Obamanomics to the rescue

Global warming, recession, war, healthcare, the energy crisis: A new book argues that Barack Obama has an answer for everything.

Published July 29, 2008 11:00AM (EDT)

Salon composite / AP photo

Near the end of John R. Talbott's hagiographic "Obamanomics" we are presented with a handy list of the 25 "Greatest Threats to Our Prosperity." The breakdown makes for an imposing compendium of approaching doom, including everything from "world poverty" and "global warming" to "imperialism," "animal rights," "religious fundamentalism" and "international trade with China." There's also "uncontrolled growth and population," "commercialization of media," "demise of workers rights" and "aging of population." We get a price tag (in trillions) and are told whether Barack Obama has made a "major policy statement" on the issue. (He's down for 23 out of 25.)

"Of course, it is too much to ask of Obama to solve all of these world problems," writes Talbott, a former Goldman Sachs investment banker who has pumped out five books on economics and politics in the United States since 1999. Then again, he's referring to a man who has been known to finish speeches with a thundering promise that during his administration, "the oceans will stop rising and the planet will begin to heal." So come on, not even the sky is the limit. Without a doubt, Talbott believes Obama is the right man for an impossible job. "Obamanomics" does not lack for hero worship -- a point made clear from the introduction, in which Talbott makes a lengthy comparison between Obama and a previous generation's would-be savior: Bobby Kennedy.

Bobby Kennedy never got the chance to change the world. Similarly, Obama has yet even to be officially confirmed as the Democratic nominee for president. Talbott's decision, from the get-go, to summon forth the ghost of the crushed liberal hopes of the 1960s feels ominous. To think of Obama as a latter-day Kennedy is to practically beg for disappointment. We know how that story ends.

But the subtitle for "Obamanomics" is "How Bottom-Up Economic Prosperity Will Replace Trickle-Down Economics." And we don't know how that story ends. Forget about Bobby Kennedy -- Obama also frequently gets compared to Ronald Reagan. Because just like the Gipper did, Obama makes audiences feel better about themselves and their country when he draws his rosy pictures of what America is or could be. And just like the Gipper had his Reagan Democrats, Obama supposedly has his Obamacons. Which raises an even more compelling potential parallel: Could an Obama presidency remake American politics to the same degree as did Reagan's?

Reagan put deregulated markets at the center of the political and economic agenda. Obama, says Talbott, wants "economic justice" to be the guiding light. Reagan said markets work best. Obama, writes Talbott, preaches fairness. Since Reagan's election, wealth has become extraordinarily concentrated among the top 1 percent of the country, and the social safety net has been progressively dismantled. Obama promises to reverse that tide.

For readers already in the Obama camp who are looking for an extended breakdown of Obama's policy positions on the economy, drawn from his speeches and copied and pasted from BarackObama.com, "Obamanomics" might be useful. If you want to know exactly what his plan is for increasing Social Security payroll taxes for the wealthy, or how a cap-and-trade system in which emission allowances are auctioned to the highest bidder might work, details are at hand.

A typical paragraph:

Obama's plan to improve economic opportunity for all is fourfold. He wants to maintain an inheritance tax on our wealthiest citizens that others have fought to end, he wishes to introduce universal preschool education to give poorer children the same opportunities at early learning as their richer classmates, he wants to improve our public education system and encourage college education for all, and he wants to make sure that all artificial barriers to personal advancement are eliminated in the workplace. Let us examine each of his proposals in more detail.

If, however, you are not an Obamafan or you come to his platform from a position of skepticism, you'd be better off reading Obama's speeches directly, or perusing the books Obama has written himself. The on-record Obama offers more nuance, and positions himself more effectively as a man ready to negotiate his way through a world of trade-offs and compromises, than does the Talbott version of Obama. Furthermore, a really useful analysis of "Obamanomics" would help us understand how all the pieces of Obama's platform fit together -- how they might be funded, for example, or how they might fare during the political tug of war of congressional battle. But such analysis is in short supply.

The closest Talbott does come to giving us the bigger picture arrives in the context of a discussion of Obama's plan to lower healthcare premiums. The plan, writes Talbott, might cost as much as $100 billion a year, but would be paid for by the savings generated from getting out of Iraq, tax increases on Americans earning more than $250,000 a year, and revenue from the sale of allowances to emit carbon.

Right there, you have the kernel of an approach to economic management that is, at least in theory, more rational than anything John McCain has proposed. One even gets a titillating inkling of a worldview in which some of the great threats to "our prosperity" -- war, healthcare costs, climate change -- are linked together in a fashion suggesting Obama has thought about how these vast challenges can be comprehensively addressed.

More, please! A satisfying investigation of "Obamanomics" would attempt to pull all the disparate strands of his agenda together and figure out how they might be paid for, how they interlock and how or whether they represent an approach to economic governance that is different from either the liberal or the conservative approaches of the past.

