Dana Milbank is really excited as he tells readers in the first sentence of his column:
"For the first time in my adult lifetime, I am really proud of President Obama."
Wow, and why is Mr. Milbank so excited? Has President Obama stood up to the Wall Street banks, the health insurance industry, the pharmaceutical companies, or the oil industry? Well, not exactly, Milbank tells us that: "I'm proud that he has finally stood firm against the likes of Peter DeFazio."
For those who don't know of him, Peter DeFazio is a 12 term Congressman from Oregon. He has never held a leadership position in the party and has not played an important role in designing any major piece of legislation. (In other words, he does not have much power.) He has also backed President Obama on all the key items in his legislative agenda.
But, Mr. DeFazio has criticized President Obama's tax deal with the Republicans. This got President Obama angry and he told DeFazio and his types to get lost. That passes for being tough at the Washington Post.
Milbank is also impressed that:
"That display [telling the liberals to get lost] was coupled with some hardball politics (Larry Summers's warning that rejecting the package would return the economy to recession)."
That's really cool. Larry Summers told the liberals that if this deal does not got through that the economy would go into a recession. How tough can you get?
Does Larry Summers have a model that shows the economy will fall back into recession without this deal? This certainly is not the forecast that the administration is using in its budget modeling. This modeling projects 4.3 percent as the growth rate for 2011. This modeling assumes the continuation of the Bush tax cuts, a continuation of UI benefits, and a couple of other items that would not happen if the Obama-Republican package and no subsequent language is approved. However, there are no (as in zero, nada, not any) models that show the items assumed in the President's budget projections, which may not happen absent this deal, boosting the growth rate by 4.3 percentage points relative to a situation without these items.
This means that when Larry Summers was playing hardball and telling Congressional Democrats that failure to the pass the compromise would lead to a recession he was saying something that is not true. Outside of polite Washington circles this is known as a "lie." (It is also worth noting that Larry Summers has a proven track record of being wrong about almost every major macroeconomic development in the last 15 years, the stock bubble, the housing bubble, the over-valued dollar, and financial deregulation.)
Apparently, at the Post, saying things that are not true to advance a political agenda is something to be applauded.
[Addendum and apology to readers. I foolishly accepted Milbank's characterization of Summers' remarks rather than reading the remarks myself.
Summers did not say that rejection of the budget deal would throw the economy back into recession as Milbank claimed. Summers said that rejection of the deal would increase the risk of recession. This claim is true, since the deal would be a net stimulus to the economy if enacted. If the economy does not get this stimulus, then it would be weaker and therefore at greater risk of recession. So, Summers statement is true; it is Milbank's inaccurate representation of his position that would be a lie.]
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