Reagan Was A Sure Loser Too

Not since Herbert Hoover has a party out of power had such an opportunity to run against everything that troubles the American family—prices, interest rates, unemployment, taxes, or the fear for the future of their old age or the future of their children—than is now presented to the Republican Party.The Republicans, however, haven't figured this out. This is their basic problem. They have no strategy for defeating an Obama administration that is highly vulnerable on both domestic and foreign policy.That's the conventional wisdom in a nutshell, isn't it?It will come as no surprise that these words appeared in a Feb. 29 column in the New York Times. They are reproduced here exactly as written, save for one small adjustment.The president whose failings they describe is Jimmy Carter, not Barack Obama. The lines were written in 1980, not 2012. The author was the then-dean of conventional wisdom, James "Scotty" Reston. The headline was "Jimmy Carter's Luck," a reference to Reagan's victory in the New Hampshire primary three days earlier.It appears the conventional wisdom hasn't changed much. Today's narrative holds that however weak President Obama's hand, Republicans find themselves in no position to capitalize on it. A glance back to where we were at this exact point in the 1980 primaries suggests otherwise.Enlarge ImageBettmann/CorbisThe Republican candidates in early 1980 (from left): Philip Crane, John Connally, John Anderson, Howard Baker, Bob Dole, Ronald Reagan and George H.W. BushThen as now, the Republican primaries opened with a bang, when George H.W. Bush upset Ronald Reagan in the Iowa caucuses. By late February, this loss would lead to Reagan's firing of his campaign manager, John Sears, in a disagreement over strategy.Then, as now, Republicans feared that an unhappy contender might bolt the party to mount an independent campaign. In 1980, that was liberal John Anderson, not libertarian Ron Paul. Mr. Anderson did end up running as an independent, whereas Mr. Paul will likely be constrained by the effect a third-party run would have on the future prospects for his Republican son, Kentucky Sen. Rand Paul.Then as now, the chattering classes wondered aloud whether a candidate who could win the Republican nomination could prevail against President Carter in November. On March 1, former President Gerald Ford amplified that view when he told a New York Times reporter, "Every place I go and everything I hear, there is the growing, growing sentiment that Governor Reagan cannot win the election."Then as now, some put their hopes on a late entry, in the same way that some now pine for Jeb Bush or Mitch Daniels or Chris Christie to enter the race. In the same interview where Mr. Ford predicted that Reagan's nomination would mean a repeat of 1964, he also declared himself open to a draft if there were a genuine "urging" by the party.Related VideoColumnist Bill McGurn compares today's GOP to 1980.In retrospect, we forget how seriously the Ford possibility was taken, or how popular it was in the polls, or how lingering its effects would be (at the convention, there would be speculation about a "co-presidency"). A Harris Poll released just about this time in 1980 bolstered the case for Mr. Ford by reporting that, in a head-to-head matchup, Ford (the noncandidate) would trounce President Carter 55% to 44%. The same poll showed Reagan (the front-runner) trailing Carter 58% to 40%.Nor was candidate Reagan without baggage. As governor, Reagan had pushed through the largest tax hike in California's history, had signed one of the nation's most liberal abortion laws, and—as George H.W. Bush pointed out—presided over the doubling of the state budget over his eight-year tenure, to $10.2 billion when he left office from $4.6 billion when he entered.Along the way in 1980 there were missteps and minor dustups inflated beyond their importance. In Iowa, Reagan lost the caucuses because he sat on a lead and played it cautious. In New Hampshire a month later, he had to apologize for an ethnic joke that made fun of Italians and Poles (to its credit, the New York Times defended him in an editorial).Later he would face Santorum-like fears about his social message, especially after appearing at a mass gathering of Christian fundamentalists and evangelicals. A minister with whom he'd shared a stage was taped saying "we're being attacked by satanic forces," which Times columnist Anthony Lewis declared "the scariest piece of television" he'd seen in some time.Yes, the parallels to 1980 take you only so far, and Mitt Romney is no Ronald Reagan. Still, at this same point in his campaign for the GOP nomination, neither was Reagan. The President Reagan we rightly admire for bringing down the Berlin Wall, reviving the U.S. economy, and attracting into the GOP millions of disaffected Democrats was still to come.And he got there by transcending the conventional wisdom rather than allowing himself or his message to be limited by it.Write to MainStreet@wsj.com

Mitch Daniels Response To State Of The Union: Text & Video

Below, Daniels' remarks as prepared for delivery, which were posted on House Speaker John Boehner's website ahead of the governor's speech.

"The status of 'loyal opposition' imposes on those out of power some serious responsibilities: to show respect for the Presidency and its occupant, to express agreement where it exists. Republicans tonight salute our President, for instance, for his aggressive pursuit of the murderers of 9/11, and for bravely backing long overdue changes in public education. I personally would add to that list admiration for the strong family commitment that he and the First Lady have displayed to a nation sorely needing such examples.

"On these evenings, Presidents naturally seek to find the sunny side of our national condition. But when President Obama claims that the state of our union is anything but grave, he must know in his heart that this is not true.

"The President did not cause the economic and fiscal crises that continue in America tonight. But he was elected on a promise to fix them, and he cannot claim that the last three years have made things anything but worse: the percentage of Americans with a job is at the lowest in decades. One in five men of prime working age, and nearly half of all persons under 30, did not go to work today.

"In three short years, an unprecedented explosion of spending, with borrowed money, has added trillions to an already unaffordable national debt. And yet, the President has put us on a course to make it radically worse in the years ahead. The federal government now spends one of every four dollars in the entire economy; it borrows one of every three dollars it spends. No nation, no entity, large or small, public or private, can thrive, or survive intact, with debts as huge as ours.

"The President's grand experiment in trickle-down government has held back rather than sped economic recovery. He seems to sincerely believe we can build a middle class out of government jobs paid for with borrowed dollars. In fact, it works the other way: a government as big and bossy as this one is maintained on the backs of the middle class, and those who hope to join it.

"Those punished most by the wrong turns of the last three years are those unemployed or underemployed tonight, and those so discouraged that they have abandoned the search for work altogether. And no one has been more tragically harmed than the young people of this country, the first generation in memory to face a future less promising than their parents did.

"As Republicans our first concern is for those waiting tonight to begin or resume the climb up life's ladder. We do not accept that ours will ever be a nation of haves and have nots; we must always be a nation of haves and soon to haves.

"In our economic stagnation and indebtedness, we are only a short distance behind Greece, Spain, and other European countries now facing economic catastrophe. But ours is a fortunate land. Because the world uses our dollar for trade, we have a short grace period to deal with our dangers. But time is running out, if we are to avoid the fate of Europe, and those once-great nations of history that fell from the position of world leadership.

"So 2012 is a year of true opportunity, maybe our last, to restore an America of hope and upward mobility, and greater equality. The challenges aren't matters of ideology, or party preference; the problems are simply mathematical, and the answers are purely practical.

"An opposition that would earn its way back to leadership must offer not just criticism of failures that anyone can see, but a positive and credible plan to make life better, particularly for those aspiring to make a better life for themselves. Republicans accept this duty, gratefully.

