Month: November 2011

Reporting from the edge of catastrophe

by digby

There’s lot’s of economic stuff this morning worth sharing. First, the view that austerity is bad for us is starting to make it beyond the pages of obscure blogs and Krugman’s column. Here’s one from a historian in Bloomberg News:

…“common sense” tells us that growth requires private investment. After all, everybody knows that an unequal distribution of income is a requirement of comfortable existence for the masses.

As British author John Lanchester explained, when the “jet engine of capitalism was harnessed to the oxcart of social justice” after World War II, the lives of ordinary people got better, and the “most admirable societies that the world has ever seen” were born. Everybody knows that “the prosperity of the few is to the ultimate benefit of the many.” To which I say, baloney.

Growth has happened precisely because net private investment has been declining since 1919 and because consumer expenditures have, meanwhile, been increasing. In theory, the Great Depression was a financial meltdown first caused, and then cured, by central bankers. In fact, the underlying cause of this disaster wasn’t a short-term credit contraction engineered by bankers. The underlying cause of the Great Depression was a fundamental shift of income shares away from wages and consumption to corporate profits, which produced a tidal wave of surplus capital that couldn’t be profitably invested in goods production — and wasn’t invested in goods production.

In terms of classical, neoclassical, and supply side theory, this shift should have produced more investment and more jobs, but it didn’t. Paying attention to historical evidence allows us to debunk the myth of private investment and explain why the redistribution of income has become the condition of renewed, balanced growth. Doing so lets us see that public-sector incentives to private investment — say, tax cuts on capital gains or corporate profits — are not only unnecessary to drive economic growth; they also create tidal waves of surplus capital with no place to go except speculative bubbles that cause crises on the scale of the Great Depression and the recent catastrophe.

This too from Robert Skidelsky:

Politicians are masters at “passing the buck.” Everything good that happens reflects their exceptional talents and efforts; everything bad is caused by someone or something else.

The economy is a classic field for this strategy. Three years after the global economy’s near-collapse, the feeble recovery has already petered out in most developed countries, whose economic inertia will drag down the rest. Pundits decry a “double-dip” recession, but in some countries the first dip never ended: Greek GDP has been dipping for three years.

When we ask politicians to explain these deplorable results, they reply in unison: “It’s not our fault.” Recovery, goes the refrain, has been “derailed” by the eurozone crisis. But this is to turn the matter on its head. The eurozone crisis did not derail recovery; it is the result of a lack of recovery. It is the natural, predictable, and (by many) predicted result of the main European countries’ deliberate policy of repressing aggregate demand.

That policy was destined to produce a financial crisis, because it was bound to leave governments and banks with depleted assets and larger debts. Despite austerity, the forecast of this year’s UK structural deficit has increased from 6.5% to 8% – requiring an extra £22 billion ($34.6 billion) in cuts a year. Prime Minister David Cameron and Chancellor George Osborne blame the eurozone crisis; in fact, their own economic illiteracy is to blame.

Unfortunately for all of us, the explanation bears repeating nowadays. Depressions, recessions, contractions – call them what you will – occur because the private-sector spends less than it did previously. This means that its income falls, because spending by one firm or household is income for another.

In this situation, government deficits rise naturally, as tax revenues decline and spending on unemployment insurance and other benefits rises. These “automatic stabilizers” plug part of the private-sector spending gap.

But if the government starts reducing its own deficit before private-sector spending recovers, the net result will be a further decline in total spending, and hence in total income, causing the government’s deficit to widen, rather than narrow. True, if governments stop spending altogether, deficits will eventually fall to zero. People will starve to death in the interim, but the budget will be balanced.

This view has been pretty much frozen out of the debate up until now and the politicians either didn’t understand it or were too chicken to confront it. But the result is horrible and now that the Eurozone is falling apart (at least partially due to this banrupt worldview), it’s looking more likely that it’s about to become a catastrophy.

Here’s Dean Baker today:

The European Central Bank (ECB) has been working hard to convince the world that it is not competent to act as a central bank. One of the main responsibilities of a central bank is to act as the lender of last resort in a crisis. The ECB is insisting that it will not fill this role. It is arguing instead that it would sooner see the eurozone collapse than risk inflation exceeding its 2.0 per cent target.

