Obama Economics and Governance

It has been said here before but now that Marketwatch’s Darrell Delamaide agrees – it bears repeating. The Achilles Heal for President Obama appears to be his nominal interest in, flawed understanding of and/or declining excellence of his advisors  in Economics and Governance. Darrell argues that it will not be the GOP but the Herbert Hoover-like penchant of the Obama Administration to  making bad economic and governance decisions that will make Barack Obama a one-term President. Judging by the missed opportunities Darrell may have a high probability bet on his hands:
Missed Governance Decisions
1)Failure to control Wall Street  after the Financial Meltdown. Instead of an immediate and  well justified commission with powers to launch criminal investigation on the nature and complicity of  financial players in the Financial meltdown, the Obama team chose to engage with a financial community that has no goal other than perpetuating its powers of self aggrandizement. As a reward the Financial Community has provided the financial muscle to obstruct appointments, bleach regulations, and ignore National Interest in the cause of returning to the gravy days of self remuneration on a Gilded Age scale.
2)Failure to control GOP after the defeat of Bush. John McCain was running as George Bush III with a nest of lobbying and special interest vipers that were revealed in the early 2010 Supreme Court Decision to remove all shackles on campaign finance and lobbying. The GOP was and still is leadersless. This made and continues to make the GOP doubly dangerous  allowing demagogues{Rush Limbaugh, Fox News, Glen Beck,  etc], renegades[Tea Party extremists] and agentes provocateurs to take unblinkered shots at the administration and governance. After all conservatives like Irving Kristol had condoned such scorched Earth policies as obstructing  executive appointments to promote the perception of poor administration;  “Starving the Beast” policy – passing populist programs without having the funding to pay for them [think Bush’s Medicare Prescription Benefits or proposed Social Security “reforms” ] so that government would become so unwieldy that it would not work.
A carrot and stick approach might have been much more effective The carrot is to give the GOP near carte blanche proposing  legislation on coinciding issues like  Tort Reform and/or Immigration Policy and then carry the stick of investigations into the Interior Department’s MMS mishandling of mining and drilling regulations,  HEW’s FDA interference problems, and/or the Bush Administration on a number of Security and Treatment of Prisoners in Iraq, Afghanistan  and Quantanamo Bay. The latter  would have absorbed the time and petulance of Bush Administration operatives who having escaped any investigation. Instead the Obama team chose a  Nelson Mandela like “Truth and Reconciliation” gesture in hopes of some bipartisanship in a time of War and great economic upheaval. Instead, with no Stick, the “no thanks whatsoever” from the GOP has been 60 vote filibustering on every issue in the Senate and a fierce SwiftBoat-like campaign of smearing  and blaming the administration for every thing that has gone wrong in the economy.
3)Failure to appoint a clean-house Economic and Financial advisory team. Fed Chair Bernanke, Treasury Secretary Geithner, Economic Advisor Larry Summers have a)ceded too much power to the banks and financial institutions and b)shown minimal regard to the task of getting the US working again.
4)Failure to rely on his Cabinet to clean up the problem of departments effectiveness. As the Obama administration came into power there were clear  signs of  administrative negligence and abuse with much  reform needed in Treasury [SEC, CFC, and the sprawl of regulatory agencies], Energey, Educations, HEW, and Interiror Departments. Obama should have given his Cabinet clear marching orders to get the Departments and agencies delivering more effective value for money from his agencies. it just did not happen and so the blame that government is too big and is not working for the people has the tendency to stick.
5)Wasting so much time and political capital on Health Care Reform –  the GOP then demonized Health Care in libelous fashion and once it had gained the 41st Senate seat, set about to paralyze all administration reforms with Senate filibuster tactics.

Missed Economic Decisions

1)Failure to make protecting and creating Jobs the number one priority of the Administration – instead the US is entertaining QE2-Quantitative Easing 2 which gives even more money to banks and financial players rather than investing/giving targeted tax incentives to industries and small businesses that create domestic jobs.
2)Falling for the Finance and Investment Trickle Down ClapTrap
– all during the Bush years, the Financial community had been able to mount the argument money invested in the Financial Markets is money efficiently and effectively utilized – as the markets always allocate dollars with highest returns. First there were two Big Bubbles so efficiently produced by the Infallible Markets – the DOT.Com Bust and then the Massive Mortgage Fraud and Bust. Second, profits and wealth accreted to a privileged financial elites [top 1% of  US earners have 25% 0f US wealth and 50%++ of those are in finance roles] who then  went onto castigate the Obama administration for “elitism”.
3)Making key “repeat-offender” Economic appointments and granting access to White House for the wrong players
–  Larry Summers, Tim Geithner, Robert Rubin, Lloyd Blankfein, Ben Bernanke became major economic and financial policy shapers who have always choose crude financial policy instruments over  targeted job creation measures.
4)Ignored the threat of China to  the US and  Global Economy – the Chinese are more than willing to make the US [and a substantial portion of the rest of the World] pay with their jobs by constantly tapping a 750 million work force for which 20 dollars a day is a substantial increase in earnings over their peasant incomes.
So as one  Marketwatch reader observed in commenting on Obama’s chance of doing a Hoover-repeat:

Since the end of WWII, the prevailing driving force of the American electorate has never wavered: “It’s the economy, stupid.” Politicians, great or small, ignore this absolute truth at great peril to their electability.

Amen and take a 5th of your favorite beverage as toast to better times.

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