The right eloquence needs no bell to call the people together and no constable to keep them. ~ Emerson

Friday, January 15, 2010

Unpopular and Unpopulist

Obama May Have Just Learned How to be the Kind of President that Americans Want

Republicans are already celebrating what they see as inevitable crushing success in the 2010 midterm elections, based on President Obama’s dismal poll numbers and lack of Democratic accomplishments. The reason for Obama’s woes, they maintain, is a basic disconnect with the American people.

“The people are here and he is there [regarding healthcare reform],” scolds Peggy Noonan in the Wall Street Journal. The Washington Post’s Charles Krauthhammer blames Obama’s triumvirate of progressive reforms in healthcare, energy, and education. “The reason for today's vast discontent,” he harrumphs, “is not that Obama is too cool or compliant but that he's too left.”

I think the critics are half-right on this matter. Krauthhammer, in particular, is correct that Obama aspires to be a transformative President in the manner of FDR or Ronald Reagan. Leaders attempting to bring about sweeping change are bound to generate passionate resistance. In this sense, almost manic hostility to Obama by many conservatives and some Independents over legislation such as Cap & Trade and Healthcare Reform is only natural.

The critical missing piece for Obama these days is sustained enthusiasm from the liberal base and other Independents. Instead, his would-be supporters are exhibiting emotions ranging from apathy at best to disappointment and betrayal at worst. Sadly, Obama has given them little reason to feel otherwise. Resistance to his signature progressive initiatives have resulted in their languishment or gutting by Democratic Senate moderates.

What is more, in other areas, most notably national security and the economy, Obama has proved more like a clone than the antithesis of George W. Bush. This is not especially surprising in the case of security, where unease over Obama’s lack of experience and gravitas was universal during the campaign. The economy, however, has been a genuine surprise.

Obama is no populist. Despite a gift for oratory, he prefers professorial analysis to demagoguery. His mood tends toward cool detachment over fiery resentment. Yet he rode into office last year on a wave of populist revolt against the Bush Administration, whose economic policies rested on a thirty year old philosophy in which moderate-to-conservative Presidents and conservative Congresses favored Wall Street, banks, and corporations – with benefits to “trickle down” to everyday Americans.

One of the changes I most hoped from Obama was a liberal President and moderate-to-liberal Congress turning this tenet around to ask how the powerful of society might bow to and serve the needs of the common people. The policies they championed might not be perfect or even completely fair but would serve to help offset/correct the prevailing emphasis/excesses of the past three decades.

I do not doubt Obama has chosen a dichotomy of approaches as a way to provide the bipartisan governance he promised. However, his efforts to date have seemed random instead of balanced, angering the right but also dispiriting the left.

Unfortunately, Obama’s reputation regarding economic matters suffered greatly when his first legislation in office was a multi-billion dollar bailout of the financial industry.

There was never any allusion that everyday American would benefit from this bailout, except to the extent that allowing several great ships to sink would produce a wake sufficiently large enough to swamp many small boats (i.e. the whole “too big to fail” argument). However, billions spent that left them no better off also left a sour taste in the mouths of many voters.

This sourness turned terminally bitter when banks, even those who received bailout money, began posting huge profits and giving out huge bonuses to executives. Despite public outcry, Obama followed the advice of Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers to go easy on financial institutions out of fear of harming/slowing the economic recovery.

This approach, as well as Obama’s falling approval ratings, has been the standard until now.

Obama, looking for ways to balance the budget in anticipation of his annual State of the Union address, needed to find a source of new revenues. At last, he removed the gloves of restraint and delivered a solid populist punch at the very institutions he helped to save/stabilize twelve months ago.

His proposed 0.15 percent tax on the liabilities of large financial institutions would apply only to those companies with assets of more than $50 billion – a group estimated at about fifty companies. The legislation is not perfect or even entirely fair. All banks would have to pay, including those that did not accept any taxpayer assistance and those that did but have since repaid their loans.

Obama reasons that despite how much or little their individual institutions suffered, all bankers acted irresponsibility, taking reckless risks for short-term profits and plunging the entire U.S. economy into crisis.

Predictably, both banks and Republican politicians denounced the tax as counterproductive to recovery.

“Politics have overtaken the economics,” said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, a group representing large Wall Street institutions.

Jamie Dimon, CEO of JPMorgan Chase & Co., characterized it as “punitive” and “a bad idea.”

Republican Representative Scott Garrett of New Jersey, a member of the House Financial Services Committee, called the plan a “job-killing initiative that will further cripple the economy by increasing fees passed on to consumers and small businesses, while reducing consumer credit.”

The Obama Administration was accepting none of this.

“It just strains credulity to suggest that banks who are now announcing bonus pools ranging from $10 billion to perhaps even $30 billion can find no other way to meet their responsibility to pay back the American taxpayer other than to suggest that they would pull back on lending,” countered Treasury Department adviser Gene Sperling.

The President was even less forgiving and in starkly populist terms. “We are already hearing a hue and cry from Wall Street, suggesting that this proposed fee is not only unwelcome but unfair, that by some twisted logic it is more appropriate for the American people to bear the cost of the bailout rather than the industry that benefited from it . . . Instead of setting a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to help evade the fee, I'd suggest you might want to consider simply meeting your responsibility.”

Ouch! But Obama was not yet finished. “My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people, folks who have not been made whole and who continue to face real hardship in this recession.”

This is exactly the type of rhetoric, the type of action, and the type of “change” I have most wanted to hear from Obama. I cannot deny the accusations of his liberal critics that it has been much too long in coming but it is no less welcome despite its tardiness.

Conservative critics, such as Krauthhammer and Noonan, will doubtless oppose it as wrongheaded, even as they dismiss it as purely politically motivated. I invite them to do so at their own peril. As White House Spokesperson Robert Gibbs wryly observed to reporters, “If you want to be on the side of big banks, then you're certainly – this is a great country – you're free to do so.”

Obama did not have to learn how to be President so much as he had to learn how to be the kind of President to which he aspires. His failure about how to do so has made him extremely unpopular with many Americans. He may have just figured out what to do about it.

“Restraint,” “detachment,” and “disconnect” were used far too much in conjunction with Obama in 2009. If the word latched on to him for 2010 is “populist,” the Republicans may be counting votes at the midterm elections as apprehensively as Democrats are counting them today in the special runoff for Ted Kennedy’s old Senate seat.

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