What Obama Has Done Right

With Maureen Dowd, Thomas Friedman, and long-time ally Rep. (D) John Conyers jumping ship, almost everybody has some problem with the President these days. This is normal, but the rapidity of anger is not normal. So in the spirit of all the criticism thrown Obama’s way, it’s useful to step back and give him credit where credit is due.

Not Nationalizing the Banks. Top economists like Paul Krugman and many of his advisers, including Larry Summers, wanted to nationalize Citi and Bank of America way back in the spring. Presidents don’t get credit for things they didn’t do, but in this case Obama should. At this point it’s hard to see that we would’ve been better off had Obama done nothing. Chaos would’ve  probably ensued and the financial markets would’ve gone into a tailspin. With the Dow above 10,000 and with more liquidity in the debt markets, things are relatively decent.

Not going after Capital Gains or the Income Tax. Bush’s tax cuts for a 35% rate on top income earners and 15% rate on capital gains are set to expire in early 2011 and Obama will let them expire at that point. But Democrats wanted him to hasten the process and increase them now. Obama showed resolve and stuck with the economic theory that holds you don’t raise taxes during a recession. Another example of Obama deserving credit for not doing something.

Standing up for Colombia. Many of Obama’s foreign policy detractors have accused him of weakness, but he certainly showed strength by solidifying the relationship America has with Colombia, our strongest ally in Latin America. With Venezuela and FARC threatening war, he deployed extra troops and sold more weapons in August to deter both from any type of attack on Colombia. Perhaps Obama’s gambit simply increases the chances of war, but theory holds that his move should maintain the peace.

Lessened Concerns in India. Obama has certainly been less pro-India than his predecessor was, but he quelled some of India’s worries by granting the country his First State Dinner and accepting an invitation from PM Singh to go there next year. These actions articulate Obama’s preference of India to Pakistan. The preference might be smaller than Bush’s was, but he does not equate the two as many in India feared.

Carved out a Good Relationship with Australia. President Bush maintained an excellent relationship with former PM John Howard and Obama is doing the same with PM Kevin Rudd. In the general election, Australians feared that only McCain would be good to their country (he wrote a glowing op-ed in their top newspaper, Obama did no such thing). But since he has been in office, Obama has made a point of speaking to Rudd relatively frequently and has seen him a few times. It’s probably not random that a liberal leader from Australia is sending more troops to a dicey Afghanistan—-it’s probably good diplomacy by Obama.

When the media said Obama’s presidency was optimistic and brilliant in February, that was hyperbolic. And the media’s current narrative that his presidency is doomed and unintelligent is equally foolish. His presidency has been a mixed bag from the start and still is today. That’s the real narrative.

The Political Moment is Now to Repeal Don’t Ask Don’t Tell

President Obama has repeatedly promised that he’ll jettison the Pentagon’s homophobic policy toward gays before 2012. That inherently political promise means he’s searching for the best moment to do so. If there were ever a perfect moment to do so, it’d be now. He’s losing liberal columnists like Maureen Dowd and Richard Cohen because they find him to be spineless, too much of a political compromiser. On top of that, he’s losing many liberals over Afghanistan. A catholicon for his disillusioned base would be  the elimination of Don’t Ask Don’t Tell.

If he indulges the desires of his base, he’ll energize them for crucial 2010 midterms and purchase more of their support for Afghanistan. And it’d be a great fundraising tool—-many wealthy liberals are passionate about the subject.

Some might contend that such a gambit would alienate moderates, but a majority of moderates are pro-gay. And for those who aren’t, he has lost them anyway over healthcare and spending.

In many respects, President Bush failed in his second term when he lost his base over concessions on spending and immigration. Politics requires support from the other side, but it most importantly requires vigilant support from the donors and volunteers who put the President in the Oval Office. Without them, a President’s policy dreams stay as dreams. If he wants to fructify them, he needs his base.

