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Posted by on Feb 16, 2009 in Economy, Politics | 2 comments

Obama Punching Bag Seems A Bit Premature

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As President Barack Obama switches from campaign to governing mode he is doing a rope-a-dope absorbing blows from friends and foes alike.

As for fulfilling his campaign promises, he’s damned if he does and damned if he doesn’t.

People with agendas and axes to grind fail to realize Obama is a governing pragmatist, not an ideologue. They refuse to accept he is president of all the people, not just a surrogate for MoveOn.Org or any other interest group that helped him win the election.

The right-wing attacks from the Republican National Committee, to Republican House and Senate members to media radio and television talk show hosts, is to be expected. Forgive them for they live in a world which has passed them by.

But liberal allies such as those in the House who filled the stimulus bill with tired old favorite projects having nothing to do with job creation demonstrate little patience. They act like the window of opportunity was yesterday when, in the House’s case, they might have postponed their zeal and stick them in the upcoming appropriation bills.

The liberal special interests, Obama’s most fervent supporters, are the ones second guessing the president’s intentions. They see policy fights in the areas of stem cell research, labor union organizing, “Buy American” rules in the stimulus plan, faith-based charities, Guantanamo Bay prisoner detention and to keep in place one of the most controversial legal tactics of the Bush anti-terrorism arsenal by using the “state secrets” doctrine to block lawsuits by detainees.

In an analysis reported Monday in the Los Angeles Times:

Advocates for stem cell research thought Obama would quickly sign an order to reverse former President Bush’s restrictions on the science. Now they are fretting over Obama’s statement that he wants to act in tandem with Congress, possibly causing a delay.

Critics of Bush’s faith-based initiative thought Obama had promised to end religious discrimination among social service groups taking federal money. But Obama, in announcing his own faith-based program this month, said only that the discrimination issue might be reviewed.

And Obama’s recent moves regarding a lawsuit by detainees have left some liberal groups and Bush critics, including the American Civil Liberties Union, feeling betrayed, given that Obama was a harsh critic of Bush’s detainee policies when running for office last year.

The anxiety is also being felt in the labor movement, one of Obama’s most important support bases. Some union officials and their allies are frustrated that at a crucial point in negotiations over his massive stimulus package, Obama seemed to call for limits on “Buy American” provisions in the bill aimed at making sure stimulus money would be spent on U.S.-made materials.

Obama has been president for less than a month, and his liberal critics concede that the economic crisis has understandably taken the focus off their issues…

“He made very clear promises, and he should live up to them,” said Arthur Stamoulis, director of the Oregon Fair Trade Campaign, which received an unqualified “yes” from Obama on a campaign questionnaire last year when the group asked if he would support “Buy American” requirements. “The fact that he’s hedging on this is not promising. He’s catering much too much to the desires of Republicans who are not going to support the change that voters wanted.”

Thea Lee, policy director of the AFL-CIO, said, “We would like to have him stand more forthrightly behind the positions that he took during the campaign.”

Obama has long said his administration will be driven by competence, not political ideology. He has blamed the nation’s problems on a failed and highly partisan political system, and has said that solutions should come by building coalitions that cross the traditional battle lines in Washington policy fights.

Moreover, White House aides say, Obama has already fulfilled promises such as enacting a labor-backed pay equity law and beginning the process of closing the prison at Guantanamo Bay, Cuba…

Yet for some who supported him, Obama’s recent actions contain either outright abandonment of what they thought had been campaign promises, or at least a hesitation on Obama’s part to follow through quickly and clearly.

Union leaders were taken aback this month when Obama, during television appearances discussing the stimulus legislation, spoke skeptically of “Buy American” provisions in the bill giving U.S. makers of steel and other materials an advantage in bidding for contracts.

Obama told Fox News that the U.S. “can’t send a protectionist message,” and he cautioned on ABC News that the requirements could be a “potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe.”

Business groups were thrilled at Obama’s words. “That was an extremely important moment,” said John Murphy, vice president for international affairs at the U.S. Chamber of Commerce, one of the biggest business associations. “The business community is very pleased that the White House stepped in and showed leadership on this issue…”

But labor advocates were alarmed by Obama’s willingness to insert himself in the debate as a champion of business concerns. They said his stance was far different than during the presidential election, when Obama was trying to win union votes and called for rebuilding America with union-made materials. Obama’s new language was “a little disturbing,” said Jeff Faux, an economist at the liberal Economic Policy Institute, which has received funding from labor unions.

