Obama and the US Economy: Singing "Three Wheels on My Wagon"

In mid-1960s Britain, the New Christy Minstrels had a huge hit with “Three Wheels on My Wagon”, a song about a US pioneer family attacked by Cherokee Indians. As each verse begins, another wheel on the wagon goes missing. By the last verse, all the wheels are off the wagon, which is forced to stop. Regardless, the pioneers face death while “still singing a happy song”.

What if one substituted the Obama family for the pioneers and the Washington press corps for the Cherokees? Last week was a public relations disaster for Obama. The faux pas on the Tonight Show with Jay Leno about bowling and Special Olympians might appear small beer, even if it raises the uncomfortable question: could it be that Obama has a discriminatory bone in his body?

More significant is the furour over the bonuses for executives at the troubled financial company AIG.

Compared with the total of the Federal bailout, the sums for bonuses is trfiling, according to the President. However, when American people have insufficient funds to pay their bills, $200 million-plus is far from trivial. The President, according to the press, is giving the unfortunate impression that he's quite happy even as the wheels are coming off his wagon.

Obama wasn't always so blasé about trifling matters. In his book, Dreams From My Father, he describes his efforts on behalf of projects residents in a Chicago suburb. True, the problems, if looked at on a federal scale, were miniscule, but to those Project residents and organisers, the solutions offered through Obama’s efforts were immense.

Little things matter. Indeed, the Obama presidential campaign always paid great attention to detail. Micro seemed as important as macro.

So what happened to Obama last week? Was he overwhelmed by the enormity of his job? Has he become hypnotised by the “very cool” Air Force One and other trappings of the Presidency? Is he already surrounded by White House dobermans and inured to the needs and feelings of the little people?

I don’t think so but the President needs urgently to attend to his public relations.

On Sunday on the flagship TV news programme 60 Minutes, Obama talked about the AIG bonus: "I wasn't surprised by the intensity of the bonus debate and reaction to it. Our team wasn't surprised by it.” Instead, he emphasized that he would not govern out of anger. Treasury Secretary Timothy Geithner has been ordered to use every legal means to recover the bonus money from AIG. If it is not repaid, it will be deducted from the company's next bailout payment.

At the same time, the President is having to tread carefully in the AIG case. The House of Representatives has decided to extract its own revenge by passing a bill that would impose a tax of up to 90 percent on the AIG bonuses. Indeed, anyone making more than $250,000 a year who works for a financial institution receiving more than $5 million in bailout money would be liable to the tax. Obama, who was a constitutional law professor, has rightly expressed doubt as to this law’s constitutionality: "Well, I think that as a general proposition, you don't want to be passing laws that are just targeting a handful of individuals. I think you certainly don't want to use the tax code to punish people."

Obama's fulsome apology to Special Olympians should be sufficient to cope with the sideshow created by his appearance with Jay Leno. The AIG issue is more interesting. Irrespective of the President's correct reading of the law, if the Washington press corps successfully links Obama with the privileged in American society and nails him as unable to curb the worst excesses of Wall Street, his Presidency may descend into the disaster that few predicted and fewer, except died-in-the-wool Republicans, wanted.

Hopefully, Obama will soon put the wheels back on his wagon.