The End Of Obama's Honeymoon

Irwin M. Stelzer: The President Sure Did Have a Good Thing Going, Until Recently

(Weekly Standard)  Irwin M. Stelzer is a contributing editor to The Weekly Standard, director of economic policy studies at the Hudson Institute, and a columnist for the Sunday Times

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"It started out like a song we knew we had a good thing going. And if I wanted too much, was that such a mistake?" President Obama's answer to composer Stephen Sondheim's question would be "yes," were he not a president who rarely admits error.

We are six months into the Obama reign, and he surely did have a good thing going until very recently. He pushed through what voters thought was a stimulus bill. He held numerous press conferences at which an adoring media allowed him to display his rhetorical skills. No mumbling George W. Bush, he. He toured the world, to the applause of adoring masses from London to Paris to Cairo. He fulfilled a campaign promise to tackle perceived global warming and lead the world to a cooler, greener future by urging Congress to pass a cap-and-trade bill aimed at cutting CO2 emissions. He bailed out General Motors and Chrysler, rewarding the United Auto Workers for delivering key states to him in last year's election.

Then he made the mistake about which Sondheim wrote and Sinatra sang -- he wanted too much. He attempted to push through Congress a so-called reform of the nation's health care industry -- a $1 trillion restructuring that would turn effective control of one-sixth of the economy over to government regulators and bureaucrats. Not a good idea: some 90 percent of Americans are satisfied with their health care, a majority think that the burgeoning deficit is more of a problem than health care, and 42 percent think his plan is a bad idea, while only 36 percent say it is a good idea (22 percent have no opinion).

It is too early to say that the presidential agenda is dead in the water. But it is not too early to say that he made some serious errors.

The stimulus not only failed to keep the unemployment rate to 8 percent, as Obama promised (it is now 9.5 percent). It also unleashed a flood of red ink that shifted voters' attention to the implications of the deficit for their children's and grandchildren's standard of living. So when the president insisted that Congress pass a cap-and-trade program that will drive up energy costs, and a health care plan that will add more than a trillion dollars to the deficit or the tax burden over the next decade, Congress heard from unhappy constituents (39 percent strongly oppose his health plan while only 25 percent strongly support it), and momentum shifted from the president to more centrist congressional Democrats, who are doing what Republicans don't have the votes to do: preventing the liberal Democratic leadership from taking a giant step to a government-controlled health care system.

The President has a 78-seat majority in the House of Representatives, and a filibuster-proof majority in the Senate. He does not need a single Republican vote to pass any bill he sends to Congress. Still, he could not have his way with the Congress, and it now looks likely that he will have to trim his health-care program to get anything in the fall that he can declare a victory, which he will have to do if he is to avoid acute political embarrassment. Equally important, the president's difficulty with Democratic centrists will inevitably slow the pace of his efforts to "transform" the entire American economy.

But slowing is not the same thing as derailing. The president remains popular, more popular than his policies. He is articulate, assured and, more important, not George W. Bush. No Republican has his communications skills, although he is subject to some ridicule for his ever-present teleprompters. And if the economy continues to recover, all will be forgiven.

Share prices are about 20 percent higher than when Obama took the oath of office. The index of leading economic indicators is up. Some banks -- most notably Goldman Sachs and JPMorgan Chase -- are profitable enough to repay the bailout moneys meted out to them when it looked as if the financial system would collapse. Inventory liquidation is slowing and manufacturing activity seems to be recovering. Business investment is up, and Federal Reserve Board Chairman reports that the Fed's support for the commercial paper market has fallen to one-third of crisis levels.

Perhaps most important, the housing sector might, only might, be "finding a bottom," to use Wall Street lingo. Sales of existing homes are at their highest level since October 2008, and sales of new homes rose 11 percent in June. The much-watched Standard & Poor's Case-Schiller index of house prices rose in May from the previous month for the first time in three years. Vacancy rates are down, as is the supply of unsold homes, now at its lowest level since October 2007. Housing starts rose 3.6 percent in June, and I am told that some builders in the hard-hit southwest have begun buying up land in anticipation of again constructing new homes. There is even talk of the "exit strategy" the Fed will adopt to reduce the money supply when the recovery proves durable.

Against that voters will have to weigh the fact that the unemployment rate has risen from 7.6 percent to 9.5 percent since Obama took office -- some three million more people are out of work than early in the year. Perhaps even more crucially, there is the troubling, soaring deficit and the prospect of large tax increases or future inflation.

