"Everything that the White House does concerning this deep recession contains an element of gambling because no one has been here before," said Robert B. Reich, labor secretary under President Bill Clinton and a professor of public policy at the University of California at Berkeley. "There's no formula that can be applied, and that's why the president's popularity and credibility are vitally important."



Reich noted, "Very soon we'll be in the gravitational pull of the midterm elections, and it seems clear that Republicans want to challenge Obama on the economy and will run on tax cuts, deficit reduction, and a much more scaled-down and privatized health-care plan."



"If they can get their act together and come up with something that is halfway respectable, and if the public begins to lose patience by Election Day, Democrats could have some real problems," he said. "And those problems, of course, could possibly extend through 2012."



Those concerns about spending and deficits are not confined by U.S. borders. Treasury Secretary Timothy F. Geithner traveled to China this month to assure leaders there that "we will cut our deficit and we will eliminate our extraordinary government support that we have put in place to overcome the crisis." Traveling in Germany this month, Obama responded to Chancellor Angela Merkel's concerns that U.S. spending could lead to global inflation and undermine the stability of U.S. debt.

“In the midst of the worst economic crisis since the Great Depression, Mark Kirk is essentially telling China, which holds more U.S. debt than any nation on earth, not to trust the American government, and by extension, the American people. This puts the full faith and credit of the United States at risk and threatens to permanently wreak havoc on the credit markets that are essential to our recovery and our economic future... Congressman Kirk’s reckless actions demonstrate a terrible lapse in judgment and should be immediately retracted."

On it's front page today, thedecided to warn how Obama's spending plans may pose political risks . As the Establishment in Iran is in the midst of proving, when you cross the powers that be, popularity, in very imperfect "democracies" like the U.S. and Iran, is not necessarily the last word. Thedismisses Obama's "towering polling numbers" and notes that Establishment figures-- criminal elements tied to corporate management and fronted by haughty senators on both sides of the aisle-- are not happy with the way Obama's change agenda is impacting their own particular special interests. Is the anti-democratic House of Lords ready to turn on the new president so soon?When Inside-the-Beltway hacks mention that "even some leaders in his own party are calling on the president to soon begin making those difficult choices, despite a fragile economy that remains in recession," they're not talking about creating a more equitable balance between the wealthy and powerful and normal working families through things like a more progressive tax structure. They're talking about things like cutting Social Security or dumping this whole "public option" plan for medical insurance.But surely the kind of partisan power fight stops at our borders, right? Well, not if you've paid attention to the startling controversy around Illinois Rep. Mark Kirk, who traveled to China and told Chinese officials not to trust Obama's budget numbers. He wasn't talking to a bunch of drooling idiots at a GOP club house in Deerfield or to a Sean Hannity audience; he was basically telling China to undermine the U.S. government financially. He's running for the U.S. Senate. Illinois' state Treasurer, Alexi Giannoulias, was appalled:Even hard to embarrass right-wing bloggers like Sister Touldjah and SayAnythingBlog were aghast and told Kirk to STFU and that his kind of cheap "politics stops at the border."But sniping from two-bit partisan clowns like Mark Kirk isn't the worst of what Obama has to contend with while he's trying to clean up the abysmal series of messes left behind by Bush, Cheney and an irresponsible and cowed Republican-dominated Congress. They left Obama-- as if purposefully-- a rapidly escalating $1.3 billion deficit. That doesn't turn around on a dime and knee-jerk GOP obstructionism hasn't helped either. Nor has the tendency of many of the members of the House of Lords-- particularly ego-driven mediocrities like Ben Nelson, Joe Lieberman , Max Baucus, Susan Collins, Blanche Lincoln, Chuck Grassley, Arlen Specter and Evan Bayh-- to think they were each elected president. So theanalysis goes on and on to make the point that because Obama isn't following conservative dogma, Democrats could fail in the 2010 midterms. The Establishment foes of FDR and the New Deal said the same thing about the midterm elections of 1934, a period almost exactly analogous to our own. At that time the Republicans yelled and screamed "socialism" about everything Roosevelt and the Democrats did and they obstructed it all every step of the way, certain that the voters would reward them at the polls. When the first midterm after Roosevelt's first election rolled around Republicans lost 10 seats in the Senate, leaving them with 25, and 14 seats in the House, leaving them with 103. Thealso warns, several times, that Obama could be jeopardizing his re-election in 2012. Roosevelt did very well in 1936, winning every state but 2 and 523 electoral votes to Alf Landon's 8. Governor Landon didn't even carry his own state, Kansas. As for the Senate, Republicans shed another 8 seats, leaving their pathetic and extremist rump with just 17 members. Obstructionist Republicans in the House fared no better and voters excised another 15 of them, leaving only 88 Republicans in the House opposing 322 Democrats and 13 progressive independents.Meanwhile A.P.'s Jim Kuhnnenn is echoing the Wall Street version of "tighter controls" on banksters. Obama is faced with not just BushCo's economic devastation, but with decades worth of deregulatory mania courtesy of the Wall Street-financed administrations of Reagan, the two father and son Bush disasters and Clinton. "The goal," he writes, "is to prevent a recurrence of the economic crisis that erupted in the United States and exploded last fall with devastating consequences still reverberating around the world."And how do the pro-Wall Street forces inside the Administration-- Geithner and Summers and their team-- think they can stop those reverberations and prevent them from happening again? And why are progressives already calling their proposals "too timid?" The Republicans-- for a change, and God only knows why-- aren't wrong when they warn about giving more power, unitary power, to the Fed, an institution that can hardly be mentioned without using the word "failed," is a huge mistake. It is, a potentially catastrophic one, since the Fed has demonstrated that it is far from infallible, unable, as the usually clownish Alabama corporate hack Spencer Bachus, perceptively pointed out, "to anticipate crisis, let alone prevent them." Re-regulation, definitely. The Fed? No way-- back to the drawing board.

Labels: 2010 congressional races, federal regulatory agencies, Federal Reserve, Mark Kirk, obstructionist Republicans