Obama's Mistake

Robert Reich has writtena post in his blog that identifies the trap that Obama has gotten himself into:

Presidents tend to overcompensate for the errors of their predecessors in the same party and in so doing sow seeds of their own mistakes. Bill Clinton wanted above all to avoid Jimmy Carter's fate -- losing re-election because the economy was heading south on Election Day. So Clinton made a deal with Alan Greenspan to slash the budget deficit and thereby jettison much of his ambitious campaign agenda (that was Greenspan's precondition for lowering interest rates and causing an economic boom in time for the re-election) and then Clinton took direction from Dick Morris, who told him to move to the right. The result: Clinton avoided Carter's failure and won re-election handily. But the Clinton years produced few if any major social reforms. Clinton spent so much of his initial political capital, as well as his time and energy, on deficit reduction that he didn't have enough left to enact health care in 1994.

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While health care reform, if done right, can help American families stay afloat in the economy, the current bills won't offer most Americans any appreciable decline in the cost of their health insurance nor clear improvement in the efficiency or quality of the health care they receive, and those who will benefit won't see the benefits until 2014 at the earliest. All this is partly a result of Obama's sharpest break from Clinton -- whose ambitious health care plan drew immediate fire from Big Pharma, the American Medical Association, and health insurers: The Obama White House bought off the medical-industrial complex by promising it fatter profits, bolstered by tens of millions of new paying customers.

That and other deals cut with industry -- including promises to Big Pharma that Medicare wouldn't use its bargaining clout to reduce drug prices, to the AMA that doctors wouldn't have to face larger cuts in Medicare reimbursement rates, and to private insurers that the White House wouldn't fight hard for a public insurance option -- are likely to make the resulting reform far more costly than it would be otherwise. These extra costs will be borne by those Americans who will be required to buy insurance but won't qualify for federal assistance, along with Medicare beneficiaries who will be paying more and receiving less. These people may not know they're indirectly paying the costs of buying off these industries, but they'll know they're getting shafted (Republicans will be sure to make them aware, even though the GOP has a much longer record of shafting the middle class for the benefit of big business).

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If Obama and the Democrats lose one or both houses of Congress in the midterms, it will be because the president learned only the most superficial lesson of the Clinton years. Health-care reform is critically important. But when one out of six Americans is unemployed or underemployed, getting the nation back to work is more so.

It sure appears to me that Obama simply ignored the costs of pleasing the big lobby group -- especially the Wall Street banks -- while ignoring the fact that the suffering public are not going to be happy when the 2010 elections come. It sure appears to be that Obama will suffer the equivalent of Clinton's 1994 setback. The Republicans who created the mess and who use every opportunity to sabotage Obama, will get handed an economic climate that they can exploit. I foresee the Republicans winning in 2010 as they portray Obama as a failure.

Sure Obama is falling short, but the real tragedy is that the Republicans put a roadblock on any attempt to resuscitate the economy. Sadly, most Americans don't understand how Republican policies created the collapse. They don't understand how eight years under Bush created so many problems that tie the hands of any administration. They don't understand the trick Republicans will play by portraying Obama as a failure.

I think to the collapse of any great empire or nation in the past. It usually isn't enemies abroad that pulls them down. It is the internal politics where those how pretend to great patriotism are the ones who sabotage the state.

Go read the full Reich posting. Even better, go read as many postings as you have time for from Robert Reich's blog. He is a very intelligent man who is trying hard to save Americans from themselves.