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The Capitalist-in-Chief

By Dan Froomkin
1:53 PM ET, 03/ 9/2009


Obama walks down the stairs of Air Force after his New York Times interview Friday afternoon. (AP Photo/Pablo Martinez Monsivais)

It's not easy to shock our famously unflappable president. But when Peter Baker of the New York Times asked Barack Obama during an interview on Air Force One on Friday if he was a socialist, that's exactly what happened.

Obama initially replied with a denial and a largely boilerplate answer about his budget plan. But some 90 minutes later, he called the Times back to express his disbelief that the question was actually intended seriously, to castigate critics who have been using the term against him -- and to point out that it was George W. Bush, not he, who started buying up shares in banks.

It was another lesson for Obama in the ways of Washington, where Republican calumnies still make it into the mainstream political discourse with alarming ease.

By no serious measure or reasonable standard could Obama be called a socialist. While one could legitimately ask whether his budget reflects a return to the "big government" of three decades ago, Obama's allegiance to capitalism is so intense as to actually be troubling to many of his more liberal (yet not socialist) supporters.

Obama continues to resist the nationalizing of so-called "zombie banks," for instance, even when economists across the political spectrum increasingly think it's the only way to fix the financial system. Yes, Obama is in favor of raising taxes on the wealthy, but not until 2011, and even then only by restoring the top 39 percent marginal rate of the 1990s -- a far cry from the 92 percent it was during, say, the Eisenhower administration. Obama is trying to revive the financial markets, not control them. His budget would focus on energy, infrastructure, health and education -- all of which would redound to the benefit of corporate America.

Here's the transcript of the interview:

NYT: "The first six weeks have given people a glimpse of your spending priorities. Are you a socialist as some people have suggested?"

Obama: "You know, let's take a look at the budget – the answer would be no."

NYT: "Is there anything wrong with saying yes?"

Obama: "Let's just take a look at what we've done. We've essentially said that, number one, we're going to reduce non-defense discretionary spending to the lowest levels in decades. So that part of the budget that doesn't include entitlements and doesn't include defense – that we have the most control over – we're actually setting on a downward trajectory in terms of percentage of G.D.P. So we're making more tough choices in terms of eliminating programs and cutting back on spending than any administration has done in a very long time. We're making some very tough choices.

"What we have done is in a couple of critical areas that we have put off action for a very long time, decided that now is the time to [act].....

"[I]t's going to be hard and it's going to require some costs. But if you look on the revenue side what we're proposing, what we're looking at is essentially to go back to the tax rates that existed during the 1990s when, as I recall, rich people were doing very well. In fact everybody was doing very well. We have proposed a cap and trade system, which could create some additional costs, but the vast majority of that we want to give back in the form of tax breaks to the 95 percent of working families.

"So if you look at our budget, what you have is a very disciplined, fiscally responsible budget, along with an effort to deal with some very serious problems that have been put off for a very long time. And that I think is exactly what I proposed during the campaign. We are following through on every commitment that we've made, and that's what I think is ultimately going to get our economy back on track...."

NYT: "Is there one word name for your philosophy? If you're not a socialist, are you a liberal? Are you progressive? One word?"

Obama: "No, I'm not going to engage in that."

Here's what Obama had to say in his follow-up phone call.

Obama: "Just one thing I was thinking about as I was getting on the copter. It was hard for me to believe that you were entirely serious about that socialist question. I did think it might be useful to point out that it wasn't under me that we started buying a bunch of shares of banks. It wasn't on my watch. And it wasn't on my watch that we passed a massive new entitlement – the prescription drug plan without a source of funding. And so I think it's important just to note when you start hearing folks [throw] these words around that we've actually been operating in a way that has been entirely consistent with free-market principles and that some of the same folks who are throwing the word socialist around can't say the same."

NYT: "So who's watch are we talking about here?"

Obama: "Well, I just think it's clear by the time we got here, there already had been an enormous infusion of taxpayer money into the financial system. And the thing I constantly try to emphasize to people if that coming in, the market was doing fine, nobody would be happier than me to stay out of it. I have more than enough to do without having to worry the financial system. The fact that we've had to take these extraordinary measures and intervene is not an indication of my ideological preference, but an indication of the degree to which lax regulation and extravagant risk taking has precipitated a crisis."

