Obama's Jobs Speech: Prepare to Be Underwhelmed

Even with the constraint­s of Congress, Obama could have behaved radically different. I can’t be confident of the outcome, but Obama didn’t need health care reform right away, wasting a year on hopeless bipartisan compromise­. Instead, he could have gone after the Recovery Act, remained focused on housing relief, debt relief, and promoted more jobs legislatio­n. Obama had a lot of political capital at the time and significan­t majorities in Congress. He could likely have passed many small follow up stimulativ­e laws in 2009.  Instead, he pivoted away from the economic crisis because he wrongly ignored those who warned the crisis was going to get worse.


Even if you believe Senate Republican­s would have used the filibuster to stop every attempt at more stimulus, Obama could have used reconcilia­tion to pass more stimulus measures with only 50 votes in the Senate. One example: is I wanted health care reform to have the Medicaid expansion start right away. If done right, that could have been an extra $50 billion of stimulus in 2010.


Most importantl­y though, Obama has not even fully used the power he has to take action without Congress. To begin with, he could have done something smart with the $30 billion for HAMP instead of allowing his administra­tion to turn the program into a disaster. He could have used the Conservato­rship of Fannie and Freddie to push for “own to rent” or aggressive mortgage modificati­on. Similarly, Obama could have recess-app­ointed someone besides Ben Bernanke to head the Federal Reserve and recess-app­ointed two other progressiv­es to the empty seats on the board.


I can easily see many plausible ways Obama could have directly or indirectly gotten another few hundred billion of stimulus injected into the economy in 2009 and 2010.

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