The Floundering, Fumbled First Fifty Days
Lots of rookies bat below the Mendoza line in their first two months in the big leagues, so past performance by the new president is no guarantee that he won’t get his swing fixed.
But lots of the inside-the-Beltway folk are worried. Perhaps Democrats reading my interview with Mary Matalin from yesterday will dismiss it as just a Republican critique, even though most D.C. Dems know and admire MM’s sharp analytical skills. (The podcast of the Mary chat is here.)
But even if they don’t, they are going to have to pause as they read Newsweek’s Howard Fineman’s conversation with me. Key excerpts:
HH: Now Howard Fineman, I also want to spend some time here talking about the President and the stock market, and whether or not the sense is spreading that they’ve overreached, they’ve bit off too much. As Jack Welch said today, he’s not focused on the economy, as Warren Buffett warned today, they’ve got to stop a lot of this nonsense, as Jim Cramer…these are three supporters of President Obama blasting him. Do you think the word is getting through that their fundamental ambition is contrary to economic recovery?
HF: Well, it’s funny you mention that, because I’m just sitting here gazing at my laptop trying to write a column saying approximately that. So I can save your viewers, I mean your listeners the time of reading it. But yeah, I think the focus, I think you can’t try to do too much. I understand Obama’s urgency here, because 62% approval ratings don’t last, and nothing in Washington has the attention span of a flea, and you want to try to get your agenda through that you promised in the campaign. But just like you tell your kids, you can’t do everything. You have to make choices. I have two problems. First of all, I don’t think the stimulus…I agree with Paul Krugman, the stimulus package wasn’t big enough, but more important, it wasn’t focused. It wasn’t relentlessly focused on near-term economic stimulus, which would be a combination of tax cuts, more tax cuts, and more immediate spending. Double food stamps, I mean, I’m talking food stamps, welfare, you know, all that kind of stuff. So it wasn’t focused enough on immediate spending, there’s too much long range stuff in the stimulus package, so that wasn’t big enough. And then in the case of the budget, the budget’s too big in the sense that you can’t borrow…it’s okay to borrow money, I mean, I think I agree with most mainline economists that you’ve got to spend, you’ve got to spend. That’s true. But don’t pencil in things like cap and trade which probably aren’t going to happen, that there’s $650 billion dollars. Don’t talk about totally changing the health care and education system right now when we have to focus, to use an old term, like a laser beam on the economy. That’s so…and I think that’s a lot of valid criticism that you’re hearing from a lot of the guys that you just mentioned.
Yesterday was a day in which a lot of the president’s friends got out of bed and began to speak very clearly about what the president must do to restore confidence in the markets and thus allow an economic recovery to gain traction –a set of steps that begins with “do no (more) harm. That is, President Obama has to scale back his wildly ambitious agenda and its legion of tax hikes and sweeping, radical reforms for that period of time that it takes the economy to hit sunnier weather. Some Democrats must be figuring that the Dow’s drop of 3,000 points since the president’s election is going to imperil their re-elections 19 months from now unless some or even most of that ground is recovered, and they aren’t going to stand by why the already-mocked-on-Saturday-Night-Live Tim Geithner continues as Hamlet not Hamilton.
Ronald Reagan inherited an economic mess from Jimmy Carter and set out, with Paul Volker, to fix it. It took a while even with a determined and not bumbling start, but the public nevertheless dismissed Reagan’s good intentions and voted their anger, and Republicans lost 27 Congressional seats in the 1982 elections. (The GOP was in the minority then, without a lot of seats to lose to begin with.)
Already some Senate Democrats have balked at the President Obama’s confused and at the same time hyperkinetic approach to the recession, and are balking at the massive and radical changes proposed in the tax system, such as taxing mortgage interest and charitable deductions. Some House Democrats refused to vote for the stimulus and more are showing signs of a refusal to go over the falls with the wilder ambitions of Speaker Pelosi and the president. Certainly the continued weakness on Wall Street isn’t being laid at the feet of George Bush by neutral observers who saw the wasted opportunity of the stimulus and the deeply worrisome announcements about the future of tax policy combined with the very silly growth projections.
Yesterday the release of the tape of the president’s “I am not a socialist” phone call to the New York Times reporter raised a lot of eyebrows. In the call the president sounded unnecessarily quarrelsome. Petulance doesn’t become presidents, especially young ones with enormous capacity to be charming. Good humor is his best weapon, and the would-be Plumbers who are advising him on attacking Rush and the previous Administration are giving him lousy advice.
In a stroke, with the announcement of a growth agenda made necessary by the weak economy –an agenda that would at a minimum postpone all tax hikes of any kind until four consecutive quarters of more than 2.5% GDP growth are behind us– would mark a bold pivot that reflects economic realities. A refusal to adapt to the economic forces at work –some of which he has triggered– will tell us that no matter what he calls his ideology, it is driving him, and not the best policies for the times at hand.