Blogs > HNN > OBAMA OVERREACHES?/update

Nov 22, 2008 9:59 am


OBAMA OVERREACHES?/update



Obama cares less than Putin? I cannot believe I am writing this but that was the question that crossed my mind upon reading these two headlines: Putin: Crisis will not sink Russian economy and Obama stays out of car wars on the Hill. He also stayed out of the the G-20 economic summit. His failure to appoint a treasury secretary or promise not to raise taxes merely makes matters worse. We may not have breadlines yet. But we sure have food distribution lines and even Democrats are losing their patience.

Ram Emanuel's quip even enforces suspicion that Obama and his people actually view the current global meltdown as good for another Democratic party New Deal:

“Rule one: Never allow a crisis to go to waste,” Mr. Emanuel said in an interview on Sunday. “They are opportunities to do big things.”

Yesterday WSJ editors warned that Democratic party firsters may find that they bit more than they can chew:

No doubt many Democrats figure nothing that happens before January 20 is on their watch, so they don't need to worry. But the deeper the economic fall, the harder the road back.

Today, even the NYT is questing Obama's aloofness, albeit most gently. In a front page column Floyd Norris writes:

By resigning from the Senate before the current session began and allowing it to appear that a sense of drift could prevail until he is inaugurated, Mr. Obama may have missed an opportunity to exert leadership.

Liberal Nobel price economist Paul Krugman is more direct. He calls his column, The Lame-Duck Economy and warns about the consequences of letting the economy worsen in order to ready the country for an Obama New Deal:

Everyone’s talking about a new New Deal, for obvious reasons. In 2008, as in 1932, a long era of Republican political dominance came to an end in the face of an economic and financial crisis that, in voters’ minds, both discredited the G.O.P.’s free-market ideology and undermined its claims of competence. And for those on the progressive side of the political spectrum, these are hopeful times.

There is, however, another and more disturbing parallel between 2008 and 1932 — namely, the emergence of a power vacuum at the height of the crisis. The interregnum of 1932-1933, the long stretch between the election and the actual transfer of power, was disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action. And the same thing is happening now.

It’s true that the interregnum will be shorter this time: F.D.R. wasn’t inaugurated until March; Barack Obama will move into the White House on Jan. 20. But crises move faster these days.

How much can go wrong in the two months before Mr. Obama takes the oath of office? The answer, unfortunately, is: a lot. . . .

Is economic policy completely paralyzed between now and Jan. 20? No, not completely. Some useful actions are being taken. For example, Fannie Mae and Freddie Mac, the lending agencies, have taken the helpful step of declaring a temporary halt to foreclosures, while Congress has passed a badly needed extension of unemployment benefits now that the White House has dropped its opposition.

But nothing is happening on the policy front that is remotely commensurate with the scale of the economic crisis. And it’s scary to think how much more can go wrong before Inauguration Day.

Does Obama care? Not really. He continues to put the country second arguing that he does not know what where to start. David Brooks may be comforted by the IVY degrees of the Obama advisers but I am not. These are not only rich enough to avoid real economic pain but I have yet to meet an Ivy policy wonk with an open mind and a real caring heart.

Yes, the stock market ended the week well. I am glad. But whatever hope I have focuses on Obama and his men realizing that their political game playing is beginning to loose its charm even with their rich Democratic supporters. Let us not forget, Obama knows only one thing: how to run and win. He also knows that he was elected by those earning more than $100,000 and they have seen their stock portfolio decimated.

Update: New appointment mean that Obama realized his mistake and began to bite some bullets.




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