USA: Lay off the president, man!

Coming from me, a defense of Barack Obama may surprise my readers.  That’s because they may not have read the fine print!  Some of his policies I haven’t exactly agreed with (principally, the expensive health care reform, which at a time of rapidly rising sovereign debt, was imprudent).  I reluctantly supported Obama for president in 2008 because he was the better of the two candidates.  Reluctant because we could have chosen a more experienced hand (read here), especially on economic policy. 

Nevertheless, the president has done an exceptional job in tough times.  He has been lucky both before and after the election, but, judging by the recent grilling from his erstwhile supporters, his luck may be running out. They even talk about Obama losing his mojo.  You can criticize Obama and the Democrats, for sure, but what is the alternative?  The only thing innovative in the Republican Party these days is the Tea Party, and I for one don’t want to be dumbed down by the likes of Sarah Palin and the former witch from Delaware (Christine O’Donnell). As for the more “mainstream” Republicans such as future Speaker Boehner, is the answer really more tax cuts at a time of skyrocketing government debt?

What really gets me about this country is the electorate’s emotional bipolarity.  First Obama is viewed as nearly Jesus Christ, now he’s a bum.  C’mon people!  C’mon Velma Hart!

I cringe at charisma.  The Obama-euphoria of the campaign trail scared me, as many of his supporters failed to think critically about the choice.  Instead they anointed a messianic figure and expected him to deliver paradise.  Obama fanned the flames of euphoria then and is now getting burned.  Today, even though the administration managed to sidestep a 1930s-style economic meltdown by rescuing the banks and providing a huge Keynesian stimulus, we hear from Velma and Company that they’re upset they don’t “feel it yet.”  Jon Stewart is “saddened.”  As I have said before, Americans are spoiled. Unlike citizens in emerging markets, accustomed to crisis, accustomed to lines outside of banks, Americans want it all.  Now they are mad at Obama for only achieving what is humanly possible. He has delivered far more than Bill Clinton did by this time in his administration, and is even delivering on the liberal agenda – for example, by appointing two very young, very liberal female lawyers to the Supreme Court.

Now he is branded as anti-business.  There were a pair of articles in The Economist on this (see below).  I noted in my blog during the 2008 election that it did not make sense to elect a man with no economic policy experience to pilot us through the economic storm, who, as a young man, quit a job as an economic analyst because he didn’t want to become a tool of corporate exploitation.  Two years later, people have noticed that his passion is not for business.  Well, lay off him now.  His policies are not particularly anti-business – this government has spent more bailing out corporations than any previous one.  Furthermore, he is in good company taking on corporate abuse.  Anyone remember Teddy Roosevelt’s trust-busting?  Finally, if we continue to harp on this anti-business thing, it will become self-fulfilling.  The Obama administration’s credibility growing the economy could be irreparably damaged, which will hurt us all.

It is human to fight the last war.  So, to avert a depression, the Obama administration took actions that were not taken in the thirties.  Yet our undoing will be something unforeseen, and in my view, this is likely to come on the fiscal side.  Government debt is around 90% of GDP and deficits are in the double digits.  With economic growth likely to remain sluggish (economists have declared a “new normal”), it is not far-fetched for the United States to be in a Greek-style sovereign default over the medium term if a road map to solvency is not charted soon.  There are as yet few signs of determination in this administration to deal with this problem (they appointed a panel), not least because of the recent turnover in the economic team.

What I don’t like about Obama is the spin.  Spin is less than truthful.  I know all politicians do it, especially the successful ones. But, Barack Obama ran as a change agent, a post-partisan, and he has been, is, and will probably always be an aggressive left-of-center partisan.  Centrists, such as Evan Bayh, Joe Lieberman, Norm Coleman, Ben Nelson, Olympia Snowe and Susan Collins, need not apply.  He admires Ronald Reagan and is his heir in terms of image-making.  Now he is going around the country discussing his Christian faith.  Good timing.  The other side does it too.  It is demoralizing for a centrist like me to hear John Boehner savage Obama’s economic policy record and Obama call Boehner’s Pledge to America irresponsible.  Where lies the truth?  Same thing happened on health care.  The problem is, partisanship wins elections. 

On foreign policy, Obama savaged Bush for adventurism and questionable methods in war.  Yet in office, he has ramped up the use of targeted assassinations, sometimes resulting in the deaths of innocents.  The end justifies the means, the saying goes.  As a candidate, he lashed out at David Petraeus for the “surge” in Iraq; now he has hired him to salvage his Afghan policy.  Yet Obama supporters don’t bat an eye, as they swing from indicting Bush for torture to arguing for the necessity of targeted assassinations.

