I have been arguing for some time that Barack Obama made a crucial tactical error in bailing out the big banks early in his presidency. His actions have left him vulnerable to populist resentment.  In my view, this weakens his credibility and ability to push through other pieces of his legislative agenda and will harm Democrats in the 2010 elections.

Slipping poll numbers

Indeed, Obama has slipped somewhat in opinion polls. Now, some will tell you that it is because Obama is running a socialist left-wing big government agenda in a center-right country. And as a result, he is losing independent voters. But, is that really true? 

While conservatives are opposed to the Democrats’ health care initiatives as an expansion of the state, progressives are identifiably more opposed to a greater number of Obama legislative issues (willingness to abandon the public option, escalation of war in Afghanistan, and continuation of rendition to name a few).

Bailouts poisoned the well

I would argue that it is the apparent ineffectiveness and unfairness of Obama’s policy initiatives on banks and the economy which has angered middle class Americans – conservatives and liberals alike. The economy is still in the tank despite incipient signs of a technical recovery. And Americans understand that banks and bank staff are making lots of money while thousands lose job and home.

Why then would you trust government? More likely, you would see government as the problem? Most people are not ideological and have no opinion about the role of government except when things are not going well. In my view, this is a major reason why so many are sceptical about changing healthcare. Barry Ritholtz gave voice to this sentiment in a post earlier today.

A problem of substance and style

However, I want to take this one step further because the problem is as much style as substance.  Today, we are to hear Obama’s much-anticipated speech on healthcare reform.  Some feel this is a make-or-break speech for the President. I look forward to hearing his ideas.  But, I don’t expect to hear anything new and I suspect many others feel the same way. Has Obama’s charm worn off?  In some ways, yes.

I have tried to put my finger on it in previous posts, and I think Barry did a fine job in describing the connection between the disgust over bailouts and  Obama’s difficulty with healthcare.  But, there was something missing for me until I saw Yves Smith’s last post on debtor’s revolt. The woman in the video calling for a debtor’s strike made a passing reference to the bailouts which made clear to me her anger that a bank could charge her 30% interest when that same bank wouldn’t exist except through taxpayer largesse.

And that’s when it hit me: it’s the Obama as Bush Three meme. Look at these two videos below. I have some words afterwards.

George W. Bush video

Barack Obama video

As I see it, the man in video number one shows extreme callousness when switching abruptly from a serious discourse about war to a game of golf, generally considered the sport of the wealthy. If one wants a defining moment for the failure of George W. Bush’s presidency, there it is.

Fast forward to August 2009 and we see an eerily similar circumstance.  The economy is still in tatters and Americans are at verbal war over health care. Yet, the President of the United States is off playing golf. Why anyone in the White House thinks this is a good idea is beyond me. It certainly appears to be more of the same – and that is in striking contrast to the pre-inauguration image Obama enjoyed.

I was struck by the fact that Obama was golfing during his vacation two weeks ago as his legislative agenda was falling apart.  So this is the image that I will have in my head as I listen to the President tell us why his legislative agenda is the right one for America.

Related posts:

• Obama and health care: Wasting political capital
• The purpose of health care reform
• 2010 elections: “Completely out of control” for Democrats
• The less optimistic view of Treasury’s handling of the crisis
• What real comprehensive healthcare reform looks like

I think this video is an example of the most self-reflective you will see the current U.S. President George W. Bush become. In it, he talks about his mistakes, grappling in front of the camera with how historians may look back on his stint in the White House.

Source
Bush Cites Few Regrets Defending White House Record – Bloomberg.com

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This video of George Bush’s top 10 moments according to David Letterman is hilarious. Bush is nearly out of office. We’ll miss moments like these. (hat tip Marshall)

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In a surprising move, the Bush Administration has decided not to seek the $350 billion still to be used under the TARP (Troubled Asset Relief Program). Instead, they will allow Barack Obama’s Administration to distribute the monies as they see fit.

This is a good gesture on the part of the Bush Administration and should do some good in removing a growing sense that the funds were not being used appropriately. It remains unclear whether George Bush or Henry Paulson was responsible for this honorable gesture of good faith, but it appears it was George Bush overriding the desires of his Treasury Secretary.

