THE BLOG
04/26/2011 09:31 am ET Updated Jun 26, 2011

Obama's Presidency Is Not Working From Its "Core"

"Body by Jake" Steinfeld -- the first and still most prominent television 'personal trainer' (and an old friend) -- always says that everything starts and stops with an individual's 'core'. Jake obviously means that part of the body -- your 'gut' -- from which most other strength emanates.

Unfortunately, in "Presidency by Obama", Mr. Obama often neglects his core -- his core values and his core supporters -- and he seems to have lost that 'gut feel' that so wonderfully defined his campaign for the presidency just three short years ago. It is also patently apparent that the 2012 election is already a major driver of his proposals and priorities.

Having looked at polling numbers and conducted a number of focus groups, President Obama and his team seemingly have decided that his electoral future is in the hands of those whose highest priority for the nation is significantly cutting the budget. This view is evident in a 'planted' op-ed in the Financial Times (4-05-11) by Roger Altman, a frequent surrogate for the administration, who wrote that "Mr. Obama must continue his centrist push", a push that is evident in the White House's recent 'five-year freeze in non-security discretionary spending, its acceding to large Republican-led cuts in the current year's budget, and its submission of the South Korea free-trade agreement to Congress for approval'.

Altman, as does the president himself, describes this political ideology as "pragmatism."

Well, as someone who also worked hard for the Obama campaign in 2008 and as a longtime supporter of the Democratic Party, this judgment is not only short-sighted but it's also profoundly mistaken. As Paul Krugman recently wrote: "What have they done with President Obama? What happened to the inspirational figure his supporters thought they elected? Who is this bland, timid guy who doesn't seem to stand for anything in particular?"

In these troubled economic times, the American people are looking for principled leadership, not someone who is constantly checking the polls, figuring out how to compromise on longstanding beliefs, and worrying about the next election. By being overly willing to compromise with people who themselves never compromise and are publicly committed to making him a one-term president, Mr. Obama is caught up in his own Patty Hearst-like "Stockholm Syndrome", as Frank Rick observed so eloquently back in December.

In the latest budget agreement, President Obama agreed to significant reductions in programs that he long favored going back to the 2008 campaign. Yet if he opts to continue on such a budget reduction path -- allowing the Republicans to determine the playing field for economic policy debate -- then the American electorate that I encountered on his behalf in 2008 will choose actual Republicans for office, not someone who is playing at 'Republican-lite'. In the interim, as Krugman wrote, by caving in so completely on the first round of budget reconciliation, Mr. Obama has set a baseline for even bigger concessions over the next few months as the 2012 budget comes to the fore. And in doing so he hasn't even kept for himself the bully pulpit that every President before him selfishly held on to -- Mr. Obama is more than happy to share his pulpit with Mitch McConnell, John Boehner, Eric Cantor and Paul Ryan for them to spew out their anti-middle class, pro-rich guy drivel.

For Mr. Obama right now, good policies would (again) be good politics. This means that while keeping a proper eye on the deficit and waste in the federal budget, he needs to (i) steadfastly advocate for those programs which will create the 20 million jobs that are needed to fill the current real employment 'Jobs Gap', (ii) bring fairness back to the individual and corporate tax code, and (iii) pursue only free trade agreements that are at once fair to American workers.

Let's take these in order.

Despite the reluctance of our larger private sector employers to do any significant new hiring -- especially in the all-important manufacturing area which alone has lost more than 2 million jobs since December 2007 -- Mr. Obama nonetheless keeps emphasizing small businesses like Subway sandwich shops. And he does so notwithstanding the fact that the vitality of small and even most medium-sized businesses flows directly from the vitality of bigger businesses. Mr. Obama's other emphasis is his 'jobs exporting' techie friends in Silicon Valley even though the Bureau of Labor Statistics has just recently estimated that employment in 'information technology' will be lower in 2018 than it was as far back as 1998.

In the absence of a proactive all-of-government American manufacturing and industrial policy that closely matches up with the mercantilist policies of our major trading partners, U.S. manufacturers are making increasing use of part-time workers and overtime and further offshoring American jobs to China and other emerging economies. What they aren't doing is hiring. Yet it was Mr. Obama's campaign promise to quickly implement such a policy -- call it what you will -- along with his job creation and trade promises that mostly gave him his electoral wins in the nation's heartland. The promise of health care reform, to include a "public option", was certainly important to millions of voters as well, but health care never stood alone as sadly became the case immediately after the Inauguration.

