Episode 87 – Dollars and Sense: Campaign Finance, Elections and Jobs

Jeff and Glenn break new ground in this episode, not sticking to what one would expect to be their usual positions as Jeff proposes abolishing campaign finance limits and Glenn justifies (but doesn’t necessarily defend) the Obama Administration’s messaging around jobs. They both agree that the best way to decrease the corrupting influence of money in politics is…to have no limits on money in politics, but more comprehensive transparency. Provocative? You Bet Ya, to paraphrase Sarah Palin. Early in the show, Glenn explores one of the themes, arguing that the two parties are, “two sides of the same coin.” Jeff counters that his hope in voting for President Obama was to have a more stark contrast with Republicans, especially around issues like the public option in health care, off shore drilling (before the BP disaster), too big to fail and the so-called financial reform and the exclusion of the re-instatement of Glass-Steagal in the bill. Near the end of the episode, Glenn proposes a fascinating new theory about why the Obama administration is failing in its efforts to talk about jobs, but why that may indeed be a very calculated view.

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10 responses to “Episode 87 – Dollars and Sense: Campaign Finance, Elections and Jobs

  1. Guys – great show. I think Glenn nailed it when he spoke of the business cycle.

    I think that the President, any President, has very little impact over the economy. The business cycle is the business cycle. Public policy and the commercial sector are linked, but I just don’t think as much as many believe. The Fed has more impact, and they are not an elected body.

    I’d say Presidential candidates are more victims of the business cycle than drivers of them, regardless of whether they are on the winning or losing side.

    The stimulus did a lot to plug holes in public sector employment at the state level, which certainly helped the unemployment rate from going even higher. But to drive the economy, a small business or big business has to hire a new employee.

    The uncertainty about financial reform and uncertainty over how Obamacare will be implemented is preventing companies from hiring and taking risk.

    One thing this administration could do would be to reach out to businesses and help them understand how the new Healthcare legislation will really effect them going forward so they can remove the uncertainty of how much it will cost to hire new employees. When businesses don’t understand exactly what their costs are going to be (impact of Obamacare, and impact of soon to be financial reform) then they sit on their money and don’t invest. We are stuck there right now.

    My biggest fear going forward; where will the growth come from? I can’t identify a sector or business that has the potential of re-building the economic engine. Technology as both a manufacturing driver and a service driver is in a steady state. Financial services is going to be constrained for decades (we can only hope), and our industrial manufacturing base is crippled (cars, appliances, etc.)

    One place the President could make a huge impact and decide to lead, is deciding that the US should lead the world to a “new energy economy”. So far, there does not seem to be the will for this administration to create a new “space race” around energy independence. If we are going to spend like drunken sailors, at least lets spend the money to re-tool factories and re-train workers to build solar panels and wind turbines.

    There’s good debt and bad debt. Good debt creates capital and bad debt consumes capital. Most good debt comes from the private sector. Its expansion and contraction, as Glenn pointed out is a function of the business cycle. We may just have to wait this one out.

  2. Hey guys —

    I got to listen to the first part of this episode before my iPod went >bleep< and the battery ran out, but I heard my name mentioned. Thanks for the ego-boo!

    Speaking of fiscal policy (weren't we?) here's something from that bastion of liberal thinking, the American Enterprise Institute:


    Money quote: "At this point in the postbubble transition to deflation, fiscal rectitude and monetary stringency are a dangerous policy combination, as appealing as they may be to the virtuous instincts of policymakers faced with a surfeit of sovereign debt. "

    I'll likely have more to say once my iPod is recharged and I can listen to the balance of the episode.

  3. Paul – great link. I only understood about 3/4 of the article but it was very informative.

    I think it also reinforces some common sense that all of us see. If companies don’t want to invest, and individuals would rather save than spend, how could prices rise?

    I think that there is such sensitivity now, and perhaps Americans have capitulated finally to the idea that we should save some money and be financially cautious instead of living from paycheck to paycheck. There is just no way for prices of anything to rise without immediately decreasing demand. I vaguely remember something called elasticity from my economics class.

    I follow this logic; I’d be interested to hear the policy options based on this reasoning.

    Why not do nothing and let the market work it out?

    Why not let the market readjust to a state of lower consumption and lower natural employment?

  4. Hey guys—first time listening to the podcast and it was really interesting. Good job!

    As far as the Obama administration and some of their more politically calculating ways, I don’t know if I agree w/ the conclusion you guys seemed to come to—that Obama is being politically smart (if a tad dishonest) to have modulated his message—at least about jobs—for closer to his 2012 election.

    Now, I should preface this by saying I am a straight up, far-left liberal significantly to the left of the majority of the democrats in congress.

