Thursday, 28 January 2010

Analysis: Barack Obama the underdog

Extract from The Times (UK), 28 January 2010


Barack Obama has had to come down from the Olympian heights to recast himself as a street fighter, even an underdog - and he did it well.

His political task last night was to gloss over a thin record of accomplishment and chart a course towards midterm elections in November that a deeply demoralised Democratic party is starting to dread.

He admitted he and his team had made mistakes in their first year even if most of the errors were left unspecified other than a failure to communicate his aims for health reform.

But he did not abandon his big goals on health, financial reform or climate change and made the Republicans look like the party of "no".

And the key line from the speech was one of defiance: "We do not give up. We do not quit. We don’t allow fear or division to break our spirit.”

Few of his supporters would have forecast such a shrunken agenda a year ago, when Mr Obama’s sweeping promises of change still seemed equal to the monumental challenges posed by a collapsing economy. Since then recovery has been sluggish, unemployment has been stuck at 10 per cent and Republican efforts to sabotage health, financial and energy legislation have been relentless.

But aides said Mr Obama had lost none of his ambition and still planned to change the way Washington does business – but in reality he is more dependent than ever on the 535 members of Congress who crammed into the House of Representatives last night.

Obama's State of the Union speech

US President Barack Obama has said in his first State of the Union address that creating jobs must be the nation's number one focus.

Mr Obama accepted Americans were "hurting" and that his election pledge of change had not come quickly enough.

He defended his healthcare reform efforts and bank bailout policy, but said there would be a spending freeze from 2011 to tackle the budget deficit.

Bob McDonnell, for the Republicans, criticised the expansion of government.

The Virginia governor said the federal government was "simply trying to do too much".

'Devastation remains'

Mr Obama was given the traditional warm welcome by all sides of Congress and received several standing ovations.

He opened his address by saying the US had to "answer history's call".

On the issue of employment, Mr Obama said: "People are out of work. They are hurting. They need our help. And I want a jobs bill on my desk without delay.

"Jobs must be our number one focus in 2010."

Read a full transcript of Obama's speech here.

Sunday, 24 January 2010

Obama announces dramatic crackdown on Wall Street banks

Obama's 'new Glass-Steagall Act' will prevent banks with customer deposits taking risky investment bets

Extract from the Guardian (UK), 21 January 2010

by Jill Treanor

President Barack Obama today declared his intent to take on Wall Street by announcing plans for stringent rules on the banking sector that prompted comparisons with the draconian regulations introduced after the Great Depression.

In the boldest move taken by any government around the world to respond to the financial crisis, Obama told banks they would no longer be able to take risky bets with their own capital to make money on the financial markets.

Banks which take deposits will not be allowed to use their own money to take bets on markets, run hedge funds or make private equity investments through what he called the "Volcker rule" after former Federal Reserve chairman Paul Volcker.

He also wants to prevent further consolidation of the financial system in the US and will ban takeovers and mergers among American firms in the sector.

Obama said the new proposals would keep taxpayers from being "held hostage" by banks that have become "too big to fail" and that pose a risk to the entire financial system.

Wall Street was nervous ahead of the announcement, with the Dow Jones Industrial Average down more than 160 points before he spoke and then falling a further 40 points once he had finished. The FTSE 100 index in London fell sharply in afternoon trading as the markets feared the impact on UK banks such as Barclays and RBS.

"We simply cannot return to business as usual," said Obama.

Click here to read the article in full

Friday, 22 January 2010

What a week this anniversary

Mark Mardell, BBC News Online, 22 January 2010

Timothy Geithner, Barney Frank, President Obama, Paul Volcker

What a week. This anniversary of the president's year in office was always going to be a time for reflection.

The victory of Scott Brown in Republican-resistant Massachusetts turned it into a time for urgent reassessment for the president's party. The word "pivotal" has been used

a fair bit. That's right. After twelve months the President has swung on his heel.

This may be, as many commentators contend, the beginning of the end for a one-term, flash-in-the-pan President. This is the third victory in a row for Republicans and they are on a roll. It certainly hints to sweeping Republican victories in November's mid-term elections.

But it may be just the kick the president and his party needed. After that stunning victory and the adulation that followed, he assumed his popularity gave him political invincibility. Although he has been accused of governing from further left than some expected, at heart he's a pragmatist.

He got his head down and got on with the new, serious, difficult and no doubt fascinating business of running the most powerful country in the world.

This week may have reminded him that these days, and especially in America, the political campaign can never stop. The most important thing about power is what you do with it. But a very close second is making sure you keep it.

There have been immediate changes. Whether they like it or not, the Democrats' number one priority, health care, has just slipped dramatically down the agenda.

Scott Brown's election left them with few options. The two main ones have now been ruled out. The president has said the plan must not be pushed through the Senate before Mr Brown takes his seat. Nancy Pelosi has said the Senate bill won't get enough votes in the House.

This surely means that healthcare reform, as currently proposed, is finished.

They deny it is dead, but it is certainly in a coma, only to be wakened if some Republican senators have an unlikely epiphany.

This will be very disappointing for some who voted for Obama. But many on the left thought the plan was too watered down to be worth much.

The opinion polls suggest a more complex picture than simply people hating the idea of any reform, but the current plan had become politically toxic.

The two bills are just too confusing, and the Democrats haven't tried to sell them clearly. I heard a fascinating piece on NPR this morning, an economist trying to convince a union member that taxing her Cadillac plan wouldn't hurt her.
His argument rested on the belief that her company would raise wages if it was forced to adopt a less expensive plan. Not surprisingly, she wasn't convinced.

