The Schumer Consensus, Ctd

A reader points out:

I agree with everything you said re: the myth of Obama not having “putting the economy first,” but I wanted to note that TARP was actually signed into law by Bush just before the 2008 election.

Many others look at recent history:

I think you are managing to get it exactly wrong about where and how President Obama jumped the shark with the American working class.  You cite TARP, the stimulus and auto bailout as three examples of how this is incorrect.  But consider an alternate take on these three pieces of legislation:

1) TARP: a massive giveaway to rich Wall Street Types who screwed us and the economy by being reckless, and bad at business.

2) The stimulus: a massive giveaway to unions and other Democratic constituencies that seems to have built precisely zero infrastructure or really any other lasting result.  (“Inflecting the curve” of a recession hasn’t cut it as an explanation.)

3) The auto-bailout:  a massive giveaway to failed businesses that were bad at what they were doing.  (See also, #1)

And here is the Democratic rude awakening:

if you add up the Wall Street bankers, the union members, and the employees of the Big Three auto companies … it doesn’t add up to very many voters. 

Finally, I would ask that you not indulge the liberal canard that the PR failure of these items was due to “perception,” i.e. the Americans can’t understand what is good for them.  Americans have judged that the cost-per-unit of any macro-economic benefit from 1, 2 and 3 above was simply much too high to be worth it. And they are correct about that.

But don’t forget that regarding the so-called “massive giveaway” of TARP, the big banks paid that money back. Another dissent:

I have to respectfully disagree with your narrative of the economic situation in 2009 and Obama‘s reaction to it. Let’s forget what the Republicans have to say on the issue, as they have no intellectual honesty on the matter. If we go back to the White House’s own predictions on economic growth during the 2009 debate, we see that the stimulus failed to hit its own expectations. We were told we would have GDP growth of 4% per year since, and we’ve gotten close to half. Ditto for TARP. Americans were told if not for the bailouts millions would lose their homes and jobs. But all of that happened anyway. It was only the banks themselves and their unscrupulous executives that benefited.

The common rebuke to this argument is “yeah, but without either program, things would have been worse.” Maybe, maybe not. But that’s not how these programs were sold. They were sold with specific promises by Obama and his supporters that did not materialize. And frankly, to tell someone that lost their house or their job, or the 50 million people currently on food stamps that they should be grateful because things aren’t as bad as they could be is an insult.

The same narrative problem exists with the ACA. People are upset because they were promised something that they didn’t get. I thought it rather odd that when Obama first launched that campaign in 2009 he talked about a program that would drastically increase coverage, help reduce costs, not add to the deficit and take on the insurance companies while also allowing people who were happy with whatever they had to keep it. It was an impossible goal, just as unlikely as a diet plan that says you could eat all the cheeseburgers you want and lose weight while living longer. That’s why people are upset. When they see the plan they liked get cancelled, the doctor they had get dumped or their premiums spike just as the health insurance companies report record profits thanks to the law they feel like they were sold a bag of goods. Even if that wasn’t the laws intentions, that’s what it became.

I wish you and other intelligent people would stop making the argument that this is all a communication or perception problem. It’s a cynical argument that presupposes tens of millions of people are too stupid to know what’s good for them, and the real work that lies ahead is for the smart people in charge to convince them otherwise.

Another reader broaches a new issue:

I largely agree with your analysis of Schumer‘s position and those like it, but there was one big area where Obama could have improved: housing policy. This is arguably the main reason perceptions like Schumer‘s exist in the first place. Obama’s housing policies were total failures in doing much of anything to unravel the mortgage mess left by the financial crisis. Obama could have forced a much more aggressive response from his administration towards the mortgage issues, breaking through institutional resistance to helping people refinance their homes, and begin to unwind the mortgage foreclosure process before robo-signing became a thing. Had he done a better job handling the mortgage crisis, he probably would have retained a lot more goodwill from whites than he has.

