Is Obama deliberately trying to cause a financial panic?
John Podhoretz believes he is:
An enraged Barack Obama just took to the nation's airwaves to announce his effort to strike a deal with Republican Speaker of the House John Boehner has fallen apart. Perhaps for the first time in American history, this president is literally using this press conference to create a financial panic over the weekend about the opening of the markets on Monday. He is warning of disaster on Monday. Clearly, he wants to use this as leverage to frighten the GOP into passing the plan proposed by Senate Minority Leader Mitch McConnell, which will push the debt ceiling problem into 2013, but it's still an entirely new and astonishingly reckless gambit.
Watching the insta-reaction on Twitter is very instructive. Liberals say this is good for Obama because it shows GOP recalcitrance. Conservatives say that he has remained so committed to enormous tax increases that he tanked the very possibility of a deal. Time will tell, but it strikes me that the heated rhetoric he is using-"I didn't get my phone call returned," "I've been left at the altar," "there's nothing Republicans will say yes to"-does not suggest he, Obama, feels he has been handed a gift by Boehner and the GOP.
Liberal Yves Smith agrees:
But we can see how the endgame is already being scripted. Ezra Klein, the Democratic Party's answer to Baghdad Bob, is already telling us how this staged drama will play out. The messages in his piece tonight: Boehner allegedly doesn't have the votes, and not having a deal (just like not passing the TARP) is The End of The World As We Know It (in his words, "disaster," "unleash a market panic,"). So the only solution is for the Democrats to give in to this Republican non-negotiable posture and presumed market armageddon (which we indicated, might not be the calamity the DC punditocracy presumes it will be).
Fascinating how both commentators believe Obama is trying to gin up panic - but for different reasons.
Frankly, I'm not sure that Obama thinks about it one way or another. His depthless knowledge of economics point to a sublime ignorance of how his words are heard by the markets. His only purpose is political - to make Republicans look bad. If it occurs to him that his words might have some impact on the markets, it is probable that he believes he can talk them out of a panic once he gets his way.