Monday, December 20, 2010

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December 19, 2010
When Zombies Win
By PAUL KRUGMAN

When historians look back at 2008-10, what will puzzle them most, I believe, is the strange triumph of failed ideas. Free-market fundamentalists have been wrong about everything — yet they now dominate the political scene more thoroughly than ever.

How did that happen? How, after runaway banks brought the economy to its knees, did we end up with Ron Paul, who says “I don’t think we need regulators,” about to take over a key House panel overseeing the Fed? How, after the experiences of the Clinton and Bush administrations — the first raised taxes and presided over spectacular job growth; the second cut taxes and presided over anemic growth even before the crisis — did we end up with bipartisan agreement on even more tax cuts?

The answer from the right is that the economic failures of the Obama administration show that big-government policies don’t work. But the response should be, what big-government policies?

For the fact is that the Obama stimulus — which itself was almost 40 percent tax cuts — was far too cautious to turn the economy around. And that’s not 20-20 hindsight: many economists, myself included, warned from the beginning that the plan was grossly inadequate. Put it this way: A policy under which government employment actually fell, under which government spending on goods and services grew more slowly than during the Bush years, hardly constitutes a test of Keynesian economics.

Now, maybe it wasn’t possible for President Obama to get more in the face of Congressional skepticism about government. But even if that’s true, it only demonstrates the continuing hold of a failed doctrine over our politics.

It’s also worth pointing out that everything the right said about why Obamanomics would fail was wrong. For two years we’ve been warned that government borrowing would send interest rates sky-high; in fact, rates have fluctuated with optimism or pessimism about recovery, but stayed consistently low by historical standards. For two years we’ve been warned that inflation, even hyperinflation, was just around the corner; instead, disinflation has continued, with core inflation — which excludes volatile food and energy prices — now at a half-century low.

The free-market fundamentalists have been as wrong about events abroad as they have about events in America — and suffered equally few consequences. “Ireland,” declared George Osborne in 2006, “stands as a shining example of the art of the possible in long-term economic policymaking.” Whoops. But Mr. Osborne is now Britain’s top economic official.

And in his new position, he’s setting out to emulate the austerity policies Ireland implemented after its bubble burst. After all, conservatives on both sides of the Atlantic spent much of the past year hailing Irish austerity as a resounding success. “The Irish approach worked in 1987-89 — and it’s working now,” declared Alan Reynolds of the Cato Institute last June. Whoops, again.

But such failures don’t seem to matter. To borrow the title of a recent book by the Australian economist John Quiggin on doctrines that the crisis should have killed but didn’t, we’re still — perhaps more than ever — ruled by “zombie economics.” Why?

Part of the answer, surely, is that people who should have been trying to slay zombie ideas have tried to compromise with them instead. And this is especially, though not only, true of the president.

People tend to forget that Ronald Reagan often gave ground on policy substance — most notably, he ended up enacting multiple tax increases. But he never wavered on ideas, never backed down from the position that his ideology was right and his opponents were wrong.

President Obama, by contrast, has consistently tried to reach across the aisle by lending cover to right-wing myths. He has praised Reagan for restoring American dynamism (when was the last time you heard a Republican praising F.D.R.?), adopted G.O.P. rhetoric about the need for the government to tighten its belt even in the face of recession, offered symbolic freezes on spending and federal wages.

None of this stopped the right from denouncing him as a socialist. But it helped empower bad ideas, in ways that can do quite immediate harm. Right now Mr. Obama is hailing the tax-cut deal as a boost to the economy — but Republicans are already talking about spending cuts that would offset any positive effects from the deal. And how effectively can he oppose these demands, when he himself has embraced the rhetoric of belt-tightening?

Yes, politics is the art of the possible. We all understand the need to deal with one’s political enemies. But it’s one thing to make deals to advance your goals; it’s another to open the door to zombie ideas. When you do that, the zombies end up eating your brain — and quite possibly your economy too.

Friday, December 17, 2010

Wall Street Whitewash - NYTimes.com

December 16, 2010
Wall Street Whitewash
By PAUL KRUGMAN

When the financial crisis struck, many people — myself included — considered it a teachable moment. Above all, we expected the crisis to remind everyone why banks need to be effectively regulated.

How naïve we were. We should have realized that the modern Republican Party is utterly dedicated to the Reaganite slogan that government is always the problem, never the solution. And, therefore, we should have realized that party loyalists, confronted with facts that don’t fit the slogan, would adjust the facts.

