The Magazine

An Agenda in Shambles

The ‘New Foundation’ collapses.

Feb 8, 2010, Vol. 15, No. 20 • By MATTHEW CONTINETTI
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An Agenda in Shambles

In April 2009, President Obama laid out his domestic agenda in a speech at Georgetown University. This was no ordinary chat; Obama envisioned nothing less than a reorientation of the American system. He sought to shift the economy from the rough and tumble cowboy capitalism of the past to a less risky, pricier, and perhaps slightly more comfortable European future. “We must lay a new foundation for growth and prosperity,” Obama said.

Less than a year later, this agenda is in shambles. The president’s “new foundation” is just another part of America’s crumbling infrastructure. Its pillars are strewn across the congressional landscape. Democrats are afraid to touch them—and for good reason. They are radioactive.

To read Obama’s Georgetown speech today is to see a president at the height of his power. The ambition was huge. The language was bold. The theme was clear: The financial crisis had repudiated unregulated markets and a small social safety net; hence the need to reform the financial sector and provide for the uninsured and unemployed. In the president’s view, the crises he inherited proved that the Reaganite model of governance—low taxes, a budget favoring defense over social spending, limited regulation—had outlived its usefulness. It was time to replace it.

Obama had five goals: reform the banks, spend more on education, create a “green economy” through cap and trade and government subsidy, pass universal health insurance, and shift the focus of discretionary spending from defense to social programs. Strip away the spending initiatives, and you see that none of Obama’s goals has been achieved.

The bank bill awaits action in the Senate. Cap and trade and health care died in the Massachusetts snow. That leaves education, which is a bipartisan issue and an area of domestic policy where Obama is probably doing more good than harm. It’s small fry, moreover, to a president who billed himself as FDR’s heir.


 

What brought Obama down to earth? Economic stagnation and public opposition. Democrats blame the president’s troubles solely on unemployment—get more people working, they say, and his agenda would pass. What the Democrats miss is the president’s own role in creating a hostile economic environment. They should try rereading his Georgetown speech.

“We’ve had no choice,” the president told his audience, “but to attack all fronts of our economic crisis at once.” Next came a reference to the $787 billion stimulus bill, the signature economic policy of the Obama administration and the most important mistake of his young presidency.

The stimulus has done nothing to promote private sector employment, and it seriously damaged the president’s credibility. In selling the plan, the White House said the stimulus would hold unemployment to 8 percent. Unemployment is holding at 10 percent. The administration can argue, with some justification, that things might have been worse without the stimulus. But voters are seldom swayed by this sort of “you-don’t-know-how-good-you-got-it” argument.

The stimulus had two other important effects. It united a dispirited Republican party, and it lulled the White House into a false sense of security. Well, the economy’s taken care of, they must have thought. Now we can start turning America into a really, really big version of Liechtenstein.

It is remarkable just how out of step the White House became. Health care reform, the bailouts, and cap and trade are not only unpopular. The public sees them as unimportant. Last week the Pew Research Center released a list of the public’s priorities. Number one is the economy. Health care is eighth. Financial regulation is fifteenth. Global warming? Dead last at twenty-one.

Which brings us to Obama’s other big mistake. Throughout 2009 the White House cavalierly dismissed its critics. It picked high-profile fights with Rush Limbaugh and Fox News. It dismissed all objections to health care reform as lies. It said the public’s “anger” and “frustration” was completely disassociated from the substance of the Obama agenda. It ascribed Republican victories in Virginia and New Jersey solely to weak candidates and local issues.

Progressive confidence devolved into progressive hubris—a hubris that blinded Obama to changing political reality. Before he knew it, Massachusetts voted to replace Edward Kennedy with a Republican truck driver from Wrentham whose mother had been on welfare and who campaigned explicitly on opposition to the president’s health care bill.

Obama’s response? In his State of the Union address last week, the president blamed these setbacks on Senate rules, Republican obstruction, and a failure to communicate effectively. In other words, the message was not received.

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