If you are looking not only for clues into Barack Obama’s character but for a definition of what his presidency will mean to the country, then the speech on fiscal policy that he delivered at George Washington University the Wednesday before last is the most significant one he has ever given. It is, in its own way, an astonishing document, alive with the themes that undergirded his Philadelphia speech on race and his Nobel Prize acceptance, on the tragic enmeshment of American limitations and American strength. Obama was responding mostly to the Republican budget plan, and he understood exactly what its author, Representative Paul Ryan, had in his sights: “This vision,” Obama said, “is less about reducing the deficit than it is about changing the basic social compact in America.”
And yet, having defined the fight so starkly, Obama delivered a plea for compromise. He ended a stirring defense of the welfare state by explaining his plans to gut it. Then he said that even this proposed $2 trillion cut in government spending was only a starting point for negotiation: “I don’t expect the details in any final agreement to look exactly like the approach I laid out today,” he said. “This is a democracy; that’s not how things work.” There were notes of deference, and passivity: If Obama believed that his vision of society was at stake, why place it so squarely on the partisan bargaining table—or why not at least begin with a stronger gambit? This was, at any rate, the point of view of one particular strain of liberal reaction, whose position was summed up with poignant resignation by New York Times columnist Paul Krugman. “I could live with this as an end result,” he wrote. “If this becomes the left pole, and the center is halfway between this and Ryan, then no.”
For the first two years of the Obama administration, Krugman has been building, in his columns and on his blog, not just a critique of this presidency but something grander and more expansively detailed, something closer to an alternate architecture for what Obamaism might be. The project has remade Krugman’s public image, as if he had spent years becoming a chemically isolate form of himself—first a moderate, then an anti-Bush partisan, and now the leading exponent of a kind of liberal purism against which the compromises of the White House might be judged. Krugman’s counterfactual Obama would have provided far more stimulus money and would have nationalized Citigroup and Bank of America. He would have written off Republicans and worked only with Democrats to fashion a health-care reform bill that included a so-called public option. The president of Krugman’s dreams would have made his singular long-term goal the preservation of the welfare state and the middle-class society it was designed to create.
This purism is not a role Krugman is altogether comfortable with, but it is one he has sought: His blog is titled The Conscience of a Liberal. He uses it as a kind of workroom for his column, and it is now, according to Technorati, the most popular single-author blog online—a more statistically rigorous counterpart to Rachel Maddow’s show and the Huffington Post. The comment section has become a repository for a certain form of liberal anguish, and a community unto itself: “His campaign promised a better, more equitable America. Those who believed him feel betrayed,” wrote one commenter in regard to a recent column titled “The President Is Missing.”And another: “Come on, Professor Krugman, will you lead the people out?”
In December, Krugman and five other liberal economic thinkers (Joseph Stiglitz, Robert Reich, Jeffrey Sachs, Alan Blinder, and Larry Mishel) were invited to the Oval Office for a 90-minute off-the-record audience with the president. It was a month after the midterms, and many progressives were worried that even the modified liberalism of the administration’s first two years would dissolve in a new spirit of conciliation with the ascendant right. The economists present understood the meeting, one of them says, as the moment when Obama talked to the left.”
The economists sat ringing Obama—two Nobelists, a former Labor secretary, and a former vice-chairman of the Fed. Not a Gentile among them, Krugman noticed, but “an amazingly high proportion of beards.” To begin the meeting, Obama asked each of his guests to identify the most pressing economic issue. Five of the economists emphasized the same problem. Unemployment, they said, was so high that the recovery might never get out of first gear. It was not the time for austerity; the president should focus on short-term job creation and turn to the deficit later. But the other economist, Sachs, the director of the Earth Institute at Columbia, held out. Concentrate on the long-term outlook, he told the president.
For Krugman, the path forward was perfectly clear: The only way to avert a deepening crisis was massive Keynesian stimulus. During the nineties in Japan, he had seen the nightmare alternative. Officials in Tokyo, faced with a very similar scenario, had done too little to stimulate the economy, again and again, and as their nation’s recovery stumbled, they found they were toggling an unplugged joystick. And yet now, after more than two years of economic calamity at home, the liberal solution again wasn’t getting through: Krugman couldn’t even build a consensus among six like-minded economists, let alone convince a Democratic president. “I have no idea what Jeff was talking about,” he says.