Obama's Hard Sell

by John M. Curtis
(310) 204-8700

Copyright February 1, 2009
All Rights Reserved.                    

           Finding his charm offensive losing steam, President Barack Obama got an inhospitable welcome from House Republicans considering his economic stimulus plan.  While the House passed his plan 244-188, not a single Republican joined the Democratic majority, signaling more problems as the plan moves to the U.S. senate.  Winning a stunning victory Nov. 4 didn’t impress the GOP minority, signaling they want a bigger voice drrafting the plan.  Barack’s miscue stemmed from the haste with which his advisors sought to cash in on his political capital.  With mounting criticism over former President Bush’s $700 billion bailout, Obama faces the same skeptics, questioning whether or not the new plan will do any better fixing the economy.  Most economists examining Barack’s plan can’t say with certainty whether or not it will improve the nation’s financial health.

            Instead of railroading the Congress, Barack should convene an economic summit, bringing together the best economic minds in the country.  At the summit, the experts should study, modify and endorse a consensus plan that will have far-reaching implications for the U.S. economy.  Adding nearly $1 trillion on the national debt deserves the kind of thought and deliberation needed to get it right.  Republicans object that they see too much pork-barrel spending and not enough stimulus to jump on the bandwagon.  “This isn’t about playing the game, this is about doing something good for the American people,” said Sen. John Kyl (R-Ariz.), accusing the majority of ignoring their concerns.  Republicans want a chance to fashion the plan as much as Democrats, believing their input valuable.  Without an economic summit, Republicans feel they’re being ignored.  

            Republicans weren’t too happy about the amount of bailout money going to pro-choice family clinics.  Nor were they excited about the profusion of pet Democrat projects, including providing health care to the unemployed.  While there’s plenty of funds for developing alternative fuels and infrastructure, there’s less incentives for entrepreneurs and small businesses.  GOP objections would be neutralized by an economic summit.  Without convening a nonpartisan summit, Republicans feel ignored.  Economic heavyweights, Fed Chairman Ben Bernanke, New York Times’ Paul Krugman, New York University’s Nouriel Roubini, Harvard’s Kenneth Rogoff, Yale’s Robert Shiller, Warren Buffet, George Soros, etc., need to carefully evaluate, critique and modify Barack’s proposal to build a national consensus.  Reminding the opposition about their loss in the last election breeds more dissent.

            Leading economists would have a far easier task of convincing Republicans that tax cuts alone will not fix the economy.  They’re well aware of how Bush’s tax cuts left the country in the worst shape since the Great Depression.  “As an American, I want to see the right thing don regardless of who gets the credit,” said Sen. Bob Bennett (R-Utah), objecting the current bill.  “I’m going toe vote against this package because it won’t work.”  Politically disinterested economists would have more sway with Senate Republicans than members of Obama’s economic team   While Barack has some political capital following the last election, he doesn’t have a blank check to do as he pleases.  It’s more important to get the new bailout right than to win partisan backing on a dubious but well-intentioned plan.  Developing a consensus plan would safeguard Barack against negative political fallout.

             Questions still unsolved by Obama’s plan involve what to do with estimated $2 trillion left in so-called “toxic assets.”  When former Treasury Secretary Hank Paulson abandoned the Toxic Asset Relief Program Nov. 13, he gave a green light to financially-strapped banks to do as they please.  Before the Congress agrees on any new bailout, they must figure out how to re-capitalize banks.  Economic guru George Soros makes a convincing case in London’s Finanical Times that the government can’t afford to let any more large banks fail.  He urges the Fed to print whatever money is needed to add  liquidity to the banking system.  He also urges the Treasury Secretary to find a way of disposing “toxic assets,” enabling banks to once again begin extending new credit.    He blames the government’s failure to save Lehman Bros. as the precipitating cause in today’s financial meltdown.

            Obama’s economic plan needs far more scrutiny and consensus by the nation’s leading economists.  No administration can pretend to be “post-partisan” when they don’t include the opposition in the decision-making process.  “We reached out to Republicans all along the way and they know it,” said House Speaker Nancy Pelosi (D-San Francisco), citing new tax-cutting provisions in Barack’s plan.  Pelosi needs to stop scoring points and support an economic summit before the nation commits itself to another trillion dollars.  “Ladies and gentlemen, a trillion dollars is a terrible thing to waste,” said Sen. Roger Wicker (R-Miss.), seeking more input to fashion the most effective possible stimulus.  No one wants to drag his or her feet.  But before either side gets their way, it’s prudent and responsible to seek a working consensus with the nation’s best economists.

John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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