The problem with Obama

The economist and <em>New York Times</em> columnist Paul Krugman’s damning verdict.

The Nobel Prize-winning economist Paul Krugman, one of America's leading liberal commentators, used his New York Times column yesterday to issue a devastating crititique of Barack Obama in the wake of the president's decision, on Monday, to introduce a pay freeze for federal government workers across the United States.

The Princeton professor describes the move as "a (literally) cheap trick . . . slashing federal spending at a time when the economy is depressed is exactly the wrong thing to do".

But it is his analysis of the politics, not the economics, of the issue that stands out in his column. Krugman writes:

Mr Obama's pay ploy might, just might, have been justified if he had used the announcement of a freeze as an occasion to take a strong stand against Republican demands – to declare that at a time when deficits are an important issue, tax breaks for the wealthiest aren't acceptable.

But he didn't. Instead, he apparently intended the pay freeze announcement as a peace gesture to Republicans the day before a bipartisan summit. At that meeting, Mr Obama, who has faced two years of complete scorched-earth opposition, declared that he had failed to reach out sufficiently to his implacable enemies. He did not, as far as anyone knows, wear a sign on his back saying "Kick me", although he might as well have.

There were no comparable gestures from the other side. Instead, Senate Republicans declared that none of the rest of the legislation on the table – legislation that includes such things as a strategic arms treaty that's vital to national security – would be acted on until the tax-cut issue was resolved, presumably on their terms.

It's hard to escape the impression that Republicans have taken Mr Obama's measure – that they're calling his bluff in the belief that he can be counted on to fold. And it's also hard to escape the impression that they're right.

To be fair, Krugman was never a big supporter of Obama; he backed Hillary Clinton in the Democratic primaries in 2008. But it's difficult to disagree with his stinging conclusion:

Whatever is going on inside the White House, from the outside it looks like moral collapse – a complete failure of purpose and loss of direction.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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Richmond is a wake-up call for Labour's Brexit strategy

No one made Labour stand in Richmond Park. 

Oh, Labour Party. There was a way through.

No one made you stand in Richmond Park. You could have "struck a blow against the government", you could have shared the Lib Dem success. Instead, you lost both your dignity and your deposit. And to cap it all (Christian Wolmar, take a bow) you self-nominated for a Nobel Prize for Mansplaining.

It’s like the party strategist is locked in the bowels of HQ, endlessly looping in reverse Olivia Newton John’s "Making a Good Thing Better".

And no one can think that today marks the end of the party’s problems on Brexit.

But the thing is: there’s no need to Labour on. You can fix it.

Set the government some tests. Table some amendments: “The government shall negotiate having regard to…”

  • What would be good for our economy (boost investment, trade and jobs).
  • What would enhance fairness (help individuals and communities who have missed out over the last decades).
  • What would deliver sovereignty (magnify our democratic control over our destiny).
  • What would improve finances (what Brexit makes us better off, individually and collectively). 

And say that, if the government does not meet those tests, the Labour party will not support the Article 50 deal. You’ll take some pain today – but no matter, the general election is not for years. And if the tests are well crafted they will be easy to defend.

Then wait for the negotiations to conclude. If in 2019, Boris Johnson returns bearing cake for all, if the tests are achieved, Labour will, and rightly, support the government’s Brexit deal. There will be no second referendum. And MPs in Leave voting constituencies will bear no Brexit penalty at the polls.

But if he returns with thin gruel? If the economy has tanked, if inflation is rising and living standards have slumped, and the deficit has ballooned – what then? The only winners will be door manufacturers. Across the country they will be hard at work replacing those kicked down at constituency offices by voters demanding a fix. Labour will be joined in rejecting the deal from all across the floor: Labour will have shown the way.

Because the party reads the electorate today as wanting Brexit, it concludes it must deliver it. But, even for those who think a politician’s job is to channel the electorate, this thinking discloses an error in logic. The task is not to read the political dynamic of today. It is to position itself for the dynamic when it matters - at the next general election

And by setting some economic tests for a good Brexit, Labour can buy an option on that for free.

An earlier version of this argument appeared on Jolyon Maugham's blog Waiting For Tax.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.