It would be bad enough if the ECB’s incompetence just put Europe’s economy at risk. After all, there are tens of millions of people who stand to see their lives ruined because the bureaucrats at the ECB don’t understand introductory economics. But the consequences of a euro meltdown go well beyond the eurozone.

At the very least, the chaos following the collapse of the euro will mean a second dip to the US recession. The loss of the European export market, and the likely surge in the dollar that will result from a worldwide flight to safety, would be enough to turn a weak positive growth number into a negative.

However, it is also likely that the financial panic following the collapse of the euro will lead to the same sort of financial freeze-up that we saw following the collapse of Lehman Brothers. In this case, we won’t be seeing unemployment just edge up by a percentage point or two, we will be seeing unemployment possibly rising into a 14-15 per cent range. This would be a really serious disaster.

That’s quite a prediction. His solution is sufficiently outside the mainstream that it’s doubtful it will be considered although you might be surprised to read what it is. (Particularly in light of this.) Do read on. It’s fascinating … and scary.

We are likely on the verge of a Very Big Deal with what’s happening in Euroland. The political system is locked up, mostly because of a case of political malpractice on the part of those who should have learned from their own legacy and nihilism on the part of those who seem to want to bring on the rapture. So we wait and watch and hope for the best.

At least some sane voices are rising above the din. The question is if it’s too late.

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I miss him already

by digby

O’REILLY: This is why Americans don’t trust the government.
FRANK: No, this is why your stupidity gets in the way of rational discussion.

Barney’s retiring:

He deserves to retire. He’s 72 and he’s been fighting the good fight for decades. But he’s one of the funniest, smartest people in politics and he will be missed.

The New Realignment

by David Atkins

I’ll have more thoughts on this later, but for now, this is a good and important read:

For decades, Democrats have suffered continuous and increasingly severe losses among white voters. But preparations by Democratic operatives for the 2012 election make it clear for the first time that the party will explicitly abandon the white working class.

All pretence of trying to win a majority of the white working class has been effectively jettisoned in favor of cementing a center-left coalition made up, on the one hand, of voters who have gotten ahead on the basis of educational attainment — professors, artists, designers, editors, human resources managers, lawyers, librarians, social workers, teachers and therapists — and a second, substantial constituency of lower-income voters who are disproportionately African-American and Hispanic.

It is instructive to trace the evolution of a political strategy based on securing this coalition in the writings and comments, over time, of such Democratic analysts as Stanley Greenberg and Ruy Teixeira. Both men were initially determined to win back the white working-class majority, but both currently advocate a revised Democratic alliance in which whites without college degrees are effectively replaced by well-educated socially liberal whites in alliance with the growing ranks of less affluent minority voters, especially Hispanics.

Less educated whites have been a stumbling block for Democrats for decades. Democrats held them together under the New Deal coalition pretty much until the Civil Rights movement, after which the conservative movement successfully transposed a “cultural” elite trying to enforce race and gender equality over the financial elite that this group had resented previously.

Democrats had been trying to “win back” these voters for decades with compromises designed to assuage their anti-welfare, anti-equality sensibilities. But with current demographic trends, that’s increasingly unnecessary–even if it were possible. Ideally, the Democratic missions of securing the safety net, increasing the minimum wage and safekeeping middle-class jobs should appeal to less educated whites. But it won’t. A more strident progressive message would do a good deal to bring these voters back and convince them that Democrats best serve their interests, but it’s still mostly a lost cause. The right-wing propaganda machine has been very effective in creating a tribal mentality with these voters that will be nearly impossible to break.

For those most concerned with social issues, this development will represent a step forward: Dems will feel increasingly emboldened to openly support women’s rights, gay rights and the like without feeling the need to seek cover. Yes, minority groups tend to be more socially conservative on these issues, but they’re also not the defining issues on which minority groups are voting. Few Latinos will vote for a party of anti-Latino racists just because that party happens to agree more with them on the subject of abortion–not even if that party is led by the likes of Marc Rubio.

