Outlook: Obama's Domestic Agenda Teeters

 Nick Gillespie and Matt Welch
Nick Gillespie and Matt Welch
Nick Gillespie and Matt Welch
Editor, Reason.tv and Editor, Reason Magazine
Monday, July 20, 2009; 11:00 AM

Nick Gillespie, editor in chief of Reason.tv and Reason.com, and Matt Welch, editor in chief of Reason magazine, were online Monday, July 20, at 11 a.m. ET to discuss their Outlook article titled "Obama's Domestic Agenda Teeters."

Archive: Transcripts of discussions with Outlook article authors


Matt Welch: Hi everyone! Glad to be with you here today, and let's get started!


McLean, Va.: Since when is a 57 percent approval rating a bad thing?

Nick Gillespie: I wish I had a 57 percent approval rating in my own mind! But that figure looks less sharp when you consider two things: First, it was 11 point higher in April and, as we note in the article, Obama's policies are genuinely unpopular with the public. Nobody other than Hank Paulson is still crowing about TARP, auto bailouts are not popular, and few people want marginal health care reform at any price.


Anonymous: Given the tone and tenor of your column, what makes you any different from Rush Limbaugh, Sean Hannity or the many others whose sole goal is to tear Obama down?

Matt Welch: Though I rarely listen or watch either, I suppose one difference might be that Nick thought Bush was a "Big Government Disaster" (http://www.reason.com/news/show/131264.html), and I (shudder) voted for John Kerry. More specifically, the content of our criticism tends to be different than vested-interested Republicans, because we're not.


Los Angeles, Calif.: Why do you say that Obama has a short honeymoon? According to Gallup poll, a President's honeymoon is where his poll numbers are greater than 55 percent and the latest Gallup poll at Obama's 6 month mark his poll number is 60 percent. George W. Bush's and Clinton's "honeymoons" only lasted three months each and Obama's is lasting so far at least six months. Neither one of them have had to deal will the economy and two wars this early in their Presidencies. You sound very partisan.

Matt Welch: I would say less that it's short, more that it's ending far quicker than we & most people might have thought. Of course, it's possible that you could have said the same thing about Ronald Reagan early in his presidency. And if I'm partisan, it must be in that special, don't-belong-to-or-like-political parties kinda way.


Washington, D.C.: What alternatives are the GOP or Blue Dogs offering to the multiple health care plans currently under consideration in the House and Senate? What ideas do the Blue Dogs have to control costs? Are they willing to give up their pork barrel projects to help move the process along?

Nick Gillespie: I think one alternative that will gain ground is the idea of severing the tie between employer and health care in the form of killing the tax break for employer based programs. We live in a world in which individuals are expected to shop for and pay for houses, cars, retirement, you name it. We should be in charge of finding and paying for out health care. Both single-payer utopians and business interests want to can employer-based health care, so it will happen. And it will help usher in an age of actual competition for patients and cut costs while raising service. Just like it has in every other industry.


Burlington, Vt.: If Obama's Keynesian solutions don't work, what solutions should we try? How would YOU fix the economy?

Matt Welch: Though it might sound flip, I'd start with rolling back the notion that presidents or federal governments have a magic wand to "fix the economy." They don't, and the more they think/pretend they do, the more apt they are to intervene whenever, say, an auto parts supplier goes out of business. More substantively, the root of the crisis is an illiquid corner of the financial market. I would cease bailing everything out, and see what the government can do (and most likely, not do, or undo) to create a trading market for that illiquid sector.


Ann Arbor, Mich.: What's it like to have your evidence-backed assertions continually ignored by people from whom you'd like to hear? I'm continually frustrated by the phenomenon, and figure that the two of you have dealt with it for longer than I have. I'm sure this article will continue the trend.

Nick Gillespie: For me, the evidence that the drug war is a failure on every level (other than providing ever-increasing wages and jobs for cops, prison guards, addiction counselors, etc) is irrefutable. Yet it proceeds apace, with annual increases. I also find the inability of people to recognize that government spending, not revenue, is responsible for bankrupt local, state, and federal governments. Look at increases in spending vs. revenue and the ugly truth is there to see, plain as day.

