A Speech To Give Before We Hit The Iceberg

September 2, 2010

There’s a pretty strong sense among Democrats in Washington that the Obama Administration is blissfully headed for an electoral iceberg that will sink it in a two-year morass of partisan gridlock, investigations and bickering.  There is little hint that any serious thought is being given to changing course, and that is scaring the cognoscenti bigtime.

We’ve seen this movie, and it doesn’t end well for Leonardo Obama and company.   When 60 percent of the country thinks we’re headed in the wrong direction, framing the election as “going forward versus backward” is not exactly a winner.

There’s still time for the President to recast this election.  Time for him to acknowledge that he’s gotten out of step with those who elected him, and to put forward a program to stimulate the economy, change Washington, and strip the status-quo mindset from his Administration.

He’s your speech, Mr. President.  Lock and load (and please lose the teleprompter).

My fellow Americans, I have asked to speak to you from the Oval Office this evening to do something that Presidents very rarely do.  I want to apologize to you for taking my eye off of the fundamental reason you sent me to Washington nearly two years ago.

You sent me here to restore our economy and to bring real change to Washington.  As you know, when I was elected, the economy was in free fall; financial institutions around the world were on the brink of collapse; and we faced the very real threat of a worldwide depression.

In our haste to pass legislation to stimulate the economy and stabilize our financial institutions, my Administration drew too heavily on the advice of those who got us into this mess, and those who were captive to the status quo in Washington and on Wall Street.  We assumed that the way things have been done on Capitol Hill was the way things had to be done.  We focused too much on preserving jobs on Wall Street and K Street, and not enough on creating jobs on Main Street.

From now on, that’s going to change.  Tonight I am sending to Congress legislation that will stimulate job creation on Main Street, while restoring fiscal discipline for America’s future.  The legislation I am proposing will cut in half the payroll tax for the next two years, allow businesses that put buildings or factories in service in the U.S. within the next three years to write off the full cost of those new investments over a five-year period, and keep the Bush tax cuts in effect for the next two years for families earning less than $500,000 per year.   That will stimulate demand, and help at long last to put people back to work.  Part of the cost of these cuts will be offset by a special surcharge on those earning more than $1,000,000 per year, and part by an end to government subsidies to firms with revenues greater than $5,000,000 per year.

At the same time, I will be asking Congress to enact real deficit caps beginning in 2013, which will fulfill my prior pledge to cut the deficit in half by 2015.  I have already appointed a commission to make recommendations about cutting the deficit, and the enactment of these caps will force Congress to adopt these recommendations or come up with alternatives to put the nation on a path to fiscal responsibility.  I want Congress to pass this legislation right away to give businesses the certainty they need to invest in creating jobs for America’s future.

We must also change the way business is done in Washington. I am tonight sending Congress legislation to enact the proposal I made in my State of the Union address to stop lobbyists and lobbying firms contributing to, or fund-raising for, members of Congress.   Fund-raising is what gives lobbyists the special access they have enjoyed for too long.  That special access must end, and I call on Congress to enact this simple reform to clean up the way Washington works.

I am also announcing tonight a number of personnel changes in my Administration.   I have accepted with gratitude the resignations of Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers.   I have asked Paul Volcker to serve as Acting Treasury Secretary; I will be nominating FDIC Chairwoman Sheila Bair to serve as Deputy Treasury Secretary; and former World Bank Chief Economist Joseph Stiglitz to serve as National Economic Director.  These three very distinguished public servants understand that our financial institutions exist to provide capital to businesses and individuals, not to line the pockets of senior executives who leveraged up their balance sheets with debt and put the entire economy in jeopardy.  I have also asked Paul O’Neill, the former CEO of Alcoa who was forced out as Treasury Secretary in the prior Administration for opposing its reckless deficits, to serve as my special advisor for manufacturing and job creation.  It’s time that we have someone in a senior position in this Administration who has created jobs on Main Street.