On the other hand, the new coalition of upscale (mostly white) liberals plus minority groups has big problems. For one, the interests of each group are fairly divergent, and educated whites tend to vary significantly internally as well, split largely between angry progressives, and comfortable neoliberals who enjoy reading Thomas Friedman and prize civil tone over progressive legislation. The anger against President Obama is mostly an upscale educated white phenomenon: a vanishingly small percentage of the electorate has even heard of Al-Awlaki; Guantanamo Bay is a nearly irrelevant issue in this election; very few voters have any idea what a credit default swap is, or what Glass Steagall was. Minority groups, meanwhile, still have very high approvals of the President.

The abandonment of less-educated whites also poses a big problem in terms of labor unions, which are a crucial part of the Dem base. Not to mention the Occupy Movement, which is based on uniting the interests of the 99% against the 1%, and breaking down the tribal barriers that have kept the middle classes from uniting against the economic predations of the top 1/10 of 1 percent.

So the problems with this coalition are many.

But all in all, it’s conservatives who should be most worried. They have doubled down on appealing to less affluent whties with a calumnious message of lies and pure hate, targeted to a disappearing demographic. And they’re counting on a magic hail mary pass to win back Latino voters with Latino figureheads after they have wrung every last drop they can out of white resentment. That’s not a sound strategy, and it won’t work for them over the long haul, no matter how much money they have to spend on it.

Meg Whitman’s disastrous campaign for California Governor proved as much. Money can buy a lot of things, but it can’t buy love from people you’ve spent decades kicking into the dirt.

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Just a few billion among friends

by digby

Blockbuster story from Bloomberg tonight:

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

It’s huge. Read it all.

The good news is that the government refused to compound the problems by helping out average Americans with their foreclosures, thus avoiding moral hazard.

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This week-end there has been a flurry of discussion about this article by Naomi Wolf in The Guardian in which she made a series of outlandish assertions with little evidence about congressional and presidential involvement and motivations along with direct accusations of Federal involvement in the raids. Joshua Holland dispatched them all in this article.

Among the “advice” reportedly disseminated by DHS was that cities should demonize their occupations by highlighting health and safety violations, and evict them without warning in the dead of night. As a supporter of the Occupy Movement and a civil libertarian, I find that offensive and inappropriate – DHS should be worried about terrorism, not political dissent.

Both of these things cannot be true

by David Atkins

It’s almost beating a dead horse at this point, but another salient point comes to mind in critique of this Jonathan Chait column that I took on earlier today.

Recall this paragraph by Chait, with which I agree on its merits:

What, by contrast, are we to make of third-party activists like Thomas L. Friedman or Starbucks CEO Howard Schultz? They have a president who supports virtually everything they want—short-term stimulus, long-term deficit reduction through a mix of taxes and entitlement cuts, clean energy, education reform, and social liberalism. Yet they are agitating for a third party in order to carry out an agenda that is virtually identical to Obama’s. In a column touting the third-party Americans Elect, the closest Friedman comes to explaining why we should have a third party, rather than reelect the politician who already represents their values, is to say that such a party “would have offered a grand bargain on the deficit two years ago, not on the eve of a Treasury default.” He agrees with Obama’s plan, in other words, but proposes to form a new party because he disagrees with his legislative sequencing.

And yet Chait’s lengthy disquisition is meant not to attack the centrist Third Way crowd, but the progressive base for supposedly being so unreasonable.

Sure, progressives have never really been happy with Dem presidents. Point taken. But did it not occur to Mr. Chait that if Obama has done pretty much everything that Thomas Friedman wants, anyone to the left of Thomas Friedman–which would be at least 40% of the country or significantly more, depending on which issues you focus on and how you slice the electorate–might have serious complaints?

Especially since Mr. Obama actually campaigned as a Democrat, on the Democratic Party platform and “change we can believe in,” not as a third party candidate on the Americans Elect platform for neoliberal technocracy? Either Obama is Thomas Friedman’s best choice for President–in which case progressive Democrats have every reason to be furious–or he isn’t, in which case Chait owes Thomas Friedman an apology.

Chait can’t have it both ways.

