SUNDAY, SEPTEMBER 26, 2010
KLMNO Sunday OPINION DAVID IGNATIUS DANA MILBANK
Republican for lunch!
I
t was a biting remark by the Democratic National Committee chairman. “You know, the Republicans, I think,
merged with the Tea Party, and in many in- stances they’re finding out it’s the Donner Party,” Tim Kaine told CNN’s Candy Crowley last Sunday, “because it’s knocking off Re- publicans left and right.” The chairman may have thought it was a harmless people-eating joke, one that he had already served up to the New York Times and to reporters on a teleconference. But it set my teeth on edge. Comparing Re- publicans to cannibals is deeply offensive — to the cannibals.
I claim some standing on the matter, be- cause I’m a Donner. According to family lore, we’re related to the Donners who, stranded by snow in the Sierra Nevadas a century and a half ago, resorted to eating their dead. My amateur genealogical work finds that
my great-great-great-grandfather, Jacob Donner, lived near Springfield, Ill., in 1846, when the Donner Party set out from there. He doesn’t appear to be the same Jacob Don- ner who perished in the mountains. Still, the geographic proximity and other similarities (not to mention my prominent canine teeth) suggest the family lore may have some truth. I have come to embrace cannibal kinship. But being compared to Republicans? This goes too far. Republicans have been doing things to each other that would make a Don- ner’s stomach turn. It has been estimated that 15 of the 36 members of the Donner Party who died in the mountains were eaten, and that half of the 45 survivors ate human flesh. The en- during fascination with the Donners led to books, movies, tourist attractions, a musical and even a Donner Party cookbook. But the Donners, unlike the Republicans, waited until their companions were dead before eating them. They took no pleasure in eating each other, and they exhausted all other possibilities — eating shoelaces, raw- hide, boiled animal bones — before resort- ing to what one survivor called “the unutter- able repugnance” of cannibalism. Compare that to the way Republicans
have been treating their kin lately, tearing them limb from limb and devouring them without so much as a burp of regret. They eat flesh not out of desperation, but out of tribalism; their partisan bloodlust has over- powered them and turned them on each other.
Among the recent victims: Sen. Lisa Mur-
kowski of Alaska. Murkowski was vice chair- man of the Republican caucus in the Senate, a faithful conservative who often was a spokeswoman for the party. But after she lost her primary to a Tea Party candidate and chose to run as a write-in candidate, her Senate colleague Jim DeMint (S.C.) called her a “big-tent hypocrite” who has “put her own personal interests ahead of everything else.” “Principles have never been that impor- tant to Murkowski,”DeMint told supporters. “She is one of the worst abusers of the pay- to-play earmarks system. And she doesn’t support the sanctity of human life.” Also taking a piece out of Murkowski was
Sen. John Cornyn, who runs the National Republican Senatorial Committee. He said that Murkowski deserves “consequences” for her behavior, and he then signed on, with a dozen other Senate Republicans, to do a fundraiser for Murkowski’s opponent, Joe Miller,on Wednesday. Meanwhile, Sen. Mitch McConnell, the Republican leader of the Senate, forced Murkowski to give up her leadership posi- tion. McConnell is scheduled to appear at a breakfast with Miller on Friday. Murkowski’s not the only one with her colleagues’ bite marks. Florida Gov. Charlie Crist was a darling of the party, but now that Crist is running for the Senate as an inde- pendent, the party is encouraging a class- action lawsuit against him by Republican donors seeking to have their campaign con- tributions reimbursed. (So much for tort reform.) Then there’s Sen. Bob Bennett (Utah), an- other colleague who was defeated in a pri- mary but who accepted defeat without at- tempting an independent run. That didn’t stop DeMint from belittling Bennett as one who thinks his “job is to take home the bacon.” Now that’s bloodthirsty. And yet the Re- publicans, who should be grateful for being compared to Donners, brushed off Kaine’s remarks. Sarah Palin was asked by Fox News’s Jon
Scott about Kaine’s Donner line. “Well, yes, the cannibals,” was her dismissive answer. “I think there are fewer of those than there are of us.” The way you’ve been eating your own,
Governor, it won’t be that way for long.
danamilbank@washpost.com
Have a
ness contraction since World War II, technically ended in June 2009. This may be a recovery, but to most people it still
T
doesn’t feel like one: Business confidence is shaky, and unemployment is above 9 percent. No wonder the public is in a funk and fringe political groups are in vogue. Even good news leaves people feeling grumpy. Let’s go back to Monday’s announcement from
the National Bureau of Economic Research, which is the official chronicler of the business cycle. The group said that the decline in economic output that began in December 2007 had lasted 18 months and that employment had continued to fall for six months after that. The economy is still weak: In the second quarter of this year, gross domestic product grew at an an- nual rate of just 1.6 percent. The numbers are so anemic that it’s easy to lose sight of what they mean: The cyclical downturn that traumatized the nation, and for a time seemed as if it might topple the global economy, is over. A new recession may begin, al- though economists seem increasingly doubtful that this “double-dip” scenario will happen. But even if it does, it will be a new cycle, with its own causes and consequences.