And, to be fair to Schumer, there was another way for Obama to possibly achieve more than he has, but it would have required a total surrender to Gruberism: he could have followed Chris Rock’s advice, let everything go to hell, and then used the ensuing panic with his popularity and control of Congress to pass anything he wanted. And honestly, considering the depth and breadth of the institutional rot in international finance, that might not have been such a bad thing (not that we knew about the numerous mafia-style schemes Wall St. had hatched at the time). Still, it’s impossible to picture a moral person choosing to dive into that chaos, letting everyone suffer massively for their own political gain. Can you imagine if everyone was like the House GOP?

Another also looks at housing:

It bears repeating that, despite the Tea Party’s current scattershot rhetoric, what galvanized the movement as a national force was Rick Santelli’s fierce opposition to Obama’s proposal of the Homeowners Affordability and Stability Plan in February 2009, under which the government would subsidize home mortgage refinancing.  In other words, within a little over a month of Obama taking office, it was clear that the full force of Republican opposition would be placed in front of any additional attempts to directly address the poor economy, especially demand-side solutions.

People also forget that, as recently as the fall of 2008, the entire country had broadly agreed that the U.S. healthcare system was broken and needed radical reform – Michael Moore’s Sicko had been nominated for an Oscar in 2007, and while McCain opposed mandates, he at least campaigned on the idea of universal coverage being a goal of national healthcare policy.  There was broad bipartisan consensus in late 2008 that our healthcare system was broken.

So, in mid-2009, the president shifted from the fight on the economy, which was prompting full-throated histrionics from the opposition party, to healthcare, proposing a Republican idea in a policy area in which there had weeks before been a bipartisan call for action. We all know what happened then.

A political wonk goes into great detail:

I’m broadly supportive of what you said, but let me add a few points.

1. Who is health care reform supposed to benefit if not working-class people on the way up? These are EXACTLY the people who lacked insurance, who were at risk from even small hospital bills, and so forth. To argue otherwise is just to dismiss what – and who – the facts on the ground actually are. Per Kaiser Family Foundation:

Who are the uninsured?

Most of the uninsured are in low-income working families. In 2013, nearly 8 in 10 were in a family with a worker, and nearly 6 in 10 have family income below 200% of poverty. Reflecting the more limited availability of public coverage, adults have been more likely to be uninsured than children. People of color are at higher risk of being uninsured than non-Hispanic Whites.

How does the lack of insurance affect access to health care?

People without insurance coverage have worse access to care than people who are insured. Almost a third of uninsured adults in 2013 (30%) went without needed medical care due to cost. Studies repeatedly demonstrate that the uninsured are less likely than those with insurance to receive preventive care and services for major health conditions and chronic diseases.

What are the financial implications of lack of coverage?

The uninsured often face unaffordable medical bills when they do seek care. In 2013, nearly 40% of uninsured adults said they had outstanding medical bills, and a fifth said they had medical bills that caused serious financial strain.  These bills can quickly translate into medical debt since most of the uninsured have low or moderate incomes and have little, if any, savings.

2. What were the elements of Schumer‘s extended economic package that Obama never took up? There never were any. You can demagogue on the minimum wage, but that is a political show more than an economic one, as justified as a minimum-wage hike might be. The remainder of Dem ideas on the economy in term one were mostly about community colleges and work-training subsidies – snooze. At best, they have a long-term impact. Mostly, they are just trifles – sops to public-worker unions Schumer spends too much time talking to. As for inequality, even Krugman begrudgingly and belatedly figured out that Obama raised taxes on the rich – in the fiscal cliff deal, in the ACA and elsewhere. All of that went, ultimately, to protect and expand spending on the middle and working class. Maybe this is Wall Street Chuck’s big problem. There never was a Democratic package for short-term stimulus that Obama didn’t sign on to in 2009-2010. Not one.

