The Path to the Next American Economy: The Cult of Scale

Jan 22, 2013Bo Cutter

An obsession with the largest economic players distracts us from the smaller companies that should drive our future economy.

An obsession with the largest economic players distracts us from the smaller companies that should drive our future economy.

Both Richard Fisher, the president of the Dallas Federal Reserve Bank, and Alan Blinder, arch-economist and former vice-chair of the Federal Reserve Board, had fascinating commentaries last week on "too big to fail," the big banks, and financial stability. Fisher's was a reform proposal; Blinder's a set of lessons to remember. Both dealt explicitly or implicitly with our cult of scale. 

The business, popular, political, think tank, and NGO cultures of America are all infatuated with big enterprise and its leaders. As a society, we pay ritual and theoretical attention to small business and entrepreneurs, but with a very few exceptions we court big company CEOs almost exclusively. Every presidential economic statement or study has its requisite CEO centerpiece. When presidents (of all political persuasions) want to show that they are really, really serious about the economy, they have pictures taken of themselves with big company CEOs. The most frequently quoted business organization, the one whose policy pronouncements are taken as the last word in economic wisdom, is the Business Roundtable -- the insiders club for big business CEOs. The big news talk shows always have big business CEOs as their private sector representatives. The lobbyists whom congresses and governments pay attention to are from the biggest businesses. The same set of CEOs are always invited to presidential state dinners for visiting heads of state. The board development committees of think tanks, NGOs, and foundations covet the same set of CEOs. 

Why? 

Certainly not because big businesses play an actual dominant and dynamic role in our economy. Essentially 100 percent of all new jobs in America are created by new medium and small businesses. Even though large companies dominate R&D spending, revolutionary breakthroughs come almost exclusively from small entrepreneurial companies. If you look back just at the business history of the last 20 years, the pathbreaking innovations were always driven by small and medium companies -- never by the giant incumbents of an industry. 

So what benefits does scale bring us? Richard Fisher raises this question dramatically in the case of banking. Banks with less than $10 billion in assets -- 98 percent of all banks -- held only 12 percent of total bank assets in America but they made 51 percent of all small and medium business loans. Banks with less than $10 billion in assets continued lending to these businesses during the financial debacle; the big banks stopped. Lending, I'll remind you, is basically what banks are supposed to do.

And of course big banks are the riskiest and most costly part of the banking sector. Their failures or near failures nearly cratered our economy, they received the vast bulk of the bailout money, and they continue to hold the riskiest assets. The five largest banks in America hold $4 trillion in non-deposit liabilities, 26 percent of U.S. GDP. Among other problems posed by these liabilities -- for example, that virtually no one understands them -- they are the reason for the excess leverage of the big banks.

Blinder usefully underlines 10 commandments for avoiding the next financial crisis. They all make sense. But when you look closely at his commandments, at least eight out of 10 are directly linked to unavoidable problems of scale and complexity. Consider this: the five biggest banks operated through over 19,000 subsidiaries in a minimum of 50 countries each. The simple fact is that Blinder's very intelligent commandments can't work in this world. I begin with a prejudice: compared to the directors of the five giants (and these are highly sought after and highly compensated directorships), directors of America's smaller community banks are every bit as smart,  know more about the banks they direct, hold the CEOs of their banks in far less awe, are much more likely to discipline their management effectively, and are closer to the customers. None of this is just a role of the dice. According to Richard Fisher, J.P.Morgan Chase has about 5,000 subsidiaries. I'll grant that many of these are meaningless. But no set of directors on earth can really understand or guide well an entity with thousands of subsidiaries. In these circumstances, the amount of arbitrary, mostly unchecked authority given to senior management and the CEO is enormous. A single director is rarely going to risk either losing his or her directorship or simply being humiliated in the club by challenging the CEO on anything.

Which gets me back to the general problems of mega scale in business. While the biggest banks pose particular problems and the biggest dangers, all the evidence seems to say that as businesses get very, very big, four developments are inevitable. The businesses become sclerotic and bureaucratic. The businesses lose the creativity and dynamism that initially drove them. The businesses become extraordinarily complex. The businesses become less market-driven and more dominated by CEOs with a fair amount of arbitrary power. Some businesses and some extraordinary leaders -- Steve Jobs -- delay all of this, but the trends are inevitable. 

So once again, why the fascination with big companies and their chiefs? Awe, power, and money. The heads of the biggest companies are the real masters of our universe. They are treated like heads of sovereign states. A lot of them think of themselves that way and, in fact, a heck of a lot of big company CEOs have more actual power than the heads of government of all but 30 to 50 countries. And within a range the power is fairly arbitrary. The biggest companies have the widest range of  choices about products, locations, suppliers, public and community relations money, and foundation money. There is lots of economic "rent" buried among all those choices and everyone wants a little bit of it. I think the resources most big companies allocate through these choices mostly do an enormous amount of good and have a significant function in our strange society, but that's not the same thing as believing these companies are the future of our economy.

To be clear, big companies play big, real, valuable roles in our economy. We need a mix. But the balance has gone too far in our infatuation with bigness. The true path to the Next American Economy does not go in that direction. We will not grow as fast as we must with an increasingly big company economy. Equity and social mobility won't increase that way. We will need more breakthrough innovation, more new companies creating good jobs, more highly specialized value-added products and services, and more diversity and localization of businesses. The dream should be an economy driven by thousands of companies growing from dozens of very different urban platforms, not by a few dozen giants. But achieving that dream will be much harder if our political and intellectual culture is perpetually fascinated and seduced by the non-economic glamor of the wrong part of the private sector. 

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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We Could Use More Public Servants Like Jack Lew

Jan 16, 2013Bo Cutter

Despite criticism from the left, Jack Lew has a commitment to public service and a deep understanding of public finance.

I've already been fairly widely quoted in support of Jack Lew's nomination as Treasury Secretary. And for full disclosure, I supported his appointment as head of OMB and Chief of Staff of the White House, and he's been a longtime friend.

Despite criticism from the left, Jack Lew has a commitment to public service and a deep understanding of public finance.

