The fight of his life

Opinion Article

2010 December, 24

Is Barack Obama the new Comeback Kid who has secured a second term in 2012 two years ahead of  schedule? Or is he Hostage-in-Chief suffering Stockholm Syndrome at the hands of his Republican  captors?  

Obama’s tax deal, which passed swiftly through congress and was signed into law last Friday, is the  most fascinating political question of the year.  

The dismal view of Obama’s compromise with the Republicans comes from the Left: the liberal anger  for their Great Black Hope is the culmination of two years of increasing disenchantment with Obama’s apparent weakness in the face of virulent opposition from the Right.  

As soon as the daydream of post-partisan “Yes, we can” politics crashed into the Republican “No, you  don’t” stonewall and the rise of the Tea Party, liberals everywhere urged Obama to put his foot on the  throat of the conservatives - but he didn’t.  

A few astute liberals understood that he didn’t because he couldn’t: America proved ready for a black  president, but it is unlikely to be ready for an angry black man.  

If the Tea Party was the creation of the Obama presidency, the combination of a mistaken prioritisation  of healthcare reform ahead of financial reform, and Obama giving a blank cheque to Wall Street ahead of Main Street (outrage about which metastasized into blaming the the poor wretches of Back Street),  then it is hard to see how a strategy of muscling up would have worked. The situation was close to  incendiary: the time for making a defiant defence of the leftist orientation of the first two years of his  presidency was long past.  

So Obama went into the November mid-terms seemingly paralysed and copped a self-described shellacking. But less than a month later, with his tax deal manoeuvre with the Republicans, Obama  may well have underwritten his second term.

The scenario was this: the notorious tax cuts to the middle class and the wealthy enacted by George W.  Bush in 2001 were due to expire at the end of this month. Senate rules prevented Bush from legislating  the tax cuts beyond 2010, therefore congress had to authorise any extension.  

While the Democrats supported tax cuts for the middle class and were pressing for unemployment  relief extension, they were utterly opposed to extending tax cuts for the wealthy. And the Republicans  refused to separate tax cuts for the middle class from the wealthy.  

In his December 5 column for The New York Times headlined “Let’s not make a deal”, Nobel Laureate Paul Krugman made a forceful case for Obama to resist the Republicans. “Mr Obama should  draw a line in the sand, right here, right now,” he wrote.  

“If Republicans hold out and taxes go up, he should tell the nation the truth and denounce the blackmail  attempt for what it is.”  

Krugman’s take on the political metrics facing Obama was this: “Yes, letting taxes go up would be politically risky. But giving in would be risky, too, especially for a president whom voters are starting  to write off as a man too timid to take a stand. Now is the time for him to prove them wrong.”  

The same day, Krugman’s fellow liberal columnist at the Times, Frank Rich, wrote a column entitled  “All the President’s captors”. It began: “Those desperate to decipher the baffling Obama presidency  could do worse than consult an article titled ‘Understanding Stockholm Syndrome’ in the online  archive of The FBI Law Enforcement Bulletin. It explains that hostage-takers are most successful at  winning a victim’s loyalty if they temper their brutality with a bogus show of kindness. Soon enough,  the hostage will start concentrating on his captors’ ‘good side’ and develop psychological characteristics to please them: ‘dependency; lack of initiative; and an inability to act, decide or think’.”  

The online version had a helpful link to the FBI paper, just so readers can confirm Rich’s political diagnosis of a psychologically crippled presidency. 

The next day, Obama announced the deal that was struck with the Republicans. The estate tax was cut  to 35 per cent and the individual exemption raised to $5 million. For two years, more than 40,000 of  the richest families will avoid more than $23 billion of taxes annually.

The deal sent the Left into a tail-spin. Rumbles against Obama came from across the democratic spectrum; from members of the congressional black caucus to Wall Street’s main advocate in the Democratic Party, Senator Chuck Schumer of New York.  

The most charitable feeling seemed to be deep pessimism about the Obama presidency. Then along  comes Charles Krauthammer, conservative columnist for The Washington Post, the Right’s most perceptive and trenchant critic of President Obama.  

In a December 10 column entitled “Swindle of the year” he declares: “Barack Obama won the great  tax-cut showdown of 2010 - and House Democrats don’t have a clue that he did. In the deal struck this  week, the President negotiated the biggest stimulus in American history, larger than his $US814 billion  2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the US economy over the  next two years - which just happen to be the two years of the run-up to the next presidential election. This is a defeat?” Krauthammer goes on: “If Obama had asked for a second stimulus directly, he would  have been laughed out of town. Stimulus. I was so reviled that the Democrats banished the word from their lexicon throughout the 2010 campaign.  

“And yet, despite a very weak post-election hand, Obama got the Republicans to offer to increase  spending and cut taxes by $990 billion over two years. Two-thirds of that is above and beyond  extension of the Bush tax cuts but includes such urgent national necessities as windmill subsidies.”  And further: “Obama is no fool. While getting Republicans to boost his own re-election chances, he  gets them to make a mockery of their new-found, second-chance, post-Bush, Tea-Party, this-time-we’re-serious persona of debt-averse fiscal responsibility.”  

Touche. At his joint press appearance with Obama, the original Comeback Kid, former president Bill  Clinton, referred to Krauthammer’s analysis, saying “He’s a brilliant man.”  

Krauthammer describes the tax deal as Obama’s Sister Souljah moment, an allusion to the moment in  the 1992 presidential campaign when the candidate who would become America’s “first black president” slapped down the black rap artist Sister Souljah, therefore taking an unexpectedly decisive  step towards the centre ground.

So it’s Clinton and Krauthammer’s political analysis of the meaning of the tax deal versus the loathing  of the Democratic Left that the tax breaks for the rich receive a two-year extension, and the delight of  the Republican Right for having extorted the outcome. But who’s played who?

The fight of his life