Then there is the president's radical plan for the banks. This looks like a dramatic policy shift. The White House says it was signed off before Christmas, so I'll just observe that by an amazing coincidence it is a perfect fit for this week's narrative.

The president has christened the new plan, so offensive to many big banks, the Volcker rules after former chairman of the Federal Reserve Tall Paul. This is kind of the president because by all accounts Paul Volcker had all but given up on his plan ever being adopted. Treasury Secretary Tim Geithner was apparently opposed. Now it seems he's been overruled.

The president knows getting this through congress will be hard. But this isn't a messy vote loser in the country. This is a populist clarion call.

He's predicting a swarm of lobbyists will descend on Capitol Hill and he's doing a good impression of a man relishing the scrap ahead.

He'll hope the American people will be cheering him on. He has called on Republicans to join in designing common sense rules to protect ordinary Americans.

They may well deride his plan as another example of government interference, but they are in a sticky position and they know it.

One senator has dismissively said he is creating a "bogeyman". But I bet it is a bogeyman that frightens many of his voters.

The Supreme Court ruling raises another spectre. Banks that feel threatened can spend their money running ads against the new laws.

There may be a torrent of them. But they will have to put their names on them, rather than saying "This advert was paid for by Americans for a nicer America" as happens at the moment. They will have to be very clever adverts to avoid public distain.

The White House no longer seems complacent in the face of bad opinion polls, disastrous elections and a re-invigorated Republican party. Late in the day, they are accepting the battle is serious and returning to the fray.

Mark Madell's article was originally published here.

Wednesday, 20 January 2010

Republicans take Ted Kennedy's seat in dramatic upset

Democrats lose Senate seat in Massachusetts, throwing Obama's health reform plan into doubt

From the Guardian, UK- Ewen MacAskill, 20 January 2009

The Republicans have produced one of the biggest political upsets of recent US history by winning Ted Kennedy's Senate seat in Massachusetts, traditionally one of the safest Democratic states in the country.

The victory against the odds came on the eve of the anniversary today of Barack Obama's inauguration, a heady time for the Democrats when they entertained hopes of a prolonged period of dominance.

The win robs the Democrats of their filibuster-proof 60-40 majority in the Senate and throws into doubt the future of Obama's health reform plan. Obama and the Democratic leadership will have to decide whether to take another look at the bill.

Scott Brown, a truck-driving National Guardsman who was virtually unknown even in Massachusetts a few weeks ago, beat Martha Coakley, the state attorney general who had expected to inherit the seat, by 52% to 47%.

Brown, in his victory speech, referred to one of the decisive moments of the campaign, when in a debate Coakley referred to "Ted Kennedy's seat". Brown said: "This Senate seat belongs to no one person, to no political party … This is the people's seat."

Coakley, in her concession speech, said: "I am heartbroken at the result, as I know you are, and I know we will get up together tomorrow and continue this fight, even with this result tonight."

It is a huge psychological blow to the Democrats: the seat of John F Kennedy and then Edward Kennedy until his death last year is now in Republican hands. If a seat regarded by Democrats as one of the safest in the country can fall, then scores of Democrats standing in the congressional mid-term elections in November will see themselves as also vulnerable.

"It is a shock, a total shock," said David Hadas, 37, one of more than a thousand Coakley supporters at a Boston hotel for what they hoped would be a celebration.

"It is only a year ago everyone was very upset with the Republican party and we swept Obama into office."

Voters, citing reasons for the shift to the Republicans, repeatedly expressed hostility towards the healthcare bill but also a belief that Obama represented too much government interference, was too leftwing and was spending too much.

The Democrats have several Plan Bs for the health bill, none of which they regard as satisfactory. One was to vote on the bill before Brown takes up his seat but Jim Webb, a Democratic senator, appeared to block that last night by saying the election had been both about heathcare and the integrity of the government process.

More than 2,000 Republicans turned up at another Boston hotel last night to noisily celebrate a rare victory after heavy defeats in the 2006 congressional elections and again in 2008 for the White House.

"I pray this will be the start of a bloodless revolution, the start of the campaign against the Obama agenda, in which the silent majority are heard," David Knight, 43, a Republican from neighbouring Rhode Island, said. "We hope this is the end of the health bill but they could still ram it through."

Michael Nicolazzo, 26, who was also at the party, was a Democrat until two years ago but felt Obama was too left wing. "This was a referendum on Obama. For the bluest of all states to elect a Republican, it really sends a message that people do not want extravagant spending." He, too, hoped the health bill will be killed.

Brown received a lot of backing from Republicans who had travelled to join him from all round the US, and also from grassroots groups that have grown up in opposition to Obama's agenda, particularly on health, such as the Tea Party.

At the Boston hotel where the Democrats held their wake, some began crying as the first results came through. Most headed home early.

"We are all in shock," said Addrienne Walker, 40, who was still carrying a Coakley poster. "We have not had a Republican in that seat since 1952." She hoped Obama would not back off on health reform but admitted that the November elections would be tough. "It is not looking good. Obama is going to have a fight on his hands."

Even before polling closed, the Democrats were engaged in a blame game. The White House and the national leadership hinted that Coakley had been responsible because she had fought too low-key a campaign.

Obama issued a relatively terse statement, thanking Coakley for her hard work.

Local Democrats blamed the national leadership, saying they had been too slow in recognising the danger and providing the necessary campaign cash and staff. They accused the national leadership of having pushed for the negative ads in the final days and claimed this had alienated independents.

A third candidate, Joe Kennedy, representing the Libertarians, took only 1%. He is no relation to the late senator.