Washington Post columnist E.J. Dionne recently wrote this about Obama which puzzled me:
An Obama who roared straight ahead hit a political wall. This next Obama is using finesse and subtlety to get to the same place.
Roared straight ahead? Obama? Yes, he appointed two not-batshit-lunatic Supreme Court Justices. But economically, how different would he have been than a Republican? Maybe there would have been more tax cuts and less spending in the ARRA, but even Republicans would have done something. Consider:
What do the American economy and economic policy look like right now on that President Romney branch of the multiverse?
Well, they look a lot like they look right here on earth.
President Romney would have provided support to troubled banks -- capital injections and stress tests -- but he would have avoided even a few targeted nationalizations of the banking system: He is, after all, a Republican.
He would not have pushed the Treasury to engage in large-scale quantitative easing through the Public-Private Investment Program or large-scale mortgage restructuring through the HAMP home mortgage modification program.
On monetary policy, Romney would most likely have reappointed Ben Bernanke and let the Federal Reserve proceed as it wished. On fiscal policy, Romney's Chairman of the Council of Economic Advisers Mark Zandi, and his National Economic Council Director Douglas Holtz-Eakin, would have proposed a fiscal stimulus package that was 60 percent tax cuts and 40 percent spending increases. The Democratic Congress would then have bargained with the administration to produce a stimulus that was 40 percent tax cuts and 60 percent spending.
But, of course, all these policies are exactly what Obama and the Democratic Congress actually enacted.
On global warming, Romney would have abandoned economists' preferred Pigovian carbon tax for the complicated, corporatist and business-friendlier approach of a cap-and-trade system. But he would have been no more successful than Obama in assembling a Senate coalition to achieve anything.
On healthcare, Romney would have taken his signature Massachusetts health care reform and expanded it nationwide: we would have RomneyCare. But that is precisely what we do have.
I see only two key policy differences between RomneyWorld and ObamaWorld. Had Romney been elected president in 2008 we would not have repealed the military policy of "Don't Ask, Don't Tell." And had Romney been elected president in 2008, Elizabeth Warren would not now be assistant to the president for Consumer Financial Protection.
Like I said, we also got two not-batshit lunatic Supreme Court Justices. It's not clear that Romney would have been worse on environment issues either. Likewise, we wouldn't be having the Social Security IS DOOOMMEEDDD!!! crap either: the political dynamics would be such that the Democrats would stand firm on this, just like they did when Bush tried it.
While Palin would be a lunatic as vice president, no one in the McCain administration would have listened to her. I don't see McCain being much different than Romney.
I don't see McCain being much different than Romney.
You haven't mentioned foreign policy. Under a McCain administration the U.S. might have bombed Iran by now. (I think this constitutes a difference between McCain and Romney, but I'm damn sure it constitutes a difference between McCain and Obama.)
Also, I don't think there's a chance in hell that Romney would have picked Palin for V.P. That by itself distinguishes him from McCain. Not to mention the fact that statistically McCain is much likelier to die in the next 2 to 6 years than Romney (or Obama) is.
FOLLOWING IS A COMMENT POSTED IN THE NYT. I think it makes a good deal of sense. I wonder whether this is something that might be accomplished administratively. Would Obama have the (presidential) ability to do this if he could be sold on it?
August 7th, 2011
Rebooting the housing market through a universal home loan modification program would be the best way to fix this problem. It will get the economy going again. If we put America back to work, revenue will be raised without raising tax rates. The United States owns, controls and guarantees about 90% of all home loans.
I suggest that the President announce that all of those loans be modified simultaneously, so that the principal is reduced to 85% of the current tax assessment, the term is extended to 40 years, and the interest rate is equal to 4%. The homeowner will be required to pay back the principal reduction by paying the government one third of the home's appreciation when the house is sold or refinanced, capped at the amount of the principal reduction. This would apply to all homes, whether in default or not. This would amount to a governement loan to all homeowners which, I believe, would reboot the entire economy and make things much better for all Americans.
Universal home loan modification would lower the average homeowner's monthly payment by 40%. That money would be spent, for the most part and restore consumer demand. That would create jobs which would further demand. More spending, more jobs, more tax revenues. It would result in a huge boost for the equity markets. The banks' balance sheets would be aided by giving real value to the cdo's that are still poisoning them. The boomer's retirement accounts would be repaired. Foreclosures would be reduced, the housing market would bottom out. Underwater homeowners would be thrown a life ring. The conflict between the haves and the have nots, which the debt ceiling deal boils down to, would be ameliorated.
It would cost some real money to do this, but most if not all would be paid back. And the added income, decreased misery, and reduced unintended consequences of prolonged unemployment and deficits would be avoided. No ideas currently on the table have this potential.