An Awfully Painful Way to Convince the President Our Economy Is Not Moving

Remember when Robert Gibbs justified his attack on the professional left by suggesting that they didn’t understand–but the rest of the country did–that Obama had gotten our economy moving again? Remember Recovery Summer, Obama’s effort to convince Americans that the economy had turned around? Well, we’ve already seen that voters don’t take their understanding of our economic state from the same wonky metrics the White House does.

You think the White House is beginning to understand that no matter how many times you repeat the news that the economy is good, voters know better?

Six in 10 voters named the economy as the nation’s No.1 problem. Roughly four in 10 said their family’s financial condition has worsened under Obama. About six in 10 said the country is on the wrong track.

I assume yesterday’s defeat is the kind of metric that will finally make it clear to the White House that the economy sucks and people are pissed about it.

Administration Inches Closer to Rule of Law on Foreclosure Crisis

…with this statement from Robert Gibbs:

As institutions are determining their next steps in addressing these issues, we remain committed to holding accountable any bank that has violated the law. In addition to strongly supporting the investigation by the state attorneys general, the administration’s Federal Housing Administration and Financial Fraud Enforcement Task Force have [sic] undertaken their own regulatory and enforcement investigation into the foreclosure process.

This is stronger than the repeated statements from HUD Secretary Shaun Donovan.

Let’s hope the Administration includes individual banksters in that statement.

The Anonymous Coward Returns

The White House was okay with Robert Gibbs attacking the Professional Left and their Catfood Commission Co-Chair attacking, well, everyone.

But they wouldn’t let Steven Rattner’s claim that Rahm Emanuel had attacked the UAW go unanswered.

Rattner depicts White House Chief of Staff Rahm Emanuel as a force to be reckoned with who disparaged unions — once quipping “Fuck the UAW” — and who effectively supervised Treasury Secretary Tim Geithner during his first rocky months on the job by dictating his public appearances and staff picks.

However, unlike Rattner, who put his name to his version of Rahm’s attack on the UAW, the White House push-back was done under the cover of cowardly anonymity.

A senior White House aide emails: “Throughout the entire process that saved the auto industry, Rahm tirelessly defended and advocated on behalf of the auto workers. Any suggestion to the contrary is simply ridiculous.”

Uh-huh. So ridiculous that it couldn’t be said on-the-record.

Nothing To Be Done But Blame Republicans

Jake Tapper hammered Robert “a recovery that got our economy moving again” Gibbs yesterday on whether the Administration is not doing more for the economy because of political paralysis. After four attempts to avoid answering the question or focus exclusively on blaming Republicans, Gibbs finally suggested there wasn’t all that much the Administration can do to stimulate the economy.

Q Is the reason the President is not pushing for a bolder move on the economy because he doesn’t believe there is one, or because he doesn’t think he could get it through Congress?

MR. GIBBS: Well, Jake, I think you will hear the President — you heard him today after meeting with his economic team, and you will hear him over the course of the next several weeks outlining a series of ideas, some of which are stuck in Congress and some of which we continue to work through the economic team, that will be targeted measures to continue to spur our recovery and to create an environment in which the private sector is hiring.

Q But these are smaller-bore type proposals. These aren’t $787 billion stimulus packages.

MR. GIBBS: No, they’re not. But let’s understand — when you mention small bore — some of you probably saw this article today — “Small businesses sit in holding pattern.” “Small businesses have put hiring, supply buying, and real estate expansion on hold as they wait out the vote on a small business aid bill that is stalled in the Senate earlier this summer.” Right?

As the President said in the Rose Garden, 60 percent of our job losses have come from small business. Small businesses are waiting for the Senate to act on a bill that would cut their taxes and provide them greater loans and investment opportunities with which to expand.

The Republican Party talks a lot about their support for and their helping of small business, and I think the question that the President put toward them today is, if that’s what you support, why are you standing in the way of something that small businesses acknowledge would help with their hiring, with their purchasing, and with their expansion?

Q Okay, but the question I asked was, do you think — does the President think that there should be a bolder move taken beyond a $30 billion small business lending initiative —

MR. GIBBS: Well, again, I think —

Q — and there aren’t the votes for it, or he just didn’t think there is such a thing?

MR. GIBBS: I think, Jake, I think the President mentioned several ideas today that he believes are important to continue that recovery that we will pursue. I think these will be areas and initiatives that are targeted towards spurring recovery and creating an environment for hiring, not some —

Q But does that mean he believes that that is the right approach, or he believes that it’s the only politically possible approach?

MR. GIBBS: Well, look, I don’t think there’s any — I think there’s no doubt that there are — there’s only so much that can be done.

