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Sunday, August 14, 2011

White House Debates Giving Up on Helping the Economy

The administration hasn't figured out that it's supposed to lead -- that sometimes it's supposed to move public opinion instead of following it:

White House Debates Fight on Economy, NY Times: As the economy worsens, President Obama and his senior aides are considering whether to adopt a more combative approach on economic issues...
Mr. Obama’s senior adviser, David Plouffe, and his chief of staff, William M. Daley, want him to maintain a pragmatic strategy of appealing to independent voters by advocating ideas that can pass Congress, even if they may not have much economic impact. ...
But others, including Gene Sperling, Mr. Obama’s chief economic adviser, say public anger over the debt ceiling debate has weakened Republicans and created an opening for bigger ideas... Even if the ideas cannot pass Congress, they say, the president would gain a campaign issue by pushing for them. ...
So far, most signs point to a continuation of the nonconfrontational approach ... that has defined this administration. Mr. Obama and his aides are skeptical that voters will reward bold proposals if those ideas do not pass Congress. It is their judgment that moderate voters want tangible results rather than speeches. ...
But Christina Romer, who stepped down last year as the chairwoman of the president’s Council of Economic Advisers, said Mr. Obama should fight for short-term spending in combination with long-term deficit reduction.
“Playing it safe is not going to cut it,” said Ms. Romer... “Not proposing anything bold and not trying to do something to definitively deal with our problems would mean that we’re going to have another year and a half like the last year and a half — and then it’s awfully hard to get re-elected.”
But there is little support for such an approach inside the administration. ... Several of his political advisers are skeptical about the merits of stimulus spending, and they are certain about the politics: voters do not like it.
Mr. Plouffe and Mr. Daley share the view that a focus on deficit reduction is an economic and political imperative, according to people who have spoken with them. Voters believe that paying down the debt will help the economy, and the White House agrees, although it wants to avoid cutting too much spending while the economy remains weak. ...

Apparently one of the things holding up a push to put people back to work is worries that the GOP might chant "tax-and-spenders," and the administration's demonstrated inability to respond or defend itself in response would harm Obama's reelection chances.

In any case, the administration promised it would put doing what's right ahead of doing what's best for reelection. This is how you convince yourself that your reelection rather than, say, job creation is the most important thing to focus on:

Administration officials, frustrated by the intransigence of House Republicans, have increasingly concluded that the best thing Mr. Obama can do for the economy may be winning a second term, with a mandate to advance his ideas on deficit reduction, entitlement changes...

The best thing the administration can do is abandon support for struggling households now so Obama can get reelected and reduce social insurance programs that help struggling households?

The administration should put its effort into job creation and talk of little else (though mortgage relief is also high on the list). If Republicans go along, great, households need jobs. If not, it's up to the administration to make sure it's their loss.

    Posted by on Sunday, August 14, 2011 at 12:33 AM in Economics, Politics | Permalink  Comments (92)

          


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