Washington Post opinion columnist E.J. Dionne Jr. and NPR's Cokie Roberts discussed the socialist label on ABC's This Week on Sunday. Via Media Matters:

Dionne: "You know, it's fascinating because there is -- socialism has never been closer to reality in our lifetimes if you listen to some of our conservative friends. And the notion that Barack Obama, over the long run, is going to increase the size of government by about 2 percent, maybe less, as a share, of gross domestic product -- mostly that's because of health care -- that's going to happen anyway 'cause as we get older, more and more of us are going to collect Medicare. So, that's going to happen anyway. And suddenly, this is a form of state socialism."

Roberts: "But he -- "

Dionne: "It's exactly the same kind of argument that was made against FDR when he instituted Social Security, raised the minimum wage, instituted some public power through the TVA [Tennessee Valley Authority] -- and that didn't seem to cause capitalism any problems."

Roberts: "But Obama must be concerned about it, because he -- about socialism as a term -- because his interview with The New York Times yesterday, and then calling the reporter back to say, you know, I -- basically, I am not a socialist."

Jon Meacham and Evan Thomas helped thrust the term into mainstream discourse with their Newsweek cover story early last month: "We Are All Socialists Now."

They argued, however, that the "U.S. government has already -- under a conservative Republican administration -- effectively nationalized the banking and mortgage industries. That seems a stronger sign of socialism than $50 million for art" in Obama's stimulus package.

"We remain a center-right nation in many ways -- particularly culturally, and our instinct, once the crisis passes, will be to try to revert to a more free-market style of capitalism -- but it was, again, under a conservative GOP administration that we enacted the largest expansion of the welfare state in 30 years: prescription drugs for the elderly. People on the right and the left want government to invest in alternative energies in order to break our addiction to foreign oil. And it is unlikely that even the reddest of states will decline federal money for infrastructural improvements."

And in case you missed the point: "The architect of this new era of big government? History has a sense of humor, for the man who laid the foundations for the world Obama now rules is George W. Bush, who moved to bail out the financial sector last autumn with $700 billion."

Frank Rich writes in his New York Times opinion column about an "the economic imbalance that Barack Obama now wants to remedy with policies that his critics deride as 'socialist' ('fascist' can't be far behind)... 'There is something wrong when we allow the playing field to be tilted so far in the favor of so few,' the president said in his budget message. He was calling for fundamental fairness, not class warfare. America hasn't seen such gaping inequality since the Gilded Age and 1920s boom that preceded the Great Depression."

Daniel Gross writes in Newsweek: "To hear conservatives tell it, you'd think mobs of shiftless welfare moms were marauding through the streets of Greenwich and Palm Springs, lynching bankers and hedge-fund managers, stringing up shopkeepers, and herding lawyers into internment camps. President Obama and his budgeteers, they say, have declared war on the rich."

The "'massive increase in progressivity' that [Washington Post opinion columnist Michael] Gerson deplores. It consists largely (but not exclusively) of returning marginal tax rates to their levels of 2001, before Gerson and the epically incompetent Bush administration of which he was a part got their hands on the reins of power."

Jacob Weisberg writes in Newsweek: "The indictment that Obama wants to foist foreign ways upon us echoes the claim by Roosevelt's critics that he wanted to usher in socialism under cover of the New Deal. It similarly misreads the president's substantive views, his political sophistication and what is within the realm of the possible in our country. Obama gets that we want government to fix the free market, not take its place."

Charles Krauthammer wrote in his Washington Post opinion column late last month that Obama's address to Congress constituted "the boldest social democratic manifesto ever issued by a U.S. president" and warned that "the current crisis gives Obama the political space to move the still (relatively) modest American welfare state toward...the regulation-bound, economically sclerotic, socially stagnant, nanny state that is the European Union"

But a more credible case can be made that Obama is acting too conservatively.

Paul Krugman writes in his New York Times opinion column that "many economists, myself included, actually argued that the [stimulus] plan was too small and too cautious. The latest data confirm those worries -- and suggest that the Obama administration's economic policies are already falling behind the curve....

