Barack Obama's first year

Barack Obama's first year

Reality bites

Governing is harder than campaigning. But America’s 44th president has made an adequate start

FOR some, the magic is undimmed. Carl Baloney is extravagantly happy that Barack Obama is his president. He is old enough to remember segregation: back in the 1960s, his local university turned him away because he was black, he says. He is also old enough to have high blood pressure, which pushes his monthly health-insurance premiums skywards.

Mr Obama plans to bar insurers from turning away the sick. That will take some of the fear out of life for people like Mr Baloney, who is self-employed and pays his own bills. Others in his neighbourhood near New Orleans are much worse off, he says: “Health care is the emergency room. Next stop is the funeral home.” This will change, predicts Mr Baloney, and he is proud that it will change under a black president. “I never thought I’d see it,” he says, “and such a sharp president, too.”

Others feel differently. “I’m neither a Democrat nor a Republican, neither a jackass nor an elephant. But I wouldn’t vote for a socialist. Hell, I’d vote for Adolf Hitler before I’d vote for Barack Obama. At least you know what he’d do to you,” says Ron King, a retired policeman in Stuart, Virginia. He adds that Mr Obama “lies all the time” and is “dangerous; he’s trying to change the entire country.” Mr King has perhaps not rigorously thought through his Hitler analogy, but his anger is real.

Mr Obama came to power proclaiming an end “to the petty grievances...that for far too long have strangled our politics” and to “the stale political arguments that have consumed us for so long”. By electing him, he said, Americans chose “unity of purpose over conflict and discord”. Alas, this was balderdash.

Abroad, Mr Obama is still loved. But at home his star is tarnished. His approval rating has fallen from almost 70% at the time of his inauguration a year ago to 50% now. The proportion of Americans who disapprove of the job he is doing has quadrupled, from 12% to 44%. More than half of voters think the country is on the wrong track, and they are roughly evenly divided as to which of the two parties would do a better job of correcting that. A poll of polls by RealClearPolitics, a political website, finds that a generic Republican candidate for Congress beats a generic Democrat by 44% to 41%.

Mr Obama’s reputation as a miracle-worker was easier to maintain on the stump than in office. He said he would end the war in Iraq, bring health insurance to all Americans, erect a cap-and-trade system to curb global warming and clean America’s soiled reputation by closing the prison at Guantánamo Bay. He has not yet done any of these things, though he has made progress in Iraq and is close to signing a health-care bill.

None of this should be surprising. Governing is hard, especially during an economic crisis. The American political system is fraught with checks and balances: a president cannot simply tell Congress what to do. Everything takes time and requires ugly compromises. Nonetheless, many of Mr Obama’s fans feel let down.

The same technology that Mr Obama used so effectively to promote his candidacy can also be used to highlight his broken promises. When Democrats opted to hold the final negotiations on the health-care bill in secret, critics immediately posted footage of Mr Obama vowing that such talks would be televised. Ditto his promise never to hire lobbyists, and to post bills online for five days before he signed them. Some voters have concluded that he cannot be trusted. Others are outraged at what they see as his march towards European-style socialism. Anti-tax “tea party” protests have swept the country. Re-energised Republicans crow that they can recapture the House of Representatives this year, and cut the Democrats’ Senate supermajority down to size.

Mr Obama came to power at a time when American-style free-market capitalism was seemingly in disgrace. Many of his supporters thought he had a mandate to push the country significantly to the left. But since he took office, public opinion has shifted sharply to the right.

At the beginning of 2008 Americans trusted Democrats over Republicans to deal with the deficit by a whopping 30 percentage-point margin, according to Ipsos-McClatchy. Now they prefer Republicans by seven points. On taxes, Democrats led by 17 points, but now trail by two. On protecting America against terrorists, their nine-point advantage has mutated to a seven-point deficit. And in areas where Democrats still have the advantage, the gap has narrowed: from 39 points to four on health care, from 21 to five on Iraq and from 44 to 25 on the environment.

Americans have not suddenly fallen in love with Republicans, who seem keener to obstruct Mr Obama than to offer a coherent alternative. Rather, they are fed up with the recession and government in general. Since Mr Obama is the public face of power, he gets the blame.

Four cheers for 44

A YouGov Polimetrix poll for The Economist found that Americans disapprove of Mr Obama’s handling of the economy by 54% to 40%. They also frown on his handling of health care (by 53% to 40%), terrorism (48% to 42%), immigration (49% to 28%), Afghanistan (51% to 39%), Iraq (50% to 41%), Social Security (49% to 33%) and gay rights (39% to 33%). Of the ten topics mentioned in the poll, he scored a pass mark on only two: education, where he has taken tentative steps to promote autonomous “charter” schools and the environment. In short, Americans still like Mr Obama more than they like his policies, but they are increasingly souring on both.

