The Grappler

by Russ Roberts on May 13, 2009

in Politics

From USA Today:

For a guy grappling with recession, bank and auto bailouts, and
record-setting budget deficits, President Obama also has a longer-term
headache: The worsening financial condition of Social Security and Medicare as the Baby Boomers age.

Grappling? In the movie version, maybe Mickey Rourke can play the President. Grappling? That makes it sound as if the President has all these vipers and snakes and Rouses surrounding and attacking him and all over him that he as to fend off. Grappling? Usually you grapple with stuff that surprises you, not stuff you did to yourself. You can't blame Obama for the recession or the bank bailouts and maybe even the auto bailout. Those started on Bush's watch. But the record-setting deficits? Those are Obama's idea. He's not grappling with that problem. He created that problem, certainly in the dimensions that we're talking about. It's not one of his short-term "headaches." A headache is what usually happens out of the blue. But if a guy is banging his head against the wall, you don't want to say that one of his short-term problems is a headache. The short-term problem is that he's banging his head against the wall.

Be Sociable, Share!

Comments

comments

Add a Comment    Share Share    Print    Email

{ 50 comments }

Daniel Kuehn May 13, 2009 at 12:01 pm

RE: "But the record-setting deficits? Those are Obama's idea. He's not grappling with that problem. He created that problem, certainly in the dimensions that we're talking about."

I googled a random, common medication – Ibuprofen. One of the possible side effects of Ibuprofen is "headaches". If you administer yourself Ibuprofen because you need to take it for another ailment, and then suffer a headache as a result – you may have caused it by your choices, but does it make the resulting any less real or less deserving of sympathy?

Give me a break, Russ. You're just looking for something to be pissed off about. They aren't running deficits for the hell of it. Maybe you think the deficits are ill-advised. Maybe it's worth addressing that. But you sound pretty ridiculous making the "banging your head against the wall" analogy – as if he's just doing this for fun.

If you want to be relevant to issues like the deficit, at least be realistic about why these deficits are being run up.

Daniel Kuehn May 13, 2009 at 12:02 pm

*the resulting headache any less real

Lee Kelly May 13, 2009 at 12:06 pm

Did Obama create the problem, or did the political process–the institutional incentives–create the problem? If Obama refused to play the game of politics, would he have been elected? Would he be popular? Would someone else, someone with less dignity and honesty, be president instead?

I submit that Obama would be no more likely to be president today than Ron Paul had he not pursued such policies, and someone else, perhaps Hillary Clinton, would be there instead doing exactly what Obama was unwilling to.

Superheater May 13, 2009 at 12:07 pm

There's a reason that publication is called
the "useless today" and its circulation is
driven by its use as a gratuity by hotels.

Ignore it, it might follow some other mastheads.

Martin Brock May 13, 2009 at 12:22 pm

That's an admirable rant, but I suppose the deficits are all about the aging baby boom. Social Security is only the tip of an iceberg atop state pension funds, corporate and union pension funds, insurance companies financing annuities and the rest, including foreign pension funds with much bigger problems than we face in the U.S. These funds need to buy "securities" offering high yields; otherwise, they only hold lots of cash continually losing value.

That's what the mortgage backed security/CDO/CDF debacle was all about really. The demand for these "securities" was all too real. Sure, statesmen enabled some of the risky ventures, but this unprecedented demand for future income streams enabled most of it, and now that considerable doubt surrounds the real value of these "securities", Uncle Sam is selling entitlement to tax revenue like there's no tomorrow to make up for it.

Right?

The next act in this play occurs when Bernanke must sell these securities at firesale prices to tame the inflation he's stoking now. He'll soak up all of the cash he's been shoving down our throats by selling these securities, and we'll realize only then that while he holds the entitlement to tax revenue, we don't really bear the tax burden, only the inflation risk. We bear the tax burden only when he sells the entitlement to capitalists in the "private sector".