Which brings me to the case of the collapsing crisis commission.

The bipartisan Financial Crisis Inquiry Commission was established by law to “examine the causes, domestic and global, of the current financial and economic crisis in the United States.” The hope was that it would be a modern version of the Pecora investigation of the 1930s, which documented Wall Street abuses and helped pave the way for financial reform.

Instead, however, the commission has broken down along partisan lines, unable to agree on even the most basic points.

It’s not as if the story of the crisis is particularly obscure. First, there was a widely spread housing bubble, not just in the United States, but in Ireland, Spain, and other countries as well. This bubble was inflated by irresponsible lending, made possible both by bank deregulation and the failure to extend regulation to “shadow banks,” which weren’t covered by traditional regulation but nonetheless engaged in banking activities and created bank-type risks.

Then the bubble burst, with hugely disruptive consequences. It turned out that Wall Street had created a web of interconnection nobody understood, so that the failure of Lehman Brothers, a medium-size investment bank, could threaten to take down the whole world financial system.

It’s a straightforward story, but a story that the Republican members of the commission don’t want told. Literally.

Last week, reports Shahien Nasiripour of The Huffington Post, all four Republicans on the commission voted to exclude the following terms from the report: “deregulation,” “shadow banking,” “interconnection,” and, yes, “Wall Street.”

When Democratic members refused to go along with this insistence that the story of Hamlet be told without the prince, the Republicans went ahead and issued their own report, which did, indeed, avoid using any of the banned terms.

That report is all of nine pages long, with few facts and hardly any numbers. Beyond that, it tells a story that has been widely and repeatedly debunked — without responding at all to the debunkers.

In the world according to the G.O.P. commissioners, it’s all the fault of government do-gooders, who used various levers — especially Fannie Mae and Freddie Mac, the government-sponsored loan-guarantee agencies — to promote loans to low-income borrowers. Wall Street — I mean, the private sector — erred only to the extent that it got suckered into going along with this government-created bubble.

It’s hard to overstate how wrongheaded all of this is. For one thing, as I’ve already noted, the housing bubble was international — and Fannie and Freddie weren’t guaranteeing mortgages in Latvia. Nor were they guaranteeing loans in commercial real estate, which also experienced a huge bubble.

Beyond that, the timing shows that private players weren’t suckered into a government-created bubble. It was the other way around. During the peak years of housing inflation, Fannie and Freddie were pushed to the sidelines; they only got into dubious lending late in the game, as they tried to regain market share.

But the G.O.P. commissioners are just doing their job, which is to sustain the conservative narrative. And a narrative that absolves the banks of any wrongdoing, that places all the blame on meddling politicians, is especially important now that Republicans are about to take over the House.

Last week, Spencer Bachus, the incoming G.O.P. chairman of the House Financial Services Committee, told The Birmingham News that “in Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.”

He later tried to walk the remark back, but there’s no question that he and his colleagues will do everything they can to block effective regulation of the people and institutions responsible for the economic nightmare of recent years. So they need a cover story saying that it was all the government’s fault.

In the end, those of us who expected the crisis to provide a teachable moment were right, but not in the way we expected. Never mind relearning the case for bank regulation; what we learned, instead, is what happens when an ideology backed by vast wealth and immense power confronts inconvenient facts. And the answer is, the facts lose.