Political Consequences of Escalating Afghanistan

CBS News reports that Obama will escalate our presence in Afghanistan with an additional 40,000 troops. Commentators speak of the merits and demerits of doing so. What does this mean for US foreign policy, the budget, the 2012 election against Republicans, etc. But the most interesting part will be the emerging quarrels Obama will have with key Democrats, namely his Chief of Staff Rahm Emanuel and Senator Russ Feingold.

Virtually all relevant newspapers report that Emanuel vigorously opposes Afghanistan on the grounds that it will create acrimony among the doveish Democratic wing just like Vietnam did. As a man who prided himself on engineering the 2006 Democratic comeback , he will eschew any personal blame for future Democratic losses. He will help write the history books of this administration; that is he will probably be a source for Bob Woodward’s upcoming book on Obama. Just as David Petraeus was probably a key source in Woodward’s last book (Woodward wrote glowingly of him in it), the sagacious Emanuel will likely strike that bargain too. The Washington Post believes he’ll leave soon and seek political office again, incentivizing him all the more to burnish his reputation. Woodward’s revelatory book on Bill Clinton’s first two presidential years helped the Republican opposition in 1996 and so will disgruntled Obama aides.

Meanwhile, the liberal Feingold has extensively steamed over America’s deep involvement in the Middle East for quite some time. He was one of President Bush’s fiercest critics over war matters and recently wrote a WSJ op-ed calling for an American withdrawal from Afghanistan. Less noticed and more importantly, however, is his passionate opposition to Presidential “signing statements,” which let the President dismiss parts of legislation if he believes those parts to be unconstitutional. He repeatedly vituperated Bush for invoking this doctrine. And when Obama reallocated IMF appropriations as he saw fit, Feingold censored him for that too. With Obama drawing Feingold’s ire over Afghanistan, expect to see a real fight over these signing statements, given that they are often used on military matters. Feingold chairs the Subcommittee on the Constitution, so he possesses real legislative power on this front.

Presidential candidates and early administrations gain positive reputations because they keep their party members and senior aides happy. But when they begin to alienate their own, the real stories begin to trickle out. Colin Powell, Scott McClellan, and Dick Cheney are just a few examples of this during the Bush Administration. When a President blows off the opposition, they’ll nastily retaliate but say nothing substantive. When he fights his own, the contretemps surface.

Obama Poking Fun at (the art of) Economics?

There has been much uproar over the Obama Administration’s predilection for the metric “jobs saved.” Top advisers and the President himself will often say this program saved several hundred jobs or this bill saved several thousand jobs. His critics like Harvard economist Greg Mankiw say there’s no way to measure how many jobs a President rescued. They demand to ask for the methodology behind these statistics—does capitalizing the banks count for jobs saved because it  indirectly keeps many financial jobs afloat? How about companies that now have a line of credit available to them and are subsequently eschewing firings they were otherwise going to make? Or does that metric only explicitly refer to a job directly created by the government?  This thirst for rigor is certainly commendable, but specifying jobs saved is as legitimate or illegitimate as many other economic claims.

A variation of the notion jobs saved is jobs created, a favorite among politicians and professional economists. During the Bush Administration, for example, senior officials would often says his tax cuts created fifty-two months of job growth. The fact that there was a tax cut and the fact that there was fifty-two months of job growth are accepted facts. But the implied, or not even implied but stated relationship is his tax cuts caused the job growth. How can any economist that possesses the slightest facility with rudimentary logic make that claim with scientific confidence? The policies of Europe’s Central Bank (ECB), economic decisions by the Chinese government, and general weather patterns also played an undisputed role in America’s economic activity. Perhaps those variables, which are bigger than a 4.6% decrease in the income tax and 5% decrease in the capital gains tax, have more explanatory power. Yet that causal relationship was accepted among the intelligentsia. Why?

It was blindly regurgitated in the media because that causal relationship makes intuitive sense. The private sector has more money to spend, so it will hire more people. That statement is easy to accept, but it has no “intellectual rigor,” the thing that supposedly makes Larry Summers or Al Hubbard’s economic predictions more reliable than the predictions of ordinary citizens.