3. If the head of the Democratic Senate Campaign Committee wants to spread blame for this year’s election, ask him who picked Bruce Braley, the Iowa candidate who thought it would be a good idea to use “farmer” and “dumbbell” as synonyms at a fundraiser. Especially when talking about Chuck Grassley. Or ask him who told Senator Udall to never talk about the fact that Denver has the second-lowest unemployment of any US metro. Amy Klobuchar needed no prompting to say on Election Night that St. Paul-Minneapolis has the lowest. Udall also never managed to mention, in his Rachel Maddow interview or much of anywhere else, that the ACA cut the unemployed in CO by 45% AND provided a third of the profit growth at HCA, which has more CO hospitals than anyone else. He did manage to bring up at least three different kinds of gay rights and talk a lot about pot with Rachel. Was he overcompensating for who Maddow is, or does he really think gay adoption rights are a bigger deal than job growth and an historic expansion of health care that will save tens of thousands of lives a year?  Either way, Hickenlooper ran about six points ahead of this bozo, who couldn’t talk about much of anything but birth control for months, even after it was obvious that it wasn’t working.

4. When did Obama’s alleged dilution of focus due to climate change occur? He folded like a suit on the carbon tax in 2009, killing it off before it became a distraction and disappointing some liberals in his base, and cap and trade died in the Senate. He turned back to climate only in his second term. In the meantime, his stimulus and related legislation had funded a huge portfolio of programs that lay the groundwork for combating climate change, including financing Tesla’s first factory, Nissan’s Leaf factory and the lines that build Ford’s more efficient EcoBoost engines. All of these provided plenty of middle-wage jobs that are short in the economy overall (largely because construction and government employment are so weak) – but Schumer never had anyone campaign on them. All that and Obama made a very big deal with the industry on fuel-economy standards, and stayed out of the way of fracking, which proved to be enough encouragement to boost U.S. oil production by 80% (it will have doubled by next year from 2008 levels). I’d have approved Keystone XL both to get the “war on energy” talking point off the table, and because the oil is going to get used anyway.

Whatever political damage Obama took from climate issues is really about things that were happening anyway. Coal is getting killed by gas without any help from D.C – that help is just arriving now in the form of power-plant emission standards that were proposed in June and haven’t taken effect yet. Offshore drilling was barred for a few months after BP’s rig exploded off a state that has 4% unemployment today. That people campaigned against Landrieu based on that moratorium reflects something other than the idea that Louisiana job growth is slow under this administration. Look at the data. It’s really straightforward.

In Louisiana, the problem is that Obama, like oil, is black. And a Yankee, Harvard, wiseass, etc. But that’s all culture, not policy. And the culture is moving in Dems’ direction; the only real risk is that the GOP will figure out too soon for Dems’ liking that maybe they should lose the homophobia and the pretend belief in evolution and the rest. And the future certainly isn’t going to be found, economically or culturally, in West Virginia, Arkansas, or the like. There aren’t enough votes or House seats in the Dakotas to worry about much, though you should try for them and Montana. The game is the states that are now purple – North Carolina, Colorado, Virginia. And maybe some Dems  hope they  can make purple — GA, AZ and the like. If you have to pander, pander to the constituencies that are key to turning those states bluer, and then get them to vote.

One last thing: Pre-election polls showed the GOP with a large edge over Dems in trust over handling the economy, in sharp contrast to Ray Fair’s economic model, which said Dems should get 52% of the House vote. That’s absurd, a political failure the likes of which we’ve never seen. The economic policies didn’t fail. The politicians did. All Dems had to do was draw the charts: Stocks crashed under them, went up under us. Jobs crashed under them, came all the way back under us. And so forth.

In 1982, Reagan spun much worse short-term economic facts than these into his Stay the Course speech, which effectively fought that midterm to a draw. In 2014, the argument for Staying the Course was much stronger. And it’s on Chuck Schumer, as much as anyone else, that it never got made.