If you listen to some reports, two months into his presidency, Barack Obama is pretty much done. The American International Group (AIG) bonus blowback has so depleted his political capital, according to The Washington Post, that it is "threatening to derail both public and congressional support for his ambitious political agenda." There is, however, hardly any evidence to support that assertion.
It is worth remembering in the midst of all the dark-clouds chatter about Obama's political troubles that he has a job-approval rating of 61 percent, equal to or higher than George W. Bush's or Bill Clinton's at similar points in their presidency. If that is depleted political capital, depletion may be the way to go in terms of political strategy.
But the entire AIG episode hints at a different problem that the president must confront and soon. In the midst of all the predictions of doom, disaster, and failure, we have no clear idea of what progress would look like coming out of this financial crisis. It is up to Obama to present us with a well-defined idea of success.
If he doesn't, he will lose the message war to those who predict that his efforts will end in failure. For one thing, we have lots of familiar examples to consider. His stated aim of creating or saving 4 million jobs is not just ambitious, it is a large and distant end point that will be hard to measure over time. His more immediate task is to provide concrete and accessible examples that can compete with the easy story of a failing company that gives out unwarranted bonuses with money that does not belong to them. Maybe this is the purpose of his upcoming fireside chats.
In one way, Obama faces a very simple task in trying to re-energize the economy: He just needs to get people spending money again. Consumer spending is responsible for about two-thirds of all of our economic output, and as soon as people stop feeling so poor, they'll just jump right back in. And if the president can assure Americans of enough promise in the future, we will happily return to our true consumerist selves. It helps, of course, to have a job and access to credit and a sense that your financial house will not fall in on you in the near future.
Equally important, Obama must somehow steady the markets and stanch the flow of bad economic news that tends to dominate the public discussion about the economy. While the equity markets are affecting fewer and fewer people directly, the sports-page coverage of their ups and downs has rendered them the main psychic measure of our economic health. Calm the equity market, and the credit markets will slowly come back to life, and pretty soon we're back in business.
If Americans understood what to look for in terms of an improving economy, then they would see the AIG bonuses for what they are, a symptom of a larger problem that is slowly being corrected. Then the outrage, correctly directed, does not become the same kind of political liability for the White House, and when The Washington Examiner puts a photo of a downcast Obama on its Thursday cover behind a headline declaring "Losing His Magic," it will be seen for the joke it is. I want Obama to explain how and why all the money we’ve spent and are spending will revive the economy, and what to look for as proof that his plan is working. For example, how many more months will we have to hear about rising job-loss before we begin to reverse that trend? He needs to tell us.
There are some very small but hopeful signs that people are ready to rally. Despite all the predictions that we will spend 2009 in the economic outhouse, things seem to be looking up slightly: According to Gallup's Consumer Mood Index, people were more optimistic in the last week than at any time since September. "The increase is commensurate with the four-day consecutive gains in the Dow Jones Industrial Average, beginning last Tuesday, and also with the Obama administration's recent emphasis on more positive views of the economy," the researchers observed.
David Broder, the oracle of Washington political wisdom, has pronounced the Obama honeymoon over: "His critics in Washington and around the world have found their voices, and they are subjecting his administration to the kind of skeptical questioning that is normal for chief executives once they settle into their jobs," Broder writes.
The president's critics have found their voice and it is one of doom. Obama needs to raise his.