The Obama White House is dabbling in small ideas when what the country needs is a big reset of this presidency. My suggestion: dump the measured moderation. It’s not working as economic strategy or as politics. Take a deep breath and admit the Democratic Party failed to grasp the enormity of the economic upheaval facing the country—people will be grateful for some honest talk. Start over with a more aggressive and realistic economic agenda that measures success in the tangible results people can see, not rosy forecasts of macroeconomic models.
Instead of holding back, start using the government’s vast, untapped powers in more ambitious ways that directly generate real changes in the economy, starting with jobs, jobs, jobs. Stop saying "recovery" is here or right around the corner—people know better. Start explaining with painful clarity the hard facts of our situation, including that no one really knows how long it may last, how deep this ditch will become.
Make only one promise. The government will keep trying—whatever it takes—to help Americans through this until they can begin building better lives, a better country.
The problem with this suggestion is everyone knows it’s not going to happen. Adopting an aggressive, high-risk mobilization of governing powers would be out of character for the no-drama president. His policy team of super-brainy technocrats would reject it as irresponsible. They are fidgeting with smaller adjustments because they claim politics won’t allow them to do more. The claim is defeatist, bordering on self-pity. Republicans will gain seats this fall exploiting the public confusion and misery. Paralysis will rule.
So why even talk about big ideas for greater government interventions? Because the country has no other alternative. When the private sector is not delivering what the society needs, government inevitably tries to fill the void, motivated by necessity more than ideological conviction. Banking and industry are now hunkered down defending their balance sheets, not investing, not hiring. Most consumers are tapped out, nursing wounds and not spending.
If the federal government declines to step up, that is a decision to do nothing. Let nature take its course, let the country stew in its pain and loss and social deterioration. Tea Party libertarians might be satisfied with that, but even the cynical GOP cannot embrace passivity and expect to survive in power.
The driving imperative of this new era is the expansion of governing powers, not a smaller government imagined by pious conservatives. That sounds contrary to current political passions. But the great unraveling has created an ineluctable drift leftward—toward measures that give government greater presence and power in the private economy.
A reinvigorated public square not only must strengthen the muscle of government regulation, as Congress has attempted. Government should also accept the need to produce some of the shared public goods people need in their lives—the common assets the private sector will not provide and often seeks to destroy.