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The High Cost of Centrism

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Posted on Feb 11, 2009

By E.J. Dionne, Jr.

    The Obama administration keeps having to learn that bland centrism is not pragmatic, it’s not helpful in resolving a big crisis, and it certainly doesn’t buy you any love.

    Oddly, this week’s good news for the president—in Wednesday’s agreement on a stimulus package—and the bad news teach the same lesson.

    The bad news came in the almost uniformly negative early reviews of Treasury Secretary Tim Geithner’s bank rescue plan. It didn’t constitute change we can believe in. It was change nobody could understand. For all we know, the plan is, as was once said of Wagner’s music, better than it sounds. Who could be sure, given the vagueness of Geithner’s pronouncements?

    This is the cost of bland centrism: The plan seemed to be defined more by what it didn’t want to be than by what it actually was, inspired more by a concern with how things look than what actually works.

    Geithner did not want the administration to seem leftist, and so he rejected the temporary nationalization of the bad banks. Yet the advantage of nationalization is that it’s straightforward: The government would take over the bad banks—as opposed to throwing endless sums of money at them—clean them up, and sell them off.

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    Temporary nationalization is far from a perfect solution. But it’s a better idea than having taxpayers take on bad assets while letting the banks keep the good ones. Socializing losses and privatizing profits is a recipe for ripping off taxpayers. It’s still not clear, to me at least, how Geithner’s proposal will protect the interest of taxpayers.

    Oh, yes, and Geithner absolutely didn’t want to look like—God forbid!—a populist. He cast aside the advice of David Axelrod, Obama’s senior adviser, to put genuinely tough restrictions on the incomes of the financial geniuses to whom the taxpayers are now throwing life preservers.

    As a result, Geithner invited further skepticism about a necessary government program from those legitimately outraged by the arrogance of Wall Streeters who think they are morally worthy of all the money they make.

    Again, perhaps this is unfair to the treasury secretary. Maybe his plan, once it is fully revealed, will be seen as reflecting not the complexity of confusion but the intricacy of brilliance. I certainly hope Geithner is right that he can get the financial system moving more quickly by combining carrots for the private sector with the regulatory sticks. Still, it’s hard to see pragmatism in the administration’s decision to take the focus off its stimulus bill by announcing an incomplete banking plan at the same time.

    But the stimulus victory was indeed good news for Obama, even if the final $789 billion package is smaller than it should be and lost some of the president’s useful spending programs. He got things moving only after he stopped allowing his happy talk about bipartisanship (a close cousin to bland centrism) to drown out his substantive case for large-scale government spending to spur the economy.

    The Senate compromise bill was the essence of preferring the illusion of moderation over substance. By stripping out of the House bill significant amounts of fiscal help to the states, school construction money and other forms of spending, those so-called moderate senators who provided key votes in the end made the proposal far less stimulative.

    Mark Zandi, chief economist at Moody’s Economy.com, estimated that the Senate proposal would have created about 625,000 fewer jobs than the House bill. Surely “moderation” should not mean more moderate job creation.

    The final agreement got some of that spending back by paring down a few of the questionable tax cuts the Senate added to the bill, but it still fell short, notably on assistance to the states and on money for health coverage. Sen. Olympia Snowe of Maine cast one of the three crucial Republican votes for the bill and set the right test in an interview on Tuesday. “The whole issue,” she said, “is: What is the job creation value of each provision?” The final agreement did not fully live up to that standard, but it is still a significant achievement.

    There is nothing wrong with a sensible centrism that tries to balance competing goods. But Washington has become too concerned with appearances and with calculating the distance from some arbitrary midpoint in any given debate. The sensible center should be defined by what works, even if that means discovering that the true middle ground isn’t where we thought it was.

    E.J. Dionne’s e-mail address is postchat(at)aol.com.

    © 2009, Washington Post Writers Group


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By altlic, February 15, 2009 at 4:51 pm Link to this comment

And from EJ Dionne? More bedtime stories for all the good people who just want reality kept at bay. Zzzz.

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By altlic, February 15, 2009 at 4:44 pm Link to this comment

Okay, that’s the last straw. I’ve had it with Obama.

Over on ABC Ms. Lindsey Graham is hinting that nationalisation may be the only way forward while Chuck the-people-first Schumer is stonewalling that the banks should remain private.

The commenters on Huffpo are going hysterical trying to figure out whose side they are on now that the GOP and Dem positions have flipped around.

Clearly Obama and the dems, as the party in power, are the officially sanctioned face of the Masters of the Universe/ World government/ Wizard of Oz. Wow. I feel like a born-again American.

What’s really disappointing is how people approach politics as a mixture of reality tv and cage fighting, even on huffpo where you’d think they’d have more sense.

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By Max Shields, February 15, 2009 at 1:17 pm Link to this comment

dihey

I agree with your analysis regarding Obama. Always watch what he does, not simply what he says.

But I think there is something very wrong, and even gravely dangerous, when one is a particularly slick politician unlike the bumbling one who just exited.

As they say in boxing “it’s not the punch you see, but the one you don’t see that knocks you out.”

The fact there was little demonstration during B. Clinton’s administration while over a million Iraqis died and thousands in Somalia, and Yugoslovia with Clinton as Commander In Chief, doesn’t mean that returning to that “hear no evil, see no evil” is substantively different than the reign of George W. Bush.

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By dihey, February 15, 2009 at 6:45 am Link to this comment

I do not criticize President Obama because I think that he is a devious person but because I think that he is a standard-type, crafty, self-promoting politician whose “shtick” is his claim that he is not.