I will also be nominating Elizabeth Warren to serve as the director of the new consumer agency created by the financial services reform legislation.  She has been the leading advocate for protecting consumers against predatory and unfair practices by banks, credit card companies, and other lenders, and she will do an excellent job in this important position.

My fellow countrymen and women, I want to close by saying that my Administration has accomplished quite a bit in the past 18 months, but we haven’t yet done what you elected me to do.   With the initiatives and changes I am announcing today, we will restore the promise of my campaign and steer a new course toward a brighter and more prosperous future for all Americans.  I won’t stop working until all of us are back at work.


The “Shuttle” Court: The Kagan Nomination, Geographical Diversity, And The Tyranny of Small Decisions

May 10, 2010

Let us grant that Elena Kagan is well qualified by intellect, temperament, experience, and judicial philosophy to serve on the Supreme Court.  By any fair application of confirmation precedent, she easily deserves to be confirmed.

But her nomination continues a trend – the near elimination of the Court’s geographical diversity — that I fear will, over time, leave the Supreme Court more open to challenge when it makes decisions vindicating the rights of unpopular minorities.  With the addition of soon-to-be-Justice Kagan, and the exception of Justice Anthony Kennedy, the Court will consist entirely of justices who spent the vast bulk of their legal careers in the three metropolitan areas served by the US Air and Delta Shuttles:  Washington, New York and Boston, with seven justices (all but Kennedy and Sotomayor) serving long stints in Washington government service, and a majority (Scalia, Ginsburg, Sotomayor, Alito and Kagan) raised in or around New York City.  This contrasts with the Warren Court, for example, which in its halcyon days included a former Governor of California (Earl Warren), a former Senator from Alabama (Hugo Black), an All-American from Colorado (Byron White), and the former Vice-Mayor of Cincinnati (Potter Stewart), just to name a few.

The continuing “Northeasternerification” of the Supreme Court clearly was not a conscious decision by President Obama or his predecessors.  Instead, it is the result of what noted economist Alfred Kahn called “the tyranny of small decisions” in which a series of relatively small decisions (here individual nominations, in the case of Sotomayor and Kagan based on legitimate considerations and superb qualifications) collectively leads to a less-than-ideal result, a Supreme Court markedly lacking in geographical diversity.

My concern is that this lack of geographical diversity will be used by critics to attack Court decisions protecting individual rights and liberties.  When the Supreme Court strikes down government action undertaken by duly elected officials – e.g., striking down a law than infringes on freedom of speech, banning official public school prayer, or preventing the Executive Branch from indefinitely detaining a terror suspect without trial – it is acting as a quintessentially anti-democratic, or countermajoritarian, institution.  The public accepts unpopular decisions because of faith in the Constitution and in the legitimacy of the Court as an institution.  It is this public faith in the Court that may be undermined to some degree by the Court’s lack of geographical diversity.

Suppose, for example, that the Olson/Boies challenge to the California anti-gay marriage initiative is successful and the initiative is struck down by the Supreme Court.  It is all too likely that critics of such a decision would question why a Court consisting almost exclusively of Northeasterners should be permitted to impose their views (albeit constitutionally-determined) on the rest of the Nation.

It may be argued that because of modern transportation and technology, geographic diversity is less important than it used to be.  But in an era of popular dissatisfaction with Washington and Wall Street, it would be a mistake to assume that geographic considerations are unimportant.

Indeed, expect Senate Republicans eager for political gain in the South and the West to make noise about the lack of geographic diversity in Kagan’s upcoming confirmation hearings.  The Obama campaign was politically astute when they held the 2008 Democratic Convention in Denver, the center of the increasingly purple Rocky Mountain West.  For the Court’s sake, let us hope that this astuteness is brought to bear if and when President Obama gets to make a third Supreme Court nomination.