    That being said and realizing that I am hardly unbiased, I think the decision by the Obama administration to largely run to the center — both in message and hard policy— will be disastrous both for congressional Democrats in 2010 and the president himself in 2012.

    Hear me out: the modern democratic electoral strategy is straight out of “The Politics of Evasion”, and not without reason. Bill Clinton’s election proved that running from the left to the center can score big wins for democrats in what many political analysts are calling and increasingly conservative America. And the strategy works, you only have to look @ the wealth of Purple State “Red Dogs” within the current Democratic congress to see that. As long as you don’t look too liberal, as long as you stay just conservative enough, you can make a Democrat electable in even the more conservative Purple States.

    The flip side of this is of course the modern (…and traditional for that matter) Republican strategy embodied by Karl Rove—base mobilization. Forget the center—swing voters are never going to vote in sufficient numbers to make up for the hit in base voter turn out you are going to get from muddying your message to appeal to the center.

    Obama, in many ways, embodies the best of both worlds in 2008. Democratic voter enthusiasm was riding an all time high after Dems amazing success in the 2006 midterms and any swing votes that were turned off by his left of center message were replaced by others seeing him as the “anti-Bush”—the intelligent, eloquent young candidate compared to George Bush’s perceived stupidity or recklessness. He ended up winning w/ a clear majority of swing votes and managed to mobilize a huge (young) portion of the democratic base to vote.

    But since getting into office, things have changed. Obama, like Clinton after his 1994 defeat on Healthcare reform, moved sharply to the center of the field. He passed healthcare reform, but refused to fight for a public option; passed the stimulus, but didn’t push for money to grow jobs as opposed to simply staunching the flow; has said that he supports repeal of DADT, but hasn’t actually signed a presidential order to abolish it; is filing suet against Arizona for Immigration reform, but isn’t fighting for national reform (as he promised he would in his first year). No matter how many times the right calls Obama a communist or socialist the fact is his policies and legislation is all dead center—and that creates a problem.

    Objectively, Obama has had nothing but victories. Stimulus—passed. Healthcare—passed. Financial reform—passed. But that isn’t the whole story. The watered down, half measured, worse-case-scenario bills have had a greater degenerative effect on democratic voter enthusiasm that even outright failures would have—at least then Dems could frame the 2010 election as a battle for the elusive 60th seat needed to pass anything w/ the current republican minority, a message that would be easy to feed an angry liberal base that had at least seen it’s elected officials fight the good fight. Worse still, the move to the right has done little to ingratiate Obama w/ center swing voters who, already set to jump ship from midterm buyer’s remorse, have seen Obama on the wrong side of issues like oil and the environment.

    Obama’s only chance @ this point, at least in my opinion, is to go back to the base. He needs to push jobs, further stimulus, unemployment benefits, and emergency social welfare programs and he needs to do it fast. Will the Dems lose seats for trying these policies, even if they fail to pass—yes. But what’s the alternative? Democratic voters are increasingly disappointed in the Obama administration and are disgusted w/ the way congress is operating; and w/o the base democrats are looking at losing both the house and senate if things keep going the way they are. And the White House won’t be too far behind.

    …Phew—okay I think I just ranted for like 2 pages. Sorry 🙂

    I’d love to hear your thoughts on what impact you think Obama’s political calculations will really have (good or bad) in 2010 and in 2012.


    • Hi Jon,

      What a great comment — really intelligent and refreshing. I totally agree with your comparison to Obama and Clinton. I was in the Senate in ’94, so I saw it first-hand, and I watched with “shock and awe” at how Obama ran to the center and caved on things like the public option, DADT or the re-establishment of Glass-Steagal. I have said on the show repeatedly that it would be nice to have the Democratic party back again — we seem to have Democrats who are Republican wanabees, but who court the base when they need money or votes. Yes Obama, unlike Carter, has a long string of “victories,” but do the ends really justify the means? Sure we have something called “health care reform,” and for those of us who have been waiting a good long time it’s nice to see that, but is it really health care reform? I know I sound like I’m whining, but I thought all that political capital was supposed to be spent on things like the public option. As I have also said many times before, I thought I was getting something akin to FDR when I voted for Obama, but in the end I think I got something like the Professor in Chief. He is, afterall, a politician, but my expectations were set so high, because I bought into change that I really could believe in. In the end what we have, it seems, is a lot of stuff — “financial” reform, health care reform, maybe, one day, DADT or energy policy, but in the end what do we have if not, to use Glenn’s phrase from the show, two sides of the same coin.