Yet no one in California--with the exception of the voters, who put down all tax increases in ballot initiateves--wants to hear that.

It can be frustrating at times, but it takes a long time for reality to set in. First they laugh at you, then they ignore you. Then they laugh at you some more. Then when they adopt your ideas, they really laugh at you. Or something like that.


Washington, D.C.: Is Obama's domestic agenda even plausibly capable of a Clintonite turn? To avoid becoming Carter, does he have to abandon alternative energy and public health care entirely?

Matt Welch: Maybe! I think if Obama limited his scope on health care reform so that it really went after what most pro-reform people really want -- finding a way to insure those people who are both uninsured and seeking insurance (a place where I have been for example), he could be hailed as a hero. Unfortunately, I think the chances of getting after that in a rational, saleable way are not high, because people & interest groups are wedded to company-provided health care and all the state limitations on insurance programs, etc.


Arlington, Va.: I thought your comparison of Obama to Bush on using a Crisis to jam through legislation was spot on. With Bush, everything was a security crisis and we passed bad laws. Between the media love affair with the President, the huge Democratic Congressional majority and the Republican inability to mount a real opposition, what can the average person do to make sure we aren't stuck with bad policies? I'm feeling helpless.

Matt Welch: I'm not normally in the business of advising people how to act, but since you asked, I have always heard from everyone involved in government work that one of the most surprisingly effective things a citizen can do is HARASS YOUR CONGRESSCREATURE. The House of Representatives is a sensitive organ, and when a bunch of people start shouting at a Rep about such and such policy, they tend to take note, and even change votes.


Overland Park, Kan.: Do you think Obama will shift his agenda more to the center if Republican's gain more seats after the 2010 election?

Matt Welch: Undoubtedly, yes. As we say in the piece, Obama is a wonderfully talented politician, one who is keenly aware that it's his own popularity, and the coattails that has in the House, that's key to pushing through changes that aren't nearly as popular. If he's rebuked, he'll obviously change the calculus. What's more, with the deteriorating fiscal picture he might be relieved to have an *excuse* to change course.


Prescott, Ariz.: Do you think that not wanting to takeover GM and taking over GM because you don't see any better option to ward off what would be a quick and massive economic dislocation are mutually exclusive? I really don't want to mow my lawn, but after the recent rains here I don't really see any other option for beating back its tangled masses. Hey, what would you do to stimulate job creation?

Nick Gillespie: If GM had gone directly into bankruptcy, the dislocation wouldn't have been any more intense than it is now. This is a company (and an industry) that has been dislocated for decades now. Bankruptcy is not liquidation, after all, and GM has assets worth buying at certain prices.

Re: Job creation. One thing that screws up the stimulus and Obama's and most pols' thinking in general is that they think in terms of immediate crisis rather than long-term solutions. You want to create jobs? Consistenly keep the cost of hiring and maintaining workers lower. Keep taxes and regulations minimal and clear (Bush, btw, passed more bigger regulations than any modern president). These aren't as snazzy as pouring dollars down the shovel-ready drain, but over time, that's how you keep an economy vibrant and resilient. And oh yeah, don't mess with the money supply all the time.


Right-Wing Nut in Florida: Excellent article, guys.

I predicted last November that within a year the Obamaniacs would be a lot more disappointed with him than I would be.

Any reason to doubt that prediction?

Matt Welch: Thanks. And yes, there's plenty of reason to doubt that, simply because it's too early for most supporters to be *really* disappointed in him, and because hatred of the Republican Party -- much of it so very richly deserved -- shows no sign of abating.


New York, N.Y.: Hi Nick and Matt, Would you say that you are more interested in promoting what you consider sound policy rather than the party that promotes it?

Nick Gillespie: Absolutely. I am not interested in partisan politics, which I believe is a lagging indicator of what's going on in American life. Being a small government, pro-choice, pro-open borders, pro-drug legalization, etc. libertarian is for me a pre-political question. It informs what party I might seek out, but the party should express my desire. I have never understand people who use a party affiliation as a primary dimension of identity. And in being this way, I'm in more and more company--party affiliation is way down since the 1970s.