When the large bonuses to bankers became known Obama expressed outrage. However, when Congress wrote stringent restrictions on future bonuses into the “stimulus package” Obama was privately upset because it might cause a “brain drain” in the banking business.

When Congress debated the stimulus package Obama kept harping that no time must be lost to save jobs from disappearing. The final bill was passed on Friday February 13. Obama will sign the bill four days later in Denver for the sake of political theater.

There is nothing wrong with this all but please stop trying to tell me that Obama is a “different” politician and must therefore be trusted. It is no on both counts.

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By John Crandell, February 14, 2009 at 1:29 am Link to this comment
(Unregistered commenter)

Set up a guillotine in the center of Pennsylvania Avenue. Sever Maadoff’s head first of all and then proceed to the investment bankers. Finish it all off with Cheney, Bush, et.al.

Jefferson was so right!

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Leefeller's avatar

By Leefeller, February 13, 2009 at 2:17 pm Link to this comment

Big B,

Understand and sympathize with your premise, looking at socialism for most of the people in the U.S.  as they have been indoctrinated, is the same as communism. Attitudes need changing.

Your comment: A little mixture of socialism and capitalism might work, but does Barry have the balls to push for it?

In a sense he has,  the Bail out or as they like to call it now, “Stimulation”  is a little mixture of both, I look at it as sort of like a High Colonic, all we have to do is bend over and get stimulated and it will work out.

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By Big B, February 13, 2009 at 1:50 pm Link to this comment

Communism dropped dead about 20 years ago. Who would have thought that unregulated, unapologetic capitalism would fail so quickly after that. And for the same reasons, greed, avarice, and derivatives of the seven other sins.

Yessiree bucko, it’s time to throw in the towel and try something else, cause this theory ain’t cuttin it anymore!

But will we have the leadership needed to really change direction ASAP? Well, maybe after the rest of the middle class disappears, and a few rich people are roasted on a spit by the hungry and frustrated masses. Because let’s face it, change is just not in the american character. We have become a soft bellied, hard hearted bunch over the years. And the saddest part of all is that we still think the rest of the world looks to us for leadership.

We used to just be fat and stupid, but sometime recently we crossed the line to pathetic.

A little mixture of socialism and capitalism might work, but does Barry have the balls to push for it?

Do we have the forsight to listen to him if he did?

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By Folktruther, February 13, 2009 at 10:13 am Link to this comment

Centalism is mediaspeak for the policies of the right wing, which is supported by both wings of the Dem-Gop leadership.  And of course by Dionne and the other pseudo-progressives.  The historical frunction of Obama is to make Bushite policies Centalist ideologically, to draw the support of the Democrats Under Presidential Enchantment (DUPEs).

The DUPEs are opposed by the White Old Rpublican Men (WORMs).  Centralism is consequently the outcome of the DUPE-WORM coalition.  With Obama Patriotically placing himself in the center.  Wile the American people are increasingly being treated like the Palestinian people, left to fend for themselves.

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By wildflower, February 13, 2009 at 12:25 am Link to this comment

On leadership, “appearances” and “how things look”. . .

If the leadership in capitalistic countries like Japan, Germany, Switzerland, United Kingdom and Taiwan can provide affordable healthcare systems for their citizens, why can’t the leadership in the U.S. do it?

http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/countries/

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By SteveK9, February 12, 2009 at 11:45 am Link to this comment

All so true.  I hope these lessons don’t take TOO long.  The next one to learn—-the major US banks are insolvent and must be nationalized and then reorganized to minimize the cost to the taxpayer.

How to sell it?  Fire every executive above a certain level.

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Tony Wicher's avatar

By Tony Wicher, February 12, 2009 at 11:00 am Link to this comment

Re Eric L. Prentis, February 12 at 9:45 am

Your proposal sounds right on target to me. But I kind of like the idea of nationalizing banks as giving government the right kind of control over the economy. Get rid of these greedy idiot bankers that screwed up and find some smart ones who will make sound investments. I’m sure there are plenty of those around. Pay them a good salary, no bonuses, no golden parachutes, and let them go ahead and act as good bankers, lending money to businesses and consumers just as they do now at a government-regulated rate of interest. This will provide an environment where “free enterprise” can flourish while being constrained to serve ends beneficial to society as a whole rather than to increase the wealth of bankers.

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By Eric L. Prentis, February 12, 2009 at 10:45 am Link to this comment

Progressives don’t advocate nationalizing US banks as the neocon Republicans will have you believe. We are saying that a small percentage of the 8,000 US banks are currently insolvent and before their managers do more grievous harm to the economy, these bankrupt banks should fall under temporary receivership, be reorganized and then resold to private interests. Stop taxing the poor to bailout the incompetent, rich, bonus-baby Wall Street bankers!

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Tony Wicher's avatar

By Tony Wicher, February 12, 2009 at 10:44 am Link to this comment

There is a fundamental philosophical difference between the center and the mean. Check out Aristotle’s “Ethics”. The mean is the virtue that lies between the extremes, a balance point, or a point of integration. In Chinese philosophy this is called the Tao. A statesman such as Obama seeks the mean, not the center.

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Leefeller's avatar

By Leefeller, February 12, 2009 at 7:48 am Link to this comment

Boggy man socialism has been the meat and potatoes of the corporate elite, with a salting of Bolshevik and communism for flavor.  Now Fascism, we will call it something else, for peering hard into a mirror is uncomfortable. 

Ignorance makes it all work like a charm.

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