At the ACLU, Executive Director Anthony D. Romero said his group’s disappointment was “deep and unparalleled” after the Justice Department decided to keep in place one of the most controversial legal tactics of the Bush anti-terrorism arsenal: using the “state secrets” doctrine to block lawsuits by detainees. The Justice Department invoked the privilege last week in arguing that a case should not proceed because it might lead to the disclosure of state secrets. As a candidate, Obama had attacked Bush for using the tactic and had pledged to reverse such policies.

“Clearly, the state secrets campaign promise is broken,” Romero said, “on his watch, with his attorney general, and with his government lawyers articulating the Bush administration policies.”

Criticism also was expressed in an editorial in Monday’s New York Times, hardly a bastion of conservatism.

On the campaign trail, Mr. Obama made clear that he would extend the faith-based initiative started by former President George Bush to help social service programs run by religious and other charitable groups obtain federal grants and contracts. But he also pledged that unlike Mr. Bush, he would provide meaningful safeguards to avoid the blurring of church-state boundaries, including a firm rule barring discrimination on the basis of religion. The rule is notably missing from his new decree.

Speaking last July in Ohio, Mr. Obama set forth his “basic principles” for assuring constitutional balance. “First, if you get a federal grant, you can’t use the grant money to proselytize to the people you help and you can’t discriminate against them — or against the people you hire — on the basis of religion,” he said. “Second, federal dollars that go directly to churches, temples and mosques can only be used on secular programs.”

He said taxpayer dollars should not be used to advance partisan interests, and there was reassuring language about maintaining the separation of church and state in Mr. Obama’s remarks at the National Prayer Breakfast preceding the issuance of his order, and in the order itself. But it would have been a lot more reassuring if the directive had actually revoked Mr. Bush’s 2002 executive order authorizing religious-oriented recipients of federal funding to hire and fire on religious grounds.

We suspect that Mr. Obama was not particularly proud of this omission. He chose to sign his order away from the view of television cameras or an audience. Joshua DuBois, the Pentecostal minister selected by Mr. Obama to lead his initiative, says the president is “committed to nondiscrimination,” and that the executive order “provides a process” for case-by-case review to decide if grants to faith-based organizations are “consistent with law…”

The case-by-case review seems destined to confuse as much as enlighten. And it is hardly the clear commitment to proper employment practices Mr. Obama voiced as a candidate, and the Constitution requires.

Most people have heard the complaints voiced by Republicans regarding the $787 billion stimulus bill. Now comes word from an economist who says Obama is fear mongering and the current recession is far from catastrophic proportions the president describes as the worst since the Great Depression.

Fear mongering? Haven’t we heard that refrain before concerning Bush’s national security policies? Must be the expressional soup d’jour of our times.

Writes Bradley R. Schiller, an economics professor at the University of Nevada, Reno, and the author of “The Economy Today” in Monday’s Wall Street Journal:

In (Obama’s) remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today’s economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover.

This fear mongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don’t come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate…

The latest survey pegs U.S. unemployment at 7.6%. That’s more than three percentage points below the 1982 peak (10.8%) and not even a third of the peak in 1932 (25.2%). You simply can’t equate 7.6% unemployment with the Great Depression.

Other economic statistics also dispel any analogy between today’s economic woes and the Great Depression. Real gross domestic product (GDP) rose in 2008, despite a bad fourth quarter. The Congressional Budget Office projects a GDP decline of 2% in 2009. That’s comparable to 1982, when GDP contracted by 1.9%. It is nothing like 1930, when GDP fell by 9%, or 1931, when GDP contracted by another 8%, or 1932, when it fell yet another 13%…

Mr. Obama’s analogies to the Great Depression are not only historically inaccurate, they’re also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren’t likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fear mongering can trigger a political stampede to embrace a “recovery” package that delivers a lot less than it promises. A more cool-headed assessment of the economy’s woes might produce better policies.

Cool headed? Now, even Obama’s unflappable demeanor is challenged.

Cross posted on The Remmers Report