Obama on the Precipice: The Ten Worst Things He Could Do When He Takes Over

By Don Hazen and Jan Frel and Joshua Holland and Liliana Segura and Tara Lohan and Heather Gehlert, AlterNet. Posted January 17, 2009.

And in reality, "The real-world function of Beltway centrism has not been to wage high-minded war against 'both extremes' but to fight specifically against the economic and foreign policies of liberalism. Centrism's institutional triumphs have been won mainly, if not entirely, within the Democratic Party. Its greatest exponent, President Bill Clinton, persistently used his own movement as a foil in his great game of triangulation."

Frank bitingly adds: "And centrism's achievements? Well, there's NAFTA, which proved Democrats could stand up to labor. There's the repeal of the Glass-Steagall Act. There's the Iraq war resolution, approved by numerous Democrats in brave defiance of their party's left. Triumphs all."

The Politics of Delay

Perhaps given some time, Obama may have been able to fashion a new style of politics that would transcend the same old, same old. But conservative Republicans dance to a very different drummer than the Democrats, and they have given little indication they are about to change their stripes.

For virtually their entire eight years, the Bush administration paid no attention to the Democrats. They rammed home a rash of highly ideological and destructive deregulations, tax cuts and executive policies that in the end were shocking in their disregard for the future, leaving us in the worst social and economic situation in 75 years. Yet it is these same discredited and marginalized politicians -- particularly Senate Minority Leader Mitch McConnell of Kentucky and House Minority Leader John Boehner of Ohio -- who are already calling for frankly absurd elements in a stimulus package, including their tired old quest for a permanent reduction in capital gains and income taxes for business and the wealthy.

In case no one has noticed, the Democrats have the biggest majorities in both houses since 1981. With Roland Burris now seated from Illinois, and Al Franken likely to seated from Minnesota, Democrats will have 58 votes in the Senate, two shy of the 60-vote support majority needed to cut off debate, according to Senate rules. It would be shocking if Obama, with all his political skills and the pressure of this gigantic crisis, can't get 60 votes for the strongest stimulus possible.

A further problem is post-partisanship translates to delay; it is a style of inclusion, compromise and deliberation, which runs contrary to the state of emergency we find ourselves in. Obama insists that we need swift and bold action, and many Democrats were talking about having legislation on his desk when he takes over. But that was ludicrously optimistic.  

House Speaker Nancy Pelosi of California is now saying she wants a completed bill on the president's desk by mid-February or else no spring break for the members. Time will tell if no vacation is enough of an incentive for the Republicans, but the prospect is a bit dubious. The Republican leaders are calling for hearings and scorn speed.

Borosage points out: "Delay will simply embolden lobbyists swarming to get their special interests built into the plan." That is the situation we find ourselves in.

The 10 Potential Mistakes 

Mistake I: Screwing Up the Stimulus Plan

We do not know what will work in terms of jump-starting the economy, but there is growing consensus that if there will be an error, it will be because an economic stimulus is too small, not too big.

Screwing up the stimulus could be a combination of factors including: watering it down and making it too small because of Republican resistance, or larding it up with tax breaks that will not provide the necessary kick to the economy; not spending the money in the most efficient ways, the methods that will bring the most bang for the buck; focusing too much on building highways and perpetrating a culture that will undermine efforts to address climate change; and finally, and perhaps most importantly, to try to escape the perpetual quick-fix mentality that has dominated economic, social and corporate  policy for so long. 

James Galbraith emphasizes in his article, "Stimulus Is for Suckers: We Need a Recovery Plan that Will Last for Years": 

"The historical role of a stimulus is to kick things off, to grease the wheels of credit, to get things 'moving again.' But the effect ends when the stimulus does, when the sugar shock wears off. Compulsive budget balancers who prescribe a 'targeted and temporary' policy, followed by long-term cuts to entitlements, don't understand the patient. This is a chronic illness. Swift action is definitely needed. But we also need recovery policies that will continue for years.

"First, we must fix housing. We need, as in the 1930s, a Home Owners' Loan Corporation to restructure failed mortgages on sustainable terms.

“Second, we must backstop state and local governments with federal funds. Otherwise, falling property (and other) tax revenues will implode their budgets, forcing destructive cuts in public services and layoffs.

“Third, we should support the incomes of the elderly, whose nest eggs have been hit hard by the stock market collapse.

“Fourth, we should cut taxes on working Americans. Obama has proposed to effectively offset the first $500 of Social Security taxes with a refundable credit. It's a good idea, but can be expanded.

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Don Hazen is the executive editor of AlterNet. Jan Frel, Senior Managing Editor; Heather Gehlert, Managing Editor; Josh Holland, senior writer; Tara Lohan, Envionment editor and Liliana Segura is Rights and Liberties Editor.

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