating some of those in the middle. At least if I lose some major battles I will keep a Republican from winning office.

Years ago, there was a good book published on how to manage investments. It took its lessons from tennis. If you are a club player, you will win if you play defensively. Don't go for winners, just avoid mistakes. That was also the best way, the author insisted, to manage a mutual fund, for example. Slow and steady, defensive, no big ambitions, don't try to beat the market badly. That's now the Obama game plan.

The budget confrontation is not about economics, of course. Budget cuts in the midst of a weak economy are dangerous and potentially tragic. The long-term budget deficit should be addressed when the economy is running strongly. And it should be addressed honestly -- rapidly rising health care costs are the issue.

The confrontation is simply the same old Republican game. Starve the beast. It is all about reducing government, nothing about economic health. It is about ideology, not prosperity. It is bad economics, in fact.

Will lower taxes produce economic growth sufficient to reduce the unemployment rate rapidly? No. It seems people can't get this simple fact in their head. After the Bush tax cuts at the start of the last decade, the U.S. economy grew more slowly than in any other expansion since World War II. If we had better data, it would be probably show that it was slower than any other expansion since the 1870s. This is between the end of the last recession and the beginning of the new one in 2007, when the economy was growing. It does not include the credit crisis debacle and Great Recession, for which Bush deserves plenty of blame.

The creation of jobs was unprecedentedly weak as well. Employment grew far more slowly than in any other expansion, as did industrial production. Even capital investment, despite rising profits, grew more slowly than in all but one previous expansion.

So this budget exercise, and a Paul Ryan budget plan of big tax cuts, is likely a disaster. And whatever you do, don't think this confrontation is purely about economics. It is entirely about cutting the size of government and those awful social programs. Down to the wire, we now know the Republicans' real strategy is to attack abortion and the anti-pollution regulation. It is not even about budget balancing.

Obama is again being outmaneuvered. As a close friend says, Obama is playing checkers, the other guys are playing chess. But the root causes are the insupportable strategy of being calm 24/7, avoiding angry attacks, and ultimately accepting compromise with those who don't believe in gravity. This is not leadership. I yearn for FDR more every day.

Cross-posted from New Deal 2.0.