Chessmaster Obama Morphs into the Polar Bear in “Don’t Break the Ice” Board Game

cross-posted at the Widdershins

The cool objectivity of Amy Walter’s political analysis is almost unnerving at times, especially to one accustomed to sorting out the spin of pseudo-liberal pundits from their mirror images on the right. In Walter’s On the Trail post yesterday at National Journal, she asks, “what if congressional candidates in 2010 have to defend economic results that aren’t there?”

In 2012, President Obama will have had four years to see if the gamble on big federal outlays into a stimulus package, auto and bank bailouts, and energy investments has paid off. For congressional Democrats up in 2010, however, the long view isn't politically feasible.

At a recent Christian Science Monitor breakfast, House Majority Leader Steny Hoyer handed out a tightly spaced one-pager that listed 13 "major initiatives" that have been enacted into law since Obama took office. To be sure, it's an impressive list. But the next election will be a referendum on the economy. Period. If things are looking good, then Democrats can make the case for why it's important to keep their party in charge. If it's not, then all the bragging about the Lilly Ledbetter Fair Pay Act or Credit Cardholders' Bill of Rights won't mean much.

At this point, it's tough to argue that the stimulus has indeed stimulated the economy.

The bottom line is that right now, there's little tangible proof that all the outflows have made much of an impact. In a new Fox News/Opinion Dynamics poll, about as many people think General Motors will be profitable in five years as think it will be out of business. Meanwhile, just 9 percent in a new McClatchy-Ipsos poll say the economy has turned the corner, with 37 percent expecting it to get worse. The good news, if you want to call it that, is that just four months ago, more than half of voters (54 percent) thought the economy would get worse.

Walter takes a jibe or two at Joe Biden, “Obama’s “cheerleader-in-chief for stimulus spending:”

Yet, watching Vice President Joe Biden's awkward attempts to promote the benefits of the stimulus package suggests that congressional Democrats will have their work cut out for them. A greater effort by the White House to get the money out the door could help matters. At this point, however, it's tough to argue that the stimulus has indeed stimulated the economy.

On "Meet the Press" this Sunday, when asked by moderator David Gregory about the rationale behind the administration's estimate of 150,000 jobs created or saved by the stimulus, Biden replied: "There's an econometric model that economists have been using for decades to correlate the economic circumstances of the nation with the creation of jobs.... It's a model the Council of Economic Advisers have used to come up with that 150,000 jobs."

Um, what? You lost me at "econometric model." Just imagine trying to put this into a compelling 30-second commercial.

Walter concludes:

For now, Obama still has a reservoir of good will built up with the public, and his high approval numbers may help insulate members of his party.

Ultimately, though, watching Democrats these days reminds me of the kids' board game "Don't Break the Ice." In that game, a plastic polar bear was placed on top of an elevated board made up of individual cubes of "ice." The goal of the game was to knock out as many pieces as possible without sending the polar bear crashing to the ground. Sometimes the polar bear came down after one piece was knocked out; sometimes he could still be standing even as his ice world crumbled all around him.

Obama won't necessarily be the polar bear on the floor in 2012. But a lagging economy could take out quite a bit of the Democrats' board.

In addition to the questions raised by Walter, the recent funding of the current Administration’s continuation of war efforts in Iraq and Afghanistan reminds me of candidate Obama’s boast about how much money the government would save from defense spending once he took office and magically ended America’s dual military adventures abroad.

President Obama’s Messianic Powers Also Falter in Europe

Sister blogger Stray Yellar Dog points out that Secretary of State Hillary Clinton appears to be the only woman present at this meeting of G-20 leaders from U.S. and China shown above.

As mentioned in an earlier post, our messianic president has not yet succeeded in uniting the red states and the blue states as evidenced by the passage of the original stimulus package in the House with zero Republican votes; the final version passed in the Senate with only three Republican votes.

And just yesterday, Congress passed 2010 budget resolutions of about $3.5 trillion without a single Republican vote.

Nevertheless, Mr. Obama issued a congratulatory statement from Europe after the Thursday votes: “Tonight, the Senate has joined the House of Representatives in taking an important step toward rebuilding our struggling economy.”

