Shaping the future with today’s choices.
Why is anyone surprised about the tax deal and why is the Democratic party’s left once again going crazy? To start with, you could see this from a mile away, long before the November elections. President Obama never had the votes to cut off the Bush tax reductions at incomes above $250k. After the election, the only question was whether he could get anything at all in exchange for a total defeat. Let’s hope he gets the extension of long-term unemployment insurance.
This is just life in the big league — or any league. You lose an election, you tend to lose on the issues over which the election was fought. Why the left has to see this as yet another opportunity to whack President Obama is beyond me. But then again, I have never believed that he went badly wrong by failing to pursue an agenda that was more to the left’s liking. There are, however, a number of places he did go wrong, and some new emerging opportunities to go further wrong.
The first instance was inexplicably giving away the economic narrative to the Republicans and the right. This derived from a failure to think through on an economic strategy, the unwillingness to focus enough on such a strategy, and an almost complete vacuum in terms of communication about the economy. Once the administration gave away the story, it was on a slippery slide toward losing its capacity to get anything difficult done.
Then the “magic option” comes in. I think the magic option is a particular favorite of government and legislatures — but I’ve certainly also seen it in business. When all options are bad and you are reduced to choosing between the really bad or the least bad — and this describes almost all political/governmental choices — you, of course, don’t suck it up and make a choice. You invent an option that isn’t bad and choose that. So instead of asking what achievable tax deal is better than total defeat, you decide to push the issue off until after an election you know you are going to lose. That is how we got here.
And in the future? President Obama has to get back to basics, define an actual economic strategy, and regain ownership of the narrative. And to be realistic, he has one chance to do this — in the January State of the Union speech. This is the last State of the Union when anyone will listen. Normally, a White House is already in intense discussion about the strategy and purpose of the impending State of the Union speech by now. But President Obama has an acting chief of staff, a very good but new Director of OMB, and no National Economic Council leadership. I hope the State of the Union Speech fairy is at work.
Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team.