If we can accept that these causal relationships are more intuitive than scientific, then the notion of jobs saved isn’t so silly after all. Without the (successful?) execution of TARP (the debate can now morph into one about the relative importance of executing the law versus lawmaking), jobs would have hemorrhaged with more acceleration. Or perhaps the jobs saved is a despite argument because another President would have executed TARP better, which in turn would have made the capital markets work better and sooner? The more you think about it, the more complicated these seemingly basic arguments become. But if the goal is consistency and to avoid being hypocritical, then the same folks who criticize jobs saved should criticize jobs created or the same people who accept jobs saved should also accept  jobs created. That much I know, or at least think I know.

Obama’s Dereliction of his Iraq War Duties

Barack Obama is understandably busy with many things these days.   Tackling health care reform, prepping for the G20, revamping the military’s missile defense program, containing the Swine Flu are just a few of the problems on his plate. But the Washington Post had a highly disturbing assertion in an editorial written last week. The board wrote, “President Obama delegated management of Iraq to Vice President Biden in June; since then Mr. Obama has appeared to spare it little of his attention.” His decision to given more responsibilities to Biden is  a known fact; his subsequent decision to ignore it himself is news. Although the United States is in the process of dwindling down its  troop presence in Iraq to 50,000, as of today it still has its largest military commitment in Iraq. It’s inexcusable for the commander-in-chief not to play a hands on role in overseeing his military.

If there were any unambiguous and nonpartisan lessons to take away from the Bush Administration, it is that the President should pay careful attention to what his commanders and military strategists are doing. The very fateful and consequential decision to disband the Iraqi national army, for example, happened while Bush was primarily focused on reelection politics. Bob Woodward reported that Bush wasn’t aware of how or even why the decision was made. On the flip side, Iraq began to stabilize while Bush channeled a large chuck of his energy to decide on and oversee the surge. It doesn’t seem to be a stretch to say that there is a causal relationship between how involved a President is with his military and the success of his military.

Some defenders of Obama might argue that finishing a war is not as important as starting or waging one. That principle, however, flies right in the face of Obama’s frequently used phrase, “We must be as careful getting out of Iraq as we were getting in.” Others might say VP Biden is more competent than VP Cheney or other top Bush officials were. That’s unconvincing because Biden also voted for the Iraq War and proposed that Iraq be cut up into 3 small states—an idea virtually rejected  by all sides in the foreign policy community. And some others would say Obama is markedly smarter than Bush is. Even if that premise is granted, intelligence  achieves nothing without energy and commitment.

In George Herring’s comprehensive book on the history of American foreign policy, From Colony to Superpower: U.S. Foreign Relations Since 1776, he recalls a lighthearted conversation JFK and Richard Nixon had right after the 1960 election. Agreeing with Nixon about the importance of international relations, JFK said that he didn’t care whether the minimum wage was a $1.10 or a $1.25; the action and significance of the Presidency lies in foreign policy. Obama would be wise to take the advice of his political hero.

The Tragedy of Afghanistan Commentary

Once conservative columnist George Will espoused a conventional critique of the Afghanistan War last week and said our troops should come home now, there has been a herd mentality among columnists to join in on this increasingly popular position. In one way or another, these columnists have used one or a combination of these arguments: no foreign nation has ever succeeded in the rugged and undeveloped terrain of Afghanistan, it’s not worth American casualties,  the logic defense officials use for Afghanistan  should apply to intervening in a place like Yemen, and predator drones alone can do an adequate job of killing terrorists. All of these arguments are legitimate and compelling. But there’s no reason to come to these conclusions now; these arguments should have been made while President Obama decided to send more troops in February or they should not be made at all.