I've already been fairly widely quoted in support of Jack Lew's nomination as Treasury Secretary. And for full disclosure, I supported his appointment as head of OMB and Chief of Staff of the White House, and he's been a longtime friend.

I don't much care what the hard right thinks about Jack Lew, but it is irritating to see the left instantly take up again its incessant twin rituals of circular firing squads and endogenous cannibalism -- dining on one's allies. Thus, Jack Lew is a dangerous budget hawk, responsible for Clinton administration financial regulatory mistakes, a "gofer" rather than an idea man, and nowhere near as good as the people on some other list someone can dredge up.

So just to restate the points, Jack Lew has spent essentially his entire career in public life -- on the Hill, in the executive branch, and with universities --  though he did spend about 18 months with Citigroup, which I suspect he'll never live down. He has succeeded in every role he has taken on. He is not spectacular -- from my fairly close observations, as they used to say in my high school, he brings his lunch and does an all-day job. He believes deeply in the value of the public sector, and as deeply in the importance of a high-quality public sector, in the importance of getting it right. 

He hasn't spent a lifetime in the financial private sector -- I'm personally delighted President Obama did not go that way -- but there is no one who knows and understands the complexities of our public finance better than Jack Lew. People always dismiss that as a green eye shade, low order kind of quality. Understanding budgets and public finance is for people who wear breast pocket pen protectors, not for the higher order idea men and women.  

But this is a very good nomination, and the odds are high that Jack Lew will be a very good Treasury Secretary. Much more importantly, Jack Lew is the kind of person we all would like to see in public life. 

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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The Fiscal Cliff Post-Mortem, Part 1: Putting the Deal in Context

Jan 15, 2013Bo Cutter

The weakness of the fiscal cliff deal reflects the lack of direction coming from the White House.

The weakness of the fiscal cliff deal reflects the lack of direction coming from the White House.

I haven't written for a month largely because I thought it was one of those times when everything possible had been said about the fiscal cliff but not everyone had said it. Moreover, absolutely no one actually knew anything. Negotiations like this are "unknown unknowns" to everyone, including the participants. But with the fiscal cliff deal now done, I intend to write three brief pieces: The context of the deal, the deal and its immediate results, then the deal and its long-term results.

I'll get to the deal later. For now, suffice to say that -- even granting its one big positive, a more progressive income tax system -- the deal represents something close to a new standard for the smallest amount above nothing it is possible for intelligent people to accomplish in a negotiation.

But the most surprising and disappointing aspect of the post-election lame duck period was not this deal itself but the absence of a framework for any deal. This was a point on which I was simply wrong. I wrote in a number of places that I hoped a newly re-elected President Obama would quickly endorse Simpson-Bowles-Rivlin-Domenici. While I never predicted or expected this endorsement (I continue to believe the president has missed a huge opportunity here), I very clearly expected that he would create a framework, a road-map for where he wanted to go and what he wanted to do during his second term.

He didn't. As a result, we do not have, and the president doesn't have, anything close to such a framework right now.

The campaign and the election did not provide a framework. I've never really believed that campaigns were learning opportunities, and as I've come over decades to understand campaign consultants, I've realized that the last thing campaign managers want to do is have "teaching moments." And this particular campaign was even less of such a moment. Democrats wanted to tax whomever they defined as wealthy, but had no other ideas. And they faced a deeply flawed opposition candidate who was incapable of pushing them to develop any ideas. The Republican campaign from beginning to end was so completely incoherent that it is impossible, at least for me, to distill any organizing ideas or philosophy.

So we entered the post-election period absent any overall sense of direction. And I find it impossible to understand why the White House did not then provide such a sense of direction -- call it a governing philosophy -- immediately after the election.

What would such a philosophy be? I think it's obvious.

The second term of President Obama has to be focused on what is required to build the foundations for higher, more equitable, more sustainable economic growth. The difference between being caught for a long time in a two percent growth environment, as many predict, as opposed to a three percent to three-and-a-half percent growth rate -- which I think is possible -- is profound in terms of the health of American society.

Clearly a necessary but completely insufficient condition of the path toward higher sustainable growth of this kind has to be a long-term solution to the debt/deficit trap in which we are caught. But there is much more we must do, and the debt issue cannot be the whole of President Obama's second-term governing philosophy. But only President Obama can say what that governing philosophy is -- and he hasn't.

In the absence of such a philosophy or framework, it was completely inevitable that any fiscal deal would be the paltry, lowest common denominator result we ended up with.

There seem to be three theories as to how we reached this dismal point. They are not mutually exclusive.

First, the Obama covert socialist conspiracy, as promulgated by any number of conservative columnists: President Obama wants to make America into a new version of socialist Europe and this deal is step one. I give this about a 1 percent weight -- President Obama clearly did and does want a more progressive income tax system. But that's as far as it goes.

Second, the we are doomed hypothesis. America has become hopelessly polarized and ungovernable, and none of those poor members of the House or Senate could do anything of any scale or scope because they would be "primaried" and lose their jobs. There is considerable truth to this. The left and the right have mutually exclusive views of America and the Republican House in particular has lurched its way into an impossible corner. This polarization clearly limited the freedom of movement President Obama or anyone else had to reach an agreement. I give this a 45 percent weight.

But I think the third theory, the "if you don't known where you're going you'll get there" hypothesis, is at least as big a factor. This deal is the most a lame duck Congress -- indeed any Congress -- could conceivably ever come up with on its own. As we have learned time and time again, Congress does not make big policy, or establish major directions, or make trade-offs. It wasn't built to do any of this and it can't. The only possible source of intentional energy in our system is the presidency. If there is to be any sense of direction whatsoever, a president has to provide it. In this case, the president did not provide a sense of direction, Congress spun its wheels uselessly for a while, and inevitably the range of possible deals rapidly diminished until we reached this deal.

This cliff deal has one substantial positive feature: it creates a more progressive tax system. In fact, it creates the most progressive tax code since 1979. In my view, given the increase in earnings inequality the country has experienced, this is an unqualified good direction.

