Disenchantment About Obama

[Since this posting includes different writings pulled together, it may be a bit disjointed. Sorry.]

More and more, I am disenchanted about Barrak Obama. I fear his unrealistic bi-partisanship; his close ties to big business, especially Goldman Sachs, home to Robert Rubin and his economic and financial friends, Timothy Geithner and Larry Summers; his back-tracking on gay rights and torture memos; and his handling of the bail-out which was too small to begin with and is defended in such a way that a needed booster shot may never take place. He is endangering Democratic rule and making it easier for Republicans to come back to power and enact whatever God-awful things they come up with in 2013 (or even 2011). More later. (What follows is often edited comments.)
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FRIEND A
A friend of mine writes: "I'm disappointed that you're disappointed in Obama . Whadda-I-know, but is more G spending than projected the answer? Has he really sold out to Wall Street? Doesn't he--the Administration--have to operate in a harsh political arena where not just the paleo-Republican party, but many from his own party would not tolerate the radical measures you would like to see?"
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ME
Everybody agrees he’s smart. One question, then, is why is he behaving so cautiously, and seemingly at opposition to his rhetoric. And your answer is the political environment. But I think he is far more moderate, not only in action than his orations, but more moderate than what he has to be.

The disparity between what he says and the cautious policies he pushes–in medical; in stimulus; in his appointments–and not just Geithner (who you could argue, not persuasively to me, he needs for expertise) and Summers (the same) but the Interior guy and the New Hampshire guy, whatever his name, who backed out at the last moment; his back-down on the bill on helping the small, in trouble, mortgagees on a bill he had said he supported and which passed big in the House, then failed in the Senate; his commitment to support Spector in future Democratic primaries, without getting any kind of commitment from Spector to support more liberal measures, which it appears he won’t.

This conservative pattern goes beyond, I think, political need. He does, however, say whatever he thinks will get him elected, than picks and chooses which of these promises he intends to follow up on. In the end, he is simply more conservative than his rhetoric. One additional thought: Obama has made "hope" his campaign logo. What we need is someone who also says we will need to sacrifice, to reach the goals we want–medical care for all and full employment. And he has to show more courage on the gay front and reconsider our commitment to Afghanistan.

But my point is that there is ultimately a conventionality in his thinking–that education is the answer (and especially his emphasis on mathematicians, engineers, and scientists), the smart grid, etc. With more of these, poof, we live happily ever after. And I don’t think this is political. I think, beyond his intelligence and modest liberality, he is unaware of the real hole we are in. This is not simply an empty suit, words I should not have written earlier. It’s a belief that he is at bottom so conventional in his essence that he cannot see that we are, economically, in a world that is shifting under our feet. It’s a belief that old-fashioned ways–which worked in decades since WW II–will readily work in the new world we are now in. In reality, China and others are undermining the enormous gap in well-being we have over them and how, in a world where their labor is so cheap and their government so powerful, can we continue to maintain our prosperity? This is the 64 trillion dollar question.

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A 2nd friend (FRIEND B) more sympathetic to my view, responding to what was written by FRIEND A

"I think (FRIEND A'S thoughts display some naivete.

1 The enormous commitments (Trillions!!) to the financial industry with the US holding the bag (TALF after TARP) and no nationalization in sight, all banks having passed the stress with flying colors. Nothing for homeowners. Continuing scandal of securitization and derivatives as if nothing had happened.
2 Turnabout on torture, abuses, civil liberties, etc. The Bush argument: National security is in danger, so we cannot do anything to hurt our troops!! As if the pictures, not the facts, are what matters.
3 Single payer off the table, not even to be heard in the secret debate, a total cave-in to promises of "reform" from the corporate culprits. Endless billions wasted and entitlements in danger.
4 Endless commitment to Af-Pak (2024!) war with a new general more interested in counter-terror than counter insurgency.
5 No change on Israel and continuing saber-rattling with Iran.
6. Bloated and totally ineffective spending on military continues as if we could afford it.
7 Maybe cap & trade on carbon, but no carbon tax to begin to bring down emissions and begin to deal with global warming.
8 No effort to mobilize the public to understand how precarious our economic, financial, diplomatic, infrastructure, educational and manufacturing deficits are.
9 His "Moslem" speech will be in Egypt!! The poster boy for authoritarian regimes which are fueling Al-Queda and Islamicists everywhere and which is the chief Arab supporter of the worst aspects of Zionism.
11 No real change that the public hungers for. Go along and get along with Republicans,
Conservative-Dems, and almost every aspect of the status quo. No use of the bully-pulpit when he still has it. No real effort to curb the multinational corporations in their efforts to avoid all taxation while driving American economic and foreign policy.

Those are just the high points! I agree with Friend A that Obama has real opposition and it’s politically tough, but in almost every case he takes the line of least resistance and does not fight back. I don't agree that he is "an empty suit"; he is the smartest leader we could have and that may be the reason that he may be the most disappointing. If he fails, not because he tried and lost fighting, but because he was so tepid, the consequences will be even graver for the US. You and I, I think, agree, that that could lead to Republican victories in 2012 and to a political future that we would find extremely unpleasant.
I wish it were different and that we could have some confidence in the possibility of real change, but I think that hope is rapidly dwindling."
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Paul Krugman’s blog. He has since become a bit more positive on Obama’s health plan, although whether this is justified remains to be seen. But his criticism is still valid, in my view, even if what passes in the health area turns out to better than what PK thought on June 24. And I think it likely that the health plan will be far less than what we would have expected after Obama was elected.

Paul Krugman: June 24, 2009: Obama messes up on health care, big time. Really bad news on the health care front.

And now he’s done it on a key component of health care reform. What was the point of signaling, right at this crucial moment, that he’s willing to give away the public plan? Let alone doing it at the very moment that he was making such a good case for it?

Maybe there’s a way to recover from this. But it’s up to the health reform activists to stiffen the administration’s spine. Obama may be satisfied with "broad parameters" — but the rest of us aren’t, and have to make that known.After making the case for a public option, and doing it very well, Obama said this: "We have not drawn lines in the sand other than that reform has to control costs and that it has to provide relief to people who don’t have health insurance or are underinsured," Mr. Obama said. "Those are the broad parameters that we’ve discussed."
There he goes again, gratuitously making a big gift to the other side.

My big fear about Obama has always been not that he doesn’t understand the issues, but that his urge to compromise — his vision of himself as a politician who transcends the old partisan divisions — will lead him to negotiate with himself, and give away far too much. He did that on the stimulus bill, where he offered an inadequate plan in order to win bipartisan support, then got nothing in return — and was forced to reduce the plan further so that Susan Collins could claim her pound of flesh.
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Julian E. Zelizer is a professor of history and public affairs at Princeton University's Woodrow Wilson School. Julian E. Zelizer says President Obama needs to speed up stimulus spending to jump-start economy.

Vice President Joseph Biden has acknowledged that the $787 billion economic stimulus program has not yet had the impact that the White House was looking for.
"We misread how bad the economy was," Biden said during an interview.
But Biden's account downplays the damaging compromises that the administration made on the stimulus package back in February, as well as the problems that have emerged in implementing the program.

Back in January and February, when the administration and Congress completed their work on the economic stimulus bill, several Democrats and liberal pundits warned that President Barack Obama's stimulus was not going to be enough to revitalize the economy.

While Republicans argued that Congress should do nothing other than cut taxes, Obama's Democratic critics said that another bad scenario was to pass an expensive and highly visible measure that would not actually accomplish the job. This would become a recipe for political attacks down the road, evidence that government can't help achieve economic stability and that President Obama's judgment on policy was suspect.

And there is some early evidence that this scenario is now playing out. According to the most recent Gallup Poll, many of the cherished independent voters in swing states who had shifted toward the Democrats in the 2006 and 2008 elections are now unhappy with the president's policies.

While President Obama's approval ratings remain at the high level of 56 percent, according to Gallup, these independents are concerned that the president's programs are resulting in too much government spending without achieving clear results.

With two million jobs having been lost since Obama started his presidency, it is difficult for many Americans to react well when Director of the White House National Economic Council Lawrence Summers says, "the stimulus is on track...."

The early criticism is now worth revisiting. When Congress agreed to the final stimulus in February 2009, liberal critics offered two major complaints. The first was that the level of spending in the bill was too low given the dire state of the economy.

"I'm not sure if the $800 billion stimulus plan is adequate to the problem," said Nobel Prize- winning Princeton economist Paul Krugman at Willamette University in January before the final deal had been reached. "We're facing one hell of a crisis and we'll need more than a Band-Aid . . . My guess is that the administration will be back later this year for a second round."

After initially complaining that the stimulus was too small, liberals were then furious when Obama agreed to cuts in the size of the stimulus in response to a small group of Senate centrists.
The second criticism had to do with where the money was directed. The liberal critics argued that the final stimulus bill focused too much on infrastructure programs and tax cuts, with not enough assistance being provided to state and local governments. Cuts in the legislative process eliminated funding for states to help with food stamps, school construction and more.

Finally, there is a problem with the stimulus that did not really become clear until after the bill passed. The implementation has been flawed. Currently, only a small percentage of the stimulus funds has been spent. While countries such as France have immediately made use of their stimulus money, the United States has gone slower.

Rightly concerned about the potential misuse of funds, the administration has moved too far in the direction of delaying the distribution of funds. The government's grinding bureaucratic process has also slowed down progress. And the U.S. relies heavily on third parties rather than directly spending the money.

The stimulus is experiencing problems similar to those of President Franklin Roosevelt's Public Works Administration. In 1933, the PWA was slowed down by administrator Harold Ickes due to concerns about corruption and inefficient projects. Ickes, who believed that PWA faced the "unattainable ideal of administering the greatest fund for construction in the history of the world without scandal," centralized decision-making and insisted on approving virtually every decision personally.

While many of his worries had merit, the White House was unhappy that needed dollars were not getting out the door and into the hands of workers. Roosevelt was fortunate because he could rely on Harry Hopkins and the Federal Emergency Relief Agency, which spent money as quickly as possible. Eventually, despite its problems, the PWA created a lot of jobs and accelerated the development of the South and the West.

As the unemployment rate continues to rise and the stock market swings up and down, it is difficult for many Americans to understand the purpose of allocating so much money but then not spending it as soon as possible. The worse that economic conditions become, the harder it is for existing levels of funding to have their desired impact.

Seeing results is important politically if the White House needs to ask for more money to jump-start the economy. The stimulus has become a litmus test through which to evaluate the president and this problem compounds the challenge of passing health care and other measures sought by Obama.

The best strategy for Obama is not to react as Biden and Summers did. Rather, the best strategy is to fix this. With all the doom and gloom about the president, he still enjoys strong standing with the public, and Democrats remain in a good political position.

It is worth remembering that many of FDR's earliest programs, such as the National Recovery Administration, did not succeed, and others, such as the PWA, experienced some problems during the implementation phase. But in the end, FDR's New Deal is widely considered by most historians to have been a tremendous success.

While the economy was not fully revived until World War II, the New Deal provided relief. It significantly and steadily brought down levels of unemployment starting during FDR's first term. The jobless rate dropped from a high of nearly 25 percent in 1932 to just above 9 percent in 1937.

Even if, as some conservatives insist, you somehow consider people who were working in New Deal public works jobs to be jobless -- a dubious claim -- the unemployment rate fell by more than 10 percentage points during this period. The only rise in unemployment occurred in 1937-1938, and that was precipitated by FDR's reducing levels of public spending.

Today, the Obama administration cannot afford to stand still on the stimulus. The time has come to correct what's gone wrong with the existing program by speeding up spending and to consider the possibility of making a politically difficult request for more.