The president made a bit of a splash in January, choosing to unveil his new business-friendly approach to regulation on the often-hostile op-ed pages of The Wall Street Journal. Now, William Daley, his savvy chief-of-staff, is pursuing the administration’s charm offensive in the Financial Times. President Obama, he writes, is committed to freer trade and fixing “rules that needlessly stifle job creation and economic growth.”
These are important signals. We can’t recall a time when a sitting president signed an op-ed devoted to reforming regulation. Regulation may be a sexy topic for policy nerds like us, but it’s hardly cable-newsworthy unless it’s in the context of toxic toys or runaway cars.
So, how to interpret this move to the center? Some would suggest that it’s not really a move – that the administration has always sought the pragmatic middle ground. At the very least, though, it’s a change in emphasis. While some of the president’s men (and women) are undoubtedly free traders, and more or less approach regulation from a common-sense, benefits-versus-cost perspective, this has not been a priority. Indeed, the White House seems to have left the regulatory meat of health care and financial reform to Congress.
The most plausible explanation for the take-a-businessman-to-lunch initiative is that Mr. Obama sees both economic and political advantages to clarifying his views. That’s not cynicism; it’s triangulation in the best spirit of American politics, driving policy toward the center because it serves politicians’ interests as well as the nation’s.
Whatever his motives, though, the timing is serendipitous. It helps to slow the momentum of the tea-party enthusiasts, whose lack of a practical agenda is reflected in their passion to eliminate the budget deficit in the midst of a fragile economic recovery – and without, of course, adding to anybody’s taxes or disturbing the perverse incentives that are driving Medicare costs. And it also signals to independent voters that this president understands that there’s no need to fix markets that aren’t broke.
What are the best indicators that policy is indeed following the new rhetoric? Keep your eyes on three things. First, whether the president really slams existing regulations that flunk the benefit-cost test – something no administration, Republican or Democratic, has ever done. Second, whether the administration applies similar standards to regulations in the pipeline. And finally, whether the President uses his bully pulpit and political capital to move forward on long-stalled efforts for global trade liberalization.
(This post was also published on Forbes.com.)