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Barack Obama and the Three Envelopes

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The frantic final days of the 111th Congress were an emotional rollercoaster that mirrored Barack Obama's first two years as President. As he prepares to run for reelection in 2012, he faces grave national problems, a recalcitrant 112th Congress, and disgruntled Democrats. Obama should reread the classic management tale of the "three envelopes".

A newly hired CEO moves into his office, where he finds a note from his predecessor: "Good luck! If things don't go the way you plan, here are three envelopes you may find helpful. As you need them, open them in numerical order." The CEO puts the envelopes in his desk drawer and gets to work.

It's not clear whether George W. Bush left his successor three envelopes, but Newsweek columnist Jonathan Alter's new book The Promise supplies many fascinating insights into Obama's first year in office. Obama began running the government the day after he was elected President -- Bush stepped aside and let Obama call the shots about aid to financial institutions, homeowners, and American auto manufacturers. Because Bush was so accommodating, and because everyone understood that Dubya didn't understand what was going on, Obama made the critical decisions. It didn't take long for the incoming White House team to recognize that the economy was in deep trouble, worst than they imagined prior to the election.

In the three-envelope story, things start badly for the new CEO and he opens envelope one, which contains terse advice, "Blame your predecessor."

Alter says Barack Obama isn't the kind of person who blames others. Because of this, and the cordial reception the Obama family received from George and Laura Bush, the new President was hesitant to attack his predecessor. This was an early indication of Obama's weakness on tactics and a more pervasive problem with messaging: Democrats never got their "America is in bad shape because the Bush Administration screwed up" message to stick and that gave an opening for Republicans to score with "Government is the problem."

It appears that the Obama Administration's poor messaging was primarily the fault of Senior Presidential Advisor David Axelrod. However, Nation columnist John Nichols also blames Press Secretary Robert Gibbs and White House Chief of Staff Rahm Emanuel.

The communication disaster is indicative of a systemic White House problem. While all exceptionally smart folks, Team Obama only has had a few people who can stand up to the President. In Foreign Policy, there's Hillary Clinton, Robert Gates, and Joe Biden. In Domestic Policy there was only Larry Summers, Director of the White House Economic Council. (Obama had high hopes for Treasury Secretary Tim Geithner, but he turned out to be Summers' acolyte, and former Federal Reserve Chairman Paul Volcker was frozen out by Summers.)

One of the ironies of the first two years of the Obama Administration was that our brilliant 44th President needed the most help on economic policy. He turned to Summers, who -- despite his legendary intellect -- gave Obama the wrong advice on the big decisions: whether or not to breakup "too big to fail" banks, the need for strong financial regulations, and the necessity of a jobs initiative.

In the three-envelope story, the new CEO continues to have problems, so he rips open envelope two and reads, "Reorganize."

As he begins the second half of his first term, President Obama is reorganizing. He's announced that David Axelrod, Rahm Emanuel, Robert Gibbs, and Larry Summers are leaving the White House staff. And others will follow.

But it's not enough for Barack Obama to replace his staff; he needs to recognize his own part in the failures of the past two years. Alter cogently summarizes Barack Obama's strengths and weaknesses. He's very bright, perhaps the most capable President since FDR. Nonetheless, Obama is not tactical, does not have the Bill Clinton gift for translating big national problems into words the average voter can understand, is not as political as he needs to be -- in 2010 Obama had a weak relationship with the Democratic National Committee (DNC) and the rest of the Democratic Party, and does not surround himself with strong enough people.

In the conclusion of the three-envelope story, the situation disintegrates and the CEO turns to the final envelope: "Prepare for your successor and make three envelopes."

While it's not clear that Barack Obama is doomed to be a one-term President, it's obvious changes need to be made. Near the end of Alter's book, he notes that Obama is a fan of the Chicago Bulls professional basketball team and saw them change from an average team, dominated by superstar Michael Jordan, to a winning team, where Jordan became more of a team player. That's the transition the President needs to make if he wants to improve his chances of reelection. Obama has to build a stronger team, particularly in the area of messaging and political strategy, or he's going to have to prepare three envelopes.

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