I've spent a lot of time thinking about ways in which the past few years could have gone differently. I've even come up with a few. But none of them lead to dramatically better outcomes today.
I can come up with scenarios in which President Obama accomplished somewhat less — perhaps by scaling back the health-care plan — and lost fewer seats in the midterm election. I can come up with scenarios in which the White House accomplished marginally more — perhaps by using the reconciliation process for an energy bill — but paid a greater political cost. I can come up with scenarios in which the stimulus was slightly more visible — perhaps it could have wiped out the payroll tax entirely — or slightly larger or included a long-term deficit reduction component.But I've never been able to come up with a realistic scenario in which a lot more got done, the economy is in much better shape, and the president is dramatically more popular today.
Reading this, I just shook my head. Either Ezra Klein is a complete and utter schmuck or he really can't imagine courses of action outside of his usual liberal democratic viewpoint. A reconciliation process on an energy bill? What the heck would that accomplish? My guess is that we still wouldn't be doing anything that would benefit us in the near term (drilling on public lands that hold oil/natural gas) and would still just be getting a lot of hand waving from the President about clean energy. In fact, we'd be lucky if it weren't a net negative on the economy as he does like to ban things he doesn't like (note the recent EPA rule that will force many coal plants to close). Also, note no mention of any jobs program in lieu of Obamacare, the most he can assume is just its "scaling back". Anyway, here is what I think Obama could have done differently, keeping in mind of course that he is a Democrat:
- Work with the GOP on bi-partisan legislation. The economy was in shambles, Obama came into office to bring America together and what does he do instead? Gloat and rub it in the GOP's face that they lost and he doesn't need their help to pass squat. He pretty much poisoned the well on any cooperation for the rest of his tenure. Remember when he told the GOP "I won" during negotiations over the failed stimulus? Remember when he told McCain "the election is over" at the Healthcare Summit? Or when he said he didn't want the GOP "to do a lot of talking"? This guy has been completely uncivil with regards to opponents of any party. My guess that if he acted like a statesman and not like a bully, things would have gone differently.
- Re-focus within the $862 billion stimulus. Instead of paying his union buddies to fill (or not fill) holes in the ground or pay to save other union jobs, he might have actually thought about programs that might actually help create wealth and jobs. Once a highway project is done, all those people who were paid through it are out of a job again. However, when you create new companies in new industries, you help create jobs for years on end. A smaller stimulus that would have focused on new job/industry creation (through increased R&D credits, subsidies, job training) and not have broken our budgetary bank would have probably done wonders. Even if this wouldn't work (like the first stimulus), at least he would have had some dry powder to try later, but as it is now, there is nothing he can do.
- Why do Obamacare at all during a financial crisis? It seems pretty clear that Obama and his cronies just assumed that this business cycle would repair itself in time for the next election and that he didn't have to "let a good crisis go to waste" by not pushing for Obamacare. Unfortunately, the massive tax increases within Obamacare have probably had a negative impact on today's economy (people/businesses do restrain spending when they know their are taxes coming their way in the near future). So have the new health insurance regulations that were included which causes premiums to skyrocket in the last year, making it even more expensive for companies to hire new workers.
- Don't do Dodd-Frank. Thousands of on the whole profitable traders lost their jobs because of the Volcker rule which pretty much eliminated proprietary trading at the banks. This has always been a profit center and was not why we had a financial crisis. So why target them? If you want banks to lend, make them feel more comfortable, the less comfortable they feel, the less they lend. Dodd-Frank did not make them feel more comfortable.