From the moment he was elected, Obama had two agendas—the agenda of choice, on which he had waged his campaign, and the agenda of necessity, forced upon him by events. In effect, Geithner was arguing that the latter would require the president-elect to defer much of the former. Obama responded by deciding to do both, simultaneously. That is the choice that led to a year spent on measures such as health insurance reform and cap-and-trade legislation. While the former was successful and the latter failed, both initiatives no doubt measurably contributed to the Democrats’ 2010 mid-term debacle.
We will never know what would have happened if Obama had taken his Treasury Secretary’s advice, any more than Stephen King knows what would have happened if JFK had lived. Still, the possibilities are intriguing. Would the president have insisted on tougher treatment for miscreant financial institutions, starting with Citigroup, despite his Treasury Secretary’s evident misgivings? Would he have demanded a serious response to the housing crisis, despite his National Economic Council director’s belief that all the policy options were counterproductive and stupid? Would he have pushed to redeem his campaign promise to create a national infrastructure bank? Would he have traded additional stimulus for a long-term agreement on fiscal stabilization? Would he have figured out how to end the Bush tax cuts as part of comprehensive tax reform? Would he have broken the logjam on trade much earlier in his term? Would he have exerted more pressure on the Chinese for a comprehensive rebalancing of our economic relationship?
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