Who’s Afraid of Barack Obama? Or WWLBJD

December 15, 2009

Yesterday’s meeting between the President and leading Wall Street CEOs (the ones who actually showed up rather than dialing in for a video conference call) reminded me that time and time again during the past eleven months, I have found myself wondering who’s afraid of Barack Obama.

Charlie Gasparino, who, like a busted clock, is right every once in a while, reported that the White House supplied the bank CEOs with an advance copy of the President’s talking points – so that there would be “no surprises”.  Well, excuse me; we wouldn’t want any of our Wall Street Titans getting anxious, now would we?

These are the same CEOs who presided over the greatest financial meltdown since the Great Depression — the same ones who are spending hundreds of millions of dollars lobbying against anodyne financial reform legislation that would reduce the risk of a repeat meltdown.  No, we don’t want them anxious – we want them pissing in their pants.

What would LBJ have done in yesterday’s meeting?  The LBJ who famously said “”If you’ve got ’em by the balls, their hearts and minds will follow.”  I can only imagine:

LBJ:Vik, Jamie, Ken, Lloyd welcome to the Oval Office.  Jamie and Lloyd, have a seat.  Ken and Vik, you still work for me, so you can stand against the wall there with the staff.”

“Now, I  want to be clear that y’all have a perfect right to lobby against my financial reform legislation.  That’s entirely your decision – at least it is while you have your jobs.

“I just want to run through a list of things I have a perfect right to do as President.  Not that I’m necessarily going to do any of them, mind you, but I might.

  • I have a right to ask the Attorney General to begin preparing lawsuits on behalf of the American people and your shareholders – and I am one of your shareholders – to recover from you and your Boards of Directors the sums that you squandered.  I’m pretty sure he’ll come up with something we can file.
  • And I have a right to send in an army of bank examiners to make sure that none of you were spending bank funds in a way that wouldn’t hold up under public scrutiny.
  • And, oh yes, I can ask little Timmy Geithner to find someone to replace every one of you – the banks I didn’t own yesterday, I just might own tomorrow.

“Now, I have a right to do those things, and I just want you to think about that when you’re deciding which of your rights you want to exercise.  Thanks for coming down.  Help yourself to some Christmas cookies on your way out.”

LBJ was hardly the only president who understood that a president needs to play Fear Factor from time to time.  JFK famously jawboned the steel industry into rescinding price hikes by threatening a Justice Department antitrust investigation.  Richard Nixon demonstrated that the appearance of angry irrationality could serve his interests when he put American forces on alert during the Yom Kippur War in 1973.  Ronald Reagan understood that even a genial president needs to be feared when he summarily fired the striking air traffic controllers in 1981.

So far, President’s Obama’s friends have had a lot more to fear from him than have his enemies.  Consider Greg Craig, a loyal and courageous man who earned the wrath of his former friends and employers, Bill and Hillary Clinton, by publicly and strongly backing Obama for president, only to be driven from the White House Counsel’s post by a campaign of leaks orchestrated from the very top of the Administration.

Every so often, I find myself humming “Johnny Get Angry,” and wondering when President Obama will give one of his political opponents something to be afraid of.  It can’t happen too soon.

Obama 2.0: Losing That Loving Feeling – And Getting It Back

November 27, 2009

As noted in an earlier post, the Obama Administration is sorely in need of a “re-boot” to realign its core message and agenda with voters’ concerns.  There’s no question that Obama 2.0 has to be relentlessly focused on jobs and the economy, since they remain voters’ biggest concerns.  But the Administration is in need of thematic repositioning, too.

While watching HBO’s documentary about the 2008 election the other day, I was struck by how much the Obama Administration has lost the transformative “Yes We Can” spirit of the Obama Campaign.  This was, to a large extent inevitable — as Mario Cuomo once said, “You campaign in poetry, you govern in prose.” Speaking eloquently about the bricks and mortar of government – budget estimates, appropriations, regulations and the like – is beyond the rhetorical reach of even this gifted First Orator.

