Obama's Honeymoon is Over

The $800 billion stimulus package wasn't big enough, 5 million homeowners are in danger of foreclosure and the White House is yet to fix the main problem: the rules that govern the finance industry.
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Five months after his inauguration, Barack Obama has finished his honeymoon period. Republicans attacked the President from day one, now there's indication of pushback from Democrats, too.

Obama's approval ratings continue to be in the low sixties, better than either Bill Clinton or George W. Bush at this stage in their presidencies. But personal popularity doesn't always translate into effectiveness and there are huge challenges ahead for this Administration.

The Economy continues to be the primary concern. Most financial experts believe the recession is at or near the bottom, but are pessimistic about the prospects for a speedy recovery.

Discounting the stale Republican response - the solution is to cut taxes and let the free market do its "magic" - there are three criticism of Obamanomics. The first is that the 800 billion dollar stimulus package wasn't big enough and, therefore, hasn't created jobs at the pace required to offset declining payrolls. The second is that Obama hasn't actually helped homeowners who are in danger of foreclosure. And the third is that the White House hasn't fixed the fundamental problem: the financial industry should run by a new set of rules.

Obama recently defended his stimulus package, promising to pick up the pace of job creation and add 600,000 jobs in the second 100 days of his Administration. That's nowhere near enough to offset the 6 million jobs lost since the recession began in December of 2007. There needs to be an additional stimulus package that bolsters job creation.

Despite the Administration's promise to help responsible homeowners, foreclosure rates are high, as are the total number of mortgage delinquencies. On May 20th, Obama signed the Helping Families Save Their Homes Act that will benefit 400,000 families. However, 5.4 million homes are in danger of foreclosure. Clearly, additional measures will be required over the next few months.

Finally, the Administration has to goad Congress into passing rules that guaranteed the financial industry has the strict supervision required to ensure that the 2008 meltdown never recurs. In a recent New York Times article, Sandy Lewis and William Cohan write, "We're concerned that nothing has really been fixed." The President has to get the financial industry to make public the conditions that caused the crisis and goad Congress into passing tough and sweeping regulations that guarantee this crisis won't recur.

Healthcare continues to be American's biggest domestic concern after the economy. There's increasing call for universal coverage and the Obama Administration promises to push meaningful legislation through Congress by the end of the summer. While the bill is under construction, the good news is that its current form includes the option of letting individuals buy insurance from the Federal government. The Administration needs to ensure that Congress passes this legislation by the end of the summer.

Energy: To lower costs and protect the environment, President Obama has proposed that, by 2025, one-quarter of America's electricity be produced from renewable sources. Unfortunately, Congress is resisting this change.

If there is going to be a sustainable recovery with real growth in GDP, then the economy has to add high-skill, high-wage jobs. A massive shift to clean energy is the leading candidate to spur real economic growth. First, Americans have to become more energy efficient by weatherizing their homes and installing technology to use energy more wisely. Second, we have to drastically reduce our gasoline consumption by using public transportation and trading our gas-guzzlers for electric cars. Third, our homes and businesses have to be fueled by renewable energy: solar, wind, and bio-fuel systems.

President Obama must fight for aggressive clean-energy legislation.

Writing in The Nation, Robert Borosage and Katrina vanden Heuvel bemoaned Barack Obama's propensity to compromise: "The White House mantra is: Never let the perfect be the enemy of the good... The danger is that this process may make the weak the enemy of the good."

There are many components of effective presidential leadership. One of them is vision. Another is listening to the American people and making tough decisions in the public interest. Still another is the ability to steer needed legislation through a risk-averse Congress. That's what's needed now.

Barack Obama needs to leverage his public popularity and his considerable communication skills to get Congress to act aggressively. Washington has to do more than patch the nation's economic wounds. Obama has to move America onto the path to a sustainable recovery.

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