US Politics Opinion: "Give 'em Hell, Barry" --- Why Obama Needs to Get Tough Over the Economy

The last two weeks have not been the best of times for President Obama. First, unemployment rose to 8.2% --- a "kick in the gut", as one Democrat called it, after a period of optimism that the rate was gradually easing.

This news, the soundbite that grabs the attention of Americans even during the summer when interest in politics wanes in favour of other pursuits, was swiftly followed by a report from the Congressional Budget Office predicting an ominous growth in federal debt levels.

Both developments were inevitably seized upon by Republicans as evidence that Obama has failed to fix the American economy during his tenure in office, building the narrative that a second term would be a disaster for the future of the American economy. The GOP put out the message: not only is Obama a short-term liability, he is a long-term danger to the American way of life.

The campaign propaganda has been accompanied by the corollary that Mitt Romney and Mitt Romney alone has the solution for America's economic woes. His experience as a company executive who created jobs, along with a working knowledge of how businesses function, have qualified the former Governor of Massachusetts to be the President who --- like Ronald Reagan --- can rescue the US from global economic turmoil.

It doesn't matter, in the context of an election, whether that Republican line of attack against President Obama is correct. It only matters that the perception resonates so voters accustom themselves to the idea that Obama cannot fix the economy.

That is why Obama is in serious trouble of losing his bid to remain in office, with five months to go before Election Day. There is not going to be a miraculous recovery in the economy before November --- if anything, the overall trend is downward --- and unless the Obama campaign can stem the steady erosion of belief in his economic competence, Mitt Romney will be the next President of the United States.

The President's response to this growing story line has been less than impressive. Instead of finding a way to establish his vision for rebuilding the economy, President Obama has chosen to tear down the record of Mitt Romney both at Bain Capital and as Governor of Massachusetts. Those allegations might prove fruitful in the short term, as a poll released on Thursday revealed that attacks on private equity firms do have some traction with Independent voters, but highlighting Romney's business record only bolsters the impression that the challenger has a plan to create jobs and mend the economy.

Obama is making Mitt Romney look decisive, an executive with a plan and the will to implement it, and that is an attractive quality for an undecided voter while the economy falters. In contrast, the President appears a man without a clue, a possible candidate for that death-knell accusation for a politician, “You don't know what you're doing." As The Wall Street Journal concluded while looking at the ineffectual Democratic attack advertisements, “Mr. Obama's re-election campaign is zero for two in its assaults on Mr. Romney's record at Bain and in Massachusetts. Is this the President's best case for a second term?”

It is not. More importantly, there are other options for Obama to make a case for re-election. The last week alone has seen three high-profile economists come out publicly, all but pleading with the Administration to renounce austerity as an economic policy and to embrace loudly and aggressively a growth agenda that pays no heed to the Republican message that Government spending is the ultimate problem.

Paul Krugman argued in The New York Times on Sunday, “Look (first) at total government spending — federal, state and local. Adjusted for population growth and inflation, such spending has recently been falling at a rate not seen since the demobilization that followed the Korean War.”

Krugman sees the “gigantic con game” of Republicans, with the attack that Obama is a big spender, in their assertion that cuts in spending are the cause of America's stagnant economy. Last week, he denounced the fallacy that The Austerity Agenda of spending cuts would lead to growth in the long term, especially when all nations are following the same ill-advised path:

So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.

In an appearance on the BBC, Krugman offered a lesson for bama to take into his television debates with Romney, Krugman illustrated how devastating a logical defence of growth policies can be --- especially when you are debating fellow guests who are more interested in promoting the vague ideological desire for a smaller state rather than connsidering the economic realities of a global depression.

Joseph Stiglitz, a Nobel Prize laureate like Krugman, told Bloomberg editors and reporters on Monday, “The Romney plan is going to slow down the economy, worsen the jobs deficit and significantly increase the likelihood of a recession.” And writing in The Washington Post, Larry Summers, Secretary of Treasury in the Clinton aAministration, explained why the current historic lows for interest rates on government borrowing make it economically rational to increase the debt now, investing in maintenance projects.