Martin Brock May 13, 2009 at 12:28 pm

The more things change, the more they stay the same, and the more things stay the same, the more politicians say they're changing.

tw May 13, 2009 at 12:31 pm

Russ,

Don't be too quick to hold Obama blameless for the recession and the initial auto/bank bailouts. When he was a Senator, he voted for all those bills; he even left the campaign trail a la McCain to return to DC to vote for/push for that awful first stimulus bill.

John May 13, 2009 at 12:44 pm

A tragedy is when the hero of the story is brought down by their own frailty.

I suppose Obama could be the hero of this story, and his frailty would be his eagerness to please.

His eagerness to please has resulted in this massive expansion of government and of debt, and will eventually be his undoing.

I just hope he doesn't take the country down with him.

Jeremy May 13, 2009 at 12:59 pm

I suppose Obama could be the hero of this story, and his frailty would be his eagerness to please.

Obama can't help but be the hero of this tragedy. We're talking about a guy with a God complex that is out of control; the very epitome of all that I hate about intellectuals. From his mighty temple to himself built for last year's DNC to the very remaking of the United States in His image, Obama will be the hero of this tale, regardless of the outcome. Don't you get it?

OregonGuy May 13, 2009 at 1:07 pm

Martin hit it.

How can there be a shift without a turning point? And where, within the rhetoric of the dominant impluse in modern American politics is there talk of such a turning point?
.

I_am_a_lead_pencil May 13, 2009 at 1:46 pm

"One of the possible side effects of Ibuprofen is "headaches". If you administer yourself Ibuprofen because you need to take it for another ailment, and then suffer a headache as a result – you may have caused it by your choices, but does it make the resulting any less real or less deserving of sympathy?"

He didn't simply take the Ibuprofen. Instead, he:

1. Admonished others who said that he shouldn't be taking it.

2. Acted so quickly (and encouraged this haste) that a full reading "the bottle" was nearly impossible.

So, yes – he is much less deserving of sympathy.

dg lesvic May 13, 2009 at 1:56 pm

What do you call it when you're banging your head against Daniel Kuehn?

Prof Roberts hit the nail on the head, but, unfortunately, Daniel's head, which couldn't be penetrated by an atomic powered harpoon.

Daniel Kuehn May 13, 2009 at 2:06 pm

I_am_a_lead_pencil:

Of course I disagree with that re-hash of my analogy, but I'm glad you're at least accepting it at face value. Russ's initial post acts like Obama is running deficits for the hell of it. That of course is ridiculous – there is a purpose to them. Maybe he should have listended to people who said "it's not worth the side effects", maybe it wasn't worth it. That is worth debating. But I appreciate that you're at least running with the analogy. That is significantly more accurate than Russ's intiial framing of the issue.

dg lesvic-
RE: "Prof Roberts hit the nail on the head, but, unfortunately, Daniel's head, which couldn't be penetrated by an atomic powered harpoon."

Long time no see (my fault I know)!

Do you have any reason for saying this than just that you don't like hearing my points and you don't appreciate Obama's budget? I mean – do you actually think it's worth presenting the issue in the way Russ does – as if Obama ran deficits in a vaccuum with no purpose or plan? That seems disingenuous to me – maybe you can explain why it's not.

Notice I'm not saying you have to accept that it was the right choice on Obama's part. But comparing it to banging your head on a wall is a little juvenile and indefensible on Russ's part.

John May 13, 2009 at 2:22 pm

Welcome to Cafe Kuehn.

John May 13, 2009 at 2:26 pm

Or should I say Welcome to Daniel Kuehn's chat room.

jl May 13, 2009 at 2:50 pm

Daniel is right. There was a purpose. It was a transparent payoff to the people who got him elected. He called it a stimulus in order to give it a patina of legitimacy.

There. Now that that's done, does anyone believe Obama's grappling with it?

K Ackermann May 13, 2009 at 2:55 pm

I'm not sure if I have a headache. I wish they had a test for it.

Daniel Kuehn May 13, 2009 at 2:59 pm

John -
RE: "welcome to cafe kuehn"

It's worth noting that (until this post) I've made the same number of comments on this post as you have.

