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Reality check: Feds vs. business

By Howard Kurtz
Washington Post Staff Writer
Tuesday, June 22, 2010; 9:35 AM

It's time to move beyond Joe Barton's political face-plant.

Yes, it was quite amusing to watch the congressman's righteous indignation, prompted by the Obama administration's awful mistreatment of BP, fade when his own party leaders engaged in the very act of which he had accused the president: extortion. Suddenly, to hang onto his committee seat, Barton was very sorry that anyone had the impression he believed the oil giant had been unfairly pressured into providing $20 billion for the Gulf oil spill's victims.

But the Texas Republican wasn't going off on a half-crazed tangent. He was giving voice to a philosophy embraced by a sizable faction of the conservative movement and the Gingrich wing of the GOP: Activist government is strangling business. (Newt also said the Obamaites were extorting BP.)

In recent generations, there has rarely been a more vivid example for the opposing camp than the murky oil washing up on beaches and marches, thanks to a permit that should never have been issued.

For 35 years, proponents of federal regulation have been on the defensive. Few remember it now, but Jimmy Carter pushed for deregulation, most notably of the airline industry. Ronald Reagan told us government was the problem, not the solution. Bill Clinton was more of an activist-government type, but he also presided over the loosening of banking restrictions that helped produce the Wall Street meltdown. George W. Bush also thought government's hand was too heavy, which gave us an SEC that dozed through the Madoff scandal, a FEMA that was out to sea during Hurricane Katrina and an MMS that allowed oil companies to write their own inspection reports.

Of course, too much government regulation can strangle businesses, kill jobs and boost prices. The trick is finding the right balance.

But evidence that corporations were flouting the federal cops on the beat rarely changed the tenor of the debate. Yes, the Enron and other accounting scandals of the early 2000s led to legislation, but even after the great banking collapse and the charges against Goldman Sachs, Congress is still debating legislative fixes. A series of mine collapses doesn't seem to have changed much. The Toyota accelerator deaths don't seem to have changed much.

Candidates continued to run against Washington. Who, after all, trusts government anymore?

Barack Obama brings a more aggressive approach to business. He took on the health-care industry, and his hard-fought legislation is still seen in many quarters as government run amok. He took on insurers such as WellPoint for excessive premium increases. Now he is vowing to boost oversight of oil drilling -- something he failed to do in the past year and a half -- even as many Americans believe he has been too deferential toward BP.

In the abstract, government regulation sounds onerous. But when an offshore rig explodes, people want to know why the regulators weren't doing their jobs.

Maybe Obama is going too far. This is a debate we need to have. This is a debate the media need to have, rather than just playing the video of Joe Barton embarrassing himself.

John Aravosis of Americablog told me in a conversation the other day that such coverage might be too "boring," too Atlantic Monthly, for most Americans. I disagree. If we can't find a way to make such fundamental issues compelling, we ought to find another line of work.

National Review's Daniel Foster backs Barton -- but not his language:

"For the record, I agree in part with Rep. Barton that the establishment of the escrow fund -- over and above the claims process that is already in place, and run by an Obama administration hack sold as an 'independent third party' -- is, if not illegal, than at least extra-legal, and another example of Democrats' selective disdain for the rule of law when it gets in the way of a government-run redistribution scheme.

"But, what a stupid way to say it, Rep. Barton!"

At Politics Daily, David Corn is one of many on the left who says the congressman was no outlier:

"Barton had not committed a gaffe. With his initial remarks, he had merely shared with the world what he really believed. More important, he had said what other Republicans believe. Rep. Michele Bachmann (R-Minn.), a Tea Party darling, derided the account as a 'redistribution-of-wealth fund' and 'one more gateway for more government control.' The Republican Study Committee, a collection of over 115 House conservatives, dubbed the fund a 'Chicago-style political shakedown' -- terminology Barton used during his apology to BP.

"Barton's quasi-retracted remark was no accident; it was an airing of strong partisan and ideological sentiments shared by his GOP comrades. They really see the Obama administration as the evildoers in its face-off with poor, transnational BP. Are they motivated by an infinite love of the marketplace and corporations or driven by a knows-no-bounds hatred of Obama? Ultimately, it doesn't matter, because they end up in the same spot: in sympathy with the biggest despoiler of the environment in U.S. history."