From Bloomberg News:

The Bush administration told congressional aides it won’t ask lawmakers to release $350 billion remaining as part of the $700 billion U.S. financial- rescue package, people familiar with the matter said.

The administration of President George W. Bush ends in less than 10 weeks, and a delay in requesting the cash would leave it to President-elect Barack Obama to tap remaining cash in the bailout money.

The Treasury Department has committed $290 billion, or about 83 percent of the total allocated so far in a program Congress enacted last month to inject capital into a wide spectrum of banks and American International Group Inc. The U.S. invested $125 billion in nine major banks, including Citigroup Inc. and Wells Fargo & Co. and plans to buy an additional $125 billion in preferred shares of smaller lenders.

Treasury Secretary Henry Paulson has been criticized by lawmakers for shifting the focus of the program to inject capital directly into financial institutions. His initial proposal presented to Congress called for buying troubled assets from the firms.

The Treasury Department informed Congress that there would no notification this week, and didn’t go beyond that, a department spokesman said today. The secretary has no timeline for accessing the second $350 billion, the spokesman said.

Paulson and Federal Reserve Chairman Ben S. Bernanke will meet today with House Speaker Nancy Pelosi and other Democratic leaders to discuss how the funds are being used and a proposal to rescue the auto industry.

`No Timeline’

Paulson last week repeatedly declined to answer when and whether he would go to Capitol Hill for the rest of the funding.

“Right now, I have no timeline for drawing down the next $350 billion,” he said in a Nov. 13 interview with Bloomberg Television. The legislation setting up the program gives Congress the ability to block the final installment.

The shift in using the funds came under fire last week from legislators in a committee hearing with Neel Kashkari, Treasury’s interim head of the TARP program.

“This looks like classic bait-and-switch,” said Representative Dennis Kucinich, an Ohio Democrat.

Paulson and Bernanke are scheduled to testify tomorrow on the program before the House Financial Services Committee.

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As the economy has faltered, George W. Bush’s approval numbers have plummeted. All of this has occurred despite Americans’ belief that the strategy in Iraq is bearing fruit. And last year, Iraq was a central issue for most voting Americans. Below are George W. Bush’s ratings as recounted by Political Wire:

A new Washington Post/ABC News poll shows Sen. Barack Obama leads Sen. John McCain by ten points nationally, 53% to 43%.

“Though every race is different, no presidential candidate has come back from an October deficit this large in pre-election polls dating to 1936.”

Other interesting findings:

• A record 90% of registered voters say the country is seriously off on the wrong track, the most since this question first was asked in 1973
• Bush’s 23% job approval rating has now fallen below Nixon’s lowest
• Bush’s 73% disapproval is at an all-time record
• 92% of Americans are following the election closely

With monetary stewards returning some faith to global markets, will Bush’s approval ratings be on the mend? What will all of this mean for John McCain, who has been slipping in the polls as the economy has soured?

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Hank Paulson seems to be everywhere these days. However, it does seem that U.S. President George W. Bush has vanished since the credit crisis began.

The result? The lowest approval rating of the Bush Presidency, with a full 78% disapproving of his handling of the economy.

George W. Bush’s overall job approval has matched its low in American Research Group monthly polling as 82% of Americans say the national economy is getting worse, according to the latest survey from the American Research Group.

Among all Americans, 19% approve of the way Bush is handling his job as president and 76% disapprove. When it comes to Bush’s handling of the economy, 17% approve and 78% disapprove.

Among Americans registered to vote, 19% approve of the way Bush is handling his job as president and 77% disapprove. When it comes to the way Bush is handling the economy, 18% of registered voters approve of the way Bush is handling the economy and 78% disapprove.

A total of 82% of Americans say the national economy is getting worse and 68% say the national economy is in a recession.

The results presented here are based on 1,100 completed telephone interviews conducted among a nationwide random sample of adults 18 years and older. The interviews were completed September 16 through 19, 2008. The theoretical margin of error for the total sample is plus or minus 2.6 percentage points, 95% of the time, on questions where opinion is evenly split.

