Obama’s Long Six Months

on | Filed under Governance

By Conrad Black in National Post, July 25, 2009.

The observation of Barack Obama's six-month anniversary as President has received much less attention than did his 100th day. All the portentous comparisons with FDR have died away, and the administration is in a fierce struggle to salvage two of its most ambitious legislative projects — cap-and-trade to reduce carbon emissions, and universal medical care.

The country is sailing into uncharted waters and gigantic waves with projected trillion-dollar annual deficits for the next decade. All the celebrations of a filibuster-proof Democratic Senate (after the brazen theft of the Minnesota Senate election by leftist comedian Al Franken) will not mitigate the public’s eroding confidence in the administration; nor their misgivings about higher taxes, bone-crushing deficits, and socialized, coercive, health care.

Obama sold the country a false prospectus of easy, obvious, and almost painless change. The usual six honeymoon months have elapsed, and the country is nearly through rejoicing at the consolation that they have a president whom foreigners are unlikely to throw shoes at, and who speaks in sentences.

But his own Environmental Protection Agency director acknowledges that his cap-and-trade bill will have no effect on the climate, and it will neither raise revenue nor reduce carbon use. It must be replaced with a straight carbon tax of bearable impact coupled with sensible conservation, and alternate-energy-source and oil-exploration incentives. The bill that limped through the House of Representatives was a Rube Goldberg contraption of Al Gore myths and Congressional vote-buying boondoggles. Its adoption would be a disaster. The president’s claim of putting millions of Americans to work making wind-mills and solar panels is a fable that extends the frontiers of quixotry.

Instead of the well-proven Roosevelt-Johnson-Reagan method for legislative change, of declaring an emergency and unveiling a plan of action to deal with it, sending precise bills to the Congress and whipping them through, and using his forensic skills to rouse the nation, the president spent months frightening the public, which was by then a redundant exercise, to create conditions for adoption of a radical tax, spending, health-care and energy program. He wanted to incite panic on the scale of the 1930s, though the economic crisis was not comparable, in order to institute a more radical program than circumstances justified or the public wanted. The half of economics that is psychology was not well-served, and his own party is stumbling in the legislative gate.

Only a fantastic, unstimulating, stimulus package, a Christmas-come-early tree on which the Democratic committee chairmen in the Pelosi-fied Congress hung their baubles of permanent reelection goodies, has resulted. And now the public is wary. There are many versions of universal medical care floating in different committees in the Congress. (Canadians should note that the Canadian health care system is being held up by both parties as a model of what not to do.) After nearly 45 years of advocacy, Senator Ted Kennedy’s venerable proposal has been exposed as hideously expensive and of no benefit to half of those who are not now insured.

No universal health care plan will work if it does not tackle excessive malpractice awards and premiums, and if it does not focus on providing coverage to those who do not now have it, rather than shouldering aside the private sector providers to those who already do. So far, the administration has flunked both these tests and all hopes are now invested in the Senate Finance Committee leaders, Max Baucus (Democrat) and Charles Grassley (Republican). All the existing proposals and the hare-brained suggestions for financing them are on the fast track (i.e. the unimpeded force of gravity) to the dust-bin of history. The government has no mandate to nationalize the medical profession and the health insurance industry.

Raising taxes on incomes in a recession is an insane, innumerate concept, a sentimental journey back to the piping days of Herbert Hoover, and the community-sharing spirit of the bread-lines, soup kitchens, and Hoovervilles. New revenues should be streamed in according to milestones of economic growth, in bearable carbon taxes, taxes on financial transactions, and the hapless John McCain’s much-mocked taxes on some medical benefits (which the Obama entourage now admits was not a bad idea).

On the plus side of the ledger, the current account deficit has fallen by 50%, to under US$400-billion per year, and the savings rate has risen from a slight minus to over 5% positive, as the mad Clinton-Bush formula of borrowing staggering sums from China and Japan to buy non-essential goods from China and Japan is inching toward a more investment-driven economy closer to a pay-as-you-go model in the private sector.

Unemployment is about 9.5%, a rise of over five-million people, but this isn’t the Great Depression, when it peaked at 33%; and the current figure, though no consolation for those out of work, is inevitable as the economy refocuses on more sustainable levels of production and consumption and different patterns of employment. The tens of thousands of lawyers and merchant bankers who have been laid off are well-trained professionals who should not be at long-term risk. And the legal- and financial-transaction industries were generating US$3.5 trillion and employing many of the country’s most talented professionals and executives, though doing relatively unproductive work.

One of the many myths that has been exposed in these events is the fraud of the service-industry economy. Somebody has to make or extract or process something, to pay for service industries. A revival of manufacturing is not easy to foresee. But the United States remains the world’s largest manufacturer, at about US$2.5-trillion, almost all at the most sophisticated scientific level, such as aerospace and advanced technology instruments. This industry must be encouraged to grow.

The automobile-industry intervention, though harsh treatment for the bondholders and shareholders, has given GM, Chrysler, and the UAW a second chance. Bringing a colossal company like General Motors through bankruptcy in less than two months is a feat only the federal government could accomplish, and there are early signs of rebirth in that industry.

Foreign policy has been inconclusive. Honduras was handled well, as long as the United States doesn’t try to restore President Manuel Zelaya, who was removed constitutionally. Obama is doing the necessary thing in Afghanistan with admirable determination. No one who is not privy to inside intelligence can know what is happening in Iran. It is like dogs fighting under a blanket, and forces of comparative moderation may be gaining ground. The rest has been generally good public relations, including the speeches in Cairo and Accra. But when even a well-disposed dean of leftist comment, Leon Wieseltier, accuses the president of “mincing” in the world, it is time for more policy definition.

It has been a rocky start. All depends on whether the president is sufficiently flexible to recognize and adjust to changing political facts. There is time and need for much intelligent legislation, and Americans like their presidents to succeed. But he can’t raise his poll numbers any more by hand-catching house-flies on television. The time for ponderous daily speeches has passed, and the time to take hold and govern has come, and the best quarter of the mandate has already been spent with little to show for it.

Tags: ,