Tax Cuts and Trade: Is Obama Triangulating?

It was about this far into his first term--back in late 1994 and early 1995--when President Bill Clinton truly fell under the spell of malevolent strategist Dick Morris. Stung by the heavy losses brought on by the "Republican Revolution" in the 1994 midterms, Clinton began to believe that his only route to reelection was to tack to the right and steal some of the conservatives' thunder on issues like welfare reform and federal deficits.

Morris, who was only forced out of the White House after a sex scandal and who has since exposed his true political stripes as a FoxNews commentator, thought triangulation both a brilliant political strategy and a generator of fine public policy. The remaining liberals in the Clinton administration disagreed. As the Economist notes, George Stephanopoulos incisively labeled it "a fancy word for betrayal."

Not yet two weeks after the 2010 midterms, and just two years after Obama's campaign of "hope" and "change," there are troubling signs that the current president might be tempted to follow the same path as Clinton.

Obama's first move after the midterms, already much criticized by progressives, was to express his willingness to cave on Bush tax cuts for the rich. This one felt to me more like a gutless compromise than a calculated shift to the right. And, on the hopeful side, the White House is now backpedaling, indicating that the story was overblown and Obama's pre-midterms position hasn't changed.

There's no detectable silver lining, however, to the president's drive to push forward the Bush-negotiated, NAFTA-style trade agreement with Korea. While it appears the deal has stalled for the time being, the denunciations of the neoliberal "free trade" program that Obama once used to attack rival candidate Hillary Clinton in the Democratic primaries are now long gone.

Given the composition of the administration's economics team, this flip-flop is not surprising. There were signs of it already back in 2008, when Obama quickly tried to moderate his earlier stances during the general election campaign.

Nevertheless the maneuver is a sad one. While triangulation arguably worked for Clinton (he was reelected at any rate), rightward moves promise few benefits for Obama. A too-small stimulus meant that unemployment remained higher and anger about the economy greater than might otherwise have been the case going into the midterms. It also produced an uninspired Democratic base, resulting in a low-turnout election that favored Republicans.

Likewise, the trade deals on deck with Korea, Colombia, and Panama are bad not only because they seek to expand a flawed economic model, but also because "free trade" is a political loser. The Democratic base is firmly in the "fair trade" camp, disenchanted with neoliberal policies, and an anti-NAFTA message also resonates with the wider electorate. As Public Citizen has documented, "House Democrats that ran on fair trade platforms in competitive and open-seat races were three times as likely to survive the GOP tidal wave than Democrats who ran against fair trade."

Global Trade Watch Research Director Todd Tucker has gone so far as to call compromising with the Republicans on pending trade deals a "political death wish" for a president who will soon be seeking reelection.

After Obama's first year in office, I gave the administration a "B" on trade policy, on the grounds that no news is good news. As long as unfinished "free trade" deals remained bogged down in negotiations and are not an administration priority, I am willing to judge the situation as no harm, no foul. But it's a different story if the White House starts investing any real political capital in advancing these deals.

Even worse would be if Obama keeps his backbone as well hidden from public view as it has been since the midterms and turns to triangulation, imagining that moving right on trade would be politically beneficial.