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Politics, media pranks, songs, jokes, and NYC revelry. I'm at [my full name no dots or dashes] at gmail. All original content copyright Peter Feld, 2008-2011.
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"Dancing On The Ceiling," Lionel Richie. OK, I’ve decided we can all relax. This is 100% political theater with a foregone outcome - and if you’ve heard the saying "may you live in interesting times" described as a Chinese curse, the fringe benefit at least is that the times are interesting. The debt ceiling will be raised before the deadline. Here are a few of my takeaways from the speeches.

  1. Obama was arguing for a plan that’s already dead — increasing revenue. Both the harsh Republican House plan and the one Democratic Sen. Reid is pushing — which the White House has endorsed — have given up on revenue. Why did he spend time in the speech  making the revenue case? For positioning only.
  2. Networks were puzzled that Obama didn’t “make any news” — Chris Matthews in particular didn’t get that if you want to “make news” you issue a statement during the day, though Lawrence O’Donnell and Nate Silver recognize the president’s need to make this understandable to the general public (for the first time) in prime time. If you read through the speech you’ll see lots of very poll-tested language — “millionaires and billionaires,” corporate jets, “balanced approach,” etc. — that seem to build the case for more revenue (increasing taxes on the rich).
  3. But the real goal is to put the public on his side, scare Republicans that they’ll be blamed for disaster if they don’t blink first, and come away with what the President really needs: a) a deal that avoids repeating this process in six months — here the public would naturally be on his side, because they hate this stuff, and b) a deal that backloads the spending cuts — the Republican right is insisting on “real, immediate cuts.” It’s reasonable to backload the cuts, because most of the danger from ballooning deficits is on the back end, and because frontloading them would be even worse for the economy now. Of course, a worsening economy through 2012 suits Republicans just fine: they’re counting on it to beat Obama next year, keep the House and/or win the Senate. But they can’t admit that and public opinion wouldn’t be too kind if they did. So on what Obama needs most, he’s on the side of public opinion.
  4. Boehner, on the other hand, wants to extract as much leverage as he can. He controls one half of one of the three branches of government, and the Republicans have gotten a lot of mileage from that relatively weak positioning by staying tough and not compromising (the opposite of Obama’s preferred process) — as they did in the last Congress with their mere 41 votes in the Senate. Boehner knows his side may not hold such good cards in the next Congress, so he wants to get the most he can through next year. This would ideally (for him) mean forcing Obama and all of us to go through this again in six months. He’s probably on the losing side of that — as I said, the public hates these battles, and further, Wall Street won’t tolerate that. So Boehner will have to accept some deal like the Senate’s, which gives him everything he wants (spending cuts, no revenue) except the replay before 2013.
  5. And that’s as it should be. The fundamental difference between the Republican (steep cuts only) and Democratic plans should be settled by the 2012 elections.
  6. Boehner did OK in his speech, better than liberals think. But that quote circulating (“I didn’t sign up for going mano-a-mano with the President of the United States”) will haunt him. I give him a B to B+ and Obama an A-.
  7. Things the President could have done better: a) made even more clear — in a phrase — that the Republicans are refusing to pay the bills for things they racked up, especially the Iraq War; b) given people a clear call to action, a website and phone number to contact Congress. If he was trying to reach the uninformed public and get them engaged, he should have given them some tools. Your average uninformed American doesn’t know how to contact Congress or what to say. He needed a better ask.

But the endgame is: it was a charade. Obama was arguing for something that won’t happen — tax increases on the wealthy. Or, won’t happen now, I should say, because if Obama is reelected and shows more resolve than he did in 2010, when he caved, he can get an automatic tax increase by letting the 2001 Bush tax cuts expire automatically as scheduled. This is why the Democrats can afford to let this deal go down with no tax increase on the wealthy: as long as he’s reelected, those Bush tax cuts can die with no action needed on anyone’s part. The other thing Obama needs is to backload the cuts, per the Reid plan, so as not to kill the recovery. He gave this speech to try to wake up public opinion and get it onto his side, to give him the leverage he needs to get to that outcome.

  1. permanentsix said: I figured when both the foreign markets and the Nikkei didn’t crater yesterday that the fix was in; Street numbers yesterday confirmed it.
  2. peterfeld posted this
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