The economy is in tatters, with no likelihood of a swift recovery. Indeed, the short term threat of not raising the debt ceiling threatens an immediate plunge into an official second dip recession.
Digby discusses the new Pew Poll findings on what Americans believe will help grow the economy:
I realize that the president has been more nuanced than the Republicans on the benefits of the massive spending cuts and contractionary nature of this whole debate. [. . .] But it is still the case that most Americans have come to believe that fixing the deficit will lead to jobs.
There's not much the President can do now to revive the economy. The GOP House will block any worthwhile initiative. But avoiding doing harm would be nice. Of course the President must do what's necessary to raise the debt ceiling but he should try to fashion a deal that does the least harm to the economy. Cutting the deficit now will be very harmful. Despite what Americans might think. And in November 2012, no one is going to be thinking about whether they were right or wrong about deficit reduction spurring economic growth. They'll look at the results and blame the guy in charge. Unless the guy in charge can blame someone else. Contrary to the beliefs of the Obama team, and as the Pew poll demonstrates, "Independents" will not be won over by "reasonableness." Good policy is good politics. And not horrible policy is better than horrible policy politically.
The President is in a difficult position (leaving aside the partially self inflicted nature of his predicament.) Looking forward, what can he do? Cut a debt ceiling deal with as little in the way of short term cuts as possible. Make sure he does not leave the GOP with another debt ceiling hostage situation that will lead to more short term cuts.
To me this means while a symbolic second vote on the debt ceiling is acceptable, the President should do all in his power now to avoid a substantive second vote. That could be done by permitting a second McConnell style vote, where the Congress would have to "override" the President's raising of the debt ceiling. Some would argue that this would do political harm to the President. I don't agree. No voter has ever decided on the issue of raising the debt ceiling. I doubt they start now. But even if some might, the tradeoff is clear - it is more important politically (not to mention in real life) to minimize the harm to the economy than to have "buy in" on raising the debt ceiling.
The other action the President must take is to look for someone else to blame for why the economy is not doing better. Yes, of course this must be the Republicans. But why? It is here that the President must create a record. He must propose initiatives that have no chance of passage. He must talk jobs, jobs, jobs. He must stop talking about deficits, deficits, deficits.
He also must reaffirm his commitments to the social safety net - Medicare, Social Security, Medicaid and universal health care. It is true that the President undermined his political position on this score in his absurd search for a "Grand Bargain." But he must put that behind him and get back to defending the New Deal programs. Yes, he needs to engage in some MediScare.
The old dream of "transformation" and "post partisan unity" are now long gone. What remains ahead is a tough reelection campaign. For any number of reasons the President's reelection is crucial. But he must set the scene and run the right campaign. I have doubts that his team have figured out how to do it.