Intersecting Minds: Education, Business and Technology at the North Carolina State Jenkins Graduate School of Management

Obama’s Strategic Gamble

Watching the Massachusetts Senate race has been fascinating on a number of levels, but there’s one in particular tossing about my brain, and it concerns President Barack Obama’s strategy for tackling major issues when he was elected. Obama has long been known to play strategy over tactics, and it’s the major reason he was able to defeat Hillary Clinton for the Democratic nomination in 2008. He takes the long view.

Looking back to Obama’s nomination we can sketch a basic outline of Obama’s domestic agenda. First, stabilize the economy. In early 2009, we didn’t know if we were going to fall off a cliff. While he took a lot of criticism from both the right and left, Obama managed the $787B stimulus that likely prevented our economy from sliding towards a second Great Depression.

Then, instead of approaching financial reform and staying focused on the economy, Obama chose to tackle health care reform. Obama knew the time was ripe to act considering Democrats had just earned a 60-seat majority in the Senate and a large majority in the House, and with a decisive Obama victory, they had the necessary political capital to burn.

You can see the logic in Obama’s thinking. If the Dems could finally pass health care, they would have a signature accomplishment to point to. In addition, this bill would help millions of people. Once voters could have a year or two to let the effects of the bill sink in (i.e. no more denial of coverage for pre-existing conditions, extension of coverage to 30 million+ people), then they would be much more amenable to further legislative action. Health care reform would truly be a landmark. And from there Obama would have an improved ability to work on other major issues such as financial reform, environmental reform and education.

Almost a year later, Obama’s gamble is on the verge of failing. The ineffectiveness of the American legislative system has still not produced a signed health care bill. To the contrary, the bill has undergone such criticism from both the right and left that not even 40% of the nation supports the bill in its current form. And with Scott Brown’s victory tonight in Massachusetts, it appears as if House Democrats will now wilt on trying to pass the legislation.

Even worse, the economy has continued to be miserable. While Wall Street prepares to pay out tens of billions in bonuses, the unemployment rate remains above 10%. Populist anger is real, and it has increasingly become pointed at the current administration. While Reagan, Clinton and Bush may have dug this hole, the public is expecting, fairly or unfairly, for Obama and the leadership in Congress to pull us out. When they fail to see results, they take out their frustration at the polls.

With Brown’s election to the Senate, the chances of health care passing have dimmed considerably, and Obama’s strategic gamble looks like it will come crashing down on him and the Democrats. Unless some version of health care gets passed soon, the left will lose faith in Obama and Congress, and the Republicans will become increasingly oppositional to any other legislation going forward.

Hindsight is 20-20, but I wonder what would have happened if Obama had chosen to pursue financial reform first and then gone after health care. The people needed to see effective government in action to buy into Obama’s campaign pledges. And the last year of hapless governing by the Democrats and obstinate opposition by the Republicans is what we have received.