Speaking of Europe, an editorial in the LA Times leads off:

This week, President Obama found out how much harder it is to sell economic stimulus packages in Europe than it is in Washington.

The editorial continues:

Obama went to the Group of 20 summit in London hoping to persuade leaders of the world's biggest economies to boost government spending to counteract the global downturn. Backed by Japan and Britain, the administration argued that restoring growth around the world required a stronger fiscal push from other developed nations. Besides, getting more money into the hands of foreign consumers would help them buy goods from the United States, just as the $787-billion stimulus package Congress passed in February should help buttress the demand for imported products here.

Echoing Obama's Republican critics, though, some European leaders said their governments couldn't afford to go more deeply into debt. The borrowing binge could prove counterproductive too, making it harder for businesses to obtain the capital they need to operate and expand. The G-20 settled on vaguely worded promises to keep trying to restore growth and to keep interest rates low. The most tangible commitment was a pledge to provide $1.1 trillion more in financial support, mainly for developing nations. Still, that funding -- a portion of which will come from the U.S. -- could help this country's economy by enabling poorer nations to buy more goods.

The other main point of contention in London was how much regulation to impose on the financial system. Leaders of France and Germany were particularly eager to clamp down on hedge funds, which have come to symbolize dangerous excess -- even though they had little to do with the housing bubble that caused the economy to collapse. The G-20, though, stuck largely to the plan for more comprehensive regulation that finance ministers had already outlined, including a new focus on systemic risks (including those posed by hedge funds), bigger capital buffers and more cooperation among the various countries' regulators. If Europe was hoping for the power to rein in Wall Street, it didn't appear to get it.

For all the discussion about regulation, the G-20's agreement does not address some of the fundamental problems in the financial system, such as the incentives for firms to become too big and intertwined, and the failure to measure and adequately price risk. It will be up to lawmakers and regulators around the globe to address those issues individually, and that's as it should be. Coordinating rules across borders makes sense, given the global nature of the financial industry, but a one-size-fits-all approach to regulating the vastly different financial systems in each country does not.

The Verdict on Obama’s Response to the Financial Crisis: “No We Can’t”

Nobel prize-winning economist Paul Krugman gently turns the Obama Administration’s response to the nation’s economic crisis inside out and concludes there’s not much there.

Krugman writes:

(emphasis mine)

By any normal political standards, this week’s Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!

Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dream.

Krugman continues:

For while Mr. Obama got more or less what he asked for, he almost certainly didn’t ask for enough. We’re probably facing the worst slump since the Great Depression. The Congressional Budget Office, not usually given to hyperbole, predicts that over the next three years there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce. And $800 billion, while it sounds like a lot of money, isn’t nearly enough to bridge that chasm.

Officially, the administration insists that the plan is adequate to the economy’s need. But few economists agree. And it’s widely believed that political considerations led to a plan that was weaker and contains more tax cuts than it should have — that Mr. Obama compromised in advance in the hope of gaining broad bipartisan support. We’ve just seen how well that worked.

Now, the chances that the fiscal stimulus will prove adequate would be higher if it were accompanied by an effective financial rescue, one that would unfreeze the credit markets and get money moving again. But the long-awaited announcement of the Obama administration’s plans on that front, which also came this week, landed with a dull thud.

And here’s the conclusion of Krugman’s disturbing reflections on the state of the economy this morning:

Over all, the effect was to kick the can down the road. And that’s not good enough. So far the Obama administration’s response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It’s early days yet, but we’re falling behind the curve.

And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach — a feeling that America just isn’t rising to the greatest economic challenge in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, oblivious to the grotesque failure of their doctrine in practice.

There’s still time to turn this around. But Mr. Obama has to be stronger looking forward. Otherwise, the verdict on this crisis might be that no, we can’t.

Again, Americans, it's time to wake up. You voted for a charming, motivational speaker in 2008 and elected the least experienced candidate in either the Democratic or Republican primaries to lead us through the most challenging period in recent American history.

Were you really so idolatrous as to expect Mr. Obama to walk on water?