But it probably is very close to the last drop of new revenues that can be squeezed from this source. It is easy to be in favor of taxing someone else, which is why I never found it particularly interesting that the polling showed majorities in favor of taxing the wealthy. The next revenue increases will be much harder.

Beyond this achievement, the deal solves no known problems. It does not raise enough revenues. It does not cut or even reduce the growth of any expenditures. It leaves an immense long-term debt problem. It does not resolve the sequestration problem that last year's Super Committee left us. It does not solve the debt limit problem. It leaves the nation's public finances in a state of high uncertainty. It reduces the 2013 rate of economic growth by about one-half of a percentage point. And it almost guarantees a series of completely unproductive fights throughout this coming year.

If this is what you get when you try really hard, then a possible total closure of government in a few months looks pretty good.

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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Transition Tasks: Rethink Presidential Leadership

Nov 6, 2012Bo Cutter

If Obama gets a second term today, one of his biggest tasks will be showing strong leadership.

If Obama gets a second term today, one of his biggest tasks will be showing strong leadership.

A re-elected President Obama faces difficult choices, as every commentator will say tiresomely and ad nauseam. But more importantly, he also has a huge and unique opportunity. The media will inevitably begin to write its ritual story regarding who would want to be president, how daunting the problems are, and on and on. Don't take this seriously; certainly the media doesn't. It's just one of those stories the formula requires them to write. In fact, my guess is that both President Obama and Governor Romney saw somewhat similar versions of the opportunity and badly wanted to be the president who seized it. 

There are two parts to the opportunity. First, a reelected President Obama has by my figuring the first mostly clear, uncluttered second term since Ronald Reagan. And second, America is slowly, but with increasing strength, emerging from the Great Recession. Our economy is the best positioned in the developed world. We have a new growth model available to us, if we will reach for it. And the political stars could be aligned.

But we will need the element I haven't mentioned yet: the political leadership to see the opportunity and do something about it. Neither campaign has shown much if any evidence that this leadership is likely to be forthcoming. If he were elected, Governor Romney would take a long time to extract himself from the commitments he made to his party's far right. He certainly took every chance to re-reverse himself in the last few weeks of the campaign, and the Etch-a-Sketch would be furiously at work, but it would take two years to get himself in a position to lead anywhere.

President Obama has all of the right personality traits and at times he has shown real flashes, but he hasn't been the leader he should be, and he often hasn't shown the steel leadership requires. If he has a second term, what does he have to know and what does he have to do?

He has to know himself and he has to reflect deeply on what he now knows about the presidency. He came into office unprepared for hard-edged executive leadership and it showed. His training wasn't the best possible. While I'm reasonably convinced that the worse possible prep for the presidency is running a buy-out firm, I wouldn't argue that being a constitutional law professor at an elite university and augmenting that with four years in the U.S. Senate is great background either. In a debate, I'd take the "pro" side that it is anti-training. So President Obama had to surmount his wonderful resume. One hopes he has the humility to reflect in private on how tough the journey has been. 

But what should he have learned and what should he now do? Here are five possible lessons and four possible actions.

First,  the presidency is not a high intensity management job, but rather the highest intensity leadership job in the world. Everything in the White House has to be organized around presenting the right decisions and choices to the president, helping the president make decisions, and then getting things done in a divided political system, across an immense bureaucracy, for a continental nation.

I am not certain this describes the first-term White House, but I am certain the president should ask someone he trusts to take a very hard look at structure, processes, and people. The president has to be tough-minded about this. Second terms don't last very long and he doesn't have forever to start. (On a related topic, Erskine Bowles is famous for the following advice about staffing a White House: "Tell your friends from home to stay at home.")

Second, focus, time, and energy are essential to get any message through to a big, busy, and polarized continental nation. A president simply cannot have a priority of the week or even four or five big priorities in a term. To get anything done he has to stay with a problem for years, and as much as elite professors may hate the idea, you actually have to market your policies. The White House basically forgot this for the whole middle two years of the first term.

Third, every choice presented to a president is a 49.99-50.01 choice, and events -- as Harold MacMillan, Prime Minister of the United Kingdom, famously said -- always intervene, usually in the worst possible way. But maintaining any steadiness and consistency in the face of 1,000 necessary but unrelated decisions, during completely unpredictable events, is flat impossible without a direction, a priority, and a plan.

I think the direction has to be economic growth. The president has to tell the NEC at the White House to lay out a growth vision, and if it can't, he ought to get another NEC.

And he has to sell whatever vision or priority he decides on. This means creating an actual plan, allocating his time, assigning big tasks to the Cabinet, and thinking ahead about this marketing effort. But all of this is what White Houses are supposed to do, what they have to be structured to do. In our system, the only real source of steady energy is the presidency.

Fourth, a president never has a stable coalition. He is in the negotiating business 24 hours a day. This means compromise isn't inherently evil and achieving durable solutions requires steel, not bonhomie. I'd make two bets. First, after the election there will be actual pragmatists in the Republican Party who both want to accomplish something and, in any case, think that politically they have to accomplish something. Second, the American people are sick to death of the unending quarrels in Washington and are far more ready than the politicians or the ideologues on both ends of the spectrum for a set of pragmatic compromises and for courage. So the president has to ask himself what does he need to get things done and then figure out who will do it with him.

But to do this, a president has to believe that deals aren't evil and, more significantly, that deals can lead -- if you are smart -- to better, more creative directions than anything you came up with on your own. Wyden-Bennett, which we didn't pursue, was a better and genuinely bipartisan health reform approach.

On occasion, a president has to show the steel, the hammer that sometimes is all that can make hard deals happen. Doing this may involve taking major but calculated risks. White Houses -- which are mostly royal courts -- aren't good at this. The courtiers are never going to tell the president something he doesn't want to hear unless he makes clear he'll listen.

And fifth, a president has to care and believe. In times of great change, presidents have to provide a bridge -- they become the bridge -- between an unsustainable present and an uncertain future. For Americans to cross that bridge, they have to believe that the president cares about them and believes deeply in the directions he is proposing. Cool, abstract, ironic detachment doesn't work. Simplicity, consistency, showing up, working on the problem, being completely honest about difficulties do work. The president's demeanor and style in the first debate will never work. But his approach to the second two debates was vastly better not just for the debates but as examples of presidential leadership. He was mostly calm, he showed flashes of real anger, and he was completely engaged. That president could convince the American people that he believed, cared, and had the courage to act.

