The Power of the President is the title of a great new report by the Center for American Progress on some of the things President Obama can and should do that do not require Congressional action. It is important to keep a laser-like focus on this topic because it could not be clearer that the Republican House will not be passing anything useful in bringing our economy back to life. Whether because of not wanting to help the President improve the economy to weaken him going into 2012, having a completely screwed up economic theory, being terrified of their own off the wall base that wants no compromise on anything with Obama, or (most likely) all of the above, Republicans coming to the table to help Barack Obama improve the economy is not happening, no way no how.
Progressives and Democrats need to spend less time commiserating over all the good things that Congress should do but won't. Another stimulus will not happen in the next two years, so we need to move on. Instead, we need to spend more time thinking about the things Obama could do if he aggressively seized the reins of government that he possesses and pushes forward.
The biggest thing that could be done to help the economy and the middle class immediately is to focus on stabilizing and revitalizing the housing market. If struggling homeowners had their mortgages written down, and mass foreclosures stopped wracking neighborhoods all over America, housing prices would finally stabilize and be poised to start going back up. If the shadow housing inventory of the homes that have already been foreclosed on were converted into rental properties, housing costs for working class younger and unmarried people who can't afford to buy a home yet would start to go down. If families finally got their mortgages renegotiated they could get their own finances in order again, and would gain the confidence to start spending money in the economy again. All of these things would improve the economy, and all of them could happen without Congress doing anything: all that needs to happen is for Treasury, HUD, FHA, Fannie and Freddie, and DOJ to start exerting the very considerable authority they have over the banks to push them to start writing down mortgages, and for the President to start issuing the executive orders on housing and financial regulation the CAP report proposes.
Another area that the administration could move aggressively in without congressional action is in regards to manufacturing. CAP has one outstanding idea, which is an executive order related to developing a new strategy around promoting competitiveness, especially in terms of manufacturing policy. While this would help more in the long run than short term, having such policies could do things that would promote manufacturing jobs in the short run as well. Another place the federal government can move now is in instituting a stronger, more assertive Buy America policy in contracting, and making sure federal government contractors pay decent wages. This would make a big difference in promoting American jobs and improving the incomes of American workers. Finally, Treasury needs to get far more assertive with trading partners, especially China, in dealing with currency manipulation, and needs to look at their own policies that keep the dollar so high, which hurts our manufacturing base.
Another big thing this administration could do immediately with no help from Congress is to accelerate the implementation of the Small Business Jobs Act just passed by Congress right before the election. CAP has some great ideas about implementation which have the potential to really speed up job creation in the small business sector.
There are plenty of other great policy ideas I'm not even touching that the Obama administration could do to make a difference on the economy, but my central point is that the President needs to lead, and he needs to act. Republicans and corporate Democrats like Doug Schoen keep bleating about how all Obama has to do is just compromise with the Republicans the way Clinton did, but there are some big problems with that. For one thing, the Republicans have no interest in compromising, only in capitulation. For another, they have no policy ideas that would actually create any jobs. But most of all, it ignores what actually happened in 1995: what Schoen forgets is that he and Penn and Morris all were advocating giving in to the Republicans on the budget fight in 1995. Had Clinton caved without a fight, he would have been seen as weak, and his base would have demanded a primary. Instead, he painted Gingrich and Dole as extremists, stood tall on the fight, and cleaned their clocks. Clinton went from being 10 points down to Dole before the budget fight to 10 points ahead afterwards, he ended any chance of a serious primary challenge, and he never looked back.
President Obama needs to be strong in taking the action he needs to take to make the economy better, and he needs to stand up to Republicans and force them to compromise on his terms, not theirs. He needs to stop bragging about an economic recovery no one feels, show leadership on making the economy better, and show the Republicans to be the do-nothing Congress they intend to be. Obama needs to take what action can be taken, pick some important early fights with the Republicans, and show people the difference between his vision for the economy and the far right wing Republican vision.