The Week In Politics

Political commentators E.J. Dionne of The Washington Post and Matthew Continetti of The Weekly Standard about the week in politics with Melissa Block.

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MELISSA BLOCK, host:

For more now on the political week that was, I'm joined by two of our regular political analysts, E.J. Dionne of The Washington Post and Matthew Continetti of The Weekly Standard. Welcome back to you both.

Mr. E.J. DIONNE (Political Analyst, The Washington Post): Good to be here.

Mr. MATTHEW CONTINETTI (Political Analyst, The Weekly Standard): Thank you.

BLOCK: Let's start with this presidential charm offensive that we just heard about. We heard Don Gonyea use the words patience and sacrifice among the people in the country there. E.J., what do you think, do you think going on Jay Leno, cracking jokes, taking - talking about basketball on ESPN, does that help the president with a jittery American public?

Mr. DIONNE: I think it does. I mean, he had that unfortunate slip on the Special Olympics, he's blessed…

BLOCK: Talking about his bowling score, yeah.

Mr. DIONNE: Bowling score. He's blessed that Tim Shriver, the lovely guy who heads the Special Olympics, kind of likes Obama, so he sort of said he appreciated the apology afterward. But other than that, I think this really works because there are a lot of people who watch Leno, who listen to NPR, but a lot of people who don't. It's a very broad, mixed audience of people who don't necessarily key in all the time to politics, and that's helpful.

And I think on his bracket, I think the best observation was from Nate Silver at fivethirtyeight.com where he analyzed the bracket Obama picked, mostly favorites, but where he veered from the favorites, he tended to pick teams from the swing states. And what state could be more important to him than North Carolina, one of the closest states in the last election?

BLOCK: Matt, what do you think about the president's strategy here? Maybe not on the bracket, but on the charm offensive?

Mr. CONTINETTI: Clearly thinking about reelection already. You know, what strikes me is the Obama team seems to understand the economic risks involved in something like AIG. They say, they argue, and I think pretty persuasively, that the risks of letting something like AIG go under outweigh the risks of keeping it alive as a zombie institution.

But what I don't think the administration quite understood was the political risks involved in keeping these institutions on life support. And that's how they got sideswiped with this outrage over the payment of bonuses. And so Obama's been playing defense, I think, in this week, trying to sort out his message.

I think they were caught off guard, but now I think he's probably straightened the ship and has to kind of chart a course, to continue my metaphor, to get past these latest attacks.

(Soundbite of laughter)

BLOCK: (Unintelligible) attacking.

Mr. CONTINETTI: Exactly.

BLOCK: Let's talk about those bonuses, the $165 million in retention pay given to AIG workers. In the context of the big picture here and the stimulus plan, what do you make of this debate? Do you think it's important or is this a distraction, if you think about how they need to get this economy back on track.

Mr. CONTINETTI: No, I think it's actually a central debate, and here's the reason. Since September, the federal government has been plucking these companies, these financial institutions, or even the automakers from the private sector and putting them in the public sector. And what no one seems to have realized until now is that the second that you do that, all the market rules are suspended.

So when the defenders of the free market could say previously, well, these bonuses are being rewarded in order to compensate for performance, or because we don't want - we want to attract the best talent and so on and so forth, those rules no longer apply, because these companies are now politicized. And everything involved, whether it's the basic management decisions, or bonuses, or even remodeling offices, becomes political.

BLOCK: E.J., there were pitchforks on the White House lawn today as they started digging the new White House garden. Pitchforks, in a metaphorical sense, out in the country among populist - with that populist anger, what do you think happens with that?

Mr. DIONNE: Right, there was that great populist called Pitchfork Ben Tilden, and he'd be out there on AIG. And I think they misread the sort of - they didn't even think through the politics of it when it started because AIG and these bonuses became a metaphor for a whole lot of people who put the economy in a very bad way, who were vastly overcompensated, in the eyes of a lot of Americans.

I mean, the people, the top 50 hedge fund and investment fund managers earn 19,000 times what the average worker does and that is a lot of money. And I think that AIG became a symbol of that in that the Obama administration regularly talks about how it wants to make things more equal and more fair, and this was just totally at odds with its own message. And I think that they - Obama's desperately trying to make up for that, as Matt suggested.

BLOCK: Let's talk about the deficit here a little bit. Excuse me. Big projections coming out now, $1.8 trillion, the new projection, how does the president get through what he's planning to do? Pardon me, I'm losing my voice. It's a long show to go - with the numbers that he's looking at with the deficit.

Mr. CONTINETTI: It's going to be very tough. We've already heard from Kent Conrad, the senator in charge of this banking committee, give, budget committee, excuse me - voice concern over these things. And what we have is a return of deficit politics to Washington, D.C. We have a national debt, publicly held debt is about 40 percent of our gross domestic product - the value of all the goods and services in our economy. And it's going to start spiking upwards. And I think as it does that, you're going to have a lot of pushback, not only from the Republicans who aren't the best advocates for fiscal responsibility, being the big budgets they oversaw during the Bush years, but more important, from those Democrats in the south and in the Midwest.

Mr. DIONNE: I think it is a problem for them, although, I was talking to some budget folks this week in the administration who think that in the end they're not going to have a big problem on this year's budget. Because after all, really, all you can cut is domestic discretionary spending, that's everything except Social Security and Medicare, Medicaid, defense. And so the cuts would be largely symbolic.

But I think it will sort of give those who want to block Obama's larger program a set of reasons and an argument that will say, look how big - as a share of the gross national product - government's going to be at the end of this. And those may be the most difficult numbers in this report for Obama. Nonetheless, I think they're going to plow forward. And I think a lot of those Democrats will eventually come home to him.

BLOCK: Thanks to you both. I'm getting all choked up just thinking about it. Appreciate it.

Mr. CONTINETTI: Emotional.

Mr. DIONNE: Thank you.

Mr. CONTINETTI: Thank you.

BLOCK: E.J. Dionne of the Brookings Institution and The Washington Post, and Matthew Continetti of The Weekly Standard.

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