A very long time ago, I found myself in a late-night conversation in Cronin's bar in Cambridge, Mass. I was talking to a graduate student maybe 10 years older who had been wounded and highly decorated for leading his Marine rifle platoon out of the Pusan Reservoir disaster during the Korean War. I asked him how he could possibly have done it.  And he said he didn't do it, he faked it. He said he had been terrified and thought it was hopeless and his sergeant pulled him aside and said, "You are going to get us all killed. You don't have to tell the men how to fight, they were trained and they know. You don't have to decide on our tactics, that's mostly my job. But you do have to f*****g lead us and you have to act like you know what you're doing, even if you don't. Because we need that and there's no one else but you."

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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Transition Tasks: Commit to a New Model of Economic Growth

Oct 31, 2012Bo Cutter

The global economy is heading toward a huge transformation. Can America rise to the challenge?

Neither of our two major political parties have at their cores a commitment  to economic growth. In his second term, President Obama has an extraordinary opportunity to grab the golden ring, make a genuine commitment to sustainable, equitable growth, and follow that up with a credible, plausible entrepreneurial growth model.

The global economy is heading toward a huge transformation. Can America rise to the challenge?

Neither of our two major political parties have at their cores a commitment  to economic growth. In his second term, President Obama has an extraordinary opportunity to grab the golden ring, make a genuine commitment to sustainable, equitable growth, and follow that up with a credible, plausible entrepreneurial growth model.

But aren't both parties pro-growth in their platforms and their various position statements? Of course they are. It's a necessary ritual of political life. But for both the left and the right, growth is a residual - it's what you're for, after you get everything else you want. Moreover, both parties are wedded to whole sets of client groups whose agendas don't include economic growth at all.

The right wants austerity, low taxes, budget surpluses, preferably no government but at the most a small and passive government, no abortion, a Christian nation, and no immigrants - all before it wants growth. There will certainly be those who argue that some of these elements are essential aspects of an economic growth strategy, but I've yet to see a serious and specific growth model from the right and I've heard nothing about equitable and sustainable growth. In any case, the problem is that you can't just get elements of this list; holding today's right-wing coalition together requires that you get the whole package.

The left favors large active government almost as a principle, rather than a tool for something. By far it's highest priority is the current social safety net, unchanged forever. It does not regard debt or deficits as issues that matter. It is deeply contemptuous and dismissive of business, suspicious of markets, and is far more concerned about income distribution than about income expansion. It is very concerned - as it should be - about the short- and long-term effects of unemployment and it wants a sustainable and equitable world but sees no particular connection between these good things and economic growth. As with the right, one searches in vain for any useful theory or model of long run growth in the writings of the left.

The central attitude toward growth of both party philosophies is similar to the foreman on the loading dock who said, regarding his company's attitude toward quality, "It's in the slogan, and the vice president talks quality at least four times a year. But the assistant vice president talks shipping cases several times a day."

Other than playing whack-a-mole with each other over the short-term growth rate right now, the view of both the left and right is that the economy is a perpetual motion machine that will just keep rumbling along. But it isn't. Not ever and particularly not now. 

Economies have rhythms. They don't just march along forever at some preordained rate of growth. Big economies respond over decades, generations, to big impulses: revolutions in the cost of power, or transportation, or information; revolutions in the applications of these big cost shifts. These impulses spread throughout an economy, driving higher rates of economic growth, and then, as they become pervasive, lose their force. America has experienced such impulses, or waves, at least five times in the last 200 years. We are in the end phase of one such impulse and the very early stages of the next.

The "golden era" of the 20th century between roughly in 1950, and 1980 represented the full flourishing, the height of one such era and growth impulse. In these 30 years, the economy was dominated by large companies, managerial capitalism, and a financial system that evolved to meet those particular needs. The success of this era importantly shaped our expectations, our sense of how the world works, our institutions, and our politics. But as successful as this era was, the most important thing to know about it now is that it is over. Both parties - and both America's left and right - believe or at least act as though it is returning again, it's just around the corner. And it's the other guy's fault that it hasn't rearrived yet.

But it's not coming back. One reason among others is that we will never again see a world in which our economy dominates the world's economy. Beginning in the 1970s, as colonial empires collapsed and economic philosophies were revolutionized, major new nation states entered the same world economy we were in along with billions of new workers and households. At first that represented a boost to us, but as the economic sophistication of these economies evolved this new world meant vast and hard structural shifts for us. As Michael Spence makes clear in his book "The Next Convergence," much of the structural change we see and don't like comes from this changing shape of the world. Falling manufacturing employment, the 20-year slowdown in income growth, a large piece of income inequality, and the polarization of our labor force are all due in part to the changing shape of the global economy. (Just to be clear, the other major factor in all of these structural shifts is technological change.) 

We can't do anything about the shape of the world, but we can figure out how to change and thrive in this new environment. Which means we have to have a new growth model.

Fortunately, another technological revolution is occurring now and all of the elements of a new growth model are coming together. The model plays to American strengths and is there for us develop - unless we choose to be stupid. The model will require entrepreneurial capitalism, independent capital, high levels of private sector investment, equally high levels of infrastructure investment, mayors who see their cities as platforms for growth, and an educational revolution. It requires us to see that technological change can, uniquely, work for us. I've called it an era of mass specialization; it can be much more equitable and environmentally sustainable than the golden era.

And here lies President Obama's second transition task and a huge opportunity. He has to start immediately making this new growth model clear and comprehensible to Americans. He has to offer the hope that there is more to the future than just a repeat of the trends of the past. And he has to begin to propose the public policies that will allow the next growth era to be born. But above all, this will require that President Obama sees equitable, sustainable growth as the core of his governing philosophy for the second term.  Two good places to start with would be to put his endorsement of Simson-Rivlin-Dominici-Bowles in the context of a focus on growth and to make this the theme of his January 2013 State of the Union.

