Calling the Better Angels of Our Nation

Do we want to be a people, one people?

This is the fundamental question that most often divides our representatives -- how are we to be together.

Loosely?  If all people have some evil in their hearts, then loosely would seem best.

But if we are born innocent, and any evil we have is only learned, then we might be redeemed by a helping hand.   One might reach out to grab and rescue a hand from the rough waters of the sea.

Will we choose to be more than only allies?

Might we be a People?  The American People.

"Together," Obama says, and this needs to become the heart of his message this fall. Because "A house divided against itself cannot stand."

Will Obama Speak to Americans?

Typically, President Obama speaks very well to me, and that's a problem.

I'm definitely more of a reader than average Americans, with a tendency towards nuances and complexity.

As I write, I'm always trying to avoid convolution, because my wife says many paragraphs are unclear in my initial drafts.

And I find Obama's rhetoric, his paragraphs, to be engaging and quite good.

Which means he loses too many people too often before he gets his main points across.

For instance, perhaps he will get across a point at the beginning, and 4 or 7 minutes later, many in the audience are thinking about taking their kids to soccer practice or the dentist, and miss crucial points.

Less is more, for Obama.

I wonder if he knows that?

Popular pundits underestimate Obama's management skill, and overestimate his rhetorical skill. Of course, popular pundits usually misconstrue most things most all the time.

Obama's job is to make it clear even to the obtuse. He won't get the ideological to listen -- they are actually unable, handicapped -- but he could communicate to the rest of us.

Obama needs to be ready to go off his speech, and speak off the cuff.

At such a moment, he needs to begin a sentence not even knowing what he will say, so that more Americans will listen.

He could speak for 3 or 4 minutes, and tell most Americans all they need to hear from him.

Obama, the Pragmatic, and the Ideal

Lately, a significant portion of the fate of our nation is hanging on the seeming necessity of choosing between the pragmatic and the ideal.

We are in two wars on the other side of the world because many Americans presume the pragmatic and the ideal are often at odds.

Obama struck a deal with the pharmaceutical industry at the outset of health care reform on the expectation that pragmatically, it might be politically impossible to pass health care reform if the drug lobby opposed reform.

This deal making though has helped damn the current health care reform bills in the eyes of many independent voters.

Those who might be skeptical of Republican rhetoric against the reform legislation nevertheless could find no way around the fact that backroom deals had been struck at the expense of the American taxpayer.

In 2003, Congress passed Medicare Part D, and did not use the potential advantage of a huge insurance agent (Medicare itself) to negotiate prices with drug makers!

I expect somewhere between 60-90% of Americans would choose the label "corrupt" over alternatives like "beneficial" to describe this aspect of the 2003 legislation -- an apparent giveaway to for-profit drug makers.

What if you had to individually negotiate, as a household, with a toll road operator, for your toll road rates? The toll road operator could consider your address and decide just how much it might be able to wring out of you based on what it guesses is your individual likelihood to be willing to pay more.

When government appears to simply create an extra margin of profit for some corporations when it could easily have solicited bids instead (as it does for many other goods and services), it is entirely reasonable for citizens to view that provision as an instance of corruption.

What label might Americans who view the lack of drug price negotiation in Medicare Part D as corrupt now apply to the 2009 Obama deal with drug makers at the outset of this new reform?

Pragmatism, by its very nature as a word, implies deciding what to do on the basis of the expected practical outcomes of options. But for many people "pragmatism" also implies that simply following principles, ideals, might often be unworkable in terms of outcome.

Was the likelihood of passage of health care reform increased by making a backroom, apparently corrupt deal with drug makers?

Might I suggest a portion of Massachusetts independent voters may have reached the conclusion this was a corrupt deal?

Consider further -- does invading an entire region of parochial tribes to fight a group of wing nut terrorists, at times fighting tribal people that fight us only because we have invaded their territory, make terrorism more likely or less?