"The routes back to an America of promise, and to a solvent America that can pay its bills and protect its vulnerable, start in the same place. The only way up for those suffering tonight, and the only way out of the dead end of debt into which we have driven, is a private economy that begins to grow and create jobs, real jobs, at a much faster rate than today.

"Contrary to the President's constant disparagement of people in business, it's one of the noblest of human pursuits. The late Steve Jobs - what a fitting name he had - created more of them than all those stimulus dollars the President borrowed and blew. Out here in Indiana, when a businessperson asks me what he can do for our state, I say 'First, make money. Be successful. If you make a profit, you'll have something left to hire someone else, and some to donate to the good causes we love.'

"The extremism that stifles the development of homegrown energy, or cancels a perfectly safe pipeline that would employ tens of thousands, or jacks up consumer utility bills for no improvement in either human health or world temperature, is a pro-poverty policy. It must be replaced by a passionate pro-growth approach that breaks all ties and calls all close ones in favor of private sector jobs that restore opportunity for all and generate the public revenues to pay our bills.

"That means a dramatically simpler tax system of fewer loopholes and lower rates. A pause in the mindless piling on of expensive new regulations that devour dollars that otherwise could be used to hire somebody. It means maximizing on the new domestic energy technologies that are the best break our economy has gotten in years.

"There is a second item on our national must-do list: we must unite to save the safety net. Medicare and Social Security have served us well, and that must continue. But after half and three quarters of a century respectively, it's not surprising that they need some repairs. We can preserve them unchanged and untouched for those now in or near retirement, but we must fashion a new, affordable safety net so future Americans are protected, too.

"Decades ago, for instance, we could afford to send millionaires pension checks and pay medical bills for even the wealthiest among us. Now, we can't, so the dollars we have should be devoted to those who need them most.

"The mortal enemies of Social Security and Medicare are those who, in contempt of the plain arithmetic, continue to mislead Americans that we should change nothing. Listening to them much longer will mean that these proud programs implode, and take the American economy with them. It will mean that coming generations are denied the jobs they need in their youth and the protection they deserve in their later years.

"It's absolutely so that everyone should contribute to our national recovery, including of course the most affluent among us. There are smart ways and dumb ways to do this: the dumb way is to raise rates in a broken, grossly complex tax system, choking off growth without bringing in the revenues we need to meet our debts. The better course is to stop sending the wealthy benefits they do not need, and stop providing them so many tax preferences that distort our economy and do little or nothing to foster growth.

"It's not fair and it's not true for the President to attack Republicans in Congress as obstacles on these questions. They and they alone have passed bills to reduce borrowing, reform entitlements, and encourage new job creation, only to be shot down time and time again by the President and his Democratic Senate allies.

"This year, it falls to Republicans to level with our fellow citizens about this reality: if we fail to act to grow the private sector and save the safety net, nothing else will matter much. But to make such action happen, we also must work, in ways we Republicans have not always practiced, to bring Americans together.

"No feature of the Obama Presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others. As in previous moments of national danger, we Americans are all in the same boat. If we drift, quarreling and paralyzed, over a Niagara of debt, we will all suffer, regardless of income, race, gender, or other category. If we fail to shift to a pro-jobs, pro-growth economic policy, there will never be enough public revenue to pay for our safety net, national security, or whatever size government we decide to have.

"As a loyal opposition, who put patriotism and national success ahead of party or ideology or any self-interest, we say that anyone who will join us in the cause of growth and solvency is our ally, and our friend. We will speak the language of unity. Let us rebuild our finances, and the safety net, and reopen the door to the stairway upward; any other disagreements we may have can wait.

"You know, the most troubling contention in our national life these days isn't about economics, or policy at all. It's about us, as a free people. In two alarming ways, that contention is that we Americans just can't cut it anymore.

"In word and deed, the President and his allies tell us that we just cannot handle ourselves in this complex, perilous world without their benevolent protection. Left to ourselves, we might pick the wrong health insurance, the wrong mortgage, the wrong school for our kids; why, unless they stop us, we might pick the wrong light bulb!

"A second view, which I admit some Republicans also seem to hold, is that we Americans are no longer up to the job of self-government. We can't do the simple math that proves the unaffordability of today's safety net programs, or all the government we now have. We will fall for the con job that says we can just plow ahead and someone else will pick up the tab. We will allow ourselves to be pitted one against the other, blaming our neighbor for troubles worldwide trends or our own government has caused.

"2012 must be the year we prove the doubters wrong. The year we strike out boldly not merely to avert national bankruptcy but to say to a new generation that America is still the world's premier land of opportunity. Republicans will speak for those who believe in the dignity and capacity of the individual citizen; who believe that government is meant to serve the people rather than supervise them; who trust Americans enough to tell them the plain truth about the fix we are in, and to lay before them a specific, credible program of change big enough to meet the emergency we are facing.

"We will advance our positive suggestions with confidence, because we know that Americans are still a people born to liberty. There is nothing wrong with the state of our Union that the American people, addressed as free-born, mature citizens, cannot set right. Republicans in 2012 welcome all our countrymen to a program of renewal that rebuilds the dream for all, and makes our 'city on a hill' shine once again."

Parody - President Barack Obama's First Ad of 2012

Rumsfeld: Obama Did Not Go To Congress Because He Didn't Know What To Ask For

Vice President Dick Cheney interview

Visit msnbc.com for breaking news, world news, and news about the economy

In Bush v. Obama, Bush Wins in a Rout

According to Reuters:

President Barack Obama attacked the economic policies of his Republican predecessor George W. Bush in Bush's home state ... as evidence of the way Republicans would operate if given power in Nov. 2 U.S. congressional elections.

At a fund-raising event for Democrats in Dallas, where Bush now lives, Obama said the former president's "disastrous" policies had driven the U.S. economy into the ground and turned budget surpluses into deficits.

Obama defended his repeated references to Bush's policies, saying they were necessary to remind Americans of the weak economy he inherited from Bush in January 2009.

"The policies that crashed the economy, that undercut the middle class, that mortgaged our future, do we really want to go back to that, or do we keep moving our country forward?" Obama said at another fund-raising event in Austin, referring to Bush's eight years as president.

So President Obama describes his predecessor’s policies as “disastrous.” Just for the fun of it, let’s do compare the two records, shall we?

In the wake of a recession that began roughly seven weeks after President Bush took office, America experienced six years of uninterrupted economic growth and a record 52 straight months of job creation that produced more than 8 million new jobs. During the Bush presidency, the unemployment rate averaged 5.3 percent. We saw labor-productivity gains that averaged 2.5 percent annually — a rate that exceeds the averages of the 1970s, 1980s, and 1990s. Real after-tax income per capita increased by more than 11 percent. And from 2000 to 2007, real GDP grew by more than 17 percent, a gain of nearly $2.1 trillion.

As for Obama’s claim that Bush “turned a budget surplus into a deficit”: by January 2001, when Bush was inaugurated, the budget surpluses were already evaporating as the economy was skidding toward recession (it officially began in March 2001). Combined with the devastating economic effects of 9/11, when we lost around 1 million jobs over 90 days, the surplus went into deficit.

