OBAMA AFTER 1 DAYS
Dr. Monroe Newman
Professor Emeritus of Economics at the Pennsylvania State University
Ever since the epic first three months of Franklin Roosevelt’s first term as President in 1933, Americans have had the practice of passing judgment on a President’s first 1 days. The judgments pronounced recently have been as diverse as the voters’ sentiments were last November, when Barack Obama was elected.
Those who opposed him then complain about just those items that appeal to those who view him favorably now – and likely did then. In essence, they agree. In his first days he has done what he promised and taken steps along the road he charted earlier. In that sense, there have been no policy surprises.
That, in itself, is noteworthy and a surprise to those whose cynical view is that great distance separates candidates’ statements from their behavior when elected. Those same cynics are probably also surprised by the candor with which their President acknowledges mistakes.
There have been accomplishments. Torture and the secrecy surrounding it and its justification have seen the cleansing light of exposure. Science concerning such subjects as climate change and health research has been released from political control. Equality and securing individual rights have been restored to their rightful place in the society. Health insurance coverage has been extended to 11 million children. Monumental legislation affecting the operation of the economy has been passed despite almost unanimous opposition from those formerly in power. Interim aid to facilitate readjustment has been given to two of the country’s three major vehicle manufacturers. A budget, actually a statement of program priorities for the next 5 years, has been proposed and received generalized Congressional approval. Attitudes of respect and understanding have begun to characterize relations with the rest of the world. Forces will be leaving Iraq. The focus of efforts to thwart organized purveyors of terror has shifted to where they actually are.
These have clearly been a busy and accomplishful1 days that have also seen missteps. Two are probably most notable. One was the spectacle of nominees for very significant posts having to step aside because of their failure to pay their past tax obligations fully. The other was approving the payment of bonuses to employees of a recipient of very large amounts of government financial rescue money.
The domestic and international repercussions of the U.S. economic problems gives special point to the programs to stimulate the real economy and address issues in the financial industry. By the administration’s calculation, there are already 15, more jobs than would exist without the stimulus program. That is not a small number, especially for the otherwise unemployed. But the economy has been losing 6, jobs a month of late so it is not a surprise that most are still anticipating feeling the program’s impact. However, those who examine recent data think they see the beginning of the end of the decline. Should that be the case, there will be debate on many levels for many years concerning the role and extent of the stimulus program’s contribution.
Formulating a remedial program for the financial industry was difficult and was left unresolved by the preceding administration. After abrupt changes and re-changes of direction, they left it for the newcomers to resolve. Doing so has not been easy.
After an unpromising beginning, the complex elements of a program were announced. Separate approaches were to be taken to the financial health of the companies in the industry, to mortgage debt and to various types of consumer debt. All of them were bedeviled by the same issue the preceding administration had encountered. Assistance should not reward profligacy nor provide perverse incentives. To protect the integrity of the assistance programs for financial institutions, for example, their officer and employee compensation practices were scrutinized and limited. As these institutions felt the impact of the somehow unexpected impact of accepting public funds, some became so irked that they wanted to return the money. Some succeeded but some did not. The latter were told that since they were too big to fail, their private desire to re-pay was secondary to the public’s interest in their long term stability.
Other elements of the financial recovery programs are at the earliest stages of operation and, in general, it is far too early to judge implementation or effectiveness. One judgment does seem to have been made, however. There is a paucity of public support for helping what is summarized as “Wall Street” and the administration would face a resistant Congress were it to seek further funding for the purpose.
Mightily substantial items are still to be formulated into proposed policies – health care, climate change, alternative energy sources, industrial policy and regulation, immigration, income support for the aged and infirm, education, abortion, military strategy and procurement – among others. It is said that each will be addressed, some in the next months, some in the next years. So far, the new president has retained his high standing with the public and that will be crucial for achieving success in what he has begun and has yet to begin.