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September 4, 2011
David Warsh, Proprietor


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Obama Smartens Up

President Obama took quite a beating over the summer, from right and left alike. There is no doubt about it. Routinely overlooked, however, is the basis on which he won the Democratic nomination and then the general election in 2008.

There was little or no chance of electing a Republican that year to follow the discredited George W. Bush. Obama was the alternative to the talented but unentitled Hillary Clinton, the favorite of the Democrats’ progressive wing. He held out the promise of ending the bitter politics that had marked the sixteen years since Bill Clinton unexpectedly beat George H. W. Bush in 1992.

It didn’t work out that way. The emergence of the Tea Party forced mainstream Republicans to redouble their opposition and gave rise to debt-limit brinkmanship. Meanwhile, Clinton has proved to be a superb Secretary of State.

And now Obama must switch to a more assertive and confrontational approach or risk losing the 2012 election.

The story of how his upcoming speech on job creation was delayed, as reported last week by Roger Simon in Politico, the controlled-circulation Beltway newspaper, is nothing short of astonishing.

[A]t first, things seemed to fall into place.

At about 10 or 10:30 a.m. on Wednesday, White House chief of staff Bill Daley called House Speaker John Boehner and asked that a joint session of Congress be assembled the following Wednesday night. The White House viewed Boehner as a political opponent, but not an enemy and the call was cordial, even pro forma considering such a request had never before been refused.

And, according to the White House source, Boehner said “okay” to Daley’s request for the Wednesday evening date. (Asked for comment, Boehner’s press secretary, Brendan Buck, said he had nothing to add to his statement of Wednesday that read in part: “No one in the speaker’s office – not the speaker, not any staff – signed off on the date the White House announced today.”)

Then things quickly unraveled. It turned out not everyone was as sanguine as Boehner with the notion that a Democratic president was going to step on a Republican debate.

At 11:55 a.m. Wednesday, the White House tweeted the news about the joint session. “And then Rush Limbaugh beat Boehner up,” the source said.

The conservative talk show personality was in his familiar state of high dudgeon. “This is a pure campaign speech and to give it the imprimatur of a speech before a joint session of Congress, there’s no way, he doesn’t deserve that,” Limbaugh said. “Boehner’s got to say no. Now, whether he will, I have no clue.”

A number of Republicans in the House and a few in the Senate did have a clue and they told Boehner that while they would allow the joint session – it was hard not to for both historic and political reasons – the timing had to be on their terms, which meant it could not conflict with the Republican debate.

At which point Boehner’s office announced that Boehner had never agreed to the Wednesday date, that Congress did not get back into session until 6:30 p.m. on that day, that various votes had to be taken, that security had to be arranged and Obama should push his speech back a day to Thursday.

Which just happened to be the evening the Green Bay Packers were meeting the New Orleans Saints in the NFL season opener. Which meant Obama would have to move his speech up an hour or so before the kick-off at 8:30 p.m.

The leading Tea Party figures in the House – Representatives Eric Cantor (R-Va.), Kevin McCarthy (R-Calif.) and Paul Ryan (R-Wis.), together with their allies among lobbyists, religious evangelists, editorialists and talk-show hosts – have fashioned a machine capable of bringing to bear enormous force on the Republican leadership on a moment’s notice.

This was the second time that Boehner has buckled under pressure from his right. (The first was this summer when he abruptly broke off debt-ceiling negotiations with the White House.) The likelihood that he’ll remain House speaker after the next election is diminishing all the time.

What Obama must do is make the case as clearly as possible that that his presidency represents a continuation of the governmental compact that was agreed upon under Franklin Roosevelt in the 1930s and ratified by Ronald Reagan in the 1980s – a strong defense coupled with a reliable federal safety net, consisting mainly of unemployment insurance and the Social Security Administration, financed by income taxes, accompanied by government oversight of banking, housing, transportation, education, competition policy and environmental concerns.

Obama’s decision to address health care early in his administration still looks pretty good, since the government’s role in health care has been a bone of contention since the 1950s. Medicare, which is essentially a basic single-payer government insurance program for those over 65, with room for private insurance supplements of many kinds, was established under President Lyndon Johnson in the 1960s and expanded in the 1990s under Bill Clinton.

The prospect of battles ahead in the Supreme Court suggests that the new heath care regulatory measures, broadly modeled in their conception on the public/private regulatory hybrid of the Federal Reserve System, still have a long way to go in order to be broadly accepted. Rep. Ryan has proposed to replace Medicare with a voucher system, and his plan deserves and will get a thorough discussion in the coming years.

It is clear in retrospect that the administration’s original response to the financial crisis was flawed in some important ways. It turned out that the mess left by a quarter-century of nearly uninterrupted boom was much worse than Obama’s advisers had thought. Economic counselor Lawrence Summers was better than anyone else in the top ranks of advisers to Democratic Party candidates, in that he was well-acquainted with policy-makers at home and abroad (he had been quietly associated with Clinton during the primaries), but as a traditionally trained macroeconomist he was ill-equipped to deal with developments in banking and finance – or to devise a politically acceptable stimulus package.

And, unlike 1933, when Sen. Carter Glass (D-Va.) and Rep Henry Steagall (D-Alabama) took charge, fully knowledgeable after 25 years apiece of experience on their respective banking committees, no one in Congress in 2009 had a saleable idea what to do with the banks in the wake of their desperate reorganization presided over by Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson. Instead, the Dodd-Frank Wall Street Reform and Consumer Protection Act assigned responsibility to an Office of Financial Research that has yet to be appointed.

At least Obama has the right man now in Alan Krueger as chairman of the Council of Economic Advisers. Krueger, a labor economist, served a stint as a high-level aide in Timothy Geithner’s Treasury Department. He is capable of being quite as chippy as his fellow Princeton professor, New York Times columnist Paul Krugman, but possesses a much better inside game.

For the next fourteen months, an ambitious jobs program may be enough to rehabilitate the president’s reputation as an action-oriented leader, even if the program is opposed by Congressional Republicans. Making public the terms of this summer’s “grand bargain,” from which the Republicans walked away – and braving the resulting criticism from his progressive wing – will demonstrate some steel.

Meanwhile, there is no telling what will happen to the control of the Senate in the next election. Twenty-three seats held by Democrats or their allies are up for election next year, compared with ten for the Republicans. A gain of four seats would give the GOP a majority in the Senate as well as the House — a prospect that may actually strengthen the case for divided government in many voters’ minds, meaning they would vote for Obama in order to split their ticket.

Who will eventually gain the Republican nomination is anybody’s guess. But as the story of the subordination of the President’s address to Wednesday’s GOP debate makes clear, the Republicans’ Tea Party wing has already taken over the party. Obstructionism can humiliate the president – it already has – but it is unlikely that the Tea Party can win the presidency in a general election.

Meanwhile, the Long Slump continues. We’re in a real mess. The Republicans face a bitter fratricidal battle before they can produce leaders who can appeal to a majority of voters in a national election.

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