By now you may have figured out that I think "The Deal" was a terrible mistake. Consider the counterfactual I propose in the title of this post - what if Obama had not done The Deal. Let's start with the positives of The Deal - unemployment insurance was extended for a year - an unmitigated good thing.To me, that is the end of the goods things. YMMV. More . . .

Via Daily Kos, the President of the United States said in his weekly radio address:

Now we’re seeing more optimistic economic forecasts for the year ahead, in part due to the package of tax cuts I signed last month. I fought for that package because, while we are recovering, we plainly still have a lot of work to do. The recession rocked the foundations of our economy, and left a lot of destruction and doubt in its wake.[. . .] Independent experts have concluded that, taken together, this package of tax cuts will significantly accelerate the pace of our economic recovery, spurring additional jobs and growth.

And that is our mission. That should be the focus, day in and day out, of our work in Washington in the coming months, as we wrestle with a challenging budget and long-term deficits. [. . .] The tax cuts and other progress we made in December were a much-needed departure from that pattern. Let’s build on that admirable example and do our part, here in Washington, so the doers, builders, and innovators in America can do their best in 2011 and beyond.

(Emphasis supplied.) Touting tax cuts and 'addressing the deficit' to spur the economy. Feels like 1981.

Speaking for me only

Via dkos diarist bobswern, the banks' personal Santa Claus Tim Geithner is giving out more gifts:

Financial stocks just caught fire. Someone must be getting bailed out, right? Why yes, say critics of the giant banks. They charge that Monday's rally-stoking mortgage-putback deal between Bank of America (BAC) and Fannie Mae and Freddie Mac is nothing more than a backdoor bailout of the nation's largest lender. It comes courtesy, they say, of an administration struggling to find a fix for the housing market while quaking at the prospect of another housing-fueled banking meltdown.

"This looks to me like a gift from Tim Geithner," said Chris Whalen of Institutional Risk Analytics. "There's politics all over this."

From the corrupt incompetent Tim Geithner? Say it ain't so. God bless all the banks! What a disgrace.

Speaking for me only

I meant to write about this end of year markedly ridiculous Obama Administration puff piece by Ezra Kiein before, but work and college football got in the way. I just will point to one part to give you the flavor of the nonsense:

In housing [. . .r]ather than fundamentally reform the market, the administration and Federal Reserve focused on backstopping it. Buying a house in 2009 and 2010 was little different from 2004 and 2005. What had changed was the Fed using every tool in its toolkit -- and a few that people didn't even know were in there -- to keep interest rates low, the federal government handing first-time home buyers $8,000 to get into the market, and Fannie Mae and Freddie Mac buying virtually every mortgage that was issued.

(Emphasis supplied.) What absurd claptrap. The Obama Administration did virtually nothing to effectively address the homeowner crisis in the country and indeed, the results demonstrated that. The key failure was, of course, HAMP. What the Obama Administration did regarding the homeowner crisis was protect lenders, not homeowners. The policy was unmitigated disaster.

But in Ezra Klein's world, this was using "every tool in its tool kit." Just ridiculous.

Speaking for me only

President Obama named six recess appointments yesterday, including James Cole as Deputy Attorney General.

A few windbag Republicans like Peter King of NY are outraged...."shocked" they say. Why? Cole had the common sense (audacity in their view) to suggest terrorism is a crime that should be tried in our federal courts.

I'm outraged and shocked that someone like Peter King is an elected representative in our government. And good on Obama for giving King and his ilk a little pin prick. One of Cole's duties will be to sign off on the secret FISA wiretaps.

Joan McCarter and David Dayen both highlight this Elizabeth Warren Op-ed on foreclosure fraud and her notion that the new Consumer Financial Protection Board. Warren writes:

[T]his mess might well have been avoided if the Consumer Financial Protection Bureau had been in place just a few years ago.

Excuse me, but this is simply not true. The main reason why this is not true is because Tim Geithner is the Treasury Secretary. To this day, Geithner has been against any and every measure that would assist homeowners and trouble banks in any way. It is hopelessly naive to believe that this Administration will do anything to help homeowners that would involve any pain for the banks so long as Tim Geithner has anything to sday about it..

Geithner is a corrupt incompetent who should be immediately fired.

Speaking for me only

President Obama telephoned Philadelphia Eagles owner Jeffrey Lurie to compliment him on giving Michael Vick a second chance. According to Lurie, here's what Obama said:

"He said, 'So many people who serve time never get a fair second chance,...He said, 'It's never a level playing field for prisoners when they get out of jail.' And he was happy that we did something on such a national stage that showed our faith in giving someone a second chance after such a major downfall.''

What's interesting is this was not a media interview, but a call that Obama placed on his own initiative. He obviously feels strongly about it. That's good news.

Kevin Drum:

Jonathan Bernstein has a question for us left-leaning types:

Think back to what you were thinking in November 2008, and in January 2009. As the 111th Congress winds down, what's your biggest disappointment of the things you expected to happen? Not your wish list, but the things you really expected to happen. What's your biggest happy surprise?

Drum mentions health care reform, withdrawal from Iraq and carbon pricing as his 3 big issues. He thinks Obama got 2 out of 3 plus some other good stuff. Yet again, I find myself in disagreement with Establishment bloggers and remain dumbfounded by their disregard for the importance of tax policy. My biggest disappointments were the inadequate stimulus and especially, the Bush/Obama tax cuts. If he had performed well on those 2 fronts, I would be the biggest Obama Bot there is. He didn't and I'm not. (I also don't think much of the "reform" in the health bill so that makes a difference for me too.)

Speaking for me only

Paul Krugman:

How, after the experiences of the Clinton and Bush administrations — the first raised taxes and presided over spectacular job growth; the second cut taxes and presided over anemic growth even before the crisis — did we end up with bipartisan agreement on even more tax cuts?

[. . . T]he Obama stimulus — which itself was almost 40 percent tax cuts — was far too cautious to turn the economy around. [. . .] A policy under which government employment actually fell, under which government spending on goods and services grew more slowly than during the Bush years, hardly constitutes a test of Keynesian economics.

We're all supply siders now. Yesterday, the NYTimes editorialized:

The Change:

Congress at midnight Thursday approved an $801 billion package of tax cuts and $57 billion for extended unemployment insurance. The vote sealed the first major deal between President Obama and Congressional Republicans[. . .] to prevent an across-the-board tax increase that was set to occur if the rates enacted under President George W. Bush had expired, as scheduled, at the end of the month.

Booman says:

As I wrote earlier, Dana Milbank defends The Deal as "strategy" by the White House. This has it backwards. It is the Republican strategy that is at at work here- The Grover Norquist strategy. David Dayen writes:

This is the gambit that Republicans have worked for a generation – make taxes so low and deficits so burdensome that pressure builds to slash spending. They claim that tax cuts shouldn’t be counted as part of the deficit but that any spending must be offset or eliminated. It doesn’t have to make sense. Because it’s working.

At this point, Barack Obama's legacy will be the enabling of the GOP's Norquist strategy to demolish the social safety net. The Deal is the first step. President Obama and his team need to start making the point now that The Deal is temporary and that he will veto any attempts to extend the Bush tax cuts beyond 2012.

Speaking for me only