Wednesday, December 15, 2010

Epigones of Orgonomy The Incredible History of Wilhelm Reich and his Followers by Joel Carlinsky Wilhelm Reich in 1946—his unusual hair style appears in many photos of him from this period and has not been exaggerated in this drawing. (click to enlarge) In 1957 Wilhelm Reich, famed psychiatrist and “discoverer” of Orgone energy, died in a Federal prison while serving a two-year term for contempt of court. Many people, not least the Food and Drug Administration which had brought charges against him, thought that that was the last anyone would hear of Orgone Accumulators and the rest of Reich’s highly original ideas. They were wrong. Today, 37 years after Reich’s death, Orgonomy, the “science” of the Life Energy, is stronger than ever. The basis of this revival of Reich’s “scientific” and psychiatric theories is a group called the American College of Orgonomy (A.C.O.), based in Princeton, New Jersey. The A.C.O. is composed mostly of psychiatrists who use Reich’s method of psychotherapy, which is called “Orgone Therapy.” The A.C.O. is very far to the right of the political spectrum. The A.C.O. is into a lot more than just scamming a quick buck from gullible patients who have been led to think their sex life will be better if they pay an Orgonomist to fix it. They are also involved in Wilhelm Reich’s method of rainmaking in a big way. Known as “cloudbusting,” this technique was invented by Reich in 1952 and consists of pointing hollow metal pipes at the sky and grounding the other end into water. By aiming the pipes properly, and, according to one recent issue of the Journal of Orgonomy, by having the proper “intent” (whatever that means), the operator can withdraw Orgone energy from the sky and induce rainfall. Wilhelm Reich was a figure unique in 20th century fringe movements. Once regarded as Freud’s most brilliant pupil and probable successor, the courageous anti-Nazi activist parted company with mainstream science when he decided that Pasteur was wrong about spontaneous generation. A few years later Reich “discovered” the cosmic Life Energy which he named “Orgone,” and spent the rest of his eventful life doing research on Orgone energy. The “science” of Orgonomy, which he founded, included medical treatments claimed to be far more effective than anything known to orthodox medicine, meant to neutralize radioactivity; a motor that can run without fuel on free and unlimited cosmic energy; and a technology of weather control that he claimed could save the world from droughts and desertification. The Food and Drug Administration however, did not accept Reich’s medical claims and eventually Reich wound up in Federal prison, where he died. Reich and his theories, however, were resurrected in the late 1960s. Dr. Ellsworth Baker, a psychiatrist who had studied under Reich, founded the American College of Orgonomy in 1967. The college publishes a slick, professional-looking journal called the Journal of Orgonomy. This journal publishes reports on weather control with Reich’s cloudbuster; cancer research with the Orgone Accumulator (which concentrates Orgone energy out of the air); creation of life by means of “Bion” experiments; and their unique form of psychiatric treatment, called “Orgone Therapy.” Political articles of a far right orientation are standard fare, especially attacking “liberals” as mentally ill and therefore a form of social cancer. Most of the 30 or so members of the A.C.O. are psychiatrists. Most of the 4,000 or so people who have donated money to the A.C.O. fundraising campaign ($5,000,000 to date) are patients or former patients. This exploitation of emotionally vulnerable people is facilitated by the fact that Orgone Therapy seems to render the patient more or less permanently emotionally dependent on the therapist. In any case, it is a flagrant breach of ethics for psychiatrists to solicit funds from patients for a cause in which the doctor has an interest. The A.C.O. has a very active outreach program to spread the word. They encourage gift subscriptions of their journal to university libraries. They have a speakers’ bureau. They hold frequent conventions here and abroad, and offer training programs and laboratory courses. Almost all of the people who get involved have had Orgone Therapy or go into Orgone Therapy subsequently; indeed, it is claimed that one cannot do successful work in Orgonomic biology, physics, or meteorology without having had “psychiatric restructuring” by Orgone Therapy. Their theories on medicine, psychiatry, microbiology, physics, biophysics, sociology, politics, meteorology, astronomy, childraising, ancient history, and just about every other subject imaginable are totally at odds with those of establishment science. In spite of this (or because of it) they constantly reiterate the theme that Reich was the greatest genius in history and was persecuted as Christ was; that Orgonomists today are persecuted; that they have great knowledge and wisdom unknown to the rest of humanity (and that cannot be understood or appreciated by those who have not had Orgone Therapy); and that all social and environmental problems can be dealt with only by their enlightened leadership. The Cloud Buster — While running an experiment in which he hoped to neutralize the effects of radiation with orgone energy, Reich observed a gloomy, persistent weather pattern. Since he felt his actions had created the threatening clouds, he invented the cloudbuster to dispel them. Water flowed through the metal cables. It was said to be "powered" by a milligram of orur — radium that had been treated with orgone energy. He claimed that it could both dissipate clouds and attract them. (click to enlarge) The most prominent member of the organization is not a psychiatrist. James Demeo, author of The Orgone Accumulator Handbook, did his M.A. thesis on the Reich cloudbuster at the University of Kansas. He met with some faculty opposition but the degree was granted. He later did his Ph.D. work on a sociological and historical theory that all social problems — yes, all — including war, violence, injustice, patriarchial families, mental illness, environmental destruction, etc., are due solely to droughts and desertification. Dr. Demeo now makes his living doing lectures and workshops on Orgonomy all over the world, selling books and devices related to Orgonomy, and using his cloudbuster to “break droughts.” His “Drought Abatement Outreach Program” has