It's been written that the current most powerful economics adviser in the White House is Treasury Secretary Tim Geithner. You could argue that the team-lead on the Dem side of this disaster is Treasury, and Geithner.
That said, here's Felix Salmon on how we got here, via Brad DeLong. Bottom line — Treasury decided to "go big" and this is the result (my emphasis):
The lion’s share of the blame here belongs with the Republicans in general, the House Republicans in particular, and the Tea Party caucus within the House Republicans most of all. But it’s not like these people’s existence or intransigence was any great secret. And so the White House tactics over the course of the past few months look dangerously naive….Naiveté? Possibly? Electorally driven (and entirely self-centered)? Certainly. Does it matter?
The budget debate, of course, sets near-term taxation and spending. So seeking to make a virtue out of necessity, Treasury entered negotiations over the debt ceiling to do something longer-term: to put in place a decade-long “fiscal straitjacket” which would constrain future Democratic and Republican administrations alike…. Treasury’s bright idea backfired catastrophically. Far from putting the US on a course of long-term fiscal prudence, it put the country on a log raft with no paddle, careening straight towards a deathly waterfall…. [E]ngag[ing] the House Republicans on long-term fiscal issues was a silly idea — these are people who think you can raise revenues by cutting taxes. A fiscal straitjacket, necessarily, involves some mechanism for raising taxes; since that was always going to be anathema to the Republicans, there was no point even trying to construct one.
The cost of Treasury’s tactical mistake is going to be enormous.
I guess we'll find out. However this turns out, I hope Geithner finds a nice place for himself on Thank You Street when this mess is over and the next president gets to mislead us. The workman is worth his wages.
GP
