Newsweek: Why the 44th president is no FDR—and the economy is still in the doldrums

Michael Hirsh writes a powerful essay in Newsweek explaining how Wall Street didn't, and won't, have to face real reform because of Geithner and Summers having rolled the President. But Hirsh doesn't give the President a pass.

Obama can hardly take all the blame for the surprising persistence of high unemployment and slow growth. Among the new headwinds beating the economy down in recent months was Europe’s currency crisis, for example. But the leadership question can’t be ignored. Financial and economic reform just never seemed to be a subject that kindled Obama’s passions, his critics say. (The White House strenuously disagrees: “Financial reform has been a top priority to the president since day one,” administration spokeswoman Jennifer Psaki told me.) For much of his first 18 months in office, Obama always seemed to be finding some new thing to focus on. He spoke about financial reform, but he often seemed to address it on the fly, as he was tackling other priorities, like health care. To be fair, Obama was also juggling two wars. Yet all in all, he seemed perfectly willing to leave things to his trusted lieutenants, Geithner and Summers, puzzling some Democratic allies on the Hill. “Doesn’t the president realize he’s got a big flank exposed here?” said one Democratic staffer pushing for tougher restrictions on Wall Street early in the summer of 2010.

There was so much passion and ambition in Obama’s words about fixing the economy, and so much dispassion and caution in his policy choices. Early in the Democratic primaries, in January 2008, Obama had stunned many of his supporters by praising Reagan as a transformational president—a contrast to the eight years of Bill Clinton, Obama added cuttingly. Reagan, Obama said, “put us on a fundamentally different path because the country was ready for it.” Yet at what would seem to be a similar historical inflection point—what should have been the end of Reaganism, or deregulatory fervor—President Obama seemed unprepared to address the deeper ills of the financial system and the economy. Several officials who have worked with the Obama team said the president’s heart was in health care above all else. “He didn’t run for president to fix derivatives,” says Greenberger. “And when he brought in Summers and Geithner, he just thought he was getting the best of the best”—good financial mechanics, in other words, who would “get the car out of the ditch,” to use one of Obama’s favorite metaphors.

Obama was clearly not pushing very hard to be FDR or even his trust-busting relative Teddy Roosevelt. Now it looks like grim growth and unemployment numbers could extend all the way into 2012. Distracting himself with health care and other issues, Obama may have politically maneuvered himself out of the only major remedy that could bring unemployment down and growth up enough to assure his re-election: another giant fiscal stimulus. Today, after engendering Tea Party and centrist Democratic resistance to more government spending by pushing his health-care plan, the question is whether he has the political capital he may well need, in the end, to save his presidency. And after a two-year fight over financial reform, one other question still lingers: has Wall Street come out the big winner yet again?

Hirsh is correct overall, but misses one rather large uber point. The President wasn't distracted from financial reform by health care reform. The President seems in a perpetual state of distraction from practically every promise he ever made. Oh how we wish Barack Obama had been "distracted" by health care reform. That distraction would have been most welcome. Instead, the President gave a few speeches, issued a few vague "goals," and then let his lieutenants screw everything up by ceding as much as they could to conservatives in the hopes that the job could done in the easiest way possible, regardless of the results.

Let's play a little game. Here's what Hirsh just wrote about financial reform:

There was so much passion and ambition in Obama’s words about fixing the economy, and so much dispassion and caution in his policy choices

Now let's change two words:

There was so much passion and ambition in Obama’s words about health care, and so much dispassion and caution in his policy choices.

There was so much passion and ambition in Obama’s words about gay rights, and so much dispassion and caution in his policy choices.

There was so much passion and ambition in Obama’s words about climate change, and so much dispassion and caution in his policy choices.

There was so much passion and ambition in Obama’s words about immigration, and so much dispassion and caution in his policy choices.

CHANGE has yielded to CAUTION. And even that isn't entirely true. Barack Obama never really pushed change at all after the election. It's going to be fascinating to see what he promises for his second term, and whether (and why) anyone believes him.