News Analysis When President Obama’s popularity dove below 50 percent in the polls, critics saw it as a sign that the president had simply stumbled during his first year in office. When he lost actor Matt Damon, however, just exactly how much he had stumbled finally came into focus.
Damon was one of the most visible and ardent celebrities campaigning for the president during the election. More recently, however, the actor told The New York Daily News that he was “disappointed” after the president’s first year in office.
“Everyone feels a little let down, because on some level, people expected all their problems to go away,” Damon said.
Indeed, perhaps Obama’s biggest shortcoming during his first year in office may have been his inability to manage expectations — not that he didn’t try. He repeatedly warned about the depths of the nation’s ills, and the lack of easy solutions to correct problems that have been festering, in many cases, for decades.
But his message was lost on the public for reasons that can be traced to the nature of his campaign, the complexity of the issues he faced entering office, and his underestimation of the impact of the hard-right’s misinformation campaign against health care reform.
The president set the stage for failed expectations, especially among ardent supporters, by promising more sweeping change on the campaign trail than he could deliver once elected. In fact, Obama moved noticeably to the right once in office.
His decision to drop into the background and let Congress hash out the details of the health care reform bill caused confusion and made the effort appear leaderless, especially since the public was expecting a proposal directly from the Oval Office.
And it’s been that lack of clear direction and strong leadership from the president that has left the issue vulnerable to right-wing misinformation.
One example of how that confusion over the issues has manifested itself was when seniors turned out at boisterous town hall meetings to protest the government’s so-called “take over” of health care, yet fiercely defended Medicare, a government-run program.
The president’s misjudgment of his role, his over-extended plea for bi-partisanship, and slow response to the misinformation campaign nearly cost him the bill. It also hurt his approval rating.
So how does his track record compare?
During his first year in office, Obama averaged a 57 percent approval rating, according to Gallup. Meanwhile, former presidents Dwight D. Eisenhower, John F. Kennedy, Richard Nixon, Jimmy Carter, George H.W. Bush and George W. Bush all ended their first year in office with higher job approval totals.
But former President Ronald Reagan, considered the greatest Republican president in the modern era, tied Obama at 57 percent and Bill Clinton, the only president to leave office with the federal budget in surplus, record employment, and a booming economy, scored even lower, at 49 percent.
From a small business perspective, Obama’s biggest shortcoming was his failure to move quickly enough to recognize Main Street’s problems and to craft more effective solutions to the credit crisis.
In retrospect, his signature program to boost small business credit, the $30 billion Small Business Lending Fund, looks more like a back-door effort to bail out community banks. It funnels low-cost capital to community banks along with incentives to increase their small business loans beyond 2009 levels. But with 40 percent of the nation’s small banks facing significant over-exposure on troubled commercial loan portfolios, it remains to be seen how much money will actually be lent. It could turn out that most of that money will be socked away to build up loan-loss reserves, a move mirroring what the big banks did.
While he has significantly bolstered lending programs at the Small Business Administration, the effort is too small to have a significant effect on the credit crisis. Only about 1 percent of small firms are involved with SBA loan programs.
The president, so far, has steered away from more dramatic efforts, such as a program to make direct loans to small businesses, even though Democrats in the House are pushing legislation to do so.
The administration has also yet to crack the code on the nation’s real estate crisis. A record 2.8 million households were threatened with foreclosure last year, according to RealtyTrac, an agency that tracks the data. The number is expected to rise to more than 3 million homes this year, while an untold number of mortgages are under water.
The problem directly impacts small businesses, because home equity loans were one of the biggest sources of small business financing before the downturn. The president’s program to modify mortgages has failed to put a dent in the problem.
In that sense, small businesses probably feel a lot like Matt Damon. They entered the year with high hopes and suffered a failure of expectations.
Read Part 3: What Obama Should Do for Small Businesses