To illustrate what I am talking about, let’s look at the writings of NY Times columnist Tom Friedman. Before the casualties began to mount in July and August, he wrote optimistically about America’ chances of succeeding in Afghanistan nation-building. Exploiting the always tempting anecdote, he wrote, “When you see two little Afghan girls crouched on the front steps of their new school, clutching tightly with both arms the notebooks handed to them by a U.S. admiral — as if they were their first dolls — it’s hard to say: ‘Let’s just walk away.’ Not yet.” Yet months later, when the obvious and expected casualties began to amass in greater numbers, he lamented in yesterday’s column, “This is a much bigger undertaking than we originally signed up for. Before we adopt a new baby — Afghanistan — we need to have a new national discussion about this project: what it will cost, how much time it could take, what U.S. interests make it compelling, and, most of all, who is going to oversee this policy?” In defense of President Obama, he can’t flippantly decide in February it’s worth it and then walk away when the expected bad gets bad. Once the war machine gets going, it takes a long time to slow it down again—yet columnists write as if decisions can be easily reversible. Why didn’t Mr. Friedman contribute to this “national discussion” in February?

This is not to pick on Friedman in particular; anyone who goes to Realclealpolitics.com or Realclearworld.com with any regularity has seen a recent spike in anti-Afghanistan columns contemporaneously with a surge in casualties and marked decline in public support for the war. Correlation or causation? And if we revisit earlier articles about Afghanistan when the war had more public support, we can see several examples of effusiveness that borders on jingoism.  David Brooks, another NY Times columnist, titled an op-ed in late March “The Winnable War,” and concluded, “Foreign policy experts can promote one doctrine or another, but this energetic and ambitious response — amid economic crisis and war weariness — says something profound about America’s DNA.” When the war worsens over the next few months, shall he too be predictably against it? I’ve seen much more foolish bets than that one.

The point is that many of these columnists who supported the war six months ago knew we’d be exactly where we are today. Nothing surprising has happened yet. But those who so rapidly change their opinion seem to be obsessed with being where the ephemeral conventional wisdom lies. By doing so, their columns-columns that are in theory supposed to challenge and inform their readers- are nothing more than a naked attempt to corroborate  status quo thinking.

 

I feel a vast and rising ambivalence about this in the American public today, and adopting a baby you are ambivalent about is a prescription for disaster. This is a much bigger undertaking than we originally signed up for. Before we adopt a new baby — Afghanistan — we need to have a new national discussion about this project: what it will cost, how much time it could take, what U.S. interests make it compelling, and, most of all, who is going to oversee this policy?

I feel a vast and rising ambivalence about this in the American public today, and adopting a baby you are ambivalent about is a prescription for disaster. 

Put Republicans on Defense

As the  old saying goes, the best defense is a good offense. As Obama finds himself having increasing difficulties over health care reform, he should offer a few carrots to shame the Republicans into cooperation. Advocates of his might say this signals weakness, but the murky status quo of being open to anything is a doomed position.

As former Senator Bill Bradley suggested in a NY Times op-ed over the weekend, dangling tort reform might galvanize support among the middle. Obama’s reason for not doing so thus far is transparent; he does not want to jeopardize the relationship Democrats have with trial lawyers— a wealthy and powerful constituency. To succeed in politics, however, political parties must occasionally compromise with their financial backers. President Clinton got NAFTA through at the chagrin of the unions. President Bush distanced himself from the militant, anti-immigrant wing of the Republican party to change immigration laws. His attempt failed, but that was more a function of Bush’s inability to overcome his abysmal approval ratings in 2007 than a failure in challenging a special interest group. If Obama promised the Republicans tort reform, they would have to acknowledge it and at least come to the table. Except for vague promises of bipartisanship, nothing about health care hitherto now has really involved Republican ideas. And no one can deny that  liability insurance has played a key role in the rise of health care costs.

Another possibility is for Democratic lawmakers to personally pledge that they would join the “public option.” Over the years conservatives have successfully accused Democrats of hypocrisy. Two such examples of this are  when Democrats told middle-class communities that their schools should have poor students bused in while those same liberals sent their children to expensive private schools and when they  asked for ordinary citizens to personally reduce their carbon footprint while they  unnecessarily flew on private planes. To preempt this type of accusation, Democrats could show authenticity by joining a program they are creating.

