Kuttner: Mixed Signals - "A little populism here and a little conciliation there is no game-changer"

[highplainsdem]

http://www.huffingtonpost.com/robert-kuttner/mixed-signals_b_434832.html

Robert Kuttner

Posted: January 24, 2010 10:30 PM


As so many of us writing for Huffington Post have been arguing for the past year, if President Obama did not cease behaving as the ally of Wall Street, the right wing would emerge as populist champion of the forgotten American. The election results in Massachusetts have now provided the exclamation point.

The loss of Ted Kennedy's former senate seat seems to have gotten the president's attention. Obama is belatedly getting in touch with his anger, as it were. He has turned up the rhetorical heat against the banks. But will he walk the talk?

Are we seeing a true shift in the Obama presidency where he revises his theory of change and discovers that political progress sometimes requires confrontation before you reach consensus? Or are these simply gestures of expediency and desperation?

So far, the signals are mixed. With the State of the Union Address getting drafted and re-drafted, debates are still raging inside the White House: Should Obama, after the Massachusetts wake-up call, be more conciliatory, or more feisty; more progressive or more centrist?

On the banking front, Obama has begun signaling a welcome populism. First, even before the Massachusetts vote, he called for a surtax on bank profits -- a relatively small and symbolic gesture than neither brings in a lot of money nor alters the banks' toxic business models, but a start.

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Even more significantly, Obama resurrected Paul Volcker as a senior adviser and embraced a Volcker proposal to revive the Glass-Steagall Act, an idea that Summers and Geithner have been resisting all year.

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So Obama seems to get that he needs to be more populist both in tone and substance when it comes to the banks, though it remains to be seen how hard he'll fight. But banking reform is only one piece of the battle. Obama went the other way when it came to trying to salvage the re-nomination of Ben Bernanke to chair the Fed for a second term.

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Even more ominously, Obama thus far is on the wrong side of the deficit-versus-jobs debate. Budget Director Peter Orszag and other deficit hawks in the administration have long been urging Obama to support a proposed fast-track commission that would bypass usual legislative procedures and compel an up-or-down vote on a compulsory deficit-reduction package designed to slash Social Security and Medicare spending.

This is, of course, appalling politics. It signals: we had to spend a ton of taxpayer money to rescue the banks and prop up the ruined economy. Now, gentle citizen, though you have paid once through the reduced value of your retirement plan and your house, you will pay again through cuts in Medicare and Social Security.

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A little populism here and a little conciliation there is no game-changer. The worst strategy of all would be for Obama to be a populist on Mondays and Wednesdays, and a conciliator on Tuesdays and Thursdays. That would signal pure mush.

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[depakid]

1. Spot on-

[jonnyblitz]

2. k & r. nt

[highplainsdem]

3. Thanks!