How Obama Can Succeed in the Next Hundred Days and Beyond

Robert Reich:

Consider: A $787 billion stimulus package. A 10-year budget including universal health insurance and a cap-and-trade system to combat global warming. Subsidies to help distressed homeowners stay in their homes. Public-private partnerships to clean up the big banks. A bailout of the auto companies. New regulations to clean up Wall Street. A G-20 meeting to harmonize global economic policies. A proposal to regulate greenhouse gas emissions. A thaw in relations with Cuba and Venezuela. Overtures to Iran. A start to immigration reform. Even a dramatic rescue from pirates.

And this is just the first 100 days.

He also has done this without breaking a sweat. Obama is the serene center of the cyclone - exuding calm when most Americans are petrified about paying the monthly bills, offering assurance when everyone in the world is worried about loose nukes falling into the wrong hands.

All this activity has made the right angry and the left uneasy. But a whopping 65 percent of Americans think highly of him. And no president since John F. Kennedy has received such an enthusiastic welcome around the globe. By almost any measure, his presidency so far has been a triumph. (I give him only a C-plus on his economic policies so far, but that's mainly because of a provisional F on the bank bailout. See below.)

Yet Obama's success has rested on several delicate balancing acts. Whether he continues to succeed will depend on how well he shifts his balance in the months ahead.

Short-term or long-term economics?

The stimulus and bank bailouts have required the government to pump almost $1.5 trillion into the economy and the Federal Reserve Board to dramatically expand the money supply. This makes sense in the short term. With almost 1 out of 6 Americans either unemployed or underemployed - and consumers and businesses still tightening their belts - government has to be the spender of last resort. But as the economy recovers, Obama will have to rein in government deficits. If he does this too early, he risks prolonging the deep recession. Yet if he waits too long, he risks wild inflation.

Progressive vision or conservative governing?

Obama's 10-year budget presents the most ambitious and progressive vision of any president since FDR. But when it come to governing, Obama has been cautious and incremental. His stimulus was smaller than even conservative economist Martin Feldstein recommended. He has been unwilling to take over the banks. He won't push Congress on the Employee Free Choice Act. His mortgage relief program is modest. He doesn't want to prosecute CIA torturers. Yet if he wants to be a transformative president, he's got to move boldly. Universal health insurance will be his first big test.

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