"[H]ere's the picture that scares me: It's September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it's still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

"But he can't get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked."

Albert R. Hunt write in a Bloomberg opinion column: "Republicans and self-styled conservatives, like Captain Renault in 'Casablanca,' are shocked -- shocked -- that President Barack Obama is trying to govern as candidate Obama promised he would.

"They are disturbed that Obama’s 'radical' initiatives on the budget and economic-stimulus package would massively increase the size and scope of government and encourage class warfare in America....

"The greater danger with the $787 billion package is that it may not be enough. That’s the view of Alan Greenspan and his successor as chairman of the Federal Reserve, Ben Bernanke. Neither is a likely member of what [former Republican presidential candidate Mike] Huckabee and some other Republicans warn will become the “United Socialist States of America.”

So far, the (not socialist) American public remains strongly behind Obama -- except when he's being too meek.

Michael Hirsh writes for Newsweek: "Overall, 58 percent of Americans surveyed approve of the job Obama is doing, while 26 percent disapprove and one in six (16 percent) has no opinion. Although his approval ratings are down from levels seen a few weeks ago in other polls, 72 percent of Americans still say they have a favorable opinion of Obama -- a higher rating than he received in Newsweek Polls during the presidential campaign last year."

Majorities of Americans, however, are unhappy with his bailout half-steps. They "think too much has been spent so far to help rescue large banks in danger of failing and domestic auto companies facing bankruptcy." By contrast: "A somewhat surprising majority (56 percent) supports nationalizing large banks at risk of failing -- a policy the Obama administration has shied away from."

Greg Sargent blogs for Whorunsgov.com today that Baker, in an e-mail, defended his question for Obama, saying it was simply intended to "draw him out" on "his political philosphy." Wrote Baker: "The point is not the label, per se, but the question of whether the times and the solutions under consideration represent some sort of paradigm shift in our national thinking about the role of government in society. In a moment of taxpayer bank bailouts and shifting tax burden proposals and exploding deficits and expansive health care and energy plans, what is the future of American-style capitalism?"

But as Sargent notes, the question came perilously close to "doing the bidding" of opponents whose critiques are "politically motivated, substance-free, or plainly out of touch with reality."

Ezra Klein blogs for the American Prospect: "The economy is collapsing. The Omnibus bill is flailing in the Senate. The Treasury Department still needs a workable approach to the banks. Why is the New York Times wasting Obama's day -- and their 35 minutes of interview time -- with these gotchas? Did they really think he would slip and admit that his stimulus plan was cadged from a footnote in Das Kapital?"

Obama as the Anti-Bush

By Dan Froomkin
1:35 PM ET, 03/ 9/2009

In a column headlined "George W. Obama," Washington Post deputy editorial page editor Jackson Diehl writes on Sunday that Obama is behaving like George W. Bush in trying to take advantage of a crisis to ram through his ideological agenda.

Also in Sunday's Post, White House correspondent Michael D. Shear writes in an opinion piece that Obama's constant use of the word "responsibility" creates a risk "that the word -- and the president who deploys it -- may suffer from its overuse, especially if 'responsibility' moves from reassuring to lecturing, from calming to hectoring, turning this young new president into the father-knows-best figure that kids tune out."

But what both essays overlook is how much the Obama presidency has turned out to be, at heart, all about fixing the mistakes of the Bush years and addressing the issues he overlooked -- and how Obama stresses "responsibility" to telegraph an agenda that is the antithesis of the Bush approach.

Redressing the errors of the last eight years has become so central to the Obama presidency that, despite his efforts to foster bipartisanship, he hasn't shied away from blistering critiques of his predecessor's legacy at the key moments of his presidency.

Remember, for instance, his inaugural address, in which he said it was time "to set aside childish things," and called on Americans to "pick ourselves up, dust ourselves off, and begin again the work of remaking America."

And the main theme of Obama's address to Congress last month was, as I wrote at the time, Exorcising Bush's Ghost.

"[W]e have lived through an era where too often short-term gains were prized over long-term prosperity, where we failed to look beyond the next payment, the next quarter, or the next election," he said. "A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations -- regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.

"Well, that day of reckoning has arrived, and the time to take charge of our future is here."

