Obama turns left
The U.S.
President is putting the
state in charge of the
economy in the land of
free enterprise. Are the
'best and brightest' up
to the task?
By John Ibbitson
Washington - In the
space of a few months,
the United States of
America has been
transformed from the
most entrepreneurial
society on Earth to one
so state-directed that
even the Europeans are
raising their eyebrows.
The government has
become deeply enmeshed
in the banking and
insurance sectors, a
chunk of which it now
owns. It holds or
guarantees $5-trillion
worth of mortgages. It
is directing the future
of the automotive
industry.
Conservatives accuse
President Barack Obama
of being a socialist.
"The Union of Soviet
Socialist Republics may
be dead," Mike Huckabee,
former candidate for the
Republican presidential
nomination, said
recently, "but the Union
of American Socialist
Republics is being
born."
It's a wild claim. But
Mr. Obama is an
interventionist. He
believes he can
restructure the American
economy and heal this
recession while also
transforming the health
care, education and
energy sectors, even as
he ramps up the war in
Afghanistan.
Mr. Obama is the most
activist president since
Lyndon Johnson. Mr.
Johnson's presidency
failed.
The best and the
brightest is how author
David Halberstam dubbed
those who advised Mr.
Johnson and John F.
Kennedy before him. They
believed they could win
the war in Vietnam while
reshaping health care,
education, housing and
civil rights the Great
Society, it was called.
But they didn't know
what they didn't know,
as former defence
secretary Donald
Rumsfeld liked to say.
They failed to
appreciate the
complexity of the
issues, and they paid
the price in quagmires.
Is Mr. Obama leading us
into a domestic Vietnam?
Is the ambition and
complexity of his agenda
bound to overwhelm an
administration that has
taken on more than any
White House could
possibly handle?
"The brightest and best
always think they can
manage everything,"
responds the
conservative satirist
and commentator P.J.
O'Rourke. "Smart people
are stupid that way.
"The current financial
meltdown may give us an
answer to an age-old
question: Which is
worse, having the
brightest and best ruin
government or having the
brightest and best ruin
business?"
On the other hand, the
administration could
simply be responding,
finally, to America's
desperate need for
root-and-branch reform
of its social and
economic fundamentals.
"One thing about Obama
is that he's a big
thinker," believes
Howard Dean, the former
candidate for the 2004
Democratic presidential
nomination, and until
recently chairman of the
Democratic National
Committee. "He gets it
that health care,
education and the
economy are all
related."
On whether he truly does
get it rests the fate of
the Obama presidency and
America's place in the
world.
Cynics might once have
said that the head of
General Motors decides
who will be president.
Now the president
decides who will be the
head of GM.
The times, and the Obama
agenda, are pivotal.
Broad political will
exists for the first
time to fundamentally
reform the health-care
system, which will lead
to a tremendous increase
in publicly funded care.
In order to receive
federal funds, state
governments are going to
have to test their
students using federal
criteria. Teacher pay is
going to be based on
merit, and charter
schools publicly
funded, but privately
run will proliferate,
especially in low-income
areas.
The cost of energy, of
any kind, will increase,
in order to reduce
greenhouse gases and
reorient manufacturing
toward alternative
energy products.
And Afghanistan is going
to replace Iraq as the
front line in the war on
terror.
It increasingly appears
that all or at least
most of Mr. Obama's
beyond-ambitious agenda
is actually going to
happen. Both the House
and Senate passed
framework legislation
Thursday that approves
the main features of the
president's budget.
Months of negotiation
lie ahead before that
budget is finalized, but
the Democratic caucus
appears to have the
votes to execute the
president's will.
In response, the
conservative magazine
National Review entitled
its cover story "The New
Socialism."
The administration is
hardly seeking to
control the commanding
heights of the economy.
Yet a more activist bent
in government appears to
be what Americans want.
A recent Washington
Post/ABC News poll
revealed that 60 per
cent of respondents
approved of Mr. Obama's
economic policies. A CNN
poll concurs, adding
that 57 per cent support
his plans for health
care, 63 per cent are
onside with his energy
policy and 65 per cent
approve of his plans for
education reform.
"There is no question
that both Mr. Obama and
the American people want
America to move in a
more progressive
direction," contends
Faiz Shakir, of the
Center for American
Progress, a political
advocacy group whose
agenda is virtually
synonymous with the
President's.
After all, "Barack Obama
is not proposing
anything that he hid
from the American
population during the
campaign. He articulated
every single one of
these policies."
The key to this debate
may lie in a statistic.
There are now more
millennials than
boomers. To be precise,
there are 17 million
more people born between
1982 and 2003 living in
the United States than
there are people who
were born between 1946
and 1964. There are 27
million more millennials
than there are Gen-Xers,
the generation in
between. The millennials
constitute the largest
generation in American
history.
Millennials identify as
Democrats over
Republicans by 55 to 30
per cent; in one poll 80
per cent identified with
Mr. Obama, and only 10
per cent identified
generically with
Republicans.
The boomers, who were
raised to believe in
ideals hence the
culture wars of the past
50 years taught their
children civic
responsibility, says
Morley Winograd,
co-author of Millennial
Makeover, a book that
explores the phenomenon.
In the last election,
millennials constituted
17 per cent of the
electorate. In 2012 they
will make up 25 per
cent. By 2020, they will
make up 36 per cent of
the electorate, and will
be the dominant
demographic for decades
to come.
