Like a troubled bank, President Obama is overleveraged. When a bank makes risky loans and many of them default, the bank goes bankrupt (or gets bailed out). When a first-term president adopts risky policies and many of them fail, his prospects for sustained public approval and reelection diminish.
One of Obama's policies--the decision to close the Guantánamo prison within a year--has already gotten him in a jam. He has no plan for relocating most of the 241 detainees, and Congress refuses to fund the shutdown until he produces one. Both Congress and the public oppose transferring the prisoners to jails on American soil.
The president's distress was reflected last week in a speech in which he blamed the Bush administration for what he called the Guantánamo "mess." He said captured terrorists should never have been sent to Guantánamo, but he offered no alternative of what should have been done with them. Obama also denounced Bush officials for using tough interrogation tactics such as waterboarding to get information from terrorists. But a new poll by Whit Ayres for Resurgent Republic found a majority of Americans disagree with Obama and believe the tactics were justified.
So Obama, like a banker who made a bad loan, is confronted with a problem of his own making. The president said Bush acted too hastily in setting up Guantánamo. But Obama's announcement, two days after his inauguration, of a deadline for closing Guantánamo was a rash decision made in even greater haste.
Most presidents propose two or three risky policies
in their first year--risky because there's a significant chance of failure to deliver what's promised. In 1981, President Reagan's policies of deep cuts in taxes and spending and aggressively confronting the Soviet Union were dicey. But the economy rebounded 18 months later and the Soviets buckled, though not until Reagan's second term.
Obama has outdone Reagan or any president since Lyndon Johnson, perhaps even since FDR, in risk-taking. He's adopted or proposed eight or nine risky policies (by my count). Re-election doesn't require all of them to succeed. If his policies bring about a briskly growing economy and nothing more, that may be sufficient for Obama to win a second White House term.
The president has been criticized for trying to do too much in his first year rather than focusing on a few important issues. But the size of Obama's agenda is less of a problem than the likelihood that much of it will be enacted, given the large Democratic majorities in the Senate and House.
The difficulty is that some of his policies are likely to hinder others. Tax hikes, increased energy costs, and new regulations work against the economic recovery that soaring spending and peacetime deficits at historic highs are supposed (by Obama at least) to spur. A more likely result: stagflation, a simultaneous surge in inflation and interest rates.
Obama is now trying to deleverage. The purpose of his speech last week was to take the risk--or at least the appearance of risk--out of his policy on Guantánamo and terrorists. He insisted the safety of Americans would never be put in jeopardy by the release of prisoners from Guantánamo or their transfer to prisons in this country.
|
