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