Paul Krugman has some good news on Biden’s economic picks:
I don’t know why there are special names for groups of birds, although some of them — like an “exaltation of larks” — are lovely. Anyway, one term for a group of doves is a “bevy.” And I was encouraged by reports about the people President-elect Joe Biden plans to appoint to key economic positions: They are, as a group, a bevy of deficit doves.
Some background: From 2010 until around 2014 much of the political and media establishment was gripped by the idea that rising federal debt was the most important threat facing America, and that being a “deficit hawk” was the supreme political virtue. It wasn’t just politicians: As The Times’s new columnist Ezra Klein (hi Ezra!) put it, calls for deficit reduction somehow became an issue for which “the rules for reportorial neutrality don’t apply,” in which journalists were allowed to “cheer for a particular set of highly controversial policy solutions.”
Sad to say, President Barack Obama himself seemed to buy into the Beltway consensus, trying to strike a “grand bargain” to reduce future deficits by cutting social programs. He was only saved from his own instincts by the intransigence of Republicans, who refused to consider any tax hikes as part of the bargain.
In reality, as I could have told you — as I and others did, in fact, tell you — the consensus among the Very Serious People (a term I stole from the blogger Duncan Bowen Black) about the evils of debt was wrongheaded and destructive. Government debt didn’t pose any significant economic threat, while spending cuts were materially holding back recovery from the 2007-9 recession.
Oh, and many of the most prominent deficit hawks were phonies. They didn’t really care about government debt, they only pretended to care as an excuse for trying to slash social programs. The proof came when President Donald Trump inflated the deficit with tax cuts for corporations and the wealthy — and many of those who pretended to believe that deficits were an existential threat under Obama cheered him on.
Still, some of us were worried about whether Biden would pick up where Obama left off — whether he would choose Very Serious People, still wedded to the old debt obsession, for his economic team. The good news is that he hasn’t.
Oh, you can pick over past writings by some of Biden’s choices and find places where they spoke up for deficit reduction — generally when they were, you know, working for Obama and dutifully repeating his administration’s official position. And I know that some Bernie Sanders supporters still want to relitigate the 2016 primary and are trying to portray Neera Tanden, a Clinton supporter Biden is nominating to head the Office of Management and Budget, as some kind of closet conservative.
But the reality is that as far as I can tell, all of Biden’s economic picks are people who understand that federal debt isn’t currently a major policy concern, whereas it would be a disaster if we don’t spend enough either to get through the pandemic or on crucial long-run issues, especially climate change.
Now, how much they can act on this understanding is very much up in the air; specifically, a huge amount rides on the Georgia Senate runoffs. But Biden, it seems, has learned something from Obama’s missteps.
In the early days of the Obama administration I was excoriated by progressives who were still in their ecstatic euphoria over his election because I objected to his Grand Bargain that included cuts to the safety net because deficits were a crisis that “had to be dealt with.” I had to watch my words very, very carefully at the time lest I get my slapped down hard for failing to “trust Obama.”
Recall this from E.J. Dionne before the inauguration:
Mr. Obama’s anti-ideological talk is not just a vehicle for progressive inclinations but the real deal. Mr. Obama regularly offers three telltale notions that will define his presidency — if events allow him to define it himself: “sacrifice,” “grand bargain” and “sustainability.”
To listen to Mr. Obama and his budget director Peter Orszag is to hear a tale of long-term fiscal woe. The government may have to spend and cut taxes in a big way now, but in the long run, the federal budget is unsustainable.
That’s where sacrifice kicks in. There will be signs of it in Mr. Obama’s first budget, in his efforts to contain health-care costs and, down the road, in his call for entitlement reform and limits on carbon emissions.
His camp is selling the idea that if he wants authority for new initiatives and new spending, Mr. Obama will have to prove his willingness to cut some programs and reform others.
The “grand bargain” they are talking about is a mix and match of boldness and prudence. It involves expansive government where necessary, balanced by tough management, unpopular cuts — and, yes, eventually some tax increases. Everyone, they say, will have to give up something.
Only such a balance, they argue, will win broad support for what Mr. Obama wants to do, and thus make his reforms “sustainable,” the other magic word — meaning that even Republicans, when they eventually get back to power, will choose not to reverse them.
It is riotously ambitious. But it’s worth remembering that last November, Americans elected a man who counts “audacity” as one of his favorite words.
Progressives have learned from that experience. Joe Biden doesn’t have the kind of blind faith on the left that Obama had in the beginning. And that’s a good thing. No leader should have that. But it does appear, at least so far, that Biden and his team do not have a grandiose vision like Obama’s “Grand Bargain” with Republicans, even despite his rhetorical emphasis on “unity”, nor an overarching concern about deficits.
This is reassuring. Back in 2009, it was pulling teeth to get progressives to pay attention to the fact that Democrats were sabotaging themselves with deficit obsession. While I don’t think anyone should let their guard down this time either — it’s a zombie ideology — but it’s good that we aren’t starting off with austerity on the menu at the very beginning.
BTW, with respect to Tanden I think she’s a fool for waging twitter fights. It’s just a stupid waste of time and it’s greatly harmed her reputation. I also know that she’s considered too much of a neo-liberal centrist by many on the left and that’s a fair argument that’s going to be waged within the Democratic party regardless of whether it’s Tanden at the center of it or a piece of legislation or a speech by the president. It’s part of our politics and everyone needs to accept that it’s happening.
Having said that, it’s vitally important that the various factions in the Democratic party resist the use of “alternative facts” or fake news or propaganda of any kind. We’ve had enough of that. So, with that in mind, I’m sharing this, just to make sure people know where Tanden is today on the issue of cutting Social Security, which she once backed as part of President Obama’s agenda: