Friday, April 17, 2009

Second Six Weeks' Report Card

We will continue to grade Obama on three dimensions: Political, Economic, and Diplomatic.

Re-Election Is the Validation We Crave

Right now, the measure of political success is completely identified with economic recovery and the expectation of it. Hopes have risen in recent days, driven by stock market improvement, which has interrupted the slide in Obama's popularity.

The projected political outcome--which I graded a 'B' from the first six weeks' report--is of Congressional losses in 2010 driven by the sense that recovery is not yet in place, but by a sufficient recovery by 2012 for a commanding re-election victory.

That remains the standard measure of acceptable political success. If we get at least that kind of moderately-good result we can expect a definitive success in the other key areas--the economic and diplomatic ones--rather than some kind of reversion to neo-Bushite Misrule (Bushite, but without the incompetence). So, while today politics are subordinate to economics, in terms of long-term result, political success rates first in importance.

Put in those terms, the tides that rise and fall with the outcome of policy and legislation on the issues themselves are an order of magnitude less important. Obama is off to a good start on health care reform, and energy policy is clearly going to move forward. The debate on education has begun--being the most long-lasting and the key policy area one most worthy of deliberate consideration, I don't think the urgency of action in the first year is as important as establishing the right long-term direction.

One area which is probably a bridge too far--though just at the boundary--is immigration, and Obama's pledge to press for legislative reform in this area this year. It's clearly redemption of a pledge earned with the huge contribution of Hispanic votes to his election, but I think it risks damaging the Democratic brand and letting the opposition demagogue its way back into the national dialogue. Otherwise, the trend is clearly to move the Republicans to the periphery of the debate, and I for one welcome this trend (and the recognition of it, as well, which has prompted some interesting debate whether we need the Republicans' "contributions").

Second Six Weeks' Grade: A- Cumulative Average: B+

Riding the Curve of the Great Crater

Not even the most impatient could expect that the economy would already be improving. The CNBC Talking Crania are about right when they identify the general perception as having recently passed "an inflection point". That would be the second derivative, when the rate of increase in the rate of decrease crosses zero. In other words, things are not getting worse at an accelerating rate anymore--the deterioration was accelerating for a good six months, from September, 2008 to March of this year.

I think passing that perceived mathematical milestone was a definitive one; the economy will continue to decline for another year, in my estimation, but at a rate generally slower than in the past several months.

Has the market found a bottom? Not necessarily, but it has shown that a bottom exists. I do expect a downturn in stock prices, and probably quite soon, but not as widespread as before and not as deep. New bad news will be doubly punished, as the smart guys have socked away enough reserves for contingencies and bumps in the accounting road.

What has Obama done? He got the stimulus passed; whatever its job-creating qualities (many or not so many; sooner or later; sustainable or temporary), he's got some muscles to flex. He's also gotten people to stop hyperventilating about the unquantifiability of the toxic asset problem with round two of Tim Geithner's public sales job for The Nasty.

Second Six Weeks' Grade: B+ Cumulative: B

President of the World

"Well, he hasn't gotten us into a new war yet, so his grade is at least passing." That was my evaluation of Bushite Misrule in mid-2001, and I kept it until he got us into the second new war--I gave him a pass on the first one in Afghanistan.

Obama is not being graded on the pass/fail scale, though--expectations are much higher. His multilateral outreach program has been a huge success. Hardly a grimace in any of the targeted countries (maybe Pakistan), but the G20 and Latin America have fallen hard for Obama, and his speech in Turkey was boffo (click on the title of this blog), even if he probably didn't write much of it. It's probably the only country he's visited that he wouldn't be able to defeat the local sitting President in a straight runoff, but I still think it went down well, and beyond Turkey as well.

Movement on relations with Cuba has been very positive; on Iran, results are a bit more problematic as we get past the first, euphoric stage. I still think that a meeting with Khamenei may occur after the Iranian Presidential election, if its result is not too negative (i.e., something better than Ahmadinejad coming out of it).

Second Six Weeks' Grade: A Cumulative Grade: A-

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