Sunday, January 31, 2010

Obama's First Year: The Economist

I often agree with the analysis and views of the Economist. That's probably because I tend to agree with their general views on the appropriate balance of economic policies and social responsibilities. We share an advocacy of robust open markets intelligently regulated to protect those markets and society from the avaricious side of man's nature, the inclination to rationalize and risk actions that will weaken or destroy those markets, their customers and general economic health in order to advance personal or organizational gain.

We also share a view that it is society's responsibility to provide universal education and health care to it citizens, as well as a reasonable subsistence living for those unable to compete in the marketplace: the aged, infirm and disabled. And yes, this represents the higher sense of social responsibility that an advanced society acknowledges to its citizens--at least in the view of many of us. But it is also justified by the more mercenary and pragmatic concern for strengthening the labor and intellectual capital components of our economy--and ultimately reducing the cost of both. And lastly, we share advocacy for international cooperation on an effective strategy to address climate change, or global warming.

It should surprise no one that The Economist has consistently been open and unbiased about the candidacy, potential and presidency of Barack Obama. They have unerringly supported his views, goals, and policy initiatives that appear wise, needed, or consistent with their own--and they have been unfliching in their criticism of those that are not. But on balance they have been favorably disposed to the potential and goals of the Obama presidency--especially in a time of such economic carnage, polarized domestic political dysfunction, and bruised, sometimes fractured international relations.

Likewise, it should not be surprising that The Economist's assessment of President Obama's first year in office is generous in acknowledging his limited progress and successes, yet direct, scolding, and uncompromising in pointing out his lack of progress and weaknesses. From The Economist:

Barack Obama's first year has been good, but not great—and things are going to get a lot harder

One year on, how well has he done?

Not too badly, by our reckoning (see article). In his first 12 months in office Mr Obama has overseen the stabilising of the economy, is on the point of bringing affordable health care to virtually every American citizen, has ended the era of torture, is robustly prosecuting the war in Afghanistan while gradually disengaging from Iraq; and perhaps more precious than any of these, he has cleared away much of the cloud of hatred and fear through which so much of the world saw the United States during George Bush's presidency.

More generally, Mr Obama has run a competent, disciplined yet heterodox administration, with few of the snafus that characterised Bill Clinton's first year. Just as important have been the roads not taken. Mr Obama has resisted the temptation to give in to the populists in his own party and saddle Wall Street with regulations that would choke it. He has eschewed punitive taxation on the entrepreneurs who animate the economy; and he has even, with the notable exception of a boneheaded tariff on cheap Chinese tyres, turned a deaf ear to the siren-song of the protectionists. In short, what's not to like?

--"Time to Get Tough," The Economist (1.1410)

That's the part that addresses progress and successes. Here's the part that, as the article's title suggests, addresses the lack of progress and weaknesses:

[What's not to like?] Only one thing, really; but it is a big one, and it is the reason why most of the achievements listed above must be qualified. Mr Obama has too often remained above the fray, too anxious to be liked, and too ready to do the popular thing now and leave the awkward stuff till later. Far from living up to the bracing rhetoric of his inaugural, he has not been tough enough. In this second year of his presidency, to quote his formerly favourite preacher, his chickens will come home to roost.

It could have been so much better

At home Mr Obama's dangerous diffidence explains why the health bill that now seems likely to pass, while on balance a good thing rather than a bad one, is still a big disappointment. Yes, it makes provision for tens of millions of Americans who lack insurance, and many more who fear being cast into that boat should they lose their jobs. But it is expensive, and it takes only hesitant steps in the crucial direction of cost control. Constantly rising health-care charges threaten the entire federal government with bankruptcy. So it is tragic that the most comprehensive health reform in generations does so little to tackle this problem. Yet that, alas, is exactly what you would expect to happen if a president leaves the details to be written by Democrats in Congress, barely reaches out to the admittedly obstructive Republicans on issues such as tort reform, and remains magisterially aloof from much of the process.

