Obama Lost His Charisma—Not His Political Skill

Obama’s presidency is surviving on what little personal charm he has left despite his complete loss of charisma as a leader. And yet, the pared down president is revealing himself to be a skillful and dangerous political opponent with moves this week that show he’s been biding his time while giving the Republicans room to make their own mistakes.

Long before November’s loss, Obama telegraphed that the second phase of his presidency would be quite different from the first. Though there’s been a lot of complaining that West Wing went dark over the last three months by not naming a new Chief of Staff or a replacement for Larry Summers, today’s trial balloons announcing that William Daley and Gene Sperling would fill the jobs show that the pilot light has been on all this time.

Even before the election, it has seemed that Obama has been playing rope-a-dope with the Republicans. He’s been letting them punch themselves out–a process that still has some time left to run as the Boehner, Cantor and Ryan try to solve the conundrum of cutting $100 billion without touching defense or raising taxes. (The decision to change the House’s pay-as-you-go rules into a no-tax-increase rule is the sign of unnecessary zealotry.)

With the Republican leadership is now fully in the spotlight, Obama has waited a beat in the news cycle and then announced his new conciliatory economic team. His choices play up the difference between the now conciliatory administration and a House controlled by reckless Tea Party neophytes.

Obama’s most confrontational and colorful aides are now gone and no one with star power has been chosen to replace them. That’s not an accident. Sperling is a pragmatic negotiator who won’t be the lightning rod Summers was; Daley will convince the corporate community that adult supervision is back in the White House.

The Wall Street Journal speculates this morning about a growing consensus over reforming corporate taxes:

Mr. Obama has expressed a willingness in recent interviews to have “a conversation” this year about lowering corporate-tax rates, while reducing the number of tax breaks. Administration officials caution that he hasn’t decided whether to push for action this year.

Executives on Mr. Obama’s Export Council last month said the U.S. corporate-tax code, with its top rate of 35%, puts U.S. companies at a disadvantage against rivals from countries where tax rates are lower. To be sure, many companies don’t pay that top rate. The panel recommends a federal rate of 20%.

As an issue, this helps Obama much more than the Republicans. Any move on corporate taxes, especially if it repatriates the profits of American multi-nationals, plays well for Obama because it shows him making concessions as well as highlighting the revenue issue. The Republicans simply cannot cut taxes and keep on spending forever. Obama’s best positioning is to show the Tea Party as irresponsible and unrealistic about both the problems facing the American economy and costs of running even a reduced government.

Obama will let the Republicans and the Tea Partiers grandstand, fulminate and start in-fighting. They’re internal contradictions and fissures are his best weapons.

Meanwhile, he’ll make serious progress on reforming corporate taxes as a competitiveness issue which will also serve as a bargaining chip over hiring. Meanwhile, the debt ceiling fight will ensnare the House leadership. As Dan Gross smartly points out, the decision to oppose any tax increases–and demand the full gamut of the Bush tax cuts be extended–has put more pressure on the debt ceiling issue than anything to do with spending. With the clock running against the Congress. The debt ceiling fight is something Obama can remain passively above.

Obama’s man Austan Goolsbee  already lobbed the best sound bite of the issue last weekend with his comment on ABC’s Sunday morning show, This Week. “If we get to the point where you’ve damaged the full faith and credit of the United States,” the adviser said “that would be the first default in history caused purely by insanity.”

The administration is doing everything it can to box the Tea Party in. It hasn’t been an easy or quick process. But through deliberate and concerted effort, Obama seems to be pulling off a masterly reversal. He’s going from being the radical to the establishmentarian. Like Clinton, he’s allowing his opponents to drive their own issue–tax cuts–over a cliff while setting himself up to be a defender of sober and sound economic principles.

There’s a long road left ahead; but Obama has accomplished his legislative agenda. The battles going forward are all playing defense where his proxies will bear the brunt of the fighting and the casualties. He’s now in the best position to play president and use the office to enhance his reputation. Gallup released polling data this week that shows him moving back into positive job-approval territory with 49-to-45 rating, the first time he’s been in the black since July.

Momentum Builds for Corporate Tax Overhaul
January 6, 2011; The Wall Street Journal

Boehner Takes Reins, Vows Change
January 6, 2011; The Wall Street Journal

Economic Team Gets Sperling; Gibbs Out
January 6, 2011; The Wall Street Journal

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