Why President Obama has failed
Article added on January 11, 2012 at 14:13 Swiss time
After three years in power, it is time to assess
President Obama's first term.
Economic and financial policy
On the economic front, Obama's record is weak. The moral hazard situation in
the financial sector remains. Gains still get privatized, losses socialized
and fraud such as selling junk mortgages as secure securities has no legal
consequences. Glass-Steagall is just one keyword in this economic field. The
government-sponsored enterprises Fannie Mae and Freddie Mac have not been
dismantled; as I wrote in
September 2008: “There is
no need for the state to be active in the housing market.”
My advice of
January 2009 remains:
“Split up Fannie Mae and Freddie Mac into 1000 companies.”
The leading banks are fewer, bigger and as intertwined as before the crisis.
The stimulus did of course not stimulate the economy. The deficit remains
out of control. The public debt of the United States keeps rising. The
unemployment rate has been improving lately, but still stands at 8.5% (with
of course many people having left the job search and therefore being no
longer counted among the jobless).
Only the auto industry intervention
(for people working for GM). It remains a shady action to help Obama's trade
union buddies mainly at General Motors. Chrysler is now by 58.5% owned by
Fiat. Ford, the one company not
“rescued” by the Obama Administration,
is doing best. As a result of the state intervention, GM got rid of its
debt. The GM pension claims remain a shady affair. Competition has been
biased. The state intervened to save a specific company in a specific
sector. Would the free market not have been able to solve the problem!?
Pork barrel and (e.g. agricultural) subsidies remain a problem. So does
political campaign financing, but that's another story...
Health care policy
Obama needed to show to his own voters and lawmakers that he can deliver.
ObamaCare was that
bill, a giant one outlined on some 2000 pages. The probably correct
claim is that some 30 million previously uninsured people got (or will get)
health care insurance. But at what price? The president's claim that the
overall health care cost in the United States would be lower thanks to
ObamaCare is a fairy tale. It is another nail in the public deficit and debt
coffin. As outlined in
April 2010, it is not the end of
market driven health care. Already beofore, there was not enough
transparency and competition between doctors, hospitals, pharmaceutical and
health insurance companies. There were already state-sponsored insurance
plans (Medicare, Medicaid). But the new bill was a step towards more state
control without effective cost control measures. Obama promised the
impossible, mainly health care for more people, but cost-neutral, without
thinning services and reducing benefits for people already insured
(Medicaid). The truth of the matter is that with the new (European-style)
bill, health care will become more expensive in the United States.
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Foreign and military policy
On the foreign and military policy front, President Obama can refer to a few
successes: The killing of Osama
bin Laden and the end of the US occupation of Iraq. Blunders include the
2009-Afghan presidential election, where Karzai was able to get away
with a rigged election. The timid reaction to the brutally repressed revolt
in Iran and Hillary Clinton's support for Mubarak, when it was already clear
that the autocrats days in power were numbered, are among the not so fine
hours of Obama's foreign policy.
Human rights policy and Guantanamo
Ten years ago, the Guantanamo prison opened and quickly became the
symbol of a failed torture and human rights violation strategy. During his
presidential campaign, Obama had said that he would close the prison
immediately. At the beginning of his first and hopefully only term, Obama
disposed of a Democratic majority in both Houses of Parliament. Despite all
his claims and good intentions, he has not managed to close Guantanamo,
which holds still 171 prisoners. Not only did the “Messiah” fail to overcome
resistance in Congress regarding Guantanamo, but military tribunals resumed
and, on December 31, Obama signed the National Defense Authorization Act,
which allows indefinite military detention without trial.
Obama rightly repealed Don't Ask, Don't Tell because, as the
president said and wrote: “Our military can no longer be deprived of the
talents and skills of Americans just because they happen to be gay or
lesbian.” It's a matter of “justice and equality”.
In June 2011, Vietnam and the United States began taking first steps towards
cleaning up Agent Orange contamination in Vietnam. Dioxin, Napalm and Agent
Orange were used by the U.S. military in the jungle wars in Vietnam from
1961 to 1971. Five years ago, in 2007, efforts by the U.S. embassy began to
focus on cleaning up dioxin polluted areas. Obama is not involved in a high
level effort, but his administration continues on the path embarked by the
previous ones to come clean with the dirty war past, one of the darkest
chapters in American history.
Environmental and energy policy
Obama's dealing with the oil-spill in the Gulf of Mexico was rather
incompetent. Government oversight was a joke. Obama himself had allowed the
deep water drilling.
Obama's global-warming and pollution fighting policies are unconvincing. He
promised a lot and has not delivered. After the Tsunami in Japan and the
nuclear disaster which followed, Obama has not decided to check the security
of the US nuclear plants, some of which are in California, where a major
earthquake is overdue. Obama has decided to hold on to nuclear energy. He is
surely right not to panic like Angela Merkel. But a new risk assessment and
the funding of fundamental research regarding alternative, renewable
energies are vital for both the American environment and economy.
Instead, the Obama administration subsidized solar energy, with the Chapter
11 bankruptcy of Solyndra being this policy's major “achievement”. In 2009,
the US Department of Energy gave a $535 million loan to Solyndra, which also
received a $25.1 million tax break form California's Alternative Energy and
Advanced Transportation Financing Authority; Solyndra investors and
executives contributed reportedly between $50,000 and $100,000 to Obama's
November 2012 outlook
As Republican presidential candidate Mitt Romney rightly said: “This
President doesn't understand how the economy works.” He added: “It's time to
get a president who does”. Of course, that man is Mitt himself, who said
after the New Hampshire primary, that Obama wants to turn the US into a
European style welfare state.
Romney surely flip-flopped, partly to pander to the Republican right. He
once wanted to double Guantanamo. He is not a white knight. But Obama not
only pandered to the left of the Democrats. He is a social-democrat.
His first term could have been worse. But it is far from glorious.
Everything is relative. In times of economic and financial trouble, Romney
is the better man than Obama to lead the United States (check the
New Hampshire and
Iowa articles on Romney).
The 2012 presidential election may well be decided by the latest job numbers
and the latest growth rate figures known on election day. But the fact
remains that the president is a dilettante who does not deliver much more
than colorful speeches. Make Obama a one-term president!
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