Diehl supports his argument with several analogies such as this one: "Just as Bush promoted tax cuts as a remedy for surplus and then later as essential in a time of deficits, so Obama has come up with strained arguments as to why health-care reform, which he supported before the economic collapse, turns out to be essential to recovery."

But when it comes to their substance, Bush's tax cuts really don't have a lot in common with Obama's health care plan. Indeed, Bush's tax cuts, primarily for the wealthy, were arguably never appropriate, while health reform has been an urgent need for decades, and certainly no less so during an economic crisis. It's nearly impossible to find any serious thinker who supports the status quo for health care; and it's only slightly easier to find one who will argue that Bush's tax cuts were a good idea, ever.

Examples of Bush's irresponsibility -- and that's exactly the right word -- are legion, starting with those tax cuts but, of course, also including the invasion of Iraq under false pretenses, the occupation of Iraq based on faulty assumptions, the sanctioning of anti-terror policies that inspired rather than deterred terrorism, the punting on such key issues as climate change and health care -- and a complete failure to anticipate the financial crisis born of massive deregulation. Obama is taking a dramatically different course in all those arenas.

By contrast, it's precisely in the places where Obama really is acting like Bush -- such as his vague bank bailout strategy, his slowed-down Iraq pullout and his assertion of some specious executive powers -- that he seems on the shakiest ground, responsibility-wise.

The Obama as Bush metaphor gets another backer this morning in The Post, with opinion columnist Robert Kagan writing: "President Obama's foreign policy team has been working hard to present its policies to the world as constituting a radical break from the Bush years....

"When it comes to actual policies, however, selling the pretense of radical change has required some sleight of hand -- and a helpful press corps."

But the facts generally demonstrate that -- with a few exceptions -- Obama has already taken, as Bridget Johnson conveniently writes for The Hill this morning, a "sharp turn on foreign policy."

Consider how in just seven weeks, Obama has renounced torture, is reaching out to Iran and Syria, and has made it clear that he may abandon Bush's proposed missile-defense bases in Eastern Europe -- just for starters.

Meanwhile, Washington Post opinion columnist Robert Samuelson has harsh words for Obama, primarily because he won't raise taxes enough.

"Obama is a great pretender. He repeatedly says he is doing things that he isn't, trusting his powerful rhetoric to obscure the difference. He has made 'responsibility' a personal theme; the budget's cover line is 'A New Era of Responsibility.' He says the budget begins 'making the tough choices necessary to restore fiscal discipline.' It doesn't."

Samuelson's biggest concern is the looming deficit, and he is upset that Obama isn't raising taxes, eliminating all farm subsidies, and cutting Social Security and Medicare for the wealthy, for starters.

"Like many smart people, he believes he can talk his way around problems. Maybe. He's helped by much of the media, which seem so enthralled with him that they don't see glaring contradictions. During the campaign, Obama said he would change Washington's petty partisanship; he also advocated a highly partisan agenda. Both claims could not be true. The media barely noticed; the same obliviousness persists. But Obama still runs a risk: that his overworked rhetoric loses its power and boomerangs on him."

Quick Takes

By Dan Froomkin
1:30 PM ET, 03/ 9/2009

Kevin Sullivan writes in The Washington Post from London: "Opposition lawmakers on Sunday called for a judicial inquiry into allegations that British intelligence agents participated in the 'extraordinary rendition' and torture of a British resident who was held in U.S. custody at Guantanamo Bay, Cuba, and other locations for nearly seven years."

Binyam Mohamed, in a newspaper interview published Sunday, told the Mail on Sunday newspaper that during 18 months of CIA-controlled captivity in Morocco, when his captors repeatedly sliced his chest and genitals with a scalpel, interrogators questioned him about photos and information contained in British intelligence files they showed to him.

David Rose writes for the Mail: "The worst time in Binyam Mohamed's seven-year ordeal in American captivity, worse even than the medieval tortures he endured for 18 months in Morocco, came in the first half of 2004 when he was held for five months at a secret CIA prison in Afghanistan."