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Newtie’s empire

by digby

“… a soft spot for its has-beens, even those who gave up power in defeat or disgrace.”

Former House speaker Newt Gingrich transfigured himself from a political flameout into a thriving business conglomerate. The power of the Gingrich brand fueled a for-profit collection of enterprises that generated close to $100 million in revenue over the past decade, said his longtime attorney Randy Evans.

Among Gingrich’s moneymaking ventures: a health-care think tank financed by six-figure dues from corporations; a consulting business; a communications firm that handled his speeches of up to $60,000 a pop, media appearances and books; a historical documentary production company; a separate operation to administer the royalties for the historical fiction that Gingrich writes with two co-authors; even an in-house literary agency that has counted among its clients a presidential campaign rival, former senator Rick Santorum (R-Pa.).

Separate from all of that was his nonprofit political operation, American Solutions for Winning the Future. Before it disintegrated this summer in Gingrich’s absence, American Solutions generated another $52 million and provided some of the money that allowed the former speaker to travel by private jet and hired limousine.

Along the way, Gingrich has become a wealthy man, earning $2.5 million in personal income last year, according to his financial disclosure form.

As unforgiving as Washington can be, it has long had a soft spot for its has-beens, even those who gave up power in defeat or disgrace.

There is a well-trodden path from Capitol Hill to downtown law and lobbying firms, where former members of Congress can earn a far better living than they did when they were on the taxpayer’s dime — and still have afternoons free for golf.

But that would be a narrow and confining existence for a man who has always considered himself a transformational figure, and even a historic one.

“He just had a vision for being a great citizen,” said Evans, who set up Gingrich’s business operation and served as its chairman. “He looked for ways to participate in the dialogue that was going on.”

Read it all. Unless you don’t want to be sick.

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Fairnbalanced boilerplate

by digby

Oh dear God, do they have a machine that cranks this stuff out?

[Republican presidential candidates’] specific contortions and distortions are no more worrisome than the backdrop against which this campaign unfolds, one of toxic partisanship and breathless hyperbole.
[…]
IS all of this hot air part of a broader climate of unprincipled hucksterism? As a country we’ve shifted emphasis from goods to services, manufacturing to marketing, and everyone natters on about the importance of brand rather than the quality of product — about the sell rather than the substance.

I think politics has followed suit, and politicians, stuck in a sclerotic system that renders real accomplishment difficult, lavish more energy on words than on elusive deeds. What matters is what they can convince voters of and how voters are left feeling about them — and their foes — as a result.

Look at the deficit-reduction supercommittee. As it sputtered to the finish line, how did its members spend the final days? Not with a last-ditch stab at compromise, according to many news reports, but with separate discussions among Republicans and Democrats about how to emerge from the debacle looking better than the other side. The endgame wasn’t about outcomes. It was about positioning.
[…]
Many Democrats say privately that the Republican nominee will need to be savaged for the president to prevail. And the Web site Politico asserted in an article last summer that Obama’s allies were prepared, should Romney be the nominee, to stress his weirdness, which sounds an awful lot like a proxy putdown for his being Mormon. The White House denied any such strategy.

Whatever the case, candidates clearly don’t envision much of a penalty on Election Day for having slung mud and tortured the truth in attacking opponents. I bet Romney’s aides expected — and saw an upside to — the charges of foul play prompted by their ad. The coverage of it reached many more voters than the ad itself did, and that attention ultimately underscored Romney’s overarching assertion that Obama should be ashamed of his economic performance. If Romney came across as shifty in the process, well, that was apparently a small price to pay.

But there’s a larger cost, borne not just by the candidates but, sadly, by the rest of us, too. Campaigns waged with lies presage governments racked by distrust. The sclerosis starts there. And I don’t think this country can endure much more of it without profound, lasting damage.

So candidates viciously attack one another in campaigns with lies. Shocking news.

Interestingly, he fails to note that we have an institution designed for the purpose of sorting this all out for the people. It’s called the press. Unfortunately, it’s overly populated by reporters who are so excited at being given affectionate nicknames by the candidates that they lose all ability to report accurately.

