Shaping the future with today’s choices.

In a recent column, Paul Krugman argued that the real problem of the Obama Administration for the last two years was "a lack of audacity." He went on to disagree completely with the view -- which I have certainly expressed -- that the Obama Administration had not been sufficiently focused on economic recovery. He derided the notion of "focus," referring to it as cowardice. "The whole focus on 'focus' is, as I see it, an act of intellectual cowardice -- a way to criticize President Obama's record without explaining what you would have done differently." (I want to be clear that I am not implying in any way that Professor Krugman was referring to my blog. I cannot imagine that he read it.)

Let's start with "audacious". Here I agree with Professor Krugman. I agree now, as I did at the time, that the stimulus should have been larger (his major point). I also think that the financial crisis package should have been different. And I have no problem with Professor Krugman's "Plan A" and "Plan B": "Plan A the passage of a truly adequate economic plan, with Plan B being to place blame for the economy's troubles on Republicans if they succeeded in blocking such a plan."

But I want to focus on the notion of "focus." In his deriding of the very concept of "focus", Professor Krugman is, in my view, flat wrong. More interestingly, he is revealing an unfamiliarity with actual executive government that President Obama also demonstrated.

The job of legislators, columnists, and brilliant academic economists is to say things. Once you have given the speech, drafted the legislation, or written the column, you are mostly done. What more could you do, except say something else? So it is natural that you would think that having said whatever it is you want to say, you have finished. You are through. The idea of "focus" is meaningless. Professor Krugman suggests that critics may be saying that President Obama "should have walked around with furrowed brow muttering 'I'm focused, I'm focused.'" While I like the image, my point is that President Obama should have done a lot more, not necessarily said much more.

Because the job of an executive is really different. After you say things, you have to do things. Actions have to occur. Others have to make decisions. Money has to be spent. Shovels have to move. And on and on. And the job of president is doubly different. Not only do you have to do things, you have to secure the support and understanding of a continental nation, with 300 million people and a short attention span. Not a single thing that follows after a president makes a hard decision happens naturally. Making anything happen is hard. Making a lot of things happen in the right sequence, and more or less the same direction requires, yes, "focus".

Professor Krugman asserts that the "focus" advocates -- intellectual cowards all -- avoid "explaining what you would have done differently." So let's think about economic policy. After pretty good policy in the face of the worst crisis in 80 years, the Administration just had its head handed to it. The American people did not understand how much worse the economy could have been. The American people did not understand the difference between the TARP and the stimulus. The American people thought taking over Chrysler and GM were signs of Obama the Socialist. The American people did not know that within the stimulus was a substantial tax break for a lot of them. The American people thought matters would get better faster. The American people did not know what the way out could look like. The American people did not know the next steps in policy, nor the next. The American people probably did not feel that the President and his cabinet were using every possible minute to make things better.

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The other side's story won.

I don't think it is genetic that the American people didn't understand these issues. The world isn't composed of geniuses at the White House and dummies everywhere else. Something did not happen. What? The White House did not focus on the incredibly hard task of conveying understanding to a big county at a hard time.

Specifically, what did not happen? The President never gave an overall speech on the economy. The American people were never given a clear sense of how bad things could get -- softening the message by saying unemployment would top out at 8% was a big mistake, and clear at the time -- and why the President's program would make them better. I did not notice the 10 regional economic summits the President led -- because, you're right, he didn't hold any. I didn't see the cabinet and senior White House staff out every week, week after week, talking about the economy. I didn't see a group of Congress people, even the other side, or of business people -- imagine that -- coming into the White House every day. I didn't see the National Economic Council come up with a broad, convincing plan for the next few years.

So, specifically, I would have done those things.

What I did see was the entire White House move on to health care reform, and then to energy and climate. Whatever you think are the merits of these efforts, pursuing them clearly meant one thing -- every second the President, the chief of staff, the political operation, the communications staff, and the National Economic Council spent on these issues was a second they did not spend on the President's economic program.

So, specifically, I would not have moved on those issues.

All of this -- an overall narrative, repeated speeches, regional summit meetings, cabinet trips and speeches, groups invited into the White House -- will be dismissed as mere PR and "communications." President Obama already has done so. These things are not what the smart people do. The smart people have ideas and then say them. The smart people don't say things twice, or take boring trips to regional meetings, or talk to group after group after group, often groups that disagree with you.

