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Mon Dec 31, 2012, 03:32 PM

Krugman: Conceder In Chief?

Conceder In Chief?

OK, Iíve had my own sorta-kinda briefing on the apparent fiscal cliff deal, and Iím pretty much with Noam Scheiber. Viewed on its own, itís a bad and upsetting deal but not as terrible as initial rumors had it. But the strategic consequences are likely to be very bad indeed, and in very short order too.

As background, itís important to understand what Obama clearly could have gotten just by going over the cliff. Basically, he could have gotten the whole of the Bush high-end tax cuts reversed, which would mean close to $800 billion in revenue over the next decade...So what Obama appears to have done is trade away part of the revenue from high-income taxpayers in return for some of the spending items he wanted. Extended unemployment benefits for a year, and the refundables either extended in perpetuity or for 5 years.

<...>

At that point he can redeem himself by holding firm ó but because the Republicans donít think he will, they will play tough, almost surely forcing him to actually hit the ceiling with all the costs that entails. And look, if I were a Republican I would also be betting that heíll cave.

So Obama has set himself and the nation up for a much uglier confrontation than we would have had if he had set a negotiating position and held to it.

Update: I should mention that on one issue, the estate tax, the problem is apparently with the Senate; there are, unfortunately, some heartland Dem Senators who are extremely solicitous of the handful of super-wealthy families in their states, so that Obamaís people donít think they can get a majority for higher taxes here. Itís bizarre: states like New Jersey have far more large estates, not just total but per capita, than states like Montana, but itís the Senators from the latter that are eager to preserve the inherited privileges of the few.

http://krugman.blogs.nytimes.com/2012/12/31/conceder-in-chief-2/

Ugh!

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Response to ProSense (Original post)

Mon Dec 31, 2012, 03:43 PM

1. Kick for

the Senate Democrats who are using Republicans for cover.

Disgusting!

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Response to ProSense (Reply #1)

Mon Dec 31, 2012, 04:07 PM

11. I believe that the "heartland" rich are slimier than the blue state rich

"Middle America" is completely run by Hate Radio, while in the blue states there is still some semblance of sanity.

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Response to ProSense (Original post)

Mon Dec 31, 2012, 03:50 PM

2. Krugman: liberal whiner in chief. Getting tired of his bull

 

He's quoted like he is a God and omniscient. These are just one economist's opinions.

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Response to Pretzel_Warrior (Reply #2)

Mon Dec 31, 2012, 03:52 PM

4. Who has consistently been right

why listen to him?

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Response to edhopper (Reply #4)

Mon Dec 31, 2012, 03:55 PM

5. If Obama doesn't have 2nd round of stimulus--double dip recession

 

He was wrong about that. And much more. When you talk and write as much as Krugman, you will be right about a lot of things and wrong about a lot of things.

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Response to Pretzel_Warrior (Reply #2)

Mon Dec 31, 2012, 03:57 PM

6. A Nobel-winning economist, who was rated as the most accurate pundit in the media

and an economist who has been more right than nearly all the others about things after 2008. No, he's not omniscient, but he's been better than the rest.

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Response to muriel_volestrangler (Reply #6)

Mon Dec 31, 2012, 03:59 PM

7. When he talks straight economics--sure. When he assesses political

 

Negotiations and outcomes--not so much.

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Response to Pretzel_Warrior (Reply #2)

Mon Dec 31, 2012, 04:06 PM

10. Well, among Obama's critics, Krugman has my respect, at least

He's not omniscient, he's not an expert on every side of things, and more often than not he winds up pointing out the dire consequences of some direction or other that we wind up not going toward.

But I like him because his heart is in the right place, he has a very thorough grasp of those things he does know about, and he generally keeps his hair on the "medium-low" setting.

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Response to bhikkhu (Reply #10)

Mon Dec 31, 2012, 08:23 PM

14. I agree with your praise of Krugman, and I'll add one point.

He generally doesn't simply assert opinions. Instead, he cites facts and explains his reasoning, far more than do most pundits. He does very well at it, considering the constraints imposed by the space limitation of his regular column.

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Response to ProSense (Original post)

Mon Dec 31, 2012, 03:52 PM

3. cliff divers

not for the squeamish

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Response to ProSense (Original post)

Mon Dec 31, 2012, 03:59 PM

8. He's just not smart enough to understand 12D chess



OK, Iíve had my own sorta-kinda briefing on the apparent fiscal cliff deal, and Iím pretty much with Noam Scheiber. Viewed on its own, itís a bad and upsetting deal but not as terrible as initial rumors had it. But the strategic consequences are likely to be very bad indeed, and in very short order too.


Just like ACA was not horrible on the surface, but signaled to the Repukes that Obama has no ideological or moral core - and so they pummeled him after that (tax cut extensions).

At that point he can redeem himself by holding firm ó but because the Republicans donít think he will, they will play tough, almost surely forcing him to actually hit the ceiling with all the costs that entails. And look, if I were a Republican I would also be betting that heíll cave.

So Obama has set himself and the nation up for a much uglier confrontation than we would have had if he had set a negotiating position and held to it.


This is like saying a cat would have done better if he'd barked like a dog. My cat will bark before Obama stakes out a Dem position and holds firm to it.

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Response to Doctor_J (Reply #8)

Mon Dec 31, 2012, 04:07 PM

12. Senate Dems aren't

helping. As Krugman mentions, they're part of the problem with the taxes on the rich. I bet Schumer is in on this.

"The estate tax would exempt estates up to $10 million and tax them at 40 percent above that."

http://www.democraticunderground.com/10022104810

These were the original choices:

1) Accept the President's proposal with "dividends to be taxed as ordinary income" and the "estate tax to be levied at 45 percent on inheritances over $3.5 million."

2) Pass the Senate bill, "which currently taxes inheritances over $5 million at 35 percent," but excludes Obama's dividend proposal.

3) Go over the cliff when "the estate tax is scheduled to rise to 55 percent beginning with inheritances exceeding $1 million."

In each case, the tax cuts for the rich end.

G.O.P. Balks at White House Plan on Fiscal Crisis
http://www.nytimes.com/2012/11/30/us/politics/fiscal-talks-in-congress-seem-to-reach-impasse.html

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Response to ProSense (Original post)

Mon Dec 31, 2012, 04:04 PM

9. After reading the entire blog post I'm okay with the current budget deal.

Especially since a friend is on the last dregs of his unemployment and this deal extends some unemployment benefits.

Still, concerned about Obama's negotiating stance. But I just take it as it comes along. It's important to pressure congress & the senate to do the right thing, there's not going to be progress without people making themselves heard.

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Response to nilram (Reply #9)

Mon Dec 31, 2012, 04:16 PM

13. So am I

Although I take Krugman's point about future implications. As is, it was a good negotiation and Obama "lost" exactly what I expected him to lose through negotiation. The 250,000 threshold was important as a good starting point. If they started with 500,000 and negotiated that away, I would be more weary. The fact is, the future is dependent on a complete overhaul of Congress. We need to raise tax revenues several more times to make up for the damage that has been done over the past 30 years. The only way to ensure this happens is to get to work on taking back state legislatures and ousting tea partiers while promoting more progressive candidates.

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