Michael Grunwald informed his readers that “the percentage of those who thought it [the stimulus package] had created jobs was lower than the percentage of Americans who believe Elvis is alive.” (“Think Again: Obama’s New Deal” Foreign Policy Sept/Oct 2012) A slight exaggeration! A quarter of a century after the death of Elvis Presley, more than 4 in 10 Americans remain fans, but just 7% think he may still be alive. (CBS NEWS, 11 February 2009) But about half of Americans do not believe that Obama’s interventions worked.

Pew polls showed that support for the auto bailout rose from 37% in 2009 to 56% by February of 2012. Those who thought the bailout was bad for the economy declined from 54% to 36% of Americans. In contrast, the bank bailout is still denigrated by over 50% of Americans. Supporters only number 39%, 1% less than two years earlier. (Pew Research Center for the People & the Press, 23 February 2012)

Support for the stimulus package declined by 1% to an even lower figure than support for the bank bailout, but the disapproval rate also fell from 49% to 41%. More telling, the numbers opposed to government regulation and intervention have increased from 50% in January of 2008 to 52% in February of 2012, though when the banking crisis hit in October of 2008, opposition to regulatory intervention dropped to 38%, though it popped back up to 43% three months later and hovered at just above that level for the next two years — receiving a further boost when the run for the nomination and the office of the president took place. In comparison, half the population supported regulations related to safety and the environment.

If Grunwald was wrong about Elvis, he was right about the stimulus package. Though an economic success, according a preponderance of economists, it was a political failure. If the Obama boosters are correct, why is the support so small and so fickle? Different polls appear to offer different statistics about the stimulus package. Gallup Poll data showed that 52% of those surveyed in January 2009 supported the stimulus package; 37% opposed, a number that declined a month later to 33% while the number of supporters rose to 59%. Whatever the accuracy of each poll and whatever the differences in methodology, polls are consistent in showing a very divided public concerning its attitude to government regulation and intervention and faith in its effectiveness.

Support for economic intervention depends on expectations. Will those interventions work? Did they in fact did work? The polls indicate a public divided. However, support for interventions increased over the last four years so that more people than ever believe in interventions, but never by more than a mere majority except when the society is in crisis mode (the Gallup Poll).

If polling reveals different perspectives that can seem contradictory, this is also true of academic studies. Although most studies suggest that the stimulus package really worked, on close examination the much smaller group of more sceptical studies also reveal that the stimulus may have worked. “While the optimistic studies do, in fact, support the conclusion that the stimulus worked, there is some reason to doubt that the pessimistic studies support the conclusion that it failed. Conley and Dupor [Timothy Conley at the University of Western Ontario along with Bill Dupor from Ohio State “The American Recovery and Reinvestment Act: Public Sector Jobs Saved, Private Sector Jobs Forestalled”] found a negative effect on employment and output but, as they concede and critics of the study have emphasized, their results are not statistically significant. Taylor [John Taylor of Stanford “An Empirical Analysis of the Revival of Fiscal Activism in the 2000s”] found that the stimulus did not increase government purchases significantly but, as Noah Smith argued, this result could be consistent with the stimulus increasing employment and output. Oh and Reis [Hyunseung Oh and Ricardo Reis of Columbia “Targeted Transfers and the Fiscal Response to the Great Recession”] found a small multiplier for tax transfers of the kind found in the stimulus package, but as they concede, their model produces estimates for key figures that are empirically implausible. Using more plausible figures produces a significantly larger multiplier, meaning the package was more effective than the model initially suggested. Due to these issues, I’m inclined to believe that the preponderance of evidence indicates the stimulus worked.” (Dylan Matthews, “Did the Stimulus Work? A review of the nine best studies on the subject”)

Most economists overtly support the Keynesian position and most of the remaining minority accede to the possibility that it did. Brian Barry and Anil Kashyap from the Booth School at the University of Chicago (hardly a hotbed of liberals) in their Economic Experts Panel drawn from a wide spectrum of outstanding economists from across the country, had Justin Wolfers conduct a survey (“The Secret Consensus Among Economists” 25 July 2012). In the survey, 92% agreed that the stimulus succeeded in reducing the jobless rate. Not one challenged the contention that the stimulus lowered the unemployment rate. Every one of them disagreed with the claim that tax cuts would yield higher government revenues. In contrast to public opinion polls, the consensus among academics is shocking.

