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April 2nd, 2009

“The Obama Enigma”

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I was listening to the morning-radio program “Bloomberg Surveillance” on my drive into work this morning when I heard the discussion about an interesting article written in this morning’s Washington Post. The title of the article, written by E.J. Dionne Jr., was “Obama’s Boldness Wrapped in Caution.”

Dionne spawned the phrase “the Obama Enigma” as a means to define the administration’s economic agenda — boldness mixed with caution.

Let’s first look at Obama’s boldness according to Dionne. The author sees the president’s actions taken towards tax and budget proposals, health care reform, and the ultimatum given to the dying domestic auto industry as “daring, honorable, gutsy, and aggressive.”

Yet Dionne views Obama’s approach to saving the banking system as starkly different as to his other initiatives — one filled with caution, worry, and the hope that his trusted advisers are making the right decisions:

“We can’t fall back on the stale debates and old divides,” Obama said at his Wednesday news conference in London… Obama’s alternative is a novel blend of opposing ideas.

Nowhere are the challenges facing this method more dramatic than in the bank rescue. The debate over the plan is rooted in three disagreements.

Obama’s Treasury Secretary has employed a slower, more cautious strategy to prop up the banking system as opposed to the strategies that two Nobel-Prize-winning economics would choose to correct the problem:

If Geithner is correct, he will move us to recovery with less disruption. If he’s wrong, he will waste a lot of taxpayer money before eventually reaching the [Paul] Krugman solution. My heart is with the Nobel critics, but my head hopes that Geithner is making the right bet.

Dionne concludes:

That’s the Obama enigma: boldness wrapped in caution rooted in an ambivalent relationship to the status quo. This is why Obama will, by turns, challenge not only his entrenched adversaries but also his natural allies.

How would you rate the president’s strategies so far? Will having different approaches to different problems ultimately harm his success?

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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