Obama Cautious, Vague In Economic Crisis

Senator Barack Obama has taken a commanding lead in the race for president not because of any dramatic gesture, but because of a signature political trait: His caution.

The nation's economic crisis triggered Obama's sharp rise in what had been a tight race. But Obama hasn't tried to seize the kind of central, national leadership position for which McCain grasped, and fell short. Nor has he been touting - Bill Clinton-style - a highly detailed plan for what he'll do the moment he takes office.

The result is that while virtually all observers agree that he has benefited from the crisis, his allies and critics alike remain a bit hazy on what exactly he'd do if he takes office January 20, 2009.

"He's certainly laid out all the right elements that are needed for an economic recovery, but nobody's sure at this point which ones will be at the very top of his priority list when he takes office," said Thea Lee, the chief economist for the AFL-CIO.

"To my knowledge, he's said absolutely nothing about what he would do," said Glenn Hubbard, a former chairman of Bush's Council of Economic Advisors who is now the dean of Columbia Business School.

Obama has often thrived in this campaign by talking in foggy terms about his plans, here and abroad. It frustrates critics – and some voters looking for clear indications of how he would lead – but also provides tremendous flexibility for adjusting positions now and in the White House if he wins. 

In fact, Obama has talked about the economy - only softly. Many of his key plans - for economic stimulus, for attending to the troubled housing market, and for financial regulations - are policy prescriptions he and other Democrats have been discussing about for months or more. Several became urgent - and in some cases passed into law - when the crisis deepened last month. 

Publicly, though, he's said little, repeatedly answering a question in the first debate about what priorities would have to be set aside owing to the cost of the bailout with a list of the many programs he'd nonetheless provide. McCain was hardly more specific, though he did finally say he'd seek to freeze almost all federal spending.

"Steady leadership is not just about having ideas - it's about having consistent ideas and working to make them happen," said Obama's director of economic policy, Jason Furman.

While Obama has been a quiet player in shaping the federal response, he's been avoiding a high-profile association with the policies, which have thus far failed to halt the financial markets' precipitous decline. In the early days of the crisis, Obama walked a tightrope between support and opposition of Treasury's moves - rescuing first the mortgage lenders Fannie Mae and Freddie Mac, then the insurance giant AIG, while allowing Lehman Brothers to fail. On September 18, after saying that Obama "does not second guess" the AIG bailout, his spokesman, Bill Burton, objected to Politico's description of Obama as "supporting" it.

"At what point did not second-guessing become support?" Burton asked, resisting McCain's demands that Obama take a stand.

Another demonstration of his style came the next day, when - as the scope of the crisis became clearer -- Obama immediately released a statement on what he wouldn't do.

"I have asked my economic team to refrain from presenting a more detailed blue-print of how an immediate plan might be structured until the Treasury and the Federal Reserve have had an opportunity to present their proposal," Obama said, citing a wish to avoid "partisan wrangling."

Then, as McCain nosedived in to Washington in what appeared to be an attempt to rally support among House Republicans for the White House's bailout, Obama worked quietly with congressional allies to craft a plan that fit the principles he'd articulated, and which matched the priorities of key Democratic committee cairmen. The final deal included protection for homeowners and limits to executive compensation, items Obama had pushed for. But Obama didn't celebrate it as a victory: He released a skeptical statement saying he'd keep a careful eye on its implementation.

"He played a leadership role in saying we're going to get a deal," said Dean Baker, the co-director of the left-leaning Center for Economic Policy and Research, who opposed the bailout. "Since then what he's had to do is look calm while you've had McCain looking very erratic."

Obama and McCain both voted for the bill, but by then McCain's public floundering had made all the difference.

"He mostly cleverly dodged being associated with the issue while McCain was happy to smear radiation all over himself," said Dan Mitchell, an economist at the libertarian Cato Institute.

This isn't to say that Obama doesn't have a thick stack of policy proposals. He proposed a $115 billion stimulus package in August, for instance, though - disappointing some on the left - he didn't make it a condition of his support for the bailout. He gave a detailed speech on financial regulation in March. He called for the government to take partial ownership of troubled banks, which is the latest Treasury plan, which he greeted Friday with measured support. And more recently he's rolled out a pair of smaller-scale initiatives: Raising the cap on deposit insurance and providing emergency loans to small businesses like those given after September 11, 2001.

"We have a plan to respond to the market crisis and the jobs crisis, and we've had it for a long time, and he keeps on talking about it," said Furman.

Still, Obama's response had some veterans of the last administration noting the contrast with former President Clinton, whose politics were always rooted in richly detailed policy plans.

"It's a wiser approach with regards to this crisis to not lay out what the 90-point plan is," said former Clinton White House chief of staff Leon Panetta. "I think what we're finding out is that everybody's 90-point plan is not working."

If Obama does come to office, the fact that he hasn't been selling a specific package may leave him more leeway to cope with what is expected to be a severe budget crunch, economists said.

"He's being cautious, and he's doing everything he can to leave his options open at this point," said Baker. "I don't think he sees any money in getting out there and saying, 'Here's my 47-point plan.'"