There was a lot of self-delusional and semi-fascistic talk among conservatives during the late stages of the presidential campaign blaming the entire economic calamity on poor people and minorities who supposedly blew up the Boom Times by taking out mortgages they couldn’t afford to pay. As an exercise in right-wing populist “wedge politics,” it didn’t work. But it didn’t go away, as witnessed by yesterday’s now-infamous on-air tirade by CNBC business reporter Rick Santelli from the floor of the Chicago Board of Trade.
You should watch the video itself, but the main thrust of Santelli’s jeremiad was aimed at Obama’s new foreclosure relief proposal, which rewarded “losers,” and will place the United States on a trajectory to become just like Cuba. The sheer self-righteousness of Santelli’s rant–inflated by attaboy cries (genuine or facetious) from the prosperous white men on the trading floor around him–was what was remakable about it. As Ezra Klein brilliantly observed:

[W]atching the traders bray and cheer as Santelli calls for the streets to run green with the equity of the working class is an astonishing insight in the psychology of the crisis. These guys feel betrayed. America let them down! After all, they didn’t buy the mortgages and default. They just bought the packages that then defaulted. They trusted Americans to be responsible and they were burned for it. And so you know what? Screw ’em. This is their problem. Let them default. They should lose their houses. Wall Street is tired of being ground under the thumb of the lower middle class. This country has coddled those losers long enough, and see where it’s gotten us.

But I think something a bit deeper is going on here as well. Santelli’s argument is not much more than a crude and boorish version of a lot of the sober “moral hazard” criticism of Obama’s housing plan. You probably know the idea: when government helps people who have suffered from bad behavior in the past, it encourages bad behavior in the future. Better to make them object lessons of the consequences of bad behavior. What are a few million ruined lives as compared to the advantages of a country with improved moral muscle tone?
The problem with this “analysis,” of course, is that there really weren’t a whole lot of people who sat down one fine day and decided: “I think I’ll buy a house I really can’t afford and then default on the mortgage!” Put aside the blandishments of lenders, the national ideology of homeownership as a sign of middle-class status (and as a rare source of working-class capital), and the widespread expectation that housing values would continue to more-or-less improve for the foreseeable future. More fundamentally, it’s difficult to wax angry at homebuyers who somehow did not anticipate losing jobs, health insurance, savings, home equity, and most of all the ability to sell homes at a break-even price. And you also have to wonder how many people who are upset at government help for housing “losers” were the completely accidental beneficiaries of more fortunate trends in the housing market in the past (e.g., those millions who bought at a price slough, built up equity without lifting a finger, and then used government-subisidized home equity credit to retire debt, boost savings, and acquire many nice things).
What may be at the bottom of some of the angrier “moral hazard” talk is even deeper than the habit of blaming victims, with the oft-accompanying strains of self-righteousness and sometimes racism. Big economic downturns challenge one of the most abiding myths that well-off Americans venerate: that economic success is a sign of personal virtue. The corrollary, of course, is that economic failures tend to deserve it. That obviously wasn’t true in the depths of the Great Depression, when a fourth of the population couldn’t get jobs. But the myth lived on, and precisely at times when it seems to be endangered by empirical evidence, it sometimes emerges in a nasty and vengeful manner, as when Rick Santelli indulged himself yesterday in sneering at Barack Obama for caring about “losers.”

Even as we await the effects of the economic stimulus package, the Obama administration’s first federal budget is due to be released next week. And according to some rich hints dropped by Office of Management and Budget director Peter Orszsag to Politico‘s Ben Smith, that budget is likely to focus to a surprising extent on creating a foundation for universal health care:

Though the budget’s details have been closely held, Orszag revealed, in broad terms, two: a continued focus on health care policy and a plan “to restore the nation to a sustainable fiscal trajectory over the five-to-10- year window.”
The next step on health care, he said, is a set of “changes to Medicare and Medicaid to make them more efficient, and to start using those programs more intelligently to lead the whole health care system.”
With a growing body of research finding some practices more cost-effective than others, the program’s reimbursement rules can be used to force changes at those hospitals — a sort of back door to health care reform.
“Medicare and Medicaid are big enough to change the way medicine is practiced,” he said.