Q Not having to do with politics?

MR. GIBBS: Not having to do with politics. [my emphasis]

At which point Gibbs promptly pivoted and adopted the most thread-bare of DC excuses: whocouldanode.

Q In retrospect, was the stimulus too small?

MR. GIBBS: Look, we always — I think it makes sense to step back just for a second. If you look at — and I don’t think anybody had — and I think we’d be the first to admit that nobody had, in January of 2009, a sufficient grasp at the sheer depth of what we were facing. I think that’s, quite frankly, true for virtually every economist that made predictions. You had — the chart that I generally show, adding the job losses for the last three recessions up doesn’t get you to the job loss that we’ve seen in this recession alone.

It took us a long time to get to this point. We got here not simply because of one thing but because of many things. We’ve seen the housing market collapse. We saw what happened to credit markets. We saw what happened to the stability of our financial system. All of that accumulated after many years into one big pothole that — the size of which any stimulus was unlikely to fill.

I think that for all of the political back-and-forth on the Recovery Act, there should no longer be any doubt — despite some Capitol Hill nonbelievers — that what the Recovery Act did was prevent us from sliding even into a deeper recession, with greater economic contraction, with greater job loss, than we have experienced because of it. [my emphasis]

Calculated Risk didn’t even have to look outside of the Administration–at least as it existed when people were making predictions about the recovery act–to find an economist who had enough of a grasp on what was happening.

How about Christina Romer (the chair of the Council of Economic Advisers)? From Ryan Lizza at the New Yorker:

At the December [2008] meeting, it was Romer’s job to explain just how bad the economy was likely to get. “David Axelrod said we have to have a ‘holy-shit moment,’ ” she began. “Well, Mr. President, this is your ‘holy-shit moment.’ It’s worse than we thought.” She gave a short tutorial about what happens to an economy during a depression, what happened during previous severe recessions, and what could happen if the Administration didn’t act. She showed PowerPoint slides emphasizing that the situation would require a bold government response.

The most important question facing Obama that day was how large the stimulus should be. Since the election, as the economy continued to worsen, the consensus among economists kept rising. … Romer had run simulations of the effects of stimulus packages of varying sizes: six hundred billion dollars, eight hundred billion dollars, and $1.2 trillion. The best estimate for the output gap was some two trillion dollars over 2009 and 2010. Because of the multiplier effect, filling that gap didn’t require two trillion dollars of government spending, but Romer’s analysis, deeply informed by her work on the Depression, suggested that the package should probably be more than $1.2 trillion.

So Romer thought the right size was probably about double what was actually enacted (excluding the Alternative Minimum Tax relief).

And then there are the prominent Nobel prize winning economists in the Democratic party who predicted the stimulus was too small.

So basically, the Administration’s strategy for limiting the political damage of the dismal economy (to say nothing of doing something to fix it) is simply to blame Republicans, because actually admitting that the Administration fucked up–much less doing something like firing Tim Geithner and starting fresh–is just not palatable.

A pity for all those struggling Americans who have to pay for the Administration’s arrogance, huh?

How a Previously Qualified Elizabeth Warren became Unqualified, According to a Previously Progressive Chris Dodd

July 27: Chris Dodd says of Elizabeth Warren, “She’s qualified, no question about that”

August 9: Katrina vanden Heuvel tweets that several sources have told her Elizabeth Warren would be nominated “next week”

August 12: Warren meets with Financial Services Roundtable President Steve Bartlett and then meets with David Axelrod at the White House to discuss the CFPB position

August 13: Robert Gibbs acknowledges that Warren had been meeting about the CFPB position, but says no announcement would be made in the next week

August 17: Chris Dodd raises questions about whether Warren can manage anything to suggest she may not be confirmable even while he admits she has “a great campaign”

“My simple question about Elizabeth is: Is she confirmable?” Dodd said during a visit Tuesday with The Courant’s Editorial Board. “It isn’t just a question of being a consumer advocate. I want to see that she can manage something, too.”

But when pressed about where he stands, Dodd said: “If the president wants to name her and it goes through the hearing process, then fine, he’ll have my support. But she has to tell me more than just she’s a good consumer advocate or that’s she’s got a great campaign.”

I guess the only question this chronology leaves is whether or not Dodd is acting at the behest of his future employers, the banks, the White House, or both.

The Things Bob Bauer Was Doing before Taking over Ethics

The White House Ethics Czar, Norman Eisen, has gotten himself nominated to serve as Ambassador in one of the greatest places on earth, Prague, Czech Republic. To replace the function of Ethics Czar, the White House has announced that White House Counsel Bob Bauer will take over, and Steven Croley (who worked on the campaign) will lead a team of six to oversee ethics.

