By Simon Johnson
Increasingly, senior administration officials shrug when you mention the November mid-term elections. “We did all we could,” and “it’s not our fault” is the line; their point being that if jobs (miraculously at this point) come back quickly, the Democrats have a fighting chance – but not otherwise.
It may be true, at this point, that there is little fiscal policy can do that would have effects fast enough; and monetary policy is out of the administration’s hands.
But ever so quietly, you get the impression the Obama team itself is not so very unhappy – they know the jobs will come back by 2012, they feel that Republican control of the House will just energize the Democratic base, and no one will be able to blame the White House for getting nothing done from 2010 on.
When you push them on this issue, they snap back, “Well, what do you want us to do? What’s the policy proposal that we are not pursuing?” But this is exactly the wrong way to think about the issue.
The point is that the administration has lost control over the narrative. Why have we lost 8 million jobs since December 2007? Why will debt-GDP rise by 40 percentage points relative to what the CBO baseline would have been? Who is responsible for this deep global disaster?
The president has only addressed this head-on once – when he launched the Volcker Rules in January. That was a good moment, grabbing attention and focussing it in a productive direction. But it proved fleeting – Secretary Geithner was spinning it away within 7 hours – and there has been no follow-up in terms of clear political messages.
There’s no story in the culture about what the big banks did and why. There is no attempt from the top to push through the key message for the day – financial reform – and to explain what this can do and how. The adminstration, in effect, is not even trying.
The inner team apparently thinks that 2012 will go just fine – as long as unemployment is down around 6 percent. And, they reason, the people who lose their seats this November won’t be around to complain.
If the administration fights hard and loses in November, that is one thing. If it fights on clear issues – forcing the other side to support Too Big To Fail structures – they may still lose, but such a loss will clearly communicate that the political strength of the big banks is now out of control. That is an issue to run on – and win big – in 2012.
And if the administration doesn’t even care and hardly tries now, who will come out for them (or send a check) in two years?
The Obama team – both political and economic wings – seems to feel that their base has nowhere else to go, and all they need to do is drift towards the right in a moderately confused fashion to assure re-election for the president.
Jimmy Carter had the same sort of idea.