For now, the highest-value chip is in Obama’s pile

The Obama transition is officially no longer ”flawless”, to use the word often invoked from the day after the election until just before Christmas. The mess over the nomination of Leon Panetta to head the CIA involved an uncharacteristic misstep by Barack Obama’s team. The New Mexico governor, Bill Richardson, the president-elect’s nominee to head commerce, awkwardly withdrew his name in light of a pending investigation into contributions to his gubernatorial campaign. And there’s the Rod Blagojevich-Roland Burris operetta.

But these are secondary hiccups.

The real killer was the December jobs report, showing the US economy lost 524 000 jobs during a month in which job numbers traditionally increase because of Christmas-related hiring. The December losses concluded a year in which the US economy lost more jobs than in any single year since 1945. If the transition period were a movie, the jobs-report release would be that implication-rich moment in the plot when the incidental music descends from major into minor key, the cymbals crash, the cellos crescendo and the violins switch to an alarming staccato. We’re in trouble.

So how is Obama handling it? Some say inadequately. Several economists, chief among them Nobel prize winner and New York Times columnist Paul Krugman, argue that the price tag of the stimulus package, $775-billion, is too small to caffeinate the economy to the needed degree. Senate Democrats groused last week when Obama announced around $300-billion of that would be tax cuts rather than spending. Spending produces more economic activity than cuts, at least in the short-term, but Obama wants to throw the Republicans a bone and get their votes for his package. Republicans, however, aren’t responding to the gesture all that graciously, since they’re not particularly thrilled at the idea of $475bn in new government spending.

It’s a delicate high-wire act. Many presidents have learned the hard way that Congress, especially the Senate, serves as the cemetery for grand presidential schemes. If Obama and his aides miscalculate this committee chairman’s hunger for a new bridge in their district or that senator’s fondness for soybean subsidies, the package could be bottled up for weeks.

But passing it quickly is of vital importance, for substantive reasons (to get the economy cranking as quickly as possible), and political ones (to get unemployment, which is expected to rise dramatically, back down to acceptable levels by the time of the midterm elections in November 2010).

Obama and his people get this. They are nothing if not learners from others’ past mistakes. The new president will not, for example, demand a quick change to the policy about gays serving openly in the military, as Bill Clinton did. He’ll address that, but later this year. And the team is also well aware of the blunders both Clintons made on healthcare reform in not acting deferentially enough toward key senators. I would be surprised if they reprised those errors of the past.

Of course, they might make an entirely new set of errors that we can’t yet identify. But here’s what I think Obama is up to.

He has shown time and again that unique skill of being able to guide people toward his desired conclusion with what I will call indirect direction. When the issue was his race, his name, his religion, his inexperience or what have you, he rarely (except in the big ”race speech”) tried to assuage voters by addressing these points directly. After the financial crisis hit in mid-September, for example, he rarely said, ”Yes, I can handle this, and here’s why.” He laid out a few proposals, let his superior debate performances speak for themselves — and let the public watch John McCain flail. The voters reached his desired conclusion (that he was better prepared to handle the crisis) without his having to write it across the sky in letters.

On the stimulus package, I guess he wants about the same thing Krugman and other liberal economists want, if he can get it. Something closer to a trillion, with more spending and less in tax cuts. But he knows he’s far better off if he just lets Congress do that. Let John Kerry bash him for proposing a $3 000 tax credit to businesses for each job they create. That credit is a poker chip. If Kerry can get it off the table, more power to him. But it’s much better for Obama to let Kerry do it than for him to do it. That lets Kerry be seen as the liberal — which is no skin off Kerry’s nose, since he represents Massachusetts and has a seat for life — and lets Obama be seen as more centrist.

It’s canny poker playing, though by no means a formula for sure success. There is one final factor Obama may be banking on — a near-unanimity across the country that we have to get behind him and let him try. I was just in my hometown of Morgantown, West Virginia, and chatted with old friends, people from both parties. They’re all nervous as hell, and no one was talking in the normal partisan way. There’s too much at stake. That’s the highest-value chip on the table, and for now it’s in Obama’s pile.