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Marking Ezra Klein’s Beliefs to Market

Summary:
A tweet sent me to this column Ezra Klein wrote long, long ago in a city far away. In the heady day of April 8 2021, Klein discussed Joseph Biden’s radicalism and contrasted it with Barack Obama’s caution. I remember. Biden had just signed the American Rescue plan and was proposing what would be called the infrastructure bill and the Inflation Reduction Act (ne’ Build Back Better). “I covered him in the Senate, in the Obama White House, in the Democratic Party’s post-Trump reckoning. Biden was rarely, if ever, the voice calling for transformational change or go-it-alone ambition. But you’d never know it from his presidency. “ Since then, the sausage has been Machine-made and it seems long. long ago. However, Klein is smart enough that his

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A tweet sent me to this column Ezra Klein wrote long, long ago in a city far away. In the heady day of April 8 2021, Klein discussed Joseph Biden’s radicalism and contrasted it with Barack Obama’s caution. I remember. Biden had just signed the American Rescue plan and was proposing what would be called the infrastructure bill and the Inflation Reduction Act (ne’ Build Back Better).

“I covered him in the Senate, in the Obama White House, in the Democratic Party’s post-Trump reckoning. Biden was rarely, if ever, the voice calling for transformational change or go-it-alone ambition.

But you’d never know it from his presidency. “

Since then, the sausage has been Machine-made and it seems long. long ago. However, Klein is smart enough that his thoughts remain interesting. Briefly

  1. Democrats now know that it is impossible to compromise with Republicans and so they negotiate only with each other
  2. 20 something and 30 something aids are very influential (they write the bills) and kids these days are way to the left of kids those days.
  3. Biden doesn’t listen to “economists”
  4. Biden is a politician not a statesman and Americans are pissed.

I think all stand up (except note that I quote him naming some guys “economists” and will actually defend the profession.

I blog mainly because I think he omitted a 5th explanation of Democrats attempting more with a Senate caucus of 50 than with a caucus of 58 then 59 then 60 then 59. Oddly, Klein does not focus on the Senate when discussing the long serving Senator Biden and the short serving Senator Obama and the husband of Senator to be Clinton. I think if asked, he would accept the 5th partial explanation. The point is that the Senate is an absolutely key veto point (as made clear again by the cutting of BBB down to the IRA). This was very clear already in 2009.

So let’s focus on the Senate. Why are 50 Senators will and able to do about as much as 60 ? Why, in particular, did Obama and Reid aim for 60 and cloture and not use the reconciliation process (before the election of Scott Brown made it absolutely necessary for the second ACA) ?

I think that one just has to focus on the reconciliation process to understand why 2021 was so different from 2009. I have a guess (maybe ignorant). I think that the reconciliation progress gives a central role to the chairman of the Senate budget committee and the big change is not Obama to Biden but Kent Conrad to Bernard Sanders. Notably Conrad is a conservadem who really really sincerely hated deficits. When first elected, he swore to not run for reelection if the deficit weren’t eliminated. He kept that promise (and later returned to the Senate to complete the term of a colleague who passed away). There may have been no more than one person who really cared about the deficit, but there was one. It is certainly a fact that Democrats had almost no access to the reconciliation process. It turned out to be important (at the very last minute) that there was a budget resolution which said that health care financing should be reformed. But after that there were no budget resolutions, so no possibility of reconciliation bills. There is no way that Conrad would have allowed the ARP (and I think (perhaps incorrectly) that he could block it). In contrast Sanders was willing to spend $ 6 Trillion on building back better (and also as always willing to compromise and spend 3 billion on the IRA).

More generally, I think there was a blocking coalition in the 110th Senate which prevented action even more radical than the ARRA and the ACA (for one thing it blocked the climate Cap and Trade bill which passed the House). This coalition consisted of 42 then 41 then 43 Republicans, Most of the roughly 15 Democratic Senators from red states (not including Sherrod Brown and Tom Harkin). the overlapping set of conservadems (and Joe Lieberman) and moderate Democrats *and* critically Senate traditionalists who would not consider nuking the filibuster and were reluctant to use the reconciliation process except to reduce budget deficits.

Biden had to deal with Manchin and Sinema (or rather beg them to tell him what to do). Obama had to deal with Ben Nelson, Lieberman, Baucus, Conrad, Specter, Landrieux, Lambert Lincoln, Pryor, McCaskill, Bill Nelson (moderate to conservadem)

*and* Byrd, Levin, Feinstein, Jeffords, who were dedicated to the traditions of the Senate (Jeffords has learned and I think Feinstein now does what her aids tell her to do).

So that was my point (if any). I do want to keep typing.

One obvious thing is way back in April 2021 Klein was contrasting BIden’s ambitions with Obama’s achievements. Things look quite different now. He does not consider Obama’s policy proposals which were blocked by the Senate.

Finally “economists”. Here Klein is actually a bit sloppy. He wrote “Multiple economists, both inside and outside the Biden administration, told me that this is an administration in which economists and financiers are simply far less influential than they were in past administrations.” emphasis mine. Klein also lists “economists” who had a lot of influence on Clinton and Obama “there is nothing like the axis of influence held by Summers, Tim Geithner and Peter Orszag at the dawn of the Obama administration, or that Robert Rubin and Summers held in the Clinton administration. Janet Yellen, the Treasury secretary, holds real weight in internal discussions, and so do some others, but economists are one of many voices at the table, not the dominant voices.”

I define “economists” to be people who publish in the peer reviewed economics literature. By that criterion, Summers and Yellen are economists. Rubin is a banker, Geither was a bank regulator, and I really don’t know what Orszag used to do (he is now a financier). They are different.

Also Klein does not mention Alan Greenspan. Greenspan had enormous power (much more than Summers and Rubin combined — Clinton approached him on bended knee).

Summers was not always a voice against radical policy. He did refuse to transmit Romer’s highest Trillion dollar option for that ARRA to Obama (explicitly arguing politics in what was supposed to be the national economics council) but afterwards he repeatedly argued for more stimulus. Summers advocated financial deregulation, but Rubin opposed it (and inquired about a Tobin tax). None of the economists are exactly mainstream.

Robert Waldmann
Robert J. Waldmann is a Professor of Economics at Univeristy of Rome “Tor Vergata” and received his PhD in Economics from Harvard University. Robert runs his personal blog and is an active contributor to Angrybear.

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