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An introduction to Obamanomics

Neither Barack Obama's newly debuted economic plan nor his bulked-up economic team seem to embrace the theme of sweeping change that characterizes his campaign.
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We’re getting the gist of Barack Obama.

As a campaigner, he is strategically, tactically and technically bold and brilliant. He thinks outside of the box.

As a would-be president, however, he has so far proven to be cautious and conventional.

In terms of policy, he is not looking to do the unexpected, or the radically new.

He made an unspoken calculation long ago: that he, himself, is change enough.

As he launches out on his first days of true general election campaigning, consider Obama’s most recent moves.

His innovative and daring campaign advisors have plotted out an artful game plan, and it’s every bit as shrewd as Obama’s caucus/internet based bid for the Democratic nomination.

With vast advantages in cash, charisma and crowds, Obama will harass John McCain from a wide array of angles. A wider attack hasn’t been launched by another Democrat in recent history.

And he’s not joking about those races in Montana and Virginia being in play. Obama is going to tear the playing field wide open.

But on the other hand, I just listened to the debut of his newly bulked-up economic team during one of those wonkish conference calls for reporters.

And I have to say, if sweeping change is what Obama is all about, I didn’t hear it on that call.

Obama’s advisors were intent on labeling McCain’s economic ideas as more of the same, rather than touting the newness of their own vision.

Their attack on McCain is simple: the Republican’s tax-cut promises are even more sweeping than President Bush’s own. They point to the some $7 trillion in additional cuts McCain is offering over ten years.

Still, these advisors seem to accept at least one of the basic premises of Reaganomics: tax cuts keep the economy humming.

Obama wants to slice the cake differently, of course, giving a larger hunk to lower-income Americans.

But he’s still looking at the same cake.

Obamanians should remember what Democrats asked for during the prolonged nomination race: a big push on the nation’s reset button.

Average Americans are now facing a triple whammy: excruciatingly high gasoline prices, declining home values, and unreliable services from government programs weighed down with debt.

Here’s Obama’s new crisis management answer:

  • $50 billion to unemployment insurance and to states for serving the needy and unemployed.
  • $10 billion fund to prevent foreclosures.
  • New “tax relief for ordinary Americans” – that is, those families which earn less than $150,000 per year – with up to $1,000 per family in direct payments.
  • A recently proposed windfall profits tax for big oil companies

If the economy is heading as deep into the tank as some economists think (even, evidently, some of Obama’s), then the plan he announced Monday is little more than a bandage.

Deficit hawks will wonder how Obama would pay for it all, even at this level of action.

His plan will likely be paid for out of the same two bowls of stone soup that much of Obama’s current and future proposals will draw from: a wind down of the Iraq war and higher taxes on that infamous “top 1 percent of taxpayers.”

But it’s unlikely that those two sources will prove sufficient, especially as Obama inevitably makes more campaign promises as the season goes on.

Elsewhere, Obama hasn’t asked for any real sacrifice, except from the rich.

The $50 billion stimulus package, said one of his economic advisors, Austan Goolsbee, isn’t supposed to be paid back at all.

“The very idea of stimulus is not to pay for it!” he declared.

He was uttering a truth that dare not speak its name, especially in Democratic circles: tax cuts and stimulus payments work in the short run, but someone has to pay for it in the end.

The comment brought silence from the crowd and a quick announcement that there would be only one more question.

Goolsbee, an up-and-comer from the University of Chicago, has already gotten into trouble for his candor. He’s the one who told the Canadians not to worry about Obama’s commitment to NAFTA.

But his role as chief economy spokesman for the campaign now falls to a more experienced political hand.

His name is Jason Furman, a Harvard Ph.D., and one of those people who perpetually circle the bases of government, academia, think tanks and presidential campaigns. They never seem to last more than a year or two in one place, but pick up referential authority by virtue of having been everywhere.

He most recently comes from Brookings Institution, where he directs the Hamilton Project, whose goal is to restore to the country’s fiscal sanity at a time when America is in hock up to its eyeballs and the dollar is weak.

Debt is good, Alexander Hamilton taught us – but only if you can pay the money back!

If Furman remains true to Hamilton’s legacy, Obama will have to stop handing out tax cuts and figure out how to limit the growth of Medicare so we all don’t go bankrupt.

This is Obama’s real challenge should he become president.

He’ll have to call on all of his imaginative campaign skills to sell voters on the most cautious goal in the world – pay-as-you-go government.