You're just mad I don't nod my head in agreement with everything that Russ and Don says, and unlike muirgeo I can actually put together a coherent argument when I do disagree.

dg lesvic May 13, 2009 at 3:00 pm

Daniel,

You wrote,

"Long time no see (my fault I know)!"

I forgive you.

I_am_a_lead_pencil May 13, 2009 at 3:02 pm

Daniel,

The asinine wording of the article suggests that he is "grappling" with the very budget busting gremlins which he himself unleashed – "bank and auto bailouts."

Russ playfully stated that:
"if a guy is banging his head against the wall, you don't want to say that one of his short-term problems is a headache."

i.e. Obama caused at least one of the problems (high deficits) which now necessitate "grappling". There is a viewpoint which says that the problems did not need to be solved, and the head banging (ibuprofen taking if you feel better about it) need not take place. If you were sympathetic to this viewpoint, you might view Obama's head banging (deficit spending) to be needless self-inflicted pain.

Must it even be explained that agreement with his rant necessitates a view that the stimulus wasn't necessary?

Daniel Kuehn May 13, 2009 at 3:13 pm

I_am_a_lead_pencil -
I know Russ doesn't think it's necessary – that's totally legit and I'm not begrudging him that opinion. I'm just saying he's forfeiting the real debate by pretending that this was willful masochism, which it clearly wasn't even if disagreed with the stimulus! :)

BoscoH May 13, 2009 at 3:46 pm

Daniel, when little old ladies cry because they never thought they'd see a black President, it's cute and excusable. It's kinda like when I bought my first 4 GB SD card. Even 8 years ago, I would never have dreamed! But when anyone under 40 feels about Obama the way you say you feels, it's a man crush.

That man crush attitude is precisely what Russ is mocking in his post. It's only a man crush attitude that can label what Obama is doing "grappling". And look at Daniel's response. He makes Russes point better than Russ. You'd think Mark Cuban had told Daniel's mom that he's a thug.

Lee Kelly May 13, 2009 at 3:48 pm

Daniel,

A short rant by Russ on his own blog, is hardly "forfeiting the real debate", whatever that means.

I_am_a_lead_pencil May 13, 2009 at 3:57 pm

"…by pretending that this was willful masochism, which it clearly wasn't"

A bit more thought leads me to see how off the mark your ibuprofen analogy was.

The analogy really only works if you have perfect knowledge that taking the pill will definitely give you a headache (create a deficit) while it may or may not relieve your back pain. If you view your back pain as bad enough, you might be willing to put up with the headache on the outside chance your back improves.

This is what Obama willfully did – with full knowledge of a deficit headache to come. He is now "grappling" with an awful headache. Even worse, he appears anxious to take another headache inducing pill – with the hope that it will help his sore knee (health care).

Russ isn't pretending that Obama willfully brought it onto himself – he did.

muirgeo May 13, 2009 at 4:13 pm

"But the record-setting deficits? Those are Obama's idea." RR

From CBO;

$166 B lost on 2009 from decreased reciepts
$180 billion TARP bill on 2009 budget
$240 billion Fred/Fan bailout on 2009 budget
? billion lost revenue from Bush tax cuts on 2009 budget
? billion on war spending on 2009 budget.

Obama's idea???? Whatever.

Daniel Kuehn May 13, 2009 at 4:14 pm

BoscoH -
RE: "But when anyone under 40 feels about Obama the way you say you feels, it's a man crush."

Yes, CLEARLY my general approval of a broadly accepted macroeconomic policy response and my insistence that it is not akin to banging your head against a wall is tantamount to a man crush! Clearly!

"Grappling" just means he's dealing with these issues. How is that description an overflow of sappines and pathos?

Lee Kelly -
RE: "A short rant by Russ on his own blog, is hardly "forfeiting the real debate", whatever that means."

You're probably right on that one. Well then put it this way – I was just trying to point out that it was a rant and it didn't make sense at all.

