Obama's Lack of Focus: Some Further Thoughts
I recommend Bruce Bartlett's latest Fiscal Times column to you, where he discusses how "Obama's Lack of Focus Could Be Politically Fatal." I'd like to offer two refinements:
First, Bruce argues that with regard to the 2009 stimulus plan, the medicine was appropriate but the dosage was inadequate:
By way of analogy, suppose you went to your doctor for an illness and he prescribed the correct medicine. But for some reason, you were given a dosage only half as big as necessary to cure your condition. Consequently, while you got better, you were not cured and continued to suffer. Under these circumstances, it is clear that the problem was not the medicine itself, but the dosage. Had you been given the correct dosage in the first place you would have been cured.
I agree with Bruce that it is important to get the history correct. An alternative of no increase in fiscal policy would not have been better. But I would characterize the problem as the primarily in the medicine, not the dosage. My analogy is nutrition. The 2009 stimulus plan contained too much fat and carbs and not enough protein. Fat is the stuff that gets stored -- think of temporary tax cuts to households that could already have incrased their spending if they had wanted to. Carbs are the stuff that gets used up immediately, with no impact on long-term expectations -- think of the various tax giveaways to households and firms that will consume them immediately rather than invest them. Protein is the stuff that builds muscle and improves your ability to perform in the future -- think of public infrastructure investment. I think that $787 billion (calories?) were enough, but what should have been a meal for a contestant in a bodybuilding competition actually turned out to be take-out from a greasy spoon. There was a better way to deal with downturns. Known at the time.
Second, Bruce argues that the time the President spent focused on health care reform could have been better spent focusing on the economy. He writes:
He appeared to believe that he had done quite enough to turn the economy around and thus moved on to other issues such as health reform, the environment and energy policy, which occupied an enormous amount of White House attention in 2009 and 2010.
I think this was a mistake, not because I think the Affordable Care Act was inherently bad policy, as Republicans do, but because it diverted Obama’s attention from the economy and caused him to take his eye off the ball.
Politically, it was only a mistake to focus on health care reform first if President Obama is not going to campaign on it as a success. As I wrote last month regarding President Obama's Re-Election Chances:
At the level of policy, I don't see why Obamacare, Dodd-Frank, and ARRA are not policies that he can run on. And remember that I am a conservative saying this. [Ed. Some readers have reasonably questioned this assertion.] The first provides badly needed insurance reform and greater health care access to millions. It does so at too high a projected cost (primarily the design of the subsidies up to 400% of the poverty level), in my opinion, but it is a step forward. The second improves the framework for preventing financial crises and resolving them once they arrive. A lot will depend on whether the new regulatory structure actually raises capital requirements, clamps down on the most abusive practices, and puts a profligate financial institution out of its misery at its first opportunity. And the stimulus package was either too small if it was to be "timely, targeted, and temporary" or simply spent on the wrong things (consumption, not public investment). But the president can make the case that it provided assistance when assistance was needed. The economy may not improve rapidly enough for any of this to matter, but I reject any suggestion that he cannot make a credible case for re-election based on his policies.
I think re-election strategies are fairly straightforward -- whatever you did, then that's what you campaign on. I don't see why a "They made the mess. We've been cleaning it up. Even though they keep hiding the key to the broom closet." theme wouldn't strike the right tone.