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Just one more modest concession

by digby

This is a powerful post by Frances Kissling discussing the debate among Catholics on the issue of reproductive health and freedom. It raises a very interesting question: by acceding to the conservative, overtly pro-Republican Bishops, is the administration taking sides in an internal religious dispute? I confess that I hadn’t thought of it that way, but if I were a Catholic I certainly might.

If course, in typical Village fashion, the goalposts are so skewed that acceding to what is a blatant power grab on the part of the highly political Bishop patriarchs is seen as a small concession that women should be grateful wasn’t worse than it is. Here’s the usually sensible E.J. Dionne:

But the question of what a fair and principled compromise would look like on contraception and the health-care law should not be lost in the political maelstrom. Even an expanded exemption covering Catholic hospitals and universities would still go far beyond what the bishops have called for, as Cardinal Daniel N. DiNardo, chairman of their Committee on Pro-Life Activities, made clear in a September statement opposing mandated contraception coverage altogether.

Far from constituting a “cave-in” to the bishops, in other words, a broader exemption would be a modest concession, honoring the rights of religious institutions that liberals and Obama have long respected. And as Sister Carol noted in an interview, “we’re not talking about taking away from women anything they have,” since Catholic institutions that don’t cover contraception now wouldn’t cover it in any event.

Catholic bishops need to lower the rhetorical temperature — as the head of the conference, Archbishop Timothy Dolan of New York, seems to be trying to do. Advocates of reproductive rights need to do the same.

If the administration is pressured into refusing any accommodation on the contraception rules, the people who will be undercut most are progressive Catholics who went out on a limb to support the health-care law and those bishops holding the line against the Catholic right by standing up for the church’s commitment to social justice. This will only strengthen the most conservative forces inside the Catholic Church. That can’t be what advocates of reproductive rights really want.

So the progressives need to give in once again because it could make the other side mad if they don’t and then all hell will break loose? That’s exactly what abused wives tell themselves.

And I guess we’re supposed to believe that the Catholic Right will be strengthened by losing this battle but not by winning it. That’s a nice little bit of sophistry I hear every time social conservatives hold the line and get their way.

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We Have Examples, Mr. Chait

by David Atkins

The insightful David Frum piece that Digby highlighted earlier was complemented in New York Magazine by a companion piece by regular concern troll Jonathan Chait attacking the liberal/progressive base.

One shouldn’t dismiss Chait out of hand. He deserves a fair hearing, and much of what he has to say is food for thought, if only because he brings some uncomfortable facts to the table that need grappling with. Unlike the usual neoliberal claptrap, Chait’s essay is lengthy, packed with evidence and detail, and in some ways persuasively argued while lacking in others.

Chait examines the presidencies of every Democratic President since FDR and notes that the Left has always seen as them as too compromising, too ineffective, and too beholden to right-wing economic interests. Obama and Clinton, obviously, have been seen by many on the left as little more than affable fronts for socially liberal but economically and militarily conservative policies. History tends to look back at Carter as more progressive than he actually was as president, a point that Hacker and Pierson also note at length. LBJ was despised for the Vietnam War. Kennedy was constantly stymied by conservatives, and had a fairly aggressive foreign policy. Truman had his problems with the left.

And Chait is right that even FDR was pilloried frequently from the Left, and would have been more so today. FDR came into office railing against Hoover for allowing deficits, and in 1937 lengthened the Great Depression by making big cuts to curb deficits. He made big compromises on his social programs to secure business support and especially the support of racist Southern Dixiecrats, which meant that African-Americans were largely excluded from some of the most important programs:

An exception to this trend, but only a partial exception, is Franklin Roosevelt, the most esteemed of the historical Democratic president-saints. Roosevelt is hard to compare to anybody, because his achievements were so enormous, and his failures so large as well (court-packing, interning Japanese-Americans). But even his triumphs, gleaming monuments to liberalism when viewed from the historical distance, appear, at closer inspection, to be riddled with the same tribulations, reversals, compromises, dysfunctions, and failures as any other. Roosevelt did not run for office promising to boost deficit spending in order to stimulate the economy. He ran castigating Herbert Hoover for permitting high deficits, then immediately passed an austerity budget in his first year. Roosevelt did come around to Keynesian stimulus, but he never seemed to understand it, and in 1937 he reversed himself again by cutting spending, helping plunge the economy into a second depression eventually mitigated only by war spending.