But all of these things are what actual government and leadership is about. Every once in a while you get to do the soaring rhetoric thing, and I wish President Obama had done more of it, of course "focusing" on the economy. Every once in a while you get to be the brilliant White House economist with an idea no one else is smart enough to have. But most of the time, you had better be grinding away on all of the dull things. That is what actual high-level government service is, and that is what "focus" is.

But, hey, maybe I'm wrong. Maybe we think things turned out just fine.

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team.

Shaping the future with today's choices.

There is no point in kidding around. This was a thumping of historical scale. And if the Democratic party feels otherwise, this simply means that it is even more delusional than it was in believing that 2008 brought in a transformational era.

But what kind of thumping? It was no more a national swing to the wing nut right than the 2008 results meant a permanent progressive majority. And I don't think it had a lot to do with particular policies -- those were stage props the right was allowed to use. The thumping stemmed from (1) Americans' legitimate anger about where we are today -- and that includes but is not limited to the economy; (2) the frustration that nothing seems to be working to change any of this; and (3) the absence of a plausible broad vision of an American future. (One might legitimately ask how the White House, with one of the most rhetorically brilliant presidents of modern times, allowed such an absence to happen? But, as they say in the financial world, we are where we are.) Among other things, these results have to be read as massive dissatisfaction with the political establishments of both parties.

This is the end of the transformational ambitions of the Obama Presidency. But it does not, at all, mean the end of the Obama Presidency itself. But the choices are more stark, and the learning curve period has to be over. Not to be pollyannish about it, but if President Obama draws the right lessons and takes the right steps, he will survive this and thrive in this new world. But if he doesn't, he is a one-term president.

I think there are six right steps.

First, reset the Administration now. This means a lot more than new people, but that is a start. I sure hope that Leon Panetta has received a call asking him back to that West Wing office assigned to the White House chief of staff. The reset has to be done skillfully -- there is one chance -- and completed by the 2011 State of the Union speech.

Second, focus the President's efforts on the economy for the next two years. This means economic policy, budget policy, tax policy, and trade policy. As I have said in this space before, this should have happened earlier; it didn't; it should happen now, today. The President needs to be dealing with the issues Americans care about, he should be dealing with them from the center, and he should be seen as pragmatic -- willing to take good ideas from anywhere.

Third, develop and then control the narrative. After November 2, the narrative has to start with the lessons the President draws from this debacle. Americans like presidents who learn lessons from hard experience. But the narrative has to go on to the plausible broad view of America's future I mentioned above, how we are going to get there working together, and what we are going to do now as the start. But you have to have a story; you have to say it more than once; and you have to mean it.

Fourth, work inclusively. I mean this in a couple of senses, and I used the word "inclusive" instead of "bipartisan". In any case, there isn't going to be anything resembling bipartisanship for a long time. But the Republicans now own part of government: they asked for power, they won a lot of it, they now deserve to be part of the decision process. And the President should give them lots of chances.

The President should ask the Republican leadership to the White House weekly. He should discuss specific issues and pose specific choices. He should take their ideas seriously. He should ask them when they are going to make specific decisions, and then how are they going to make the next decision. The new House leadership and members seem to feel they can make the next two years about subpoenas. The President has to make it clear that the two years have to be about joint decisions.

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The President has wider freedom of movement now than he did three days ago. He can deal directly with the Republican leadership because in practical terms the Democrats can't deliver on their own. And he is "the executive" dealing with a Republican legislative branch that has no consensus on actual policies, and no coherent governing vision of the world.

And the President's tone will matter. He should be involved, not distant; calmly looking for a practical path forward; not blaming particular people or groups. Friendly. Optimistic.

Fifth, move to limit the craziness from the insane lame duck congressional session we are about to have inflicted on us. The possibilities for bad policy, gridlock, and chaos are vastly greater than any positive outcome. The President should state a very small number of actions that have to be taken; and if the Republicans want to push big issues into January, he should let them. Make a reasonable proposal on the Bush tax cut extension -- for example, set the ceiling so every family with income below $500,000 annually keeps the cuts; if the Republicans won't agree, propose a three month extension and get the old congress out of Washington.

Finally, see this next State of the Union speech as the most important speech of President Obama's life. This is his chance to look back, pivot forward, and create the narrative of the next two years. It would be good not to blow it.

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team.