Saturday, February 28, 2009

Looming Battle of Obama Socialism

'Economy tanking' is the real danger for Obama to pull off his Socialism. He and his Administration will have to be nimble in this regard. Treasury Secretary Geithner has not been very reassuring in this regard and looks like Obama is handicapped there. The other issue here seems to be that Obama Administration may be less open to public in listening to alternating Economic Ideas. It seems more of 'my way or highway' when it comes to Economic Policy. The way Obama is simply barreling his proposals, there is real danger that we miss genuinely smart solutions in the process and then he can not pull off his Socialism. Both Administration and FED Chief are assuming quite optimistic Economic outcome. Somebody needs to keep on 'hammering' Gibbs in daily press meetings about this disconnect - what Administration is assuming and what reality is when it comes to ‘revenue receipts of Fed’.

The other part is in today's weekly speech, Obama is indicating that he is ready for the fight. But the jury is out. Literally he and his Administration need to be obsessive and paranoid about this fight. The problem here is Obama does not have the luxury of 'smaller time window' to push his budget as like his stimulus package. Effectively there are 6 months before the budget is finalized and even if today the opposition forces are salient and dormant, they have plenty of time to gather, regroup and attack. In a war, it is always difficult to defeat an entrenched enemy on his home turf. So they say you need 1-to-4 advantage for the attacking forces to uproot the entrenched enemy on home turf. Here, we only see Obama. Where is his Cavalry?

This is quite a big fight in adverse and deteriorating economic environment. It reminds the political battle George Bush lost about ‘privatization of Social Security’ immediately after his thumping victory in 2004. Bush was ‘flush’ with the Political Capital, he had his forces aligned with him; but still in the end could not pull off that change. That is the reason why many had hoped that Obama would pick these battles down the line when he has established credibility by averting the immediate economic crisis (WaPo Editorial was right on that...). But Obama thinks this is the best time from his popularity point of view and it is for these policies he was elected. He is right and public agrees with that. Unfortunately, this is unlikely to result in much of advantage on the field while battling the opponents.

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