"As long as they hold on
to these more
politically progressive
ideas, which generations
tend to hold onto
throughout their lives
it's not true that they
get more conservative as
they get old it
obviously bodes well not
just for Democratic
politics but for
activist government in
economic matters, though
not in social issues,"
he says, "which is the
reverse of what we've
seen."
Beyond the question of
social consensus is the
question of capacity.
Last September, when
John McCain suspended
his election campaign
and returned to
Washington in a futile
effort to help pass the
bank-rescue bill, Mr.
Obama continued
campaigning, saying, "A
president has to be able
to do more than one
thing at a time."
Certainly he is
multitasking both
himself and his Treasury
Secretary. Since his
confirmation nine weeks
ago, Timothy Geithner
has presided over the
$787-billion stimulus
package; the
$3.6-trillion budget;
the formula for removing
toxic assets from banks;
the administration's
response to public
outrage over bonuses at
AIG; the restructuring
or sale of GM and
Chrysler; the
negotiations leading up
to Thursday's G20
summit, and new
legislation to
re-regulate the
financial-services
sector.
Health and Human
Services, Environment,
Education, State from
North Korea to the
Middle East and
Defence Iraq and
Afghanistan all have
full plates as well. And
David Axelrod, Rahm
Emanuel and the other
senior staff must
co-ordinate this agenda,
and present its more
intractable elements to
Mr. Obama, who is making
one presidency-defining
decision after another.
If this is Friday, it
must be Afghanistan. If
this is Monday, it must
be cars.
The White House strategy
is clear. Make all the
big decisions at the
very beginning, set
everything in motion,
then step back and watch
how it plays out,
intervening whenever it
becomes obvious that
earlier decisions did
not produce the desired
results.
The health-care file is
a typical example. The
administration is
convinced that a window
exists for fundamental
reforms. Voters are
upset that premiums are
rising faster than the
rate of inflation, while
coverage in the event of
a major illness becomes
increasingly uncertain.
Employers want relief
from the crippling costs
of covering their
workers. Even insurance
companies realize that
they must co-operate in
reform or be trampled
beneath it.
So Mr. Obama assembled a
team of advisers, found
himself (finally) a
Health and Human
Services Secretary
former Kansas governor
Kathleen Sebelius
convened a health summit
at the White House, put
a $634-billion
placeholder in the
budget, and told
Congress he wanted
legislation passed this
year.
Now it is up to Congress
and the stakeholders to
shape that legislation.
Mr. Obama is open to
pretty much any
solution, so long as the
uninsured have a
realistic chance of
becoming insured, and
costs start to come
down. Health-care costs
in the United States are
almost twice as high, as
a share of GDP, as they
are in Canada or Europe.
But will this strategy
succeed? Or will it
collapse in acrimony, as
Hillary Clinton's
proposed reforms did
during her husband's
presidency? Or will
Congress implement the
reforms, only to learn
in a few years that they
made the situation
worse?
Multiply this quandary
by a cap-and-trade
system to fight global
warming, a troop surge
in Afghanistan, removing
toxic assets from
troubled banks,
preserving a domestic
automobile industry,
smart grid,
re-regulation, Israel,
immigration and the
enormity of the gamble
that Mr. Obama is taking
starts to take
frightening shape.
"Can you do everything
at once?" asks Herbert
London, president of the
Hudson Institute, a
conservative think tank.
"My judgment is you
cannot.
Spending money
on something doesn't
mean you get the result
that you want."
"What we have is the
Europeanization of the
American economy," Mr.
London laments. "It's a
remarkable
transformation: enormous
expenditures, you're not
entirely clear about the
result, but the one
thing you're sure about
is indebtedness into the
future." It is, he
maintains, a
prescription for
injustice, failure and
waste.
But when Mr. Dean is
reminded that this is
exactly what happened a
generation ago, when the
Johnson administration's
lofty goals of defending
South Vietnam, waging
war on poverty and
fighting discrimination
led to a failed war,
high-rise ghettoes and
race riots, he snorts in
derision.
"I hate to ruin your
article, but I think
that's a ludicrous
proposal," he said.
Since leaving the DNC,
Mr. Dean has been
championing a
public-sector solution
to health-care reform,
and working as a
consultant at McKenna
Long and Aldrich, a law
firm involved in, among
other things, government
relations.
Medicare, civil-rights
laws and much more were
great achievements under
the Johnson
administration, he
points out, and besides,
"Obama has learned from
history."
He will not let
Afghanistan turn into
Vietnam or Iraq, for
that matter. "He
understands the
limitation of military
force against
terrorists." And as for
the plethora of domestic
reforms, "Obama now has
both the opportunity
created by this enormous
crisis and the
obligation created by
this enormous crisis to
take a long-term view,
not just a short-term
view."
The fate of the Ontario
economy rests on how the
Obama administration
handles the auto crisis.
The success or failure
of the troop surge in
Afghanistan will
determine the wisdom of
Canada's investment in
blood and treasure
there. How fast and in
what way the rest of the
world's economies grow
in the coming years
depends on whether the
administration's
approach to stabilizing
the financial sector
works.
However diminished the
United States might be
in the wake of the past
eight years, its future
remains our future.
"I'm pretty confident,"
Mr. Dean says. "This is
not rocket science."
It's not?