Economic life has its own sort of personality dis- order: When times are good, investors and con-
A glimmer of hope
he announcement last week made barely a rip- ple in the dark puddle of public opinion: The Great Recession, the longest and deepest busi-
sumers get manic. They act like the happy days will never end — borrowing too much, overpaying for real estate and other assets, and taking on more risk than they can handle. That’s a snapshot of the bub- ble years on the way to the crash of 2008. When the inevitable downturn finally came, Wall
Street and Main Street both got depressed. People acted as if the bad times would last forever, too, and they become overly cautious. Investors tried to stay as liquid as possible, preferring the low returns of Treasury securities to riskier assets. Consumers post- poned major purchases to build up their savings. It’s no comfort to people who lost their jobs, but this post-recession period of slow growth has had some benefits. The two big imbalances in the U.S. economy — our low savings rate and our high trade deficit — are in much better shape now, providing the potential for sustained economic growth once confidence picks up. The public-sector deficit is still frighteningly high, partly because of spending that was needed to cope with the Great Recession. But for the first time in a decade, we have an administration that sounds serious about rebuilding the fiscal base, with higher taxes for people who can afford to pay more and cuts in entitlement spending. It’s a mistake to think of economies in static terms.
They are always in dynamic motion, in one direction or another. But just as it’s a mistake to assume that booms will last forever, it’s also wrong to expect that a
slow-growing economy emerging from a deep reces- sion will remain permanently sluggish. At some point, people will sense that the worst is over and be- gin to invest and spend at more normal levels. Political fortunes can change as quickly as eco- nomic ones. The political market today seems to have bought the idea that Barack Obama is a failed president. His earnest, optimistic demeanor has been a bad fit with an economy that still feels so raw. But it’s easy to imagine this picture changing if the country posts a year of steady growth in 2011. If that happens, a lot of the politically unpopular deci- sions that Obama made — from the Wall Street and auto industry bailouts to pumping stimulus into the economy — may look a lot better to the public. For more than a year, top White House officials have
talked as if they were confident that their political strategy would work out well in the end. “I like where we are,” a senior official kept saying to me. “When the public compares a president who’s working hard for the middle class with a Republican Congress that says no to everything, they’re going to like our guy.” For many months, I’ve suspected that this official and his White House colleagues were talking through their hats. But think about it: The Great Re- cession is over. It’s official. It would take relatively small improvements at the margins for the recovery to finally gather steam. And then, the certainties of this political season won’t look so certain anymore.
davidignatius@washpost.com
R
A23
TOPIC A How did Obama’s economic team do? PETE SOUZA/THE WHITE HOUSE MARK ZANDI
Chief economist at Moody’s
Economy.com President Obama’s outgoing economic team
deserves high praise. They are earnest people who were required to make epic decisions under extreme uncertainty and distress. And the decisions they made worked. Think back to January 2009, when Obama took office: The financial system was frozen, gross domestic product was in free fall, stock prices had been cut in half, house prices were cratering and some 750,000 jobs were vanishing each month. Consider what has happened since: The financial system is stable, GDP is expanding, the stock market has recovered half its losses, house prices have risen and private-sector job creation has resumed. Some argue that the economy would have done
better if the economists had simply done nothing. Really? The much-maligned bank bailout is making taxpayers money; GM is about ready to go public, thanks to the auto bailout; and the fiscal stimulus halted the Great Recession: The recession ended in June 2009, the precise month in which the stimulus provided its maximum boost to the economy. Did the Obama team get everything right? No. As
a former entrepreneur and small-business owner, I know the importance of marketing. Forecasting that the stimulus would keep unemployment from rising above 8 percent was a serious marketing error that has soiled perceptions regarding its effectiveness. The team also failed to get the business community on board with its plans. As a provider of economic advice to large Main Street businesses, I see first-hand the distrust and uncertainty of many in this community, and these are the same firms that must create more jobs. Yes, the economy isn’t performing as well as
anyone would like, but that speaks to the calamity Obama’s economic team inherited, not to the way it responded.
