Obama’s presidency is surviving on what little personal charm he has left despite his complete loss of charisma as a leader. And yet, the pared down president is revealing himself to be a skillful and dangerous political opponent with moves this week that show he’s been biding his time while giving the Republicans room to make their own mistakes.

Long before November’s loss, Obama telegraphed that the second phase of his presidency would be quite different from the first. Though there’s been a lot of complaining that West Wing went dark over the last three months by not naming a new Chief of Staff or a replacement for Larry Summers, today’s trial balloons announcing that William Daley and Gene Sperling would fill the jobs show that the pilot light has been on all this time.

Even before the election, it has seemed that Obama has been playing rope-a-dope with the Republicans. He’s been letting them punch themselves out–a process that still has some time left to run as the Boehner, Cantor and Ryan try to solve the conundrum of cutting $100 billion without touching defense or raising taxes. (The decision to change the House’s pay-as-you-go rules into a no-tax-increase rule is the sign of unnecessary zealotry.)

With the Republican leadership is now fully in the spotlight, Obama has waited a beat in the news cycle and then announced his new conciliatory economic team. His choices play up the difference between the now conciliatory administration and a House controlled by reckless Tea Party neophytes.

Obama’s most confrontational and colorful aides are now gone and no one with star power has been chosen to replace them. That’s not an accident. Sperling is a pragmatic negotiator who won’t be the lightning rod Summers was; Daley will convince the corporate community that adult supervision is back in the White House.

The Wall Street Journal speculates this morning about a growing consensus over reforming corporate taxes:

Mr. Obama has expressed a willingness in recent interviews to have “a conversation” this year about lowering corporate-tax rates, while reducing the number of tax breaks. Administration officials caution that he hasn’t decided whether to push for action this year.

Executives on Mr. Obama’s Export Council last month said the U.S. corporate-tax code, with its top rate of 35%, puts U.S. companies at a disadvantage against rivals from countries where tax rates are lower. To be sure, many companies don’t pay that top rate. The panel recommends a federal rate of 20%.

As an issue, this helps Obama much more than the Republicans. Any move on corporate taxes, especially if it repatriates the profits of American multi-nationals, plays well for Obama because it shows him making concessions as well as highlighting the revenue issue. The Republicans simply cannot cut taxes and keep on spending forever. Obama’s best positioning is to show the Tea Party as irresponsible and unrealistic about both the problems facing the American economy and costs of running even a reduced government.

Obama will let the Republicans and the Tea Partiers grandstand, fulminate and start in-fighting. They’re internal contradictions and fissures are his best weapons.

Meanwhile, he’ll make serious progress on reforming corporate taxes as a competitiveness issue which will also serve as a bargaining chip over hiring. Meanwhile, the debt ceiling fight will ensnare the House leadership. As Dan Gross smartly points out, the decision to oppose any tax increases–and demand the full gamut of the Bush tax cuts be extended–has put more pressure on the debt ceiling issue than anything to do with spending. With the clock running against the Congress. The debt ceiling fight is something Obama can remain passively above.

Obama’s man Austan Goolsbee  already lobbed the best sound bite of the issue last weekend with his comment on ABC’s Sunday morning show, This Week. “If we get to the point where you’ve damaged the full faith and credit of the United States,” the adviser said “that would be the first default in history caused purely by insanity.”

The administration is doing everything it can to box the Tea Party in. It hasn’t been an easy or quick process. But through deliberate and concerted effort, Obama seems to be pulling off a masterly reversal. He’s going from being the radical to the establishmentarian. Like Clinton, he’s allowing his opponents to drive their own issue–tax cuts–over a cliff while setting himself up to be a defender of sober and sound economic principles.

There’s a long road left ahead; but Obama has accomplished his legislative agenda. The battles going forward are all playing defense where his proxies will bear the brunt of the fighting and the casualties. He’s now in the best position to play president and use the office to enhance his reputation. Gallup released polling data this week that shows him moving back into positive job-approval territory with 49-to-45 rating, the first time he’s been in the black since July.

Sources:
Momentum Builds for Corporate Tax Overhaul
By JOHN D. MCKINNON And ELIZABETH WILLIAMSON
January 6, 2011; The Wall Street Journal
http://online.wsj.com/article/SB10001424052748703675904576064052401692010.html

Boehner Takes Reins, Vows Change
by JANET HOOK
January 6, 2011; The Wall Street Journal
http://online.wsj.com/article/SB10001424052748704405704576063743946881736.html

Economic Team Gets Sperling; Gibbs Out
By JONATHAN WEISMAN And LAURA MECKLER
January 6, 2011; The Wall Street Journal
http://online.wsj.com/article/SB10001424052748704405704576063664116147104.html

Category: Politics, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

26 Responses to “Obama Lost His Charisma—Not His Political Skill”

  1. Jo says:

    Nevertheless, Obama’s ‘one & done’ – the US can’t (& won’t) stomach another fiscally insane administration after 2012.

