In his first month, President Obama has talked down the economy and engineered a huge surge in federal spending. Now the bills will come due. The pain may be just beginning.
Long ago, there was a president who said, "The only thing we have to fear is fear itself." Now the message from the White House can be boiled down to something like, "Be afraid. Be very afraid. And give this president what he wants."
Do we overstate the case? We'll just say this: Franklin D. Roosevelt made his share of missteps but understood the need to calm a frightened nation and restore confidence. If that meant closing the banks, so be it. Anything to stop the panic.
Barack Obama, inheriting a situation not even close to what FDR beheld, talks as if the nation isn't scared enough. He pushed a vast peacetime spending bill through Congress by warning of "catastrophe" if it failed to pass. But where boldness had been needed — with the banks — only vague work-in-progress is on offer.
With a performance like this, and Obama only a month in office, the markets are noticing. We see the Dow industrials down about 8% from the pre-inaugural close and off more than 20% from Election Day. Wall Street — and Main Street — had hoped for strong, reassuring leadership. Instead, we have a presidency "spinning the bad news story," as Cato Institute economist Steve Hanke puts it.
As details of the "stimulus" bill signed Tuesday emerge, it's also become clear that little is there to jump-start the economy. It's more like a herd of Trojan horses designed to re-institute the costly welfare state that Ronald Reagan and even Bill Clinton dismantled.
Meanwhile, the nation waits to see what the administration has in mind for ending the balance-sheet crisis at the root of the pain.
This brief track record shows the power of the politics of fear. It's the same term the Left threw at George W. Bush, as it accused him of exploiting terrorism fears to expand the security state.
Obama is now doing on the economic front what his allies have accused Bush of doing on the war front: Stoking fear to amass power. In his case, he's not trying to listen in on more phone calls. What he's seeking, and so far achieving, is bigger government with greater influence over Americans' lives and livelihoods. Fear is working.
The problem is, if you talk down the economy you get a down economy, and stocks down, too. It's worse yet when your talk is not countered by credible action to ward off the threats you claim.
The actual dollar cost of the legislation is trouble, too. Bills won't come due all at once, but new taxes and government debt that could hobble the economy for decades is looming.
People look ahead at this and don't like what they see. Their gloomy view of the future further saps their confidence in the present. More than ever, they need what candidate Obama promised: hope. It's not what they're hearing from Obama as president.
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