By Liz Peek
President Obama has finally agreed to weigh in on the debt ceiling talks. High time too. Much of the time, the Obama presidency drifts in the breeze, with all the gravitas of an inflated beach ball. Mr. Obama has not deigned to touch down on the fiscal crisis confronting our country, the immigration imbroglio, entitlements reform, gay marriage or the states’ crackdown on excessive public service union demands. His opinions on many topics, as he has said regarding gay marriage, “are evolving.”
Why are we surprised? As a presidential candidate, Mr. Obama held the slimmest of dossiers; not only did he have but a brief public service career –he left few tracks in the sand. As a state senator he studiously avoided voting on issues that might alienate supporters; he ran for president as a blank slate, and that vagueness worked out very well indeed.
Today it is not working. On many fronts we still don’t know what Mr. Obama stands for. That’s significant, because the Obama political team has made a rare political error. By ginning up his presidential campaign unusually early in his tenure, Americans now see everything he does through the political prism. That makes us suspicious.
For instance, the recent decision to pull troops out of Afghanistan does not hew to a philosophically coherent foreign policy. Instead it seems a response to polls and a good campaign move. The war is no longer popular. It is expensive and most of us don’t really understand what the objectives are. Moreover, we are rightly incensed that the president of a profoundly corrupt country claiming the lives of many of our best young people describes us as “occupiers.” How dare he?
Nonetheless, President Obama’s decision to pull troops out of Afghanistan at the worst possible time – in the middle of next year’s fighting season -- allows little time for the surge he authorized a mere year ago to succeed. That seems, tactically, a poor idea. That the commanders who championed the surge early on have unanimously criticized the move is disheartening.
Releasing oil from the Strategic Petroleum Reserve appears to be another political gesture. Clearly the biggest obstacle to Mr. Obama’s reelection is unemployment, and a tepid recovery. Since the country has lost faith in the benefits of stimulus programs, and is increasingly alarmed about our $14 trillion national debt, another round of government spending is a non-starter. And since the Federal Reserve has kept interest rates near zero through increasingly controversial quantitative easing programs, monetary policy options are limited.
The hope is that pouring 30 million barrels of oil into the marketplace (60 million worldwide including the release from foreign stockpiles) will dampen oil prices and put a little extra money in the country’s purse, cheering consumers and igniting economic growth.
Trying to energize the recovery is a worthy ambition, but dampening already-sinking oil prices through this quick-fix appears a desperate measure. We have only accessed our emergency stockpiles of oil on two previous occasions – during the 1991 Iraq war and after Hurricane Katrina, when supplies were actually threatened. Where is the emergency today? In the war rooms of Obama’s political campaign.
The Obama administration’s approach is both typical and flawed. Manipulating markets is not the path to restoring confidence. In fact, it is just such intrusions into the business of America that has alarmed investors and employers and arguably dulled the animal spirits needed to bring this country back to life.
President Obama’s response to nearly problem confronting the country has been to go after our corporations. Health care costs rising too fast? Stomp on pharmaceutical and insurance profits. Oil prices too high? Threaten to cut investment incentives for producers. States restive about illegal immigrants? Throw the compliance burden on employers. Environmentalists unhappy about progress? Loose the EPA on utilities and energy producers. Labor unions losing ground? Set the NLRB on Boeing.
The list goes on and on. Rarely a day goes by that President Obama and his team doesn’t skewer another U.S. industry. This does not unleash animal spirits. Quite the contrary.
Data tracked by the National Federation of Independent Businesses show confidence among small business owners at “recession-level” and sinking for the past three months. Rasmussen reported a few days ago that investor confidence had sunk to its lowest level in nearly two years. The index stands at 75, compared to a high in 2004, for instance, of 150. Similarly, the Rasmussen consumer index, at 71, compares to a high earlier this year of 93 and 127 in 2004.
The downturn in sentiment reflects various factors, including higher oil prices and the ongoing turmoil in Europe, but it is also stems from deep uneasiness about how our country is being managed.
Americans are discouraged that our elected leaders seem so unable to solve our biggest problems – our spiraling debt, soaring health care costs, our sagging infrastructure and our dismal public education system.
Certainly, President Obama is not responsible for all of our ills, nor can he be expected to resolve them. However, he can and should be tagged with holding back the natural energies of this country – the ambitions and boldness of our entrepreneurs and employers – who must lead us forward.
Liz Peek is a financial columnist who writes for The Fiscal Times. For more visit LizPeek.com.