Larry Kudlow-style Republicans are seemingly over the moon about the new “pro-business” attitude at the White House, and the apparent morphing of Obamanomics into Reaganomics.
And indeed, the lame-duck tax cut deal coupled with the appointment of guys like BIll Daley and Gene Sperling to important posts do indicate some kind of return of Clintonism (though in our opinion, the radical leftism of the first two years of the administration was always way overblown).
So what’s it all about?
The goal is really to marginalize the hardcore pro-austerity wing of the GOP — the Tea Partiers, the Jim DeMint acolytes, and the debt ceiling stalwarts.
If you’re Citigroup or JPMorgan or Caterpillar or Boeing or any other big US company, the last thing you want to see is the US fiscally retrench, while waiving around threats of default. That’s about as anti- (big) business as it gets, especially if you’re short-term focused.
What corporate America wants is heavy spending AND tax cuts. And actually, that’s what Obama wants too, because he needs all the juice in the economy he can get in order to win re-election.
There’s no question that he’d gladly look for more areas to cut taxes if the GOP agreed to drop spending cut demands, and by making that his position, he ensures that business groups will put pressure on GOP leadership to stand up to any members of their party — the principled ones — who would stand athwart that agenda.
Thus the analogy with 1994, and Clinton’s move to the centre isn’t exactly accurate. Clinton was happy to have the GOP blamed for shutting down the government, but in the midst of a weak recovery Obama can’t afford to let that happen, and he needs all the help he can get to keep stimulus going for the next two years.