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Monday, June 22, 2009

Over-extension: How Obama Ended Up on Thin Ice

Merriam-Webster's Dictionary defined over-extended as "to extend or expand beyond a safe or reasonable point." The definition applies precisely and accurately to where Barrack Obama is now and the position into which he has financially put the country. Sustainability is ironically a favorite word of the President and many liberals, while the shelf life on their ascendancy to power seems to be starting to show an expire date.

Very basic parts of the Obama Presidency are distinctly minority positions, i.e. massive deficit spending, higher taxes, governmnet-sponsored health care, more cash for corporate bail-outs and take-overs, and the apologetic and tepid foreign policy. This is no surprise to many folks, including me, who have noted that Americans are consistently more conservative than liberal and have not embraced any "new majority" for a Leftist agenda. Gallup reiterated this point this month with a new poll showing the same ideological split. See also Pew Center , "Winds of Political Change Haven’t Shifted Public’s Ideology Balance" (November 2008 wrap-up polling).

Obama got elected by obscuring this point, labeling himself a "progressive" or even asserting that the old labels do not fit anymore. The media indulged this fiction, since most of the liberals involved have always said that the only problem with the low popularity of liberalism was the weakness of its messengers. They finally felt they have a cover-person for liberalism, albeit sub rosa. A good part of the public was simply confused and so eager for a glib and "hipper" leader that they suppressed the little voice telling them that this was a real Leftie. Many conservative minded voters who were concerned about deficit spending, for example, voted for Obama. [Hard to visualize now, but Democrats had essentially drawn even with Republicans in pre-election polling for who would hold down taxes].

Of course, this fantasy world of alternate reality has to have a shelf life. We are now seeing moderate conservatives and independents backing off the Obama agenda in very large numbers. Among "likely voters" (an increasingly important polling demographic going into 2010) Obama now has a net disapproval rating. The June 2009 polls that consistently show disapproval of his policies are not evidence of any new shift in the public on the issues. Rather they are the emergence of the basic policies preferences that were obscured by the Democrats with the more than willing help of the media.

The slickness of the campaign of Barrack Obama and the media savvy is continues to display will also be recorded in history as its fundamental weakness in my opinion. Self-criticism and deeper policy reflection gave way from the beginning to sound-bites and imagery. Shockingly upon coming into office, it now appears that there was absolutely no stimulus plan in the Obama campaign and transition team.... the critical issue of the period was "out-sourced" to party hacks on Capitol Hill, whose "stimulus" was more like a pay-off to local constituents and special interest groups to attempt to cement long-term support. This point was dramatically illustrated in a TV interview of Steny Hoyer, House Whip, who when pressed on why the stimulus bill would really create jobs, just said that "we had to do something" and that "we hope it works." [If public works spending was a ticket to economic growth, FDR would have got us out of the depression before the war started, Japan in the 1990s would have recovered five years earlier, and North Korea and Belarus would be the economic giants in the world].

The long delays in getting serious financial proposals together, the insane number of speeches and press conferences, the TV celebrity infatuation, the aggressive use of political muscle on opponents (Chrysler, Walpin, etc.).... all these points are elements of the triumph of the pursuit of power over the pursuit of effective policy. The systemic lack of a functioning intra-Democratic mechanism to clear proposals, run traps, and fashion effective policy is coupled with a complete unwillingness to let the normal pluralistic system do that job. Compromise is only done where it may be necessary to get the result sought, not due to any innate need to adjust policies to reflect substantive changes warranted on the merits.

Similarly, the lack of real independent press criticism from the mainstream media has allowed very foolish and superficial items to pass through the process, i.e. stimulus bill, GM bail-out, and others. The asset in the campaign, the co-option of the press, actually has become a liability, since it removes another protection of the Administration from its own excesses and mistakes.

The above factors have taken us to the moment of truth for the Obama Administration. The counter-productive big-spending plans are now even described by the Associated Press as "turning out to have the opposite effect." [AP, June 6, 2009, describing the housing market].
The Congressional Budget Office pointed out before the Congressional vote that the stimulus would have a long-term negative impact on GDP. So, if there is a modest recovery occurring, it is doing so despite the Government's efforts. It is unlikely that the unemployment situation which is a lagging indicator, will hit much positive territory until after the 2010 election. It is also clear that additional taxes of some sort will be required to keep up the spending and borrowing pace (since we are hitting the limits of the bond market to take federal paper). Both will be a disaster for Democrats in 2010 (especially since the public never voted for the deficit spending and other liberal policy initatives). This is not a case of public-supported policies going bad and opinion shifting, but more like massive failure exposing a fundamental breach of public trust.

The whole nature of the Obama over-extension seems to foreshadow a very precipitous drop in polling numbers which has started in the last 60 days and is reflected in "likely voter" polls. The media has not, of course, given up, and there will be more New York Times, CBS and LA Times polls of the general public (with very dubious demographic weighting) intended to keep the bubble from breaking. Some liberals have also laid the groundwork for their post-mortem excuses by announcing that Obama is trying to do too much as once. This is, of course, delusional as well: it is more accurate to say that he is trying to do too much that the public never agreed with.

If the United States really went to a European-type system with a "head of state" that was a figurehead and real power in another leader (normally the Prime Minister) who did the heavy-lifting, Barrack Obama would be America's choice right now for a figurehead. But the President must govern, must make decisions, react to a hostile world, and submit budgets.

In some sense, Barrack Obama is not the first black United States President. Morgan Freeman was a U.S. President several times before Obama was elected....although he does seem to have more "gravitas."

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