Ethics wonks are mixed about whether this arrangement will meet the high standards Obama set when he came into the White House. POGO’s Danielle Brian takes Bauer’s appointment as a good sign that ethics will continue to be a priority. OMB Watch’s Gary Bass is happy the White House worked so quickly to implement a plan to replace Eisen. But Sunlight Foundation’s Ellen Miller views the appointment of Bauer–who has a history of supporting bad ethics habits–as a setback.

This concern is magnified manifold when Eisen’s key successor – Bauer — can hardly be described as having the DNA of a ‘reformer.’  This is the man who invented the rationale for the acceptance of “soft money’’ – unregulated (chiefly corporate) funds that flooded elections to the tune of $1.5 billion between 1992 and 2002, and the man who sided with arch conservatives in their defense of lack of transparency.

[Update: CREW has concerns as well.]

I’ll leave it to the ethics wonks to decide whether Bauer can do the job–on ethics–well or not. And FWIW, the one time I’ve seen Bauer’s work close up (during an election-related suit here in MI in 2008), I thought he was the kind of fighter Dems need more of.

But I am worried about what this says about the Administration’s focus on two other critically important functions. You see, when Bauer took over for Greg Craig, he was hailed as the kind of guy who could solve two problems Craig had failed to: judicial confirmations and closing Gitmo.

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Helen Would Have Asked about the Rape Threats for Teens

That last thread is getting a bit long, and since McCaffrey the MilleniaLab says we’re going on a walk NOW, I wanted to throw up more space for discussion.

So let me just make this observation. Apparently, not one of the crack reporters at yesterday’s White House press conference asked any question about what it means that a judge speaking for the United States of America decided the other day that using rape threats with teens is an acceptable way to force confessions.

As I suggested, perhaps Robert Gibbs’ intemperate rant wasn’t so stupid after all. It distracted from the sad state of America’s claims at being a law-abiding nation. Lots of questions about the professional left. No questions about threatening a teenager with rape and then using the confession that results as admissible evidence.

Which brings me to a point WaldenE made. Used to be, these kinds of questions got asked in White House press briefings. Back when Helen Thomas was still the Dean of the White House press corps, she would have asked about military interrogators using rape threats with teens (after which, Robert Gibbs would have sighed and given her a patronizing response). No longer. Because she was chased out because–they say–she was an opinion journalist and because she made a comment that Robert Gibbs might call “inartful.”

These things are all connected somehow…

Gibbs’ Walk-Back: Clueless about “in America”

Gibbs and Pres. Obama check out what's up "in America" from a safe distance. (Official White House photo by Pete Souza)

In Robert Gibbs’ intemperate rant about hippies, he seemed to distinguish between the “professional left” he was targeting and the Progressives “in America” who are clapping loudly over Obama’s accomplishments.

Progressives, Gibbs said, are the liberals outside of Washington “in America,” and they are grateful for what Obama has accomplished in a shattered economy with uniform Republican opposition and a short amount of time.

In a piece that had a lot to piss me off, the suggestion that professional DC hack Robert Gibbs should lecture hippies about what people “in America” think of Obama’s economic policies was the worst.

Maybe that’s because I’m out here “in America” and I’m still seeing a shattered economy.

My belief that Gibbs just doesn’t get that fact was confirmed when, in the walkback of his attack, he again boasted of Obama’s success at “getting our economy moving again.”

But in 17 months, we have seen Wall Street reform, historic health care reform, fair pay for women, a recovery act that pulled us back from a depression and got our economy moving again, record investments in clean energy that are creating jobs, student loan reforms so families can afford college, a weapons system canceled that the Pentagon didn’t want, reset our relationship with the world and negotiated a nuclear weapons treaty that gets us closer to a world without fear of these weapons, just to name a few.

Now, don’t get me wrong. Aside from areas that depend on the military and intelligence industrial complex (like the DC metro bubble in which Gibbs lives), MI has benefited more from Obama’s economic decisions than anywhere else. Not only did Obama rescue GM and Chrysler, but a lot of those “record investments in clean energy” are battery jobs in MI. As I’ve written before, I just wish there were a similar killer app to use as the excuse for investment in Nevada and Arizona.

But the truth is these states, including MI, are still functionally in far worse than a recession. The economy on Wall Street may be moving again, but without consumer demand, the economy on Main Street is not. Too many consumers are so far underwater on their house (which Obama’s disastrous HAMP has failed to fix in any appreciable way) they’re not going to be spending anytime soon. Heck, no one’s going to be spending so long as wages remain stagnant or falling.

