Obama's Double-Talk

While the president talks sobriety, his policies take America on an economic bender

High-flying presidencies tend to reveal their base character in trivial moments. In March 2002, when the nation was still massively behind George W. Bush in the wake of the September 11 attacks, he gave the first obvious signal that his administration would play cheap politics even in a time of grave global uncertainty by slapping a temporary new tariff on imported steel. If the world’s fragile economy and the putatively bedrock principles of free trade could be sold out for a couple of percentage points in contested Rust Belt states, we shouldn’t have been surprised to learn that the very “war on terror” would be subject to political manipulation, or that Bush’s skin-deep economic philosophy could not be counted on in a crisis. The costs of what this move revealed became clear soon enough, and eventually Americans withdrew their benefit of the doubt.

Barack Obama’s revelatory moment may have come in his first week as president. On his first day of work, he signed an executive order prohibiting lobbyists from holding highranking administration jobs, thereby fulfilling a campaign promise to “close the revolving door” between K Street and government via “the most sweeping ethics reform in history.” Two days later, the president granted a “waiver” from the new rules to install Raytheon lobbyist William Lynn as the No. 2 man in the Pentagon.

As offenses go, the move was trivial. But as a signal of a governing pathology, it established a pattern that Obama has repeated serially since being sworn into office: reiterate a high-sounding promise from the campaign, undermine said promise with a concrete act of governance to the contrary, then claim with a straight face that the campaign promise has been and will continue to be fulfilled.

So candidate Obama promised to usher in the “most transparent administration in history,” in part by making sure the American people were allowed to read each proposed non-emergency law for at least five days before the president signs it. Yet in his first month, President Obama signed three laws from the liberal wish list—the State Children’s Health Insurance Program (SCHIP), the Lily Ledbetter Fair Play Act, and the $787 billion “stimulus” package—in less than five days. Explained the White House: “We will be implementing this policy in full soon.…Currently we are working through implementation procedures.”

The SCHIP law, which was paid for in part by a cigarette tax hike of 61 cents a pack, also put the lie to a pledge Obama repeated after its passage in his first address before a joint session of Congress. “Let me be perfectly clear,” he said on February 24, with less than perfect clarity. “If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime.”

But not only is the cigarette tax a “tax” (and worth six dimes at that), it’s among the most regressive kind possible, since poorer people are more likely to smoke and spend a larger share of their incomes on cigarettes than richer smokers do. And it’s hardly the only tax Obama will levy on those not yet in the quarter-million club. In that same speech, and also in the budget proposal he handed to Congress shortly thereafter, the president called for a cap-and-trade system for companies that emit carbon. That would surely translate into a price increase on every gallon of gasoline sold in the United States, a change that would have more impact on the household budgets of working-class heroes than those of modern-day plutocrats.

Spending? Candidate Obama promised “a net spending cut” in which “every dollar that I’ve proposed, I’ve proposed an additional cut so that it matches.” President Obama has proposed the largest net spending increase since World War II, even while holding summits on “fiscal responsibility” and vowing to live by the same “pay as you go” principles he’s already blown to smithereens.

Deficits? A president whose first budget will expand the deficit into uncharted territory (see Veronique de Rugy’s “When Do Deficits Matter?,” page 21) nonetheless promises to cut his shortfall in half within four years. This, he claimed in his speech to Congress, will be achieved partly through $2 trillion in “savings” that will come by “eliminat[ing] wasteful and ineffective programs.” Analysts noted within hours that around half of Obama’s “savings” actually come from letting Bush’s tax cuts expire after 2010. It takes a certain kind of mind-set to characterize Americans’ taking home their own money as a “wasteful and ineffective program,” let alone tax increases as “savings.”

Once you identify the president’s tic of celebrating the very campaign promises that he breaks, you’ll see it everywhere. So there he is, “proud that we passed the recovery plan free of earmarks,” just days after passing a recovery plan stuffed with what the investigative website Pro Publica described as “items that could arguably be called earmarks” (and in the same week that Congress handed him a new budget swollen with brand new chunks of pork). The stimulus package will “save or create 3.5 million jobs,” an elastic, impossible-to-prove projection that neatly gives him credit for either boom or bust. (For more on Obama’s stimulus, please see “Will We Be Stimulated?,” page 32. For more on the state government jobs that will be “saved” by using federal money to cover for bad fiscal management, see “Failed States,” page 24.)

The two faces of Obama reveal more than just a politician hardwired to work both sides of a room. The new president’s political goals and governing goals are in tension. The post-Bush executive needs to solve a mammoth financial and economic crisis affecting the entire country, but the pre-Clintonomics Democrat needs to blame it on fat cats and Republicans.

So in early January, the president-elect lamented that “banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn’t afford.” In February his administration pushed banks to lend still more to risky homebuyers while bailing out underwater borrowers. Technocrat Obama wants to jumpstart the “flow of credit,” which he has described as “the lifeblood of our economy,” but politician Obama wants to somehow surgically remove the “speculators” from the process. “I will not spend a single penny,” he vowed to Congress, unconvincingly, “for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can’t pay its workers or the family that has saved and still can’t get a mortgage.” The following week his administration authorized another $30 billion in the $163-billion-and-counting bailout of the Wall Street insurance giant AIG.

There are both risks and rewards when a politician pronounces gray skies (particularly of his own making) to be blue. For now, Obama is mostly reaping the rewards. A public weary of the president’s tongue-tied predecessor is giving the eloquent new fellow the benefit of the doubt, as evidenced by an MSNBC poll in early March showing his approval rating at an all-time high of 68 percent. But that same poll pointed to Obama’s weakness: A substantially smaller number, 54 percent, thought the president’s policies were on the right track. The country seems to like the guy who talks about fiscal responsibility, less so the one who practices the opposite.

The illusion will eventually give way, and voters will see more of who Obama is than who they wish him to be. In the meantime the president has proposed a budget blueprint that would significantly alter the way Americans spend money on energy, mortgages, charities, and investments, to name just a few areas. Will they recognize the tic in time?

Matt Welch is editor in chief of reason. This column first appeared at Reason.com.

Matt Welch is Editor in Chief, Reason





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