Posted by Shyam Moondra
President Barack Obama just finished one full year in office. He seems to have traveled so far and yet it feels like all he did was come back to where he started. I give him a C for his efforts and personal qualities, which is far less than a B+ he gave himself during an interview on CBS. If anything, he certainly gained valuable experience from which he could learn and grow, and hopefully accomplish big things in the next twelve months.
Obama's election as president of the United States was transformative and it raised hopes for change among the American people. Right after his election, Obama enjoyed tremendous popularity and many expected that he would capitalize on that popularity and accomplish big things on a short order. The people were almost euphoric about the possibilities. They thought Obama will bring more bi-partisanship in national political discourse, stop job losses and home foreclosures, sign a health care reform legislation, implement new regulations for the financial sector, reach agreements with North Korea and Iran on non-proliferation of nuclear weapons, achieve an international consensus on climate change, and reach agreements with Russia on new arms treaty. He succeeded on none, making the voters angry and disillusioned that led to the unexpected victory of Scott Brown, a Republican, in the most liberal state of Massachusetts, filling the seat of the late Sen. Ted Kennedy. Now that the Democrats have lost their super majority in the Senate, it would become even more harder to get things done.
What went wrong?
· Obama failed to provide leadership. Obama proposed things but then he uncharacteristically became aloof from the process, leaving the members of Congress with diverse opinions to sort things out. Ultimately, the process became so polarizing, thanks to intense lobbying by the various interest groups, that it became almost impossible to realize Obama's original vision.
· Obama, a man with excellent communications skills, couldn't persuade a single Republican to vote with him. His failure to work effectively with the opposition was one of the biggest disappointments, especially to the independents.
· Lackluster leaders in the Congress from both parties sealed the fate of many initiatives that Obama proposed. The Senate Majority Leader is utterly ineffective, the House Speaker is one of the most disliked politicians in the history, and Republican leaders in the Senate and House have zero leadership skills. The Democrats have a majority in both houses and yet the party is doomed because of lack of discipline among the rank-and-file and Obama has not paid sufficient attention to the inner workings of the party.
· Obama's tendency to throw money at problems has turned off many independents and conservative Democrats. He needs to offer more imaginative solutions that require less new spending.
· Obama also suffered from bad luck. If his $700 bi stimulus spending had created the promised two million jobs, the mood of the people would have been very different than it is today. This recession has proven to be very stubborn and more stimulus may be needed down the road.
So where does Obama go from here?
· Obama needs to make some staff changes. Secretary of State Hillary Clinton and Secretary of Defense William Gates should be kept, but everyone else should be re-evaluated. Chief of Staff and Secretary of Department of Homeland Security should be replaced.
· Obama needs to move to the center and abandon his socialist tendencies, or else he will permanently lose the support of the independents. When all Republicans in the Congress vote against him, that is a big political problem. Obama needs to change his governing style and peel away pragmatic Republican lawmakers to achieve his agenda. He needs to forge and maintain special relationships with the centrist Democrats, non-ideologue Republicans, and independents to get big things done.
· Bring about changes in the Democratic leadership in the House and Senate. We need new leaders in the mode of the late Speaker Tip O'Neil or the late Senate Majority Leader L. B. Johnson who can bring discipline among the rank-and-file Democrats and also work effectively with the opposition.
· Provide more leadership. Obama tends to give broad outlines of his proposal but then he just walks away and let the members of Congress fight it out with disastrous results. Obama needs to roll up his sleeves and hammer out detailed compromises with the Democratic and Republican leaders in the Congress. Obama's recent meeting with the Republicans in Baltimore was a good start. He needs to follow-up with regular meetings with the Congressional leaders from both parties at the White House, as he said he would.
· Stop throwing money at problems at a time when our national debt and budget deficit are running so high. The case in point, health care reforms. Obama said all the right things during the election campaign, but once in office, the Democrats turned the main objective of cutting health care costs into developing new subsidies and entitlement programs. After the experience of escalating costs of Medicare and Social Security, the American people have almost no appetite for starting any new entitlement programs. Obama needs to go back and prune the health care bill to focus on insurance reforms and cost cutting. If costs are brought down, many of the uninsureds would be able to afford to buy health insurance, and thus the number of uninsureds would go down over time. The Democrats need to cut-down on the proposed subsidies and new entitlement programs.
· The first stimulus has not worked as expected, in terms of job creation. It seems inevitable that a second stimulus would be required, or else we could see the recurrence of recession in the second-half of 2010. This time, Obama needs to focus more on tax incentives rather than new spending. The government spending is never efficient and it involves a lot of waste. On the other hand, tax incentives put more money in the hands of non-government bureaucrats that tends to have immediate positive effect on economy. Besides, taxes can be raised again in the future when we have our prosperity back, but the government spending is never recovered.
· While we are still providing stimulus to the economy, simultaneously, Obama needs to aggressively propose a credible plan to reduce budget deficit and national debt. Unless the budget deficit is brought down to a more reasonable level, we are headed to a tough interest rate environment which will choke-off economic growth. Obama should eliminate wasteful spending in all different parts of the government, including the Defense Department. The federal budget gap, however, cannot be eliminated just by reducing wasteful spending; at some point, we will have to increase income taxes for those earning more than $250,00 a year ($500,000 for a couple) and close-down the corporate tax loop-holes (it's unfair when companies like Goldman Sachs pays only 10% in taxes because of creative off-shore trading schemes).
President Obama has many fine personal qualities, he is a very likable and honest man, he is very intelligent and well versed with public policy issues, and, most importantly, he has extraordinary communications skills. There is no reason why he can't use all of that and lead friends and foes into forging partnerships that would deliver for the American people. Obama just needs to show more leadership and get more involved in crafting legislation, collaborating with both Democrats and Republicans in the Congress. Even though, he didn't do as well as expected (true, he suffered from very high expectations), but he has the necessary skill set to achieve big things in the remaining three years of his presidency. Yes, he can!