been advertised in midwestern farm journals, and cloudbusting expeditions to bring rain have been paid for by drought-stricken farmers in Montana and elsewhere. Dr. Demeo claims to be responsible for most of the rain that has fallen in California in recent years, although he is silent on the subject of liability for flood damage. He also claims to have made rain in Germany, Greece, Israel, Arizona, and various other places, all of which, he asserts, were in dire need of his services. In fact, he claims, the rapid spreading of deserts threatens to engulf the entire world and can only be fought with cloudbusters, which only he and his associates are qualified to utilize properly. Demeo solicits donations to his “research fund” through a tax-exempt non-profit foundation he has set up. On at least one occasion funds contributed for one purpose seem to have been used for another purpose. He also is a partner in a commercial business venture using the cloudbuster. Currently, he is asking for $300,000 to establish a laboratory in northern California. He just might get it; his mentor and close associate, Dr. Richard Blasband, former President of the A.C.O., got $144,000, $48,000 of it from Lawrence Rockefeller via the Rockefeller Foundation, to do a study designed to prove the Orgone Accumulator violates the Second Law of Thermodynamics. Demeo publishes articles in the Journal of Orgonomy frequently. But he also publishes his own journal, Pulse of the Planet, which documents his weather control activities and energetically denounces anyone who dares to criticize him. He has also published a number of pamphlets as well as the The Orgone Accumulator Handbook, but has not managed to get anything into the refereed scientific journals. He claims otherwise. He also claims expertise in an impressively (and impossibly) large number of fields. In fact, one gets a distinct impression from his resume that if Wilhelm Reich once wrote about it, James Demeo is an expert on it. While much concerned with scientific respectability, Demeo also loses no opportunity to gain exposure to a “New Age” audience. He has been frequently published and interviewed in Wildfire, a magazine put out by the “Bear Tribe Medicine Society,” a new-age type cult of white middle-class converts to Native American religions founded by the late Sun Bear, a medicine man who was criticized by his fellow Indians for mass-marketing their religion and culture to white dilettantes. Demeo has been a teacher at their “Medicine Wheel Gatherings” and has received thousands of dollars in contributions from well-intentioned yuppies who think they are thereby helping the earth by funding his rainmaking work. Another frequent outlet for Demeo’s promotional articles, interviews, and advertising for rainmaking services is Acres USA, a New Age farm journal published in Kansas City, with a circulation of about 10,000 midwestern farmers. Acres mixes radionics machines for improving crop yields and homeopathy for farm animals, with farm-oriented conspiracy theories and support for the Posse Commitatus movement. (The conspiracy is by government, banking, and big business against the farmer.) Some of their readers have hired Demeo to break droughts. “…Reich was solidly convinced that the Food and Drug Administration’s legal case against him was due to a communist conspiracy ordered by the KGB to discredit his work in the United States so Russia could gain a monopoly on Orgonomic science.” Although psychiatry is still the major source of income in Orgonomy, a new organization was recently formed exclusively for cloudbusting. Called the CORE (for Cosmic Orgone Engineering) network, it held a conference in Oregon. Attending was Matt Ryan, former editor of Wildfire, who is now employed by a New Age guru at Mt. Shasta. Mr. Ryan, who seems to have given up being a neo-Indian, was trained in cloudbusting by the late Jerome Eden, author of numerous books and articles in which he argued that hostile UFOs were the cause of droughts, an idea first promulgated by Reich in the 1950s. Also present, but perhaps unlikely to remain active in Orgonomy for much longer, was Dr. Blasband, who has recently become a devotee of a popular faith-healer to whom he is now recommending to his medical colleagues that they send their patients. In his last few years Reich was solidly convinced that the Food and Drug Administration’s legal case against him was due to a communist conspiracy ordered by the KGB to discredit his work in the United States so Russia could gain a monopoly on Orgonomic science. Not surprisingly, many of today’s Reichians are conspiracy buffs of one kind or another. One, James Martin, a publisher and small-press mail order book and magazine distributor, has a regular Reichian-conspiracy column in the conspiracy journal Steamshovel Press, which publishes any and all conspiracy theories, no matter how improbable. Martin, who also publishes his own conspiracy-oriented magazine and book catalog, called Flatland, thinks AIDS is due to bio-logical warfare; in this he differs with his good friend Jim Demeo, who thinks AIDS does not exist and is all a hoax by the government to scare teenagers away from sex. Orgonomy is not confined to the United States. The A.C.O. has held conferences in Germany, France, and Argentina. Orgonomic groups exist in Greece, Israel, Japan, and especially Germany. The Greek and Israeli groups have done cloudbusting under Demeo’s supervision and the German group, which is large, well- funded, and based in Berlin, has had him over there several times for lectures and workshops. They have a large, well-equipped laboratory in Berlin and another in the town of Eberfürt. Most of the members of the German group are medical doctors and, unlike their colleagues in the United States, they are free to use Orgone Accumulators on patients with cancer and other serious illnesses and they do so. Orgonomy is growing and it will not likely go away. Psychiatrists and mental health professionals take courses in Orgonomic procedures and faculty members at various colleges and universities arrange for Orgonomists to give guest lectures. Many educators and childcare professionals are heavily influenced by Orgonomic theories. I venture to predict that Orgonomy will be one of the key New Age movements to watch in the decade ahead. (Statements and facts within can be found in the various journals cited in this essay.) ________________________________________