      I agree that the Democrats in Congress, and the President, have a chance to do some great things. I’m not sure the phrases “center” “right” or “left” mean anything to me anymore — they’re all shades of gray. This White House loves making deals, but every now and then I’d like to see them get out in front and take the lead on some of these issues, rather than leaving it to Congress to do all the work, and then come out in the end to support something that is watered down and possibly ineffective. The same Congress, by the way, that the White House is prepared to hand over to the Republicans in the Fall. But then again, if history repeats itself, that sure does bode well for Obama in 2012. Not only does he get to triangulate, but he also gets the pointed contrast he’s seeking in his new messaging, between the party of the past and the guy who’s trying to bring about change.

      The whole thing is a bloody mess, but if we can keep talking to each other, not at or past each other, then maybe we can try to bring some change in tone to the dialogue. If not, I guess I’ll just have to watch Glenn Beck cry some more…until I puke!

      Thanks for the comment

      Jeff Kimball

  5. Great post Jon – really well thought out.

    Did you really say that Obama is moving to the center??? This is a President who passed 3 pieces of major legislation, and still has horrible approval ratings. That’s a flat out rejection of how left his policies are!

    OK step back and be rational – I guess it does depend on the vantage point. And you make some great points.

    If he were moving to the center, I think it would be in a very different way than Clinton. Personal opinion – Bubba was a true moderate who faked being a liberal. I actually miss him a little. Barack is a true liberal. If he does move to the center, he is going to have to fake it. I don’t think there is going to be any credibility if he fakes. I think you would agree on that – yes? The right will slaughter him as being politically expedient by moving to the center for the mid-terms. Liberals, still reeling from the fact that he did make compromises on what still ended up as landmark, sweeping, big government legislation, are still ticked off at him.

    I’m not sure there is any winning situation for Obama or the Democrats in the midterms. It’s just hang-on, and hope you retain the House and the Senate by a couple votes. Unless, as Jeff pointed out in the episode, the jobs numbers start to dramatically change. If Obama does actually go to the center, it might make it worse. Then he compromises his base, his ideology, and gets nothing for the risk. This may be a case where he just sits on his hands until the unemployment numbers start looking up. Which could be late 2011.

    After the mid-terms, he’s going to have his hands full figuring out how to deal with the report from the National Commission on Fiscal Responsibility and Reform. Which will probably say things like – cut social security and medicare benefits 10%, create a 20% VAT tax, make pay-go constitutional, layoff government workers and freeze government pay. His first two years and the BP oil spill are going to seem like the good ole days for this President compared to the challenges that lie ahead.

    He’s going to have to convince Republicans to raise taxes, and convince his own party to cut entitlements. I kind of feel sorry for the guy. He’s in Jimmy Carter land.

    Thanks for joining the debate!

  6. GB Jeff,

    Do you really think that passing three pieces of legislation and dropping approval rates are the definition of a president moving to the left?

    Let’s break this down. Obama is losing the left of his base because the the legislation is too watered down for folks on the left. Also, he has embraced more Bush policies than people are talking about.

    I really do not understand how anyone can argue that Obama is moving to the left. I look forward to be educated on your rationale.



    P.S… Jon, how did you hear about our show?

  7. I was not necessarily arguing that Obama is moving to the left. I was arguing that Obama started left, and he is staying left vs. Jon’s proposition that he is moving to the center. On foreign policy, you are correct. He’s got almost the identical Bush plan for the Iraq and Afghanistan conflict. But his domestic agenda is pure social democracy European style.

    Our medium does not lend itself to visuals but I’ll give it a shot. Think of the center of the country as (0) zero. Then think of a spectrum, with the extreme left as -5 and the extreme right as +5. Obama starts as a -7. No not really. Yes actually really, Barack starts as a -7. I’m a +2, a liberal Republican. I’m going to guess that Jon is -4 but I will let him answer for himself. If Obama is at -7, and he compromises by letting go of the public option, decides to actually not nationalize all banks, and realizes that if he adds another major stimulus he will be drawn and quartered, then that moves him to a -4. Still far left of center. So a move to the center is relative. And as I mentioned in my post, it depends on your vantage point.

    If I for example were asked to speak at CPAC (I am awaiting the invitation), I would be booed off the stage as a RINO (Republican in Name Only). In my home-town of Park Slope, Brooklyn however, I did not put a McCain 2008 sign in my window, for fear of rocks being thrown and being branded a redneck racist.

    I don’t know the science behind many believing we are a right of center country, but it feels about right. That’s why I think his poll numbers are where they are.

    It’s all a matter of where you are coming from.