This suggests steps to link health care cost containment to a major shift towards adoption of medical best practices, including outcome-based medicine, chronic disease management, and prevention, all big preoccupations of Orszag when he ran the Congressional Budget Office.
So: a move towards universal health care in a budget that will reflect widespread fears over the fiscal implications of the stimulus package? Yes, because of the vast implications of medical cost containment for the federal budget.
The Obama administration’s focus on convincing Americans that universal health care will actually save money over the long run is likely to be a central feature of next week’s “fiscal responsibility summit,” which has been advertised as a first step towards “entitlement reform.” As Jonathan Cohn explained at The Treatment blog yesterday, progressives fearing some sort of change-Social-Security agenda should calm down; the “summit” will largely be about Medicare and health care costs.
As Ben Smith notes, next week will be a really big week for Peter Orszag. Comprehensive health care reform foundered in the 1990s in part because Americans weren’t convinced that the status quo would wind up being far more expensive and less reliable. Making that case again, and more effectively, will be very important for the administration and the country.

At OpenLeft today, Chris Bowers asks a good question: is it more attractive, on balance, for a politician like, say, Kathleen Sebelius or Janet Napolitano, to accept a position in the Cabinet as opposed to continuing as governor or running for the U.S. Senate?
Chris, who admits he was disappointed by Napolitano’s decision to become Secretary of DHS and is ready to be disappointed if Sebelius becomes Secretary of HHS, mainly because he views both women as the best available Senate candidates in their states, nonetheless comes up with a list of reasons for instead getting Lost in the Cabinet.
It’s a perfectly good list that mainly focuses on what a risky and difficult chore it is to run for statewide office, but I do think he misses a couple of pertinent points.
For one thing, 2009 is a historically bad time to be a governor, particularly in states like Arizona and Kansas with Republican-controlled legislatures. The pressure to cut services or raise taxes (the latter very difficult in a conservative state) is enormous, even with the help now on the way via the economic stimulus package. And both Napolitano and Sebelius are term-limited after next year, so neither could run for another term in the hopes of better economic times.
For another thing, you shouldn’t conflate gubernatorial and senatorial gigs as “statewide offices.” Governors, even in bad times, typically wield a lot of power. They have thousands of state employees ultimately reporting to them; don’t really have to answer to anyone other than the law and the public; and can make news pretty much whenever they want. They also get a free place to live, usually a very nice one with state-paid help.
A Senator is one of a hundred preening narcissists. A freshman has little real influence. Staffs are tiny by state government standards, and turnover is heavy. The solons are invariably subordinate to the party leadership and various committee and subcomittee chairs. And you have to maintain not one but two homes at your own expense, and live a bifurcated existence of shuttling between Washington and your home state (otherwise you are “losing touch”). There’s a good reason most Senators are independently wealthy before running for office. And I’m always surprised when political observers are surprised that this or that sitting or former governor doesn’t choose to “move up” to the Senate. It’s clearly a demotion.
Finally, being a Democrat running for Senate in a red state like Arizona or Kansas isn’t the same as running for governor. Senatorial campaigns are almost invariably nationalized and polarized, unlike gubernatorial campaigns where manifest executive abilities and state/local issue configurations can give Democrats in conservative areas a fighting chance.
So nobody should really be that astonished that even a screwed-up agency like DHS looked like an attractive challenge to the very competent Janet Napolitano, or that Kathleen Sebelius might prefer to play a role in an administration that could revolutionize the American system of health care. The alternatives really weren’t that seductive.

The marquee off-year political contest of 2009 is very likely to be Virginia’s gubernatorial race. Yes, New Jersey will also have a gubernatorial contest in which incumbent Democrat Jon Corzine could get a serious challenge, probably from former U.S. Attorney Chris Christie, generally considered the strongest Republican in the race. But Virginia’s proximity to the chattering classes of Washington; the Democratic national party chairmanship of outgoing Gov. Tim Kaine; the intense scrutiny of VA last year as the classic purple-to-blue state; and media fascination with Terry McAuliffe’s gubernatorial bid; will probably combine to make the Commonwealth race a big national political obsession.
At RealClearPolitics today, Sean Trende offers a decent primer on the VA race, with lots of historical detail on the state’s politics going back to the nineteenth century. My main quibble with Trende’s analysis is his implicit assumption that discontent over the economy or the state’s fiscal condition will hurt the incumbent party in Washington and Richmond. It’s entirely possible, even in conservative but hard-hit parts of the state like the Southside, that voters will not warm to a national or state GOP that seems to be telling them that pleas for government assistance represent attempted robbery or a desire for welfare dependency. And that’s why I am also less certain than Trende that GOP candidate Bob McDonnell will be able to largely ignore his party’s rural base and aggressively pursue suburban votes elsewhere.
This is another way of saying that we don’t know yet whether the national repudiation of Republicans in 2006 and 2008 represented a temporary “throw-the-bums-out” reaction or the beginnings of a pro-Democratic realignment. But I wouldn’t be real confident about assuming that recent history tells you everything you need to know about the standing of the two parties in various parts of Virginia today.
Trende’s assessment of the candidates is well-informed, including his suggestion that the likely-to-get-nasty competition between the two Democratic candidates from NoVa, McAuliffe and Brian Moran, could either create an opening for the third candidate, Creigh Deeds, or force him from the race altogether. His assessment of the sole Republican candidate, McDonnell, is also interesting:

McDonnell avoids many of the problems that have beset previous Republican nominees. But there is one potential problem – he is a bona fide social conservative. McDonnell will likely be attacked for his law degree from Regent University (founded by Pat Robertson), and comments he made while he was a Delegate to the effect that anyone engaging in oral or anal sex could be found in violation of Virginia’s “crimes against nature” law (he also claimed not to remember whether he had ever violated the law)…
The comment about the crimes against nature law could affect him much as Allen’s macaca comment or Kilgore’s death penalty ad affected them – by becoming wedges between the Republicans and their Northern Virginia base.

Yeah, I don’t think it will be too long before every late-night comic in the world has some high-profile fun with McDonnell’s 2003 comment that he doesn’t really recall whether he’s ever violated the state’s sodomy laws. And he’s not well positioned ideologically to claim that this is a “private” or “family” matter.
Unless McDonnell tries or is forced to make the campaign about cultural issues, the economic and fiscal situation, and the condition of the two parties in VA at present, will likely determine the race, against any of the Democrats currently running. Yes, the national media will try to make it all a referendum on Barack Obama, and that idea could cut in different directions among different Virginia voters. But as Trende concludes, the race begins as a toss-up, and the positive omen for Virginia Democrats is that they’ve won all but a few of the very close statewide races in Virginia in recent years.

Pew has some new Presidential job approval figures that give an additional insight into the way Barack Obama is peeling off support from the Republican coalition.
The basic partisan breakdown looks like this:
Presidential Job Approval
Democrats – 88%
Independents – 63%
Republicans – 34%
But what is particularly noteworthy is the split within the Republicans:
Conservative Republicans : 28% approve, 47% disapprove
Moderate and Liberal Republicans: 46% approve, 30% disapprove
Wow. More moderate and liberal Republicans approve of the job Obama is doing than disapprove – almost 50% favorable, in fact.
For a number of years now political independents have been polling closer to Democrats than Republicans on a wide range of issues. But now moderate and liberal Republican voters are also starting to drift distinctly away from the conservative Republican “base.”
Looks like the Democrats are going to have to buy a bigger “Big Tent” – It appears there are some new elephants coming inside.

I’ve been reading TDS Co-Editor Stan Greenberg’s remarkable new book, Dispatches From the War Room, detailing his dealings with five remarkable heads of state (Bill Clinton, Nelson Mandela, Tony Blair, Ehud Barak, and Gonzalo Sanchez de Lozada). And his second of two chapters on Bill Clinton, which focuses on the early days of his presidency, raises some interesting comparisons and constrasts with the initial steps taken by Barack Obama, particularly on the economy.
Clinton didn’t unveil his own economic plan (including his stimulus package) until the State of the Union Address on February 17. That happens to be the same calendar day on which Obama signed his stimulus package into law. Clinton’s stimulus package was pared down from $30 billion to $16 billion before it was even submitted to Congress (it ultimately fell below $1 billion). Obama’s came in at just under $800 billion. Clinton had to abandon the centerpiece of his campaign’s economic plan, a middle-class tax cut, again before it was submitted to Congress. Obama’s centerpiece tax cut was pared down in the stimulus package somewhat, but largely survived. Clinton’s approval ratings for his approach to the economy started high, fell quickly, rose again, and then fell again during his first few months in office. Obama’s have fluctuated somewhat, but have been largely steady.
Most notably, as Greenberg reminds us, the Clinton White House’s handling of his economic and budget plan–which, after all, wound up being the cornerstone of his administration’s extremely impressive economic record–was universally described, by friends and enemies alike, as “chaotic.” It certainly exceeded in uncertainty and actual confusion the “rookie mistakes” and occasional missteps that the Obama White House staff and economic team, which have barely had time to find their offices, are so often accused of.
Yes, the stakes facing Obama right now on the economy are significantly higher than those facing Clinton sixteen years ago, but not quite on the order of magnitude that many observers assume. The unemployment rate in January of 1993 was 7.3 percent, as compared to 7.6 percent in January of 2009. And Clinton, even more than Obama, had campaigned on reviving the economy and improving middle-class economic prospects.
In any event, some historical perspective is always helpful, and Stan’s book, which explicitly focuses on leaders in times demanding change, provides such perspective in rich and varying detail.