The Halo Slips: A Tough Week for Little Obamaites

Really – you have to read Gail Collins’ op-ed this morning in the NY Times. Gail is answering some tricky questions, for example:

Even when I get irked with Obama, I still want to help him. Isn’t there something people can do?

This weekend the Obama army is going to rise again, creating a nation of stimulus house parties, made up of people who would like nothing more than to spend their days off talking about the administration’s economic plan. There’s a Mommies, Daddies and Wee Ones Gathering in Brighton, Colo. (“We will have kid crafts, videos, juice, snacks and coffee.”) And a gathering called “What Happened to My Retirement Nest Egg?” is scheduled for Watsonville, Calif. (“We’ll break out the wine and cheese.”)

Or, for sterner spirits, there’s the Economic System Redesign Leadership Meeting in Manhattan, which is sponsored by the Corporate Social Responsibility Advocates for Obama, the Social Innovators for Obama and the Sustainability Activists for Obama. (“Please bring your own lunch or eat before coming.”)

Read more.

Obama’s Top Political Aides Transplanting Campaign Tactics to Policy Arena

An article titled Obama Uses Poll, Focus Groups to Sell Stimulus Plan to Congress, by Bloomberg’s Lorraine Woellert and Hans Nichols, confirms one of my worst fears about the incoming Obama Administration.

Woellert and Nichols write:

“President-elect Barack Obama’s top political aides are transplanting their campaign tactics to the policy arena, using data from polls and focus groups to shape the debate over a stimulus plan that may cost at least $775 billion.

“David Axelrod, Obama’s chief political adviser, along with campaign media adviser Jim Margolis, are encouraging lawmakers to use the word “recovery” instead of recession, and “investment” instead of “infrastructure.” Those recommendations came from focus-group research indicating that such framing would make the package more appealing to voters.

‘“The Obama camp is trying to build support for the stimulus proposals, which have encountered resistance from lawmakers of both parties over size and cost. Republicans have employed similar tactics in past policy debates, notably when they labeled the estate tax as the “death” tax in arguing for its repeal.”’

In previous posts, I’ve highlighted commonalities of President Bush and President-elect Obama. Now it appears that 11 days before he takes office, Obama is already following in the footsteps of his predecessor by confusing campaigning with governing; arguably one of the major reasons for the Bush Administration’s many failures.

With Karl Rove, his chief campaign strategist at his side in the White House, President Bush never learned the difference between campaigning and governing.

(You may remember that my concern for the president-elect’s kinship with Dubya heightened with the announcement that Obama was taking Rove’s counterpart, David Axelrod, along with him to the White House.)

Here’s a flashback to the early days of Bush’s second term:

On May 20, 2005, the Washington Post’s Peter Baker wrote:

‘“The obligatory campaign-style signs were hung behind the stage, the familiar hand-selected "conversation participants" seated next to him. The friendly, invitation-only audience cheered with appropriate enthusiasm. And when President Bush took the microphone, he spun out more or less the same speech he has given dozens of times before.

“On the 78th day of a 60-day road show, the president's nationwide Social Security tour, even to some of his own aides, has the feel of a past-its-prime Broadway production that has been held over while other, newer shows steal the spotlight.

‘“I'm just beginning this debate," Bush said in an appearance at the Milwaukee Art Museum, his 32nd Social Security event this year. "I'm going to spend whatever time it takes to continue traveling this country and make it absolutely clear to the people, we've got a problem.”’

The rest is history. Bush’s Social Security initiative failed.

In the Bloomberg piece, Woellert and Nichols quote Dick Morris, pollster for the Clinton Administration:

“We polled everything, every policy initiative, everything you can think of,” Morris said. “It’s become pretty standard.”

‘“By contrast, President George W. Bush “didn’t really poll policy, he polled the presentation.”’

As to whether Obama would follow the Clinton or Bush model, Woellert and Nichols report that Morris said, “My guess is that Obama will {be} more like Clinton than Bush.”

That would be the same Clinton that Obama and team denigrated throughout the Democratic primary.

But for the sake of America’s suffering people, let’s hope that however Axelrod, et al, decide to frame it, the much-needed stimulus plan, appropriately reviewed and amended by Congress, will be passed in a timely fashion.