Liberals frustrated with Obama’s failure to assail Wall Street have quoted FDR’s 1936 speech denouncing “economic royalists,” but that represented just a brief period of Roosevelt’s presidency. Mostly he tried to placate business. When he refused to empower a government panel charged with enforcing labor rights, a liberal senator complained, “The New Deal is being strangled in the house of its friends.” Roosevelt constantly feared his work-relief programs would create a permanent class of dependents, so he made them stingy. He kept the least able workers out of federal programs, and thus “placed them at the mercy of state governments, badly equipped to handle them and often indifferent to their plight,” recalled historian William Leuchtenburg. Even his greatest triumphs were shot through with compromise. Social Security offered meager benefits (which were expanded under subsequent administrations), was financed by a regressive tax, and, to placate southern Democrats, was carefully tailored to exclude domestic workers and other black-dominated professions.

Compared with other Democratic presidents, Roosevelt enjoyed relatively friendly relations with liberals, but there nonetheless existed a left opposition during his time, mostly of socialists and communists, who criticized him relentlessly. Progressive senator Burton Wheeler complained that FDR, “for all his fine talk, really preferred conservatives to progressives.” And actually, the Roosevelt era had the same pattern we see today, of liberals angry with the administration’s compromises, and the administration angry in turn at the liberals. In 1935, Roosevelt adviser Rex Tugwell groused of the liberals, “They complain incessantly that the administration is moving into the conservative camp, but do nothing to keep it from going there.”

All of this is unassailably accurate. One can only imagine what a 1930s era Glenn Greenwald would have said about FDR’s multiple terms, his attempts to pack the Supreme Court, the Korematsu decision on Japanese-American internment camps, etc.

Chait also takes on the myopia of the Thomas Friedman and “Americans Elect” crew in a smart way, declaring them even more irrational than the progressive base he assails previously:

What, by contrast, are we to make of third-party activists like Thomas L. Friedman or Starbucks CEO Howard Schultz? They have a president who supports virtually everything they want—short-term stimulus, long-term deficit reduction through a mix of taxes and entitlement cuts, clean energy, education reform, and social liberalism. Yet they are agitating for a third party in order to carry out an agenda that is virtually identical to Obama’s. In a column touting the third-party Americans Elect, the closest Friedman comes to explaining why we should have a third party, rather than reelect the politician who already represents their values, is to say that such a party “would have offered a grand bargain on the deficit two years ago, not on the eve of a Treasury default.” He agrees with Obama’s plan, in other words, but proposes to form a new party because he disagrees with his legislative sequencing.

As political analysis, this is pure derangement. It’s the Judean People’s Front for the Aspen Institute crowd. But these sorts of anti-political fantasies arise whenever liberals are forced to confront the crushing ordinariness of governing. (Matthew Miller, a fervent promoter of Americans Elect, likewise pined for a third party in 1996, on the curious grounds that President Clinton wasn’t doing enough to balance the budget.) Liberal disaffection helped Republicans win elections in 2000, 1968, and very nearly in 1948. All those elections came after Democrats had held the White House for at least two terms, and liberal disgust with politics had built up to toxic levels.

There is a catchphrase, which you’ve probably seen on bumper stickers or T-shirts, that captures the reason liberals have trouble maintaining political power: “Stop bitching, start a revolution.” At first blush it sounds constructive. If you consider it for a moment, though, the line assumes that there are two modes of political behavior, bitching and revolution. Since the glorious triumph of revolution never really pans out, eventually you’ll return to the alternative, bitching. But there is a third option that lies between the two—the ceaseless grind of politics.

Chait’s critique has some merit. Progressives have never been happy with Democratic presidents. But he also misses the mark in two very big ways. Both have to do with a failure to learn from example:

1) It’s undeniable that while liberals have groused forever about our own presidents, the last 30 years have given us something to actually be very upset about, particularly on the economic front. The knock on FDR and Truman was that they didn’t go far enough; the biggest knocks on JFK and LBJ had to do with foreign policy, rather than domestic policy.