Salon's Joe Conason says all this would be funny, except it's not:

"With their manic, absurd defenses of BP, certain leading Republicans (echoed by Fox News commentators) have achieved levels of self-parody far too exaggerated for a 'Saturday Night Live' sketch. Everyone understands that politicians of both parties sometimes stooge for corporations. But Haley Barbour, Michele Bachmann and Joe Barton, among others, have said things about the British oil giant -- and the $20 billion escrow fund to compensate Deepwater Horizon damages -- that could only be uttered by someone truly stupid. Or someone who thinks the rest of us are truly stupid. . . .

"Then there is Bachmann, who represents a district in Minnesota and therefore cannot be excused for standing up on behalf of a regional economic interest. To her, the escrow fund represents a scheme for 'redistribution' of wealth -- as if the people who will receive money from it are undeserving welfare recipients and as if BP had done nothing to injure them. She derided the BP executives who will pay into the escrow account as 'chumps.'

"All of these ultra-free-market, regulation-and-bureaucracy-hating conservatives agree, by the way, that President Obama and the federal government are just as blameworthy as BP, Halliburton and the other corporations in charge of Deepwater Horizon -- because federal agencies didn't regulate them stringently enough. Regulation is very, very bad, except when Obama doesn't do enough of it."

Former labor secretary Robert Reich says flatly that we can't expect businesses to restrain themselves:

"Barton's view that the White House overreached in forcing BP to put aside $20 billion has been voiced elsewhere in the netherworld of the Republican right, on Fox News, and among Tea Partiers.

"Unlike four years ago, this country is now having the sharpest and most emotional debate it's had in more than a century over a deceptively simple question: Which do you trust less -- Big Business (including Wall Street) or Big Government?. . . .

"The political question of the moment is whether the Barton moment finally convinces the President and Democratic leaders it's safe to fully embrace the other story line. The problem for many of them, of course, is that a large percent of their campaign money is coming from big business and Wall Street. But fundamentally, the debate is absurd.

"It's not the purpose of the private sector to protect the public. Companies like Goldman Sachs, Massey Energy, WellPoint, and BP will do everything they can to make money. They owe allegiance to their shareholders. Hopefully along the way, they also make great products and provide terrific services. If the market is competitive, both consumers and investors gain. The purpose of government is to protect and enhance the well-being of Americans."

Newsweek's Jonathan Alter says the GOP was into regulation, back in the day:

"Regulating industry in the public interest began a century ago with Theodore Roosevelt. He was the last Republican president who argued strongly that government had to check the free market -- or else it would kill people. The Pure Food and Drug Act of 1906, and the raft of health and safety rules that came out of the 1911 Triangle Shirtwaist Factory fire, showed that regulation could save lives." And Nixon created the EPA.

"Clinton protected environmental and safety regulations, but went along with Sen. Phil Gramm's idea to free financial institutions from meaningful oversight. By the Bush presidency, deregulation was out of control. Dick Cheney convened secret meetings on energy that handed regulation to industry. In 2002 I reported that, during his transition, Bush had assigned an old friend to interview candidates for chairman of the Federal Energy Regulatory Commission. A guy named Ken Lay, of Enron. . . .

"So BP's oil spill, or something like it, was inevitable. Without regulators to insist on unprofitable safety measures, prevent corner cutting, and plan for emergencies, the odds of a disaster shot up. . . .

"Conservatives are again trotting out the idea -- slam-dunked by history -- that energy and environmental regulations kill jobs. If we'd listened to them in the '70s, we would be living in a cesspool of pollution."

And where is the public on all this? Let's ask NYT/CBS:

"Overwhelmingly, Americans think the nation needs a fundamental overhaul of its energy policies, and most expect alternative forms to replace oil as a major source within 25 years. Yet a majority are unwilling to pay higher gasoline prices to help develop new fuel sources."

Which is precisely why nothing has been done: Politicians don't like inflicting pain.

Bummed by Obama

Liberal pundits continue to be downright depressed about the president, if the NYT's Charles Blow is any indication:

"It is becoming increasingly apparent that the magic has drained away. Even among his most ardent supporters, there now exists a certain frustration and disillusionment -- not necessarily in the execution of his duties, but in his inability to seize moments, chart a course and navigate the choppy waters of public opinion," Blow writes.

"What's left for many is a big plume of disappointment and sadness lurking just beneath the surface."

Maybe expectations were too high to begin with?

