THE FLAILING STATE OF OBAMA'S POLARIZED UNION

By Michael Gerson

Wednesday, January 27, 2010

One of the kinder explanations for President Obama's failed first year is that his agenda was just too darned ambitious. Like Bill Clinton on health reform and George W. Bush on Social Security restructuring, Obama found that, in columnist Ron Brownstein's words, "big legislative crusades aimed at big national problems produce only big political headaches." The fault, in this view, lies in a polarized political system that punishes the bold.

Obama did overinterpret his mandate. His "big bang" sputtered and fizzled like a bottle rocket on a rainy Fourth of July. Yet the main problem with his agenda was not its boldness but its utter predictability. In every early crucial domestic decision, Obama embraced, or deferred to, a conventional, unreconstructed congressional liberalism. His main legislative achievement -- the stimulus package -- was shaped more by pent-up congressional spending demands than any discernible economic theory. His health plan imposed cost controls mainly through government regulation.

A health-reform proposal that tried to achieve similar ends through market mechanisms -- giving individuals an incentive to control costs -- would have divided Republicans, ensuring its passage. The House and Senate health bills united Republicans in opposition to government price-setting and the prospect of rationing.

The administration's main problem is this: It has not contributed a single innovative, bipartisan idea on a major issue during its first year in office. Instead, it relied on its congressional majority to impose a tired leftism. But the Democratic Party was too ideologically diverse for that approach to succeed. Its internal divisions slowed the Reid-Pelosi legislative march until the state of Massachusetts -- of all places -- halted it completely.

Obama's role in all this is difficult to read. Either he is a pragmatist who always seems to choose conventional liberalism or a liberal impersonating a pragmatist. It matters little. Obama has polarized the electorate in unprecedented ways. A recent Gallup poll found a 65 percentage-point gapbetween Democrats and Republicans in their approval of Obama, the largest for any president in his first year in office.

As a candidate, Obama called for overturning Bushism. The practice of Obamaism has been to undo Clintonism. All those Clinton-era lessons -- showing fiscal responsibility, appealing to middle-class concerns, displaying symbolic respect for moral conservatism and law-and-order sentiments -- were discarded in the thrill of hope and change.

Some desperate Democrats want the president to regress even further -- past Clinton, all the way to Huey Long. Flog the fat cats; every man a king. But inauthentic populism in a politician is as painfully obvious as a child trying to muster fake tears. In his populist mode, Obama seems grumpy, offended and surprised by the views of his own country. And, as the president found last week, attacks on Wall Street and taxes on banks tend to spook the markets. Unlike Obama, Huey Long was not held responsible for declines in millions of 401(k)s.

The more serious counsel is for Obama to return to Clintonism. This seems to be the theory of Obama's recently unveiled spending freeze covering about 17 percent of the federal budget, and his middle-class relief package, which includes child-care tax credits and easier IRA deposits.

In normal circumstances, these moderate, small-scale proposals would be promising. In my political past, I pushed for similar ideas in Bush's State of the Union addresses. But this isn't the moment for Clintonism. Economic stagnation and the prospect of inflation caused by massive debt overwhelm this kind of political approach.

The need of the moment is job creation, which has nothing to do with the typical priorities of Democratic jobs legislation. In December, the White House held a "jobs summit" to which the main small-business groups were symbolically not invited. The House passed a "jobs bill" that reprised the stimulus package -- more public spending on roads, unemployment benefits and teachers' salaries. Said Democratic Rep. Dan Maffei of New York, "The bill we passed in the House, I don't think was real. It was all spending, no tax cuts."

It is not enough for the president to argue that health reform is really a jobs program or that energy policy will create green jobs. Job creation depends on a vigorous private sector, which requires a better atmosphere for small-business creation and expansion, which means fewer regulations and lower taxes, especially on returns to investment. The formation of capital is jobs creation.

This approach is more Ronald Reagan than Huey Long. Adopting it would show Obama's seriousness at a serious moment.

mgerson@globalengage.org