As for bringing fairness back to the individual and corporate tax code, it's really pretty simple. On the individual side, just go after the tax evasion and selfish tax avoidance schemes that have robbed our tax system of much of its fundamental progressiveness, starting with taxing carried interest as ordinary income, increasing capital gains taxes for the top brackets, and eliminating frivolous personal deductions for the wealthy. On the corporate side, as I recently wrote, (a) incentivize American multinationals to attribute less not more of their profits to their foreign operations; (b) cut the corporate income rate to, say, 26% while increasing the capital gains rate to 28% and taxing dividends as ordinary income; and (c) consider adopting a modest value-added-tax or VAT on the order of 5% that reduces both corporate income and payroll taxes and includes thoughtful exemptions.

Finally, there is the issue of making free trade at once fair to American workers, an area that right now couldn't be getting any more screwed up by the administration.

In November 2010, Mr. Obama backtracked on his three years of stated objections to the South Korea Free Trade Agreement (or FTA) and instead embraced it. In doing so, Mr. Obama said that this FTA would 'help meet [his] goal of doubling U.S. gross exports by 2015 and further U.S. economic interests in Asia as a counterweight to China'.

Yet we know from our own official government studies that the Korea FTA will indisputably increase the U.S. trade deficit and thus kill U.S. jobs. Korea's refusal to eliminate the safety and environmental rules and other barriers that help keep Korea the world's most closed car market in the world, at the expense of Detroit, should alone doom this ill-conceived and poorly negotiated FTA.

But if the South Korea FTA isn't a big enough slap to the faces of America's workers, the president's announcement on April 7 that he now also has an "Action Plan" to advance the Colombia FTA, despite the fact that it too will increase the U.S. trade deficit and despite that country's horrific labor rights conditions, is really beyond the pale. As Leo Gerard, President of the United Steelworkers, has said, "We should not be rewarding a country that still murders more labor leaders than any other nation." Even during the last four years of maximum Senate and public scrutiny of the Colombia FTA, the number of trade unionist assassinations in the country has risen, from 37 in 2007 to 51 in 2010.

On trade, it's way past time to remind the President of the very specific trade reform promises he made throughout his campaign, first to Mr. Gerard's Steelworkers way back on March 26, 2008 -- and then hold him to them.

This really is 'gut check time' all around for President Obama and his administration, with the core beliefs that he sold Democrats and Independents on three years ago looking pretty flabby right now.

And now with his attention shifted to the federal deficit, while trying to be Clinton-like he's already unacceptably tracking to the right. President Clinton raised taxes where they needed to be raised rather than make deep cuts to the programs that protect those most in need. In contrast, President Obama is mostly only fighting against the further extension of the unwarranted tax cuts for the wealthiest Americans that he allowed to be extended last December despite countless promises during his campaign for the presidency that he would never do so.

Mr. Obama has already agreed to massive spending cuts merely to continue government spending for the rest of the year -- many more cuts than he should have -- and it seems today that he is going to give away too much to get the debt ceiling raised and a 2012 budget agreed. In his April 14 speech on the deficit, he said eloquently, as is his wont, that, "We have to reduce our deficit, and we have to get back on a path that will allow us to pay down our debt. And we have to do it in a way that protects the recovery, protects the investments we need to grow, creates jobs, and helps us win the future."

But is this just another 'defining moment' like so many others that later leads to retreat? His words are compelling, but are they just words? For then all I heard as he continued to speak was a list of headings under which deficit reduction might occur, with no amplification, no specifics.

President Obama's well-spoken view of our nation, which he's always seen as "generous and compassionate... and a land of opportunity and optimism", must increasingly be weighed against his actual performance on key issues. And by failing to be specific on the deficit issue, which is increasingly defining politics in America and certainly for 2012, he failed to sufficiently defend the government budgets needed to achieve a just, fair and progressive society.

We know who we should be, Mr. President, and we pretty much know where we need to end up deficit-wise. So now, as you did throughout 2008 in Iowa and elsewhere, tell us with specificity how to mend our fiscal policies, and then lead us there.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.