Wednesday, June 20, 2012

Obama: how not to implement change

I have been watching with some astonishment to the way Obama is operating politically. For the past few years he has been following a rather conservative policy in the financial are and now at election time he is suddenly advocating radical policies. This is exactly the wrong order.

The point with policies that mean a break with the status quo is that they always embody a risk that they will bring disaster. Political opponents will eagerly grab this opportunity. On the other hand, if they work well, these radical policies may become the new normal.

Reagan and Thatcher were people who understood this. They implemented their changes with confidence. And even though certainly not everything went fine life stayed normal enough that their ideology became the new normal.

Compare that with Obama. Important parts of his health care law will only be implemented after the elections - giving his opponents a nice opportunity to paint all kinds of catastrophes that might happen when they become implemented.

His behavior in the economical realm was even more unlucky. A broken bubble means that there is less money for everyone. The logical thing to do is to have the rich pay most for the bubble. This not out of some left wing ideal but for the simple reason that when poor people have less to spend the consequences are much more disastrous: failed mortgage payments and bankruptcies are a common effect. In addition one has to consider that much of the benefits of the bubble usually went to rich as capital gains. So ending the tax cut for the rich would have been a logical policy. That Obama didn't take it last year was a major failure of leadership. He now is advocating to end the cuts. But if he had done so a year ago it would now be the new normal, while now it still seems a radical policy and his opponents are grabbing the opportunity to paint disastrous consequences.

For the Keystone XL pipeline the decision was delayed to 2013. For the main bridge vitually all negotiations were left to the Michigan State government.

Asking the voters for a seal of approval for radical reforms is also in another way unlucky. The voters gave Obama already a general seal of trust by electing him a president four years ago. By now asking their rather explicit approval for specific reforms Obama is burdening him with their job. The success of a reform depends to a large extent on the detailed way it is implemented. This is not something the voters want to be bothered with. Unfortunately he health care reform has done little to improve Obama's image as a man who has the eye on detail needed to implement as reform.

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