Over the past two years, President Obama has blamed big banks, Wall Street, corporate executives, trade deals, tax cuts and deregulation for all the nation’s ills while presiding over $3.4 trillion in additional debt.
Now, after two years of a sluggish economy and unemployment still hovering between 9 percent and 10 percent, he’s talking like a born-again free-trader, calling for a new approach to job creation (and possibly a lower corporate tax rate), announcing a mission to root out bad regulations and putting business executives in the White House.
Gone are the far-left, inflammatory, anti-business, anti-Wall Street rhetoric and class-warfare attacks on “millionaires and billionaires” and anyone making more than $250,000 a year. He has made William M. Daley, a J.P.Morgan Chase bank executive - who championed the North American Free Trade Agreement under the Clinton administration - his chief of staff. He made one of former President Bill Clinton’s top economic advisers, Gene B. Sperling - who backed a GOP-crafted capital-gains tax cut that sent stocks soaring in the late ‘90s - his top White House economic adviser. He brought in General Electric’s Chief Executive Jeffrey Immelt, a titan of industry, to advise him on how to get the economy growing again.
Is this for real? Or is this a case of survival politics over long-held liberal principles as he shifts to the center - or pretends to do so - at the start of his bid for a second term - knowing full well that he’s not going to win re-election if the jobless rate remains above 9 percent?
After two years of the biggest government expansion in decades, the suddenness of Mr. Obama’s flip-flop message shift suggests the latter. For half his term, he has presided over a regulatory expansion of the economy that has turned the business community against him. Last week, in a transparent shell game, he ordered an official review to “root out regulations that conflict, that are not worth the cost or are just plain dumb.”
Sure. Last year he held an economic summit and did not invite the U.S. Chamber of Commerce, the nation’s largest business association, which hailed his appointments of Mr. Daley and Mr. Immelt. This week he will go to their headquarters just two blocks away to address them.
For two years, he waged war against an extension of the George W. Bush tax cuts, only to agree last month, after a “shellacking” in the elections, to keep them through 2012 and to claim they would indeed be good for the economy and job creation. Even The Washington Post calls them “the Obama tax cuts.”
For two years, against the better judgment of his advisers, his principal focus was enacting sweeping, federally dictated health care reform; expanding the welfare state; boosting spending; establishing dozens of agencies, bureaus and other regulatory bureaucracies; and re-regulating the financial sector from top to bottom while the economy languished.
In a video preview of Tuesday’s State of the Union address, he said, “My principal focus … is going to be making sure that we are competitive, that we are growing and we are creating jobs.” After signing waste-ridden budget bills loaded with pork and after Treasury Secretary Timothy F. Geithner asked Congress to raise the debt ceiling to unprecedented new levels, Mr. Obama says he wants “to reform government so that it’s leaner and smarter for the 21st century.” Where was that message when he and his party went on a two-year spending binge?
It reportedly was said that Mr. Obama’s Christmas vacation reading included a book about Ronald Reagan and that he was especially interested in how Reagan led the economy out of a deep two-year recession with tax-cut incentives to spur growth and investment that created hundreds of thousands of jobs per month and sent the U.S. economy soaring in the last half of his presidency.
After his midterm election thrashing, Mr. Obama is clearly changing his tune to save his presidency. Administration insiders say Mr. Obama’s focus will be on cutting the unemployment rate over the next two years by emphasizing trade expansion, passing pending free-trade pacts that have been on the shelf since 2009 and reforming the tax code to bring down the 35 percent top corporate tax rate. That rate leaves U.S. companies at a competitive disadvantage in the global economy. Only Japan’s rate is higher in the industrialized world.
“We have to be creative. For example, do we need to do something to our tax structure to make U.S. companies more competitive? That’s a conversation the president has already had with Immelt,” White House presidential adviser Valerie Jarrett told The Washington Post last week.
But exactly how much influence Mr. Immelt will have is in question. After all, he will only be chairman of an advisory panel, not a high-level post, but he has the president’s ear, and they’ve met frequently.
Then there is the liberal base of his party, which is still in rebellion over the Bush tax-cut extension and his newest business advisers. Mr. Obama has a political balancing act ahead of him that may not work out as well as it did for Mr. Clinton, a master triangulator. In the end, though, it will come down to the unemployment rate, which shows little or no sign of falling below 8 percent to 9 percent by the 2012 election.
Donald Lambro is a syndicated columnist.