Congress, Obama and Placing Blame

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Quite a few Democrats and liberals flocked to Matt Taibbi’s article at Rolling Stone – Obama’s Big Sellout. Whatever one wants to call it – constructive criticism or pushing for more progressive outcomes – that’s a good thing. To call Obama Bush Lite or to use untruths to indict Obama is not anymore fair when it comes from Democrats and Independents then when it comes from unhinged tea smokers. Taibbi is not a bad writer or a bad liberal, but he has made some factual errors and has also committed some errors of political math. It’s simply a fact of life that as Matthew Yglesias points out, one or two Democrats or Joe Lieberman can take legislation like the public option health care reform bill passed by a large majority in the House and trash it. Obama is not the head of an organized crime family. Sure Democrats can promise economic incentives for the home states of Senators like Snow and Lincoln, but normal politics just do not seem to work for Nelson or Lieberman. The president cannot make people act rationally. Nor can pleas to decency and humanity work on the malicious likes of Mitch McConnell(r-KY) or James Inhofe(r-OK). Matt addresses the political math,

The implicit theory of political change here, that pivotal members of congress undermine reform proposals because of “the White House’s refusal to push for real reform” is just wrong. That’s not how things work. The fact of the matter is that Matt Taibbi is more liberal than I am, and I am more liberal than Larry Summers is, but Larry Summers is more liberal than Ben Nelson is. Replacing Summers with me, or with Taibbi, doesn’t change the fact that the only bills that pass the Senate are the bills that Ben Nelson votes for.

The problem here, to be clear, isn’t that lefties are being too mean to poor Barack Obama. The problem is that to accomplish the things I want to see accomplished, people who want change need to correctly identify the obstacles to change.

Tim Fernholz at Tapped lists some very blatant factual errors in Taibbi’s piece, The Errors of Matt Taibbi.

* Jamie Rubin. James P. Rubin is a former Assistant Secretary of State in the Clinton Administration and not Bob Rubin’s son. He informally helped Hillary Clinton transition into her role as Secretary of State. James S. Rubin is Bob Rubin’s son, and had a similarly unofficial role in the economic transition. Neither were on staff, on the advisory boards, or on an agency review team.

* Austan Goolsbee “didn’t make the cut.” Goolsbee remains one of Obama’s key economic advisers and has the president’s ear from his posts on the National Economic Council Council of Economic Advisers and the President’s Economic Recovery Advisory Board. He skipped transition work and went to work immediately in those posts.

[   ]….* Over at the Commodity Futures Trading Commission, which is supposed to regulate derivatives trading, Obama appointed Gary Gensler, a former Goldman banker who worked under Rubin in the Clinton White House. Gensler was a failure in the late nineties, but in his new post he has been fighting alongside Senator Maria Cantwell to close the loopholes in derivatives regulation that Taibbi complains about later in the piece.

There is more at the link and Fernholz did a fellow up piece here, On That Taibbi Post …

To deal with the two examples that Salmon questioned, on the issue of Michael Froman’s role in the transition, I never say that the article doesn’t identify him properly. I’m just pointing out that if Taibbi’s writing an article about how these shadowy figures are undermining the bailouts and financial regulation, focusing on someone who doesn’t work on the bailout or financial regulation is a weird way to go about it, unless you’re just trying to identify everyone with a connection to Bob Rubin and use vague innuendo to suggest they’ve done something shadowy. Taibbi also claims that Froman “hired” Treasury Secretary Tim Geithner, which just isn’t true. Nor is it true that Froman and James S. Rubin were “running” Obama’s transition economics team; they also weren’t involved with the November 2008 decision to bail out Citi.

I think intra-party criticism is healthy. It’s good for Democrats and the country, but as Fernholz notes the Taibbi piece reads like the worse kind of conspiracy laden trash that is common on the net and Fox News. If you took out the shadowy innuendo there wouldn’t be enough left to publish.

Some good news, Citigroup Has Reached a Deal to Repay U.S. Bailout Funds

If President Obama and Democrats have made the U.S. into a “socialist” state, how come Exxon is till making money hand over fist, Exxon’s Natural Gas Holdings Grow With $31 Billion Deal

ProPublica has a break down of TARP funds spending, repayments and some speculation about the future costs and returns. Bailout Breakdown: Losses Likely to Be Larger Than Treasury Estimates. It’s not rainbows, but it’s not the worse either. Like the Citi repayment some things might break for the good. PP states,

Because the latest estimate deals only with the TARP’s first year, it doesn’t include two big programs that recently ramped up.  The foreclosure prevention program [9], in terms of spending, is just getting started. It’s unclear how much of the $50 billion set aside for that program will ultimately be spent, because of the program’s difficulties [10]:  As of the end of October, Treasury had paid only $2.3 million [11] in incentives to servicers. But whatever Treasury ultimately spends, none of that money will come back, since the program involves subsidies, not investments.

I realize that helping people avoid foreclosures is not, in strict accounting terms, an investment on which one gets returns. It could be argued that keeping people in their homes paying something on their mortgages is better for the economy in the long haul.