Sunday, October 09, 2011

Looking Back

There is a kind of Carter Regime ting to what Ezra Klein has rendered in a well written column about travails of Obama Administration in battling 2008 Great Recession. Eventually Ezra says that probably other paths would not have had much different result than where we are in terms of recovery; but still 'we missed the bus...' sense is in the air.

The single most important thing Obama and his administration would have done was to be cautious and keep reminding Americans that indeed we are 'in this' for a long haul. This means, there would not have any pretense of 'recovery is around the corner'. Politically that would have made it harder to 'sale' stimulus and some other policy measures. But it would have been much better to deal with such political difficulties then - when Obama administration had political capital - than dealing them now when practically all policy options are closed.

Ezra talks about how in the last quarter of 2008 Economy contracted almost by 9% which we happened to know for sure only this year. Point well taken. Then on similar lines, what policies you are adopting today on today's data are also equally on shaky data. That is what folks like David Brooks want to argue - to pretend your policy prescription can be based on solid factual information all the time is less convincing as well as less useful to us in the end. Hence it has been always important politically to support and argue your policy prescription by pointing out caveats and it's limitations. That is what is missed by Obama Administration.

Even today, the primary thing what President Obama can do is to argue that whatever policy prescription he is offering (Jobs Bill for example); those are means to lessen the impact only, those simply insurances. True Obama Administration is careful today while advocating its prescriptions. Beyond that he should also argue for household debt reduction (does not have to be necessarily 'hair cut'; but even letting home owners to take advantage of lower rates regardless of equity left) and necessary cultural shift in the country so that 'there is a compact between workers and employers'. Those all are longer term changes needed in this country.

President Obama is unlikely to get any of these changes unless he has workable majority in both chambers of Congress. The model of bi-partisan achievements because of a towering personality president reaching to Americans 'over Congress' to put real, workable pressure on Congress; that is unlikely to work in the given hyper partisan politics and divided country. In other words, Obama needs to change 'the game of American Politics' by practically conducting 2012 elections as like parliamentary elections where he asks Americans to give him the majority mandate across the board to make changes possible. Electing a president - that should be practically a simple consequence of electing 'head of a Congressional majority'; that is the change we need. Regan style bi-partisan politics is no more possible and Obama needs to cut that chase. Only when he gets this politics right in 2012; he would get another chance to correct what he missed in his first 3 years.

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