How Obama Overload Threatens the Economy

The president's numerous reform plans are outstripping Americans' ability to follow what he's doing.

By + More

OK, I'm convinced: President Obama has a remarkable attention span. Too bad the rest of us can't keep up.

Obama is fond of saying that the government can do several important things at once, and he seems determined to prove it. Unprecedented financial bailouts are still in the works, and $787 billion in stimulus money is just starting to filter into the economy, but that's no reason to sit back and take a breather. A new healthcare reform plan would transform one sixth of the U.S. economy. Obama's "cap-and-trade" plan would be the biggest American response to global warming to date. His financial reform plan would rewrite the rules for Wall Street and transform lending. In his spare time, Obama is recalibrating the nation's two wars, winding down our presence in Iraq while ramping it up in Afghanistan.

Got all that?

[See why we have an economy that only a mother could love.]

Probably not. Obama is certainly right that the federal government, with a $3 trillion budget and 1.8 million employees, is capable of multitasking. But Americans need to be able to follow along, and Obama's multifarious plans are outstripping the ability of citizens—even those determined to stay informed—to understand what he's doing. The fire-hose agenda is starting to threaten initiatives like financial reform that ought to have mainstream support, and undermining Obama's overall political standing.

The political calculus, of course, is that Obama needs to emulate Franklin Roosevelt and push through as many transformative programs as possible while he still has momentum from his historic presidential victory. Except that this isn't the 1930s and the FDR cram-down approach could alienate key parts of Obama's constituency.

Take small-business owners. They ought to be the biggest fans of healthcare reform, since companies with fewer than 50 employees typically face the highest costs for providing insurance to their workers. But Obama has been focused on so many things that he's blown the chance to get small-business owners squarely in his corner on healthcare.

[See why postal-style healthcare might not be so bad.]

It's hard to know exactly how "Obama's plan" would treat small business, since the president's plan so far is nothing more than a set of principles, with few specifics. But if somebody who owned a small business took a few hours off from a 60-hour workweek to read through half-a-dozen legislative proposals banging around Congress, he or she might discover plans to impose new fees on certain small companies and even penalize them if they don't offer insurance under the new scheme. So the small-business interest groups in Washington are criticizing Obama's plan instead of endorsing it. And new healthcare costs would come on top of other new fees the same businesses might have to pay under the totally separate and thoroughly mystifying cap-and-trade plan. Maybe small-business owners would get something valuable in exchange for these fees, but so far the president hasn't made a convincing case; he's leaving the details to Congress, you see.

[See the best and worst bailouts of the past two years.]

Meanwhile, other parts of the Obama administration have been drafting plans to strengthen oversight of the financial system and rein in firms that take the most outlandish risks. Better financial regulation ought to be a slam-dunk in the aftermath of a brutal recession caused by rapacious banks looking out for nobody but themselves. But not so fast. The U.S. Chamber of Commerce, which represents the interests of big and small businesses alike, now opposes a new Consumer Financial Protection Agency that Obama wants to establish, saying it could harm any business that extends credit to customers. True? A canard? A bit of public discussion and digging by the media ought to air out the pros and cons. So let's try to schedule that right between the national debate on a public health-insurance plan and a primer on pollution credits.

Inside the beltway, dozens of lobbying firms and special-interest groups have plenty of surge capacity to deal with a hyperactive government. The rest of us don't. So while the interest groups crank out policy papers and talking points and dubious infomercials, working Americans get deluged with information faster than they can digest it. It's an ideal environment for selling malarkey like "death panels" and absurd visions of jackbooted government auditors: Propagandists focus on harried people scared by the recession and tell them something that stokes their fears, banking on a steady stream of new schemes out of Washington to keep people from digging too deep into any one issue.

[See 4 conundrums that impede healthcare reform.]

Obama might slow the pace of rampant reform so we could work through one issue before moving on to the next. First should be financial reform, while the ravages of greedy banks are still a fresh memory. There's so much healthcare to reform that it could easily be broken into two parts and spread out over Obama's four-year term, with cost control coming first and expanded coverage coming after we've made some headway on the first issue. Global warming is an important problem we need to address, but waiting a year or two might be more prudent than forcing another mandate onto businesses while the economy is still weak, which risks killing the idea for good. And oh yeah, maybe Obama could shrink that mushrooming deficit before coming up with new ways to spend money.

But politics, not logic, dominates the agenda in Washington, so we're likely to get a slate of laws that could transform large chunks of the economy even though they're drafted by just a few beltway mandarins, with little genuine input from voters. At least we know there will be plenty of Obama speeches, explaining it all.