Obama and the search for consensus

My latest column for the FT argues that Obama should not give up on seeking consensus. This is where the piece ends up:

In each case - fiscal stimulus, financial stability and fiscal consolidation - the government has to get in front of the problem and confront it decisively. An unprecedented crisis calls for unprecedented remedies and they have to be in place before the need is self-evident. More than it has so far managed, the government must anticipate, not just react. Given the scale of the interventions, this is difficult, especially in a democracy as slow and attuned to public opinion as the US.

This is why Mr Obama is right about the need for consensus and why the partisans on both sides of Congress are wrong. The government as a whole must lead public opinion. Before the worst happens, it must convince voters that powerful fiscal stimulus is needed. Before the worst happens, it must tell voters why many more hundreds of billions of taxpayer dollars will be needed to stabilise the financial system. Before the worst happens, it must persuade the public that bringing borrowing back down in due course is necessary.

If Congress chose to focus more intently on those imperatives - deeming issues such as whether to cut taxes or raise spending as secondary for now - it could help to unite the public behind bold timely action. But it chooses otherwise, perhaps because it fails to see the peril, which puts the whole burden on the president.

Anticipation is not a strength of this system. Institutionally and temperamentally, it prefers "too little, too late".

You can read the full article here.

Comments

Asp February 16, 2009 7:47 PM

Mr. Crook, your assessment of the stimulus is filled with dubious and unsupported assertions.

1. "Much of its spending will arrive too late to boost demand when the boost is most needed"? According to the CBO the stimulus pays out about 74 percent of its benefits this fiscal year or next.

2. "The public sees the administration as both failing in its effort to win bipartisan support and losing control of the process. If confidence in government has value at a time like this, there is little cause to celebrate." Obama's approval ratings range from the mid-60s to the mid-70s.

3. "The administration can be fairly accused of trying to have it both ways. It pitched its fiscal plan both as an urgent short-term stimulus and as a programme to transform the country’s long-term prospects. That second emphasis gave the plan a needlessly strong ideological cast."
That's an absurd assessment. Obama won the election by calling for a very detailed range of long-term investments. To point stimulus spending toward long-term goals he's defined them is hardly "ideological."

4. "More than it has so far managed, the government must anticipate, not just react." True, this is not Congress's forte, and the whole burden of "anticipation" rests on the President. But Obama is on the case. He told your colleague Marc Ambinder on Friday:

You asked given what we inherited, are we going to be able to get all this done. Some of these reforms don't cost money. They will still be heavy political lifts because there are philosophical arguments about how to approach it. Some of these problems are very complicated. Health care is a classic situation where it may cost money on the front end and save enormous money on the back end and what we're going to have to figure out is what can we do now to start getting that ball rolling, because the longer we put that off, the worse off we are financially. Medicare and Medicaid on their current trajectory cannot be sustained. And the only way I think we're going to fix it is if we see those two problems in the broader contest of bending the curve down on health care inflation....

I should add one more thing and that is a budget process that starts bending the deficit curve down. I think that all these goals are complementary. I also think that the American people understand we won't get everything done overnight. The U.S. government and the U.S. economy are enormous ocean liners, they're not speedboats. So what we will do this year is to try to get them on the right trajectory and hopefully that means at the end of my term you'll look back and you'll say we're at a different place than we would have been had we not made these changes.

Elvis Elvisberg February 16, 2009 10:21 PM

Above all, their misguided fixation on the size of the overall package

I don't think that's true. They were trying to find small expenditures they could cherry-pick and caricature, at the expense of formulating any meaningful policy proposals.

Having adopted that position, they had nothing of interest to say – not that Democrats were in the mood to listen.

I don't think you've proven this about the Democrats. Two non-quotes from Dem leaders does not quite establish that.

The problem, as lifelong-'til-2006 Republican John Cole explained, is this: "I really don’t understand how bipartisanship is ever going to work when one of the parties is insane. Imagine trying to negotiate an agreement on dinner plans with your date, and you suggest Italian and she states her preference would be a meal of tire rims and anthrax. If you can figure out a way to split the difference there and find a meal you will both enjoy, you can probably figure out how bipartisanship is going to work the next few years."

zic February 17, 2009 1:37 PM

Thank you, Clive. I'm most grateful for the clear message you gave that the stimulus bill is just the first step.

For those progressives who won't click through to the full FT column (and I hope you will,) there's also this bit:

The right criticism to make of Republicans is not that they opposed elements of the plan – many parts deserved to be opposed – but that their complaints signalled no willingness to compromise. Above all, their misguided fixation on the size of the overall package, an effort to reclaim the mantle of fiscal conservatism, led them to oppose an appropriately large stimulus regardless of the mix. Having adopted that position, they had nothing of interest to say – not that Democrats were in the mood to listen.

The last dig wasn't really called for; and as a resident of Maine, I do feel that my Republican Senators listened and were listened to. There's a lot that will benefit Maine in this bill, but we were punished for turning blue in the Bush years with little in the way of Federal aid except for the decision not to close Portsmouth Navy Yard; payment, I'm sure, for my Senator's support of Bush Wars. I'm pretty certain red-state lawmakers will get a sense of a better sense of this kind of political give-and-take as they realize bipartisanship results in more help for people at home.

PL February 17, 2009 4:33 PM

I suspect you've nailed why Obama has a 65% approval rating and Congress has a 65% disapproval rating. The vast majority of people don't want to see partisanship, they want to see leadership.

DaveinHackensack February 20, 2009 10:28 AM

Clive,

"Before the worst happens, it must convince voters that powerful fiscal stimulus is needed."

To what extent does that "convincing" (which, so far, has consisted of ominously talking down the economy) increase the chances that the worst happens? Hasn't the "convincing" that led to TARP and the recent fiscal stimulus probably had a materially negative impact on the economy? Clearly, the case needs to be made for massive new spending, if that's what's required. But perhaps there's a less destructive way to make that case (e.g., focusing on the benefits of a particular bill, rather than warning of catastrophe if it's not passed).

Asp,

"According to the CBO the stimulus pays out about 74 percent of its benefits this fiscal year or next."

According to the CBO, less than 25% of the stimulus will have an impact this fiscal year. This year is when fiscal stimulus is needed most; the economy may have already started to recover by 2010. It would have been better to front-load the stimulus.