When one door closes, another usually opens. The skillful politician is the one who, instead of trying to pry the closed door open, breezes through the newly opened one.
As we have suggested In previous posts, this principle applies to the current economic crisis that president-elect Obama faces. That crisis arguably closes the door, at least for now, on the prospect of a New Deal style blitz of radical new economic and domestic legislation. As Robert Samuelson explains, Obama’s first priority must be to stimulate the economy and relieve the financial crisis. The latter objective requires a restoration of confidence and a reduction of uncertainty. Radical legislation (e.g., massive health care reform) that would create new winners and losers, and the brusing battles such legislation would entail, are not consistent with this sort of reassurance.
But as the legislative door to expanding direct government control over the economy seems to close, a back door opens by virtue of bailouts. Thus, the bank bailout has enabled the government to get at least one big foot in the door of this critical economic sector.
In addition, as Timonthy Carney argues, a bailout of the big three auto manufacturers would likely enable Obama to obtain greenhouse gas regulations that otherwise might be beyond his reach. The scenario is straight forward. The Democrats demand that, in exchange for the bailout cash, the manufacturers adopt “green efforts” that the Dems are reluctant to impose directly because they lack public support. Then, the Democrats can sit back as the big domestic manufacturers begin lobbying to impose the same restrictions they have agreed to on all companies.
Look for Obama to march through the open doors created by the economic crisis. And once that crisis subsides, look for him to revisit those other doors.
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