President Obama told me once at a very small breakfast in New York - long before he was president - that he wanted to be a transformational president. I believe him, but I don't think he's achieved that yet. Here's the chance. What could be more transformational, and more truly progressive, than to change America's governing political philosophy, wrench our politics away from its infatuation with wedge issues and a return to the 1950s, and usher in a new era of growth? As I started by saying, the golden ring is out there and the merry-go-round is heading toward 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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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Transition Tasks: Solve the Debt Question and Move On

Oct 26, 2012Bo Cutter

President Obama has three big transition tasks ahead of him. First up: get past the heated deficit debate with a real solution.

President Obama has three big transition tasks ahead of him. First up: get past the heated deficit debate with a real solution.

As I write this in mid-October, it is not at all clear that President Obama will have a second term. There are structural factors giving the president an advantage, largely that so many states are basically determined one way or the other.  And there has been a slight tendency for all of the polls to settle into to a pattern suggesting a narrow Obama win. But there is no question that the botched first debate, coupled with Paul Ryan's draw with Joe Biden in the vice-presidential debate, even given President Obama's win in the second debate, have put this election in play and clearly given Governor Romney more momentum in the race. 

But I do not have a clue how Mitt Romney thinks. Nor do I know how the Republican Party is going to move from being an opposition party with the sole goal of defeating President Obama to a governing party that actually has to do something. So I have to write this from the perspective of a Democratic president preparing for a second term. From this point of view, President Obama has three major rethinks to undertake as he considers his second term. First, he has to move immediately after election day to break the enervating debt and deficit deadlock or it will eat his whole second term. Second, he should rethink the goals of his presidency and, in so doing, begin the historically necessary process of redefining what being a progressive should mean in the first half of this still new century. And third, he should rework his approach to being president. There is a fourth task, which is to take the lead in defining America's next economic growth model. That's the biggest task of all and is touched on in task two, but I'll write about it more after the election. 

Let's start with what almost has to be the president's first major policy move. On November 7th, a re-elected Barack Obama should announce a committee composed of Alice Rivlin, Pete Dominici, Alan Simpson, and Erskine Bowles. He should tell that committee to produce in 10 days one integrated version of the economic and debt plans they have already written. (They all talk to each other and I am reasonably certain they know exactly what they would propose.) He should say he wants a plan that will (1) allow us to avoid the impending fiscal cliff and the true craziness of the upcoming lame duck session, (2) shore up near-term economic growth, and (3) credibly get us off our disastrous debt and deficit track of the next 10 years.

He should commit to supporting their unanimous recommendation. Then he should (1) tell the lame duck Congress that he wants them to end this fiscal cliff nonsense by postponing everything to June, (2) tell them not to name another useless special committee, but instead to give the permanent committees of Congress specific instructions to solve the debt/deficit plan, (3) state unequivocally that the Rivlin-Dominici-Simpson-Bowles plan is the default and will go automatically into effect if Congress fails to act, and (4) go home.

In early December, as he makes this plan public, he should appoint either Alice Rivlin or Erskine Bowles as Secretary of the Treasury, name the other three as senior advisors, and task the Secretary of Treasury-designee with accomplishing a full agreement by June 2013.

Why these four people? They're the only four in America who have put themselves publicly in the line of fire and dared to create genuinely bipartisan, credible plans. They all have years of public service experience. Their mamas taught all of them to read and count. And not one of them gives much of a damn about the inevitable hysteria that will emanate from the left or the right. 

The U.S. economy is limping along at roughly 2 percent growth and the unemployment rate is falling too slowly. The debt and deficit track we are on is not sustainable and is becoming more and more risky. We are headed into a post-election lame duck session in which the most polarized and gridlocked Congress in 100 years must accomplish more than has ever been done in a lame duck session. And then, at the end of this session, our current plan is to jump off a fiscal cliff consisting of tax increases and spending cuts of 6 percent of GDP, certainly triggering the recession of 2013.

We also have much more important tasks to accomplish as a nation than waste several more years bickering over a debt and deficit issue that we can actually solve without enormous pain - if we would just do it rather than choose to emit an endless chorus of ideological whines. We need a new economic growth model. We have to begin to correct the extreme inequality within our society. We have to figure out how to stop trashing the planet. I would think that this president - any president - would prefer taking on these tasks than another four years of mud wrestling.

But we have to act as close to now as we can get. And if the president does not take the lead, nothing will happen. No amount of strategizing, negotiating, or consulting can substitute for one clear direct act of presidential leadership immediately after the election. 

Isn't this risky? Of course it is. But there is no course available to President Obama, including doing nothing, that isn't risky. Assessing this risk demands that President Obama ask himself the following question: am I better off taking a risk now - that gives me the initiative - or waiting and being forced later into an undefinable "third best" decision? 

In my view, President Obama's choice is straightforward. He can temporize and wait, see our circumstances become worse, and fight a protracted battle throughout his second term on the same issues that bedeviled him throughout his first term. Or he can set in motion now a real effort to alter current debt and deficit trends and have a good shot at a successful second term.

A version of this piece will appear in the November issue of International Economy.

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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In the Last Debate, the President Shone Under the World's Biggest Spotlight

Oct 24, 2012Bo Cutter

The last debate wasn't just about foreign policy. It was about the diverse and difficult responsibilities of being president of the United States.

"Bullfight critics ranked in rows crowd the enormous plaza full, but he's the only one who knows, and he's the man who fights the bull."

The last debate wasn't just about foreign policy. It was about the diverse and difficult responsibilities of being president of the United States.

"Bullfight critics ranked in rows crowd the enormous plaza full, but he's the only one who knows, and he's the man who fights the bull."

For me, that sums up the debate. The president won. He was the commander-in-chief and he played a strong hand well. This isn't a foreign policy blog, but if you step back from the absurdities of the charge/counter-charge of a campaign, he and Hillary Clinton and Defense Secretaries Gates and Panetta have carried out foreign policy well in an incredibly difficult and confusing time.

