President Obama has been as disconcerting for Democrats as he has been judged as outrageous by Republicans. Look at major events over the past 2 years:
1)No Justice Department investigations of the Republican Administration for broad malfeasance particularly in the areas of abuse of power in the lead up to, pursuit of the Iraq War and handling of its aid and other funding. For their Get-Out-of-Jail cards the Bush Administration key players have been most ungrateful.
2)No Justice Department or other Financial Agency pursuing the financial community for the malfeasance of the Banks and other Financial institutions [private and government] for the Financial Meltdown events of 2006-2009. Again the thank yous may only be counted in the continued campaign funding to the President and Democratic Congressional candidates [but notably declining since Obama came to power].
3)Spending almost all of his political capital on HealthCare Reform when he had a 60 seat majority in the Senate. Much legislation passed by the House was left on the table due to 4) below. But the biggest misappropriation was to ignore the loss of jobs. Obama, Summers, and Geithner should have done all possible to help jobs in USA such as putting in incentives to retain manufacturing jobs in the US and responding in kind to China’s protected industries as well as deflated yuan.
4)Not tending to the electoral fences and allowing the Teddy Kennedy seat to be lost to Republican Scott Brown and thus losing the 60 vote Filibuster-controlling advantage in the Senate. The Republicans then proceeded to up their filibuster choke votes by 20 times previous use, obstructing much unfinished Democratic legislation.
5)Not acting at all to the Supreme Court Decision granting unlimited political funding to corporations/unions/special interest groups. So now lobby and campaign funding, also allowed stealth non-disclosure in defiance of the law awaiting a second Supreme Court ruling, have spiralled out of control.
6)Bargaining for energy reform Obama concedes offshore drilling only to have Gulf of Mexico spill and goes nuclear as key part of Energy Plan to have Japan Fukushima Daiichi nuclear disaster. Twice bitten by Black Swan events and the fact that of all the agencies gutted by Bush administration, the Energy, EPA, and MMC were the worst hit. And so the agencies most in need of reform next to the 17 different agencies policing Financial markets were left untouched. In short, the lack of administrative reform is making the likelihood of Black Swan fiascoes ever greater and allowing the Republican mantra “government does not work” to gain more credibility.
7)Finally Obama gave in on continuing the Bush Tax cuts for 2 more years and approved them for the sake of extending umemployement insurance and other “middle class” programs for 1 year. As NYTimes Paul Krugman has noted, this is not a stellar deal or record on the domestic economic and governing front.
Rather Obama is attempting to create a centrist and moderate persona – able to work with the Republicans no matter how catankerous they want to be In the process of attempting to do so, President Obama has revealed a series of Political Tells. These Tells indicate whether Obama is going to bargain tough or give in with an increasingly lopsided “compromises” with the Republicans. Obama’s economic policy is a good example.
President Obama gave away the stick when he eliminated any meaningful prosecution of the financial community and devoted most of TARP and Financial Recovery moneys to saving the big banks and other financial institutions. Obama did so without demanding payment in kind from the those same institutions. Specifically two areas were considered but dropped:
1)reduction in repayment demands by banks in foreclosure negotiations;
2)a qualification for Fed supports and access to Fed windows predicated on meeting higher capitalizations, lower leverage levels, and a higher percentage of mortgage [or loan] retention at point of origin[5-10% instead of 3% or less which encourages deceptive fobbing of of bad tranches in complex derivative instruments].
As almost none of these were done, the banks and financial resumed bad faith practices like the robo-foreclosure signing, almost no-loans to small businesses , lobbying aggressively against the Financial Regulatory reform and Consumer Financial Protections.
Another example is the Obama Tells on energy policy.The Obama administration delayed reforms of the MMC and other groups in Energy plus overlapping and conflicting responsibilities with the Interior Department and other agencies. Instead, emphasis was placed on the Copenhagen Global Energy Conference and getting a consensus among business stakeholders on a cap and trade system. But Copenhagen was a bust as has been Energy Cap and Trade when the GOP took Ted Kennedy’s seat in the Senate. Other Energy tells are no reform on Ethanol subsidies and continues 45% tariffs against much cheaper Brazilian ethanol sources, no gradual increase in gas taxes to help wean US consumers off of foreign oil dependence, etc. Instead Nuclear Energy is full go ahead despite the fact that some US nuclear sites on the West Coast are subject to the same earthquake exposures as the Japanese plant. But more telling, the issue of huge quantities of thousand year++ radioactive wastes disposal has not been solved.
