Tuesday, February 02, 2010

Obama's Troubles: A lesson for Liberals

Let Obama troubles be a lesson to the Liberals and indeed the country. The American political system is an unmediated disaster. The Democrats control both houses, the sitting president is a Democrat and until recently they had filibuster proof lead in the Senate. Still they could not pass a watered down Health care bill. US presidents should stop ending their speeches with "God Bless America" and instead sign off by saying "God help America".

The next time someone says that Canada too needs a triple E senate and free votes, smack them up side the head.

Of course a bad political system only goes so far. Obama deserves a lot of the blame. The most straightforward way of bailing out the banks was to nationalize them. Instead, Obama decided to go with a plan to buy and then resell toxic assets. That always meant that if the value of these toxic assets went up, the investors would profit, but if they went down, the investors could always walk away from their debt. Tails the investors win, heads the tax payers lose. What Obama did not foresee was that not nationalizing the banks also meant that the very people responsible for accumulating those toxic assets in the first place were then free were free to hand out politically toxic bonuses. He should have listened to Krugman Stiglitz and others. He then would have been able to say to those troublesome bankers. "You screwed up. We own you. No bonus for you. Your fired."

Obama's health care strategy was equally misguided. In many parts of the world haggling over a price is a art form. One starts high and the person on the other side counters such a high price with an equally low one. Despite having been born in a far away land -- Hawaii -- Obama seems unaware of such a game. His idea is to start low and let an overmatched oppenent bid him even lower. That is what happened with the Health care bill. Instead of trying to sell the merits of single payer option, the thing that works for the rest of the developed world, he tried to sell the public on complicated government option and when that did not work the status quo plus a subsidy to the uninsured.

It is a lot easier to sell a straightward good idea, then it is to dress up a less contentious, but fatally compromised bad idea. Compromised policy is not a starting point and certainly not something one should aspire to. It is a failure of nerve.


I am glad to hear childcare by another name is the Liberals "No. 1 social priority". It should be. However, Ignatieff is in dreamland if he can sell the same confused mess that the Liberals have tired to sell before.

It always unclear as to what the Liberals are offering. The goal of the program was ostensibly to work with the provinces to set up an early childhood education program for children under 6. However, to the average voter this amounted to little more than a vague promise to provide more daycare -- which the Liberals said early childhood education was not --- at sometime in the future; they could not figure out what this would mean for their lives. To add insult to injury, Liberals willingness to consider different deals for different provinces has muddied things all the more.

If the Liberals reintroduce such a program in the future, they need to present it in a form in which voters can understand. This is what they should do. They should promise to provide all day preschool and kindergarten for every 4 and 5 year old in Canada.

Of course, it will be said that the Liberals can not do this; education is under provincial control. It is and so is health care, but never stopped Pearson from introducing Medical Care Act. It is high time this group of Liberals grow some. No one is ever going to vote for a party that is scared of the Conservatives, scared of the provinces and just plain scared period.