One narrative has remained remarkably consistent throughout this election cycle: Hillary the cold, detail-oriented policy wonk versus Obama the passionate dreamer with only vague ideas about governing. "Perspiration versus inspiration"–it seems like a fairly straightforward choice.
The problem is that there’s not a shred of truth to the claim that Barack Obama is a policy lightweight. All the evidence suggests that Obama is every bit the policy wonk that Clinton is, if not more so. Let’s begin with the fact that Obama was a professor at the University of Chicago Law School for 12 years, teaching policy-relevant courses, and was so successful that he was invited to join the full-time tenure-track faculty. While in the Illinois State Senate, Obama spearheaded several complex initiatives, most notably an expansive campaign finance reform bill that put Illinois at the forefront of campaign finance disclosure.
In the U.S. Senate, Obama has taken on some relatively low-profile but highly complicated and important issues, especially nuclear non-proliferation. When he began his presidential campaign, Obama brought on as one of his chief economic advisers Austan Goolsbee, a widely respected U. Chicago economist who is at the cutting edge of behavioral economics. Most candidates, including Hillary Clinton, hire old Washington (non-economist) political hands to advise them on economics, yet Obama chose a leading academic instead.
And on the cluster of issues surrounding net neutrality and lowered barriers to information technology in general, Obama is the only presidential candidate who has even a passing familiarity with the range of policy choices and their relevance to the future of an increasingly information-based economy. Moreover, Obama takes a strongly pro-neutrality position that is in line with the consensus among the experts on the issue, whereas Clinton mostly just avoids the issue.
Despite the fact that there is zero evidence in its favor, the zombie meme that Obama offers no policy specifics persists. With any luck, his economic address last week will finally put to rest any doubts about Obama’s command of domestic issues.
From the beginning of the speech,it is clear that Obama thinks big. He traces America’s economic history from the days of Hamilton and Jefferson all the way to today, laying out a coherent, expansive narrative about American prosperity. He offers a vision of economic mutualism that breaks sharply from the identity-group antagonisms previous Democrats and Republicans have stoked, concluding that “the fundamental truth is that each American does better when all Americans do better; that the well-being of American business, its capital markets… and the American people are aligned.”
Obama addresses today’s economic crisis by explaining how lobbyist-induced governmental irresponsibility has frayed the bonds between Wall Street and Main Street, resulting in uneven prosperity and extreme risk-taking that is dangerous for both bankers and workers. He wants to realign the incentives so that “both high level executives and employees better serve the interests of shareholders.”
Obama deftly avoids the trap of acquiescing to the false choice between “an oppressive government-run economy and a chaotic, unforgiving capitalism,” and many of his specific policies spring from this previously excluded middle. For example, he is co-sponsoring Sen. Chris Dodd's legislation creating a new FHA housing security program that will provide incentives for lenders to buy or refinance existing mortgages, preventing foreclosures by prodding both borrowers and lenders to share the sacrifices within a market setting (note: in fairness, Clinton supports the bill as well, though she is not a sponsor). He also proposes a $10 billion foreclosure prevention fund aimed exclusively at defrauded homeowners, among other initiatives that try to solve the crisis without simply handing out government money in every direction. And looking to the future, Obama hopes to prevent problems in the housing market by introducing an easily understandable home-score system for borrowers and giving stiffer penalties to fraudulent lenders.
But he doesn't just focus on the housing market. Obama correctly sees the housing bubble and subsequent bust as part of a larger story of financial deregulation in the last few decades that has ratcheted up the level of risk while lowering the level of oversight, resulting in wildly irresponsible financial practices. His goal is to bring financial institutions back into a regulatory framework, instilling trust and accountability back into the markets with the minimum regulatory touch needed get the job done.
To do so, Obama proposes a series of specific reforms that include liquidity and capital requirements on any institution for which the Fed acts as lender of last resort (as it essentially did with Bear Stearns), increased oversight of ratings agencies, increased transparency and disclosure requirements for financial institutions, a streamlined regulatory structure to reduce overlapping agencies, and a financial market oversight commission to look for crises on the economic horizon. He concludes by tying back into his stirring historical narrative, inspiring Americans to follow in the footsteps of the founding fathers by taking the path of shared prosperity.
If last week's speech proved anything, it's that Obama can deliver both inspirational rhetoric and well-reasoned policies. In contrast, Clinton’s economic speech last week was narrowly focused on the current housing crisis, failing to seriously address its connection to the impending recession or propose measures to prevent future problems. So much for "perspiration versus inspiration."
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