Governor Romney did not do badly, but he is like a pilot: there are old pilots and there are bold pilots, but there are no old bold pilots. He doesn't have any particularly new ideas, and the ones he hints at having are either profoundly wrong, profoundly dangerous, or both.

"Hint" is a good verb. He hints at deep disapproval. He'd be stronger, firmer, altogether better. Events would be less disorderly, and the world would dance to his commands. But he actually wouldn't do anything differently. Stay in Iraq or Afghanistan? Divorce Pakistan? Invade Iran? Put troops in Syria? Really show China what's what? On all of these issues you get the impression that he actually doesn't have a different policy; he is depending on his strong jaw and magnetic personality to command events. Should he actually win, his policy would be exactly the same, except he might actually get himself bullied into a hasty bombing campaign against Iran. Does anyone think "Bibi" wouldn't be over in a heartbeat to collect his receivable?

The major preoccupation of that alternate universe White House would be attempting to demonstrate constantly that there was some sort of difference from the Obama policies. Heck, maybe the world really will sit up and do right with a President Romney. But trapped as he is between the neo-cons who have learned nothing and President Obama's mostly successful policies, he was reduced to throat-clearing and ankle-biting. And if his whole approach depends on the argument that he'd do the same things but somehow better, you have to remember that this is man who managed to insult the United Kingdom over the management of the Olympics. (Yes, they used to be enemies, and we all remember the unpleasantness of 1812.)

This was all sort of fun. But I did have a somewhat deeper thought -- a profound appreciation for America and for how tough being president is. A really long time ago, I was in a small group of appointees with President-elect Carter a month or so before the inauguration. (I know the fashion now is to be contemptuous of President Carter, but I'm not. I revered the man, loved working for him, and still revere him.) Anyway, I was mostly in such awe that I was even there -- how did someone from Loudoun County High School get here? -- that I couldn't talk. But I could think, sort of. What I thought about was the two faces of the president's job. On the one hand, he had to grapple with the actual issues, facts, and arguments as they affected the most important nation in the world, and then he had to turn around and persuade a nation of 225 million people (at that time).

I felt the same way 37 years later watching President Obama and this debate. You grapple with the most difficult possible issues of foreign policy, some completely unpredictable -- at least, I haven't seen the Romney crowd claim yet that they knew all about the Arab Spring. All of them are confusing, information is never particularly good, and most of the time getting the right thing done in one event runs right into the players and calculations involved in some other event. All you can do is approach each calmly, try to keep a larger framework intact, and live every time with the thought that you didn't do it perfectly.

Then you have to turn around and debate your opponent, in front of millions, on the details of these policies. Your opponent doesn't have to deal with all of them at the same time, as you do, and he makes it clear that he would have done everything perfectly. There is a lot you can't say. Every syllable you utter is going to be parsed by every head of government in the world. And any big misstep can both screw up something big and cost you the presidency.

I could tell that President Obama was both frustrated and, at times, angry about being in this position. But you know what? It's part of the deal. It's what we do in America, and our presidents better be good enough to handle it. I thought President Obama more than met that test. I also thought again as I looked around the bar where I watched this debate en route, a bar that was packed full with maybe half of the audience foreign-born, how proud I am to be a citizen of the country that holds these debates and doesn't think they are anything special. 

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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The Four Biggest Flaws in the Candidates' Debate Performances

Oct 22, 2012Bo Cutter

The second debate didn't do much to move the polls, but it continued to highlight some of the candidates' biggest flaws.

I'm not going to refight the second debate at any length. With these debates, we are at that well-known point most meetings and conversations reach: everything has been said, but not everyone has said it. There is no excuse to say it all again interminably.

The second debate didn't do much to move the polls, but it continued to highlight some of the candidates' biggest flaws.

I'm not going to refight the second debate at any length. With these debates, we are at that well-known point most meetings and conversations reach: everything has been said, but not everyone has said it. There is no excuse to say it all again interminably.

To dispense with the debate, Obama won. The polls all say it, and not even the Romney people contest it. He did not win overwhelmingly; the polls suggest by an average edge of about 4 percent among undecided voters. And he didn't win much. My estimate is that this debate influenced about 40,000 voters in toss-up states toward Obama; 125 million people voted in 2008, so we're talking about 0.003 percent (and I think that's an over-estimate). Clearly the biggest, most apparent victory in debate two was Obama version two over Obama version one. And the biggest effect was probably the palpable sense of relief among his own supporters.

But the debate did provide even more fuel for further rants on four topics: the future, international issues and politics, the Republican right, and "plans."

1. On the future. I continue to find President Obama and his team's failure to bring together a simple, straight narrative about the economy in the last four years and America's economic future incomprehensible. A credible narrative can be shaped, and it would work to the president's advantage. An equally credible view of a positive future could be presented. This is not a trivial omission; presenting a view of the future that allows citizens to accept and take on hard choices is a central requirement of leadership.

2. On international issues and politics. It's hard to avoid concluding that Governor Romney has been irresponsible in his approach to the violence in Egypt, Libya, and Tunisia. His grasp of the facts is weak to non-existent, his lack of understanding of the basic uncertainties involved in most of these events is deeply naive, and his sense of fundamental issues of American power and national security is, let us say, undeveloped. Not that it matters, but his political strategy is also completely wrong. Given a set of sudden and violent events about which he knows absolutely nothing, by far the best strategy is to say in a completely straightforward way that he supports the president and then shut up.

3. On the Republican far right. Governor Romney has two obvious problems in these debates and this whole campaign. The first problem is well known: he has reversed himself so completely on every major issue that to get back into the game now he has to, on the run, re-reverse himself, deny he is doing it, and somehow convince the American people that he isn't a phony. Good luck. But an equally big problem is slightly less obvious: he is tied into knots by the positions of the Republican far right, which has never missed a chance to miss a chance. Whether the subject is taxes, spending, the social contract, abortion, immigration, or guns (neither Governor Romney nor President Obama distinguished themselves there), it is very clear that there are bright lines he is not allowed to cross. My own bet now is that President Obama will win reelection and the Democrats will retain control of the Senate -- in neither case by much of a margin. In both instances, a major reason will be the revealed preference of the Republican far right to be ideologically pure losers rather than winners with a chance to govern.

