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Monday, August 8, 2011

Drama needed

“No Drama Obama”. It is a nickname that has stuck and a nickname that reflects a key part of Obama’s appeal in 2008. His firm, steady, deliberate leadership in the financial crisis of 2008 was exactly what was needed and he was rewarded with the booming election victory in November of that year. But the crisis we are now entering calls for something different from the president, and I don’t know if he has it or not. It calls for dramatic, bold, visionary leadership that is risky but necessary. The president must step forward with exactly what he believes is needed in terms of long-term debt relief. In his speech today he again pointed to the general framework and outline of his “balanced approach”, and he is right politically and policy wise in that framework. But the generalities that should have resulted in a grand bargain with Boehner two weeks ago are not sufficient now. Clearly he was right and Boehner should have struck a major deal that would have calmed investor worries and set the country on a path to fiscal strength, but that moment is gone. With each passing day the effects of that failure become clearer, but so to does the need for a new strategy by the president become clearer. He must go public with the specifics of his plan: how would entitlements be reformed? How would defense be cut? How would the tax system be reformed? How would income taxes on the wealthy be increased? The only way forward, given the collapse of private negotiations, is public persuasion and confidence building. He will expose himself to considerable political risk, and he has been right to avoid that up to now (just his general statements about entitlement reform has gotten him virulent attacks from the Left), but now there is no choice. If he waits for the supercommittee to present its proposals that will be months from now. By that time additional credit rating agencies will have lowered our ratings, Europe’s fiscal crisis will have deepened and America’s stock market will have fallen more in response to the political vacuum. He can not wait for the political cover of the supercommittee’s report—he has to step out and lead with his plan. He needs to take it to the country and do what only the president can do in our system of government. 

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