Politics & Policy

Time for Something Completely Different

November will be a contest between the status quo and change, with Obama representing the former.

If there’s a characteristic American trait, it’s moving ahead. Our great 19th-century chronicler, Alexis de Tocqueville, noted how Americans would leave their new homes — onto the next thing! — even before they had a chance to finish the roofs.

That’s why Pres. Barack Obama’s new theme of “forward vs. backwards” is so obvious, David Axelrod could have come up with it in his sleep. Obama rolled it out at a campaign event in Missouri last week. “It’s a choice between the policies that led us into this mess and the policies that are leading us out of this mess,” Obama said of the midterm elections. “It’s a choice between falling backwards or moving forward.”

This is paint-by-the-numbers campaigning. It’s also ham-handed and faintly ridiculous.

What were the policies that created this mess? Obama assails the Bush tax cuts, although he wants to retain them for families making less than $250,000 a year. In fact, Obama brags about his own prowess as a tax-cutter. “We cut taxes — didn’t raise them, we cut them — for 95 percent of working families and small-business owners,” he boasted in Missouri.

There’s no theory for why tax cuts passed in 2001 and 2003 would have caused a housing crash in 2007 and 2008. Perhaps it was the tax cuts for savings and investment? But Treasury Secretary Timothy Geithner was on CNBC the other day saying that the administration doesn’t want rates on capital gains and dividends — now 15 percent — to rise above 20 percent; this was part of his ongoing my-boss-really-doesn’t-hate-business tour.

Did the Bush tax cuts fuel the deficit? In 2007, the budget deficit was a puny $160 billion. It’s true that George W. Bush handed over a recession-bloated deficit of more than a trillion dollars to Obama, but deficits are better than surpluses in a weak economy, according to Obama’s boosters. Obama added as much new deficit spending as he plausibly could as quickly as possible, and still wants more.

Maybe the lax regulation of Wall Street was blameworthy? The key piece of financial deregulation was negotiated between then-senator Phil Gramm and then–Treasury secretary Larry Summers — now a key Obama official — and signed by Bill Clinton in 1999. It’s a stretch to blame this bipartisan, pre-Bush legislation for the crisis, which had the housing bubble and bust at its root.

Maybe the regulators were asleep at the switch? Yes, the economy’s most important regulator, Federal Reserve chairman Ben Bernanke, kept interest rates too low for too long. Obama has retained him as his Fed chairman. The bubble and the perilous state of the banks caught Geithner, the head of the New York Fed with direct oversight of Wall Street, flat-footed. Obama promoted him to Treasury secretary.

There’s a vein of continuity in the bailouts and stimuli, too. The Bush administration instituted TARP and began the bailout of the car companies; the Obama administration picked up where it left off. The Bush administration embraced tax rebates and tax credits to stimulate the economy; so has the Obama administration.

On several fronts, it’s the sheer magnitude of the Obama agenda that constitutes its radicalism, not its direction. In Missouri, Obama touted subsidies to green energy as his forward-looking economic development agenda, as if the landscape weren’t already littered with such programs. BP alone gets $600 million in subsidies for ethanol. That’s the former wonder-fuel that has proven both uneconomical and unenvironmental.

The new departure in American politics is represented by the tea partiers. They are hell on lawmakers who voted for the bailouts; they consider both Bush and Obama spending anathema; and they have endorsed candidates who have said things about entitlements — the driver of our long-term deficits — that no establishment Republican or Democrat would ever dare utter. This is something truly bold and refreshing.

The president will try to beat them back in November. It’s a contest properly defined as the status quo vs. change, with Obama’s engorged federal establishment in the unenviable position of representing the former.

– Rich Lowry is editor of National Review. © 2010 by King Features Syndicate.


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