Could Major Policy Defeat of President Lead to Economic Boom?

Posted: Sep 12, 2013 12:01 AM
Could Major Policy Defeat of President Lead to Economic Boom?
Yes, I realize Newt Gingrich is not house speaker and is instead now a talking head on a cable news network. And yes, I realize that the economy is really not that great. But a familiar pattern, with a slight variation, may be repeating itself, and it might serve as a positive shot in the economic arm of the nation.

Gingrich, who was all set to debut his new role on CNN's reprisal of "Crossfire" Monday night with a blast on President Obama's hapless effort in response to Syria's use of chemical weapons, had a sudden last minute turn of events thrown at him just before airtime. The president was suddenly putting the brakes on an immediate request of Congress to back air strikes in Syria in favor of diplomatic intervention from Russia.

That changeup would likely be enough to leave even the likes of Gingrich tongue-tied. But "Mr. Speaker" made it through his first show reiterating his well-publicized reasons for opposing Obama's move. Gingrich's new role was a reminder in history that takes us back to the years when he and Bill Clinton were engaged in their own "crossfire" -- a battle not for ratings but for high-stakes policy change.

Gingrich landed several tough political punches on Clinton, including two government shutdowns over the budget. Clinton, whose political sophistication then and now leaves Obama in the dust, got the message and worked to create a balanced budget and, behind the scenes, a far more cooperative political climate between the two leaders.

And if the government shutdown was a demonstration of Republican resolve in 1995, the smack down that President Obama has received from Republicans, Democrats and the nation over Syria is, to use his own words, "a red line" and a political humiliation.

Obama's approval ratings have plummeted and there is real potential that should the other shoe drop -- another collapse of the economy -- he could leave office in as bad shape as Herbert Hoover.

While Obama has proved to be aloof when it comes to Congress and suddenly out of touch with public opinion, he is undoubtedly a smart politician. He knows that he can ill-afford an economic decline made up of a protracted budget battle, continued increases in interest rates, a seemingly renewed decline in home sales, and a drop in the equity and bond markets.

So, the strong rebuff he has received from the nation over Syria has the potential to make President Obama far more willing to work with Congress over another looming battle to extend debt limits and reach compromise on the budget. It also means that a program, which most conservatives view as a house of cards but Wall Street loves -- the continued flow of dollars to purchase bonds -- will continue. Yes, the Fed may be toying with letting up on this monetary infusion, but if so, it won't last.

In fact, Obama has no choice now but to require a blood oath from whomever he names to replace the retiring Ben Bernanke. A promise that the printing presses will be put on high-speed, propping up bonds and thus the stock market until the mid-term elections, at the very least.

And if given time, the economy might indeed begin to recover in earnest. The reason we have seen what many call a "part-time" job recovery has been greatly due to the gross amount of uncertainty about our economic future among both large and small businesses.

Most business leaders privately view Obama's understanding of the economy to be the equal of his grasp of foreign policy. If they come to recognize that the president's days of "my way or the highway" have come to an end, they might just start operating with some real confidence, both in the concept of short-term market stability and a longer-term return to more sound budgetary policy. Perhaps the president will even acknowledge that while most Americans aren't making more, their government enjoyed a $284 billion increase in revenue this year.

Of course, the only thing missing in this trip down memory lane is a strong and resolute Republican speaker of the house and a Clinton. As for the Clinton part, that won't take long. After all, the president's complete flop over Syria certainly proves Hillary's much maligned "midnight crisis call" commercial of 2008 to be much more on target.

As for the current house speaker, his early embrace of Obama's Syrian swan song may mark the beginning of the end for his speakership.