Don’t Call it Victory
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Related subjects: Economic Recovery, J.E. Robertson, Legislation, Media, Mortgage & Credit Crisis, Obama administration, Obama's 1st 100 days, Opinion, U.S. Law, U.S. Politics, Vote 2008 Comments Off
A few years back, an ambitious youngish president staged an impressive event, in which he landed a fighter-jet on an aircraft carrier, then declared “Mission Accomplished”, in the midst of what would turn out to be only the first baby steps of a very complicated war. The $780 billion American Recovery and Reinvestment Act is a victory for the president in terms of his organizing Congressional support, but it is just the beginning of a very long, high-stakes journey, for his nascent administration, and for the nation.
Pres. Barack Obama has persuaded Congress to follow many of his principles for economic recovery and reinvestment, but the nature of doing hard things in hard times is that, even when right, they may be treated as the wrong thing by people unable to see their impact. He has, perhaps more effectively than any recent president, marshalled massive political capital to effect immediate, sweeping policy changes, and the eyes of the world are on him, both amazed and apprehensive.
His political enemies will say this is politics as usual, because they will most certainly engage in politics as usual. There will be accusations that the massive recovery package, aimed at promoting economic stimulus and both short-term and long-term growth, is nothing but spending. As Obama himself quipped in dismayed disbelief, “That’s the whole point!” You have to spend to stimulate. But the return on investment must swiftly be shown.
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Whether Republicans like to hear it or not, the most “stimulative” tax cuts are not those that go to the “investor class” or even to the upper middle class; they are those that are substantial enough to allow low-income families to change their spending habits and up their standard of living, if even slightly. So food stamps put more money back into circulation than income tax cuts, because they require immediate spending.
Engineering tax cuts that would be truly stimulatiive would be called “class warfare” by the Republicans. These are the sticky details of debating economic stimulus. But the long-term issue is that Obama will have to spend massively through the Treaasury Dept. in order to save the banks, and he has promised transparency to such a degree that he will integrate the full costs of Iraq and Afghanistan into the official budget package, which will make it look far larger than any in history.
Barack Obama’s program has been, since long before he came to Washington, to make a difference, to make things work for the better for real people, and as president, this project has manifested itself not just as change, but as an effort to sweep away the irresponsible policies of recent years and even decades that have undermined the engine of the American economy, the vibrant middle class.
Whether it’s the ARRA, or whether it’s bank bailouts that force lending and come with major new regulatory tools, or whether it’s a budget that tells the truth about bloated military expenditure and tries to set better priorities in energy, taxes, healthcare and education, Obama will have to ruffle many feathers of many powerful Washington players, but he seems to be betting that doing the right thing will resonate, because now, times are hard enough that people can understand the need for tough choices and the degree to which Bush’s tax policies were a luxury attitude for luxuriant times.
But the wholesale absence of luxury across the economy means that people may be willing to see the truth behind hard choices, but they may also be guided by defensive posturing and worries about their own immediate interests. This makes all public perception highly volatile, which means every major expenditure can be misinterpreted, even if it’s the best, most responsible choice, and there is no predicting who public opinion will deal with the evolving crisis.
The president has reportedly been studying up on FDR’s famed “fireside chats” from the Depression era, through which he made himself the close family friend and advisor of struggling Americans and won support for sometimes esoteric fiscal strategies whose long-term aim was sustainable widespread prosperity. He knows that communication is the key to holding the political high ground, and of course, as we have all seen, nobody does it better.
Polls leading up to and immediately after his inauguration, just one month ago, suggested the public understood the severity and the degree of complexity of the current economic crisis, and that they were willing to entrust to Pres. Obama the task of righting the ship of state for up to 2 years, before judging whether his efforts had failed. Essentially, as pundits talked of a crisis-eroded days-long honeymoon, pollsters were finding the people were more interested in his succeeding; that is, after all, why then sent him to the White House, and they knew, apparently, it would take time.
His message was working. That was the real victory, and that is what gives him the political capital now to tackle, in the most open and deliberate way any public official has been able in recent decades, all the complicated pitfalls of the clumsy, hamfisted ideology of always-in-all-cases supply-side stimulus. Doing so is a massive undertaking, and will require courage, resilience, communication, public support and media willing to talk about complexity, detail, and the long-term nature of economic trends.
If any of those pillars of this enterprise falters, Obama will find that his “victory” on the ARRA will be treated as anomalous and inadequately thought-through (not because it was, but because the “loyal opposition” will be relentlessly pushing this point, ever second of every day), and his major policy initiatives may be derailed. For this very reason, it is worth noting that he did not, in fact, wait to get down to business: he has taken the opportunity of crisis to redirect spending toward the major substantive improvement he wants to make on economic and social policy.
His generative long-term approach, privileging plans that utilize or enable reinvestment to expand the cycle of sustainable growth, directing incentives to not just renewable resources, but to projects that will build sustainability and broad-based potential for prosperity into the mainstream functioning of the economic system, allows for what may be the most intelligent use of the federal budget in more than half a century.
If Obama’s plans are implemented, they will bring prosperity over the long term and create a far more robust and agile American middle class, with education and living standards appropriate to a 21st century knowledge economy. If they are thwarted by relentless Congressional sabotage or widespread misunderstanding of the problem, then our current emergency will balloon into prolonged drudgery, and his political fortunes will flag.
So, he has shown his mettle and won a victory, but it is far too early to declare “mission accomplished”. The next few years will be an endless test of Obama’s diplomatic and managerial skills, as he seeks to build a bipartisan coalition for bold reform, yet pulls no punches in fighting back the more irresponsible maneuvers by the Republican leadership, aimed not at helping speed economic recovery but at pinning the blame on the new president.
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