Posted by: Jeff | November 3, 2010

Rewards and Punishments Where They’re Due

So apparently in his post-election speech today, Obama declared that he has to take “direct responsibility” for the fact that the economy isn’t doing as well as everyone would like:

He said he has “got to take direct responsibility” for the failure of the country to make as much progress as needed in repairing the nation’s economic fortunes.

I’m sorry, but this is both silly and destructive. Economic stimulus and job creation are matters of policy, which is to say lawmaking. And it’s the legislature’s job to write the laws. The president can cajole, threaten and even bribe, but at the end of the day he or she can’t force members to do anything they don’t want to do. And I’ve already said I think the Obama Administration squeezed every last bit of stimulus and job-creation policy they could out of the legislature, given the nature of the lawmakers who have populated it these last two years.

The other key player in the economy is the Fed, and again the president only has the very indirect power of persuasion when it comes to directing that entity’s behavior. At the end of the day, it comes down to what monetary policy the board and the chairman decide on their own to set. And that’s the way it’s supposed to be. The Fed is supposed to be sheltered from political pressure so it can carry out its mandate to ensure long-term growth and job creation in an objective fashion.

Now, you can argue over whether the Fed actually did a good job at that. (I’m not an expert, but I think they dropped the ball pretty severely.) And you can argue whether Fed independence is actually a good idea when it comes to our country’s governing principles. But you can’t argue that Obama should have been able to single-handedly or unilaterally overcome or scrap that independence.

So that’s it. Two government entities — Congress and the Fed — wield the most influence over the direction of the economy (and not that much influence even in their cases) and the president has only rather nebulous and limited influence over them. So with such limited powers, how can any president possibly be held “directly responsible” for the condition of the economy? The obvious answer is they can’t.

So why is Obama talking as if he does bear responsibility? Mainly, I think, because our politics have degraded to the point where we look to presidents as national daddy-figures charged with — and capable of — solving all our problems should they set their minds to it. So the public demands that presidents talk as if they have this power, and presidents oblige by doing so, and that just further encourages the public and around and around we go. Obama is smart enough, I think, to know this is going on, but he’s encouraging the feedback loop anyway because he thinks he has to — and certainly it sounds good whenever presidents “take responsibility.” But the assumptions he’s encouraging are harmful, because they distort voters understanding of which actors in our political system are and aren’t responsible for what. And if voters don’t understand that, then they can’t vote effectively or sensibly — they can’t dish out rewards and punishments alike where they’re due.

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Responses

  1. Word!! Jeff. That means I wholeheartedly agree with your assessment.


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