Well, I’m happy to report a very prominent convert to the theory that President Obama is engaging in a strategy of “grassroots bipartisanship” whose success is best measured by public opinion trends, not near-term support from Republicans in Congress. Mike Tomasky of the Guardian has a post up today that not only embraces the much-derided B-word, but cites TDS and New Yorker’s Hendrik Hertzberg as the only folks who seem to completely “get it.”

I believe that Barack Obama is right to talk about bipartisanship, and I do not think that he should drop it because of the congressional voting pattern on one piece of legislation. I think his critics – and on the broadly construed left, among bloggers and pundits and whatnot, they are legion to the point of near unanimity, with only two exceptions I can think of – are missing an important point.
The standard criticism of Obama’s bipartisan outreach goes like this. He met with Republicans on Capitol Hill. They stiffed him. They showed that they’re impossibly troglodytic. Why should he waste any more time on these people? Just crush them.
But here’s the thing. This criticism, and this entire debate about the efficacy of his bipartisan overtures, presumes that Obama’s audience for his bipartisan talk is the Republicans in Congress and the conservatives in Washington.
But that is not his intended audience. His audience is the country.

You should read the whole thing. And you should also check out Hertzberg’s typically fine column, which coins a wonderful phrase for Obama’s political strategy: “Gandhian hardball.”

There are currently two separate pieces available on The New Republic’s site providing some serious perspectives on the direction of political journalism these days. The first is a straightforward but poignant lament for the radical downsizing of The Los Angeles Times by a former reporter there, Joe Mathews. And the second is an analysis by Gabriel Sherman of Politico, that largely web-based chronicler of the daily news and talk of Washington.
The decline of the high-quality daily newspaper offering world, national, state and local coverage is hardly a new story: declining readerships, high fixed costs, corporate consolidation, vast new online competition, shrinking ad revenues, and now, for some papers, huge investment losses by their parent companies, have all taken a major toll. The current economy seems to be simply accelerating a process that was well under way, in some respects many decades ago.
It’s a lot less clear whether Politico represents any sort of wave of the future. Yes, it’s been successful, not only in generating a lot of buzz and (at least during the presidential election) high readership, but even in making a profit. Yes, it’s also scored quite a few “scoops.” But Politico may be a Beltway sui generis; where else could a periodical largely read online successfully support itself with ad revenue from a print edition that’s given away on the streets of a relatively small area? That’s a unique function of Washington’s peculiar climate for lobbying competition at present, and also of the fact that it’s one of the few places in the country where the economy’s doing well. It’s also worth noting that Politico was very nearly born as a project of the Washington Post, where its two co-editors, John Harris and Jim VandeHei were previously political reporters. Thus, it may better reflect where a few big surviving newspapers are headed in an online-dominated future, than representing any sort of successor to the newspaper itself.
In any event, the two pieces are well worth a careful read.

At pretty much any point during the last four or five years, you could count on two public opinion survey measurements looking really, really bad: approval ratings of Congress, and assessments of the direction of the country.
So it’s interesting to note that both these numbers seem to be gradually moving up.
According to a new Gallup survey, Congress’ job approval rating jumped from 19% a month ago to 31% from February 9-12, or about the time that Congress was finalizing the economic stimulus package. As Gallup notes:

Gallup has been measuring public approval of Congress on a monthly basis since January 2001. During that time, there have been only two month-to-month increases larger than the 12-point jump observed this month.
The largest single-month increase was a 42-point rally in congressional support after the Sept. 11 terrorist attacks, from 42% in a Sept. 7-10, 2001, poll to 84% in mid-October 2001. Gallup found similar increases in ratings of other government institutions around that time.
The next-largest jump of 14 points occurred after Democrats took party control of both the U.S. House and the U.S. Senate in early 2007.

And if the 31% approval rating for Congress sounds pretty low, check this out:

In general, Congress’ approval ratings tend to be low. In fact, the current 31% score is very near the historical average of 35% in Gallup Polls since 1974.

The “direction of the country” (or right track/wrong track) numbers are gradually improving as well, even though most of the economic indicators continue to deteriorate. Look at pollster.com’s chart on these numbers, and you can see “right track” sloping up and “wrong track” sloping down since October at a pretty steady pace.
Meanwhile, President Obama’s job approval rating seems relatively stable in the low 60s, depending on the poll you follow.
At some point, maybe sooner, maybe later, the Obama approval ratings and the “right track” number should begin to converge. When and where they converge will probably tell you everything you need to know about the political direction of the country in 2010 and 2012.