President Obama and a Collective Fiscal Conscience

I had little concern that the Wall Street Journal editorial page would go early into the tank for President Obama.  Whether it would lend its voice to loyal opposition of long-term fiscal irresponsibility–or merely to screechy petulance born of recently turned political tables–remained another matter.  Today, Holman Jenkins planted his first post-inaugural editorial flag in a hopefully helpful spot, although he led off rather curiously:

Barack Obama thus far has treated politics as a business of mobilization, not persuasion.  That will now have to change. 

I say “curiously” because I think Jenkins may have it backward.  Not only is it difficult to imagine a movement sufficiently tectonic to produce a victory the size of President Obama’s without an enormously persuasive prime mover.  But also, while the impressive “mobilization” of which Jenkins speaks largely ended on election day, Obama has since moved from 62% to 82% favorability ratings in the polls.  He may have mobilized his way to victory, but he has earned a mandate-sized store of political capital by persuading the public of his competence during the transition. 

Now, it’s back to mobilization for the President—and he should make it snappy if he is to make most effective use of that capital.  Members of Congress know in their heart of hearts the difference between fiscal roads high and low.  On the former, they make difficult choices which do not entirely alleviate the short-term pain of all their constituents.  Of course, Mr. Obama’s own party tends to be less than rock-ribbed in this regard.  But as Jenkins points out: 

And yet, Mr. Obama’s goals are perfectly amenable to a genuinely reforming approach….End the tax preference for employer-provided health care.  Make it up to workers with an income or payroll tax cut.   This one step would move the economy towards consuming health care efficiently and designing insurance policies that actually insure rather than channel the privileged class’s health spending through a tax loophole….Nothing else would do more to improve the country’s fiscal prospects, or do more to lend practicality to Mr. Obama’s goal of universal coverage….

 There’s a lesson here.  Real reform is often deceptively simple, leading naturally to changes in behavior that are more far-reaching than any detailed government prescription could hope to achieve…. 

Mr. Obama has been handed an opportunity.  He will put the welfare state on a path to solvency or he won’t….His stimulus spending plans will blow up in his face unless the bond markets (which will be called upon to finance them) are convinced the dollar will remain sound and the spending under control. 

There’s obviously a lot in there for anyone to mull.  But Jenkins’s point remains both simple and age-old:  the low road of “avoid the pain, damn the consequences” is easy.  The high road is hard, because it requires of a President both the conscience to explain economic tradeoffs honestly to the public, and the leadership to lean on legislators to do what they already know is right.  Obama seems to have made some shrewd choices as his internal fiscal conscience keepers:  Orszag proved his just-the-facts cred at CBO.  Former Hamilton Project Director Furman learned at the feet of Bob Rubin who—despite his recent fall to earth—was the last public servant to act successfully as a President’s fiscal conscience.  Summers has no problem speaking his mind, whether anyone asks or not.  And even if Team Obama completely whiffs on its fiscal choices, Volcker’s status as an eco-tough legend seems secure.

But even with those fellas hanging about, a loyal opposition in the economic policy press is welcome and necessary.  Hopefully, Holman Jenkins will continue to be a leader in fulfilling that role.


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