August 10, 2020

Obama’s Presidency: A Tale to Date of Missed Domestic Opportunities

Posted on 13. May, 2011 by Administrator in Politics

In my previous blog on April 26, I decried President Obama’s obvious abandonment of the ‘core’ of voters who had come together with almost unprecedented political faith to give him a clear mandate on the domestic issue most concerning them: creating the nearly 20 million high-quality stable jobs needed to return our nation to near full employment in real terms.  Few things that I’ve written since 2006 have elicited more raw response.

It’s hard to find but one other President in our nation’s history who, on the day of his inauguration, was invested with more free political capital than was Barack Obama.  That political capital was found in a near-commonly accepted national agenda, namely, to pull us out of the Great Recession of 2007 by helping create millions of jobs, and a near-commonly targeted national enemy, namely, the banks.  Only Franklin Roosevelt started with as much capital, as he too was swept into office on the same near-consensus.  Armies of progressives and conservatives alike believed that the “hope” which Mr. Obama so often eloquently offered them in his campaign speeches would be the reality of immediate large-scale job creation.  Legions of the middle class who had lost or were about to lose their jobs said, “Go create jobs, Mr. President.”  And millions more who were trying to bring the American Dream to their families said to him, “Mr. President, go get those bastards on Wall Street who did this to us.”

The problem as I’ve argued and as to which a lot of respondents to my April 26 blog agree is that Mr. Obama never really embraced the jobs agenda with anywhere near the conviction and determination that he has shown, for example, regarding healthcare reform.  This is beyond perplexing given our continued high rate of real unemployment – at 18% today it is a figure unprecedented in modern times – and especially given the polls which have consistently shown that ‘jobs, jobs and jobs’ are the three issues most on the minds of the American people.  And it is this fear of job loss and economic stagnation that has undermined confidence in the direction our country is headed.

As one respondent recently wrote me, “I think we projected on to Obama much more than is there. He isn’t up to the job [of creating jobs].” Of course Mr. Obama compounded the error of forsaking the agenda which his electoral victory mandated with his almost immediate toadying up to the big banks.  This voluntary capitulation was pre-ordained by his selection of Timothy Geithner as Treasury Secretary, who as head of the New York Fed had a miserable record of protecting consumers.  Geithner, along with Larry Summers, became the architects of the administration’s “financial reform” which just a year or so later left the big banks better positioned than before the crash and with a nary a bit of meaningful penalties.

By largely ignoring the likes of Paul Volcker, Rob Johnson and Elizabeth Warren, President Obama committed what economist James Galbraith calls his “original sin of assign[ing] economic policy to a closed circle of bank-friendly economists and Bush carryovers…who had no personal commitment to the goal of an early recovery, no stake in the Democratic Party, and no interest in the larger success of Barack Obama”.  And so, Mr. Volcker’s important ideas of repudiating “too big to fail” and barring commercial banks from indulging in heavy risk taking and proprietary trading were sabotaged to death, mostly by Secretary Geithner.  Thus, President Obama lost his capacity to harness the justified anger of voters that was pervasive on the day he was inaugurated.

Yet it is far too harsh an assessment to suggest that President Obama isn’t “up to the job”, although now two-plus years into his administration I share the frustration of millions of progressives.  Clearly, Barack Obama is ‘up to the job’.  Seldom in my lifetime have I encountered a keener intellect.  His problems are that in presidential terms he doesn’t ‘learn’, and that he often hires very poorly.  On the seminal issue confronting the domestic landscape, namely, full employment, he didn’t evolve when his first instincts failed.  And on the most complex issue confronting any American president, namely, integrating our domestic economy into our global leadership position, he has hired abysmally, with no more imagination or realism than simply to bring back the “Rubin-Summers gang.”

Sure, on that day in November 2008 when the nation chose Barack Obama as its 44th president, the voting public was so tired of George Bush and so afraid of John McCain’s unpreparedness, almost any Democrat would have been elected.  That doesn’t mean, however, that the vast majority of Americans didn’t give Mr. Obama a clear mandate as well as a dragon to slay.  Thus it is little surprise, with our economy mired in a near jobless recovery and real unemployment at 18% with a “Jobs Gap” of 21 million, that the latest McClatchy-Marist Poll (4-28-11) finds that only 40% of Americans now approve of how President Obama is dealing with the economy while fully 57% disapprove.  And often mentioned by those millions of voters who disapprove is their view that the big banks and Wall Street are back acting with virtually the same disregard for consumers and for the health of the national economy as before the Recession began.

George Kennan, who is thought by many to be greatest intellect in American foreign relations history, said that, “foreign-policy problems are always more complicated than Americans, in their native idealism, usually allow” (per Ryan Lizza, The New Yorker, 5-02-11).  In this era of economic globalization, the same can be said about our economic-policy problems – and they often seem more complicated than Mr. Obama’s own idealism allows and is capable of reacting to. This tendency to favor rhetoric over action – what one of his own senior advisors describes as “leading from behind” and Zbigniew Brzezinski describes as ‘sermonizing rather than strategizing’ – has clearly failed him in creating jobs for the domestic economy and truly reforming the banks and Wall Street.  And the compounding factor has been the President’s proclivity in many instances to hire poorly and in others to not heed the counsel of the informed people he has hired.

Clearly, President Obama was dazzling in his decision making to send U.S. Navy SEAL Team Six to get Osama bin Laden.  In helping to develop and oversee this sensitive, risky operation, Mr. Obama showed that in his own calm, rational way he can decisively lead when he sets his mind to tackling a major challenge.  It’s now time for Mr. Obama to adopt this same laser-like focus on creating jobs in America on the scale that is so badly needed.  And may his great success last week be a permanent catalyst in his evolution as a leader.  If he seriously addresses this challenge, it will carry forward the clear mandate the American people gave him in 2008 and lead to his earning – and very much deserving – a second term in the White House.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations.  Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband.  He also serves on the Board of the Huffington Post Investigative Fund.


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