Overall, 19% of Americans say that they approve of the way George W. Bush is handling his job as president, 76% disapprove, and 5% are undecided.

See the source below for more granular detail.

Source
Poll Release: 22 September 2008 – American Research Group

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From the Jed Report:

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This is big news from Clive Crook at the Financial Times.

The response in the U.S. to startling new allegations that the White House directed the forgery of evidence to support its case for the war in Iraq has been surprisingly muted so far. The charges may be false, of course, but if they are seriously examined and turn out to be true, this is – or ought to be – a Watergate-sized scandal.

Ron Suskind is a heavyweight: a Pulitzer Prize-winning journalist, and the author of a well-regarded book on the administration’s security policies, The One Per Cent Doctrine. His new book, The Way of the World: A Story of Truth and Hope in an Age of Extremism, which was published last week, contains the extraordinary new charge. It says that late in 2003 the White House ordered the Central Intelligence Agency to forge a memo dated July 2001 from Tahir Jalil Habbush, Saddam Hussein’s intelligence chief, to Saddam himself, affirming that Mohammed Atta, the September 11 2001 bomber, had contacts with the regime and that Iraq had an ongoing weapons of mass destruction programme.

This document has long been known about. It was splashed in the British press in December 2003, when The Sunday Telegraph reported on it. That story briefly entertained the possibility that the memo was phoney but insisted it was well vouched for by Iraqi sources. Reports in the U.S. subsequently cast further doubt on it and the memo came to be seen as a fake. But up to now there has been no supported allegation from a reputable author that the White House and the CIA were behind it. That is what Mr Suskind alleges.

He says he has two senior CIA agents on tape confirming the story. They are now denying it. George Tenet, then head of the CIA, has denied the story as well.

-Financial Times, 10 Aug 2008

I suspect that we will hear more about this, but it may be too late for impeachment.

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George W. Bush certainly has chutzpah. Ever the opportunist, he has taken advantage of high oil prices to lift the ban on offshore oil drilling. Americans continue to allow this President free reign and Congress as allowed him creeping presidential power, abdicating its role as a check on the executive branch. First, there was FISA where Congress caved, including Barack Obama. Now, we have another opportunity for Congress to step up to the plate. Will they?

Let’s give Bush credit; lame duck or not, George W. Bush is getting what he wants.

President George W. Bush said today he’s lifting a presidential ban on drilling for oil and natural gas on the U.S. Outer Continental Shelf, setting up a showdown with Congress over a separate ban it put in place in the 1980s.

“Today I’ve taken every step within my power to allow offshore exploration of the OCS,” Bush said in a statement at the White House. “This means the only thing standing between the American people and these vast oil resources is action by the U.S. Congress.”

Pressure to permit drilling off the Pacific and Atlantic Ocean coastlines and in the Eastern Gulf of Mexico has been building as oil and gasoline prices have surged to records.

Congress has barred drilling since 1983 through an annual Interior Department spending bill. That ban could be lifted if Bush refused to sign the department’s fiscal 2009 appropriations measure that is now being debated in the House and Senate. The president’s father, George H. W. Bush, imposed the existing executive moratorium.

-Bloomberg News, 14 Jul 2008

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In a new expose by Seymour Hersh, the New Yorker explains what the Bush administration is up to regarding Iran. Obviously, there is still time to attack Iran before Bush leaves the White House. Are they prepared to do so? Read here.

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This is a post I caught at Swampland, Time’s blog site:

All of the fireworks over Scott McClellan’s turncoat book finally culminated in last Friday’s kabuki testimony before the House Oversight Committee where Dems indulged in the word “impeachment” and the GOP tried their best to eat one of their own. But for all of the outrage, Scott’s book shouldn’t be that surprising. He’s just one of several former Austin Democrats who drank the Bush Kool-Aid, believing he was the path to the Third Way, and came away from the experience disappointed and disillusioned. Just look at Mark McKinnon and Matthew Dowd – who did more to elect Bush than Scott ever did. Scott’s biggest sin isn’t, then, the betrayal, it’s the writing of the tell-all book.