Rather than whine incessantly about the situation, President Bush proposed policies that triggered the kind of sustained growth that saw the deficit fall to 1 percent of GDP ($162 billion) by 2007. Indeed, before the financial crisis of 2008 – which I’ll return to in a moment — Bush’s budget deficits were 0.6 percentage points below the historical average. (My former White House colleague Keith Hennessey eviscerates Obama’s assertion that we faced a “decade of spiraling deficits” here).

Now let’s consider Mr. Obama’s record: an unemployment rate of 9.5 percent, with 131,000 jobs lost in July, during our so-called Recovery Summer (Vice President Biden promised us up to 500,000 new jobs a month back in April). The overall unemployment rate, incorporating people who want jobs but did not look during July, is now 16.5 percent.

According to J.D. Foster, Obama’s “job deficit” — the difference between current employment and the jobs Obama promised to create by the end of 2010 – stands at a staggering 7.6 million workers. The 2010 deficit is $1.471 trillion, or 10 percent of GDP, while the debt is $9.2 trillion, or 62.7 percent of GDP. (From January 20, 2001, to January 20, 2009, the debt held by the public grew $3 trillion under Bush, from $3.3 trillion to $6.3 trillion; in 20 months, Mr. Obama will add as much debt as Mr. Bush ran up in eight years.) And let’s not forget that the Obama administration passed an $862 billion stimulus package and assured us that unemployment would not exceed 8 percent; instead, unemployment topped 10 percent – a figure higher than what the Obama administration said would occur if the stimulus package wasn’t passed.

Sales of new homes collapsed earlier this year, sinking 33 percent to the lowest level on record (new home sales rose in June from May’s historical low, but the overall pace was still the second slowest on record, the Commerce Department reported.

Not surprisingly, the Conference Board Consumer Confidence Index now stands at 50.4. As a reference point, a reading above 90 indicates that the economy is on solid footing, while above 100 signals strong growth. We also learned on Tuesday that the Federal Reserve, downgrading its assessment of the economy, announced that the pace of recovery is “more modest” than it had anticipated. “The Fed noted that high unemployment, modest income growth, lower housing wealth and tight credit were holding back household spending,” according to the Wall Street Journal.

Consider this as well: according to the Obama administration’s own projections, in the first term we’ll see an average unemployment rate of 9.0 percent, real GDP growth of 1.1 percent, federal spending as a percentage of GDP at 24 percent, budget deficits as a percentage of GDP at 7.8 percent, and the deficits as a percentage of GDP at 6.2 percent (see here).

These projections are, across-the-board, depressing.

Now, unlike Obama, whose intellectual dishonesty can be striking at times, some of us are willing to concede that things need to be placed within a proper context. Obama took the oath of office in the wake of a financial collapse that made every economic indicator much worse; it’s only fair to take that into account. But even here, in characterizing what happened, Obama has to present a cartoon image, distorted and disfigured, pretending that it was wholly and completely the fault of President Bush and Republicans.

In fact, it was a complex set of factors that both Republicans and Democrats were complicit in. In addition, it’s worth noting that Democrats were in control of Congress beginning in January 2007 -- and Congress is where legislation, including appropriations and tax legislation, is passed.

Second, spending would have been much higher during the Bush presidency if Democrats had their way. To take just one example: Democrats proposed creating a prescription-drug program as an alternative to the one Bush proposed that would have cost a projected $800 billion over 10 years. The Bush prescription-drug law was originally expected to cost half that amount — and today it costs a third less than initial projections because it uses market forces to drive prices down (see here and here).

Third, Democrats bear the majority of the blame for blocking reforms that could have mitigated the effects of the housing crisis, which in turn led to the broader financial crisis.

As Stuart Taylor put it in 2008:

The pretense of many Democrats that this crisis is altogether a Republican creation is simplistic and dangerous. It is simplistic because Democrats have been a big part of the problem, in part by supporting governmental distortions of the marketplace through mortgage giants Fannie Mae and Freddie Mac, whose reckless lending practices necessitated a $200 billion government rescue [in September 2008]. ... Fannie and Freddie appear to have played a major role in causing the current crisis, in part because their quasi-governmental status violated basic principles of a healthy free enterprise system by allowing them to privatize profit while socializing risk.

The Bush administration warned as early as April 2001 that Fannie and Freddie were too large and overleveraged and that their failure "could cause strong repercussions in financial markets, affecting federally insured entities and economic activity" well beyond housing. Bush’s plan would have subjected Fannie and Freddie to the kinds of federal regulation that banks, credit unions, and savings and loans have to comply with. In addition, Republican Richard Shelby, then chairman of the Senate Banking Committee, pushed for comprehensive GSE (government-sponsored enterprises) reform in 2005. And who blocked these efforts at reforming Fannie and Freddie? Democrats such as Christopher Dodd and Representative Barney Frank, along with the then-junior senator from Illinois, Barack Obama, who backed Dodd’s threat of a filibuster (Obama was the third-largest recipient of campaign gifts from Fannie and Freddie employees in 2004).

So Obama and his party bear a substantial (though not exclusive) responsibility in creating the economic crisis that Obama himself inherited.

Even if you set all this aside, Obama entered office knowing what he faced, including a deficit and debt that was exploding. And rather than promote policies that accelerated economic growth and began to address our fiscal entitlement crisis, Obama went in exactly the opposite direction. For example, Obama succeeded in passing a massive new entitlement program (ObamaCare) rather than trimming existing ones.

Upon taking office, George W. Bush inherited an economy heading for recession and championed policies that made things better; upon taking office, Barack Obama inherited an economy in a deeper recession and championed policies that have made things worse. That is a key different between the two.

The problem for President Obama is that he and his party cannot escape the record he has amassed. As Karl Rove has written:

Voters know it is Mr. Obama and Democratic leaders who approved a $410 billion supplemental (complete with 8,500 earmarks) in the middle of the last fiscal year, and then passed a record-spending budget for this one. Mr. Obama and Democrats approved an $862 billion stimulus and a $1 trillion health-care overhaul, and they now are trying to add $266 billion in "temporary" stimulus spending to permanently raise the budget baseline.

It is the president and Congressional allies who refuse to return the $447 billion unspent stimulus dollars and want to use repayments of TARP loans for more spending rather than reducing the deficit. It is the president who gave Fannie and Freddie carte blanche to draw hundreds of billions from the Treasury. It is the Democrats' profligacy that raised the share of the GDP taken by the federal government to 24% this fiscal year.

This is what Obama has done now that he has been given the keys to the car (to use a favorite metaphor of his). He’s taken us from a ditch, one largely of his and his party’s making, and driven us into the side of mountain.

On his worst day, the economic decisions by Obama’s predecessor were better, more responsible, and more enlightened that anything President Obama has done.

The Economic Urban Legend carefully created by Barack Obama is breaking apart. According to some polls, more Americans now hold Obama responsible for the bad state of the economy than they do Bush. Bush’s favorability ratings are climbing, while Obama’s approval ratings are tumbling. Republican candidates are running on extending Bush’s tax cuts beyond this year. And Democrats now face the prospect of losing both the House and even the Senate in the midterm election. (In Bush’s first midterm election, in 2002, as well as in 2004, Republicans gained seats in both the House and the Senate, only the second time in history that a president’s party gained seats in both chambers in back-to-back elections.)