In contrast, if we followed a strategy of based on the ideal of peacemaking, while continuing to be on-guard, and simply issued warrants for the arrests of "criminals", what effect would that have over time on the number and passion of terrorists?

If you think peacemaking and labeling known terrorists as "criminals" would lead to a lower number of recruits to their ranks, your pragmatic instincts are quite correct.

Because Al Qaeda is not essentially a group of individuals.

It is a set of ideas.

Obama has made an important and subtle mistake, a disconcerting failure of wisdom.

He has accepted the fallacy of the pragmatic versus the ideal.

...

Life experience gradually teaches us that violating ideals in pursuit of goals is impractical over time.

We cannot win a war of ideas -- the fight against Al Qaeda -- by fighting and killing people who are not trying to conduct a war against us (tribal people in eastern Afghanistan who are not members of Al Qaeda). Such a practice in fact validates the ideology of Al Qaeda and recruits new fanatics to its cause.

No, to fight Al Qaeda and win, we need to use ideals -- ideals that are superior to the ideology of Al Qaeda.

You win a war of ideas by using and practicing better ideas -- ideals -- not by forfeiting your moral standing by fighting bystanders trying to defend their homeland territory against your presence.

To defeat Al Qaeda, we need to use words and ideal actions.

This is an instance of a very deep principle that age and experience gradually will suggest -- the ideal is the most pragmatic option. It is the option that will have the best outcome in time.

The pragmatic and the ideal are one and the same.

Is Obama in a Bubble?

Perhaps.

While Obama was known before his inauguration to have the habit of taking in many sources of information and ideas, it is likely the amount of information and briefing materials available to him daily is stupefying.

So his challenge now is to see the forest in spite of being pushed up against trees every day.

Every form of briefing and information has its presumptions, its bias. The most profound bias is which information is thought to be important enough to present.

For instance, what is most important in Afghanistan is not among these:
a) troop positioning
b) Pakistan's offensive
c) road building
d) military strategies against the Taliban; or even...
e) disrupting Al-Qaeda

Instead, what is most important in Afghanistan might not be in any briefing materials dumped on the President each day.

Instead, the most important factors are likely among these:
f) number of television satellite dishes
g) freedom of the local press
h) distribution of popular local and regional writers of all kinds by various means across Afghanistan (poetry and novels and religious views being of equal significance in the evolution of thought)
i) state of progress with lowering India's tariffs on Afghan trade goods
j) state of progress with lowering Turkey's tariffs on Afghan trade goods
k) respect for local village preferences (if they don't want us there, then leave that area)

Similarly, for financial reform, Obama certainly hears the world view and ideas which dominate the Federal Reserve, no doubt articulated quite well by Timothy Geithner, such as ideas and theories about how to sustain or increase lending. The TARP Bailouts were about sustaining lending. But other forces are at work, and not every one of them might be brought up for examination in the White House.

Does his information intake include the current average household credit card balance and current average credit card interest rate? Does he have an analysis such as this one of how the recent increase in money diverted from local economies by higher card interest rates affects the general U.S. economy?

Or does he have only the competent, convincing presentation of certain points of view, perhaps with two or three angles or alternatives -- alternatives which themselves are only variations on certain presumptions common to a particular world view?

In other words, is Obama in a bubble?


I think it is too soon to say.

Afghanistan will be one of the tests of how well he is able to step back and include broader vision in his decisions. Will Obama be able to bring insights to bear in these complex, real-world situations in spite of powerful interests that are accustomed to continuing along their current paths?


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Update: My wife sent this article that shows way Obama is clearly not in a bubble on Afghanistan.

Obama's Opening Statement at Press Conference

Barak Obama 2/9/2009

"Good evening. Before I take your questions tonight, I’d like to speak briefly about the state of our economy and why I believe we need to put this recovery plan in motion as soon as possible.

