Where Obama Went Wrong

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My new column for the FT explains.

Again and again, Mr Obama has acted as though the middle of the electorate mattered less to his administration than the Democratic base. This is not to say he insisted on leftist policies. He usually gave way, when he had to, to conservative Democrats in Congress. He went along with a fiscal stimulus that included a lot of tax cuts. He went along with health reform that excluded the so-called public option. These and other compromises disappointed the left. But the message to the electoral centre was consistent: Mr Obama would have let the left have its way if he could.

What he should have done - and what he ought to do from now on - is simple. Instead of blessing leftist solutions, then retreating feebly to more centrist positions under pressure, he should have identified the centrist policies the country could accept and advocated those policies.

Mr Obama should have led the argument for tax cuts in the stimulus. He should have led a national discussion on long-term fiscal control, rather than tacitly accepting the progressives' view that long-term deficits are not a pressing concern. He should have led the argument against the public option for healthcare. The outcomes might have been the same, but Mr Obama would have been given credit for moderating the ambitions of the Democratic left. This was one of the main things centrist voters elected him to do.

Now he is making the same mistake over the Bush tax cuts. Perhaps on this he will get his way, and taxes will rise for families making more than $250,000. But see how his own party is squirming over it. I wouldn't be surprised if he compromises again, disappoints the left again, and fails again to win the electoral advantage he could have derived by adopting the more centrist position (extend all the tax cuts for two years only) in the first place.

But this would have been to abandon principle and support the inferior policy, you think? Not really. So long as everybody's taxes rise once the recovery is more solid--as they will have to--what does it matter if the tax cuts for the rich get extended along with everybody else's for another couple of years? The fiscal constraints leave fewer choices than either party is willing to admit. In other words, this is less about economics or equity than it is about temporary political positioning. And that is what Obama keeps getting wrong.  

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