And the president cannot be certain that the economy has finally turned around. The banks still have an estimated $30 billion in commercial property loans to write off this year. Government efforts to modify mortgages so as to reduce foreclosures are floundering. Consumer sentiment fell in June, as consumers decided that the jobs market will not soon improve and "see little reason to believe that the economic stimulus package will improve their finances any time soon," says Richard Curtin, director of the Reuters / University of Michigan survey.

So Obama has much to think about as he tallies his successes and failures. Other than the stimulus package, passed during the euphoria following his inauguration, his legislative program is stalled, and by members of his own party. The economy is doing better, but the indicator that most matters to voters -- the unemployment rate -- is headed up, rather than down. And the market sent a powerful signal this week: The auction of government bonds did not go well, forcing the Treasury to pay higher interest rates than in the recent past. That is a bad sign for a president who needs low rates to encourage business investment and sustain the fragile green shoots that must flower if the Democrats are to hold their gains in next November's election.

It just might be that Obama had "a good thing going, going, gone."

[ChiqitaMJ]

Obama has achieved more in a shorter time than any other President. Each President makes mistakes or snafus just to give the media and the opposing side something to do :) Regardless, the programs in place are moving us in the right direction, c?mom, it's been six months. Your candidate would not have been any further ahead than mine. Give "Change" a chance. Join the solution instead of creating roadblocks and opposition. With your help we can once again become a nation to be respected and modeled after. Have you sign up to be a volunteer yet while you are unemployed by the actions of the past? That would be a great place to start! This is the time to build your new business, go back to school, enjoy the summer with your family. When the recession is over, you will be rejuvenated, renewed, and ready for your future...its right around the corner!

[noloyalisti]

Look at the lead up to the illegal and immoral war on Iraq. The same right wing corporations that profited from the war also run the mainstream media corporations. The Congress is lobbied to death to pass anti-consumer credit laws and anti-Constitutional spying and torture laws. The military is stocked with right wing Christian mercenaries who get all this money from Congress for war. Man, we better start paying attention to the current fascism in the United Corporate States of America.

[revlin1]

How bout we talk about the Kenyan birth certificate revealed on Hilaryvoters.com ?? I think that should make the news with this "good thing going"...what do we expect when the two most important people in this guys' life (wifey pooh: a racist, and Valerie; a well-heeled real estate mogul and racist with an Iranian mother and a black father from Africa?) I mean: Give America a break. These three have SCORES to settle with America. After all; we all DID THEM WRONG? I cannot think here of WHEN I did? But, maybe you all can think of when YOU DID?

[noloyalisti]

You are joking about the birth certificate, aren't you? I hope so because no one (maybe except for Lou Dobbs and Rush Limbaug) could be that ignorant. Could they?

[noloyalisti]

Well, we do need to help Obama stand up to fight the big corporations who have taken over our way of life. They run EVERYTHING including the right wing media and military as well as the government.

[revlin1]

Utterly absurd AND too well used ...in fact this argument has NO WEIGHT anymore...yawn!

[bigmikej50]

I am certain that every negative post of this article was written by a white man or woman who never voted for Obama. Never in the history of the Presidency has one man been so vilified, scrutinzed for trying to save this country from ruin. A mess that has been in the making for years. This President has said that it is the responsibility of each american to help restore our nation back to it's rightful place in this world theater. Yet all I see is whining from those americans who are sitting in an ivory tower and their only concern is how they can make money off the backs of those less fortunate. All of this crap about the Honeymoon being over, or his birth certificate would never be an issue if americans were really concerned on making this country stronger now and for their children. Remember, "Ask not what your country can do for you, ask what you can do for your country". Just shut up and grow a pair!

[noloyalisti]

Well you must realize that American is pretty much run by right wing white people. And they are so afraid of a black man (or a woman). They don't want to change ANYTHING, it works just great for them.

[smt1013]

Oh, so here we have a case of judging a person without having known them. Isn't bigmikej50's words a little like racial profiling? What makes you so certain? Is it your own racial bigotry? I don't support Obama, not becasue I'm sitting in some ivory tower making money of the poor, I don't support him because I don't agree with his policies. I am sick and tired of having my pocket picked to pay for social programs that don't work, have never worked, and never will work.

