In politics, new administrations often try to do the opposite of what their predecessors did. Proponents of this thinking cite Bush’s refusal to play peacemaker between the Palestinians and Israelis as a prime example. For the last few months of President Bill Clinton’s term, he worked extraordinarily hard to get a deal done. Once Bush came in, he arrantly abandoned those efforts. Once again we are confronted with a marked change in approach. For the last few years, President Bush has taken the my way or the highway approach. To his admirers, his actions reflect those of a principled and tough leader. To his detractors, his actions are rooted in stubbornness and delusion. But it is indisputable that Bush alienates a good chunk of lawmakers. Barack Obama, however, is charting a fundamentally different route; he really is attempting to unite everyone around the economic crisis.
Barack Obama’s real economic philosophy is opaque. He frequently appears to be an acolyte of Keynesian economics, where the government has a moral imperative to put equality ahead of efficiency. This was evident when he told ABC News’ Charlie Gibson that capital gains should be raised even if it decreases revenue for the government. This is evident when he tells college graduates to eschew the private sector to join the government to solve our nation’s ills. This was probably most evident when he told New York Times senior economic correspondent David Leonhardt that one of his favorite quotes concerns the pitfalls of strictly measuring GDP. He spoke affectionately of Robert F. Kennedy’s point that GDP “counts special locks for our doors and jails for those who break them…but not the health of our children, the quality of their education or the joy of their play.”
There must, however, be cognitive dissonance with his beliefs. He prefaces every economic argument by displaying a healthy respect for free markets. He thinks free markets have no rival in their ability to efficiently allocate resources. He told Chris Wallace of Fox News last spring that deregulation during Ronald Reagan’s presidency positively impacted the middle and lower class because prices came dramatically down. And he said last summer that one of his favorite economic thinkers of the twentieth century is Friedrich Hayek, a man who passionately argued for the minimization of central planning.
His seemingly bipolar views of the economy are in full force with his bailout proposal. A major part of his proposal is stimulating demand; give people money and they will spend it, creating a multiplier effect that stimulates the production of goods and services. This is an inherently Keynesian idea. He also believes the government is prudent and intelligent enough to figure out how much money should be invested in education, healthcare, and alternative energy with very little respect to market mechanisms. This is another Keynesian belief. He, at the time, advocates for many supply side measures to stimulate business. This includes a reduction in certain taxes and a tax credit for hiring or rehiring workers.
The only possible answer to why he wants such a contradictory bill is to maintain or increase his popularity. One of his aides told the Wall Street Journal that he wants at least 80 out of a 100 senators to vote on the bill, even though only 60 would be required to make it law. It is as if the bailout is a direct indictment on presidential power without popular backing. It’s another example of history moving from one extreme to another. Whether it’s the fierce intellectual movements of foreign policy from realism to neoliberalism or free markets to state control, the zeitgeist seems to change in 180 degrees. The execution of these ideologies certainly don’t move with such extremes. President Woodrow Wilson, a President who wanted to spread democracy and liberty around the world, still had good relations with the Ottoman Empire while they were killing millions of Armenians. And the free market Ronald Reagan never cut spending that much, evidenced by the US’ sizable deficits during the 1980s. But the average belief out there, which a President tries to match with rhetoric, always seems to move in extremes. So now it is about the President making good with everyone. But we should remember that President Roosevelt didn’t enter WW2 soon enough because of the country’s protectionist attitudes after WW1. And we should remember how worthwhile it was for President Harry Truman to desegregate the troops even though it almost cost him his reelection. Yes Obama should try to reach across the aisle more than Bush did. But reaching across too much might be counterproductive. The point of a representative democracy is to elect people who we think have good judgment, not to elect people to vote on how we think with our limited views. Let’s hope Obama doesn’t pamper we the people too much.
