OBAMA MUST USE SUMMERS´ EXIT TO CHART NEW COURSE / THE FINANCIAL TIMES COMMENTARY & ANALYSIS ( RECOMMENDED READING )

Obama must use Summers’ exit to chart new course

By William Galston

Published: September 22 2010 12:53

With the impending departure of his chief economic policy advisor Lawrence Summers, and all-but-certain departure of his chief of staff Rahm Emanuel, President Barack Obama faces personnel choices that will reshape his administration over the next two years.

Mr Summers’ departures coincides with a deeper reality: both the president’s economic and political strategy have hit a wall. His economic policies prevented a complete collapse but have not sparked vigorous growth, and there is neither the fiscal space nor the will for an additional round of stimulus.

On the political front, the president’s initial promises of bipartisanship quickly gave way to one-party government. Whatever the precise outcome of this November’s elections, we already know the most important consequence: Democrats will no longer be able to pass legislation with only a handful of Republican votes.

In short, when considering the new people he needs and the strategy they must adopt, there will be only two options: first, either two years of unremitting gridlock after this November’s election, or second, a new push the kind of conversation across party lines the US has not seen since the mid-1990s. The president must make a clean choice.

In recent days there have been indications that the White House is contemplating the beginnings of the second option, with a new economic approach focused on reducing the long-term budget deficit and getting private capital off the sidelines. If so, the president needs a senior economic advisor who can help him execute this strategy.

Such a figure would be someone with credibility as an advocate of fiscal restraint, who has better links to the business community than anyone on the current team. It wouldn’t hurt if the new advisor were seen as an honest broker open to new ideas that diverge from Keynesian orthodoxy.

Armed with a new economic strategy, Mr Obama would be able to invite the Republicans into a negotiation that they might initially resist but would eventually have to enter. And that is where a new chief of staff will be crucial.

To execute a pivot toward bipartisanship, the president will need someone with the background and temperament to engage the likes of likely new Republican House majority leader John Boehner, and Mitch McConnell, who is certain to command an enlarged company of Republicans in the Senate.

While each is a staunch conservative, neither is an all-out ideologue. A chief of staff who can listen respectfully to proposals regardless of their provenance and who can persuade the president to do likewise would be a man, if not for all seasons, than at least for the season we face.

The alternative, let us be clear, is a long dispiriting divisive interregnum in which American policy and politics are frozen while our competitors continue to advance. When we dominated the world, we could afford periods of stagnation. Now we don’t, and we can’t. With his coming personnel choices, the president has the opportunity to signal his willingness to avoid this worst-case outcome – and to make the opposition an offer they refuse at their peril.

The writer is a senior fellow at the Brookings Institution

Copyright The Financial Times Limited 2010.