George W. Bush’s presidency was certainly not perfect; none are. But like Truman before him, Bush’s achievements will be vindicated. Unless he changes course fairly dramatically, I rather doubt the same thing will be said about Mr. Obama.

Extreme?

"Those Voices Don't Speak for the Rest of Us"

Obama, the Thin-Skinned President

In their book "The Battle for America 2008," Haynes Johnson and Dan Balz wrote this:

[Chief political aide David] Axelrod also warned that Obama's confessions of youthful drug use, described in his memoir, Dreams From My Father, would be used against him. "This is more than an unpleasant inconvenience," he wrote. "It goes to your willingness and ability to put up with something you have never experienced on a sustained basis: criticism. At the risk of triggering the very reaction that concerns me, I don't know if you are Muhammad Ali or Floyd Patterson when it comes to taking a punch. You care far too much what is written and said about you. You don't relish combat when it becomes personal and nasty. When the largely irrelevant Alan Keyes attacked you, you flinched," he said of Obama's 2004 U.S. Senate opponent.

I thought of this memo after reading the comment by Sen. Pat Roberts after he and other Senate Republicans had a contentious 80-minute meeting with the president on Tuesday. "He needs to take a Valium before he comes in and talks to Republicans," Roberts said. "He's pretty thin-skinned."

Sen. Roberts is being too generous. Obama is among the most thin-skinned presidents we have had, and we see evidence of it in every possible venue imaginable, from one-on-one interviews to press conferences, from extemporaneous remarks to set speeches.

The president is constantly complaining about what others are saying about him. He is upset at Fox News, and conservative talk radio, and Republicans, and people carrying unflattering posters of him. He gets upset when his avalanche of faulty facts are challenged, like on health care. He gets upset when he is called on his hypocrisy, on everything from breaking his promise not to hire lobbyists in the White House to broadcasting health care meetings on C-SPAN to not curtailing earmarks to failing in his promises of transparency and bipartisanship.

In Obama's eyes, he is always the aggrieved, always the violated, always the victim of some injustice. He is America's virtuous and valorous hero, a man of unusually pure motives and uncommon wisdom, under assault by the forces of darkness.

It is all so darn unfair.

Not surprisingly, Obama's thin skin leads to self pity. As Daniel Halper of The Weekly Standard pointed out, in a fundraising event for Sen. Barbara Boxer, Obama said,

Let's face it: this has been the toughest year and a half since any year and a half since the 1930s.

Really, now? Worse than the period surrounding December 7, 1941 and September 11, 2001? Worse than what Gerald Ford faced after the resignation of Richard Nixon and Watergate, which constituted the worse constitutional scandal in our history and tore the country apart? Worse than what Ronald Reagan faced after Jimmy Carter (when interest rates were 22 percent, inflation was more than 13 percent, and Reagan faced something entirely new under the sun, "stagflation")? Worse than 1968, when Bobby Kennedy and Martin Luther King, Jr. were assassinated and there was rioting in our streets? Worse than what LBJ faced during Vietnam -- a war which eventually claimed more than 58,000 lives? Worse than what John Kennedy faced in the Bay of Pigs and in the Cuban Missile Crisis, when we and the Soviet Union edged up to the brink of nuclear war? Worse than what Franklin Roosevelt faced on the eve of the Normandy invasion? Worse than what Bush faced in Iraq in 2006, when that nation was on the edge of civil war, or when the financial system collapsed in the last months of his presidency? Worse than what Truman faced in defeating imperial Japan, in reconstructing post-war Europe, and in responding to North Korea's invasion of South Korea?

In his autobiography "Present at the Creation," Dean Acheson wrote about the immensity of the task the Truman administration faced after war ended in 1945, which "only slowly revealed itself. As it did so, it began to appear as just a bit less formidable than that described in the first chapter of Genesis. That was to create a world out of chaos; ours, to create half a world, a free half, out of the same material without blowing the whole to pieces in the process."

For Obama to complain that the problems he faces are so much worse than any other president in the last 80 years is stunningly self-indulgent, to say nothing of ahistorical.

With Obama there is also the compulsive need to admonish others, to point fingers, to say that the problems he faces are not of his doing. Oh, sure; on occasions there are the grudging concessions, like in Thursday's press conference devoted to the oil spill in the Gulf of Mexico, where Obama says, "In case you're wondering who's responsible, I take responsibility" to ensure that "everything is done to shut this down." But those words are always pro forma, done reluctantly and for tactical political reasons, a rhetorical trick that is meant to get him off the hook. As recently as last week, Obama, in the Rose Garden, was implicitly blaming the previous occupant of the White House for the explosion of the offshore rig Deepwater Horizon [Obama remarks linked here].

The president's instincts are by now obvious to all: deflect blame, point fingers, and lash out at others, most especially his predecessor. We know from press reports (see here and here) that the strategy for the Democrats in 2010, two years after Obama was elected president, is to – you guessed it – blame George W. Bush.

What explains all this is hard to know. But it's clear he has adopted an image of himself as something rare and remarkable, a historic figure of almost super-human abilities. "I am absolutely certain that generations from now," Obama said during the summer of his presidential run, "we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on earth."

"We are the ones we have been waiting for," Obama and his aides said constantly during the campaign.

President Obama's more unattractive personal qualities probably won't wear well with the electorate. Americans tend to tire of those who are look back rather than ahead and are always blaming others for the problems they face.

Barack Obama -- a man who was as unprepared to be president as any man in our lifetime -- has over the last 16 months shown that he is overmatched by events. His poll numbers continue to drop, his health care proposal is becoming less rather than more popular, the oil spill in the Gulf is badly eroding his image for leadership and competence, and his party has been battered in election after election since November. We have now reached the point where Democrats are running against Obama and his agenda in order to survive (witness Mark Critz in Pennsylvania).

We can hope that Obama, an intelligent man, learns from the errors of his ways. But the great danger in all of this is that in the face of his troubles Obama and his aides become increasingly defensive, display a greater sense of entitlement and even a touch of paranoia. When arrogant men lose control of events it can easily lead to feelings of isolation, to striking out at critics, to bullying opponents, and to straying across lines that should not be crossed.

And so the president needs to surround himself with people who can tamp down on the uglier impulses within his administration, who are willing to tell Obama that the lore created by him, Axelrod, Plouffe, and Gibbs during the campaign has given way to reality, that cockiness is not the same as wisdom, and that spin is no substitute for substantive achievements. And Obama needs someone who has standing in his life to tell him that the presidency is a revered institution that should not be treated as if it were a ward in Chicago.

The ingredients are in place for some serious problems down the road. Those who care for the president need to recognize the warning signs now, sooner rather later, before it becomes too late, for him and for the nation.

The Purposes of Political Combat

O my America, how partisan you have become! How difficult you have made it for visionary politicians who want nothing more than to improve you!

