Has Obama done a good job? Well, compared to what?
Before you can ask whether President Obama has done a good job, you need to ask — and answer — another question: Compared to what? Take Andrew Sullivan’s essay on Obama’s record, which is getting a lot of attention. Sullivan writes that “the job collapse bottomed out at the beginning of 2010, as the stimulus took effect. Since then, the U.S. has added 2.4 million jobs.” Is that a good record? A bad one? It’s impossible to say until you’ve defined what you’re comparing it to.
For the purposes of judging Obama, there are, I think, two relevant counterfactuals. The first is: What if someone else had won the presidency in 2008? The second is: What if Obama had been less constrained by Congress and thus his record more closely matched his intentions?
To the first counterfactual, I think people overestimate the differences between Obama’s presidency and the hypothetical presidencies of the likely alternatives. President Hillary Clinton would likely have run an administration almost identical to Obama’s. Her priorities would largely have been the same. Her staff would largely have been the same. The advice she would be getting would largely be the same. There would be differences on the margins, of course, but the major legislative initiatives and economic trends of the past few years have been significantly driven by events. Obama’s biggest “war of choice” was health-care reform, and there’s little doubt that Clinton would have sought to capture that territory, too.
It’s more interesting to consider the difference between Obama and a President McCain or Romney. TARP — and the auto bailout — began under the Bush administration, and the financial system was in incredibly fragile shape in early 2009. I find it doubtful that either McCain or Romney would have pursued radically different financial-rescue strategies.
We can get an idea of the sort of stimulus McCain might have supported from legislation he authored as an alternative to Obama’s bill. His proposal cut payroll and income taxes by about $450 billion. As president, McCain would have been negotiating with congressional Democrats, who would have wanted spending components as a price of passage. So I’d guess a McCain-designed stimulus would have ended up being a bit smaller, and a bit more tax focused, than Obama’s stimulus. But I think the difference would have been more of degree than kind.
Of course, what came next could be very different. Or very similar. It’s easy to imagine either a President Romney or President McCain choosing to take on health-care reform — after all, you need to do something in 2010 while you wait for your stimulus to kick in — and, after negotiating with a Democratic Congress, coming to a compromise that looks a lot like RomneyCare, which was in turn the basis for ObamaCare. But it could have been very different. With the Bush tax cuts coming due, tax reform would have been an option, and if President McCain wanted to run as an independent, bring-everybody-together type, he might have pushed on a cap-and-trade plan to fight global warming.
Either way, I find it hard to tell a persuasive story in which the job-creation picture looks dramatically different under Romney or McCain. Maybe it’s a bit worse. Or, perhaps Democrats in Congress are willing to work with them to revisit a second stimulus when the numbers go south in mid-2010, and so it is, on net, a bit better. But we’re talking marginal differences.
In some ways, the difference between various presidents, at least during a period of crisis, is probably less salient than the difference between various congresses. After all, it’s Congress that actually writes and passes the bills. The president, at best, is an agenda setter, and a persuader. And so, when evaluating Obama’s performance, you also have to ask: How much of what we’re calling “his performance” is really about him and the choices his administration has made and how much is about Congress?
An Obama administration unconstrained by Congress — or even just unconstrained by the Senate filibuster — would have had a significantly larger stimulus that included fewer giveaways to legislators, and likely included a second round of stimulus in 2010. It would have moved health care more quickly, and included both somewhat tighter cost controls — like a simple cap on the employer exclusion for health-care spending as opposed to the excise-tax workaround — and a public option. It would have passed a cap-and-trade bill and, if it hadn’t already done so in 2010, a large infrastructure-investment bill. It would have passed a deficit-reduction bill that was probably nearly half taxes. It would have raised the debt ceiling without a fuss. Reading Jodi Kantor’s book on the Obama White House has convinced me that immigration reform would be in there also.
Obama without Congress, in other words, would be the Obama administration, but more so. I think that might have had an impact on jobs, though, again, there’s only so much the president can do. So perhaps unemployment would be in the high 7s today rather than the mid-8s. Whether you like the rest of the agenda or not depends on your personal political preferences, so opinions will vary.
So where do I come down? The Obama administration, like any administration, has made mistakes. They, like most economists and forecasters, underestimated the size and duration of the economic crisis. No bill they have passed has been perfect, or even all that close to it. But it’s easier for me to imagine how presidential decisionmaking could have left the economy in much worse shape today — a botched financial rescue could have done real damage — than in much better shape.
Similarly, while I can imagine other presidents pursuing other domestic priorities than health-care reform, the design of President Romney or McCain’s health bills, or cap-and-trade bills, would likely have been similar to the design of Obama’s initiatives: They would need bipartisan support just as he did, and so they would be aiming for the center just as he was.
Which is not to say there couldn’t be differences. Other presidents would have made different decisions, and potentially some big ones. Perhaps McCain would actually have sought nationalization and unleashed a disaster. Or perhaps he would have sought nationalization and sped the recovery. Another president might have been much more aggressive in their housing policies, or their Federal Reserve nominees, and that could have moved the needle more than some expect. But I rather doubt it. There’s a risk aversion common to most White Houses, particularly in times of emergency, which is why you saw TARP begun by a Republican and continued by a Democrat. In fact, I would say the Obama administration probably was near the frontier in terms of plausible levels of legislative ambition. One possible difference is that another president could simply have sought to do less, which, again, you can judge the merits of for yourself.
The counterfactuals where I think you can imagine a very different set of outcomes involve radically changing either the composition or the rules of Congress, but that’s a different question.
Finally, I should say that there is a separate set of questions to be asked on foreign policy, civil liberties and an array of other issues. But I’ll leave those to writers who specialize in those topics.
Related: For a deeper look at the economic counterfactuals, check out “Could This Time Have Been Different?”