Thursday, December 8, 2011

Thoughts on Obama and Another Roosevelt

Obama has been a big disappointment. That being said I will vote on Nov-12, 20…—Oh, sorry that’s when Perry votes. I will vote on Nov-06, 2012 for the President. Suggesting that there are only shades of difference between Obama and a Republican chorus of thugs bent on advancing unfettered free market principles even if it means dispossessing 20 million more families of their homes is absurd.

In 1980, I was pretty hostile to Carter, believing him a simpleton, who much like Obama spent too much time kowtowing to a right wing that couldn’t stand him anyway.  I was enthused about much more liberal candidates in the primaries and sat out the general. Ronald Reagan was elected, and with his election an era of me-first government of the rich was ushered in. I don’t believe my vote made the difference. Reagan garnered 51% of the vote to Carter’s 41%, and wiped him out in the Electoral College. But what did wipe him out was the general trend of millions of progressive democrats sitting out the election, some drifting to the third party candidate out of their frustration with Carter specifically, and the political process in general.
20 Years later a small sliver of true believer progressives turned the election of 2000 for Bush in Florida and so the nation. The argument is often made that the election, with only 500 votes separating Bush and Gore, was decided by a partisan Supreme Court, and a vigilante brigade of republican operatives. In  reality the election was decided by the 97,488 Florida votes that went to Ralph Nader. I love Ralph, but that election swept in the worst administration the US has seen since Herbert Hoover.

We would do well to remember the economic circumstances under which Clinton departed (the launch site Bush had), and where Bush landed (the smoldering ruin from which Obama began). Steaming along with the explosion of the internet economy under Clinton the GDP grew at an annual rate of 3.6%, and created 23 million jobs, more than the beloved Reagan who created about 20 million. Through Sept 2008 Bush averaged a much more meager 2.3% in GDP growth, and a net increase of 3.5 million jobs, even after the biggest trickle down tax breaks in the nation’s history.  
As the poorly regulated housing and investment markets crashed in the fourth quarter of 2008 GDP shrank at a rate of 6.8%. In response the economy shed 2.6 million jobs, 700,000 in December of that year alone. After Clinton’s 23 million, Bush created six million jobs in the first 7-1/2 years of his administration, even with the massive tax cuts to the wealthy, a far cry from the previous democratic administration record. But then the economy shed the 2 million-plus jobs in 2008, which left Bush with a net increase of about 3.5 million jobs. In January and February of 2009 the economy shed another 1.3 million jobs before it starting to respond to stimulus spending and leveled off at 60,000 jobs lost on March of 2009. In the first quarter of Obama’s presidency, GDP shrunk at a rate of 4.9%. In total for the last twelve months of the Bush Presidency and the first six of Obama’s the economy shed four million jobs. The republicans would like America to forget but it was pretty grim.

The deficit in Federal spending was just $200 billion in FY 2000 and the government, Clinton’s last, was projecting surpluses in 2001 and beyond. Many then called for locking these savings way for a rainy day which it got on 9-11. However, Bush and the right enacted their tax plan by arguing that Americans had earned these savings and the money did not belong to the government. Like a kid with a buck, the money was burning a hole in our pocket and was gone. By 2008, Bush had pushed annual deficit spending to $500 billion. Much has been made of the negative effect 9-11 played on the economy and spending at the federal level, but in 2002 the federal debt stood at $6.2 trillion. It ballooned to $10 trillion at the end of Bush’s term. Currently that national debt stands at just over $15 trillion. Roughly  speaking Bush ran up the national debt by about $4 trillion in his second term and Obama spending his way out a of a recession will have run it up by an additional $6 trillion by the end of his first term.

Of course those are just numbers, evaluating the Bush Administration in terms of human lives presents a more stark picture of his failed Presidency, whether it be the missed signals before 9-11, the catastrophic failure with Katrina in New Orleans, or the execution of a war of choice in Iraq, a flawed waste of lives, treasure, and misguided national security priorities. And yet, every policy failure was dipped in a patina of arrogance. General Shinseki, who suggested in front of a committee of Congress before the war a far more robust presence in Iraq was dismissed by Rumsfeld. Eventually a parade of generals would step forward calling for Rumsfeld’s ouster. Thomas White, former Army secretary, said at the time, “Rumsfeld has been contemptuous of senior military officers since the day he walked in… It’s about time they got sick and tired.” But home grown citizens critical of the Patriot Act and the torture at Abu Ghraib and Gitmo were called naïve, unpatriotic, or both. Instead of being shamed by the faithless and despicable behavior arguments were made out of some distorted sense of national pride and necessity.
So where are we with President Obama?