You have been paralyzed into stasis by the status quo, which has injected its subtle toxins into your bloodstream by means of radio frequencies between 530 and 1700 kilohertz and a lone television cable-news channel, whose incomprehensible power overruns the combined effect of two others like it; nightly newscasts on three broadcast channels; and the vast majority of newspapers and magazines in the United States. Rallies of surly citizens claiming the mantle of Revolutionary War Bostonians in the spring of 2009 and rude questioners at political gatherings with elected officials home from Washington in the summer of 2009 were harbingers of the inexplicable political reversal that has since been made flesh by electoral defeats in Virginia, New Jersey, and Massachusetts, and polling numbers suggesting a catastrophe in the offing for President Barack Obama’s party come November, when elections for all 435 House seats and 33 Senate seats take place.

How can this be, my America? You had given Obama and the Democrats a nearly free hand; not since 1977 had the political balance in Washington been tilted so completely to the advantage of one of the two parties. Seventy million cast their ballots for Obama, and on that same night, Democrats won a 78-seat majority in the House of Representatives and (after much recounting) the 60 seats in the Senate they needed to enact legislation almost at will. Under such circumstances, partisanship should no longer have had any meaning or held any sway, for, O my America, you asked for change, and you gave the change agents the power they needed to enact change; but after only a few months, the works got all gummed up. It will now require procedural tricks and sleights of hand to effect the very change you sought—and in effecting it, and thereby following your will, Democrats may seal their own fate in this election year. Thus has partisanship worked its ugly dark magic, turning the political system upon itself when the verdict of the electorate in November 2008 should have been final.

_____________


The preceding paragraphs re-present a distillation of liberal thought about the political circumstances of the present moment. The degree of bafflement liberals express at the surprisingly perilous position in which Barack Obama and the Democrats find themselves is understandable; after all, such peril was nearly unimaginable to everyone just a year ago. The results of the 2008 election had been so decisive, the condition of the post-Bush Republican party so parlous, and the double wound to the Right caused by the difficulties of the Iraq war and the financial meltdown so infected that Obama and his party appeared to have an all but free hand.

Indeed, the combined effects of a war gone sour and the capitalist system’s apparent self-immolation seemed to Obama and his team to have brought a decisive end to one ideological era and inaugurated a new period in which the American people were now consciously and explicitly seeking liberal activism from their politicians.

It was by no means an unreasonable presumption. The 2008 election, with its 53-46 margin in favor of Obama, and his victory in the unlikely states of Virginia, North Carolina, and Indiana, followed on the 2006 midterms, in which Democrats crushed Republicans and regained control of both chambers for the first time in 12 years. Both elections were cast as, and indeed seemed to be, referenda on the failures of the Right—not just standard political failures, but failures on a grand scale that invalidated the modern conservative governing project.

Those failures were considered moral ones, expressed in the political and personal corruption in which Republican politicians had engaged and around which much of the 2006 elections seemed to revolve. They were seen as economic, with Republicans shouldering the blame for the economic meltdown of 2008. And they were thought managerial, in the decision to go to war partly on the basis of nonexistent weapons of mass destruction and then the failure to do what was necessary to win that war. Liberals and leftists were tireless in arguing that these failures were not coincidental but linked, that they shared a common root—the essential heartlessness and soullessness of the Republican party and the conservative movement. And the electorate appeared to respond exactly as they had hoped it would.

It therefore seemed only logical that the thoroughgoing rejection of the Right was pretty much the same thing as an endorsement of the ideas and policies of the anti-Right. After all, liberals had had to concede as much when things had gone against them, hadn’t they? For years following the 1994 congressional election, a common presumption in political circles was that the United States had proved itself to be a “Center-Right nation,” at least as far as the voting public was concerned. Leftist thinkers like Thomas Frank found themselves compelled to devise a theory to explain why Americans chose to vote in ways injurious to their own supposed best interests. “The matter with Kansas,” Frank said in his bestselling 2004 analysis, was that its people had been conditioned to respond to hot-button cultural stimuli on matters like abortion rather than to support redistributionist economic policies designed to improve their own well-being. The same line of argument had been offered a decade earlier about Southern and urban ethnic voters by the reporters Thomas and Mary Edsall in their 1992 book, Chain Reaction—only in that case, the Edsalls said, the stimuli had been primarily racial.

It had further become axiomatic in liberal circles from the 1970s onward that the Right had secured the superior political posture on matters of security, regarding both crime at home and America’s position abroad, by ginning up (knowingly in a state of cynicism, or desperately due to personal neurosis, or innocently as a result of stupidity) a state of peril in relation to supposed threats that were little or no threat at all—Cuba, Nicaragua, the Soviet Union. The terrorist attacks on the United States in 2001 came as an almost undisguised blessing for the Right, according to one version of this theory popularized in Michael Moore’s Fahrenheit 9/11; they became a means of generating new security fears, most especially fear of Iraq, which made possible the engagement in an unnecessary war whose purpose was to rally people ’round the flag and the Republican president—until things went horribly wrong.

Bombarded by these various catalysts, the argument ran, the American people had entered into a period of unreason in which they reacted to averse changes in their lives and communities by embracing symbols of power and authority rather than insisting on concrete and specific political changes that would make their lives better and easier. The most telling statement of this theme came from Barack Obama during his run for the Democratic nomination in early 2008, when he said of rural voters that

our challenge is to get people persuaded that we can make progress when there’s not evidence of that in their daily lives. You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. So it’s not surprising then that they get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.

These words were revealing not only in the condescension he displayed toward the very people he insisted his campaign was designed to help but also in the way they expressed Obama’s—and, by extension, the specific Left-liberal attitude he both embodies and exemplifies—distrust of and contempt for politics itself.

I am using the word politics to describe the arena of public policy, in which matters involving the direction of the United States are hashed out. Players in the arena range in size and import from the president to an individual voter, from the Senate majority leader to a school-board member in his home state of Nevada, from Charles Krauthammer to a commenter on a blog or a caller to a radio show. The arena is host to conflicts over matters large (weapons systems) and small (the food pyramid), bitterly disputed (abortion) and barely discussed (depreciation schedules), of historical import (war) and entirely evanescent (a la carte cable pricing). But conflicts are what they are, and politics is how they are adjudicated.

The great military strategist Clausewitz once said that “war is the continuation of politics by other means,” but the opposite is true as well. In a stable republic like the United States, in the 145 years since the end of the Civil War, Americans have managed not to war with each other because we have come to accept implicitly that we handle our disagreements in the arena of politics.

And that has led to another implicit acceptance, which is that the system cannot afford to have us arguing, as Henry Kissinger described North Vietnamese negotiating tactics, over the shape of the table. So with very few exceptions, we operate by consensus on the legitimacy of the essential architecture of the government. And because time is finite and there are limits even to the natural human drive to disagree, our politics actually function with a great deal of overall consensus, a consensus driven by the overall stability of the body politic. Among elected politicians, even the pacifistically inclined find it necessary to vote for increases in the defense budget, while those inclined toward libertarianism will support Social Security increases and extensions of unemployment insurance. That may not be their inclination, but they are compelled to it by the logic of a stable political system.

When a stable political system finds itself in imbalance, however, something more complicated and unpredictable begins to happen. Principled differences will tend to crystallize every now and then around one or two events or issues or pieces of proposed legislation. The crystallization almost always occurs when one party or ideological tendency attempts, or is thought by the other party or ideological tendency to be attempting, to extend the bounds of the consensus in such a way that it shifts into something else. Once the conflict crystallizes, all bets are off, and the games in the arena begin.