    Who it’ll be? Well that’s another story.

  2. AHodge says:

    this strikes me as purest planet D spin
    garbage
    business and Rs admiring and looking forward to Daly’s adult supervision?
    O just gearing up for some truly ugly infighting, possible govt shutdowns, reminiscent of the mid 90s

    Who invited you? Oh yeah…..

  3. dad29 says:

    Don’t assume that the Pubbies will NOT cut D of D appropriations.

    And a Chicago guy whom I know and trust flatly states that Daley cannot be trusted.

  4. jeff in indy says:

    can’t wait to see how the saviour will pull us out of the additional $4TRILLION he put us in and why weren’t the adults in the room to begin with? nothing like dragging out the has-beens from days gone by.

    have to agree w/ahodge, nothing but a D advertisement. i had to re-read the URL to make sure i was on The Big Pic site…

  5. BennyProfane says:

    “Obama will let the Republicans and the Tea Partiers grandstand, fulminate and start in-fighting. They’re internal contradictions and fissures are his best weapons.”

    Yup. Or, as a friend of mine said some time ago, never underestimate the ability of the Republicans to use their stupidity to self destruct.

    Ain’t nuthin’ more the White House wants than Palin, or a Palin like character to run against them in ’12. Look what just happened in the NY governor’s race. Cuomo (Mr. Milktoast) didn’t even have to campaign.

  6. AHodge says:

    Highly unlikelyO comes out of the next two years looking good. it will just be a question of which party has more piss drippin off it.

    fortunately he will have a recovery going on by then.
    which statistically speaking, has been all that matters historically. So when one of my devout Democratic friends bet 4/1 Obama would lose in 2012 i took it.
    while he now says he wont vote for him either, i know that exactly every two years a moment of electoral insanity, and a devout feeling of belonging sets in for most.

  7. machinehead says:

    ‘Political skill’ — LOL! One Term Obama — ‘O.T.’ as I call him when we’re out shootin’ pool together — is about as skilled in politics as I am in brain surgery.

    ‘O.T., you know I love ya like a brother,’ I told him the other night over beer and barbeque. ‘But when it comes to governing the country, you just ain’t worth a sh*t.’

  8. not-affiliated-with-Wall Street says:

    My math is so weak that I thought someone had to have more than 50% to have a positive approval rating.

  9. Chad says:

    Obama will probably look half-decent in a few years after the current “fiscally responsible” Republicans (hasn’t been one in my life time) fall on their face.

    I’m not happy with Obama, but I don’t see one potential Republican I would even consider voting for. The Republicans need a new star badly….one that is actually conservative fiscally and I don’t know where the hell they are going to find that guy/girl.

  10. BennyProfane says:

    @ Chad

    Look no further than Christie.

  11. Chad says:

    @ not-affiliated-with-Wall Street
    Not your math, but your knowledge is weak. The average presidential approval rating (for both Dems and Repubs) is below 50%, so knowledgable people don’t just default to 50% and up as a postiive rating.

  12. Chad says:

    @BennyProfane

    I hope you are right, as we need it.

  13. BennyProfane says:

    @ Chad

    I’m pretty liberal on a scale of one to ten, but, as a born and bred Jersey boy, I’m very impressed with the guy beating down the spending and corruption. Imagine what a boondoggle that tunnel into Penn Station would have been. The Irish gangsters up in Boston who were enriched by the Big Dig would have been very impressed. I hope he doesn’t sell out and burn out.

  14. b_thunder says:

    Hank Paulson did EVERYTHING in his power to extend the fake prosperity until after the election. how did that work out in general, and for the GOP (successor) candidate in particular?

    The new crew is doing everything to cover up (BP), extend and pretend (banks) , and borrow trillions in order to paint “rosy picture” and hopefully keep it afloat 2 more years. I do not think they govern with aim at what is the best for the country/people. I bet they have a list of things they have to prevent no matter what, things that can sink their boat: 10% + unemployment, $4.50 gas price for extended period of time, bond market collapse, inflationary collapse. But even if they succeed now, and until next election, all that will happen soon after.