New York City: The AMA facilitates a hard cap on Medical School Admissions. The supply of doctors is limited, and their prices are correspondingly high, indeed monopolistic. Since "reason" is about free markets, then surely you have criticized this, right?

Nick Gillespie: One frustrating dimension of the health care reform debate is players studiously avoid questions of the supply of doctors, nurses, etc. There is no question that the cartelization of doctors and other providers is a major problem that reflects a 19th model of doctors as secular priests.

The medical care provision industry should be as varied as the food-delivery industry. The reason medicine (and education) is so monocultural is precisely because it so heavily in bed with government, from regulations to funding.


Washington, D.C.: You laud former president Clinton's economic performance, and cite him as a model for which Obama should aspire, but even many of Clinton's former economic advisors agree that deregulation caused many of the economic problems from which we are now suffering. Do you really want to go back to a time when the government essentially let Goldman Sachs and other financial services companies do whatever they wanted, as Robert Rubin did? That's why I could never be a libertarian -- ideologues who espouse the same ideals no matter what the reality is. People realize that more government regulation is needed now than was in the 1990s. Hasn't the recent financial crisis proven that?

Matt Welch: I'm sorry, were we living in a time where Goldman Sachs *isn't* doing whatever it wants?

The deregulation-caused-everything narrative is attractive, but (sadly!) false. Our econ columnist Veronique de Rugy did a study that counted up the number of economically significant regulations added during each administration over the past several decades, and Bush came out higher than anyone since Richard Nixon. Sarbanes-Oxley was hardly what you'd call a deregulation. And much of the economic meltdown came from the sectors that were *heavily*, not lightly, regulated.

There's also a difference between smart regulation and dumb regulation. Many libertarians (including one on the SEC) were advocating, for example, the creation/enabling of a clearinghouse to at least count up the trades & values of mortgage-backed securities and credit default swaps.


Tel Aviv, Israel: I enjoyed the article, but there was no mention of Obama's foreign policy so far. I live in one of the areas of the world that is effected by America's foreign policy, and would like to know what your perspective is on his stance in regards to, but not limited to, Israel, Iran, Russia, Europa, China, and North Korea.

Matt Welch: It's a little hard to assess so far, but as a mere *directional* issue I have preferred Obama's foreign policy approach to Israel/Iran/China than that of Bush or McCain. He seems to be marginally more humble, more apt to say "it isn't always about America." As someone who thinks the rest of the world needs to take much more responsibility for itself, that's a first baby step I like.

But then again it's hard to see a huge difference between Bush on Russia (so far), or Afghanistan, except for the fact that Obama seems to be doubling down there. And on Europe, we've already seen a lot of rhetorical bullying on economic policy, though without much to back it up.

My general prediction is that he'll end up as most presidents do -- realize that foreign policy is an area where he has latitude to Act. And so therefore will Act.


Chicago: "Being a small government, pro-choice, pro-open borders, pro-drug legalization, etc. libertarian is for me a pre-political question."

Yeah, that's all good, but that's a pipe dream. How do you respond to the accusation that libertarians are living in a fantasy world?

Matt Welch: Guilty as charged! Which is to say, I don't wake up every morning agonizing over the gap between my wishlist and the goings-on in professional governance. I prefer the fantasy of my own tastes and instincts -- and the collective fantasia of all of us doing/thinking/acting in whatever private/non-violent way we choose -- over the "reality" of what is at the end of the day a cartelized racket that aims to professionalize small differences and bum me out with my own money.

(Puts down bong)

At any time, in any government, there is some belief that is so far removed from policy so as to seem impossible. And yet it becomes law within a decade. I think we're on the verge of that with legalizing pot. When that blessed day comes, we'll have the fantasy-livers, in part, to thank.


Northeast girl: Why is it that you guys and a lot of political "pundits" think bipartisanship is so important for constructing actually useful legislation? I have no confidence that the so-called moderates in the Senate are a) any less beholden to corporate interests or lobbyists than their more partisan colleagues and b) can craft a health reform bill that will actually bring down the number of people who are uninsured. Bipartisanship may be necessary to advance an agenda, but it doesn't mean the agenda is good. Just for historical context, moderates didn't end Jim Crow laws and stop segregation in the South...

