Après moi le deluge. After me the floods. That’s a statement attributed to Louis XV of France. It’s usually interpreted as a prediction but I suspect it’s more of a wish. Regardless, the yesterday’s election has certainly been followed by a flood of bad and fanciful advice, mostly to President Obama. Under the heading of fanciful I would place the advice of outgoing Democratic Indiana Senator Evan Bayh:
Having seen so many moderates go down to defeat in this year’s primaries, few Republicans in Congress will be likely to collaborate. And as the Republicans — including the party’s 2012 presidential candidates — genuflect before the Tea Party and other elements of the newly empowered right wing, President Obama can seize the center.
I’m betting the president and his advisers understand much of this. If so, assuming the economy recovers, President Obama can win re-election; Democrats can set the stage for historic achievements in a second term. The extremes of both parties will be disappointed. But the vast center yearning for progress will applaud, and the country will benefit.
He proposes tax cuts and tax simplification, reducing spending on entitlements, and fine-tuning existing legislation, particularly the healthcare reform legislation, to improve them. All of this is advice that would probably be given to him by Republicans.
The problem with it is that moderate Democrats have largely either, like Sen. Bayh, retired or been ousted by Republicans. I doubt that the president will find much Democratic support for these proposals among the more progressive Democratic Caucus that remains. How agreeable the Republican House majority will be to such proposals remains to be seen.
Under the heading of bad, place E. J. Dionne:
Obama was not wrong to fight for health care, to stimulate the economy when it was in deep peril, or to push for financial reform. But by failing to defend these achievements, the president and his allies opened the way for partisan critics, who shifted the conversation to airy language about “big government” and “bailouts.” One result: Only a third of Tuesday’s electorate, exit polls indicated, thought the stimulus had made the economy better.
First, we didn’t do enough. Unemployment would have been even higher without the stimulus, but it is unacceptably high. We’ve had nine consecutive months of private-sector job growth, and we’re going to keep at it for as long as I’m privileged to be your president.
Second, we did, for some of you, too much – too much spending, too much far-reaching legislation. It was unsettling. Every day it seemed we were writing another huge check. I’m convinced, again, that these funds were wisely spent. The much-maligned bailout will cost a fraction of the initial expense – and it saved communities across the country from economic devastation. The stimulus created jobs – and, by the way, provided more than $200 billion in tax relief. The health-care bill carries a big price tag – but I insisted that the cost be fully paid for. I will resist – with my veto pen – any effort to weaken the law that adds to the deficit.
Nevertheless, the era of big check-writing is over. That is why – after some Republicans voted against creating a deficit commission – I did so by executive order. I look forward to receiving their report – and working with Republicans to tackle the debt. And that is why I have been so determined not to rack up another $700 billion in debt by permanently extending the Bush tax cuts for the wealthiest.
Third, I did not live up to my own standards for governing in a post-partisan manner. I was wrong to use the term “enemies.” I’m not going to offer excuses or point fingers. Instead, let me describe what I’ll do differently.
I’m sure there will be a virtually unending torrent of mostly bad advice. I’ll add my own here.
After John Kerry’s loss in the 2004 presidential election, I predicted a struggle for control of the Democratic Party between its moderate and progressive wings. That took place. Moderates engineered the Democratic capture of the House and Senate while progressives took the leadership of both bodies. This effort culminated in the election of Barack Obama to the presidency in 2008.
The feckless Congressional leadership is proximately responsible for the losses in the House and Senate but, ironically, the same leadership is even more solidly ensconced than before, the ranks of moderate Democrats in the Congress being greatly reduced.
Regardless of what Paul Krugman says, you cannot fine-tune the economy. You can introduce things which, in the fullness of time, i.e. with all of the speed of turning an aircraft carrier, will effect changes in the economy. You will inevitably under-achieve or over-achieve. There is no Goldilocks scenario. The reasons for this are well-known and include that in the economy you are dealing with intelligent actors rather than blind forces of nature.
There is a limit to the amount of drag that can be placed on the economy without bringing growth to a halt. Right now the drags on the economy include a dysfunctional financial sector, actions by outside forces, e.g. the Chinese, the Japanese, the EU, beyond our control, and financial, healthcare, retail, and construction sectors that are too large, tying up resources that should be used to make other sectors grow. The reason that I single out healthcare so frequently is that the majority of healthcare spending is financed by the government and, consequently, investments in the healthcare sector are seen as being lower risk which drives investment from other, potentially more productive sectors. Why invest in anything but financial instruments or the healthcare sector when those investments are so risk-free?
Unless unemployment goes down (and employment goes up) I think that President Obama is gone gosling. And that is beyond the president’s control, in the hands of the fates. My advice: look presidential, hope for the best, and be prepared to roll with the punches.