READY TO LEAD?

We were all tired of George Bush and after bungling Iraq, the response to Katrina, and the initial phase of the market meltdown, and last November we gave a big thumbs down to Bush and his fellow Republicans. Barack Hussein Obama won last November’s election on the themes of hope, competence, judgment, bipartisanship and a commitment to use facts, reasoning and science to guide his thinking rather than pure ideology. Although I have generally voted Republican, even I had hope that Obama would be different. In the opening weeks of his presidency, he had an opportunity to calm and anxious and scared nation and jittery markets by demonstrating that he was in control and that meant what he said. Instead, he whiffed. As his first month comes to a closes, he has given us substantial evidence that our worst fears were true—that Barack is an inexperienced freshman senator with strong and very partisan liberal instincts.

As a U.S. senator and state senator, he had no major legislative accomplishments to his name so it is no surprise that when the opportunity to lead on one of the most pieces of legislation in 50 years came about—he punted to Nancy Pelosi. What came back was predictable. Very few credible economists have been very enthusiastic about the pending Stimulus Bill (see Becker Posner blog link). It was as if Nancy gave a loud whistle in the halls of Congress and announced, “Hey, boys, you’re gonna have one shot to get all of your pet projects in one big package so hurry up and get it in while the gettin’s good!” So, instead of a stimulus bill that we could all live with (mostly public works projects sooner rather than later), we have a liberal grab bag of nonsense like money for the National Endowment for the Arts, a huge Big Brother database to lay the infrastructure for government run healthcare, “fish barriers”, and most dangerous of all a “Buy American” provision (thankfully, though, watered down). It is very little stimulus and very little this year. Scores of economists took out full page ads and asked him to slow down, clean this up and get it done right.

But not to be deterred by reason and having a bill that was not defensible on its merits, Barack resorted to old rhetorical gimmickry to sell the hurry up Pelosi-made product— using the politics of fear and by knocking down straw men. “If we don’t act immediately,” he said, “our nation will sink into a crisis that, at some point, we may be unable to reverse”. Huh? All because we don’t have fish barriers, STD prevention, and a few off-broadway plays? What happened to “the only thing we have to fear is fear itself?” His other ploy was to go partisan and attack straw men, claiming that “tax cuts alone can’t solve all of our problems”. He is correct, but no one is actually claiming that tax cuts are a cure-all for this crisis. His pre-election promise to work for bipartisanship evaporated quickly and the Stimulus Bill received a grand total of 0 votes. In the middle of all this Senator Gregg bugged out as Commerce Secretary, citing “irresolvable conflicts.” He knows where Team Obama is headed. So much for reaching across the aisle.

The other disaster of the week was Tim Geithner’s bank bailout plan –the Unplan. After hammering away at Bush (justifiably so) for invading Iraq without a plan, one of Team Obama’s first trips to the plate saw the indispensable Geithner present a “broad outline” with very little details. Not surprisingly, the market tanked with one commentator referring to the Unplan as “Shock and Ugh”.

These blunders came on the heels of the capping executive compensation for executives at financial institutions at $500,000, which I guess is designed to punish all financial institutions for the bad judgment of John Thain who accelerated bonuses and then spent an egregious amount of money refurbishing his office. I understand the point, but right now, we need the best management talent available at these floundering behemoths. I don’t know about you, but if I were on a plane landing on the Hudson, I wouldn’t want a pilot that was subject to a salary cap because he’s “just a glorified bus driver.” These are large, complex organizations with monumental problems that have thousands of employees, and they are vital to the resuscitation of our economy. Why would you want to ensure that you can’t attract first rate talent to fix them?

After the events of this week, I was able to come up with a couple of proposals. First, the Stimulus Bill should reserve approximately $250 billion and contain a provision whereby an aircraft carrier takes $100 bills out to the middle of the Atlantic and shovels them into the ocean. A second carrier would clean them up, dry them, take them back to the mainland and distribute them at centers in large cities. The way I figure, an aircraft carrier has upwards of 5,000 crew and airmen. Then we would know with certainty that at least 10,000 jobs will have been created and the money would have gotten into the hands of individuals other than government bureaucrats.

My second recommendation is a new SEC rule which would provide that if the Dow drops more than 100 points during the presentation of any government official, the presentation must immediately cease and desist. It was unnerving to watch a split screen with Timothy Geithner speaking on one side and the Dow plummeting on the other. The 100 point gag rule would act as a circuit breaker which would require would ensure that a government official would be required to shut up and stop doing damage to our already decimated 401(k)s.

Between the tax problems of his cabinet nominees, the lack of planning for the Gitmo detainees once it is closed, and the sketchiness of Geithner’s Unplan, the Obama administration has not demonstrated the great leap forward in competence that we hoped for. He has given in to his shopworn liberal Democratic instincts, and has refused to push back at Congress. He promised to deliver more than politics as usual. Our national crisis demands it. He can do better than this.