Mr. Obama's First 100 Days

Okay, President Obama's first 100 days are completed. What can we say?

There have been many conservative commentaries that are extremely critical of the new Administration, fundamentally on the grounds that (pick a policy area, any policy area) what the President has proposed or achieved will not work under any reasonable scenario. For instance, Mr. Obama has been dealing with the economic debacle by raising taxes and massively increasing government debt (aka spending). The critics say this won't work and they are correct. In his first 100 days Mr. Obama has also been trying to rescue America's financial system and Detroit automakers. In both these areas, the critics say he is doing exactly the wrong things, and their opinion seems born out by the way the fortunes of the companies the President is trying to save continue to deteriorate. After months of the most extraordinary government actions both the Detroit automakers and some of America's largest banks are now careening inevitably towards insolvency, bankruptcy and/or nationalization. So, again, the critics are right.

However, I depart from the critics because as right as they are, they are right about the wrong thing. Mr. Obama's first 100 days have been a smashing success in almost every area.

I can say this for the simple reason that I am measuring Mr. Obama on what he intended to accomplish, whereas his critics insist on measuring him on what they think is important. I think he ought to be graded (at least initially) on his own yardstick, not theirs. To do otherwise would be like grading a math exam solely from a grammatical point of view. In math, the point is not clarity and concision of expression, but formal correctness and elegance of the solution. E=mc2 gets about an F as a grammatical statement, but an A for mathematical correctness and elegance.

So too with Mr. Obama. His primary goal for the economy has never been to bring the country out of a recession, as is assumed by his critics, but rather to transform the economy into something different. Higher taxes on the "rich" and massive government spending (aka debt) are entirely appropriate means towards his ends, and on these two he has achieved an astonishing amount in his first 100 days. And too, his goals for the Banks and Detroit never had anything to do with stabilizing them and then returning them to their previous status as independent private businesses. The President regarded them right from the start as significant means towards accomplishing his ultimate goal. He has seen clearly as his critics have not that if he can nationalize these two important areas of the American economy then he can go a long way towards transforming the American economy into something different without - and this is the important part - having to go through the hard, inefficient and often impossible job of pushing legislation through Congress.

To flesh out one example of what I am talking about, let's take Detroit.

Continue ..... If you assume, as is likely, that Mr. Obama's goals for Detroit were to preserve Union jobs and retirement benefits and to reduce the number of large, gas-guzzling cars on the road, then when he took office he had two ways he could go:

(1) He could have gone to Congress and attempted to get legislation increasing Federal CAFE standards to such onerous levels as to force Detroit to build only little green golf carts. However, because the sale of such vehicles could not support the existing level of Union wages and retirement benefits, this would have put the automakers out of business and thrown Union workers into the unemployment lines. So to achieve both his goals, the President would simultaneously have had to get Congress to authorize the assumption of some large portion of Union wages and retirement benefits.

Such bold, decisive transformation of the auto industry through legislation, of course, would be politically impossible, if not suicidal for any President. So, Mr. Obama decided to go with his second option:

(2) Secure government control of both the Board and the CEO of GM (he did this in his first 45 days in office), restructure the equity ownership of the Company so that his Administration and the Unions own over 50% of GM and cash out other interested parties like bond holders (he is within days of achieving this as of this writing), affirm all Union contracts including legacy retirement benefits while discharging most other obligations of the Company in a pre-packaged bankruptcy (will be done in his second 100 days in office), and finally dictate the closing down of all lines of SUV's, trucks, and other large vehicles in favor of little green golf carts (to be done in the remainder of his first term and continued for all time thereafter).

Presto! After only 100 days in office and without any legislation at all, Mr. Obama is well on his way to saving Union wages and benefits and transforming the 2nd largest automaker in the world into a producer of little green golf carts. The brilliance of Mr. Obama's maneuvers in this respect is exceeded only by his stunning success in accomplishing seemingly impossible goals for the American car industry.

As for the banking industry, suffice it to say that the President’s goal for banking has been the same as for the auto industry: to achieve through nationalization what would be impossible for him to achieve legislatively.

However, remember that Mr. Obama's actions with regard to the auto and banking industries are means to his larger goals for the American economy. I leave it to the reader to discern what exactly Mr. Obama's ultimate goals are, which are not that hard to figure out. But please, stay away from such fatuous simplicities as "Socialism." As used today, Socialism is merely a political buzz word and carries no substantive or analytic content anymore.

As regards America and its future, the President knows the math and is doing the math. His critics are content to correct his grammar. Therein lies the reason for Mr. Obama's resounding success in his first 100 days, and for the undoubted success he will have in the remainder of his term.