  15. Mannwich says:

    Whatever. It’s ALL theater with the elites in both parties putting on a show while they chuckle and divvy up the spoils in the back room.

  16. Vergennes - VT says:

    Dear Mr. Ritholtz,

    I appreciate your optimism. I personally question his agenda though. For example, why the hell did he comprise on the tax cut extension? I know nobody down there cares about the deficit, but to turn on 99% of the country like that. Come on, does the top 1% really need the tax cut extension? Will it immediately “trickle down”? The one thing it certainly will do is add to the deficit (I brace for the negative feedback on this). Its all bullshit. I bet the Republicans laughed their asses off after saying “we hear you loud and clear” to their donors while pretending to say that to the electorate. While the republicans agenda is all about redistributing wealth to the top which is bad (the cause for societal collapse), they certainly are better at playing politics. Again, I appreciate your optimism and hope you are right.

    Take care,
    Vergennes – VT

  17. not-affiliated-with-Wall Street says:

    @chad

    You should work for the Fed.

  18. Chad says:

    @not-affliated-with-Wall Street
    Nice. Attack me to prove my answer wrong. You sound like a politician.

  19. dss says:

    @jeff in Indy,

    Care to provide us some facts and credible links, to back up your claim that Obama added 4 trillion more to the debt? Until then your post sounds like more baseless whining.

    Machinehead, I see that that Senator McCain, that lovable maverick/curmudgeon of the senate (R – Get Off My Lawn, all eight of them) is not wandering around the White House today, shaking his fist and shouting profanities at the clouds, because Obama was this terrible failure as a politician.

    Anyone care to guess what America would look like if the flip flopper McCain and Mama Grizzly Caribou Barbie got into office?

  20. rip says:

    Riddle: Why did Obama choose Chicago as his home political base? He had never lived there for a single day.

    The Daley machine.

    Dirty.

    William Daley is now Chief of Staff at the White House. Dirty.

    May as well have appointed a Republican.

    So much for a little more tarnish. And less charisma. Til next election.

  21. Johnny99 says:

    Rope-a-dope is right.

    Obama’s deadliest weapon is his ability to play the long game. Everyone is working on a 24-hour news cycle, but he’s not. He’s on a 4-to-8 year cycle, and he’s willing to lose the daily PR fight in order to win the policy wars.

    And it doesn’t hurt that his competition is so pathetic.

    Say what you will about his policies (a lot of which I, too, disagree with). But one underestimates Obama at one’s own risk.

  22. jeff in indy says:

    at DSS, ask ye shall receive;
    as of 1.22.08 total public debt was $9,191,074,962,157.16
    as of 12.31.10 total public debt was $14,025,215,218,708.52

    not bad for 2 years, eh? puts a drunken sailor to shame. (no offense to my drunken sailor friends.)

    source: http://www.treasurydirect.gov/NP/NPGateway

  23. CitizenWhy says:

    JOBS

    Obama has finally decided to focus on job creation, which means he must not spook the corporate sector and instead win their trust (as well as make concessions). That’s the main meaning of the Daley and Sperling appointments.

    Meanwhile the new House, elected because of a lack of job creation, instead claims the American people will love their focus on health care,the deficit, and theatric stunts. They are truly a spooky bunch.

  24. boveri says:

    Nicely thought out and written piece by the talented Mr. Ritholtz.

  25. formerlawyer says:

    @Vergennes – VT Says: and boveri

    Tthe author of this piece is Marion Maneker not Barry Ritholtz.

  26. DeDude says:

    The republican house is going to make Obama look not only good, but like the only thing that can save the country from idiotic and destructive legislation. They will give him the second term that he would not have gotten otherwise. They have barely been in power for a week and already lost credibility on the “fiscal responsibility” platform they got elected to implement. All Obama has to do is to take that platform from them by vetoing the continuation of tax-cuts for the rich when it comes up just before the next election.

    They decided to change their “stop exploding the debt” plan such that “pay-as-you-go” is only applied to increased spending, whereas new tax-cuts can be put on the credit card. However when the increased spending is the result of repealing the health care reform, then that increased spending can be put on the credit card. And their 100 billion (drop in the 14 trillion debt bucket) spending cuts are now not going to happen this year. And when the administration suggests some spending cuts in that half of the discretionary spending that is going to the military, then they say: “no way”. All Obama has to do now is to let them cause a crisis by blocking the debt sealing increase, or shutting down government. Then they will have demonstrated themselves as dangerously incompetent hypocrites that must be kept in check by a democratic president.