Obama Lowers the Boom

by John M. Curtis
(310) 204-8700

Copyright February 2, 2009
All Rights Reserved.                    

           Dashing high hopes about his administration, President Barack Obama lowered expectations about economic recovery, reminding anxious investors that things could get worse before getting better.  Since his inaugural speech, Barack has been warning about the slow pace of recovery even with his proposed $819 billion rescue plan, winning House approval Jan. 29 [244-188], with all 177 Republicans voting against the measure.  House Republicans complain that the measure is too filled with Democratic pork, with not enough economic stimulus.  It didn’t help matters that Barack attacked conservative icon Rush Limbaugh Jan. 27, telling the House GOP not to listen to the 58-year-old syndicated radio talk show legend.  Whether you like him or hate him, Limbaugh personifies the living voice of President Ronald Reagan, to whom the GOP owes its triumphant rebirth.

            Attacking Limbaugh antagonizes the GOP, still reeling from a stinging defeat on Nov. 4 but unwilling to roll over.  Winning the election handed Barack a delicate balancing act, seeking bipartisan support, but, at the same time, requiring seismographic sensitivity.  Opening a debate with Limbaugh exposed Barack to an unwinnable argument about the economy.  Republicans, and indeed many Democrats and independents, have great skepticism about the government’s heavy-handed role in bailing out distressed businesses.  Barack wants to extend the bailout to homeowners and cash-strapped states, whose GOP governors put pressure on senators to approve the president’s plan.  Tamping down expectations, Barack continues to signal that the recovery could take years, not months or weeks.  If there’s not progress soon, his honeymoon could end quickly.

            Barack spent some political capital standing behind his Treasury Secretary Timothy Geithner.  Geithner faced some withering cross examination by Sen. Arlen Specter (R-Penn.) about his failure to pay self-employment taxes while contracting with the International Monetary Fund.  Passing Geithner sent mixed signals to U.S. taxpayers.  Geithner claimed to make an “honest mistake,” leaving members of the Senate Finance Committee scratching their heads, overlooking his blunder for the sake of the economy.  Now the same misgiving are asked of Heath and Human Services designee former Sen. Majority Leader Tom Daschle (D-Neb.), whose tax problems were far worse than Geithner’s.  Daschle failed to pay $128,000 in taxes on IRS 1099 consulting income.  Like with Geithner, Obama dismissed Daschle’s oversight as merely an inconsequential mistake       

                Obama’s failure to see Geithner and Daschle’s tax problems as moral turpitude shows an arbitrary set of standards.  “The president has confidence that Sen. Daschle is the right person to lead the fight for health care reform,” said White House Press Secretary Robert Gibbs.  What the White House doesn’t get is that Daschle’s “knowledge” of health care has little to do with whether or not he can advance the goal of national health care.  If Daschle is perceived as lacking integrity or untrustworthy, he won’t deliver the president’s agenda.  If he can’t be trusted to pay his taxes, why should his colleagues—or the public—trust him with backroom deal-making needed to attain health care reform?  Obama exposes himself to greater criticism should Geithner or Daschle stumble in their jobs.  Only Cabinet personnel with impeccable credentials should be picked.

            Obama must use the bully pulpit not to coerce Congress into backing his plan but to inform the public on the real pros and cons.  Instead of attacking Rush, Obama should convene and economic summit, hosting the nation’s leading economists to evaluate, modify and endorse his recovery plan.  No amount of arm-twisting or pressure will help convince the GOP that his economic experiment will best fix the nation’s broken economy.  Billionaire hedge fund manager and Democratic mogul George Soros believes any plan must include a commitment by the Federal Reserved Board to print money, liquidify banks and retire bad debt.  He blames the current financial crisis on the Fed failing to bail out Lehman Bros., causing a “run-on-the-bank” in the investment and banking community.  To fix the problem, the Fed, Treasury and Securities and Exchange Commissiom must restrict short-selling.

            Barack’s agenda is best served leaving Rush Limbaugh alone and convening an economic summit, letting the experts figure out how to modify his $819 billion recovery plan.  Treasury Secretary Geithner and Fed Chairman Bernanke must supply the liquidity necessary to end the cash-crunch in the banking and investment sectors.  Obama’s current plan should cut out the pork, especially gratuitous funding to family planning clinics and new health care.  Barack’s plan should emphasize helping cash-strapped states and stopping the foreclosure crisis, sapping homeowners of the resources to begin spending again.  Creating new jobs in technology and infrastructure should soften the bleak jobs’ picture. When the banking sector recovers, it should boost the stock market and corporate liquidity.  Together with GOP-backed tax cuts for individuals and business, Barack’s new plan should turn things around.       

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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