Wednesday, January 27, 2010

Thought of the Day

Sydney M. Williams

Thought of the Day
January 27, 2010

Partisanship, driven by allegations of torture and a demonized prison at Guantanamo, remembrances of Katrina and an economy collapsing due to a credit crisis, was very much on the minds of the electorate when Barack Obama was elected the 44th President of the United States. He spoke articulately and grandly of a post-partisanship Presidency, a promise incorporated in his eloquent Inaugural Speech.

However, in his words: “On this day we gather because we have chosen hope over fear, unity of purpose over conflict and discord”, he sowed the seeds of today’s continuing partisanship. Blaming the previous administration for our woes works for a while, but eventually it begins to sound like a whiner. Instead of being a unifier, he has polarized the Nation like no other recent President. According to a Gallup Poll, released two days ago, the gap in terms of approval, at 65 percentage-point gap is “easily the largest for any President in his first year of office.” (The Poll measures the difference between approval by Democrats [88%] and Republicans [23%].)

As has been widely noted by the Press, the reason lies in a too-aggressive agenda at a time when the most important thing on the minds of most Americans is jobs and when ballooning federal deficits are raising concerns of future inflation and/or debasement of the U.S. Dollar.

His first year has had to be a disappointment, with unemployment higher, not lower; Cap-and-Trade looking dead on arrival in the Senate; healthcare reform a shambles; reach-outs to Iran, North Korea and Muslims not returned; an embarrassment in China, and two failed trips to Copenhagen. On the other hand, the S&P 500 is up 30% and, with the credit crisis fading into the past and with GDP having turned positive, the mood of the country is decidedly more positive than a year ago. The greatest risks, in my opinion, lie in the size of the deficits being generated, primarily a function of an increase in transfer payments.

Tonight the President will deliver his first State of the Union speech. As always, it will be memorable and mesmerizing, for despite his dependency on Teleprompters, he is as good a speaker as I can recall. He will highlight his call for a reduction of $250 billion in spending, though the number represents less than one half of one percent of the budget. A call for fiscal responsibility will have to be followed by real action. His predecessor, George Bush, was certainly not known for his fiscal stewardship; so the electorate is “from Missouri” as regards promises in this realm. He will certainly focus on jobs and, it would be my guess, with his knowledge of a growing dissatisfaction with his policies, he will reach out to Republicans in an attempt to restore a sense of unity. He may do so by offering tax breaks to small and mid-size businesses. (I hope he does.) He is caught in a difficult position, trying to navigate between the far left – where I believe he truly lives – and the realization that pragmatism is necessary to move forward on his agenda.

One year does not make a Presidency, so Mr. Obama has time, but he will have to prove to be more empathetic toward the people, more conciliatory toward the opposition and he must recognize the enormous risk of excessive spending. Revenues are a function of taxes and growth in tax revenues are a function of growth in the private sector.

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