The most rational explanation for Obama's speech is that he's positioning himself for failure. He's explaining his position so that when Congress fails to lift the debt ceiling, Americans will blame the Republicans and not him. Maybe in the meantime some small deal can arise. But I expect a week from now we'll be bracing for disaster.
Remarkably uninsightful. Great stretches of media commentary puzzle me about markets in information. How does such a defective product even exist? There must be a lot of demand for commentary one agrees with, however dumb. (Comments that try to turn this straight line against the RC will be deleted.) The fact that makes Chait's analysis look silly, beyond his admission he's doesn't know what Obama's up to, is that the financial markets evidently expect with some confidence that a debt limit deal of unspectacular proportions will be reached, a crowd prediction with which I concur. I also doubt a non-long term deal will result in S&P downgrading the US to AA status, which would be a big deal but one the markets apparently do not expect either.
My guess is Obama is positioning himself not for failure but to take credit among the credulous for the compromise between the Senate and House that will eventually emerge from negotiations. Then he'll say something like, I'm glad you guys finally listened to the adult in the room and decided to compromise, as I said you should do all along. Nobody with half a brain will believe that spin, but most people don't pay that much attention to politics, and in normal times, they shouldn't. I also suspect he'll say something like, I called on the American people to light up the switchboards of Congress, just like Reagan used to do, and they did. I doubt much switchboard lighting up is occurring in fact. Persons of Congress will deny a popular uprising, but of course they would.
The O's approach is rather lame, but remember many so called "independents" are just people who haven't a clue and are just the sort who could be influenced by this sort of nonsense. So O is not bracing for failure so much as making a pitch to the dimmer half of the herd of independent voters. And to give Chait and also O some credit, at the same time he does buy a put so to speak on a complete meltdown, unlikely though that may be. In that event he can say, instead of, good thing you listened to me!, You should have listened to me! So he can take credit, or place blame, depending on what others accomplish or fail to. This is called leadership.