I_am_a_lead_pencil -
RE: "This is what Obama willfully did – with full knowledge of a deficit headache to come. He is now "grappling" with an awful headache. Even worse, he appears anxious to take another headache inducing pill – with the hope that it will help his sore knee (health care)."

Fine – then substitute it for a chemotherapy analogy, which is guaranteed to hurt like hell, but no guarantee of killing the cancer. It's still not the same as banging your head against a wall! There is still a purpose to these deficits besides self-flaggelation!

Daniel Kuehn May 13, 2009 at 4:18 pm

muirgeo -
RE: "Obama's idea???? Whatever."

Don't blow this one for me muirgeo!!! I've already gotten Lee Kelly to admit the original post was a rant!!

The deficits ARE Obama's. They're bigger than Bush's, he owns them, that's just how it is. And they do worry me.

But the point is – when is it appropriate to run up very large deficits?? In my mind, it's appropriate for wars that must be fought, for a general countercyclical spending policy… and not much else honestly. Obama is running deficits (which are admittedly risky) for the right reasons (or because he can't stop the wrong reasons cold-turkey). Bush ran them up to a large degree for the wrong reasons. That should be the argument, muirgeo – not that the deficits were all Bush's fault.

Lee Kelly May 13, 2009 at 4:27 pm

I was just trying to point out that it was a rant and it didn't make sense at all.

No, it did make sense. The analogy did not work entirely, but that's because it's an analogy, (if it worked entirely, then it wouldn't be an analogy!).

but was Russ being a little hypocritical? Perhaps. Russ criticised the USA today article for its misleading connotations, but his own analogy had misleading connotations too. Does it matter? Not really.

Daniel Kuehn May 13, 2009 at 4:36 pm

Lee Kelly -
RE: "No, it did make sense. The analogy did not work entirely, but that's because it's an analogy, (if it worked entirely, then it wouldn't be an analogy!)."

Give me a break – the analogy was the whole point!

Sam Grove May 13, 2009 at 4:52 pm

Daniel's head, which couldn't be penetrated by an atomic powered harpoon.

Possibly because he's had training in economics.

I_am_a_lead_pencil May 13, 2009 at 4:56 pm

"There is still a purpose to these deficits besides self-flaggelation!"

Actually – the chosen action was precisely self-flagellation! He saw his own flogging as a reasonable attempt to cure what ails him through the medical practice of 19th century bloodletting!

What were his team of Doctor's thinking by recommending such a thing?!

I_am_a_lead_pencil May 13, 2009 at 4:58 pm

Oh….they were Keynesian Doctors.

Daniel Kuehn May 13, 2009 at 5:07 pm

I_am_a_lead_pencil -

Wait a minute… if Keynesianism is a 19th century perscription then what century is the weird Cafe Hayek distortion of Smith et al. from???? The 20th or 21st?!?!?

Daniel Kuehn May 13, 2009 at 5:07 pm

goodnight all

Incuhed May 13, 2009 at 5:30 pm

Obama may have exacerbated the deficit problem with his Keynesian sympathies and 'smarter government' dreams, but he is well aware of the potential, if not inevitable, downside to floating such large sums of borrowed resources. Perhaps he is not "Grappling" with the record deficits in the context of an unforseen event, but rather the implications of such a major decision risking a net negative result? I doubt it. Nevertheless Russ is being a bit too critical here.

On a side note, headaches for me come fairly consistently – either Saturday or Sunday morning.

dg lesvic May 13, 2009 at 6:34 pm

Daniel's head, which couldn't be penetrated by an atomic powered harpoon.

Possibly because he's had training in economics.

Posted by: Sam Grove | May 13, 2009 4:52:00 PM

I'm afraid you're right, that, for the most part, what passes for training in economics today is really in anti-economics, top-down stuff, with amateurs, like children, to be seen and not heard.

So we should be especially grateful for the respectful treatment as well as real, open economics and indispensable guidance we get here at Cafe Hayek, for it's a rare thing today.

dg lesvic May 13, 2009 at 6:36 pm

We'd be lost without it!

