Rachel Maddow Slams Spending Freeze: Obama Is The New Herbert Hoover
If President Obama’s goal this week was to alienate and anger just about everyone then it would seem he has succeeded. Last night’s late-breaking news that the president would announce a three year spending freeze on most domestic programs during tomorrow’s State of the Union has met with angry responses on the left — Obama is the new Hoover! Which is quite a long drop from the other Depression-era president he routinely drew comparisons to last year.
Nate Silver calls the decision “a mistake on par with John McCain’s ‘suspending my campaign’ gaffe.” Marc Ambinder speculates that it could be seen as reactive, though the ‘middle’ may be comforted by the sound of “spending freeze” no doubt a large motivator in this decision. John Carney of Business Insider pointed out to me earlier this morning that “We spent more bailing out AIG than will be saved by Obama’s spending freeze” and that decisions such as these are often “a policy people employ when they lack ideas.” (Carney also dug up a video of Obama arguing against the spending freeze back in 2008.) Already-ticked-off Paul Krugman calls it (among other dire things) “appalling on every level.” But the harshest response thus far came from Rachel Maddow last night who just excoriated the President. Hell hath no fury like a liberal scorned. Whew.
You might recall that Republican Senator John McCain ran for and lost the presidency on the idea of answering economic calamity with a spending freeze [among other things]. Since that’s the kind of strategy that Herbert Hoover used in the ’30s to make the depression great…If you’ve ever taken economics, it’s usually on day two of like a 101 level college econ class where they teach you that a spending freeze is not the way to bring the economy out of a downturn, let alone a recession. One lesson from the interminable Japanese recession in the 1990s was that the government was not aggressive in spending enough for long enough and that’s why it became Japan’s lost decade, instead of Japan’s lost couple of years. And then, of course, there was the great American mistake of 1937, when as the U.S. was finally coming out of the depression, in a burst of stupid Hooverism, the government stopped spending for recovery too soon and it put the economy right back in the drink. Deficit spending is what governments do to get economies moving again. A spending freeze it like trying to put out a fire by putting gasoline on it.
Maddow followed up with a longish interview with Jared Bernstein, Chief Economist and Economic Policy Adviser to Vice President Joseph Biden (Ambinder calls him the “probably the best economic spokesman the White House has”) who went to some lengths to defend and explain the White House’s decision. It’s worth watching the whole segment, Obama has effectively knocked health care out the news cycle with this announcement and it will likely be the focus of just about everyone between now and tomorrow’s speech. Video below:
28 comments
The Real Royal King says: Maddow adequately illustrated the angst many progressives, moderates and liberals now feel. The rightist lurch of the Administration has been disheartening to so many of us. I think if we had wanted a rightist government, we could have just as easily supported Hillary. I still have hope things will improve, but it is not an easy time. Good catch, Ms. Maddow!
timzank says: Ya think maybe even the left is figuring out this guy is in over his head? And do you think maybe the left is beginning to figure out (post virginia, new jersey, & massachusetts) the majority of Americans don’t want to be socialists?
Grab hold of the railing Alinsky-ites, the ship is in for a major course correction.
The Real Royal King says: Tim Z. Ank: Could you be any more puerile? President Obama is governing far, far to the right of W so far. You are so FOX-like in your analytical approach. Someone, Beck, Hannity, Wiener, Limbaugh, plants stinkweed in your brain matter, it takes hold, as weeds do in many media, then, against all evidence to the contrary, you hold tenaciously to your misinformation, for surely it is not the original, planted concept which is in error. It has to be that all of the evidence to the contrary is false, misleading, perhaps itself planted in some elaborate and well-executed conspiracy. Your approach serves not our nation nor yourself at all well. Frankly, I should think you would be better able to think critically and rationally than you repeatedly display here.
dhg says: Oh my what’s a poor liberal democrat to do?Spending,with of course the attached taxation,is all they know and want,deficits be damned.Robert Reich beet Maddow to the punch condemning spending freezes as well as Jessie Jackson (no surprises there).What we have is a rudderless ship,a drifting unsure unsteady ship of state that drifts with the currents of politics and populism and like most drifting ships seems to be slow and behind the actual flow.It took a YEAR for the administration to decide jobs and the economy mattered,stupid,more than health care reform.But with a series of faces slaps including one just the other day from “Kennedy’s seat” finally they woke up.How foolish anyone is to believe all left or all right is all answering.A real answer would be the fulfillment of a promise,the reverse of a lie,the bi partisan solution.It lingers out there abandoned by all.
The Real Royal King says: Of course, dhg, you fail to pay homage to the father of modern deficits, Ronald Reagan, and his proud mentor, W, and you fail to castigate the great deficit buster, Bill Clinton. Is the blood to the brain flowing spasmodically?
SWWT says: So, Obama is moving more towards the center. Good for him.
dhg says: I prefer to think in the present royal king not the past.I don’t use the past to justify the present.
And of all the points to counter you pick the least important?Speaks volumes.
dhg says: Oh and by the way king,which of the mentioned names was dealing with the worst economic downturn since the depression?
The Real Royal King says: Yes, dhg, I can certainly understand why Republicans would want to disavow everything which transpired from 3 July 1776, to 19 January 2009, but, alas, we can’t do so. I am sure you will excuse me for not agreeing with your view that a critical assessment of all Administrations is the “least important”. As for the worst economic downturn since the Depression, it really depends on the matrix you are using. My own sense is that the combination of inflation and stagnant growth made the Carter era very dangerous, but then we would overlook the really good work President Obama did, despite his many problems, in saving our banking system from a complete collapse. I suspect with time and distance, we will begin to truly understand the terrible plunge to which W lead us and the remarkable save by President Obama. We’ll all be frightened.
SteveMG says: This President signed the largest stimulus spending bill in the history of the country and also wants to enact the largest health care legislation ever and Maddow has the gall to call him Herbert Hoover?
The President deserves credit for starting to address this debt problem that he inherited from both Democrats and Republicans. This move to the center is what the overwheming number of Americans want.
Sorry progressives, the electorate doesn’t want your statist approach to solving our problems. They just don’t.
The Real Royal King says: You have a reasonable view, SteveMG, but I wouldn’t underestimate the consequences of the healthcare crisis in our nation. As health insurance renewals come up this calendar year, I suspect millions of employees to lose their coverage. Businesses cannot afford to ever increasing, confiscatory premiums. I am not sure that is a liberal or a conservative view. It tends more to common sense.
SteveMG says: The answer to the healthcare problems we have would have been an incremental one that garnered the public’s support along the way. Small reforms that would’t have solved all of our problems but some of them.
Instead of enacting a monstrosity of a bill, the President could have expanded Medicaid coverage to cover more poor Americans. Additionally, he could have tried to do things about allowing insurance companies to sell across state lines. Or better funded risk pools for the current sick. Or vochers.
Unfortunately, the President – who I didn’t vote for but sincerely support – allowed a huge bill to be created that would invevitably allow critics, both legitimate and illegitimate, to pick apart.
Pat Doherty 
Yesterday a report came out showing we are $12trillion in debt, so perhaps curtailing the spending binge might appear like common sense, but that would have been common sense a year ago before the numerous bills that each entailed hundreds of billions in new spending. Everywhere else in America people and businesses are scaling back and spending less, the government meanwhile printed money and went on a spree. Why is Maddow upset exactly, because we are not in bigger debt? Tax cuts have always proven to both spurn economic growth and generate more tax revenue, but that clearly is not an option here. Instead Obama wants to raise taxes on the bankers now, and he thinks taking money from them is going to liquidate the markets?
RazorsEdge says: RRK:
You just complimented Pres. Bush. You might want to be careful. Pres. Bush executed the TARP program to “save” the banking system. If you want to give credit to Pres. Obama fo saving banking system fine. But Pres. Bush initiated the legislation (and spent most TARP $).
And yes, candidate Obama supported TARP legislation
A bit disingenuous for Maddow to state Pres. Obama deploying Hoover strategy. Before the announced “spending freeze”, there has been a “drunken spending party”. Regardless of how we got into trouble, spending and lots of spending (more than ever before by far) has already been done.
There’s TALF (consumer/sm business based relief), extended TARP period for rolling out TARP funds, extended Auto bailouts (and bought) that Pres. Bush started.
Cash for clunckers, PPIP, stimulus recovery act, one of the biggest is Fannie/Freddie bailouts that Pres. Obama extended from Pres. Bush. (to name a few)
CBO this week predicted 1.35 trillion budget deficit this year and $1 trillion deficit next year. You can be in a Hoover strategy with deficits that big. There’s spending going on.
RazorsEdge says: Correction:
You “can’t be in a Hoover strategy with deficits that big. There’s spending going on. We need a bigger/better word for “spending” in these cases.
Jim R says: Rachel is right on target as usual. Obama and his financial advisors know about 1937 and what works and what doesn’t, but have apparently made the political calculation to pander to a populace whose lack of knowledge of history is only exceeded by their ignorance of simple economics.
I understand it must be frustrating for this administration to govern center right and be accused of Socialism and worse, but they need to do what empiral evidence tells them is needed and not worry about what the blithely ignorant American populace is manipulated into thinking they believe.
And by the way, I’ll point out again that approximately only 10% of the 1.35 trillion budget deficit is attributable to this administration – not that it’s germane to the Hooverite right wingers.
SteveMG says: The President and Congress passed, for goor or bad, a 800 billion dollar stimulas package last year. That’s more than 10 per cent of 1.35 trilion.
I’ll also remind folks that candidate and then Senator Obama voted for the TARP bailout. Correctly so in my view.
Maddow seems to be enamored of some image that government is in charge of all of this…that the economy does (or doesn’t) do something by virtue of what the government does (or doesn’t) do. Just get out of the way! There are tens of millions of people out there…individuals and families…who were told last year that the free-market, capitalistic economy was somehow ‘dead.’ This particular version & flavor of government cannot effect a positive change in the economy, yet people like Maddow (for some reason) seem to think that it can. How many stimulus bills that don’t ’stimulate’ do we need before we conclude that the recipe is all wrong here?
I find it hilarious that anyone can suggest that this administration is centrist or even possibly right of center. Look at his acquisition of private companies, his desire to tax those industries that he disagrees with financially, his fealty to the UN and the climate lobbyists, and/or his desire for more social programs and tell me how those place him near or over the centrist line.
RazorsEdge says: Jim R,
Not true by the way. FY2010 owned by President Obama. It’s is his first budget year.
But I don’t care. You can put every year that Pres. Obama in office and his budget deficits into Bush’s fault category. It’s not going to get you very far, other than maybe feeling good you hated one politician and support another.
You talk left vs. right, conservative vs. liberal on spending and deficits. Maybe you don’t “see” the problem deficits are heading us toward.
Deficit is a deficit. When it comes to pay for deficits and debt, Government doesn’t ask you to pay more or less taxes if you’re an (R) or a (D). At least not yet.
Would you spend 1,000 times more than you earn each year on your own family budget fors years and years, then continue spending knowing it’s good for “you” because you believe your spending habits righteous? Knowing it’s “OK” because your extended family, maybe even your kids and grandchildren would just keep paying your bills for you?
The Real Royal King says: I think we all understand the perils of deficits. I simply have not seen a deficit decrease during a Republican administration. I have seen one decrease in a Democratic administration. Is that a trend? Too early to say.
Jim R says: RazorsEdge,
Family budget considerations are irrelevant and misleading when talking macroeconomics, not that you didn’t know that.
