Two Presidents and No Clear Direction
Having two presidents is starting to feel like having no president, and that's the situation we'll face until Inauguration Day. Heaven help us.
President Bush spent the weekend in Lima, Peru, at a meeting of the Asia-Pacific Economic Cooperation forum, conferring with Pacific Rim leaders who had no reason to pay attention to anything he said. Bush did, however, cut a dashing figure in a traditional Peruvian poncho. Yesterday morning, minus the poncho, he was back home lending his imprimatur to Treasury Secretary Henry Paulson's latest diving catch to save the global economy from utter ruin -- this time, the massive bailout of Citigroup.
A couple of hours later, the other president, Barack Obama, presented his new, high-powered economic team. Obama made a point of saying that the prospective officials -- led by Timothy Geithner, his pick to head Treasury -- would start working immediately. Obama also made clear that there's very little they can do except monitor the situation, study possible solutions and develop a plan to be enacted after Jan. 20. We can't afford another month or more of drift, Obama said. But I'm afraid that's just what we're going to get.
The problem, and it's becoming serious, is that no one is prepared to orchestrate a comprehensive program to stabilize the financial system, put a floor under housing prices and keep the economy from sinking into a long, punishing recession.
Bush could and should do it -- he is still president, and preventing economic collapse is part of the job description. But he won't. It's ironic that after being so aggressive and proactive in other areas, the Decider is so indecisive and passive about the economy. He has limited his role to signing off on whatever Paulson says is necessary -- most recently, $20 billion in cash and $306 billion in guarantees for Citigroup, a move that Bush apparently approved during his flight home from Peru.
In part, Bush's inaction stems from ideology. If the free market is always right, it ought to correct itself and get back on course. All the government really needs to do is take care of a few emergencies such as Bear Stearns, Freddie Mac, Fannie Mae, IndyMac, AIG, Wachovia, Citigroup . . . and, of course, whatever comes next. Not the auto companies, however: In Bushworld, the firms that created the toxic mortgage-backed securities that threaten to bring down the global financial system are somehow morally superior to the companies that created the Mustang, the Malibu and the minivan.
I don't think ideology explains it all, though. Even if he wanted to make a real run at righting the economy, at this point Bush has neither the energy nor the credibility to make it happen. Frankly, he comes off as less a lame duck than a cooked goose.
That leaves the other president, who has plenty of energy and credibility -- but no authority. Bush said he called Obama to inform him of the Citigroup bailout, but informing isn't the same as consulting. Obama said his new economic team will be monitoring the situation and giving him daily reports on where things stand. He could save them the trouble and just watch CNBC or Bloomberg all day.
Obama said he believes a huge economic stimulus is needed "right away." But he knows that won't happen -- it's unlikely that anything big enough could get through the outgoing Congress, and, in any event, a big stimulus is not something that Bush is willing to support. Obama said that "we cannot hesitate and we cannot delay," but he knows full well that hesitation and delay are all but inevitable. And he knows full well that by the time he gets the power to shape events, the economic situation might be much worse than it is now.
James Baker, the former secretary of state and current Republican eminence grise, made an amazing suggestion on "Meet the Press" Sunday -- that Bush and Obama develop and announce a joint economic rescue program. It was a stunning acknowledgment of how weak the Bush presidency has become and how dangerous it would be to spend the next two months meandering from crisis to crisis.
But that's the road we're on. When I get frustrated with Paulson's zigzags and reversals, with his overnight decisions to buy huge companies or write hundred-billion-dollar checks, I remind myself that he doesn't really have a president to work for. The poor man may stumble here and there, but he's dancing as fast as he can.