For a man whose bumper stickes promised “Hope not Fear”, Barack Obama knows how to scare people. “If we don’t act immediately,” he told the citizens of Elkhart, Indiana on February 9th, “our nation will sink into a crisis that, at some point, we may be unable to reverse.” No one doubts that America’s economy is in a bad way. Bu the notion that it might never recover was previously entertained only be bearded survivalists stockpiling beans and ammunition in remote log cabins.
And this is not from me, this is from the Economist (best political magazine in the world, in my humble opinion). And before you start complaining that the Economist is a conservative magazine, it certainly is not: They endorsed Barack Obama for President, for example. And they have been very optimistic about Obama’s leadership style and proposals.
Not so much after the stimulus debacle. The writers at the Economist feel that the stimulus is too back-loaded in spending (most after 2010), although they generally thought it was large enough in size. And they severely criticize why the stimulus plan was first, when the financial system is broken. “Fiscal stimulus, indispensable as it is, cannot create a lasting economic recovery in a country with a broken financial system.”
They then propose the same solution that I and others have stated, to remove the troublesome debt from these banks into government holding companies and restructure the debt so that the Federal Goverment can sell them at some future date. And they severely criticize Timothy Geithner’s pathetic performance in front of Congress, in proposing TARP II. They, like I, state that building confidence in the markets is essential to move forward, and Geithner did exactly the opposite.
The Economist then makes the exact same point I made in an article previously: That Mr. Obama continues to promise too much, and of course cannot deliver on those lofty goals. “Managing expectations is part of building confidence and when so much about these rescues is superhumanly complex, it is unforgiveable to bungle the easy part.”
In many ways, it appears that the Obama Administration has lost the laser beam-like focus of the campaign. As Karl Rove recently said in an Op-Ed in the Wall Street Journal, it appears that they are ‘winging it’. Whether it be on the stimulus, the foreclosure deal, Gitmo, etc., it seems that their principles guide them much less than the political talk of the day. Or maybe it is as Tony Blankley suggests, that he is either a big picture type leader who isn’t worried about details, or he frankly doesn’t think that the details that we are discussing matter all that much.
The total lack of focus was illuminated by the debate on the stimulus bill. Obama’s initial proposals were much more reasonable than the boondoggle that came out of the Democratic-led Congress. But how could Obama let things get this out of control? Either he didn’t want to fight with his fellow Democrats, or simply didn’t care. Neither option makes me feel better. Did Obama really himself support proposals to fund the National Endowment of the Arts? Condoms? Wetlands in California to protect mice? If so, I am even more frightened. What happened to the legenedary Obama focus? I believe the goal of this bill was to stimulate the economy, not just throw the kitchen sink at the problem.
Now the foreclosure proposal has the same problems. Initially Obama proposed that it would cost $50 Billion. Well, Barney Frank and others wanted a bill well over $100 Billion; so, without any reasoning, the bill became $75 Billion. As far as I can tell, unless if were done behind closed doors, there was little or no discussion on what needed to be done. It makes it appear like that there is no real rational thinking involved, just get what you can and move on. That is not true leadership. Additionally, Obama had strict restrictions are barring speculators from reaping the awards of the foreclosure bill during the campaign; that has now disappeared, though it may reappear at a later date. And the bankruptcy provisions are far greater than proposed during the campaign; this came directly from Barney Frank’s committee, as it is a proposal he has been suggesting for several years. Again, wouldn’t a property speculator who declared bankruptcy benefit from this bill, simply by convincing a judge to lower the mortgage loan amount? Why the confusion? It is no wonder that Republicans see an opportunity to point out the problems with the bill. The confusion is arising simply because Mr. Obama won’t take the helm of the ship.
Mr. Obama needs to show true leadership in the coming months. Right now, with the wave of support behind him, it frankly doesn’t matter how he presents any of his policies; most, if not all, will pass easily with the support of the large Democratic majorities. But as time drags on, popularity will fade. It is much harder to turn the ship mid course than now. He needs to show that he is involved with the key details of these major bills; right now, his detachment is scary. Who exactly is making policy right now? During the stimulus debate, it was Nancy Pelosi and Harry Reid. For the foreclosure bill, it looks like Timothy Geithner. That is all fine and good, but Obama is the nation’s leader, not those others. And he needs to start behaving like it.