Blow draws a direct rebuttal from Salon's Steve Kornacki:

"Man, oh man, do I hate these kinds of columns. Why? Because the explanation for Obama's midterm polling slide is actually very simple: It was inevitable from the moment he was elected, and there was nothing he could have done to avoid it.

"Just about every president's popularity wanes in his second year in office; the only question is of degree. In Obama's case, the drop was always going to be pronounced, given the enormous popularity he started out with and the gruesome economic conditions he walked into. Factor in sizable Democratic congressional majorities, which (fair or not) make it impossible for Obama to credibly blame the country's woes on his political opponents, and you have the recipe for substantial 'buyer's remorse.' "

He has a point, but that also kinda sorta lets Obama off the hook.

So why aren't O's numbers in the toilet? At the Atlantic, Steven Schier has a theory:

"Obama has BP to thank for his job approval stability. BP has primary responsibility for the spill and response, and the blame is readily shifted to them -- as Obama has done. A large multinational corporation is a convenient presidential punching bag. The public has by now learned much about the spill and apparently had decided that Obama does not merit sufficient blame to deserve lower job approval.

"Contrast that pattern with the Iraq war, in which George W. Bush was the instigator and held direct responsibility in the public's mind for the conflict and subsequent occupation. As the bloody occupation drug on, citizens fixed blame squarely on Bush. . . .

"It's striking that Obama's job approval has not reached the lows of Ronald Reagan during the 1982 recession. Then, the new president fell to 41 percent approval in a July 1982 Gallup poll. Obama now averages 7 percent higher than that. Has Obama reached the floor of his job approval? If so, that's very good news for the White House, because with his approval in the high forties, he remains a competitive candidate for reelection."

And if he hasn't reached the floor?

Whither Rahm

It's interesting what kind of buzz can be created when something that's sort of conventional wisdom is reported by a British newspaper, which rarely has better sources on inside-Washington stuff than American reporters.

Thus, the Telegraph reports the following with an authoritative air:

"Rahm Emanuel, the White House chief of staff, is expected to leave his job later this year after growing tired of the 'idealism' of Barack Obama's inner circle.

"Washington insiders say he will quit within six to eight months in frustration at their unwillingness to 'bang heads together' to get policy pushed through.

"Mr. Emanuel, 50, enjoys a good working relationship with Mr. Obama but they are understood to have reached an understanding that differences over style mean he will serve only half the full four-year term.

"Friends say he is also worried about burnout and losing touch with his young family due to the pressure of one of the most high profile jobs in U.S. politics."

It's true that Rahm is concerned about his family because he basically works all the time (rather than give up Sunday, he taped a "This Week" interview on Saturday). But who knows if he's ready to bail after the midterms?

HuffPost's Jason Linkins is skeptical:

"The Telegraph amasses an impressive array of sources. Let's meet them, shall we?

"--'Washington insiders'

"--'Friends'

"--'a leading Democratic consultant in Washington'

"--'An official from the Bill Clinton era'

"--'another former Clinton official.' "

Among those reacting is Hot Air's Ed Morrissey:

"An exit by Emanuel would not come as a complete shock. Chiefs of staff do not necessarily last for entire terms anyway, and they become expendable after major political defeats. Bill Clinton had four in his two terms, with Mack McClarty hitting the exits after Clinton's disastrous first midterm election in favor of the more politically adept Leon Panetta.

"Still, Emanuel is the one man in the inner circle who understood how to get things done in Washington. Axelrod and Jarrett are Chicago pols and outsiders to the Beltway. That outsider status helps Presidents sell their agenda to the people, but it doesn't help the White House sell it on Capitol Hill. While Obama won the ObamaCare fight despite Emanuel's advice (a fact that Emanuel appears to be leaking copiously all over Washington), the battles have damaged Obama's ability to move on any other issue in the weeks since. Thanks to a nationwide revulsion at the massive spending agenda the ObamaCare bill represents, Obama can't even get a jobs bill through Congress now, let alone his cap-and-trade priority.

"The Telegraph says that this will be another sign of how troubled the Obama presidency has become. Perhaps, although that may depend more on who replaces Emanuel when (and if) he leaves rather than the departure itself."

Up next: baseless speculation about who'll be the next chief of staff.

Howard Kurtz also works for CNN and hosts its weekly media program, "Reliable Sources."

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