Thursday, November 15, 2012

President Obama Is Putting Party Over Country

From "Reactions to the President’s press conference" by Keith Hennessey:
It seems like the President is thinking about the threat of tax increases (aka "going over the fiscal cliff") in relative negotiating terms, and not as much in absolute policy terms. That is, his language suggests that he thinks no legislative deal would be worse policy and worse politically for Republicans than it would be for him. If he’s right, then that should give him leverage in the negotiations, because Republicans should be willing to "pay more to avoid that stalemate outcome.

The problem is that he has a responsibility to think about a stalemate not just in relative terms (and especially not just in relative political/blame terms), but also as a matter of absolute policy. No matter who gets blamed for it, a legislative stalemate leads to a terrible short-term macroeconomic consequence: increased unemployment and a new recession, says the Congressional Budget Office. The President’s public posture treats this as if it’s not a big deal because it’s worse for Republicans. Far more importantly, it would be a terrible outcome for the country. [Emphasis added.]

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