Yet, by some measures, his first year has been quite successful. He has made no disastrous mistakes, and can brag of four substantial achievements. First, he has done wonders for America’s image abroad. Foreigners warm to his African and Muslim roots, his childhood in Indonesia, his Harvard cosmopolitanism. He seems less brash, more diplomatic and more respectful of Muslims than his predecessor. He calls for a world free of nuclear weapons. He takes a stand against torture. He talks in complete sentences. “[E]ngagement with repressive regimes lacks the satisfying purity of indignation,” he told the Nobel committee. “But...[n]o repressive regime can move down a new path unless it has the choice of an open door.”

How much does this matter? Simon Anholt, an analyst, heroically estimates the value of the “Obama effect” on America’s global brand at $2.1 trillion. Each year, Mr Anholt commissions a poll of 20,000-40,000 people to find out how much they admire various countries’ people, culture, exports, governance, human-rights record and so on. He finds that admiration in one area often translates (illogically) into admiration in others. When George Bush was president, foreigners expressed less positive views of American goods, services and even the landscape. Under Mr Obama, he finds, America is once again the most admired country in the world (having slipped to seventh place in 2008). Using the same tools that consultants use to value brands such as Coca-Cola or Sony, he guesses that the value of “Brand America” has risen from $9.7 trillion to $11.8 trillion. Writing in Foreign Policy magazine, Mr Anholt calls this “a pretty good first year”.

Second, and more concretely, the American economy appears to have stabilised. The crisis that was raging when Mr Obama was elected has eased. Carrying on where the previous administration left off, Mr Obama has used gobs of taxpayers’ cash to prop up tottering banks and insurers. He deserves at least some of the credit for the American financial system not collapsing. He intervened to rescue two of America’s largest carmakers, General Motors and Chrysler. He stimulated demand with vast injections of borrowed money. All this, his supporters say, helped to restore confidence, thereby preventing a painful downturn from turning catastrophic.

Third, Mr Obama has shown he is serious about winning in Afghanistan. As Iraq grows calmer, Mr Obama is pulling out American troops, as he said he would. If all goes to plan, only a handful will remain by the end of 2011. Meanwhile he is escalating the war in Afghanistan, as he also promised. By putting tens of thousands more American boots on the ground, he hopes to make the country stable enough to start pulling out by next summer.

Fourth, Mr Obama is close to signing the biggest shake-up of America’s dysfunctional health-care system since the 1960s. The House and Senate have each passed a bill, and now the two mammoth documents are being haggled into one. Before long—perhaps before Mr Obama’s state-of-the-union message—health reform will probably become law.

Many details have yet to be finalised, but the outline looks roughly like this. Every American will be obliged to have health insurance. Those who cannot afford it will receive subsidies. States will set up carefully regulated exchanges to make it easier for individuals to shop around for the right policy. Insurers will be barred from excluding those with pre-existing health problems.

Most of the tens of millions of Americans who currently lack health cover will soon have it, predicts Mr Obama. And ways will be found to curb costs. The House bill calls for scores of pilot schemes to find cheaper ways of keeping people healthy. The Senate version would set up a commission to explore ways of doing it. The greatest single threat to America’s fiscal solvency—galloping health-care inflation—will thus be tamed.

Mr Obama’s detractors scoff. So what, they ask, if foreigners applaud him? Being liked is no guarantee of being effective. His Nobel peace prize will hardly make North Korea surrender its nuclear weapons. His admirers insist that Mr Obama’s patient and tactful style will eventually pay dividends: for example, by persuading Russia to lean on Iran to stop pursuing its own nuclear arsenal. His critics retort that it has shown few dividends yet. They think the world’s thugocrats see weakness in Mr Obama, and intend to exploit it.

This is harsh. Mr Obama has been quicker on the trigger than George Bush when it comes to assassinating terrorist suspects in Pakistan with missiles fired from drones. He has ordered roughly one such strike a week since taking office, killing some 400-500 militants and an unknown number of civilians. He may have ruffled hawks’ feathers by pushing for terrorists such as Khalid Sheikh Muhammad to be tried in civilian courts, but he has shocked doves, too, by refusing to close the prison at Guantánamo Bay until he figures out what to do with those inside.