Freezing Out Hope - NYTimes.com

December 2, 2010

Freezing Out Hope

After the Democratic “shellacking” in the midterm elections, everyone wondered how President Obama would respond. Would he show what he was made of? Would he stand firm for the values he believes in, even in the face of political adversity?

On Monday, we got the answer: he announced a pay freeze for federal workers. This was an announcement that had it all. It was transparently cynical; it was trivial in scale, but misguided in direction; and by making the announcement, Mr. Obama effectively conceded the policy argument to the very people who are seeking — successfully, it seems — to destroy him.

So I guess we are, in fact, seeing what Mr. Obama is made of.

About that pay freeze: the president likes to talk about “teachable moments.” Well, in this case he seems eager to teach Americans something false.

The truth is that America’s long-run deficit problem has nothing at all to do with overpaid federal workers. For one thing, those workers aren’t overpaid. Federal salaries are, on average, somewhat less than those of private-sector workers with equivalent qualifications. And, anyway, employee pay is only a small fraction of federal expenses; even cutting the payroll in half would reduce total spending less than 3 percent.

So freezing federal pay is cynical deficit-reduction theater. It’s a (literally) cheap trick that only sounds impressive to people who don’t know anything about budget realities. The actual savings, about $5 billion over two years, are chump change given the scale of the deficit.

Anyway, slashing federal spending at a time when the economy is depressed is exactly the wrong thing to do. Just ask Federal Reserve officials, who have lately been more or less pleading for some help in their efforts to promote faster job growth.

Meanwhile, there’s a real deficit issue on the table: whether tax cuts for the wealthy will, as Republicans demand, be extended. Just as a reminder, over the next 75 years the cost of making those tax cuts permanent would be roughly equal to the entire expected financial shortfall of Social Security. Mr. Obama’s pay ploy might, just might, have been justified if he had used the announcement of a freeze as an occasion to take a strong stand against Republican demands — to declare that at a time when deficits are an important issue, tax breaks for the wealthiest aren’t acceptable.

But he didn’t. Instead, he apparently intended the pay freeze announcement as a peace gesture to Republicans the day before a bipartisan summit. At that meeting, Mr. Obama, who has faced two years of complete scorched-earth opposition, declared that he had failed to reach out sufficiently to his implacable enemies. He did not, as far as anyone knows, wear a sign on his back saying “Kick me,” although he might as well have.

There were no comparable gestures from the other side. Instead, Senate Republicans declared that none of the rest of the legislation on the table — legislation that includes such things as a strategic arms treaty that’s vital to national security — would be acted on until the tax-cut issue was resolved, presumably on their terms.

It’s hard to escape the impression that Republicans have taken Mr. Obama’s measure — that they’re calling his bluff in the belief that he can be counted on to fold. And it’s also hard to escape the impression that they’re right.

The real question is what Mr. Obama and his inner circle are thinking. Do they really believe, after all this time, that gestures of appeasement to the G.O.P. will elicit a good-faith response?

What’s even more puzzling is the apparent indifference of the Obama team to the effect of such gestures on their supporters. One would have expected a candidate who rode the enthusiasm of activists to an upset victory in the Democratic primary to realize that this enthusiasm was an important asset. Instead, however, Mr. Obama almost seems as if he’s trying, systematically, to disappoint his once-fervent supporters, to convince the people who put him where he is that they made an embarrassing mistake.

Whatever is going on inside the White House, from the outside it looks like moral collapse — a complete failure of purpose and loss of direction.