It’s with Jimmy Carter that the move to supply-side economics and asset-oriented policy truly begins, and it has continued mostly unabated ever since with little in the way of push back. Progressives have every right to be upset about that–and to be more and more upset with each succeeding Democratic president. FDR can be forgiven for his 1937 attempt to balance the budget during a Depression; he had few examples to go on. Carter could be forgiven for responding to 1970s economic shocks with then-untested conservative approaches. Clinton was less forgivable because two decades had shown the weaknesses of conservative approaches; even if he had to move considerably to the right to survive politically after 1994, co-operating with the elimination of Glass Steagall and other deregulatory moves was unnecessary.

One of the biggest problems with Obama is not so much that he is so different from his Democratic predecessors–though none of them have been so quick to compromise as he has been, and none until now have offered to put Medicare and Social Security on the bargaining table–as that the failures of conservative economics are so patently obvious at this point there is no excuse for perpetuating them or giving credence to them at all. We have at least 70 years of history to prove fairly conclusively that we’re right and they’re wrong.

Moreover, the devastating financial crisis of 2008 had given us a unique opportunity to make needed core changes to the economic system. The voters were ready for change. They voted for change. The biggest disappointment with President Obama isn’t so much what he has done, or that there he is somehow different from his recent Democratic predecessors, than about the missed opportunities he didn’t take, and the fact that he should by all rights have taken a markedly different approach than Clinton or Carter, who did not have the benefit of Obama’s hindsight.

This time could and should have been different.

2) Progressives have the object examples of social democracies abroad to which we can compare the American system and find it wanting. As I have pointed out in the past, conservatives have no such examples to look to:

This is one of the reasons that conservatives are so desperate to hold onto the notion of American exceptionalism: liberals have a wide of range of models from Japan to Scandinavia to prove the efficacy of various progressive solutions to America’s problems. No country is perfect, of course, and solutions that work elsewhere may not work here. But as a general rule, progressives have effective examples worldwide to prove the value of our approach, whether it be in medicine, criminal justice, labor or otherwise.

Conservative approaches by contrast are a failure wherever and whenever they are tried. Theocracy inevitably leads to tyranny and despotism, whether it be the Christian theocracies of the Middle Ages or the modern theocracies of the Islamic world. Weapons-happy libertarianism ultimately ends in the sort of anarchic despotism we see in Somalia. Conservative approaches to finance, taxation and regulation lead inevitably to economic collapse, as seen in the history of basically every single country that ever even temporarily earned the “tiger” moniker from Austrian economists seeking to validate their theories.

So if progressives are upset that Obama’s Affordable Care Act doesn’t go far enough, it’s not our grousing opinion. It’s because we know it doesn’t–and all we have to do is look north of the border at Canada, or to most any country in Europe, or to the social democracies of Asia to prove it. If progressives are upset that campaign finance laws are woefully ineffective, it’s because we have examples overseas of less corrupt electoral processes to prove it. Europe’s financial system has also been remarkably stable for decades until the Anglo-American-caused economic crash combined with the misguided adoption of the Euro. We know that our transportation and broadband infrastructure are inadequate: all it takes is a trip to Seoul or Munich to prove it. We have examples of what actually works all around us, which makes our lack of progress infuriating to those who actually travel outside the borders of the U.S.

Conservatives, despite their moniker, have few examples to look toward for policy prescriptions short of the pre-1930s Gilded Age. They’re engaged in a utopian hyperlibertarian agenda, and every piece of “progress” they make toward that agenda is just gravy. Liberals in the United States are constantly frustrated by the fact that we can look at examples from history, as well as contemporary examples just to the north or just across either ocean, to demonstrate the worthiness of our ideas. And yet little is done in the realm to public policy to acknowledge the difference between liberal fact-based arguments, and plainly wrong-headed conservative utopian speculation.

So yes, Mr Chait. Liberals are always–and increasingly of late–frustrated with our Presidents. That’s because we have every reason to be.

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