But after TeaParty/GOP Budget leader Paul Ryan introduced deficit spending with draconian cut backs to HealthCare and permanent tax relief to the very wealthy [who at this time owe so much to the American tax payers for their 3.3trillion and counting bailout], President Obama finally drew a line in the sand. In a speech to the nation [and with Paul Ryan front and center by invitation], President Obama said tax cuts to the wealthy were too expensive -over $1 trillion in the next nine years and cuts to health and other social welfare programs were against longstanding US social welfare directions. But there are two major upcoming Budget negotiations [raising the Budget Ceiling taking place in May and the 2012 Budget debat taking place in September and October ]will supply Obama Tells as to how deep a line in the sand was drawn by the President.
Upcoming Obama Tells
Here are some issues/tells that will give insights into how strongly President Obama stands behind his “line in the sand” versus reaching compromises with the GOP:
1)Appointment of Elizabeth Warren to the head of the Consumer Financial Protection Agency. Obama can do it by making a recess appointment without having to go through a contentious Senate approval. Warren has been very unpopular with the Republicans and their Financial industry lobbyist allies but gets top marks from Marketwatch and the NYTimes. If Obama fails to appoint Warren then expect across the board caves on other Financial Reform [the Dodd-Frank bill , though passed , is going through several defining conference hearings] and minimal consumer protections plus little progress on foreclosures reforms.
2)Approval of the Keystone XL pipeline from Canadian Tar Sands and North Dakota shale oil to Southwest US markets without provision for large pipeline break insurance [due to corrosive bitumen transfers] would be a key Tell that indicate “negotiations’ with Energy stakeholders is still in their favor.
3) The export of guns from USA border states to Mexican gangs in their border wars. More than 20,000 died in Mexico in the past year and the Mexican President has called on President Obama to help curtail sales. Given that 90% of the guns used in border crime come from gunshops in the US a ban and enforcement of that on sales by US border state gun dealers would have an impact on the ferocity of the drug wars. As the increase of US agents and citizens getting killed is on the rise, this appears to be a “no brainer”. But so far no action has been taken. A question of immigration and rule of law again crops up in Obama administration.
4)Various Health care Review Boards under Obama Health care program are getting started. But the GOP have already under or not-funded many of the teams and processes. These boards are extremely unpopular with healthcare providers and GOP allies. Yet these boards are the key ingredient to getting unchecked health costs down. This issue will be on thr firing line in Deficit Ceiling negotiation in April- May and then again in 2012 Budget in September/October – where will President Obama stand?
5)Paradoxically the Obama administration is opposing its own interests in the Supreme Court Case on whether the states and municpalityies can sue for better air treatment by their utilities. the administration insists the EPA will have this under control so it is supporting the Energy companies. Again – this looks like a “less than transaprent” negotiations with the Energy industry at the best and shooting yourself in the foot at at the worst.
6)77 cents on the dollar or less is what women are getting from the Wal-Mart and US busineses in general. Equal Pay legislation badly needs shoring up as women become a mjority in the workforce. The Wal-Mart discrimination issue and the $77cent issue are before the Supreme Court and Congress respectively. Follow Obama administration support for both issues as the bargaining on the debt ceiling and then the Fall budget negotiations with the Republicans continue.
In sum if you get the impression that the Obama Administration is sending out mixed signals – on key issues – join the “is this the Change we can believe in” group. Maybe President Obama is relying too much on the Gang of Fools that the GOP is offering as Presidential contenders – see a Republicans assessment here. But after President Obama said no continuance of the Bush Tax cuts for the second time – ye Editor is truly from Missouri and will be watching the above Obama Tells for how hard a line was drawn in the sand . Here is hoping it wasn’t Quantanamo sand.