So what are Democrats to do? The answer, increasingly, seems to be that they’ll have to strike out on their own. In particular, Democrats in Congress still have the ability to put their opponents on the spot — as they did on Thursday when they forced a vote on extending middle-class tax cuts, putting Republicans in the awkward position of voting against the middle class to safeguard tax cuts for the rich.

It would be much easier, of course, for Democrats to draw a line if Mr. Obama would do his part. But all indications are that the party will have to look elsewhere for the leadership it needs.

Friday, December 10, 2010

Obama’s Hostage Deal - NYTimes.com

December 9, 2010
Obama’s Hostage Deal
By PAUL KRUGMAN

I’ve spent the past couple of days trying to make my peace with the Obama-McConnell tax-cut deal. President Obama did, after all, extract more concessions than most of us expected.

Yet I remain deeply uneasy — not because I’m one of those “purists” Mr. Obama denounced on Tuesday but because this isn’t the end of the story. Specifically: Mr. Obama has bought the release of some hostages only by providing the G.O.P. with new hostages.

About the deal: Republicans got what they wanted — an extension of all the Bush tax cuts, including those for the wealthy. This part of the deal was bad all around. Yes, some of those tax cuts would be spent, boosting the economy to some extent. But a large part of the tax cuts, especially those for the wealthy, would not be spent, so the tax-cut extension increases the budget deficit a lot while doing little to reduce unemployment.

And by stringing things along, the extension increases the chances that the Bush tax cuts will be made permanent, with devastating effects on the budget and the long-term prospects for Social Security and Medicare.

In return for this bad stuff, Mr. Obama got a significant amount of short-term stimulus. Unemployment benefits were extended; there was a temporary cut in the payroll tax; and there were tax breaks for investment. Incidentally: how, exactly, did we get to the point where Democrats must plead with Republicans to accept lower corporate taxes?

Unemployment benefits aside, all of this is very much second-best policy: consumers would probably spend only part of the payroll tax break, and it’s unclear whether the business break would do much to spur investment given the excess capacity in the economy. Still, it would be a noticeable net positive for the economy next year.

But here’s the thing: while the bad stuff in the deal lasts for two years, the not-so-bad stuff expires at the end of 2011. This means that we’re talking about a boost to growth next year — but growth in 2012 that would actually be slower than in the absence of the deal.

This has big political implications. Political scientists tell us that voting is much more strongly affected by the economy’s direction in the year or less preceding an election than by how well the nation is doing in some absolute sense.

When Ronald Reagan ran for re-election in 1984, the unemployment rate was almost exactly the same as it had been just before the 1980 election — but because the economic trend in 1980 was down while the trend in 1984 was up, an unemployment rate that spelled defeat for Jimmy Carter translated into landslide victory for Reagan.

This political reality makes the tax deal a bad bargain for Democrats. Think of it this way: The deal essentially sets up 2011-2012 to be a repeat of 2009-2010. Once again, there would be initial benefits from the stimulus, and decent growth a year before the election. But as the stimulus faded, growth would tend to stall — and this stall would, once again, come in the months leading up to the election, with seriously negative consequences for Mr. Obama and his party.

You may say that economic policy shouldn’t be affected by partisan considerations. But even if you believe that — how’s the weather on your planet? — you have to consider the situation likely to prevail a year from now, as the good parts of the Obama-McConnell deal are about to expire. Wouldn’t there be pressure on Democrats to offer Republicans something, anything, to improve economic prospects for 2012? And wouldn’t that be a recipe for another bad deal?

Surely the answer to both questions is yes. And that means that Mr. Obama is, as I said, paying for the release of some hostages — getting an extension of unemployment benefits and some more stimulus — by giving Republicans new hostages, which they may well use to make new, destructive demands a year from now.

One big concern: Republicans may try using the prospect of a rise in the payroll tax to undermine Social Security finances.

Which brings me back to Mr. Obama’s press conference, where — showing much more passion than he seems able to muster against Republicans — he denounced purists on the left, who supposedly refuse to accept compromises in the national interest.

Well, concerns about the tax deal reflect realism, not purism: Mr. Obama is setting up another hostage situation a year down the road. And given that fact, the last thing we need is the kind of self-indulgent behavior he showed by lashing out at progressives who he feels aren’t giving him enough credit.

The point is that by seeming angrier at worried supporters than he is at the hostage-takers, Mr. Obama is already signaling weakness, giving Republicans every reason to believe that they can extract another ransom.

And they can be counted on to act accordingly.

Friday, December 3, 2010