This is an argument steeped in technical language, but the gist is that if the Government borrows money now at 1% to hurry up maintenance projects like upgrading schools, or even restocking the nation's military supplies, this makes far more sense than borrowing next year when interest rates are higher. On top of that, the cost is greater in a year, as further use of of existing buildings or equipment leads to higher costs for repairs.

Over the last few years Republicans have managed to establish the theme that America's debt problem and stagnant economy can only be handled by reducing government spending. The argument has its own supporters among economists, such as Professor John Taylor, but Obama needs to counter the argument, rather than waver before it.

Last week, Krugman advised the Administration to criticise loudly and boldly, as Harry Truman did in 1948, a "Do-Nothing Congress" that is obstructing rational programmes for job creation. Krugman's wish is to see this President adopt the same combative stance towards a Republican-controlled legislature as his predecessor, who toured the country to appreciative calls of 'Give 'em Hell, Harry.'

To follow that lesson, President Obama needs to forcefully contrast his position with that of his opponents, as Harry Truman did in 1948. The key to Truman's success was his acceptance speech at the Democratic Convention, where he emphatically established his differences with Republicans through the "Turnip Day" ploy. As he noted in his memoirs:

I tore into the Eightieth Congress, emphasizing that "the Republican Party favors the privileged few and not the common, everyday man. Ever since its inception, that party has been under the control of special privilege, and they concretely proved it in the Eightieth Congress...They proved it by the things they failed to do."

Truman recognised that rhetoric alone was not enough:

Toward the end of the speech, I played my trump card. I announced: 'On the twenty-sixth day of July, which out in Missouri we call "Turnip Day", I am going to call Congress back and ask them to pass laws...which they are saying they are for in their platform.

Truman knew that Republicans would refuse to pass any meaningful legislation. So after this special two-week "Turnip Day" session, the President launched his "Give 'em Hell, Harry" campaign. Despite all predictions to the contrary, Truman believed he could win if he made the election a contest between him and a "special interests" Republican Party, rather than against the personable if bland nominee Thomas Dewey.

That is the lesson for President Obama from Harry Truman's shock win. Ignore Romney and and go after the present day Republican-controlled Congress. As Truman summed up his strategy:

The campaign was built on one issue – the interests of the people, as represented by the Democrats, against the special interests, as represented by the Republicans and the Eightieth Congress. I staked the race for the presidency on that one issue.

One leading conservative columnist, Erick Erickson, fears the possibility in 2012:

Our Republican Leadership in Washington, D.C. is extremely risk adverse. It is very clear the leadership has convinced itself, despite historic truth, that Newt Gingrich lost his job because of the government shutdown way back when. They do not want to have protracted fights. They want to appear reasonable. They crave the press’s adoration of “grown ups” and “reasonable men".

I expect Barack Obama to capitalize on this Republican lack of self-esteem before October. I expect him to manufacture some fight with the GOP on fiscal issues and expect the GOP to cave so he can appear “reasonable".

Truman's example and Erickson's fear give Obama the incentive to force Republicans as quickly as possible into addressing some form of legislation for growth. If Republicans do give way, in their desire to be seen as “reasonable men", then Obama wins, as he can then campaign on the bi-partisan "get things done" theme. If Republicans refuse, then the President can cross the nation on a campaign against an obstructionist Congress.

Neither approach is perfect strategy, but both are preferable to the current insipid assault on Mitt Romney's personal record. And both, by a wide margin, are a better approach than what Krugman perceives, “The president’s advisers keep turning to happy talk, seizing on a few months’ good economic news as proof that their policies are working --- and then ending up looking foolish when the numbers turn down again.”

There is a coming crisis in the world economy that will demand decisive leadership. The President needs to get in front of this issue, with a plan for domestic growth, before he is overwhelmed by events that he cannot control. Otherwise, by default, Obama will cede the economic ground to Republicans who have a claimed solution to that problems that the current Administration appears unable to address.