This is what politics is at its core. Now, elections are the primary vehicle for the conduct of politics, because they are adjudicated at a given time and place and feature a winner and a loser. The methods used to win elections and defeat rivals are always in low odor in a democracy, because they are confrontational and impolite and lack nuance. But those methods work, and so they are used. The odd part is that the people who use them successfully, politicians and their staffs and consultants, often want to limit these methods exclusively to election seasons; they want to believe that there is a time to run for office and a time to govern, and the time for governing ought to function under different rules. According to this way of thinking, “politics” is something low, while governing is something high; you engage in politics because you have to in order to secure the power to engage in governing, which is your sworn and devoted duty.

Thus it was that Barack Obama could invite his 2008 rival, John McCain, to a health-care summit in February 2010 and greet McCain’s criticisms of the president’s health-care bill by saying, “Let me just make this point, John. Because we’re not campaigning anymore. The election is over. We can spend the remainder of the time with our respective talking points going back and forth. We were supposed to be talking about insurance.”

McCain wanted to discuss the particulars of the health-care legislation passed by the House and Senate. The purpose of the health-care event was to create some form of momentum that would help Obama and his vision for health-care reform carry the day. Nonetheless, Obama had determined that the conversation at that point was to be about “insurance.” He was annoyed at McCain’s effort to introduce political considerations into the discussion. Such a thing was lowering, the stuff of campaigning. “The election is over,” said the president. Two weeks later, speaking heatedly before a crowd in Pennsylvania, he insisted that “the time for talk is over.”

Talk is politics. Governing is action.

By saying “the time for talk is over,” Obama was echoing his own words a year earlier about the $787 billion economic-stimulus proposal he was then trying to work through the legislative process: “The time for talk is over, the time for action is now.” At every step of the way in the course of pushing his relentlessly ambitious domestic agenda, Obama has invoked this duality: His opponents want to fight; he wants to do. They are playing politics; he is above politics.

The obvious objection to my argument here is that Obama doesn’t mean this; in belittling his opponents and their propensity to talk, he is playing politics himself, attempting to throw them on the defensive. But the habitual nature of his response, and the response of those who support him, to the populist uprisings against his agenda over the past year suggests he is not the least bit disingenuous.

Obama really does seem to believe that the opposition to his core policies—the creeping nationalization of health care, the effective nationalization of the American automotive industry, the imposition of onerous regulations on energy production, and the expiry of tax cuts that will lead to gigantic effective increases—is not principled. Rather, such opposition deserves to be dismissed as bad faith—the efforts of the status quo, big business, and the politicians in their pockets. Or it is to be explained away as evidence of psychological or spiritual impairment created by the wounds inflicted upon sorry and ignorant souls who are being manipulated by forces beyond their control.

How is it that Obama can fail to see that changes of the magnitude he is seeking would compel those who believe that those changes are dangerous—who honestly believe that they are bad for the country and whose belief is grounded in powerful ideas about how society should be ordered—to marshal their forces to do whatever is in their power to prevent them from taking place? And that it would be wise not to dismiss or belittle the energy and resolve of the opposition, but rather to take their full measure and plan accordingly?

Obama’s failure may reside in his contempt for politics. For the national counter-assault against Obama is a manifestation of democratic politics as they ought to work. A rather vague promise of change during his presidential campaign morphed afterward into an agenda of astonishing size with an astonishing price tag. The passage of a $700 billion bank bailout supported by Obama before the election was followed by his $787 billion stimulus package. No sooner had that $1.5 trillion been committed than the president began advocating cap-and-trade legislation that would cost $800 billion through the election in 2012. And then came health care, with a cost of, at the barest minimum, $900 billion over 10 years, and very likely double that or more.

Americans did not take this grandiose and ruinously destructive plan on faith, nor should they have. A majority of them may have voted for change, but that change was change from something, from George W. Bush primarily, and not necessarily change toward something, toward a wholesale revision of the relation between the state and the economy. In response to Obama’s call for an end to talk and a time for action, an engaged and concerned citizenry used whatever political means were at hand—from spontaneous rallies following a financial consultant’s call on a little-watched cable-TV show for a revival of the Boston Tea Party, to a Senate victory in Massachusetts for a candidate promising to be the 41st vote to block health care.

In using politics to slow down and thwart him, Obama’s rivals are not simply talking. They are acting as citizens in a democratic republic. When challenged by their president, they, too, decided that the time for talk was over and the time for action had begun.

A Way Out of Soviet-Style Health Care

Editor's note: The following is excerpted from an article with the same headline by Nobel Prize winning economist Milton Friedman that was published in the Wall Street Journal on April 17, 1996. Friedman died in 2006. A related editorial appears nearby:

In a chapter in his novel "The Cancer Ward" titled "The Old Doctor," Alexander Solzhenitsyn compares "private medical practice" with "universal, free, public health service" through the words of an elderly physician whose practice predated 1918. . .

Mr. Solzhenitsyn himself had no personal experience on which to base his account and yet, in what I have long regarded as a striking example of creative imagination, his character presents an accurate and moving vision. The essence of that vision is the consensual relation between the patient and the physician. The patient was free to choose his physician, and the physician free to accept or reject the patient.

In Mr. Solzhenitsyn's words, "among all these persecutions [of the old doctor] the most persistent and stringent had been directed against the fact that Doctor Oreschenkov clung stubbornly to his right to conduct a private medical practice, although this was forbidden."

In the words of Dr. Oreschenkov in conversation with Lyudmila Afanasyevna, a longtime patient and herself a physician in the cancer ward: "In general, the family doctor is the most comforting figure in our lives. But he has been cut down and foreshortened. . . . Sometimes it's easier to find a wife than to find a doctor nowadays who is prepared to give you as much time as you need and understands you completely, all of you."

Lyudmila Afanasyevna: "All right, but how many of these family doctors would be needed? They just can't be fitted into our system of universal, free, public health services."

Dr. Oreschenkov: "Universal and public—yes, they could. Free, no."

Lyudmila Afanasyevna: "But the fact that it is free is our greatest achievement."

Dr. Oreschenkov: "Is it such a great achievement? What do you mean by 'free'? The doctors don't work without pay. It's just that the patient doesn't pay them, they're paid out of the public budget. The public budget comes from these same patients. Treatment isn't free, it's just depersonalized. If the cost of it were left with the patient, he'd turn the ten rubles over and over in his hands. But when he really needed help he'd come to the doctor five times over. . . .

"Is it better the way it is now? You'd pay anything for careful and sympathetic attention from the doctor, but everywhere there's a schedule, a quota the doctors have to meet; next! . . . And what do patients come for? For a certificate to be absent from work, for sick leave, for certification for invalids' pensions: and the doctor's job is to catch the frauds. Doctor and patient as enemies—is that medicine?"

"Depersonalized," "doctor and patient as enemies"—those are the key phrases in the growing body of complaints about health maintenance organizations and other forms of managed care. In many managed care situations, the patient no longer regards the physician who serves him as "his" or "her" physician responsible primarily to the patient; and the physician no longer regards himself as primarily responsible to the patient. His first responsibility is to the managed care entity that hires him. He is not engaged in the kind of private medical practice that Dr. Oreschenkov valued so highly.