Nick Gillespie: You're right to put scare quotes around "pundits"! Neither of us is pushing bipartisanship or moderation. However, there is a real value in finding consensus, especially if it reflects what the voters mostly want.

One major problem with Bush and now Obama is that by governing via (phoney) crises, they seek to get consensus through scare tactics. That leads to particularly bad policies, which don't even have the value of mass support.

Enforcing true consensus would also, in my mind, reduce the role of government generally. Americans don't agree on everything. If we can't find a mass of support for something, then government just should step out of that and let free individuals figure out how to do it.


Anonymous: How realistic do you think the chances are for your libertarian views to be enacted? It seems like federalism is dead, and we're more one nation than 50 states and therefore look to the national government more than state governments, which just leads to more and more power drifting to D.C.

Matt Welch: At the moment I'm more bullish about the word "no" then about the word "yes." Which is to say, at some point a too-large majority of Americans are going to make further bailouts & stimuli a political non-starter.

While I agree with your pessimistic take on power-concentration in DC (though I'm hardly a consistent/principled federalist), I think on balance the fastest-growing source of power is *outside* of government. People's personal lives, and options, have exploded over the past two decades in ways that were literally unimaginable before. That happy fact will eventually affect public policy in all kinds of positive ways, though who knows how.


Arlington, Va.: In your article you compare Obama to Carter but then spend more time making the case for him being like Bush. Which one is it?

Nick Gillespie: He's like Carter in that he's being attacked from his own party's left for not going far enough--and facing down a group of conservatives too on the right.

In terms of style, he's like Bush: Everything is a crisis that must be fixed now, hurry up, we don't have time to write the legislation much less read it before we vote. That sort of thing. And like Bush, he's generally enamored of bullshitting: Bush claimed to be a small government guy but jacked spending like no one before him. Obama pretends to be interested in new ideas (or to be enacting pay as you go budget rules) and just isn't.

If he continues to govern like Bush, he will end up like Carter: a one-termer. There is the Clinton option, of course, which gave rise to (only) relatively better things in terms of slowing the growth of government and creating general conditions good for prosperity.


Glass half what?: "You want to create jobs? Consistenly keep the cost of hiring and maintaining workers lower."

That is one approach. Another approach is to improve the value of potential employees by improving their job skills, which might be done by refining training to increase the workforce's skills and/or education. Its not just about finding the cheapest workers, but finding the workers that return the most on employers' investment in them.

There is an appropriate role for government in ensuring that we, as a country, have a highly skilled workforce which can help drive the economic engine.

Nick Gillespie: Quick rebuttal: The economy is not an engine that needs to be "driven." It's an incredibly complex set of interactions that no one can or should direct. It's the ultimate network.

I firmly believe that companies should do most of the training for the workers they need (and they do this btw). There's no reason why GM or Microsoft or McDonald's should be costing society to produce the workers they need.

Schools--preferably decentralzied schools of choice, whether public or private--should engage students and get them to stretch their minds in interesting ways. But business should train and pay for that.


New York City: Do you believe going from no health insurance to having health insurance is "marginal ... reform"?

Nick Gillespie: I'm talking in terms of the overall reform--it's clear that whatever comes out of the hellish legislative process will not be immediately transformative as, say, going from what we have now to a single-payer plan or to having no government role in health care.

RE: insurance. Getting insurance is good; it's not always clearly correlated to any given person's health, though, either. One of the reasons why health insurance is expensive is because it's not really insurance against rare catastrophic events (as homeowner and car insurance is) and instead covers every routine procedure such as checkups or random visits for a cold. This type of insurance is a recipe for massive bloated and inefficient costs.


Rolla, Mo.: Do you see escalating fiscal irresponsibility of the U.S. Government?

If so, has any portion of the government distinguished itself as less irresponsible (Democrats, Republicans, Congress, Executive, FED, Treasury, etc.)?

Do you see any way hyperinflation can be avoided?

Nick Gillespie: Like the Von Trapp family children, each branch and agency of/in government disappoints and enrages in its own special way. Under Bush we saw the GOP sell its soul (and they believe in souls!) for votes and power; the Dems came back into the majority with a frenzy of farm spending that was just awful. The boys at the Fed are always too smug for their own good, etc.

