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By Now, Obama Owns the Economy

Blaming one's predecessor is reasonable at first, but Democrats will start to pay the price for not taking more aggressive steps to confront unemployment and slow growth

Obama at Arlington - Jonathan Ernst : Reuters - banner.jpg

While I generally loathe press releases, I have to admit that one caught my eye on Monday morning. The e-mail release from the Republican National Committee simply said, "They Own It."

As I expected, "They" referred to President Obama and Democrats, and "It" referred to the economy. Within the first six months or even a year of a new administration, it's fair game to blame predecessors for any problems. Indeed, it's a legitimate and time-honored tradition by presidents of both parties. But such arguments get much less convincing as the second year comes to an end. Once into the third year, such claims sound downright silly. Gradually, any president and any administration take ownership of the problems facing the country.

While Obama and Democrats can say that they inherited a terrible economy and downturn that has since only marginally improved, it's far more complicated than that.

First, the administration's initial response, the much-maligned economic-stimulus package, was far too modest and unfocused.

And second, as soon as the stimulus package was completed, they pivoted too quickly to addressing climate change and health care. These were the signature issues in voters' minds that defined the legislative objectives of Obama and the Democratic Congress.

Republicans felt that the spending package was expansive and unnecessary and would run up deficits, with the consensus among economists being that unemployment wasn't going to get worse than 8.2 percent.

Democrats seemed to see it as an opportunity to load up the Christmas tree with funding for programs that they felt were worthwhile and had been shortchanged under Republican rule. Forecasters underestimated the severity of the downturn and both parties responded by not taking it as seriously as they should have.

The highly regarded Blue Chip Economic Indicators survey of top economists in January 2009, when Obama was sworn in, showed an expectation that unemployment would average 8.2 percent for 2010. The reality, of course, was that the lowest monthly unemployment rate in 2010 was 9.4 percent, and it shot up to 9.8 percent for two months that year.

Presumably, had everyone known how bad the jobless situation would be, both parties would have sought to spend on things where they would get the maximum bang for their buck in terms of job creation.

Unfortunately for Democrats, accountability only applies to those in power, so it's they and Obama who will continue to pay the price for not having been more aggressive with programs that would have generated more jobs.

This can also explain why Obama and Democrats felt comfortable moving on to climate change legislation in the summer of 2009 and then health care, an issue which would dominate the agenda.

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Charlie Cook is editor and publisher of The Cook Political Report and a political analyst for National Journal.

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