I would like to see a stronger Republican Party.  The country would benefit from an energetic opposition.  Yet, by shifting toward the loony right, Republicans are squandering the opportunity to harness the country’s frustration.  This could work out in the end for Barack Obama.  Taking a page from the Big Dog’s script in 1994-96 — after the Democrats in Congress suffer a beating this year, Obama finds a “Dick Morris” to guide his policy rightward over the next two years.  The Party of No (GOP) nominates someone or other like Sarah Palin in 2012, and No Drama wangles himself another term.  The country could do worse.

From The Economist, September 23, 2010:

WINSTON CHURCHILL once moaned about the long, dishonourable tradition in politics that sees commerce as a cow to be milked or a dangerous tiger to be shot. Businesses are the generators of the wealth on which incomes, taxation and all else depends; “the strong horse that pulls the whole cart”, as Churchill put it. No sane leader of a country would want businesspeople to think that he was against them, especially at a time when confidence is essential for the recovery. From this perspective, Barack Obama already has a lot to answer for. A president who does so little to counter the idea that he dislikes business is, self-evidently, a worryingly negligent chief executive. No matter that other Western politicians have publicly played with populism more dangerously, from France’s “laissez-faire is dead” president, Nicolas Sarkozy, to Britain’s “capitalism kills competition” business secretary, Vince Cable (see article); no matter that talk on the American right about Mr Obama being a socialist is rot; no matter that Wall Street’s woes are largely of its own making. The evidence that American business thinks the president does not understand Main Street is mounting (see article). A Bloomberg survey this week found that three-quarters of American investors believe he is against business. The bedrock of the tea-party movement is angry small-business owners. The Economist has lost count of the number of prominent chief executives, many of them Democrats, who complain privately that the president does not understand their trade—that he treats them merely as adornments at photocalls and uses teleprompters to talk to them; that he shows scant interest in their views on which tax cuts would persuade them to hire people; that his team is woefully short of anyone who has had to meet a payroll (there are fewer businesspeople in this White House than in any recent administration); and that regulatory uncertainty is hampering their willingness to invest.
Ignorant but not antagonistic That Mr Obama has let it reach this stage is a worry. But negligence is not the same as opposition. True, he has some rhetorical form as an anti-business figure—unlike the previous Democrat in the White House, Bill Clinton, who could comfortably talk the talk of business. Mr Obama’s life story, as depicted in his autobiography and on the campaign, was one of a man once mired in the sinful private sector (at a company subsequently bought by The Economist), who redeemed himself only by becoming a community organiser; his wife had a similar trajectory. There are the endless digs at Wall Street and Big Pharma, not to mention the beating up of BP. He remains a supporter of “card check”, which would dispense with the need for secret ballots in establishing a trade union. His legislative agenda has centred on helping poorer individuals (the health-care bill, part of the stimulus bill) or reining in banks (the financial-reform bill). The only businesses he has rescued are the huge union-dominated General Motors and Chrysler. Against this, it could have been much worse, especially given the opprobrium that now dogs Wall Street. A president who truly wanted to wage war on business would have hung onto GM, not rushed to return it to the private sector. Card check has not been pushed. The finance bill, though bureaucratic, is not a Wall Street killer. With the exception of a China-bashing tyre tariff and a retreat on Mexican trucks, Mr Obama has eschewed protectionism. A lot of government cash has flowed to businesses, not least through the stimulus package. And above all his policies have helped pull the economy out of recession. So what should he do? The same leftist advisers who have led Mr Obama into his “anti-business” hole are doubtless telling him that it is just a matter of public relations: have a few tycoons to stay in the Lincoln bedroom; celebrate Main Street’s successes, rather than just whining about bonuses; perhaps invite a chief executive to replace Larry Summers, the academic who announced this week that he was standing down as the president’s main economic adviser. Well, maybe. But once again this is advice from people who have never run a business. The main thing that is hurting business is uncertainty. Mr Obama was right to tackle big subjects like health care and Wall Street, but too often the details were left to others. Why, for instance, should a small American firm hire more people when it still does not know the regulations on health care, especially when going above 50 workers will make it liable to insurance premiums or fines? Fiscal policy is even more uncertain, thanks to Mr Obama’s refusal to produce a credible plan to rein in the deficit. Why should any entrepreneur plough money into a new factory when he has no idea what taxes he will eventually be asked to pay? These are questions that business needs answering in a businesslike way—and so does America. Otherwise the horse will not pull the cart.

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