Where I do see some hope is in the electorate, which is quickly gaining an education in what happens when you cede too much control or give too much power to government. There's a reason why independents are growing in numbers and the Dems and Reps are shrinking.


Washington, D.C.: As free-market libertarians, does it annoy you that Republicans are now claiming to be the party of free markets, when eight years of Republican rule were characterized by huge government regulation, deficit spending, and the least humble foreign policy possible? It seems a bit rich for them to now be calling themselves defenders of small government in the age of Obama. So even if Obama is faltering, doesn't he still benefit from having an opposition party which is hated by Americans and has no real credibility?

Matt Welch: I'd say "amuse" more than "annoy." Aside from the chutzpah of it all, I'm A) glad that at least some Repubs are paying lip service to the old-timey limited-government talk, while B) unbelieving for one second that they'll do anything positive with that once (if ever) regaining power.

What's semi-irritating to me in addition, is that the Dems actually had a case to make about post-Cold War fiscal responsibility, when comparing Clinton to Bush. For those younger than me (i.e., who don't really remember Jimmy Carter), those labels could have been permanently tweaked if a fiscally responsible Dem had replaced Bush. And in fact Obama did promise a "net spending cut," and oodles of fiscal responsibility, as late as mid-October last year.

Alas, so much for that, etc. Basically, whoever's out of power will claim to be quasi-libertarian (without using the word), then will forget it once in power. One of many reasons I dislike both parties, and rarely vote for candidates from either.


Philadelphia: "governing via (phoney) crises"

So, we're not in the midst of an economic crisis? One that's not based on a single event but is long-term and structural in nature? One that has more to do with a nation that's declining in its ability to produce and that's built an economy on unsustainable, credit-based consumption?

Nick Gillespie: We are in a recession, one that has multiple causes, chief among them bad government policies, ranging from misguided attempts to boost home ownership, rotten management at the Fed, long-term overspending, bad state-level goveranance and more. And there is a business cycle, which will never be repealed.

We are not in any sort of existential threat to the American way which, simply put, is about having a relatively open and free economy and society. US manufacturing is not an issue here, as we still make a humongous amount of stuff.

The real question is what do you do to minimize periodic recessions? You start by not adding to the problem, which is precisely what TARP and stimulus and various bailouts do. They stretch the pain out and make it longer and ultimately deeper. Consumers are already responding by reducing their credit exposure.

This is not the end of the world. And it wouldn't have been the end of the world if Dems and Reps hadn't passed TARP based on Hank Paulson's pants-wetting "end of the economy over a long weekend" scenario.


Atlanta: You are just asking the wrong questions. Who cares if he's popular? A good leader does not. A good leader does what's best for whatever he/she is leading. So, the poll numbers should be immaterial (I know they are not, and that is why we get the 'leaders' that we have). They should not care so much what the public thinks, they should be doing the right things (and they haven't been).

Matt Welch: Who cares? *He* cares. Congress cares. Political capital is called "capital" for a reason -- politicians spend it on stuff they'd like to see done. When they run out of it, they can't get as much stuff done. While I agree with your yearning for a polls-free politicians, nobly seeking the Right thing to do because it's Right and Responsible, we just don't live in that world.

Further, when huge events shock people into seeking & receiving such leadership, that can be an even bigger agent for bad policy. Patriotic consensus, too, can be an unhelpful thing.


Alexandria, Va.: Excellent article. I was a multiple commenter to your article. I hope to see more of your stuff.

Isn't this legislative debacle a huge miscalculation by Axelrod or Emanuel or both? They thought they could ram through any legislation just on Obama's popularity and use the fear associated with the recession as a tool.

Shouldn't someone get canned?

Nick Gillespie: Everyone in government should get canned on a regular basis.

Whether anyone does in this case, who knows?


California voters: I wouldn't give California voter too much credit. Those same voters that you laud for voting down tax increases (allegedly because they recognize how much spending has risen) are the very same voters that have personally approved much of California's spending increases. And when voters specifically earmark money for social programs, as voters are inclined to do, California law makes it really hard to cut back.