Charlie Savage and Scott Shane write in The New York Times that the notoriety of George W. Bush's controversial "war council" of lawyers "raises difficult questions: What is a government lawyer's responsibility if legal advice he gives turns out to be, in the view of many authorities, grievously flawed? Can he be blamed for damaging, and arguably illegal, acts carried out with his imprimatur? Should he suffer any punishment?... What, if anything, should happen to these lawyers -- damage to their professional reputations, punishment by state bar associations, perhaps even prosecution at home or abroad -- is now the subject of a lively debate in the legal world and beyond." So far, they write: "For some of Mr. Bush's lawyers, the most likely consequence may be wariness from potential employers....David S. Addington, a top aide to Vice President Dick Cheney who was a forceful voice in internal legal debates, is also said to still be looking for work."

Helene Cooper and Sheryl Gay Stolberg write in Saturday's New York Times: "President Obama declared in an interview that the United States was not winning the war in Afghanistan and opened the door to a reconciliation process in which the American military would reach out to moderate elements of the Taliban, much as it did with Sunni militias in Iraq."

Anthony Shadid writes in The Washington Post: "The U.S. military announced Sunday that 12,000 American soldiers would withdraw from Iraq by September, marking the first step in the Obama administration's plan to pull U.S. combat forces out of the country by August 2010."

Peter Nicholas writes in the Los Angeles Times: "President Obama is facing misgivings about his policy agenda from inside his own party, with prominent Democrats objecting to parts of his taxation and spending plans and questioning the White House push to do so much so fast. Obama's strategy is to advance on all fronts. Buoyed by favorable poll numbers, he is moving to jolt the economy with a massive stimulus package, revamp the healthcare system and push the nation toward renewable energy sources."

Julianna Goldman and Michael Tackett write for Bloomberg that Obama may be overreaching: "The risk is that his efforts prove to be too much, too soon, leading to a backlash that erodes his current support. 'If he's mistaken in his judgment about what the economy and the political system can bear, then he will end up overloading the Congress and getting less than he might have done otherwise,' says Bill Galston, a former adviser to President Bill Clinton."

Matt Bai writes in the New York Times Magazine that Obama's efforts at bipartisanship "haven't been the failure that some think them to be... Obama is right to value bipartisanship, even if he doesn't manage to win a single Republican vote -- and even if he doesn't need any to enact his legislative program. During the closing weeks of the fall campaign, Obama told me that bridging the cultural chasm in America would require of him, as president, a governing style that acknowledged differences rather than exploited them. This is why he intends to keep Republican leaders on speed dial, even if they vote against him -- in doing so, he demonstrates to the voters that he will not be dragged into the pettiness and derision that have caused so many of them to lose faith in their government. He may also, over time, accumulate enough goodwill to wrangle Republican votes when he really does need them."

Jeff Zeleny profiles Obama's senior adviser David Axelrod in the New York Times: "His voice, and political advice, carry more weight than most anyone else's on the president's payroll....[I]t is Mr. Axelrod who sits the closest to the Oval Office. His proximity is a symbol, in a unique West Wing kind of way, of how close he remains to Mr. Obama....Jon Favreau, the president's chief speechwriter, said there was a familiar refrain during [brainstorming] meetings, with Mr. Axelrod urging the team not to become consumed by the insularity of Washington. 'Can I speak on behalf of the American people here?' he said Mr. Axelrod often asks aloud."

Mike Dorning profiles Favreau for the Chicago Tribune: "Behind a president defined more by his oratory than any political figure in a generation is chief speechwriter Jon Favreau... the second-youngest person ever to work as chief White House speechwriter...Favreau has explained their joint approach to friends simply: 'Tell a story. That's the most important part of every speech, more than any given line. Does it tell a story from beginning to end?'...'I've never worked for a politician who values words as much as the president does,' Obama senior adviser David Axelrod said. 'The speechwriter is an unusually important person in the operation. [Obama's] willingness to entrust his words to others is limited.'"

Howard Kurtz writes in The Washington Post about the White House's outreach to minority media outlets, and warns: "The challenge for minority journalists is not to slip into the role of cheerleader."

