To President Obama: I Give Up

I have officially given up on President Obama. His main priority when taking office was / should have been the economy and he is utterly failing at it. And to make matters worse, he refuses to even fight for the right policies.

I have been reading a lot of articles, posts, quotes and columns by economists (from Paul Krugman and Brad Delong to Bruce Bartlett and Ben Bernake) and I think there is broad agreement that monetary policy will be mostly ineffective (as interest rates are near zero and things like quantitative easing have made little difference) and that austerity is a bad idea. Both government cuts and tax increases will make an already bad situation - 9% unemployment - worse. If monetary policy won't work and austerity is a bad idea, I draw the conclusion (after having been convinced by Krugman and Delong) that the government should engage in stimulus spending.

President Obama however has decided to take a few positions that are counter to all of this. First, he is parroting the absurd position that the right first started whereby if we get government spending under control - ie budget cuts and revenue increases, business confidence will increase and the economy will rebound. To be clear, business confidence isn't meaningless, but to think that we are at 9 percent unemployment because of confidence is absurd.

Second, the president is suggesting that current high unemployment is structural - ie there is nothing in the short term that we can do about it. This is clearly him setting expectations low hoping to avoid blame. In fact, in the Twitter Town Hall, Obama said he wished he had known how bad the economy was going to be so he could have changed expectations. That's too bad, because I wish I had a president who would have done more to improve the economy if he had known how bad it was going to be.

Obama needs to be saying two things over and over again. One, we need more stimulus. Two, he should put his foot down and say there will be no budget cuts in the next two to three years - until the economy has improved. There is no need to get our budgets under control in the short term (bond rates and inflation are low) and in fact it will hurt us more than it will help us. This second point he has said, but rather meekly so that no one believes he will actually put his foot down on this.

I know there are a lot of people who say that Obama could not get a stimulus through this Congress. I don't disagree with that. But he could have at least made the case, and then when he didn't get it, he could have blamed the radical Republicans. Instead, he'll be able to say that he accomplished all he set out to accomplish - a modest $787 billion stimulus (half of what was needed and not spent well at that - but Obama tried to say that it would be enough) and a budget deal to restore confidence. And when the economy doesn't improve, he'll have nothing to say. He passed the policies he wanted but still unemployment remained high.

Now, at the moment, I can see how Obama is being smart with the short term politics. To moderates, he looks reasonable and is making the Republicans look crazy. That is all well and good. But I don't think that will make up for the fact that his policies were not successful at fixing his biggest problem when he came into office - the economy. But even if it works, it will work at the expense of the economy. He'll win an election but unemployment will remain stubbornly high.

President Obama at one point said he would rather be a really good one term president than a mediocre two-term president. We now know that was a lie; what he is doing now is political positioning at the expense of the economy. And he is doing it to win reelection. We thought we were electing someone who would inspire and fight for what he believes in. Instead, we got someone who fights for what he already thinks he can achieve and nothing more.

The bottom line is that I'll still vote for him - after all, Romney's policies would be even more conservative - but I don't think he deserves to be reelected. He is failing on the biggest issue facing the country.