Sunday, August 7, 2011

What Should Obama Have Done?

There is a narrative in progressive circles that says Obama squandered a great opportunity to shift the country to the left. With the economy in free fall and the perfidy of Wall Street exposed, the time was ripe for a great liberal leader to step up and do what FDR did, reassuring people that the government would take care of them and enacting bold new programs. Drew Westen gives a good exposition of this story in the Times:
When faced with the greatest economic crisis, the greatest levels of economic inequality, and the greatest levels of corporate influence on politics since the Depression, Barack Obama stared into the eyes of history and chose to avert his gaze. Instead of indicting the people whose recklessness wrecked the economy, he put them in charge of it. He never explained that decision to the public — a failure in storytelling as extraordinary as the failure in judgment behind it. Had the president chosen to bend the arc of history, he would have told the public the story of the destruction wrought by the dismantling of the New Deal regulations that had protected them for more than half a century. He would have offered them a counternarrative of how to fix the problem other than the politics of appeasement, one that emphasized creating economic demand and consumer confidence by putting consumers back to work. He would have had to stare down those who had wrecked the economy, and he would have had to tolerate their hatred if not welcome it. But the arc of his temperament just didn’t bend that far. . . .
Actually the President has said repeatedly that the Wall Street crisis shows new regulations are necessary, and a package of such regulations has been passed into law. It is true that Obama has not been loudly blaming Wall Street for our problems, to the degree that most Americans don't even know that the Dodd-Frank bill was passed, or that Republicans are trying to block its implementation. Which brings us back to the real question here -- is it more important, in the long run, to pass laws, or to convince the nation that your vision of the world is the right one?
The truly decisive move that broke the arc of history was his handling of the stimulus. The public was desperate for a leader who would speak with confidence, and they were ready to follow wherever the president led. Yet instead of indicting the economic policies and principles that had just eliminated eight million jobs, in the most damaging of the tic-like gestures of compromise that have become the hallmark of his presidency — and against the advice of multiple Nobel-Prize-winning economists — he backed away from his advisers who proposed a big stimulus, and then diluted it with tax cuts that had already been shown to be inert. The result, as predicted in advance, was a half-stimulus that half-stimulated the economy. That, in turn, led the White House to feel rightly unappreciated for having saved the country from another Great Depression but in the unenviable position of having to argue a counterfactual — that something terrible might have happened had it not half-acted.

To the average American, who was still staring into the abyss, the half-stimulus did nothing but prove that Ronald Reagan was right, that government is the problem. In fact, the average American had no idea what Democrats were trying to accomplish by deficit spending because no one bothered to explain it to them with the repetition and evocative imagery that our brains require to make an idea, particularly a paradoxical one, “stick.”
Obama did want a bigger stimulus, and one less focused on tax cuts. But he had to get his bill through the Senate in the face of united Republican opposition, which meant that he needed every Democratic vote, and what he passed was therefore the biggest stimulus bill Ben Nelson would support. Is that his fault? Westen and others like him think that if Obama had stormed around the country giving fiery speeches about how evil corporate titans were blocking his bill to provide jobs to Americans, the votes for a bigger stimulus would somehow have materialized. Or else, I guess, that people would know that Republicans were blocking his plan to give them jobs, and therefore vote Democratic in the mid terms. I am certain that grim old senators like Ben Nelson would not have been moved by flowery orations. Obama calculated that keeping the votes of moderate Democrats was more important than trying to somehow shift the public understanding, so he went with the stimulus he could get. And having let Democratic senators limit how big the stimulus was, he could hardly go around arguing that those who did this were evil. Westen suffers from the same problem as most of Obama's critics, thinking that the President can, with the help of the people, accomplish whatever he sets out to do. In fact most things have to be done by Congress, and Obama's Congress consisted largely of moderate Democrats who were scared to be seen as too liberal. I don't think there was really anything he could do about this.
Nor did anyone explain what health care reform was supposed to accomplish (other than the unbelievable and even more uninspiring claim that it would “bend the cost curve”)
I would say that this is less a problem with Obama's presentation than with the complexity of his bill, which really was hard to explain. And he had to go with such a complex plan, rather than the simpler (and better) single payer approach, because the votes for single payer weren't there. No amount of brilliant explanation would have changed that.

In general I don't think much of Westen's critique. I don't think any amount of Presidential story-telling could have converted the America of 2010 into the America of 1934. If Obama had done as Westen and his allies wanted, we would simply have had fewer actual bills coming out of Congress, and possibly no stimulus at all.

On the other hand, the 2010 midterms could hardly have gone worse for Democrats. Americans elected a know-nothing Congress devoted to doing whatever is worst for America, including undoing the modest Wall Street reforms Obama did manage to get through. I hesitate to say that nothing could have been done about this, because that would mean that Americans are irredeemably stupid. So I want to think that more explanation from liberals of how their approach is really the right one would have moved someone. How many people that would be, and whether it would have made any difference, are questions to which I do not know the answers.

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