And that reality out here “in America” is the key to Obama’s problems (the ones that–as Chris Bowers shows–really do extend to liberals outside of DC) with voters.

No matter how many mean names Gibbs calls hippies, the real issue is that he, the voice of the Obama Administration, appears totally clueless about why America isn’t clapping louder about the Administration’s economic “successes.”

Meet Deputy Attorney General Robert Gibbs

I guess, in addition to President Rahm Emanuel and Attorney General Lindsey Graham, Deputy Attorney General Robert Gibbs sees the wisdom in putting aside rule of law for political expediency.

Some policy advisers have wondered why the administration’s flack is so often in attendance, but insiders fluent in the administration’s power dynamics know Obama values his views. According to one administration official, who would not be quoted speaking about internal White House discussions, Gibbs late last year pointed out the political perils of letting the Justice Department try Khalid Sheikh Mohammed in a civilian court and has urged the president to ignore Wall Street critics who argue Obama has adopted too populist a tone when speaking out against executive bonuses. [my emphasis]

You know, when Karl Rove unacceptably took over DOJ, he did so to support world domination. He had a plan.

But apparently we’ve decided to shred the Constitution for no other reason than a press flack thinks it would be smart.

Nixon The Obama Campaign Goes to China

One of the most telling anecdotes in this must-read Edward Luce skewer of the way a small circle of Obama advisors (Rahm, David Axelrod, Valerie Jarrett, and Robert Gibbs) dominates his Administration is this story about his trip to China.

On Mr Obama’s November trip to China, members of the cabinet such as the Nobel prizewinning Stephen Chu, energy secretary, were left cooling their heels while Mr Gibbs, Mr Axelrod and Ms Jarrett were constantly at the president’s side.

The White House complained bitterly about what it saw as unfairly negative media coverage of a trip dubbed Mr Obama’s “G2” visit to China. But, as journalists were keenly aware, none of Mr Obama’s inner circle had any background in China. “We were about 40 vans down in the motorcade and got barely any time with the president,” says a senior official with extensive knowledge of the region. “It was like the Obama campaign was visiting China.”

Coming as it does in an article that compares Obama’s Administration to Nixon’s…

And barring Richard Nixon’s White House, few can think of an administration that has been so dominated by such a small inner circle.

The story really highlights the dangers of such a close-knit group dominating Administration policy: on a visit to China, our relationship with which is one of the most challenging policy issues we face, we’ve got tourists dominating the policy, not experts.

As much as I’m thrilled the story repeats calls to replace Rahm, I think the real story is the suggestion that Obama’s cabinet members are growing tired of being treated as “minions” by Rahm. The story names four by name: Kathleen Sebelius, Ken Salazar, Janet Napolitano, and (above) Steven Chu.

Perhaps the biggest losers are the cabinet members. Kathleen Sebelius, Mr Obama’s health secretary and formerly governor of Kansas, almost never appears on television and has been largely excluded both from devising and selling the healthcare bill. Others such as Ken Salazar, the interior secretary who is a former senator for Colorado, and Janet Napolitano, head of the Department for Homeland Security and former governor of Arizona, have virtually disappeared from view.

Administration insiders say the famously irascible Mr Emanuel treats cabinet principals like minions. “I am not sure the president realises how much he is humiliating some of the big figures he spent so much trouble recruiting into his cabinet,” says the head of a presidential advisory board who visits the Oval Office frequently.

With the suggestion that Sebelius, for example, has been “excluded both from devising and selling the healthcare bill,” are we to understand that all of these cabinet officials are not intimately involved in setting policy? We’ve got Steven Chu, one of the best cabinet picks in the Administration, cooling his heels rather than the climate? And what are Sebelius, Salazar, and Napolitano advising that is not being heard? Is Sebelius growing tired of Rahm fucking up what should be her portfolio (after which, as happened last week, she has to go to Congress and get grilled on it)?

And then, of course, there’s an even more notable cabinet member that goes unmentioned: Hillary Clinton. She showed up prominently in the pictures from China, but she is not mentioned in this story as either one of those (like Joe Biden) who regularly gives Obama counsel but is not part of this inner circle, or one of those prominent cabinet members that Rahm treats like a minion. But the story does note how Arab-Israeli peace took a back seat to Rahm’s failed attempt to pass health care reform. Whether or not Hillary (or, more likely, her inner circle; John Podesta is one of the few named sources for it) is a source for this article, I can imagine how seeing a failed attempt to pass healthcare stall attempts to bring peace to Palestine would rankle Secretary Clinton.

So, yes, this is another story pointing to growing dissatisfaction with Rahm from allies both inside and outside the Administration. But note clearly, it appears to be very high level dissastisfaction.