4. On plans. I continue to be completely in awe of Governor Romney's five-point "plan." This "plan" has either set back the whole idea of a plan by at least 5,000 years or moved forward to a whole new definition of plan. There is literally nothing of substance to this "plan." The 12 million jobs he will create is slightly on the high side of the number of jobs a normally performing U.S. economy would create in any circumstances. The tax plan is nonsense. The rest of it is at a cocktail party level of analysis. And Governor Romney continues to advocate this "plan" as proudly as ever. Why not? If he loses, the "plan" won't matter. If he wins, it will immediately be jettisoned, and should anyone be so ungracious as to bring it up, they will be told that the Romney administration is looking to the future, not the past (a time-honored technique). So, the new rules of "plans": always have a plan, always talk a lot about your plan, be sure your plan says nothing whatsoever, and, post-election, deny your plan ever existed.

Finally, the numbers: Nate Silver gives President Obama a 67.9 percent chance of winning, with 288 electoral votes and a 1 percent popular vote margin. Intrade is offering 61 percent odds on Obama. The Iowa Election Market is also at 61 percent. And Real Clear Politics' forced choice gives President Obama 277 electoral votes. This election is awfully close to even.

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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The Vice Presidential Debate: Where's the Man with a Plan?

Oct 12, 2012Bo Cutter

Biden and Ryan have some real ideas, but neither side has a plan to get us out of this economic mess.

Biden and Ryan have some real ideas, but neither side has a plan to get us out of this economic mess.

Last night's debate will be seen as an interlude: there were no knock-outs and both Vice President Biden and Congressman Ryan did fine. Biden guffawed too heartedly and interrupted too much, Ryan looked strikingly like a puppy dog, the bases will be happy, and the five undecided people in America who will actually vote still can't decide. So I want to comment on four points that occurred to me as I watched, a couple of which were reinforced by two columns this morning: Paul Krugman in New York  Times and Matt Miller in the Washington Post.

First, Joe Biden and Paul Ryan are both appealingly ordinary and normal - particularly compared to their principals. The right loves to portray Biden as a buffoon while the left sees Ryan sort of as an evil genius. But both of them have actually been committed advocates of honest to god real ideas throughout their careers. I'd enjoy a beer and a conversation with either of them, and I think there would be some actual give-and-take. I'm not sure that would be the case with either Barack or Mitt. Yet in today's awful politics, there is not a chance in hell that Biden or Ryan would know each other, speak to each other, or work with each other. 

Second, I am amazed at the ease with which Romney and Ryan have been able - have been allowed - to completely reposition themselves. I say this both as a partisan and with more clinical detachment as someone with a 45-year professional involvement in government and politics. You name the issue - taxes, entitlements, the middle class, abortion, their previous statements and records - Romney and Ryan have both, blithely and nonchalantly, taken off their old, worn, primary tried and true, crazy right wing of the Republican Party clothes and put on new tailor-made ones. It turns out that "etch-a-sketch" comment by Romney's campaign spokesman a couple of months ago wasn't a metaphor, it was a prediction. I stand in awe.  

Third, I cannot understand, I will never understand, the complete absence on the part of either President Obama or Vice President Biden of a well developed, credible economic narrative and plan. This is a theme where I have on a couple of occasions disagreed with Paul Krugman. In a past column that he repeated a week or so ago, Paul Krugman has derided to an extreme degree the whole notion of "focus." He characterized dwelling on the lack of "focus" as "intellectual cowardice," saying, "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.)

God forbid I say this about a Nobel Prize winner, but he was wrong then, and he's wrong now. In a blog post I wrote in November of 2010, I did say exactly what I would have done, and it is exactly this lack of "focus," of a well developed economic narrative and plan, that lies at the heart of President Obama's campaign problem in this campaign. Joe Biden did his absolute best to fill this vacuum on the run, flying without a net, but his efforts did not substitute for a narrative and explanation developed over a whole term of talking to the American people. On the central issue, economic policy, that President Obama should never have had the slightest problem winning, his White House never built the story, and, boy, does its absence show and hurt today.

Finally, plans. Governor Romney has a "plan." Congressman Ryan referred to this "plan" a number of times. Having a "plan," no matter how completely empty, how completely devoid of substance it is, is better than not having one. I've read everything I could find about the Romney "plan" and there is no "there" there. It really does consist of saying that Governor Romney is for the Good and against the Bad. It was almost certainly created in five minutes by some speechwriter who was told the campaign needed a plan. I sure wish President Obama had had that speechwriter. Actually, I think one could develop quite a good plan, one that would actually be helpful in the real world as well as "campaign world." But there isn't one for President Obama; someone forgot.

Then on the topic of plans, Matt Miller makes a point that has continually jumped out at me: "In one sense the evening was impressive... On the other hand it was depressing, because the choice doesn't include a party with a real plan to renew the country."

Matt is correct. Neither the right nor the left has anything even remotely resembling a set of credible ideas that will get us out of the current mess and prepare us for both  hugely changed economic circumstances and for what I believe are enormous opportunities. The right doesn't seem to give a damn about inequality, mobility, or the social contract. The left is frozen in amber sometime around 1951. We could do, and we have to do a lot better, but we don't. And because we don't, we also don't debate the politics of the future. We face huge changes as a nation. Great, transformative, world-changing politicians figure out how to help a nation cope with and handle change. They don't screw around debating the validity of different numbers buried in different Medicare scenarios offered up by the Congressional Budget Office.

For those who like numbers, Nate Silver now gives President Obama a 66 percent chance of winning, with 289 electoral votes. RealClear Politics forced choice gives President Obama 292 electoral votes, but its last 6 poll average gives Romney an average 1.7 percent edge. InTrade gives President Obama a 63 percent chance and 282 electoral votes. The Iowa Market gives President Obama a 65 pwexwnr chance. In the last week, this election has become a cliff-hanger at both the national and state levels.

