I recommend two very interesting posts, one by Bruce Bartlett arguing that Barack Obama made a major mistake by shifting his energy to health care and away from the economy after the stimulus passed, and one by Kevn Drum disputing that it mattered. Drum:
I have to confess that this line of criticism has always perplexed me. What does it mean to “single-mindedly” keep his attention on the economy? I just don’t understand how that translates into concrete action. I think Obama got briefed plenty to understand the trajectory of the economy (you really don’t need eight hours a day to figure that out) and I have a hard time thinking that it’s a good use of presidential time to insert himself into the details of the appropriation process. I also doubt that Obama really had much influence over Ben Bernanke.
I don’t think moving on health care was a mistake — without it, I think Obama would have been clobbered by liberals — but I think Drum is wrong about this. Could Obama have influenced Bernanke? Sure — either by not re-appointing him, or by appointing him only after getting assurances of what kind of policy Bernanke would pursue. He could have influence Bernanke by appointing people to fill the other Fed openings as soon as possible, and then pushing the Senate hard to confirm them. He could have made it clear that monetary policy leading to economic growth was a high priority of the WH, both publicly and privately. Now, other than appointing someone else instead of Bernanke none of those is guaranteed to work, but put them all together and there’s a very good chance they have some effect (although note: my general impression is that liberal Fed watchers tend to be somewhat pessimistic about the Fed, and perhaps oversell the idea that the Fed is being run by inflation hawks…in other words, I’m not entirely convinced that Obama hasn’t pushed the Fed a long ways towards what liberals would want).
Beyond that, there’s the failure in 2009 to move aggressively on state & local governments, and who knows how many things that could have been done administratively. No single one was a magic bullet, but I don’t think that Drum believes that the administration used all it had on housing, for example. And I didn’t get many responses to my questions for economists earlier this week, but I still believe that a fully engaged administration could have done at least something to help the Eurozone situation.
It’s not that Obama needed to spend hours studying what was happening in the economy or what needed to be done; it’s that all presidents need to be aggressive about making sure that executive branch departments and agencies are giving them all the plausible options before decisions are made, and then carrying out policies once they are passed into law or put in place via executive order or otherwise chosen. And they have to be monitored to find out if they’re working or not, and what the people actually carrying them out are learning and how that should be incorporated into new policies. Now, I have no idea to what extent Obama was doing all of that or not on economic policy, but he certainly should have been.
[Cross-posted at A plain blog about politics]