Why the difference between intellectual expertise and the public? A reader of my Blog wrote me and said that he voted for Obama reluctantly. Why the reluctance? He believes in a measure of redistribution, believes in human rights and believes in a reasonable degree of necessary government regulation as well as capitalism, market economies, individual responsibility, initiative, energy and hard work. He implied that Obama matched his overall criteria for a president better than Romney — suggesting perhaps that Conrad Black was perhaps correct – that the reason the Republicans lost was that they ran with a mediocre compromised candidate. That is a possible explanation. But others are offered for the discrepancy between the huge gap between public opinion and that of the experts.

Grunwald blames the medium for not communicating the truth; they badly screwed up the story of the stimulus. (Grunwald interviewed by Aaron Gertler 1 November 2012 The Politic Yale Undergraduate Journal of Politics) Many Obama supporters blame the effectiveness of the repetitious propaganda and mythology propagated by both economic and cultural conservatives. Other supporters assume the responsibility and blame themselves for their inability and ineffectiveness in educating the public. Still others suggest that the problem may rest in a predispositional deeper ideology of Americans rooted in deep distrust of big government and big business, though the same public relies on the infrastructure and safety net of the former and shop at the big box stores and drive the cars and use the gasoline produced by the latter.

Others place the blame solely on the ineptness of the Obama administration. Jeffrey Stedfast, an Obama supporter, documented alleged failures in his Blog, “A Moment of Zen” in a piece called “Grading Obama’s Green Energy Stimulus ‘Investments’: Epic Fall,” and concluded that Obama failed to choose more winners than losers because of what George Will dubbed his “crony capitalism” under the widespread myth of dramatic climate change. Many strong supporters of Obama thought he had been weak on gun control, but Obama undercut that conviction in his inaugural address. Others thought he continues to be weak on climate change but are now waiting to see if he will follow through on the pledges in his second inaugural speech. Still others question his claims to be a bona fide liberal since he never kept his pledge to close Guantánamo and continues to use drones to assassinate alleged terrorists, sometimes killing innocent wives and children in the process.

Perhaps too many had unrealistic expectations. Whatever the case, these strong supporters cannot account for the discrepancy between the success in the effectiveness of the stimulus package and the scepticism about it since, whatever their criticisms, support for the stimulus among these cheerleaders remained strong, not only for the idea but for its effective and honest implementation. As the New Yorker (29 October 2012) opined in supporting Obama for re-election, the President “has been progressive, competent, rational, decent, and, at times, visionary…The President has achieved a run of ambitious legislative, social, and foreign-policy successes that relieved a large measure of the human suffering and national shame inflicted by the Bush Administration. Obama has renewed the honor of the office he holds.”

I suggest we look elsewhere for the key source of the problem of the discrepancy between actual performance and beliefs about the results among the public. My correspondent’s vote had nothing to do with whether the bailouts and the stimulus worked. Nor did it have to do with whether one was a Keynesian or a follower of Milton Friedman. His reluctance arose because he did not believe that Obama understood the essence of the American identity and its connection with individual responsibility and self reliance making Americans far less disposed to adopt the European welfare state. The source of the explanation may be found in the nature of identity politics in today’s America, but perhaps not in a fixed idea of that identity but in the process of change it is undergoing.

Identity politics is usually associated with whether you are black, white, Asian or Hispanic. But there is also an economic identity. In Canada, Medicare is part of the predominant Canadian identity. Faith in a single payer medical system is seen as integral to being Canadian. (Matthew Mendelsohn (2002) Canadians’ Thoughts on Their Health Care System: Preserving the Canadian Model Through Innovation, Queen’s University) Canadians are travelling in a reverse direction to Americans. They strongly believe in the collective provision of health care but are beginning to question it as an absolute and are moving towards a stronger sense of personal autonomy, empowerment and personal choice. Yet Canadians remain risk averse to any fundamental changes in the model lest the system begin to crumble. In America, the dominant identity shift is the reverse. It posits minimum government intervention. The dominant American identity has been that of my Blog correspondent, but most Americans have accepted the need for a government role in ensuring medical care for all.