Mr Obama's failure to take on the spend-alls in his own party will cost him politically. His ratings are falling, and in November's mid-term elections he looks likely, at the very least, to lose his supermajority in the Senate. [Of course, Obama lost his supermajority much earlier with the surprising, but now understandable victory of the likeable, politcally appealing Mr. Brown, the Republican candidate for the Senate seat in the special election in Massachusetts. And the healthcare legislation so close to passage is now again very much subject to renegotiation. --GH]

Some critics argue that instead of focusing on health, he should have concentrated on jobs (the unemployment rate is two points higher than the 8% peak he predicted). That seems unfair: health care was the core part of his campaign and something America had to tackle. What has spooked the voters is the sheer cost of the scheme—and the idea that Mr Obama is unable to tackle the deficit.

They are right to be worried. The national debt is set to reach a market-rattling $12 trillion by 2015, more than double what it was when Mr Obama took over. It made sense for the government to pump money into the economy in 2009; but this year Mr Obama must show how he intends to deal with the debt. So far, he has not offered even an outline of how he intends to do so. Because he failed to be harsh with congressional Democrats (whose popularity ratings, incidentally, were a fraction of his), he will now have to do more with Republicans.

Not by carrots alone

His long-drawn-out decision on Afghanistan mirrored that on health care. Yes, by sending more troops, he did more-or-less the right thing eventually. But it seemed as if the number of troops was determined by opinion polls, rather than the mission in hand. And the protracted dithering was damaging to morale. [Of course, another compelling view is that, given the discouraging history of ventures into Afghanistan, and the spare and disputed bases for optimism about ours today, a thorough, public questioning of our direction and strategy in Afghanistan was necessary to assuage the concerns of a skeptical public.--GH]

Mr Obama has been on a goodwill tour of the world, proffering the open hand rather than the fist. Yet he has nothing much to show for it, other than a series of slaps in the face. Israel dismissed his settlement freeze. Going to China with human rights far down the agenda and the Dalai Lama royally snubbed seems to have done Mr Obama no good at all, judging by the fiasco that was the climate-change summit in Copenhagen. Co-operation between the "G2" was supposed to help fulfil Mr Obama's grandiose promise that his presidency would be "the moment when…our planet began to heal". Hitting the reset button on relations with Russia has produced nothing more than a click. Offering engagement with the Iranians was worth a go, but has produced nothing yet. This generosity to America's enemies also sits ill with a more brusque approach to staunch allies, such as Japan (see article), Britain and several east European countries.

Some worry that Mr Obama will always be a community organiser, never a commander-in-chief. In fact he did not get to the White House by merely being nice, but by being bold and often confronting awkward subjects head-on. It is not too late for him to toughen up. Firm talk about the budget in his state-of-the-union message would help. Now that the administration's priority has shifted from engaging Iran to imposing sanctions, Mr Obama may be able to apply the stick and not the carrot. He is due to see the Dalai Lama. He might even, if he can relearn the virtues of bipartisan dealmaking, bully a climate-change bill through Congress. But this will all be a lot more difficult than anything he did in his first year.

No it is not too late. They are correct. One year has passed. One year only. And as was noted, his first year produced more progress, even success, than some earlier presidents. It's just that the challenges have been so important and so many, and the promises...well, so promising. But there is still a lot of road to be traveled over the next three years. And I still find good reasons to believe that the promise and potential of President Obama is quickly coming down the learning curve, and that progress will quicken in many areas, and approaches judged weakness will be reshaped to reflect strength and effectiveness.

This, to some extent, will happen. But the single-minded, defeat-Obama-at-all-costs mission of the Republicans; the undisciplined, self-interested, pork-barrel freelancing of congressional Democrats; and the surpassing ineffectiveness of Democratic congressional leadership is a daunting gauntlet to run to achieve success for any meaningful part of the president's initiatives. So yes, the gloves must come off. It is bare-knuckle time with his own party, the obstructive opposition, and the more dangerous or recalcitrant international players.

And the president apparently must not delegate leadership if the results are to be at all trusted. He will have to carry on his back the full burden of leading in the trenches in every domestic and international venue and on every major issue. But, even the tireless Obama may lack the requisite time and energy to carry off all that. And even if he could, in these most challenging of times, it may not be enough.

www.economist.com/displayStory.cfm?Story_ID=15271012

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