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I am starting to become quite cynical about the Bush Administration and crony capitalism. There may be no smoking gun, no e-mail chain to indict conspirators. The Bushies may break no laws. But, it is increasingly obvious that the War in Iraq and Bush policy on oil is very much about crony capitalism.

Yesterday and today, I came across a number of stories suggesting that the Bush administration is rewarding special interests in its policy initiatives, calling into question its policy motives.

Drilling for Oil
The first issue I noted was drilling in Alaska. John McCain has called for an opening of the Arctic National Wildlife Refuge in Alaska to oil drilling. President Bush supports him. The Guardian Newspaper says:

George Bush, responding to public alarm over soaring petrol prices, yesterday proposed overturning decades-old bans on drilling for oil off the U.S. coast and in the pristine Alaskan wilderness. “There’s no excuse for delay,” the president told a White House press conference. America was too dependent on countries abroad, many of them in unstable regions.

“Congress must face a hard reality: unless members are willing to accept gas prices at today’s painful levels, or even higher, our nation must produce more oil. And we must start now,” he said.

Expanding oil extraction off the coast would provide 18bn barrels, enough to supply the U.S. for more than two years. As for Alaska, he said advances in technology meant that oil could be extracted from the Arctic National Wildlife Refuge with “virtually no impact” on the land or wildlife.

His other proposals included extraction of oil from shale in the Green River Basin that lies in Colorado, Utah and Wyoming – a move opposed by environmentalists. Finally, he wants more oil refineries in the US, to reduce imports of refined oil.

The plan has almost no chance of being adopted. Congress, which is controlled by the Democrats, has consistently blocked exploration, for environmental reasons.

-The Guardian, 19 Jun 2008

In a blog entry in April called Drilling for oil I said the environmental concerns probably outweigh the benefits on drilling. Moreover, drilling for oil is not going to be a short-term solution. The oil drilled will not be available for many years and it will only amount to two years’ worth of oil at the most — not a very long-term solution. This is an obvious opportunistic attempt by John McCain and George Bush to use the high price of oil to push for special interests. They are rewarding their supporters in the oil patch.

Iraq and crony capitalism
The second issue is Iraq. In my opinion, the Iraq War was another example of opportunism. In the aftermath of 9/11, The Bush Administration saw an opportunity to go to war with Iraq, a desire many had prior to his taking office. Now that we control the country, American oil companies and defense contractors are cleaning up.

Today, the Financial Times Lex page wrote a scathing criticism of the way contracts for Iraq are handled by this administration:

When Eisenhower cautioned America to guard against the rising power of the military-industrial complex in 1961, spending on defence was greater than the combined net income of all American companies. Corporate earnings are now seven times the defence budget, but the procurement process remains politically charged.

On Wednesday the Government Accountability Office recommended that the U.S. Air Force re-open the bid process for a $38bn contract for tanker jets that provide mid-air refuelling. This follows a good deal of public teeth gnashing, and furious protests from Boeing, over the award of the contract to a consortium that, while led by Northrop Grumman, used a foreign EADS-made plane.

-The Financial Times, 19 Jun 2008

The Europeans are seething at the obvious bias in the Boeing vs. Northrop Grumman/EADS bid. Iraq is turning into a gold mine for U.S. defense contractors, Boeing among them.

And, in Iraq, the oil majors have finally returned after 36 years. One can just hear the cash registering in their tills. Ka-ching, ka-ching.

Conclusion
However, you look at it, the Bush administration has been very crafty at taking advantage of specific situations to push a special interests agenda at the expense of the environment, the American people and foreign competitors. John McCain has been a disappoint, as he has turned hard right in support of nearly all of the Bush administration policies, both domestically and in foreign policy.

This is one reason that the world views the United States with distrust and why come November you should be pulling the lever in the voting booth for the Democrats.