Health care reform was passed. Far from a “government takeover” of 1/6th of the economy, the plan steers millions towards the insurance industry. Health care spending which was under 14% of GDP in 2000 at the end of Clinton’s term was running at nearly 17% of GDP in 2008. In 1980 it was 9% of GDP. Netting out the cost of recession recovery, the explosion is this expense is the single biggest reason for the ballooning deficits into the future. I personally doubt that the cost containment is strong enough, something more progressive plans certainly would have addressed.
There are reforms that will benefits consumers such as the requirement that insurance companies cannot limit coverage for those with pre-existing conditions, allowing them to profitably cherry pick the healthy. Children get coverage on their parent’s policies. This has already resulted in millions being added to the roles of the insured. I now carry my daughter on my policy which saves me the cost for her insurance—about $2,300 her first year of college. Considering I pay that bill out of my after tax income that is a rather large savings. Millions of Americans want Obamacare to go away. But it is provisions like the following that bring the massive campaign donations from the insurance industry to overturn; Insurance companies are now required by law to spend 85% of revenues on healthcare coverage rather than marketing or advertising or whatever. Rules are being written now by the regulators to enforce this policy and at first glance at least it appears the administration is serious about enforcing the provision.

The same cannot be said for the regulations to enforce Dodd-Frank. Many of the regulations required to enforce the financial industry legislation remain unwritten under a firestorm of criticism from the right and campaign money and lobbying efforts from large financial institutions. There can be little doubt that initially some of this lobbying was funded at least indirectly in part with taxpayer provided TARP monies. The nomination to head the Consumer Financial Protection Bureau, has been held up by key GOP lawmakers who as the Washington Post reported earlier this week, “renewed their vow to block any nominee unless broad changes are made to the watchdog agency.” Republicans do not want a consumer advocate for the finance industry. Period. A well-financed political opposition has stymied financial regulatory reform. While I would be critical of the president on many levels on this one, I think he has pushed as hard as he can. The repubs will run out the clock, so only a second term will allow us to see whether any real reform is possible there.
On the economy the president has been a major disappointment. It is largely here that is disapproval level of sixty, equal portions of disaffected progressives, the hard right that literally hates him, and long term and hurting unemployed is consolidated. Growth has been anemic, the results of less than robust plans designed to garner the faith and support of the middle right which no longer exists. Yes, over 2 million private sector jobs have been created, but as everyone knows this has not resulted in acceptable GDP growth or substantially lowered unemployment.

As with healthcare the president has allowed the national conversation to be defined on the right. In the republican debates the dialogue mostly comes down to the dishonest desire for deficit control (see Bush 43), further tax cuts for the wealthy, and less regulation. The president leads from behind, because he was naive enough to think that once the Bush tax cuts were extended in the fall of 2010, the other party would play nice on the deficit and further stimulus. This was a HUGE miscalculation. The Republicans nearly let the country default, and there is NO movement on employment that would have immediate effect. Obama is crazy like a fox, maybe, but it appears more likely that he’s getting rolled by the Republican opposition. He seems to be winning the public relations war, but legislation is still stalled, and whatever emerges is likely to be so timid that it will not jolt the economy forward. The danger of a decade of Japan-style malaise is real. If we do see that, for progressives the argument that blames it all on the right will not hold up. Either lead, follow, or get out of the way.  While I personally would give the president a passing grade on the economy, barely, I would have to be honest and say that there is a substantial danger of a fail.
The right will no doubt make their foreign policy and security arguments. The I-can-see-Russia–from-my-house true believers and the religious right, always zealots of Israeli security, will buy it. Doubt anyone else will, though Iran is a great concern. A military involvement in Iran must be avoided, and all the other options seem sort of toothless. This doesn’t stop the time honored tradition in both parties of trying to make the toothless sound fierce, but IMHO I don’t see any clear solution there. But in the broader context I can’t imagine, especially compared to the unfettered disaster of the Bush years, Obama will score poorly there after the elimination of Bin Laden and Khadafy.

Energy policy is another area where decisive middle of the road inaction will cost him, and this has a great effect on national security.  While much was made of the Solyndra debacle, and there have been reasonable investments in green technology, the Chinese outspend us more than ten to one. They see green energy, high speed rail and other infrastructure projects as long term investments in the financial vitality of the country, and they are preparing for an economy not reliant on low cost labor. For America the sad truth is that after a decade of inaction on climate and energy under Bush, Obama has shown scant improvement and little leadership. Early on, this was a place to be bold.  Obama was not that. Now he has the right apoplectic because he has "locked up" our energy potential and the progressive left angry because he has moved forward so little. He would have taken a lot of heat early on for a bold policy, but if Americans could see results on the horizon, that would have passed. Instead both sides see weakness, another area where opposition from right and left combines to create a high unfavorable rating.
It could be a great day if the president finally figures out that a portion will hate him regardless and starts to lead. Perhaps Obama can take a page from FDR rather than Teddy. FDR spent a lot of time and expended considerable political capital trying to find compromise with a right that hated him. Thanks to Eleanor and his own progressive instincts FDR finally came to see there was little chance of compromise. Once he came to understand centers of power arrayed against him, FDR abandoned middle of the roadism became the great president he eventually was. If only…

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