For the first 30 years of my life, until World War II, that kind of practice was the norm. Individuals were responsible for their own medical care. They could pay for it out-of-pocket or they could buy insurance. "Sliding scale" fees plus professional ethics assured that the poor got care. On entry to a hospital, the first question was "What's wrong?" not "What is your insurance?" It may be that some firms provided health care as a benefit to their workers, but if so it was the exception not the rule.

The first major change in those arrangements was a byproduct of wage and price controls during World War II. Employers, pressed to find more workers under wartime boom conditions but forbidden to offer higher money wages, started adding benefits in kind to the money wage. Employer-provided medical care proved particularly popular. As something new, it was not covered by existing tax regulations, so employers treated it as exempt from withholding tax.

It took a few years before the Internal Revenue Service got around to issuing regulations requiring the cost of employer-provided medical care to be included in taxable wages. That aroused a howl of protest from employees who had come to take tax exemption for granted, and Congress responded by exempting employer- provided medical care from both the personal and the corporate income tax.

Because private expenditures on health care are not exempt from income tax, almost all employees now receive health care coverage from their employers, leading to problems of portability, third party payment and rising costs that have become increasingly serious. Of course, the cost of medical care comes out of wages, but out of before-tax rather than after-tax wages, so that the employee receives what he or she regards as a higher real wage for the same cost to the employer.

A second major change was the enactment of Medicare and Medicaid in 1965. These added another large slice of the population to those for whom medical care, though not completely "free," thanks to deductibles and co-payments, was mostly paid by a third party, providing little incentive to economize on medical care. The resulting dramatic rise in expenditures on medical care led to the imposition of controls on both patients and suppliers of medical care in a futile attempt to hold down costs, further undermining the kind of private practice that Dr. Oreschenkov "cherished most in his work."

The best way to restore freedom of choice to both patient and physician and to control costs would be to eliminate the tax exemption of employer-provided medical care. However, that is clearly not feasible politically. The best alternative available is to extend the tax exemption to all expenditures on medical care, whether made by the patient directly or by employers, to establish a level playing field, in terms of the currently popular cliche.

Many individuals would then find it attractive to negotiate with their employer for a higher cash wage in place of employer-financed medical care. With part or all of the higher cash wage, they could purchase an insurance policy with a very high deductible, i.e., a policy for medical catastrophes, which would be decidedly cheaper than the low-deductible policy their employer had been providing to them, and deposit all or part of the difference in a special "medical savings account" that could be drawn on only for medical purposes. Any amounts unused in a particular year could be allowed to accumulate without being subject to tax, or could be withdrawn with a tax penalty or for special purposes, as with current Individual Retirement Accounts—in effect, a medical IRA. Many employers would find it attractive to offer such an arrangement to their employees as an option. . . .

Where are Obama's foreign confidants?

I recently asked several senior administration officials, separately, to name a foreign leader with whom Barack Obama has forged a strong personal relationship during his first year in office. A lot of hemming and hawing ensued.

One official mentioned French president Nicolas Sarkozy, who is scheduled to bring his glamorous wife to the White House residence this month for a couples dinner with Barack and Michelle Obama. But in France, Sarkozy's bitterness toward Obama, the product of several perceived snubs, is an open secret, reported widely in the French press. In a speech at the U.N. General Assembly in September Sarkozy appeared to mock Obama's signature disarmament initiative, saying "we are living in a real world, not a virtual world."

Angela Merkel's name also came up: Obama and the German chancellor, I was told, share a down-to-business pragmatism. But Merkel, too, has been conspicuously cool toward Obama ever since he made Berlin a stop on his 2008 election campaign. She stopped him then from appearing at the Brandenburg Gate and was said to be miffed last November when Obama didn't show for ceremonies celebrating the 20th anniversary of the fall of the Berlin wall. Anyway, diplomats say that Merkel has a much warmer relationship with Secretary of State Hillary Rodham Clinton.

No one named Gordon Brown. That's fairly remarkable: The relationship between the sitting British prime minister and U.S. president has been consistently close over the past 30 years. Think Reagan and Thatcher, Clinton and Blair, Bush and Blair. But Obama has been portrayed as dissing Brown ever since he presented him with a set of DVDs as a gift during their first meeting in Washington a year ago. Last fall the British press reported that the White House had turned down five requests for Obama to meet Brown one-on-one at the United Nations or the G-20 summit.

Finally, I was offered a name I didn't expect: Dmitry Medvedev. Obama, I was assured, has built a solid relationship with the Russian president during their several bilateral meetings, which have focused in part on a new nuclear arms control agreement that both could count as a distinctive achievement. But the deal hasn't been clinched -- maybe because Vladimir Putin, whom Obama has held at arm's length, doesn't like it. And could it really be that an American president has found his closest foreign partner in the Kremlin?

The paradox here is that Obama remains hugely popular abroad -- from Germany and France to countries where anti-Americanism has recently been a problem, such as Turkey and Indonesia. His following means that, in democratic countries at least, leaders have a strong incentive to befriend him. And yet this president appears, so far, to have no genuine foreign friends. In this he is the opposite of George W. Bush, who was reviled among the foreign masses but who forged close ties with a host of leaders -- Aznar of Spain, Uribe of Colombia, Sharon and Olmert of Israel, Koizumi of Japan.

Jealousy or political rivalry may play a part -- Sarkozy is one of several Europeans who have wanted to assume the role of Obama's closest ally and reacted poorly when he didn't respond. But another big cause seems to be lack of interest on Obama's part. Focused intently on his domestic agenda, the president is said to be reluctant to take time to build relationships with foreign leaders. If something has needed to be done or decided, he has readily picked up the phone. If not, he generally hasn't been available.

Obama also hasn't hesitated to publicly express displeasure with U.S. allies. He sparred all last year with Israel's Binyamin Netanyahu; he expressed impatience when Japan's Yukio Hatoyama balked at implementing a military base agreement. He has repeatedly criticized Afghanistan's Hamid Karzai, and he gave up the videoconferences Bush used to have with Iraq's Nouri al-Maliki.

An argument can be made that none of this matters. Bush, after all, was often criticized for depending too heavily on personal relationships -- remember how he looked into Putin's soul? -- and his pals didn't save his administration from being universally condemned as "unilateralist." The Obama administration, in contrast, can argue that it has done pretty well in lining up European support on key matters such as Afghanistan and Iran. And Obama's personal popularity continues to provide leverage with leaders around the world, whether they hit it off with him or not.

Still, it's worth wondering: Would Sarkozy have fought French public opinion and sent more troops to Afghanistan (he has refused) if he had been cultivated more by Obama? Would Israel's Netanyahu be willing to take more risks in the (moribund) Middle East peace process if he believed he could count on this U.S. president? Would Karzai cooperate more closely with U.S. commanders in the field if Obama had embraced him?

The answers seem obvious. In foreign as well as domestic affairs, coolness has its cost.