[r_mcdonald1]

The "Honeymoon is over" - okay, so now - how do we go about filing for a divorce?

Mr. Obama, and his resume, have shown us beyond any doubt, given the political climate and list of qualifications, that Sarah Palin is more qualified to be President of the United States than he is. No wonder the Democratic party and its enforcement division, a/k/a ACORN, are trying to crucify this woman. They are afraid of her and what she represents - a FREE AMERICAN.

This man is not qualified to run a brothel on a military post, nor is Congress as a whole (both parties and the Independents) to be the managers of that brothel.

[sjc_1]

I don't think that President Obama ever had a "honeymoon" in the first place. He came into office in the midst of the worst recession since the Great Depression and had to work night and day to keep it from a complete implosion.

[creeper00]

Stelzer's got it figured out. "He is,....more important, not George W. Bush."

This is the biggest thing Barack Obama has going for him. Democrats could have run a lump of coal and it would have won the last election.

What's amazing is that Obama, following arguably the worst president ever, is unable to climb out of the negatives in the Rasmussen Daily Tracking Polls. His slide there is remarkable.

http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

[rocketjl]

Like all of us, Obama and his team may have good intentions, like all of us. However, he has proven that he knows absolutely nothing about the nation as a whole or how to govern it. The light really needs to come on in his head that he is wandering off on the wrong track and the people are rebelling. "His" team and the people he is putting into power are beginning to worry US-Americans whether race is really not part of his agenda.

[Victoria1959]

This horses rear (Obama) reminds me of the TV add "I'm not a doctor, but I play one on TV."

Obama's not much of anything, not ever having had much of a real job before (unless, of course, you count the Jesse Jackson style shake-down of Citibank via ACORN as a job). Biden said it..."the Presidency does not lend itself to on the job training."

I have a smug satisfaction watching all the racists in my office that voted for "the bro" have to wallow in their own racism as they come to the realization that voting by "looks" should be reserved for Beauty Contests. Their complaints of "I didn't vote for that" get a loud "Oh yes, you did" from me...as someone who actually paid attention to what the Marxist was saying pre-election.

So suck it up Obamabots, your getting EXACTLY what you voted for.

[baysailor21601]

Always with the neocon bullcrap. Put your bong down and pay attention. This is not just Dem vs Repubs. Both sides are crooksand do not care what we want or think.

[chloegirl2009]

by No_More_Neocons August 3, 2009 8:48 AM EDT
What a load of horse****. "90% of Americans are happy with thier helath care"....what a joke. It is more like 90% are unhappy....Health Care reform must get pushed through the system..... ++++++++++++++++++++++++++++++++++++ hey "no_more_neocons"...if the reform is so great, why would you have to PUSH IT? Wake up...this isn't as popular as you'd like to think....by the way, I'm thrilled with my health care...and I don't want govt to dictate to me what kind of health care I have....

[No_More_Neocons]

It has to be pushed by the DO NOTHING CONSERVATIVES..... I am glad you are thrilled with your health care you are one of the few..

[SouthwestisBest]

I think this article left out the Gates debacle. I wonder why. Obama lost 3% support the next day. And that's just among the people who supported him in the first place.

The press always forgets that 47% of registered voters came out in opposition in the first place because they knew he was lying and couldn't possibly bring on the Utopia of his delusions because none of it even made sense.

An election result of 29% of voting age Americans does not represent the majority. Americans sat back an appeased the liberals last election. But I suspect they're not going to sit back again and allow the liberals to countol both Houses and the White Houses again. They've way overstepped Constitutional boundaries and are committing illegal acts every day.

A major illegal act is 32 czars in the White House. We have 15 cabinet position set up in our Constitution and no provision whatsoever for 32 czars. We need to send the bill for the czars to Obama if he's that incompetent.

[No_More_Neocons]

What a load of horse****. "90% of Americans are happy with thier helath care"....what a joke. It is more like 90% are unhappy. This article was written by a neocon for neocons. Yes people are unhappy with Obama when it comes to health care, but I caution all you Obama haters not to jump so fast. Just because someone is upset does not make them believe the failed policies of the Republican party should be the path to take. I for one am upset with Obama for trying to play nice and include the Republicans and Blue Dog Dems. Americans are demanding Health Care reform and the majority wants a public option.. It is time to tell the Repubs to go pound sand and the Blue Dogs to get in line or pay the price.... Health Care reform must get pushed through the system.....