I took a trip to Elkhart, Indiana today. Elkhart is a place that has lost jobs faster than anywhere else in America. In one year, the unemployment rate went from 4.7% to 15.3%. Companies that have sustained this community for years are shedding jobs at an alarming speed, and the people who’ve lost them have no idea what to do or who to turn to. They can’t pay their bills and they’ve stopped spending money. And because they’ve stopped spending money, more businesses have been forced to lay off more workers. Local TV stations have started running public service announcements that tell people where to find food banks, even as the food banks don’t have enough to meet the demand.

As we speak, similar scenes are playing out in cities and towns across the country. Last Monday, more than 1,000 men and women stood in line for 35 firefighter jobs in Miami. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine. And if there’s anyone out there who still doesn’t believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don’t know where their next paycheck is coming from.

That is why the single most important part of this Economic Recovery and Reinvestment Plan is the fact that it will save or create up to 4 million jobs. Because that is what America needs most right now.

It is absolutely true that we cannot depend on government alone to create jobs or economic growth. That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life. It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs. And breaking that cycle is exactly what the plan that’s moving through Congress is designed to do.

When passed, this plan will ensure that Americans who have lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage. We will also provide a $2,500 tax credit to folks who are struggling to pay the cost of their college tuition, and $1000 worth of badly-needed tax relief to working and middle-class families. These steps will put more money in the pockets of those Americans who are most likely to spend it, and that will help break the cycle and get our economy moving.

But as we learned very clearly and conclusively over the last eight years, tax cuts alone cannot solve all our economic problems – especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it has only helped lead us to the crisis we face right now.

That is why we have come together around a plan that combines hundreds of billions in tax cuts for the middle-class with direct investments in areas like health care, energy, education, and infrastructure – investments that will save jobs, create new jobs and new businesses, and help our economy grow again – now and in the future.

More than 90% of the jobs created by this plan will be in the private sector. These will not be make-work jobs, but jobs doing the work that America desperately needs done. Jobs rebuilding our crumbling roads and bridges, and repairing our dangerously deficient dams and levees so that we don’t face another Katrina. They will be jobs building the wind turbines and solar panels and fuel-efficient cars that will lower our dependence on foreign oil, and modernizing a costly health care system that will save us billions of dollars and countless lives. They’ll be jobs creating 21st century classrooms, libraries, and labs for millions of children across America. And they’ll be the jobs of firefighters, teachers, and police officers that would otherwise be eliminated if we do not provide states with some relief.

After many weeks of debate and discussion, the plan that ultimately emerges from Congress must be big enough and bold enough to meet the size of the economic challenge we face right now. It is a plan that is already supported by businesses representing almost every industry in America; by both the Chamber of Commerce and the AFL-CIO. It contains input, ideas, and compromises from both Democrats and Republicans. It also contains an unprecedented level of transparency and accountability, so that every American will be able to go online and see where and how we’re spending every dime. What it does not contain, however, is a single pet project, and it has been stripped of the projects members of both parties found most objectionable.

Despite all of this, the plan is not perfect. No plan is. I can’t tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans. My administration inherited a deficit of over $1 trillion, but because we also inherited the most profound economic emergency since the Great Depression, doing too little or nothing at all will result in an even greater deficit of jobs, incomes; and confidence. That is a deficit that could turn a crisis into a catastrophe. And I refuse to let that happen. As long as I hold this office, I will do whatever it takes to put this country back to work.

I want to thank the members of Congress who’ve worked so hard to move this plan forward, but I also want to urge all members of Congress to act without delay in the coming week to resolve their differences and pass this plan.

