Link to Economic Crisis Is Vital to Obama Agenda

This article tells it all: Obama could never hope to pass his agenda during normal economic times, so it is critical that the economy appear to remain in turmoil for as long as possible... perhaps even manufacturing turmoil to frighten people into accepting his agenda.

The question is obvious: if his agenda requires a frightened populace and abnormal conditions, why would we expect the Obama administration to try to return our nation to prosperity before he had fundamentally changed the power structure to one of vast centralized control? And in doing that, why would we expect that there actually would be a return to a high level of prosperity?

By JOHN HARWOOD - The New York Times

Published: May 3, 2009

Rahm Emanuel, the White House chief of staff, encapsulated President Obama’s goal long before the first of the First 100 Days: “Never let a serious crisis go to waste.”

Ángel Franco/The New York Times

Rahm Emanuel, White House chief of staff. The Obama team has been accused of exploiting the economic crisis.

That post-election formulation remains the fulcrum for the legislative battle only now starting in earnest. Over the Next 100 Days, the outcome may turn on how convincingly the White House preserves the link between Mr. Obama’s agenda and the painful recession he inherited.

Team Obama casts his initiatives on health care, energy, education and the auto and financial industries as responses to that crisis. His Republican adversaries call the recession merely an excuse for big-government ambitions that liberals have failed to achieve for decades.

Mr. Obama currently holds the upper hand, riding high in the polls while Republicans appear chaotic and hapless. But he is racing to capitalize for good reason. Political history, and some early signs this spring, suggest that time is not on his side.

Weak Economy’s Lift

As Mr. Obama entered the White House in January, the yearlong trickle of job losses had became a flood. The economy, government statistics later revealed, contracted by more than 6 percent in the final quarter of 2008.

Mr. Obama exploited the nation’s alarm in seeking rapid action on his $800 billion economic stimulus plan. Conservatives, pointing to Mr. Emanuel’s remarks, accused the administration of pursuing what Wall Street Journal editorialists called a “40-year wish list” for liberals.

That Mr. Obama quickly overcame Republican opposition provided the strongest evidence so far that the president and Congressional Democrats could seize their opportunity.

“Look at the results,” Mr. Emanuel said in an interview last week. “We’ve passed the largest economic recovery act in American history.”

That paid dividends in public opinion. The latest New York Times/CBS News poll showed that 68 percent of Americans approved of his job performance; 70 percent said Republicans had opposed his economic plans “mostly for political reasons.” The proportion who said they believed the nation was headed in the right direction rose to 41 percent, from 15 percent just before he took office.

Paradoxically, however, that success may complicate Mr. Obama’s task going forward by easing the sense of crisis. And that, in turn, could help Republicans argue that he seeks an excessively costly expansion of government’s role.

An NBC News/Wall Street Journal poll in February showed that 51 percent of Americans wanted government to do more to solve problems, compared with 40 percent who said government was “doing too many things.” Last week, the same survey showed an even split; a 52 percent majority said Mr. Obama had taken on “too many other issues” besides the economy.

That helps explain why Mr. Obama found himself on the defensive at his prime-time news conference over government investments in banks and auto companies. “I want to disabuse people of this notion that somehow we enjoy meddling in the private sector,” he said.

Or, as Mr. Emanuel put it: “The moment requires” government involvement, but only to help troubled companies “make this transition to a different place.”

Risks for Democrats

Some Democrats privately complain that Mr. Emanuel’s “crisis” statement handed Republicans a cudgel for battering their motives. He voices no regrets, saying it is plain that national crises create opportunities for action that do not normally exist.

“It’s not a political tactic,” Mr. Emanuel said. “It’s an observation of human nature and history.” He likened the health care and energy investments that Mr. Obama seeks to the creation of the transcontinental railroad during the Civil War and the G.I. Bill during World War II.

In a jab at former President George W. Bush, he added: “It’s not like we are using this crisis to invade Iraq. You can ask the right-wing blogs about that.”

Yet the Senate’s defeat last week of a measure that Mr. Obama had endorsed, to let judges trim mortgages of homeowners in bankruptcy court, underscored the limits of Democrats’ ability to act even after Senator Arlen Specter of Pennsylvania augmented their majority by switching from the Republican Party to the Democratic Party. Just as the banking industry helped thwart Mr. Obama’s allies on that issue, affected interests may bolster Republican challenges to the administration’s health care and energy goals.

Mr. Obama wants action in 2009 on both fronts, aware that predecessors like Ronald Reagan and Bill Clinton saw their political capital decline markedly after their first years in office. His top aide, who also served in Mr. Clinton’s White House, insists that an agile Democratic majority can still deliver.

“Don’t make perfect the enemy of the essential,” Mr. Emanuel counseled, arguing for compromise. In a remark doubling as self-description, he praised the House speaker, Nancy Pelosi, Democrat of California, as a “pragmatic, put-points-on-the-board, get-wins” legislator.

Even if Americans had begun feeling better, Mr. Emanuel insisted that the crisis atmosphere remained strong enough to keep political winds at Mr. Obama’s back.

“I still believe people know this is very fragile,” he said. “They believe this is a moment for big things, because we have big problems.”