Still, the Obama campaign carried the promise of a different style of government – one that explicitly challenged the way things were done in Washington (i.e., a process driven by lobbyists, special interests, earmarks and a lack of transparency) — as a means of bringing about more substantive change for the country.   Yet despite a lot of happy talk from the White House’s semi-delusional ethics czar, the Obama Administration has no real reform agenda to change the fundamentals of how Washington works.

Sure, the Administration’s grossly over-hyped ethics rules have kept it from hiring some (but by no means all) former lobbyists.  But the real power in Washington resides on Capitol Hill, and members of Congress remain as dependent as ever on lobbyists for fundraising.  Check a Member’s schedule while he or she is in Washington:  there are usually at least three, and often as many as six, fundraisers a day, all of which are populated almost entirely by lobbyists and their clients.    Frank Rich was right when he wrote last month that in President Obama’s Washington, “nothing except the party affiliations has changed in the Beltway’s pay-for-play culture since Tom DeLay.”

My suggestion is for a comprehensive prohibition on federal fundraising (contributing or soliciting contributions) by lobbyists.  South Carolina (yes, the state too small to be a republic and too big to be an insane asylum) has such a ban, and eleven other states ban lobbyist fundraising while their legislatures are in session.   The D.C. Circuit upheld the constitutionality of a similar “pay to play” ban imposed by the SEC on fundraising by firms seeking municipal bond business in 1995.

Banning lobbyist fundraising wouldn’t take special interest money out of politics.  But it would change the culture in Washington by separating campaign money from the lobbying culture.  Without the access and the “juice” provided by fundraising, lobbyists are just former Members and staffers with no special claim on a Member’s time, ear, or heart.

Such a ban would help Obama 2.0 to recapture some of the spirit of the Obama Campaign and put a little distance between the President and the Democratic Congress.  (Quick: try to name an issue on which the Obama Administration and the Democratic leadership in Congress are fundamentally at odds.  You can’t.  Zippo, zilch, nada.)

In the past, voters have favored divided government as a means of checking the excesses of one-party rule.  If they don’t believe that President Obama will check the excesses of congressional Democrats, they will vote for Republican congressional candidates who will.

Obama 2.0: Why The Timing of Health Care Reform Matters

November 25, 2009

The deadline for passing health care reform has slipped several times, from the August recess to the end of the year, and now to the State of the Union.  The media has covered the slippage like a teenager smirking when a parent reels off threats while imploring him to clean his room.  The parent can’t make him do it, and the media knows there’s nothing President Obama can do to make Congress meet the deadline.  But the State of the Union deadline has real strategic importance for the Democrats; missing it could cost them dearly in the 2010 elections.

The State of the Union address is the traditional time for re-setting an Administration’s agenda, for putting in place the themes that will carry the President’s party through the fall congressional elections.  The State of the Union this year is particularly important because the Obama Administration is in desperate need of a “re-boot,” a chance to re-align its core message and policy initiatives to be more in sync with voters’ fears about the economy and concerns about the excesses of the Democratic Congress.   The President’s approval ratings have fallen markedly, as have Congress’sAlthough congressional Republicans continue to be dazzlingly unpopular, as of now, they stand to reap the benefit next November of the public’s broader dissatisfaction with government.

Former President Clinton reportedly told the Senate Democratic Caucus earlier this month that getting health care reform passed this year was critically important because it would enable the party to refocus on jobs, infrastructure and education in 2010.  Those are vital parts of the Obama 2.0“re-boot” (I’ll have some thoughts about other important elements in a later post).

But if health care reform is still pending by the State of the Union speech, re-booting the Administration to “Obama 2.0” will be virtually impossible because the media’s focus will be on the day-to-day back and forth on the President’s signature initiative.  Oh, and by the way, if the State of the Union deadline for passing health care reform isn’t met, what makes you think that Congress will pass it by Presidents’ Day, or Easter, for that matter?  Clean your room!