  8. @jdhine—Okay, after rereading my post, I wasn’t all that clear about my point—even if I did ramble on for 12 paragraphs 😉

    I wasn’t so much making a comment on if America was generally to the right of Obama (they probably are) or that Obama isn’t a “true” liberal (he defiantly is). The point I was trying to make was that I kind of think the war for the middle (at least for 2010) has largely been fought—and Obama lost. At this point crossover appeal just won’t work anymore—it’s time to try and beat Karl Rove @ his own game and focus on mobilizing the base.

    Now, I don’t think that is entirely his fault. At least some of his problems come directly form the legislative branch—namely the not-so-sterling performance of Harry Reid and, to a lesser extent, Nancy Pelosi in uniting democrats in…well, anything (Seriously—watching the Dems in congress can look like an exercise in herding cats!). Contrast to the more or less united front the Republicans have been able to present (an easier thing done in the minority—something Pelosi can surly attest to). Even when republicans break from the heard to meet w/ democrats it has as often ended w/ a weaker bill that STILL doesn’t get any support from across the isle (healthcare) as it has an actual compromise (financial reform). All of this has created a kind of sever fatigue in the minds of voters—and w/ a president in the White House and majorities in both houses it is a lot easier for the casual observer to say—“oh, well if those democrats got their act together, this would all be fixed right now.”

    The party in power always gets the lion share of the blame, both deserved and undeserved. Look @ the Bush years! I am pretty sure bad luck, AIDS and Justin Bieber Albums can all be blamed directly on George Bush, at least in the eyes of the average citizen. He was in power—it’s obviously all his fault.

    The point I was really trying to make is that if the democratic party has a chance in hell of retaining their majorities, they need to come together and pass something—anything—that is truly appealing to their base. Comprehensive energy reform w/ a tax on carbon—or at least cap and trade (a traditionally republican idea, market-driven solutions and all…just say’n); real, meaningful immigration reform that includes a clear path to citizenship; new, separate legislation to enact a public healthcare option for low-income families (…yeah, I won’t hold my breath on that one either)—SOMETHING!

    And if they fail—if the democrats push something historic and huge and game-changing, and it still ends up falling to a 59/41 filibuster, then that still helps democrats because they can go to their constituents and say they tried and fought the good fight and it will energize the base to come out and vote. ‘Cause right now? It isn’t republicans that are going to win this election—it’s an unorganized democratic party and an unmotivated democratic base that will lose it.

    So what does this have to do w/ Obama? Simple. The democratic party is a mess, a jumble of west coast environmental and social progressives, more traditional east coast liberals, purple “New Dixiecrats”, and full on Red Dogs who would largely be running as republicans if their applicable state was on a coast. And frankly, Reid and Pelosi haven’t got the job done getting them in line. So now? It’s Obama’s turn—he needs to wade in and be hands on w/ congress for a change rather than acting like the dispassionate observer. He has to push his legislation not only against the other side but against straying members of his own party as well.

    In short—he needs to be just a little like George Bush. ‘Cause if he doesn’t the dems will lose big in 2010; and @ that point any chance he has of controlling the message before 2012 will go w/ them.

    Oh—and as for Obama shifting right, I totally see where you are coming from as far as Obama still being pretty liberal, but when I look @ him choosing not to take up immigration in his first year (a campaign promise); DADT (oh look, another campaign promise); and his mind bogglingly badly timed decision to support off shore drilling (Oh look, that’s 3!) I can’t help but notice a pretty clear right turn. And that’s not even mentioning all the concessions he has given away for little or no support on his major pieces of legislation (yes—you could say that was congress, not him—but he could have chosen to fight, and he would have made a lot of his base a lot happier even if he had ended up losing).

  9. @jdhine—Nice visual w/ the slidey-scale. I’m not sure if I entirely agree w/ your conclusion about Obama being off your scale, even using a purely American context. I’m probably left of Obama (at least President Obama—I am pretty in line w/ candidate Obama) on almost all domestic policies. I also kind of think you can’t just cut out Obama’s relatively conservative foreign policy—it’s a biggy as far as your scale goes.

    So, I don’t know, I’m a -5 on your scale? -6 maybe?

    That being said—I do like to be pushed a bit on my political assumptions. I can have blinders like everybody else. Thanks for the opposing viewpoint 😉

    @jeffkimball—Thanks for the thanks 🙂

    I agree totally—it’s a huge, bloody mess and I just don’t know if Obama has the disposition to get us out of it in any direction I would call much of an improvement.

    Keep up the good work!

    @ggaudet—I actually found you guys by chance. I was cruising Stitcher Radio for something on the political side and thought I would give it a shot.

    Thanks for making it—I look forward to hearing more!

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