We find ourselves in a rare moment where the citizens of our country and all countries are watching and waiting for us to lead. It is a responsibility that this generation did not ask for, but one that we must accept for the sake of our future and our children’s. The strongest democracies flourish from frequent and lively debate, but they endure when people of every background and belief find a way to set aside smaller differences in service of a greater purpose. That is the test facing the United States of America in this winter of our hardship, and it is our duty as leaders and citizens to stay true to that purpose in the weeks and months ahead. After a day of speaking with and listening to the fundamentally decent men and women who call this nation home, I have full faith and confidence that we can do it. But we're going to have to work together. That's what I intend to promote in the weeks and days ahead. And with that, I’ll take your questions."

How Obama's Middle Class Tax Cut Will Save Jobs

Debate has intensified in the last few days about whether the Obama tax cut proposals in the stimulus package will be effective as a stimulus.

Among the majority that believe a stimulus package will indeed create and save some jobs on net versus no stimulus, the big issue is whether the stimulus size is enough to counter the large fall in consumer demand, and thus prevent higher and higher joblessness.

Keynesian stimulus in a nutshell is that government spending can increase demand in the economy to replace the fall in demand during a recession, saving jobs and creating jobs.

Several important side debates have been ongoing, and let's quickly dispose with a couple of those and get back to the main question of this post.

Objection A) Government spending does not create new jobs, since it relies on taxing or borrowing which in turn removes money or available investment and discretionary funds from the general economy -- simply shifting spending and investment from one place to another without a net increase.

For investing, this is called crowding out, and it certainly does happen when an economy is running at or near full steam, so that resources (machines, workers, money) are being fully or almost fully utilized, so that all new output of the economy requires new investment dollars. In that situation, private investment competes for those new dollars with government. But when an economy has much slack, as ours does now, so that more money is sitting in money market accounts and short term treasury bills, there is plenty of available money for government borrowing and investing, and still plenty left for any private borrowing and investing the private sector chooses. A similar situation applies to spending -- government spending does not compete so much with private spending during a recession -- concrete prices are down sharply, for instance, so government infrastructure spending on concrete will not be competing much with private demand for concrete to a level that would strain available output.

Objection B) Government spending/investing is top-down, and is thus less informed/knowledgeable than private spending/investing -- less effective at producing the goods and services people actually want for their lives and standard of living.

Example -- Joe would rather buy a new car instead of paying more taxes (or having future taxes) for more city bus service.

This again, as above, is true during a time of economic expansion, but is it true during a time of recession? Currently consumers who have jobs have sharply pulled back in spending, and are saving on the whole, which of course has led to a sharp drop in consumer demand, and thus more and more job losses. Consumers are choosing that they don't want as many consumer goods and prefer instead to pay off their credit cards, or build up their emergency fund.

As they save, more money is available for investing also, and some of it flows into safe US Treasuries. When the Government spends more now, it is not removing money from current consumer spending.

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Ok, now let's consider the Obama Middle Class Tax Cut (MCTC) as a stimulus....

We know that tax rebates of a size like that of summer 2008 are much smaller than average consumer credit card debt, and it's little surprise that much of that rebate was saved (or paid against debt), and yet helped the economy in a dramatic way not widely understood. (see link)

We can surmise that much of the coming MCTC will also be saved, at least for a while.

Until when?

Well, that's an individual level decision.

For someone who's been paying off credit card debt for example, they may continue paying it off at the same rate, or even add in the extra take-home pay from the tax cut and make even larger payments (saving all the tax cut). Until....

Until they have paid off the credit cards to zero.

Then what happens?

If you could imagine celebrating upon paying off a card or the last card, I bet you are like most people.

Might you go out to eat? Might you finally get your car repaired? Might you stop putting off that gym membership?

Yes, when consumers have less debt, they will respond by spending more, resulting in more jobs. Some will spend more, some less, but overall spending will increase in response to debt going down (or savings up). Poorer families will spend more, and the sad truth is many "middle class" families are practically poor.

Even while consumers spend less in 2009 with the new tax cut than they did in 2008, the issue is how much less. A tax cut will make a difference in consumer spending, immediately and progressively, both. Many jobs will be saved, adding to the positive effect of those newly created.