The art of Obamanomics

Alex Brummer

Like Roosevelt and Reagan, the new President’s determination to refloat the economy could provide a turning point for American prosperity. But we may have to wait until 2010 for the bounce-back

The enthusiasm generated around the Obama presidency is contagious. America’s first African-American president may only have been in office for a few short months and America may be suffering its greatest financial crisis since the 1930s, but the cult of Obama carries on regardless. In downtown Washington, the ground floor of Borders bookshop is like a shrine to the new president, with dozens of volumes celebrating his life and his family as well as repackaging his speeches.

Obama has decided, like his Democratic predecessor Bill Clinton in the 1990s, that it is the ‘economy, stupid’ which is the issue that touches most Americans and will determine the success of his presidency. But his approach has been very different. Clinton and his advisers took the view that the solution to American recovery was wiping out America’s budget deficits and bringing down long-term interest rates. Then corporate America would invest.

Admittedly, Obama inherited a much more damaged economy, with the Wall Street investment banking culture in ruins, the housing market still in freefall and two of the big three carmakers begging for a bail-out. But his cure is out of the Franklin. D. Roosevelt playbook rather than the Clinton one. Obama is determined to refloat the economy and do it in 100 days.

This does not simply involve pouring $800 billion into the economy through a Keynesian-style stimulus package, ratcheting up the nation’s debt burden. He also wants to sell it to the American people. So he’s has been in perpetual motion. In Columbus, he was saving the jobs of police recruits, which would have been sacrificed without more federal funds; in Maryland, he was extolling the virtues of road building.

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