Obama's Discarded Wisdom

Breitbart.tv has a terrific two-minute video featuring clips of Barack Obama commenting on the need to build consensus before attempting to enact major social legislation. (If the above link doesn't work, try this one.) As a public service, we've transcribed the Obama comments:

• "My understanding of the Senate is, is that you need 60 votes to get something significant to happen, which means that Democrats and Republicans have to ask the question: Do we have the will to move an American agenda forward, not a Democratic or Republican agenda forward?"--CBS-TV election night interview, Nov. 2, 2004

• "The bottom line is that our health-care plans are similar. The question, once again, is: Who can get it done? Who can build a movement for change? This is an area where we're going to have to have a 60% majority in the Senate and the House in order to actually get a bill to my desk. We're going to have to have a majority, to get the bill to my desk, that is not just a 50-plus-1 majority."--Change to Win convention, Sept. 25, 2007

• "You've got to break out of what I call the sort of 50-plus-1 pattern of presidential politics. Maybe you eke out a victory of 50 plus 1, but you can't govern. You know, you get Air Force One--I mean, there are a lot of nice perks, but you can't deliver on health care. We're not going to pass universal health care with a 50-plus-1 strategy."--interview with the Concord (N.H.) Monitor, Oct. 9, 2007

• "You know, one of the arguments that sometimes I get with my fellow progressives--and some of these have flashed up in the blog communities on occasion--is this notion that we should function sort of like Karl Rove, where we identify our core base, we throw them red meat, we get a 50-plus-1 victory. But see, Karl Rove doesn't need a broad consensus, because he doesn't believe in government. If we want to transform the country, though, that requires a sizable majority."--Center for American Progress, July 12, 2006

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The Stimulus Evidence One Year On. Over five years, my research shows an extra $600 billion of public spending at the cost of $900 billion in private

By ROBERT J. BARRO

The first anniversary of the Obama stimulus package generated a lot of discussion about whether and how much the package (originally estimated at $787 billion but now priced at $862 billion) moderated the recession. These are complex questions, and their answers require more than merely counting the quantity of goods and services that the government purchased or the number of people that the government hired.

We need to ask whether the government's spending reduced or enhanced private spending and whether public-sector hiring lowered or raised private hiring. This requires an empirical model based on the history of past fiscal actions in the U.S. or other countries. The administration must have such a model, but my own analysis makes me skeptical about the numbers they've reported about GDP increases and saved jobs.

To realistically evaluate the stimulus, I've been using long-term U.S. macroeconomic data to estimate some key economic relationships: the effects on GDP from increased government purchases (the spending multiplier) and from increased taxes (the tax multiplier).

For spending, the main results come from fluctuations in defense outlays associated with major wars such as World War I, World War II and the Korean War. The data feature large positive values in the early stages of wars (extra spending of 26% of GDP in 1942) and large negative values in war aftermaths (27% of GDP in 1946).

Although stimulus packages usually concentrate on nondefense outlays, the information from defense spending is useful for two reasons. First, the defense-spending multiplier can be precisely estimated from the available data and, second, this multiplier provides a reasonable gauge (and likely an upper bound because of the strong wartime boost to labor supply due to patriotism) for the effects of nondefense government purchases.

I estimate a spending multiplier of around 0.4 within the same year and about 0.6 over two years. Thus, if the government spends an extra $300 billion in each of 2009 and 2010, GDP would be higher than otherwise by $120 billion in 2009 and $180 billion in 2010. These results apply for given taxes and, therefore, when spending is deficit-financed, as in 2009 and 2010. Since the multipliers are less than one, the heightened government outlays reduce other parts of GDP such as personal consumer expenditure, private domestic investment and net exports.

For taxes, I focus on a newly constructed measure of average marginal income-tax rates; these rates apply to federal and state income taxes and the Social Security payroll tax. I estimate that an increase in marginal tax rates reduces GDP, particularly in the next year. When one factors in the typical relationship between tax rates and tax revenue, the multiplier is around minus 1.1. Hence, an increase in taxes by $300 billion lowers GDP the next year by about $330 billion.

Christina Romer, the chair of President Obama's Council of Economic Advisers, and her husband, David, have been major contributors to research on tax multipliers. Their results, which rely on the history of U.S. tax legislation since 1945, show tax multipliers of larger magnitude than the one I found. (So my conclusions here—based on the coming increases in taxes—would be strengthened if I switched to their estimates.) By contrast, I have not seen serious scientific research by Ms. Romer on spending multipliers, so I cannot understand her rationale for assuming values well above one, as she has apparently done when evaluating the fiscal stimulus plan. If the spending multiplier were really larger than one, it would mean that GDP would rise by even more than the rise in government spending.

My estimates allow me to assess the 2009-10 fiscal-stimulus package, which I characterize as roughly $300 billion of added government purchases in each of 2009 and 2010. I assume that, as of 2011, government spending goes back down to its 2008 level, although I could assume—perhaps more realistically—that the added spending is permanent.

I suppose that taxes do not change in 2009-10, so that the incremental spending is deficit-financed. The spending multipliers that come from my research imply that GDP rises by $120 billion (or 0.8% of GDP) in 2009 and $180 billion (or 1.2% of GDP in 2010)—all compared to the baseline of no stimulus package. These results imply that other parts of GDP fall by $180 billion in 2009 and $120 billion in 2010.

In other words, the deal looks pretty good in the short run because we "buy" the added government outlays by paying 60 cents on the dollar in 2009 (losing 180 in private spending to get 300 in government spending) and 40 cents on the dollar in 2010.

How attractive this short-run deal looks depends on how much one values the added governmental activity. If it's considered useful public investment—such as building a needed highway or, more modestly, fixing potholes—it might look good. If it's wasteful spending in a hastily constructed and highly political stimulus package, it looks bad.

But these calculations are not nearly the end of the story, because the added $600 billion of government spending leads to a correspondingly larger public debt. These added obligations must be paid for sometime by raising taxes (unless future government spending declines below its 2008 level, an unlikely scenario).

I suppose that the government collects an additional $300 billion of taxes in each of 2011 and 2012. The timing of the future taxes does not matter for the main calculations—the key point is that the government has no free lunch and must collect the extra taxes eventually. Since I assume a tax multiplier of minus 1.1, applying with a one-year lag, the higher taxes reduce GDP by $330 billion in each of 2012 and 2013.

We can now put the elements together to form a "five-year plan" from 2009 to 2013. The path of incremental government outlays over the five years in billions of dollars is +300, +300, 0, 0, 0, which adds up to +600. The path for GDP is +120, +180, +60, minus 330, minus 330, adding up to minus 300. GDP falls overall because the famous "balanced-budget multiplier"—the response of GDP when government spending and taxes rise together—is negative. This result accords with the familiar pattern whereby countries with larger public sectors tend to grow slower over the long term.

The projected effect on other parts of GDP (consumer expenditure, private investment, net exports) is minus 180, minus 120, +60, minus 330, minus 330, which adds up to minus 900. Thus, viewed over five years, the fiscal stimulus package is a way to get an extra $600 billion of public spending at the cost of $900 billion in private expenditure. This is a bad deal.

The fiscal stimulus package of 2009 was a mistake. It follows that an additional stimulus package in 2010 would be another mistake.

Mr. Barro is a professor of economics at Harvard University and a senior fellow at Stanford University's Hoover Institution.

President Obama's Dangerous Game of Politics