1) The tax cut that failed: The administration likes to brag that the stimulus was comprised substantially of tax cuts. Look how bipartisan! Only the tax cut they included was the Making Work Pay tax cut from the campaign. You don't get bipartisan points for doing the thing you wanted to do anyway, and they didn't. They also designed the tax cut to release slowly and be completely invisible to the people receiving it. This, they hoped, would make people spend more of the money. It's hard to say if it worked (Jared Bernstein convinced me that survey data isn't enough to say it didn't work). But politically, it's left only one out of 10 Americans aware that the Obama administration lowered their taxes.
2) Neglecting the Federal Reserve: Matthew Yglesias has made this critique better than I could've, so I'll outsource it to him. "A party whose leaders realized that economic results were the most important driver of public opinion wouldn't have renominated a conservative Republican to head the Federal Reserve. Even more astoundingly, having given Ben Bernanke a second term in office, the Obama administration didn't get around to nominating anyone to fill the other vacant posts on the Federal Reserve Board until April 2010."
3) The Fiscal Commission: I've come to see the "National Commission on Fiscal Responsibility and Reform" as a major error on at least a few levels. Remember, first, that it's a powerless executive body created after Republicans filibustered a bill that would've created a similar, but more powerful, commission in Congress. They did that because they didn't want to compromise on taxes. They're not going to compromise in the president's commission, either. So on the simplest level, the commission will fail, but in order to pretend it hasn't failed, it'll probably release some Social Security cuts that we probably shouldn't make anyway.
Worse, creating the Fiscal Commission accepted the argument that the problem is the deficit. It isn't. If the president wanted to change the economic conversation and show himself thinking long-term, we should've had an effort focused on a long-term growth strategy, in which fiscal sustainability would've been one pillar, but not the only pillar. Instead, the Commission's report will be a battle over deficit reduction in general and, most likely, Social Security in particular. Those are battles that Democrats -- and the economy -- will lose even if they win. How much better to have offered some deal this year pairing long-term deficit reduction with immediate stimulus, or to be looking towards a report next year that would be about growth and reform, not just about how best to manage contraction.
4) The American Recovery and Reinvestment Act: I struggle with this one. The stimulus included measures designed to create jobs and help the economy immediately and measures designed to make investments and strengthen the economy over the longer-term. As a matter of policy, I fully support that. As a matter of politics, I think it made the bill look worse to people who didn't understand -- or support -- the dual mandate. Splitting the bills in two would've allowed for a cleaner stimulus, but it might have meant we didn't get the second bill -- and we needed it. Forcing the medical system to move towards electronic medical records was incredibly important. Which is why I'm conflicted on this.
5) The size and sale of the stimulus: By now, this is a familiar critique. Christina Romer thought we needed $1.2 trillion in stimulus. Then the recession turned out to be larger than we'd calculated. Then we got just $787 billion -- and not all of that was stimulus. I'm not here to argue about whether the administration could've gotten more by working Congress harder. I'm not smarter than Rahm Emanuel or Phil Schiliro. But the fact that this was a half-measure should have been communicated to the American people. Instead, we got figures and rhetoric arguing that a stimulus of this size would be sufficient. When it wasn't, the idea itself got discredited.
6) It's the procedure, stupid: Here are four words we've really not heard out of the Obama administration: "Up-or-down vote." Obama has spoken occasionally about the filibuster, but the relentless perversion of the legislative process has not been made into a sufficient issue. The administration complains that they can only do what they can do, and they'd have done more if not for Congress, but there's been little effort and no political capital spent explaining -- much less changing -- the impediments to action. Many Americans think the administration has failed, and they've hardly even been exposed to the argument that they were actually stopped. Republican obstruction has been predictable since, at the least, the stimulus vote, but they never figured out a way to force the issue, or even really make it part of the story.
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