Related articles
Mr. Smith Goes to War With KBR, the New York Times, 19 Jun 2008
The Big Pander to Big Oil, The New York Times, 19 Jun 2008

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So, you’ve probably heard about Scott McClellan’s book. The word everyone is using is “scathing.” The Bush administration says he is “disgruntled.” Irrespective of what the spin is, the fact is he was a White House insider for seven years and the Chief Spokesperson for the White House. What he says has weight and it will definitely be an important issue against John McCain in the general election.

Barack Obama had better thank his lucky stars this book came out and that it came out when it did.

Watch this Youtube excerpt from ‘The Today Show’ and ‘MSNBC.’ Very interesting development.

(Video Here)

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I don’t talk about George W. Bush that much, but his poll numbers have hit a new low: 23%.

Despite a brief rebound last month, the overall mood of Americans has since fallen sharply, with majorities now taking a negative view of both U.S. economic policy and their own personal financial situation, a new Reuters/Zogby poll shows.

The Reuters/Zogby Index, a measurement of American confidence, has fallen to 87.9 from 95.5 in April, and is now just slightly about the all-time low of 87.7 registered in March. In February, the index boasted its highest rating since the baseline rating of 100 for the index was established in August. The Reuters/Zogby Index includes 10 poll questions that gauge perception of the state of the country and the economy. The telephone survey of 1,076 likely voters nationwide was conducted May 15-18, 2008. It carries a margin of error of +/- 3.0 percentage points.

	May 2008	April 2008	March 2008	Feb. 2008	Jan. 2008	Dec. 2007	Nov. 2007	Oct. 2007	Sept. 2007	Aug. 2007
Reuters/Zogby Index	87.9	95.5	87.7	99.3	94.2	97.3	94.9	96.0	98.8	100

Approval ratings for President Bush, Congress at all-time lows

The slight job approval gains made by President George W. Bush and Congress in April’s Reuters/Zogby survey evaporated this month. The job approval rating for the President have hit an all-time low, and now stand at just 23%, down from 27% in April and surpassing his previous record-low approval of 25% in October of 2007. Bush has lost support from both Republicans and Democrats, although he does show a slight increase in job approval among political independents. Just 44% of fellow Republicans give Bush positive job approval marks in this latest poll, falling from 55% last month. Among Democrats, just 6% now give the president a positive job approval rating, down from 8% in April, while 22% of independents give him positive marks, up from 18% last month.

-Zogby/Reuters poll.

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Barack Obama, speaking at a gathering in Gary, Indiana, made some very accurate comments about the dollar’s weakness and its causes (see Reuters story).

“We are spending all our money, spending overseas and spending dollars and nobody is buying things from us,” Obama told a town hall event in Gary, Indiana, in response to a question.

“What happens is Saudi Arabia’s got a lot of dollars because they’re selling a lot of oil. In China, they have a lot of dollars because they’re selling us all the things all the stuff we used to make right here in Gary,” Obama said.

“And at a certain point, they say you know, we have enough dollars,” he said. “Our banks are full of them right now.”

In addition, he correctly blamed the fiscal irresponsibility and profligate spending of the Bush administration for part of the problem.

“We’ve been borrowing money like nobody’s business from China. We’re like that cousin who always comes over and never seems to have job. You know that guy who always has new rims on his car,” Obama, who is vying to be the Democratic nominee against Republican Sen. John McCain in the November election.

Obama said that the national debt has gone up sharply because of the Iraq war, which by the time it is over “will cost us over $1 trillion.”

At the same, Bush has given “tax cuts to some of the wealthiest Americans who didn’t need it and weren’t even asking for it.”

Most heartening, however, was his understanding of its remedy: investment in infrastructure – both in human and in physical terms. He is very astute in understanding that America cannot spend its way to prosperity. The U.S. must save and invest for the future in order to make gains that hold over the long-term.

“The point is, the way to strengthen the dollar is to strengthen the economy and the way to strengthen the economy is to invest in our infrastructure, invest in our information systems, roll back those Bush tax cuts, end this war, get our budget in balance,” Obama said.

“If we do those things then over time, the dollar will actually get stronger,” he said.

While his populist take on free trade makes me suspicious about some of his economic policies, comments like these demonstrate he has much more savvy about the economy than either McCain or Clinton.

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