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23 Aug 2010

Lack of bold leadership on jobs by Obama may be disastrous for Democrats in mid-term elections

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August 23, 2010 Category: Commentary Posted by:

By Ron Daniels


New York Times columnist Bob Herbert has been on a tear for months bemoaning President Barack Obama’s lack of laser-like focus on the economy and jobs. While the President and the Democrats legitimately continue to call attention to an impressive legislative record that includes milestone health care and financial regulatory reform, the unemployment rate remains at 9.5 percent and the economy has stalled. Nobel Prize winning economist Paul Krugman was one of the first to warn that without bold/decisive measures to overcome the “great recession” the nation could face a “jobless recovery” that might last for a decade. This is the unfortunate scenario Obama and the Democrats face entering the critical November mid-term elections.


There are some analysts, present company included, who believe that the dismal recovery could have been averted had the newly elected President been willing to advocate bolder measures to combat the economic catastrophe he inherited. For example, he had the popularity and political capital to advocate a much larger, job generating stimulus package than he put forward. Instead of calling for something in the order of a $1.2 trillion stimulus package (with the awareness that it would be cut back in negotiations with Congress), Obama requested around $900 billion. And, in an effort to appease obstructionist Republicans he built hundreds of millions of tax cuts into the package which most economists contended would not be as effective in stimulating the economy as other measures. The package also included a considerable range of social measures which were admirable but arguably would not have the effect of boosting the economy. For example, in watching an excellent PBS feature on violence prevention programs in Chicago recently, I noted that the City awarded $60 million in stimulus monies to an organization that was doing some amazing work. The money was certainly spent for a worthy cause, but I’m not sure why stimulus dollars were used for this purpose.


At the end of the day, in his eagerness to appear bi-partisan and appease Republicans, who still overwhelming voted against his proposal, President Obama settled for a $780 billion stimulus package which was too small and unfocused to achieve the desired result. Rather than fund social programs and tax cuts, it would have been far better to allocate a much larger share of dollars for infrastructure repair, public works projects and public service jobs to directly put hundreds of thousands of people back to work. By failing to act boldly, the President advanced a proposal that was too small and untargeted to succeed at the level required but large enough for the Republicans to scream about big government engaged in runaway spending – the mantra which they have adopted to terrify much of the electorate into believing that curtailing the rising deficit is more important than additional spending to further stimulate a stagnating economy. The Republicans set a perfect trap.


President Obama’s failure to provide bold leadership on the stimulus package was compounded by the bail-outs for Wall Street financial institutions and the auto industry. While these initiatives may have been essential to avoid an even more catastrophic economic meltdown, they left the impression that rescuing Wall Street was more important than ameliorating the pain and suffering on Main Street. To this day none of the measures implemented by the Administration and Federal Reserve have significantly reversed the massive mortgage foreclosure crisis. Millions of Americans have lost their homes, are hopelessly in arrears or occupy properties that have plummeted in value. Billions if not trillions of dollars in wealth has evaporated, adding to the anxiety, anger and frustration of Americans who see the stimulus and bail-outs as failures while receiving little relief for their distress.


Now Obama and the Democrats are in a terrible bind. Additional stimulus is urgently needed to jolt the economy out of the doldrums, but the fear mongering rhetoric of Republican obstructionists has so poisoned the public discourse that the Democrats have little appetite for increased spending to stimulate the economy. Moreover, President Obama has failed to consistently tout the achievements of the stimulus package in saving and generating jobs. As Bob Herbert correctly observes, he and his advisors seem oblivious to the hard political reality that the only message that matters going into the mid-term elections is jobs, jobs, jobs and more talk about jobs! At every turn, the President must find a way to illuminate the successes of the stimulus package and the bailouts in terms of saving or creating jobs. The journey to the Motor City to hail the revival of the auto industry as a result of the investment of taxpayer dollars that have been repaid was a good use of presidential time. Showcasing businesses, small and large, that have benefited from stimulus monies and have retained and/or hired new workers should be standard fare. Meeting with firefighters, police officers and teachers whose jobs have been saved because of legislative actions taken by the Democrats as well as unemployed workers whose benefits have been extended over the objection/obstruction of the Republicans should be highlighted each and every week.


The only message is jobs. Education reform, enacting regulations to implement the health care bill, energy policy and other initiatives are very important issues, but unless they directly relate to job generation, presidential speeches on these issues are off message over the next three months. Even if a new stimulus is not possible, what the American people need to sense is that President Obama is focused on ways and means to create jobs and improve the economy thereby inspiring greater confidence that a dismal situation will eventually improve. While I agree that reminding the public how the economy was driven into the ditch is an essential tactic, it will resonate far more effectively if it is coupled with day to day, week to week messages and actions that persuade the public that Obama and the Democrats are really serious about jobs.


Obama’s advisers don’t seem to get it. I totally agree with his initial, courageous stance on the construction of a Mosque near ground zero in Manhattan; however, the firestorm it created stepped on the message of a vacation to encourage tourists to return to the Gulf to jump start the economy of the region after the monstrous oil spill, and it diverted attention away from the larger goal of focusing on jobs. Having failed to offer a bold enough package to sufficiently stimulate the economy in the first place, the least Obama can do in this critical period is point to some of the real successes of this limited proposal coupled with the promise that by retaining a Democratic majority in the House and Senate better days are ahead. Frankly, Obama and the Democrats may have already lost too much credibility in the eyes of the public to avoid disaster in November. But, if the President doesn’t act and stay on message between now and the election, it is a foregone conclusion that the bandits who drove the economy into the ditch will have the keys again. The obstructionists will benefit from an electorate suffering from a lack of bold leadership, insufficient results to ease their anxiety or pain and amnesia. It will be déjà vu all over again!


Dr. Ron Daniels is President of the Institute of the Black World 21st Century and Distinguished Lecturer at York College City University of New York. His articles and essays also appear on the IBW website and . To send a message, arrange media interviews or speaking engagements, Dr. Daniels can be reached via email at [email protected].

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