“The economic narrative argues that minorities…are voting mainly their socio-economic interests, especially jobs, but also broader social government protections of education, health and the environment. This interpretation is supported by The New York Times exit polling data showing that lower-income Americans of all colors supported President Obama at higher rates than higher-income voters. As shown by the Pew Report, economic logic – a strong need for government protection – helps explain why minorities, women and singles voted for Obama and have long expressed more support for an activist government than whites, men and married people.” (Charles Derber, “The New America Is Not About Identity Politics,” Truthout, 31 December 2012)

Activist Government versus Reduced Government! The Republican economic right has blown it. They thought that they had finally won with Reagan. But they have demonstrated that they have lost their way, cannot see the Milky Way and have been rolling their dung balls in circles. Getting on a bandwagon of immigration reform to appeal to Hispanics will not save their hide. Barack Obama may appeal to the economic and community conservative losers and invite them to partner with him. He may offer the losers some compromise. But as long as they are licking their wounds, resenting their loss of pre-eminence, they will not be able to reach back.

Because many supporters of Obama felt he was too compromising with the ex-masters of the universe, they saw his offers of reconciliation as too weak kneed and his compromises on legislation as too generous to an enemy that refuses to recognize that it has lost. And those who felt that Obama was on the right side in caring for the needy and the marginal, on human rights and modesty, but still clung to the old economic identity, voted for him but held their noses. Both on his left and on his right he was distrusted. The issue was not whether the stimulus succeeded for them but how they could relate to this father of a born again nation. If they voted for him but still held their noses they thought that they would not have to undergo a radical identity shift.

A main reason approval of his record is not higher than his voting support is that there are very many who voted for Obama who do not yet like the economic identity they endorsed. If you add to this group those who want confrontation and total defeat of the former rulers of the universe rather than compromise, we find a group of dissenters who voted for Obama begrudgingly. These groups of dissenting supporters offset disaffected Republicans who also grudgingly voted for Obama; they acknowledge that Obama has done an acceptable job. The people who voted for Obama and the people who rank his program a success are not the same clusters, for the non-supporters who nevertheless acknowledge that Obama has done a reasonable job includes people who can read the scholarly conclusions accurately but continue to disagree with the new rising economic faith.

The lag between the shift of the moderate middle class Republicans is matched by the working class white males who are part of the cluster who voted for him and benefited from the stimulus but who are also wary of a larger government presence in their lives. (http://www.economicpopulist.org) As Conrad Black has noted, if people voted just from their economic interests (and their traditional identity politics), Romney could have easily won the election given the high rates of unemployment among Obama supporters. But they voted for greater protection by the state even though that greater protection may not have yet benefitted them directly. Many were not convinced his remedies would work but they had lost faith in the economic policies of the Republicans which had proven to be false.

I suggest that a key explanation for Obama’s approval rating not exceeding his vote total is that those who thought he was doing a reasonable job but did not vote for him offset those who voted for him but were still questioning the adequacy of his performance. Why does the economic right not recognize they have failed? Why are they engaged in such bitter warfare with the new reborn ideology of a safety net state which otherwise leaves economic leadership to the free market, but one that is regulated and insured to prevent disasters? Why are the cultural conservatives equally bitter as they too shrink in power such that, even in combination with the economic conservatives with whom they actually share very little, they cannot defeat the new rising ideology. I still have to show that the old identity politics is dead since so many have credited identity politics for Obama’s win and growing support. I shall try to show that the new and emerging American identity that is replacing these old identities is NOT a regression back to the New Deal identity Or racial identities Or ethnic identities, but a new emerging cultural identity against a host of receding ones.

[tags Obama, USA, President]