Obama’s Ozone Flip-Flop: Bad Policy and Bad Politics

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My lefty friends have been asking me: If I think President Obama has been so great for the earth, and I think his enviro critics are ungrateful whiners, then how do I defend his capitulation to industry on new smog regulations? And the answer is…I don’t. He ignored the science, threw the EPA under the bus, and double-crossed green groups who had held off on lawsuits based on administration promises.

All I can say is that it’s uncharacteristic. One of President Obama’s appealing qualities—although, arguably, a source of some of his problems—has been his stubborn insistence on a distinction between “governing” and “politicking.”  The ozone decision suggests to me that governing season is over for this term. Politicking season has begun.

Bryan Walsh has explained why White House claims that withdrawing their new ozone regulations had nothing to do with politics are “frankly ludicrous.” Industry was kicking and screaming that the rules would kill jobs, so the White House (now managed by former J.P. Morgan Chase executive William Daley, who wasn’t a fan of financial regulation either) apparently wanted to signal that its overarching concern is the economy, and that it feels the pain of businessmen who keep complaining about “uncertainty.” There are a lot of coal plants in swing states like Ohio.

Substantively, it’s a terrible decision. The new ozone regulations would not have gone into effect for at least a year, so the warnings of short-term job-killing were obviously overblown. The history of air-quality regulations suggests that industry would have figured out a way to comply at a reasonable cost in the medium term, saving lives and ensuring a healthier workforce. And even if you don’t think we need significantly stricter ozone rules, it was silly to give up a bargaining chip that could have been used in the more important fight over carbon emissions.

I’m skeptical of the politics, too, even in Ohio. Is this flip-flop going to convince the kind of people who believe our economic problems are caused by burdensome regulation (is that what caused the financial implosion of 2008?) and Obama-related “uncertainty” (unemployment has been high for three years on fears that Obama would resurrect Clinton-era tax rates on the rich?) rather than a crippling lack of demand (ding! ding!) that Obama is on their side? And is he sure he wants to pick a fight with environmentalists? They helped defeat Al Gore in 2000 because he wasn’t pure enough on Everglades issues.  And Obama isn’t Al Gore.

I suspect that politically, the real danger in this kind of crass political calculation is undermining what’s left of the Obama brand.  I’ve said before that the Obama campaign doesn’t seem to have a message for 2012.  It’s going to be hard to run on hope and change when unemployment is 9%. The argument that Obama’s policies prevented even worse outcomes, while true, would be an even harder sell. Presumably, the main message will be that his Republican opponent is an extremist nut—and chances are excellent that he’ll have a plausible case to make.  But it wouldn’t hurt to be able to argue at the same time that whether or not Americans agree with everything he did, Obama has always tried to do the right thing for the country. He said in his Inaugural Address that he would restore science to its rightful place.  “Under the bus” is not that place.

Obama is obviously a politician with political advisers and political calculations, but he really has promoted an administration culture of trying to figure out the best policy and let the political chips fall where they may. My favorite example is the little-noticed tax cuts in his stimulus bill, which were dribbled out through tiny weekly decreases in withholding instead of big rebate checks, because behavioral economists believe that people are a bit more likely to spend extra money when they don’t realize they’re getting it—even though any political operatives can see that people are a heck of a lot more likely to be grateful about the extra money when they do realize they’re getting it.

This is a different approach.  Maybe Obama thinks that ticking off ungrateful eco-freaks will enhance his credibility as a reasonable man. But people like clear air. And if they liked crass flip-floppery, right now they’d be enjoying President Kerry’s second term—or President Romney’s first.