Two Myths About Obama's First Year as President

More

In the last few days, I've read and heard a lot of Massachusetts-inspired talk that funnels into two complaints about the White House: 1) Obama's mistake in 2009 was that he never focused on jobs; and 2) Obama should have sought a simpler health care plan to get Republican support. I think both these interpretations are wrong.



First there's the idea that Obama messed up by focusing on health care to the exclusion of job creation. Peggy Noonan puts it thus:

"At the exact moment the public was announcing it worried about jobs first and debt and deficits second, the administration decided to devote its first year to health care."

I don't know if this sentence is overly tricky or entirely wrong, but it's definitely something like both. "At the exact moment the public was announcing it worried about jobs first" ... ahem, that's the exact moment we passed a $800 billion stimulus, followed by a $50 billion lifeline for the auto industry, while the Fed spent over a trillion dollars to prop up the housing sector and make banks start lending to businesses. Maybe Obama didn't do enough, but he certainly did something -- and the Republican Party stood almost united against every part of it they could vote for. Steven Pearlstein gets this dead on.

The second myth is that the White House and the country would have been better off if we had passed simpler health care regulation rather than seek a $900 billion bill. These critics think we should have stuck with simple insurance regulation through taxes-- such as banning rescission and rejecting coverage for preexisting conditions. But as Pearlstein writes, the problem with that

is that if you don't require everyone to buy insurance, then there will be lots of people who will wait to buy their policies until they get sick and then demand coverage at the "community" rate. That's a great way to drive up premiums, which in turn will drive even more healthy people to drop coverage, which will raise premiums even further.

To prevent this kind of debilitating "insurance spiral," you could add one more feature -- a mandate requiring everyone to buy at least a basic insurance package. Unfortunately, there are lots of low-income households for which the newly mandated premiums could eat up as much as a half of after-tax income, which hardly seems fair. So you'd probably want to make sure that there's enough competition among insurers to keep premiums down, which is what those government-supervised exchanges are all about. And you'd want to have some subsidies to limit the financial hit to low-income families. To pay for the subsidies, you'd either have to raise taxes or cut spending in other areas.

And hey, that's exactly the $900 billion health care reform plan on the table (er, the cutting room floor).

Obama made mistakes, but the freak upset in Massachusetts is a cause for creative reflection, not creative revisionism, among both Democrats and their critics.

Jump to comments

Derek Thompson is a senior editor at The Atlantic, where he oversees business coverage for TheAtlantic.com. More

Thompson has written for Slate, BusinessWeek, and the Daily Beast. He has also appeared as a guest on radio and television networks, including NPR, the BBC, CNBC, and MSNBC.

Get Today's Top Stories in Your Inbox (preview)


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Miami: The Next Big Start-Up City?

How the city became a center for innovation

Video

Video

A Brief History of Romantic Comedies

From The Atlantic's Chris Orr

Video

Video

Life in 'the New Arctic'

A moving portrait of a fading landscape

Video

Video

The Rise of New York City

A fascinating look at Manhattan in the 1940s

Video

'I Thought It Was Really Funny, but No One Else Did'

A day with New Yorker cartoonist Joe Dator

Video

New Yorkers: The Winemaker

Make your own wine ... in New York City

Video

What Is Methane Hydrate?

"Flaming ice" is a vast natural energy source

Video

NASA's Time-Lapse of the Sun

Now with epic dubstep music

Video

A Video Letter From the Editor

Highlights from the May 2013 issue

Video

Shaken Not Tuned: Cocktail Experiments

Can a tuning fork improve a cocktail?

Video

Video

The Rise of Environmentalism

Tracking 50 years, from the Love Canal disaster to Greenpeace

Video

Is He Cheating? A 1950s Guide

'That little blonde secretary from the office?’

Video

New Yorkers: Vintage Vacuum-Tube Amps

Risking electric shock to restore old amplifiers

Video

The DIY Piano-Bicycle

Everybody needs a hobby

Writers

Up
Down

More in Business

In Focus

2013 National Geographic Traveler Photo Contest