Mr Obama’s decision to ramp up the fight in Afghanistan could hurt him politically. Doves fret that it will be his Vietnam—that a costly, bloody, unwinnable war will derail his presidency. Hawks gripe that although he made the right decision to send more troops, he dithered for months before making it and then exuded irresolution as he did so. He said that America “has no interest in fighting an endless war in Afghanistan” and will only do “what can be achieved at a reasonable cost”. The Taliban may take that to mean that all they need to prevail is a little patience.

Brickbats and tea-parties

On the economy, Mr Obama’s critics make several points. Much of his stimulus spending will be wasted, they say, because government spending is always inefficient. The money he has borrowed will have to be paid back. Last year’s budget deficit, at an estimated 11.2% of GDP, was the highest since the second world war. That is not sustainable. Mr Obama will presumably address the deficit in his budget next month, but he has not said publicly how he will do so.

Tea-party-goers assume he will raise taxes. They worry that he plans to shift America to a permanently higher level of public spending and intrusive regulation. Mr Obama has hired legions of government employees, whose pay and benefits have outpaced those in the private sector. Although he says he believes in free markets, he does not always act that way. When Washington bailed out Detroit, politically favoured labour unions fared better than bondholders. Lobbyists took note. Conservatives fret that, having spent his life in law, academia and government, Mr Obama knows little about wealth creation. “He doesn’t know anybody who’s ever had a real job,” grumbles Grover Norquist, an anti-tax activist.

Mr Obama calls himself a free trader, but he slapped tariffs on Chinese tyres last year, provoking swift retaliation. No full-blown trade war broke out, but America’s reputation has suffered. Foreigners complained more about America to the World Trade Organisation last year than about any other country bar China, according to Global Trade Alert, a watchdog.

Mr Obama’s proposed health-care reform has attracted brickbats from both left and right. The left frets that the final bill will probably not include a government-run health insurer (the “public option”). Critics on the right fear that the final goal is socialised medicine, with rationed care and scant rewards for innovators.

Others worry that reform will cost too much. Both bills call for wasteful spending to be cut, but largely in unspecified ways at some time in the future. And pitfalls abound. For example, if the government compels everyone to get health insurance, insurers can fairly easily cope with the requirement that they turn no one away. But if the fine for not buying insurance is too low, young healthy people may simply opt to pay it. Many will wait until they are ill to start buying insurance. So the pool of insured Americans will grow sicker. Premiums will rise, prompting more healthy people to stop buying insurance. This is called a “death spiral”. If it happens, either the system will collapse, or the government will have to save it with public money. Most likely, Congress will be tinkering with health care for years to come.

APStill keeping his cool

Mr Obama’s second year could be even tougher. If and when health reform passes, the Senate will start haggling about climate change. America’s failure to enact a cap-and-trade system for carbon dioxide earned Mr Obama frowns at the Copenhagen climate summit last month, but carbon pricing is hugely controversial in America, and has become more so since Mr Obama became president. The House narrowly passed a cap-and-trade bill only by making it much weaker than planned. Greens hope that, so long as the Senate passes a bill of some kind, it can be tightened later. But there is no guarantee that it will pass.

Some pundits chide Mr Obama for letting Congress call the shots. He left it largely up to Nancy Pelosi and Harry Reid, the top Democrats in the House and Senate, to design a health-care plan and decide how stimulus money should be spent. The results, critics reckon, were more wasteful and less coherent than if Mr Obama had taken charge. Nobody wanted a health plan written wholly by White House wonks; but there was a middle ground available, where the president could simply have asserted his will more forcefully over the process.

Mr Obama is trying a more hands-on approach to regulating Wall Street, proposing a stronger role for the Federal Reserve in preventing financial firms from taking risks that imperil the system. House Democrats agree, but those in the Senate would rather set up a new regulator. Other looming battles include immigration reform (see article) and a bill to allow unions to organise without secret-ballot elections. Even if rogue states and terrorists are quiet, which is hardly likely, Mr Obama will have a turbulent 2010.

A Spock or a Clinton?

Pundits never tire of dissecting the president’s personality. Is he growing less popular because he is too aloof? Maureen Dowd, a liberal columnist, likens him to Mr Spock, the emotionless alien from Star Trek. Or is it his vanity? Conservatives mock his frequent use of the word “I”, as in: “I am well aware of the expectations that accompany my presidency around the world.”

Such perceptions matter far less, however, than the state of the economy. The main reason Mr Obama’s polls have slipped is that Americans have spent the past year in fear of losing their jobs. When the economy recovers, Mr Obama will get the credit. If no recovery happens, the Republicans may regain the House. But even that need not be a disaster. After 1994, when Bill Clinton had to work with a Republican Congress, he governed from the centre, balancing the budget and signing welfare reform. And in 1996 he won a second term in the White House.