The Forces That Stopped Obama’s Recovery Will Not Stop Biden’sBreaking News
tags: Barack Obama, Tea Party, Great Recession, Economic Policy
Joe Biden assumed the presidency confronting an economic crisis reminiscent of the one that faced him when he and Barack Obama took office 12 years earlier. But it is already apparent that the political atmosphere surrounding Biden is unrecognizable. He enjoys freedom of action and a presumptive legitimacy in tackling the crisis that had been denied the last Democratic presidency. Every actor around him — the Republican opposition, business, the mainstream media, and Democrats in Congress — are behaving differently. It’s as if he’s the president of a completely different country than the one that existed in 2009.
This is not because the present crisis is more severe. Just the opposite: The deepest and darkest moment of the contraction has passed, and the question before the economy now is how rapidly it can return to health. A dozen years ago, the economy was plunging so rapidly nobody could even measure the speed of the collapse, let alone discern a bottom.
Americans in 2009 had been conditioned to treat budget deficits as their greatest threat. This began when Ronald Reagan created the modern era of large deficits, which thrust Democrats into the role of fiscal stewards. In part this reflected economic conditions that were once very real. Inflation in the 1980s, while lower than the previous decade, remained high, and periodically threatened to spiral when the deficit peaked. Alan Greenspan informed incoming president Bill Clinton that his economy depended on persuading the bond market he had a serious plan to reduce the deficit, and he was not necessarily wrong — interest rates did seem to threaten to choke off the economy.
The focus on deficits spread beyond Washington and Wall Street, becoming a national obsession. Ross Perot created a national populist movement by making deficits a symbol of national decline. The fantasy of who could cut through partisan rancor and solve this singular crisis was often reflected in popular culture. A 1992 Saturday Night Live skit imagined the Founding Fathers returning to the future through a time machine, telling the country, “as we studied your problems, we kept coming back to one overriding concern: the crippling federal deficit.” The 1993 movie Dave centered on Kevin Kline as an ordinary person who becomes president through a deus ex machina, and brings in his common-sense accountant friend to comb through the budget and find the necessary savings. A 2000 Simpsons episode, later made famous for obvious reasons, depicted Lisa Simpson growing up to become president, only to declare, “We’ve inherited quite a budget crunch from President Trump.”
And so when Obama took office, the news media treated the deficit, not the greatest economic calamity since the Great Depression, as the primary crisis. “If combined with the gigantic stimulus package of tax cuts and new spending that Obama is preparing, which could amount to nearly $800 billion over two years, the shortfall this year could hit $1.6 trillion,” reported the New York Times on January 7, “But Obama and Democratic leaders in Congress said they were more determined than ever to pass a stimulus package.” Obama’s desire to increase the deficit in the face of already-large deficits was frequently treated as completely perverse.
Republicans embraced the idea that deficit spending could only worsen the economic crisis. When Obama invited House Republicans to meet with him, 82-year-old Roscoe Bartlett became a brief sensation by instructing Obama he “was there” during Franklin Roosevelt’s New Deal, and “government programs didn’t work then.” A deeply weird revisionist history of the New Deal by Amity Shlaes was held up by Republicans as proof positive that Bartlett’s youthful memories (he was 5 when Roosevelt took office) were correct.
Throughout most of Obama’s presidency, reporters judged his success by a simple metric: Could he join with Republicans to forge a deal to reduce the deficit? The ends (deficit reduction) and the means (bipartisan cooperation) were linked together so tightly that journalists considered it almost axiomatic that if he could cooperate with Republicans, the deal would be over deficits. When Bob Woodward chronicled the failure of a deal to emerge in 2013, he lamented, “They did not get that a genuine deal would send multiple messages to the world, establishing some economic certainty, laying the conditions for a burst of economic growth and providing evidence, sorely lacking for years, that Democrats and Republicans could work together for the common good.” The endless demands that Obama spend more time drinking with Mitch McConnell or golfing with John Boehner reflected the press corps’ inability to imagine any other avenue for domestic success.
In the intervening years, the assumptions that produced this atmosphere have all collapsed one by one.
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