N. GREGORY MANKIW Economics professor at Harvard University; chairman of the President’s Council of Economic Advisers from 2003 to 2005
When President Obama took office, he assembled a first-rate team of economists. Larry Summers, Christina Romer, Austan Goolsbee and Peter Orszag are smart, sensible and moderate by the standards of the Democratic Party. How have they done? To be sure, the economy is in worse shape than they anticipated. Logically, there are two possibilities: (a) The economy was sicker than they appreciated; or (b) the policies they put in place have not had their intended effect. There is no way to know for sure which is the case, but the Obama team is adamant that the answer is A rather than B. Obama’s advisers seem unwilling to doubt the efficacy of their policies — even though they were more interventionist and more redistributionist than was probably wise. Not only has the short-run economic picture turned out worse than expected, but the long-term picture looks increasingly dire as well. As is well
known, the nation’s entitlement promises far outstrip projected tax revenue. The only solutions offered by the Obama team have been to increase taxes on the top 2 percent of Americans, who already face the highest marginal tax rates, while adding a health-care entitlement. The president and his team have yet to produce a credible long-term budget. That is a failure they cannot ignore.
DINO KOS Managing director at Portales Partners LLC and former executive vice president at the Federal Reserve Bank of New York
The Obama economic team gets credit for
reviving confidence in the banking system and withstanding pressure to nationalize the banks, something that would have been a disaster for the country. The financial regulation bill addresses some deficiencies, though it mostly skirts the “too big to fail” issue. But the Obama team loses points for its inability to craft a true stimulus bill. The one enacted was primarily a massive transfer to states and localities (and their unions) that did not provide incremental activity or jobs. The team overpromised and then under-delivered. And, perhaps most important, the administration never confronted the American people with the truth about the mismatch between the promises that have been made to our citizens and the government’s ability to pay for it. Over many years, the government has made commitments — especially Social Security and health care — that cannot and, ultimately, will not be fulfilled. Future governments will default on those promises one way or the other. Instead of shifting direction and moving to reduce those commitments, the administration doubled down with a massive expansion of government- subsidized health care, pretending the program would pay for itself. This is a mistake. Ultimately, economic growth and job creation will be driven by private-sector entrepreneurship, innovation, business formations and risk-taking. The administration has not shown that it understands this basic dynamic. Perhaps the incoming economic team will.
DIANE LIM ROGERS
Chief economist at the Concord Coalition and blogger at
EconomistMom.com
President Obama’s inaugural economic team did about the best it could, given the terrible economic circumstances it inherited and the challenges it faced in Congress. Its individual members would have preferred policies more effective in dampening the recession and in improving the long-term budget outlook. The stimulus might have been structured to provide greater short-term “bang per buck” with elements better reflecting Larry Summers’s own “three Ts” — timely, targeted and temporary. And the health-care reform could have been heavier on long-term cost-saving measures to “bend the health cost curve” more to Peter Orszag’s
liking. But given the political constraints, the policies enacted were decent successes. The departing members of the economic team were chosen for their pure intelligence and their well-tested policy instincts — exactly what was needed to perform triage on a failing economy. Over the next two years, however, there will be more time to develop a fiscal strategy that will best transition our economy from a “stimulate demand” (throw the money out there fast) mode to an “increase supply” (start living within our means) mode. Because this will necessitate many difficult policy choices that can only be achieved by working with Congress in a bipartisan manner, it is crucial that the new members of the Obama economic team have unusual people skills — not just book smarts.
SEBASTIAN MALLABY Director of the Maurice R. Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations; author of “More Money Than God: Hedge Funds and the Making of a New Elite”
The public may have lost faith in President
Obama’s handling of the economy, but the truth is that the administration’s economic team has gotten the big calls right. It was correct to push a massive stimulus in early 2009, correct to stabilize Detroit and correct to push financial reform through Congress. Yes, the economic recovery remains anemic, and unemployment is stuck near 10 percent. But that is not the administration’s fault. A growing body of research demonstrates that recoveries are bound to be slow and painful after a credit-cum-real-estate bust, especially when that bust is global.
Did the administration get some things wrong? Of course. The president’s rhetoric, if not his policy, has sometimes been excessively tough on business, contributing to nervousness in corporate boardrooms. There can be no durable recovery until businesses start to invest, so beating up on captains of industry may be good short-term politics but is lousy economic strategy. Still, blaming that on Obama’s departing economic advisers seems wrong. The president’s counterproductive rhetoric is presumably the product of his political handlers rather than his economic ones. The biggest risk to the economy is that we will
expect too much from policymakers. They can’t save us from several years of depressingly slow growth, and too much pressure on them to pull magic rabbits out of their hats will lead only to counterproductive quick fixes. We have to balance the desire to return to decent growth against the desire to return to sustainable growth. Masses of extra government spending could juice the economy in the short run and ease Obama’s worries about 2012, but it will also pile up yet more government debt and depress the economy’s long-run potential.
TOPIC A ONLINE: Douglas Holtz-Eakin, former CBO director and adviser to Sen. John McCain.
Andrew Alexander is away. The Ombudsman column will resume when he returns. OMBUDSMAN ANDREW ALEXANDER
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