It has been a bad couple of weeks for President Obama and his signature health care overhaul package.\u00a0 Now help may be on the way in the form of a reviving economy. But if prosperity is returning, did the Obama Administration really have anything to do with it?\u00a0 And will the recovery save the President\u2019s legislative proposal?\u00a0 It doesn\u2019t deserve to, but it might.<\/p>\n
First, the bad part for the Administration.\u00a0 It was barely a month ago that Mr. Obama issued a series of \u201chere I stand\u201d statements, demanding that Congress pass a health care reform bill before the August recess.\u00a0 The President was so insistent that it became received wisdom in the Washington that he and his advisors feared allowing members of Congress time to hear what their constituents thought about the proposal when they went home for summer break.<\/p>\n
Of course, members didn\u2019t really need to go home to know what voters were thinking.\u00a0 They could and did read the tanking poll numbers for the White House and its legislative package.\u00a0 So in the past couple of weeks, more than a few toes have erased that August line in the sand.<\/p>\n
But now an unlikely cavalry may be riding to Mr. Obama\u2019s rescue, or so we are told.\u00a0 The Administration\u2019s bad poll numbers, the received wisdom holds, were thanks to other bad numbers — the rising unemployment rates that accompanied the falling economy.\u00a0 Just in time, as Newsweek magazine trumpets on it current cover, \u201cThe Recession is over\u201d.<\/p>\n
The President was quick to pick up the beat.\u00a0 Mr. Obama led off his recent press conference asserting, \u201cAs a result of the actions we took in those first weeks [of his Administration], we’ve been able to pull our economy back from the brink\u2026.\u00a0 And the Recovery Act will continue to save and create more jobs over the next two years — just like it was designed to do.\u201d<\/p>\n
And, yes, the economy does appear to be recovering. Housing prices look to have bottomed out.\u00a0 Most leading economic indicators have turned around.\u00a0 But here is the catch: it is a virtual certainty that credit does not belong to the stimulus bill or any other government action since Inauguration Day. Instead, the Obama Administration may have guaranteed a shallower, slower revival than we might otherwise have experienced?\u00a0 How could this be?<\/p>\n
Start at the beginning.\u00a0 Though brought on by mistaken Federal Reserve interest rate movements and Congressional housing policies, the financial crisis was nevertheless a classic monetary event.\u00a0 In early 2008, with the fall of Bear Stearns and the seizing up of the derivatives markets (which in the prior two decades had become an alternative banking system), the U.S. experienced a massive round of monetary destruction. The Federal Reserve and the Treasury were slow to respond, waiting until the final quarter of last year and then acting in what appeared to be panic.\u00a0 Still, between Labor Day 2008 and Inauguration Day 2009, Fed money creation and Treasury direct injections into bank reserves were almost certainly enough to repair the damage.\u00a0 Now, in the six to nine months that Milton Friedman taught it takes for monetary changes to be felt in the economy as a whole, we are starting to see the results.<\/p>\n
In February I made this same argument prospectively (see here: http:\/\/tiny.cc\/HbjRh ).\u00a0 I concluded that \u201cfollowing the massive actions the Treasury and Fed took between September and December last year, the economy should rebound between May and September this year\u201d (I also warned that the new administration\u2019s policies could undo the return to expansion that had been set in place).\u00a0 Still, don\u2019t count on the Obama crowd or its media cheerleaders to give credit to measures taken during the Bush Administration\u2019s closing months.<\/p>\n
The political danger now is that, as they see the economy reviving, wavering Democrats in Congress will start to dismiss the low poll numbers for Mr. Obama\u2019s program. As his popularity revives, they may well decide to cut deals that end up making a terrible health care reform program only slightly less terrible.\u00a0 Indeed, in committee last week, they began to do just that.<\/p>\n
We are in an extraordinarily fluid period in American politics.\u00a0 The country\u2019s doubts about Mr. Obama go beyond the state of the economy to the overreaching of his entire program.\u00a0 Multiple trillions of dollars in spending and the takeover of numerous industries have at least as much to do with doubts about both him and his legislative package as do unemployment numbers \u2013 probably more.\u00a0 Still, the tide of political battle in Washington may be turning his way (at least for a time).<\/p>\n
With it, defeat or victory of the White House\u2019s plans for an indirect and direct federal take-over of the medicine, medical device and health delivery sectors of the U.S. economy will surely be \u2013 as Wellington said of Waterloo — a near run thing.<\/p>\n
Clark S. Judge is managing director of the White House Writers Group, a high-stakes policy and communications consulting firm based in Washington.\u00a0 He was a special assistant and speechwriter to President Reagan.<\/em><\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" It has been a bad couple of weeks for President Obama and his signature health care overhaul package.\u00a0 Now help may be on the way in the form of a reviving economy. But if prosperity is returning, did the Obama Administration really have anything to do with it?\u00a0 And will the recovery save the President\u2019s […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[33],"tags":[12],"class_list":["post-44","post","type-post","status-publish","format-standard","hentry","category-economic-policy-the-great-financial-crisis","tag-hugh-hewitt"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/posts\/44","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/comments?post=44"}],"version-history":[{"count":6,"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/posts\/44\/revisions"}],"predecessor-version":[{"id":429,"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/posts\/44\/revisions\/429"}],"wp:attachment":[{"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/media?parent=44"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/categories?post=44"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.clarkjudge.org\/wordpress\/wp-json\/wp\/v2\/tags?post=44"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}