Sunday, April 12, 2009

Are you getting Smart with me?

I really think Barrack Obama is trying to be a “smart” President. It may be the way he approaches the world, and, given the law of unintended consequences, it may not work, but it is interesting to watch. A couple of examples:

If you asked Americans on September 12th, 2001, what should the government do now, the response would have surely been to get Osama Bin Laden by any means possible. It would have been ok to strike a deal with the Taliban, or fine to invade Afghanistan and get him that way. "Just get him" was the operative theme.

A few Americans might have mentioned Saddam Hussein in passing. But I think no one would have thought Saddam was a primary threat.

So we went after Osama bin Laden, and spectacularly failed to get him. And a year and a half later we went after Saddam Hussein, not having got Osama bin Laden. We invaded Iraq because the Bush administration made the case that Iraq’s weapons of mass destruction would soon be in the hands of terrorists, or Iraqi intelligence operatives pretending to be terrorists, and America would suffer a more devastating attack. Later we would be told that a democratic Iraq would be a catalyst for democracy throughout the Middle East (including the Palestinian territories, where they clearly don’t understand democracy, having elected the wrong people).

So Obama wants to focus back on Afghanistan. Although it has not been mentioned, it appears Obama might be willing to accept a dictator or at least a much less democratic Iraq than what the Bush administration seemed to have in mind (to they extent they had a plan at all). Since it seems Iraq is evolving in that direction anyway, what I am really saying is that the Obama administration appears ready to accept reality in Iraq. But in Afghanistan, there is still room to expand democracy a bit, and more importantly maybe we can yet get Osama Bin Laden. That would be a popular, and therefore smart thing to do.

Meanwhile, on the domestic side, if you ask people what they would like the economy to be like, if you asked them to fantasize and think of the time they were most happy (economically speaking), you would probably get a bunch of hunh’s and wishing doesn’t make it so (I am assuming Americans are an unimaginative bunch, by and large). I suspect if they got the question, a slim majority would say they wished it was 2006 all over again, with growing home values and growing 401k’s. I suspect Obama realizes this, and realize he needs to make the stock market “happy” again, to make a majority of voters happy. What I mean is that Obama realizes he needs to have the widely recognized symbol and barometer of how the American economy is doing start going up again. Then a given subset of Americans will automatically give him some credit for being responsible for America having a good economy (like many of us blame Bush for the opposite).

But how do you make the stock market happy? Well, you start by not firing any of their CEO’s. You continue by continuing to give investment companies and banks (or bank holding corporations) lots of taxpayer money.

The problem with that is that some ordinary Americans blame the investment companies and banks (or bank holding companies) for our current financial mess. So there is a tension between make/keep the financial market happy and satisfying ordinary taxpayers desire to see someone punished for our financial mess. The solution? Fire an executive in a different industry. To use a basket ball term, throw an elbow. In this case, a symbolic elbow at Rick Wagoner of GM. I think the subtle message to the financial industry is “look, I am trying to keep you happy, but see what I am capable of; now how about that re-regulation?” Will that work, and will Americans be satisfied with Rick Wagoner as a sacrificial lamb? Probably not, but it is early days yet, and there are other heads that can go on the chopping block if the financial industry complains or resists re- and new regulations (too bad John Thain is already gone, although maybe he could be prosecuted at some point).

So Obama is trying to do the smart thing in foreign and domestic policy. Which is probably confusing to a lot of people: pundits, Washington insiders, ordinary voters, etc. Maybe we will get used to it or maybe the midterms will turn Congress back over to the Republicans.

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