Disasterious Results of Obama Team Making Economic Policy

The New York Times reported that President Obama's political team has been making economic policy.

WASHINGTON — As the economy worsens, President Obama and his senior aides are considering whether to adopt a more combative approach on economic issues, seeking to highlight substantive differences with Republicans in Congress and on the campaign trail rather than continuing to pursue elusive compromises, advisers to the president say.

Mr. Obama’s senior adviser, David Plouffe, and his chief of staff, William M. Daley, want him to maintain a pragmatic strategy of appealing to independent voters by advocating ideas that can pass Congress, even if they may not have much economic impact. These include free trade agreements and improved patent protections for inventors.

But others, including Gene Sperling, Mr. Obama’s chief economic adviser, say public anger over the debt ceiling debate has weakened Republicans and created an opening for bigger ideas like tax incentives for businesses that hire more workers, according to Congressional Democrats who share that view. Democrats are also pushing the White House to help homeowners facing foreclosure.

David Plouffe's and Daley's ideas translate into things that Republicans support like cutting entitlements. Cutting entitlements isn't going to increase jobs. In fact, it will hurt the most needy Americans during an economic downturn. Plouffe an Daley advocate passing Republican proposals with a non-confrontational approach. The White House went to the Right of Republicans by proposing $2.7 trillion in spending cuts. Obama even offering cuts in Social Security. The Republicans balked. What Sperling is proposing is put pressure on Republicans to pass tax cuts to businesses that hire new employees. The Obama political team won't listen to Sperling because he is an economic policy guy.

The Obama political team's handling of the debt ceiling resulted in Medicare cuts and Standard & Poors downgrading the United States' credit rating to AA. The political team thought the debt ceiling agreement would be a political win for Obama. They were wrong.

The ratings, which aggregate Gallup polling done from January through June, came out just as Gallup was releasing its latest tracking poll showing Obama’s approval nationwide at 39%, the lowest in his presidency. If Obama’s national approval remains stuck at that level -- or even in the low 40s – then state-by-state assessments probably won’t matter much. Historically, presidents don’t win re-election with that sort of approval rating.

Obama is in serious political trouble. I have said before that Obama is not a policy wonk. Obama governs the economy with the same lack of seriousness as President George W. Bush. I wonder if when Obama was signing the Bush tax cut entension was Plouffe telling him to "stay on message."