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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What Obama Never Heard Before the Debate: "Mr. President, You're Wrong."

Oct 9, 2012Bo Cutter

The odds are still on the president's side, but he needs to learn how to make a stronger case for himself to win a second term.

The odds are still on the president's side, but he needs to learn how to make a stronger case for himself to win a second term.

The aftermath of the debate in the media was entirely predictable. Democrats were depressed and said as little as possible. The Republican columnists took -- are still taking -- very, very long victory laps. I try to keep a balanced view of all this, but it does seem to me that people like George Will, Charles (the world's sourest writer) Krauthammer, and Peggy Noonan left all thought behind, registered as Republican precinct captains, and simultaneously underwent an ecstatic transfiguration to a wondrous level of enlightenment. This is a lot to load on one debate.

There is no question that President Obama was clobbered in this debate. I've gone back and watched it again and if anything a second watching of this harshens the verdict. I can't remember anything quite like this in all the debates I've seen. But it is useful to ask: what are the consequences and what's the evidence? Are the election odds now completely turned upside down? Should we start practicing to say Secretary of State Bachmann?

The best evidence for this side is the national polls, and the best piece I've seen was this analysis by Nate Silver today. The average of all of the post debate polls suggests that Obama now leads by 1.7 percentage points nationally and Romney gained 2.9 percentage points after the debate -- about what he lost with his "47 percent" comments.

How have these changes affected actual election probabilities? A fair amount. Nate Silver is currently forecasting that President Obama has a 74.8 percent chance of winning, with 302 electoral votes and a national margin of 2.5 percentage points. InTrade bettors give President Obama a 63 percent chance of winning, and the Iowa Election Market gives him a 67 percent chance. Real Clear Politics's "forced choice" map gives Obama 294 electoral votes. All have moved a fair amount toward Romney. As one example, according to Nate Silver's probabilities, Romney's chances moved up from 14 percent to 25 percent -- an 80 percent improvement.

But national polls don't tell you much at this point. We elect presidents on a state by state basis. There are only six states in the country where the odds are less than 80 percent of either an Obama or Romney win. Those states are Colorado, Iowa, Ohio, Virginia, and Florida on the Obama side, with all except Florida suggesting at least a 60 percent chance of an Obama win. The sixth state is North Carolina, with a 69 percent chance of a Romney win. I've yet to see a single statistical analysis that showed the debate changed the voting odds of even one state.

So in my view, we're back to where we were. Not a revolution in probabilities, but a big self-inflicted wound for President Obama. Romney's debate performance moved this election from one in which he was teetering on the brink of disaster to one in which he has an outside chance. The odds remain substantially in the president's favor, but the outcome is a hell of a lot dicier for him than it had to be.

But why did this result happen? On my second watching, four things jumped out to me beyond the fact that Mitt Romney was very good. First, the president was extremely cautious because he knows this race is basically going his way. Second, the president was obviously irritated and set on his heels at being directly challenged. Third, the president did not contend well in the cut and thrust of the political policy arguments. Fourth, the president had no agenda or narrative.

And on the premise that hard lessons, if they don't kill you, can teach you something if you let them, I think the president needs to draw these big lessons: presidential management and self-awareness matter, and agendas or the lack of them matter. And nothing, nothing in politics can be taken for granted.

A lot of the issue comes down to this: White Houses -- all of them -- are mostly royal courts. Everything revolves around the president; the place is mostly filled with courtiers who ask themselves every morning, "How can I get in or stay in the president's good graces?" And this is just as true of the president's pals from home as anyone else. People plot intricately how to be sure the president sees them working themselves into exhaustion just for him. Presidents are very, very, very unlikely to be directly challenged on anything. They think they are; they always see themselves as the kind of person who wants to be challenged. But they aren't challenged. Everything is couched painstakingly politely; any possible disagreement is muted. Presidents never hear the simple declarative statement, "Mr. President, you are wrong." Years before I went into a White House, a senior staff member of the Johnson White House told me, "in the last half hour of his last day in office, the president can still make you or break you." None of this is planned; it all just happens.

Presidents are changed by all of this. (I think the only president of the last 100 years who was not changed was Dwight David Eisenhower.) On being elected, they are prone to deciding their staff was right: this election really is a massive endorsement of "me" and the voters really do believe in all of my ideas. Early-term White Houses are so caught up in the sheer wonder of being them that they easily dismiss challenges, challengers, and disagreements as wrong-think. They see the press as a bunch of disrespectful, unruly, and uncouth folks -- this is true, but beside the point -- whom they try to avoid. (President Obama has had very, very few real press conferences.) As a term progresses and things get hard, the internal forces of White Houses and Cabinets edge reality farther and farther away, and mostly what a president hears is how unreasonable the critics are. If anyone dares to point out that there isn't a narrative and there isn't an agenda, they are buried in talking points and the president is reassured.  

This cycle is as old as the hills and it happens to almost all of them. And it sure looks as though it happened to President Obama.

So what does he do for the next debate, and a second term? First, he can't overreact. Al Gore's mistakes in his first debate led him to be so polite and deferential in the second debate that he made it a non-event. The president can't make the opposite mistake. Second, he has to get better in a hurry at the cut and thrust; he cannot allow his staff to lull him into the impression that it all wasn't so bad after all. Finally, he has to find a way to tell his story and underline his agenda so that normal people beyond the rarified levels of the White House know what he's talking about. (Take as an example Governor Romney's "plan." It is for the good, and against the bad. That's it. It will disappear completely from sight in 30 nanoseconds should he be elected. But it's a "plan" and you don't beat "plan" with "no plan".)

For a second term, President Obama should consider the following. A real transition in which policies and people are rethought. Exposure to more debate, to much more of the uncouth media. A major policy decision very soon after the election so that he determines the debate. A simple, credible story about America's future.

But right now there is less than one month remaining and the second debate is impending. The president is, without question, the single most talented speaker in American politics today. He is ahead today. There is no move Governor Romney can make that President Obama cannot counter. But if he doesn't sprint for the next 27 days, this could end badly.

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. He has also served in senior roles in the White Houses of two Democratic Presidents.

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