Michael Calderone writes for Politico about "an administration that's trying much harder than its predecessor did to influence inside-the-Beltway opinion makers." He writes that the White House press office is even planning a presidential sit-down with prominent bloggers. And he warns: "There's a downside to all the media-courting, a risk that the new administration will seem preoccupied with the chattering classes from Georgetown and the Upper West Side and therefore out of touch with flyover country."

Peter Bray writes for Slate, asking who rewrote the George W. Bush biography on Whitehouse.gov to make it much more flattering?

Science Day at the White House

By Dan Froomkin
11:59 AM ET, 03/ 9/2009

After eight years during which science took a back seat to politics, today is Science Day at the White House.

President Obama not only announced that he is lifting restrictions on funding for human embryonic stem cell research, he promised to restore scientific integrity to government decision-making processes in general.

"Today, with the Executive Order I am about to sign," he said, "we will bring the change that so many scientists and researchers; doctors and innovators; patients and loved ones have hoped for, and fought for, these past eight years: we will lift the ban on federal funding for promising embryonic stem cell research. We will vigorously support scientists who pursue this research. And we will aim for America to lead the world in the discoveries it one day may yield....

"[I]n recent years, when it comes to stem cell research, rather than furthering discovery, our government has forced what I believe is a false choice between sound science and moral values. In this case, I believe the two are not inconsistent....


"The majority of Americans – from across the political spectrum, and of all backgrounds and beliefs – have come to a consensus that we should pursue this research. That the potential it offers is great, and with proper guidelines and strict oversight, the perils can be avoided."

Obama said that promoting science "is also about protecting free and open inquiry. It is about letting scientists like those here today do their jobs, free from manipulation or coercion, and listening to what they tell us, even when it's inconvenient – especially when it's inconvenient. It is about ensuring that scientific data is never distorted or concealed to serve a political agenda – and that we make scientific decisions based on facts, not ideology.

"By doing this, we will ensure America's continued global leadership in scientific discoveries and technological breakthroughs. That is essential not only for our economic prosperity, but for the progress of all humanity.

"That is why today, I am also signing a Presidential Memorandum directing the head of the White House Office of Science and Technology Policy to develop a strategy for restoring scientific integrity to government decision making. To ensure that in this new Administration, we base our public policies on the soundest science; that we appoint scientific advisors based on their credentials and experience, not their politics or ideology; and that we are open and honest with the American people about the science behind our decisions."

And later in the day, Obama meets in the Oval Office with the super-bright high school seniors who have been named finalists in the Intel Science Talent Search.

Rob Stein writes in The Washington Post: "'The president believes that it's particularly important to sign this memorandum so that we can put science and technology back at the heart of pursuing a broad range of national goals,' Melody C. Barnes, director of Obama's Domestic Policy Council, told reporters during a telephone briefing yesterday."

Michel Specter, writing in the New Yorker in 2006, described how Bush administration officials consistently subverted science to further their political goals, how "many types of scientific analysis and research are proscribed almost wholly on religious grounds" and how Bush viewed science "more as a political constituency than as an intellectual discipline or a way of life."

Late Night Humor

By Dan Froomkin
9:35 AM ET, 03/ 9/2009

On Saturday Night Live, guest host Dwayne "The Rock" Johnson showed what happens when Barack Obama gets angry. He turns into "The Rock" Obama: "Interesting point. But me no like."

And Steven Colbert announced on Thursday night that he has "started to like Barack Obama." Why? Because Obama gave his daughters a swing set. "It's got a climbing wall, a tire-swing, and in the back, there's a slide so you can pretend you're the Dow Jones index," Colbert says. "But with all he's got going on, how could Obama put this together in just 44 days?"

Cartoon Watch

By Dan Froomkin
9:31 AM ET, 03/ 9/2009

John Sherffius on Obama's gray hair, David Horsey on how Obama stays so cool, Jim Morin on Obama's juggling act, Steve Sack on Obama's cash cow, Walt Handelsman on Obama's new swing set, Joel Pett on Obama's willingness to talk to anyone, Tom Toles on mortgage torture, Nick Anderson on earmarks, Mike Keefe on the new GOP slogan, Lee Judge on if Moses had brought along Republicans, Jeff Danziger on Rush Limbaugh crossing the Delaware, Jimmy Margulies on a pre-existing condition and Dwane Powell's flashback to early 1993.

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