Case in point: Over the course of the primary campaign a wealth of interesting detail emerged as to how Obama's economic team, starting with University of Chicago economist Austan Goolsbee, was heavily influenced by the insights of so-called behavioral economics. Behavioral economics preaches that properly structured government programs will encourage citizens to do the right thing, economically speaking, without actually forcing people to do anything they don't want to do. We will be "nudged" by libertarian paternalists rather than ordered around by Big Government or left to fend for ourselves in a dog-eat-dog "free" market. Talbott doesn't so much as mention "behavioral economics."

There's also the niggling issue of how Obama's economic positions have varied over the course of the campaign. When on the stump in Ohio during the primaries, Obama ventured into adamantly protectionist territory in his denunciation of NAFTA and other free-trade agreements. Later, having secured the nomination, he admitted that he might have gone just a bit overboard in the heat of the moment. What might that tell us about how he would govern? Economic justice and fairness are undoubtedly central to Obama's worldview, but his liberalism is not necessarily the liberalism of a Bobby Kennedy, or even a John Edwards. His liberalism is pragmatic, detail focused and full of trade-offs.

So he is pro-trade, but wants a much stronger safety for American workers negatively affected by trade. He won't privatize Social Security, but supports increasing the maximum amount of earnings covered by Social Security so that wealthier Americans contribute more to the program. He simultaneously pushes for expanded preschool funding while calling on parents to be more responsible for their children's educational achievement. He does not advocate a complete restructuring of "the system," but instead pushes a program of smart tweaks -- what might better be called a great rebalancing, or a great readjustment, rather than a new commitment to a "Great Society."

Does this make him a less likely candidate to shift the direction of American history, à la Reagan? Maybe so, although for some partisans, it may be enough just to have Obama picking federal judges and Supreme Court justices. It would also be nice to see government agencies and Cabinet posts staffed by people who took their duties seriously. A Department of Labor that didn't support union-busting, for example. Or an Environmental Protection Agency dedicated to protecting the environment, rather than corporate pollution privileges. For some of us, such a change in direction would be well nigh revolutionary.

But one could also make the case that nuance, not revolution, is exactly what the country, and the United States, really need. One problem with totalizing us-vs.-them narratives is that they get the other side's back up, and the ensuing gridlock ensures no progress whatsoever. When what is required, first and foremost, for us to move forward is a renewed sense that we're all in this together.

The real promise of an Obama presidency may lie not so much in the details of his platform as it is documented on his Web site, but in his apparent character. If you take the time to read or listen to his speeches or his books, you are likely to acknowledge, unless utterly blinded by partisanship, that he is a smart, perceptive guy who is able to articulate a complex understanding of the world to a degree that few other modern American politicians can even begin to approach. His speech on regulating Wall Street at Cooper Union in March and his speech on race in the wake of the Jeremiah Wright controversy are enough, by themselves, to make that case. For conservatives who have been dismayed with the debacle of the Bush administration, Obama's intelligence appears to be comforting. They might not agree with all of his positions, but at least it seems unlikely that he will metamorphose into a blithering idiot or a corporate tool.

To be smart, and to be able to see both sides now, are rare qualities in contemporary American politics. "Obamanomics," then, is not a platform but a person. And here is where John Talbott does nail what might be the most important attribute of Barack Obama. A smart, pragmatic guy who cares about fairness just might be able to get people to cooperate.

And cooperation, more than anything else, is what the doctor ordered.

Let's return to the 25 "Greatest Threats to Our Prosperity":

We cannot just will away these problems, but a healthy shift in the focus of our energy, efforts and motivations toward cooperation might be the critical element necessary to generate effective solutions ...

It turns out that the same thing is needed to solve each of these important problems: greater global cooperation. Individual effort won't do it. The problems are too large and too complex. A single citizen who tries on his own to work toward a solution will either see very little benefit, or in fact, may face a competitive disadvantage relative to those who ignore the problems. In the parlance of economics, all of these are collective action problems, because individuals acting in their own self-interest will arrive at an equilibrium solution that is not as good for all than if the participants had cooperated and acted together.

Judging by Obama's popularity outside the United States, the rest of the world has already made its choice as to which presidential candidate is more likely to promote a global sense of cooperation. Of course such popularity hardly helps Obama come Election Day in the United States, and may, when you take into account American isolationism and xenophobia, even hurt him domestically. But it also gets to the heart of what's at stake. The deciding vote in November is unlikely to be cast by partisans of either the right or the left. It will be cast by independent swing state voters who, ultimately, come to the conclusion that one candidate will make better decisions when facing the unthinkable, immense challenges of the upcoming decade.

As each day goes by, the complexity and interrelatedness of the challenges that confront us become more apparent. Talbott's "Obamanomics" does not clinch the deal, but then again, one can't even imagine a similar book grappling with the other side: "McCainonomics." There ain't no such thing. Which is all you need to know.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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2008 Elections Barack Obama How The World Works Nonfiction U.s. Economy