Mike Farmer May 13, 2009 at 7:10 pm

Doctor's recommendation — take two irony pills and call in the morning.

yet another Dave May 13, 2009 at 7:22 pm

DK protestations notwithstanding, Russ's post clearly makes sense – nothing even slightly difficult there. Some reactions to criticism of The Annointed One are telling. As to the spending spree, we all know the stated reasons for the binge, but can anybody be so stupid as to think it will on net make things better? Really?

Right now I'm grappling with two possibilities. Either Obama is (1) profoundly stupid, or (2) very clever and just plain evil.

I just don't buy the story that he is trying to do the right thing – it doesn't even begin to pass the stink test (the guy is a Chicago politician after all). The annointed one is definitely way beyond arrogant enough to be blind to the profound stupidity of his actions. But, by many accounts he is an intelligent man, so maybe option 2 is a better fit… (grappling continues)

Gil May 13, 2009 at 8:30 pm

"We're talking about a guy with a God complex who is out of control" – Jeremy.

In other words, a Democrat got elected as President. Or, you got used to G.W.B's not-very-good Eenglish ad libbing which makes him look stupid yet for some reason he actually prepared his Spanish speeches and spoke them rather well (consult Jay Leno for more). Heaven forbid, B.H.O. for actual thinking you have to be a good English speaker if you're gong address million of people whose primary language is English.

muirgeo May 13, 2009 at 8:43 pm

Don't blow this one for me muirgeo!!! I've already gotten Lee Kelly to admit the original post was a rant!!

The deficits ARE Obama's. They're bigger than Bush's, he owns them, that's just how it is. And they do worry me.

Posted by: Daniel Kuehn

Yeah but I just outlined ~ $800 billion of it was handed to his 2009 budget from things that happened before he was in office.

Facts are important to get out there.

Sam Grove May 13, 2009 at 8:56 pm

Obama is running deficits (which are admittedly risky) for the right reasons (or because he can't stop the wrong reasons cold-turkey). Bush ran them up to a large degree for the wrong reasons. That should be the argument, muirgeo – not that the deficits were all Bush's fault.

Ah, but there's a hint of the real problem, if you have a government with the power to run huge deficits for the "fight" reason (debatable), it is inevitable that huge deficits will be run for wrong reasons.

It's not like voters are steering the ship of state with their well-informed votes.

Rui May 13, 2009 at 10:11 pm

Professor Roberts, I took the AP Composition test today and there was an excerpt of you commenting on the Space Program in the synthesis section of the test.

I smiled and wrote an exclamation mark next to it. lol.

S Andrews May 13, 2009 at 11:09 pm

The troll is still here?

S Andrews May 13, 2009 at 11:09 pm

The troll is still here?

BoscoH May 13, 2009 at 11:50 pm

Professor Roberts, I took the AP Composition test today and there was an excerpt of you commenting on the Space Program in the synthesis section of the test.

I can imagine how the question was worded… Most people agree that the Space Program is an important symbol of national greatness and accomplishment. However, Professor Russ "Darth Vader" Roberts of George Mason University questions the historical cost/benefit ratio of the program. Write a composition about why Professor Roberts' parents must've secretly hated him.

Lee Kelly May 14, 2009 at 12:04 am

Our political leaders want to feel like big men, so they force soaring erections into the sky for all to see in an explosive release of taxpayer funds.

It's just like when some animals display their big penis in public for the ladies, except, of course, such animals are civil enough to not force taxpayers to foot the bill.

Sam Grove May 14, 2009 at 1:10 am

The portion cited by professor Roberts gives the impression that Obama is taking on these issue single handed.

Reminds me of The Pepsi Syndrome.

S Andrews May 14, 2009 at 2:44 am
S Andrews May 14, 2009 at 2:48 am

http://www.youtube.com/watch?v=c5uJgG05xUY

Link didn't go through in the previous comment. So trying again.

Previous post:

Next post: