Fallout from the mid-terms

I definitely think Obama got a raw deal on Tuesday, but the Congressional Dems more deserved their fate. Obama deferred to special-interest-tainted Congress too much and didn't win the message war vs. the GOP (much of the time he didn't even participate, maybe wanting to show that he was above that). But as a young president who wanted to be transcendent and collaborative, maybe that's just the game plan he chose and got burned for it. Despite the media hype, Obama's presidency has not been extremely leftist. Sorry libertarians, but responsible gov'ts should get more involved during recessions. Maybe that can be problematic, but it's better than the alternative (see Japan's lost decade). Say Obama behaved like a "Blue Dog" and let the banks, local gov'ts, and auto go off a cliff towards a decade-long depression, laissez faire Hoover style. He and the Dems would have been slammed in the mid-terms anyway. So he might as well have tried to stimulate a recovery if he was going to lose no matter what. And according to NBER and Wall Street, he was mostly successful, though the pace is far from stellar of course.

Powerful conservatives in the media and business saw Obama's presidency as an affront to all they stand for (corruption) and hope to achieve (more profits), so they made his destruction their top priority. Nothing Obama could have done would have dissuaded them, even if he completely imitated Regan's leadership. Even now after their election victory, Senator McConnell said this week that denying Obama re-election in 2012 is the GOP's top priority. Soon-to-be Speaker Boehner is committed to repealing Obamacare. Not fixing the country's many problems, not helping Americans, not making the world safer, but defeating Obama and erasing his accomplishments. That's not conservatism, that's vendetta. To them, Obama may be a bigger enemy than Osama. These are the people controlling the purse strings in the House now. Good job, American voters.

I guess there is the argument that Obama spent too much effort and political capital on health care and not on job creation. Well our horrible health system is a drag on employers and the economy, so reform was a type of stimulus too. I don't think the final version of health care was that helpful for the economy, but it was better than the status quo. Then the GOP lambasted the Dems for the Recovery & Reinvestment Act, but many critical GOP congressmen were exposed for writing letters to gov't agencies asking for stimulus funds for their districts. Our infrastructure and social services are pathetic in many parts of the country, which also retards economic growth and social stability. Spending there is an INVESTMENT that will yield future returns. But I guess in the narrow-minded, short-sighted political culture, that's not persuasive enough.

Bottom line, the stimulus preserved or created some jobs, and extended unemployment benefits, which kept consumption from drying up and mitigated some of the social costs of mass unemployment. Many people still lost their jobs and income (while companies hoarded $1T is cash, but were hesitant to hire/invest even with record-low interest rates), but that is not Obama's fault. How much bang for the buck we got for the stimulus is another argument, but what was the GOP's alternative to the Obama/Pelosi agenda? Cut taxes, mostly for the rich and for corporations. We know that those type of tax cuts do not promote long term economic productivity. And Obama DID cut taxes for many Americans and small businesses, but he and Rahm didn't do a good enough job marketing that to the people. What about the bank bailouts? Remember that they started under Bush/Paulson, and few GOPs opposed them at the time. I'm not saying the bailouts were 100% good, but just using them as yet another example of GOP hypocrisy. Maybe all this back-and-forth between the Dems and GOP over how much the gov't is going to get involved in the economic recovery has contributed to the low corporate and consumer confidence in a recovery. It's a vicious cycle: if people don't think the economy is going to improve, they're not going to engage in the behaviors that are necessary for improvement. If Washington showed a unified front and brought all resources to bear to stimulate a recovery, then maybe companies would feel better about re-hiring. But what stood in the way of that? The threat of GOP Senate filibuster. And weren't they supposed to be the pro-business party?

Sports analogies in politics are overused, but maybe in this case it's fitting. A great coach on a bad team may lay the foundation for improvement, but he will still get fired after a couple losing seasons, even if he did a great job with the crummy hand he was dealt. Then his replacement gets all the credit for the improvements that he initiated (like Dungy turned around the Bucs but Gruden won the Super Bowl). Government policy doesn't usually immediately affect economic conditions, so any good or bad that Obama did may not even be known today or even by 2012. But in this era of 24-7 cable news, smart phones, and instant gratification, people are impatient for results. What can a president really do to turn around a $14T economy anyway, especially when 535 members of Congress all want their say, and almost half of them are committed to his failure? Voters seemed to be worried about the "size of government" and our deficit spending, but many conservatives didn't speak up during the Bush years and Medicare Part D (a bigger expansion of gov't health care than anything Obama has done). We had 4-9% GDP growth and were still running deficits under Bush, so what do you expect Obama to do with emaciated tax revenues and more people with their hands out? Debt is truly a problem for America (currently our deficit/GDP trends are moving towards Greek levels), but not our biggest problem. Plus much of our debt is due to our wars of choice and veteran's care, which no politician is prepared to cut. A household economy is not the same as a government's budget, so all those Tea Partiers using the one-liner "tighten our belts" cliches are just ignorant. There are plenty ways that the government can get more efficient, but it's not like the GOP has a great record of delivery on that either. So what is America really getting with a GOP House and an emasculated Obama?