Matt Welch: As a lifelong California voter, I tend to agree. A couple of caveats, though:

1) The bulk of spending initiatives are not put there by voters, but rather by the state legislature, in cahoots with interest groups.

2) Yes, voters approve way too damned many of them, but so do the very same newspaper editorial boards who then turn around and slam voters for following their advice.

3) What happened in California this May *is*, I think, seismic. Yes outspent no by 7 to 1, and lost 5 of 6 "you must pass this" initiatives by an average of 30 percentage points. In a blue state. That's huge, and you can bet the ramifications are being felt in Washington.


Bipartisanship?: Do you really think that a bipartisan approach to health care reform would produce a genuinely good piece of legislation? Doesn't so-called moderate Chuck Grassley get a lot of money from drug companies (I'm sure other moderates do as well)? I'm sick of the "credit" moderates get, they're no less industry money-dependent than any other politician.

Nick Gillespie: Moderation in the defense of liberty is no virtue and excess in the condemnation of Chuck Grassley is no vice.

What we need for true and effective health care reform is precisely to remove it from the political arena and place more choice in the hands of individuals. We all value and define "health" differently and we should have a system that acts upon that basic truth and gives people as many options when it comes to buying health care (or not) as buying a computer or a car or a meal.


College Park, Md.: Sometimes I wonder if, in retrospect, Obama wishes he didn't get the nomination. I think he's a good man, and I think his intentions are pure, but I also believe that he didn't have a sense as to how complicated the nation's problems actually were. Casting a vote is an easy enterprise. Developing "a vision for the future" and getting people to sign on to it, especially when it could lead to personnel hardship, is much tougher. What do you think the Obama administration could do to lead more effectively on some of these big ticket issues? Should they be setting criteria for the Democratic Party saying "give us THIS at this PRICE and I'll pitch it to the people?"

Matt Welch: As Mel Brooks taught us, in perhaps his last semi-funny line, it's good ta be da king. Seriously, a young and relatively inexperienced dude gets to be president in his mid-40s? Sign me up!

As for the vision thing, I've always found it striking that underneath his hope/change rhetoric he didn't seem to have a lot of what you'd call original ideas. The stimulus plan, for example, is the worst kind of washed-over interest-group padding, with no interesting spending on anything. I've found that actually surprising.


Greeley, Colo.: How can Obama guarantee government payout for GM and Chrysler warranties?

Matt Welch: He's the president!


Washington, D.C.: The idea of breaking the link between employers and health insurance makes me sick to my stomach, because I'm a federal worker, and the government has promised to pay 72 percent of my insurance premium in retirement. Believe me, I wouldn't have taken the pay cut I did when I joined the government if I thought that the government would ever renege on that promise.

In any event, are there any countries in which there ISN'T a public option and where employers aren't the source of group health?

Nick Gillespie: In any policy discussion there are legacy costs and arrangements that need to be dealt with, so regardless of what happens, I'm sure people in your boat will get something no matter what. And your situation is one more argument for individuals always being in control of their benefits. Health care is compensation and should be understood as such by all involved.

I doubt that public sector health care will ever totally disappear--at the very least, there will be safety net care provided by government at some level (though there could be more done via private charities). But we can get to a much cheaper, fairer, and better system by making it easier for people to price and purchase their own insurance.


Bethel Park, PA: Maybe Obama should go on a 50 state campaign to push for term limits for congressmen.

Would that help out his agenda?

I'd vote for it.

Matt Welch: Have term limits actually been useful? I feel like that's a horse that left the barn in the mid-1990s, only to, like Wildfire, ride eternally into the winds of our mind.


Nick Gillespie: Thanks all for reading and responding. Please read Reason at http://reason.com for more material related to the topics discussed here.


Houston, Tex.: Great editorial, please keep up the good work.

Matt Welch: I'll end with this softball! Thanks, everyone, for the illuminating discussion. Please stop by our house over at Reason.com, and add your two cents in the comments section of our blog (reason.com/blog).


washingtonpost.com: Continue this discussion with Post polling director Jon Cohen at 1 p.m. ET.


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