One aspect of Obama's Presidency to date that is frustrating is their inability and/or unwillingness to co-opt Republican issues and turn them in to advantages for Obama and the Democrats. Both Bill Clinton and Karl Rove perfected this political strategy. Clinton took on Republicans on issues like the budget deficit and welfare. Karl Rove attacked the military credentials of both John Kerry and Max Cleland issues that were their supposed strengths.
I think these opportunities exist for Barack Obama but he has yet to press his potential advantage to date. Three examples spring to mind:
1) The Stimulus
The stimulus is viewed by many to be too aggressive and expensive. Just look at these numbers:
Despite the unpopularity of the stimulus many independent analysts believe it kept the Great Recession from being significantly worse. See the following two graphs.
GDP and unemployment numbers in the abstract probably won't gain much political traction but contrasting the loss of jobs under Bush versus Obama might bring the differences in sharper and more effective relief.
The Obama Administration's lack of aggression in promoting the success of the stimulus can be forgiven because unemployment is still poor. The people you are trying to persuade, those that are suffering, will find little solace if you try to tell them, "Hey, it could be worse, your neighbor could be out of work too." And to make matters worse the neighbor is not necessarily going to connect the stimulus to their ability to keep their job.
So the stimulus might be a tough sell no matter its merits, but an easier sell for the Obama Administration could be the issue that is synonymous with the right, taxes.
2) Taxes
How many people know that almost forty percent of the stimulus was tax cuts? Here is the breakdown of the $800 billion.
TARP, the Temporary Asset Relief Program, might be the most unpopular policy of all the measures designed to prop up the economy. As Talking Points Memo recently reported,
As unpopular government initiatives go, the financial bailout would seem to rank somewhere up there between Prohibition and the Stamp Act.
But the $700 billion estimated price tag now seems to be a huge overestimate...
But it now seems clear that that $700 billion figure cited as the cost of the TARP alone was way too high. Pro Publica records that of $536.3 billion that the Treasury has dispersed to date on the TARP and the programs to rescue Fannie and Freddie, $216.8 billion has already been returned, either through banks paying the money back, or through dividends generated. That still leaves $319.5 billion outstanding, but most estimates are that as the health of the financial sector continues to improve, much of that figure too will return to the government's coffers. Indeed, last month, the Treasury Department offered an estimate of its own. The TARP program will end costing about $117 billion, Tim Geithner forecast. Help for Fannie and Freddie will likely add about $85 billion more. But those losses will be partially offset by expected gains of $115 billion from the Fed's programs. That comes out to a final cost to taxpayers of $87 billion.
However much it costs, the most important issue is whether or not it worked. Even skeptics are coming around:
That hasn't happened, and experts of various stripes -- even many who initially were doubtful -- credit the bailout for that. Barry Eichengreen, a professor of political science and economics at UC Berkeley, and a left-leaning foe of the big banks, wrote earlier this year that the TARP "enabled the banks to earn their way back to solvency," and "prevented the financial system from falling off a cliff." And Tyler Cowen, a professor of economics at George Mason and a libertarian, also was skeptical at first but has conceded that "yes, the bailouts were a good idea," adding that without them, "we would have had many more failed banks, very strong deflationary pressures, a stronger seize-up in credit markets than what we had, and a climate of sheer political and economic panic."
However if one lesson was learned about Obama during the drawn out primary is that he and his staff are masters at the long game. It is possible that the Administration is keeping its powder dry realizing that the power of these messages will be more effective if they are used sparingly closer to the election when people are paying attention.
So the stimulus might be a tough sell no matter its merits, but an easier sell for the Obama Administration could be the issue that is synonymous with the right, taxes.
2) Taxes
How many people know that almost forty percent of the stimulus was tax cuts? Here is the breakdown of the $800 billion.
Their was a meek attempt on tax day, April 15, to bring attention to this fact. This article from The Huffington Post looks at the numbers:
After all, neutral economists insist that, under the Obama administration, the overwhelming likelihood is that your tax burden has gone down, not up. Even conservative economic analysts acknowledge that there really is no basis for middle- and working-class Americans to believe that they're suddenly paying more. "The only tax I think that has been put in place so far is an increase in the federal cigarette tax. I can't think of another Obama tax that has gone in place so far," said Chris Edwards, Director of Tax Policy Studies at the conservative Cato Institute.
3) TARP
After all, neutral economists insist that, under the Obama administration, the overwhelming likelihood is that your tax burden has gone down, not up. Even conservative economic analysts acknowledge that there really is no basis for middle- and working-class Americans to believe that they're suddenly paying more. "The only tax I think that has been put in place so far is an increase in the federal cigarette tax. I can't think of another Obama tax that has gone in place so far," said Chris Edwards, Director of Tax Policy Studies at the conservative Cato Institute.
3) TARP
TARP, the Temporary Asset Relief Program, might be the most unpopular policy of all the measures designed to prop up the economy. As Talking Points Memo recently reported,
As unpopular government initiatives go, the financial bailout would seem to rank somewhere up there between Prohibition and the Stamp Act.
But the $700 billion estimated price tag now seems to be a huge overestimate...
But it now seems clear that that $700 billion figure cited as the cost of the TARP alone was way too high. Pro Publica records that of $536.3 billion that the Treasury has dispersed to date on the TARP and the programs to rescue Fannie and Freddie, $216.8 billion has already been returned, either through banks paying the money back, or through dividends generated. That still leaves $319.5 billion outstanding, but most estimates are that as the health of the financial sector continues to improve, much of that figure too will return to the government's coffers. Indeed, last month, the Treasury Department offered an estimate of its own. The TARP program will end costing about $117 billion, Tim Geithner forecast. Help for Fannie and Freddie will likely add about $85 billion more. But those losses will be partially offset by expected gains of $115 billion from the Fed's programs. That comes out to a final cost to taxpayers of $87 billion.
However much it costs, the most important issue is whether or not it worked. Even skeptics are coming around:
That hasn't happened, and experts of various stripes -- even many who initially were doubtful -- credit the bailout for that. Barry Eichengreen, a professor of political science and economics at UC Berkeley, and a left-leaning foe of the big banks, wrote earlier this year that the TARP "enabled the banks to earn their way back to solvency," and "prevented the financial system from falling off a cliff." And Tyler Cowen, a professor of economics at George Mason and a libertarian, also was skeptical at first but has conceded that "yes, the bailouts were a good idea," adding that without them, "we would have had many more failed banks, very strong deflationary pressures, a stronger seize-up in credit markets than what we had, and a climate of sheer political and economic panic."
However if one lesson was learned about Obama during the drawn out primary is that he and his staff are masters at the long game. It is possible that the Administration is keeping its powder dry realizing that the power of these messages will be more effective if they are used sparingly closer to the election when people are paying attention.
Posts
No comments:
Post a Comment