Obama's Lost Year - New Yorker

The President's Failure to Connect with Ordinary Americans

George Packer

15 March 2010

Recovery Act signed on February 17, 2009 for 787 billion.

• In order to avoid a filibuster, Obama agreed to tax cuts that had little to do with economic recovery, and kept the stimulus package at the low end of what most economists thought was required.
• Spending was spread out over two years.
• Instead of giving money to local governments to hire workers, the administration thought regulations would drag out public hiring and has always felt that sustainable job creation is best done by the private sector.

Impact of the Recovery Act was nearly invisible

• No refund check for everyone like the Bush years, but instead refunds show up in the slightly larger paychecks over two years which can be missed, but more likely to be spent.
• Large numbers of jobs can be credited to the stimulus allowing states to keep public employees.
• Money was invested in long term infrastructure projects like high speed rails, etc and which was invisible.

The Key to Obama's first year is the Recovery Act

• Intelligent, but cautious policy making
• legislative compromises that watered down the bill's impact
• Immediate opposition campaign to declare it a failure.
• Gradual public disillusionment.

Shortly after the Inauguration, Republican party leaders announced to Obama that Republicans would vote against it as a block, even before negotiations had begun

Republicans thought there was greater political advantage to standing in opposition so democrats would take sole authorship of recovery efforts, rather than to help with the problems.

Windfall Tax

• The House voted to levy a 90% tax on AIG bonus and any other bonuses from firms that received public money.
• White House killed the bill because it was unconstitutional and felt that Wall Street was needed to restore long term solvency to the banks.
• Its difficult to tell people who are losing their homes that the situation is complicated.

Obama ties together the whole of his domestic agenda as a difficult, but necessary postponement of instant gratification in order to create a durable and widely shared prosperity. In a pattern that the White House has followed all year, the President just made a speech and moved on.

Similarities to Reagan

• In 1982, Reagan had 10.8% unemployment with a swelling deficit.
• Reagan continued a rhetorical offensive always drawing a distinction between his views and the Democrats.
• "Our current problems are not the product of the recovery program that is now just under way, as some would have you believe, Reagan said in his first State of the Union, they are the inheritance of decades of tax and tax and spend and spend.
• Obama's characterization that the economic crisis is a storm brought on by irresponsibility from both sides wasn't as dramatic a distinction as Reagan's words.

Obama's aversion to partisan small-mindedness and ideological oversimplification prevented him from making his case for his political agenda.

• Obama isn't rendering the country's story in a way that is memorable and convincing and as Begala puts it, "He doesn't situate it in a philosophy"
• Axelrod will tell you that they won because of character, not issues
• Barney Frank thinks that Obama could have done better if he were more adversarial to insurance companies and pharmaceutical firms and banks---suggesting that he was trying to be liked by too many people.