The first stimulus was too small in the judgement of actual economists, and 30% of it was a middle class tax cut that 90-95% are getting weekly in their paycheck; something unfortunately this administration decided not to brag about for whatever reason.
IOKIYAR rules once again. Cheney says deficits don’t matter and Republicans proceed to squander the Clinton surplus without a peep from the fiscal scolds crawling from underneath their rocks after a eight year hiatus, with irresponsible unneeded tax cuts for those who didn’t need them in the midst of two wars.
More stimulus is needed and deficits will matter someday if we make it that far.
RazorsEdge says: Jim R,
That’s left vs. right again. Yes, Bush squandered Clinton surpluses. Yes “some” economists” stated Stimulus too small. But there are plenty of other economists stating too big and not the right targets.
Pres. Obama also enacted FY2009 Omnibus ($410 billion) as part of stimulus before he did $787 billion Recovery act
Doesn’t matter.
The debt is projected to nearly double to $20 trillion by 2015, but is expected to increase to nearly 100% of GDP by 2010 and remain at that level thereafter. These estimates assume real GDP growth (after inflation) ranging from 2.6% to 4.6% annually from 2010 through 2019.
The real issue is threat. You can pile up debt and obligations. Our enemies know this too. US getting close to not being able to fiscally react to another threat creating much pain.
Debt is threat. It’s a national security issue. It has to be paid off in some reasonable way for the US to be able to safely react to threats or future obligations. Meaning, Taxes will go up, for everyone.
Meaning less and less people will be able to react to their own family threats and financial security.
SteveMG says: I simply have not seen a deficit decrease during a Republican administration. I have seen one decrease in a Democratic administration.
And a Republican Congress.
Divided government looking better and better every day.
Tater Salad says: Racheal………..Barack Obama is not trying to be Herbert Hoover. He is actually closer to Woodrow Wilson or Teddy Roosevelt without the guns and horses. He is a pure left wing progressive dead set on making the United States a socialist country from top to the bottom. Why do you think he as surrounded himself with left wing socialists and Marxists? I isn’t because he owes them anything. It is because this is true belief of what America should be. However, this is not what America voted for because he used the old “Bait & Switch” tactic and it is now showing.
Jim R says: RazorsEdge,
All reasonable concerns well stated. Knowing the cause is essential to implementing the correct solutions, not to score political points in the parallel universe of left versus right.
Empirical data and previous experience teach us government spending (I’m with you on the poor targeting to date) is absolutely indispensable to growing our way of a potential great depression. We have the evidence and experience, there is no debate, at least in concept if not implementation.
This is the only way to deal with the deficit, caused by both parties; grow our way out and pay more taxes long term.
Short term two points: If the states hadn’t got any of the stimulus money we’d be looking at financial armageddon right now and these discussions would be moot. Second, if the government cuts taxes and spending like in 1937, we will go into a Great Depression II and these long term debt discussions are moot again.
I was “financially conservative” too, until the Republicans repeatedly stole the money and gave it to their rich, powerful friends.
Sorry, couldn’t resist. Like my dad always said, a Democrat will always do less damage by accident than a Republican will on purpose. You go to financial war with the Democratic Party you have, not the one you wish you had.
J Baustian says: Comparing Obama to Hoover? Hoover was a conflicted progressive. Far to the left of Harding and Coolidge — Coolidge despised him.
Hoover wanted to do all the things that Roosevelt eventually did, but Hoover was frightened by the huge budget deficits. He didn’t have Keynes around to tell him it would all turn out okay.
Hoover did have his own party in Congress pushing a protectionist trade policy. So does Obama, so there’s a similarity.
It is hard to find serious points of disagreement between Hoover and Roosevelt. Hoover probably never had a chance to enjoy being president, Roosevelt got to be president and certainly enjoyed the power and perks. But he was never the opposite of Hoover, he was just a variation on the same theme.
Hoover, Roosevelt, Lyndon Johnson, Jimmy Carter — these are the men whose mistakes Obama is determined to repeat.
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