After 1994, Clinton pursued policies by way of "triangulation," standing above and separate from both parties and negotiating with each. Last October, Democrats and the Bush Treasury made concessions to the House Republicans. Obama is doing the same sort of thing ahead of time.
The likelihood then is that the final stimulus package will be supported by many in both parties. And that both parties will be held responsible for the results. Moreover, Obama was careful to note that good results may be long in coming. Just as he eliminated the possibility of a primary challenge by Hillary Clinton in 2012, so Obama seems to be trying to remove an issue that Republicans might run on in 2010.
Good politics, then. But is it good policy? That's harder to say. We are in the midst of a financial crisis unlike any we've seen in many years and are facing the threat of deflation, of the sort that choked off economic growth in America in the 1930s and Japan in the 1990s. Federal Reserve Chairman Ben Bernanke probably knows more about the economics of the 1930s than anyone else on earth. Outgoing Treasury Secretary Henry Paulson and incoming Treasury Secretary Timothy Geithner know as much about financial markets as just about any two experts you could find. Obama's lead adviser Lawrence Summers, in the opinion of others as well as himself, is one of the world's most knowledgeable economists.
But it is not apparent that any of them knows how to produce the optimal economic conditions that Americans have become used to over the past quarter-century at the speedy pace that American voters are inclined to demand. In a time of deflation, prices tend to fall -- and so it makes sense to hold onto your money and buy things next year. In a time when households are overburdened with debt, it makes sense to pay your credit cards and your mortgage down and not take on more.
Obama's decision to include tax cuts as well as stimulative spending in his George Mason speech indicates that he's not willing to bet on any one policy to succeed anytime soon -- and that he's interested in spreading any resulting political blame.
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