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Responding to Jonathan Chait

John on August 4, 2009 at 9:58 am

Writing for the New Republic, Jonathan Chait had a piece up yesterday responding to this Weekly Standard article by Peter Berkowitz. Berkowitz’ piece argued that Obama’s actions thus far undercut his claims during the campaign to support entrepreneurship and competition. In short, Obama ran as a centrist but has governed from the far left. Chait calls it a “bait-and-switch” argument.

In support of this thesis, Berkowitz offers three items, all of which Chait attempts to debunk. Let’s look at them in order, first Berkowitz notes the stimulus:

[P]lenty of competent observers were flabbergasted shortly after he took office when, notwithstanding an economic crisis that he himself declared the worst since the Great Depression, he called for and signed into law a $787 billion stimulus package short on stimulus spending, high on transfer payments, and larded with pork aimed at pet Democratic party special interests.

Chait has this to say:

Berkowitz argues that, “notwithstanding” the economic crisis, Obama proposed a major economic stimulus. I’m not sure what to say here. It’s true that Obama did not campaign promising a giant economic stimulus. But that’s because his campaign, like most of us, did not realize that we were on the cusp of a giant recession that by January would appear to be the worst crisis since the Great Depression.

Notice what Chait has done (and here I have to give a hat tip to one of TNR’s own readers who corrected Chait on this point). Berkowitz wasn’t objecting to the stimulus per se. That wasn’t the bait-and-switch. Rather it was the nature of the stimulus, i.e. “short on stimulus spending, high on transfer payments, and larded with pork.”

Each of these three qualifications could be taken one at a time. Obama said the stimulus was “dramatic investments to revive our flagging economy.” Yet the Wall Street Journal reported that twelve cents of every dollar couldn’t be considered stimulus at all. Beyond that, 30% of the money went for “transfer payments” to things like Medicaid ($81 billion) and food stamps ($20 billion), totaling $250 billion in all. In other words new money for old programs that won’t stimulate any new spending. Finally, there was a long list of pork projects given (surprise!) to mostly Democratic districts. This is despite Obama’s repeated promises during televised debates to put an end to earmarks and pork in general.

Instead of dealing with any of these issues squarely, Chait simply inserts his own ellipsis after the word stimulus. He spends two paragraphs talking around the issues Berkowitz raised and then moves on. It’s hard to fisk points you haven’t even acknowledged.

Here’s is Berkowitz’ second point:

[Obama] rolled out a 2010 budget that, according to Congressional Budget Office projections, would quadruple the 2008 Bush deficit that candidate Obama had decried as intolerable…

Here Chait is on somewhat firmer ground noting that the majority of current deficits have to do with pre-existing policy (and of course the economic downturn). Here’s what he says:

[T]he skyrocketing long-term deficit is more than 100% the responsibility of policies Obama inherited. As I’ve pointed out before, according to CBO data, Obama’s policies would slightly improve the long-term budget picture

A link directs readers to this post which then redirects them to this policy paper issued by the Center on Budget and Policy Priorities (CBPP). Two points about this. First, here is what the CBO actually said about Obama’s budget in their own report:

The cumulative deficit from 2010 to 2019 under the President’s proposals would total $9.3 trillion, compared with a cumulative deficit of $4.4 trillion projected under the current-law assumptions embodied in CBO’s baseline.

In other words, the CBO painted a grim picture of future deficits under Obama’s budget. What Chait does is introduce the CBPP paper to argue, essentially, that the CBO baseline numbers are wrong. That’s not the same as saying Berkowitz misunderstood the CBO or misrepresented their position. Indeed, when Chait says “according to CBO data…” he is being a little fast and loose with his words. It would be more accurate to say “according to the Center on Budget and Policy Priorities which adjusted the CBO data…”, but he doesn’t say that.

Second point. I’m not economist. The CBPP may indeed paint a more realistic picture of the outlook. But it’s worth pointing out that according to none other than Paul Krugman, the CBPP is “Democratic in orientation.” Of course Krugman goes on to say their work is flawless, but then he would say that wouldn’t he. Again, nothing wrong with arguing underlying assumptions, but it’s at least worth noting that the massaging of numbers Chait is using comes from a group on the left which is predisposed to look more favorably on Obama than his predecessor.

Finally, Berkowitz third and most important point:

[H]is determination to pass comprehensive health care reform before year’s end although the flaws in the current health care system had nothing to do with the toxic assets and frozen credit markets afflicting the economy.

Chait responds by arguing that Obama’s campaign rhetoric (remember Berkowitz is claiming bait-and-switch) was no better or worse than any other Presidential contender. It’s hard to argue with him here. However Chait ends with a rhetorical flourish of his own that makes a specific claim:

Is it possible that Obama really believes that his health care plan is perfectly consistent with individual freedom and would not destroy the free market?

In response to this I would ask Mr. Chait to please familiarize himself with our sidebar. There he can find links to various video clips — everyone from Jacob Hacker (author of the President’s plan), to Rahm Emmanuel, to Barney Frank, Russ Feingold and other member of the President’s party, and even economist Paul Krugman and journalist Ezra Klein — all of them have stated, on video, that the public option is really a means to an end. And the end they all have in mind is a single-payer system.

To rephrase Mr. Chait…Is it possible that everyone around the President recognizes that the “competition” language is salesmanship but that the President somehow remains cocooned and still really and truly believes this is all about choice?

No, Mr. Chait, I’m sorry. It’s not possible.

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Category: Health & Education, Politics |

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