And the White House should consider changing its political strategy to achieve its goals. Instead of exclusively going to 2012 swing states (Colorado, Ohio, Indiana, North Carolina, etc.), Obama should go to states that have a Blue Dog or moderately Republican senator. If within the same few days Obama announced tort reform and did a townhall in Nebraska, Sen. Ben Nelson would be a lot more likely to come on board. The same logic applies to  folks like Louisana’s Mary Landrieu and North Dakota’s Byran Dorgan. President Bush successfully did this for his 2001 and his 2003 tax cuts.  It is hard to see how going to swing a state and recieving good press for a day will tangibly make a difference three years from now, especially when swing voters  repeatedly tell pollsters that they make their electoral decisions within weeks of election day. And if a President can’t pinpoint to any policy successes, what difference will it have made if he shook an extra hundred hands in these states?

The brilliant and billionare investor George Soros said, ” I’m only rich because I know when I’m wrong…[I]basically have survived by recognizing my mistakes. I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or [take] flight.” Obama would be wise to heed to the secret behind Soros’ success. His current strategies and tactics have failed; he must change course.

Let Logic, Not Facts Govern the Debate

The main schism over health-care can be reduced to a philosophical difference over how to approach a problem. The President’s supporters swat away criticisms by explicitly referencing what the House bill says and what Obama says. Arguments not grounded in legislation or Obama’s words, they say, are unfounded speculation. Critics of the President instead point to the inevitable outcome of any bill that becomes law. If A happens, then B will happen, eventually leading to C. In a sense, they detect a nefariously causal and linear sequence ultimately leading to the rationing of health-care except for the uber-elite. Although many neatly formed causal puzzles that are predicated upon one fact tend to be spurious, in this case it is better to air on the side of logic than to rely on factual chicanery.

To help explain what I am saying, it is useful to revisit the fractious debate over the stimulus package in February. Proponents of the $787 billion bill said that lower and middle class citizens would particularly benefit because it included a tax cut of $25 per week, prolonged Medicaid benefits, and employment-heavy projects. These facts, treated in isolation, are inarguably true. When critics of the bill would riposte that this empowers government, takes away individual liberty, etc., advocates would always return to those previously stated benefits. The true logic of the bill is that those lower and middle class citizens will  in the future pay for that $787 billion in the form of higher taxation, interest rates, inflation, and/or a weaker dollar. In response, someone on the left could argue that those things will be more burdensome to the wealthy than the poor, but the evidence points to the contrary. The point is that folks on the left exclusively focused on the present facts and benefits while the right would speak of economic laws that they believed will surely come to fruition. Debates over whether more public spending comes at the expense of private spending and whether inflation will always come as a direct consequence of an increase in the quantity of money are perhaps debatable, but they cannot be dismissed in an argument that wants to only stick to the “facts.”

So we once again have the same thing for health-care. The President promises that if someone likes their healthcare, they can keep it. Detractors say the government can lull companies into opting for a public option by the government option promising the same benefits for less as a result of having no cost of capital and being able to run in the red. The logic follows that eventually the government will need to cut costs, meaning fewer benefits and worse care than current insurers offer. The President says that there will be no pressure on cutting costs for old people. Critics say that if he promises to cover a lot more people at a lower cost, that will inevitably result in older people getting worse care. There is no mention of this in any speech or bill. Nonetheless critics say this is what will logically follow.

The espoused logic that refutes Obama’s plan is certainly not airtight. But all of these arguments should be concerned with the logic, not muddled empiricism. In many ways the financial crisis can be tied back to muddled empiricism that paid no attention to the logical outcomes of what it was proposing. Fannie Mae and Freddie Mac had to inevitably fail; a corporation gets to borrow money at artificially low rates because the government guarantees its debt. In return, the companies buy up half of all existing mortgages to promote middle and lower class housing. The outcome: a housing bubble bound to severely crash. Instead of citing graphs and esoteric models, it would have been helpful if a rational and thoughtful debate centered around economic assumptions and outcomes governed our government’s federal housing policies.

The same is true for health-care. Instead of writing off people who come to conclusions that aren’t stated by any public figure, let them articulate their premises and causal links. We’ll make much better policy that way.

