I taped a Bloggingheads diavlog with Jesse Eisinger this afternoon, which should go up on Monday. We ended up in a pessimistic place: a Japanese outcome to this economic and financial crisis seems much more likely than a Swedish outcome, and the base case scenario is an L-shaped recession.
One of the reasons is what I called "institutional constraints" on the White House, or what can also just be called political realities: no matter how much Change you promise to bring to Washington, some things are set in stone — as Obama himself conceded last month, when he said that he would continue the incomprehensible yet time-honored practice of appointing cronies rather than career diplomats to key ambassadorial positions.
A Republican associate of Gregg’s says that he knew "from the beginning" that "it was not going to work"…
The friend speculates that Gregg was waiting for the right moment to withdraw. That said, Gregg wanted the job in the first place, and presumably knew what he was getting into.
The moral of this story is that you should never put yourself forward for a high-profile political position if you’re harboring serious misgivings about doing so: Judd Gregg is really the Republican Caroline Kennedy, in this regard, although this whole thing is being handled much more graciously on both sides than Kennedy’s withdrawal from consideration for the New York senate seat.
It’s increasingly looking as though bipartisanship is one of those ideals which just isn’t going to work — that’s a shame, and a big problem. Because without bipartisanship, you can’t really ever have fiscal balance: each side overspends to boost its own popularity in the short term and beggar the other side when they get into power. Fiscal responsibility is all about politicians behaving like grown-ups, and that seems, today, as far away as ever.