Digby asked a good question, Who Are the Austerians Anyway? She never really answers the question, but does point out one very prominent austerian: President Obama. She takes us back to February 2009—Just one month after taking office—Obama was already talking about cutting entitlement programs. That shouldn’t surprise anyone who reads this site. Obama is now and has always been a New Democrat and that means on economic issues, he is conservative.
In 2008 the economy was exploding. People were very upset. The crisis was the result of decades of uninterrupted conservative economic policy. The people wanted a change! So who did they vote into office? A moderate who was committed to lead like Bill Clinton—the prototypical New Democrat who enacted much of the legislation that directly caused the financial crisis. He allowed Glass–Steagall to be repealed and re-nominated Alan Greenspan, the man most responsible for the housing bubble that caused the crisis. I don’t think the people voting for “hope and change” were hoping for a change back to the president before Bush. But that’s all they got.
Right now, Japan has Shinzo Abe as prime minister. He appears to be a loose cannon. There is much about him that I don’t like. But because he doesn’t care about how things are normally done, he is doing for the Japanese economy what others were too conventional to do. Of course, that conventional thinking was not textbook economics. In fact, it was just the opposite. It was conventional in the sense that everyone all over the world was doing it, even though it was doing no good and causing great harm. If half the leaders of the world decided to kill themselves by jumping off a cliff, apparently the other half would do the same thing. Abe is one of those rare leaders who doesn’t go along and as a result, Japan is finally getting some good fiscal and monetary policy.
Digby is correct that Obama didn’t pivot to the budget deficit (in the middle of the worst economic downturn in generations) because the Republicans won big in 2010. He didn’t pivot at all. He was always the defender of the power elite, so the deficit was always primary in his mind. Liberals are so inclined to cut Obama slack and act as if the only reason he ever does anything bad is because he is forced to. But that’s just not true. Obama is simply not that much of a liberal when it comes to economic issues. He certainly does want to do things to help the economy, but he also wants to cut spending. And his “threading the needle” approach to policy is often particularly bad. For example, he wants to cut entitlements in exchange for raising taxes. That’s doubly bad for the economy.
What we needed in 2008 is the same thing that we will need in 2016: an actual economic liberal in the White House. But because we will have had 8 years of a Caspar Milquetoast presidency, we may end up with some conservative whackjob. The positive aspect of that is that he won’t be much more conservative on economic issues than Obama.