The Historian’s Growling Stomach

For the first seven months of the Obama Administration, the economist has been given ample data to work with. For those on the left, Obama’s interventionist policies have corroborated the notion that government can play a positive role in the economy. For those on the right, Obama’s plan to nationalize many parts of the economy will stifle growth. For the political scientist, the  gridlock over health-care further proves that hyper-partisanship  has come to define our era. For the poet, Obama’s fall from the heavens is another illustration that great men are still men—subject to hubris and luck. But the historian’s appetite has not been whetted yet. He is still searching for the great transformation.

As of now  it appears that TARP, the Fed, and all of the other financial shenanigans have simply preserved the status quo on Wall Street and the general economy.  With all of the backlash it looks as if healthcare will undergo minor changes to the current system much akin to President Reagan’s very unmemorable changes to Social Security and immigration.

On foreign policy Obama hasn’t taken any radically different steps from his predecessors. He is upping the ante in Afghanistan and hastening the end in Iraq. He still uses  pro democracy rhetoric while implicitly allowing human rights violations to go on. He finds China to be more a partner than a competitor.

Of course something memorable will happen and it is likely that the beginning of that narrative arc has already been written. Maybe Obama succeeds in Iran like Nixon succeeded in China. Maybe the populist anger at these townhalls will morph into something more tangible. Maybe the US-Japan alliance that has defined East Asian foreign policy is beginning to crumble. Maybe this is the beginning of the end to NATO. Who knows.

The legendary journalist Bob Woodward was in the middle of a manuscript about the politics behind former President Bush’s tax cuts before he decided to do something on the post 9-11/Afghanistan policy instead. It was a smart decision; Bush’s tax cut will only find interest among parochial scholars concerned with debating the extent and importance of economic inequality during the start of America’s 21st century. For everyone else, it will be a footnote at best. The nature of terrorism and Iraq will grab the attention of future Bush scholars. And it seems that pirates, health-care, drug violence in Mexico, the stimulus package, etc. will be footnotes too. The point is that everything hitherto now will seem inconsequential. The historian is waiting for the consequential stuff.

Are Questions of Republican Viability Legitimate?

Arlen Specter’s recent switch to the Democratic Party amplified a burgeoning narrative of Republican parochialism. Republicans have supposedly failed in recent elections because they are glued to the moribund thinking of the 1980s that emphasized social conservatism, low taxes, and a strong defense. That coalition has withered away and conventional wisdom says to survive they must embrace new constituencies like Hispanics and gays. Perhaps that is true. Or maybe they are just a victim of an almost  scientific process?

Voters in the 2006 midterms cited corruption as their main reason for voting Republicans out of office. Not Iraq, not social values, but corruption. This did not happen because Democratic politicians somehow had a monopoly on virtue, but because it was the inevitable consequence of Republican longevity and power. They controlled all three branches of government and owed too many people too many favors after the  steady accumulation of  quid pro quos. That’s politics.

If the impediment to Republican success is narrowness, then how did they win using the 1980s formula just four years ago? The demographics are pretty much the same. Pundits can always counter with such claims as Kerry was a particularly weak candidate or Republicans effectively exploited terrorism, but if those were the real variables at play then that just further illustrates the insignificance of party platforms.

Republicans are in a flux because they are simply a function of the political pendulum. With Democrats currently in charge of all three branches of government, they too will be inevitably blamed for corruption and failed promises. Steep inflation could lead Republicans to steal a page out of James Carville’s 1992 playbook, “It’s the economy, stupid.” Whatever the issue might be, something will trigger a change back to the other party. That’s how a two party system functions.

Popular Personalities and ad hoc policy gambits might prolong the power of one party or hasten the demise of the opposition, but the parties are in a permanent tug of war governed by a liberal constitution. All political players are just actors in a script that was written long ago. Taking that approach strips the excitement and fun out of the game. So all of us accent specific variables to attribute blame for the ephemeral fall of one party. But we should just be cognizant of the real truth. And then continue to play.