Obama's Radical Transformation of America: Year One. Joshua Muravchik

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      IN AN INTERVIEW broadcast just before Christmas 2009, Oprah Winfrey asked Barack Obama to give himself a report card for his first year in office. Obama answered that he deserved a B-plus, then added that he would raise it to an A-minus if health-care legislation passed. Either way, Obama’s assessment was wildly at odds with that of the American voters, who give the president lower approval ratings after his first year than any other recent occupant of the Oval Office. If poll numbers were grades, Obama’s would be a D.

      In his inaugural address, the president gave us what now must be interpreted as a warning when he said, “Starting today, we must . . . begin again the work of remaking America.” Indeed, he has tried to radically transform the nation’s financial and social institutions and its foreign policy. And that has been a problem - for him and for us.

      Obama implied in that first speech that his grandiose goal of remaking America would mean altering the balance between the public and private sectors: “The question we ask today is not whether our government is too big or too small, but whether it works.” But since no one - save perhaps Venezuela’s Hugo Chávez - worries about government being “too small,” the import of this statement was to challenge the consensus articulated in Bill Clinton’s 1997 declaration that “the era of big government is over.” This, Obama suggested, was among the “worn-out dogmas [that] for too long have strangled our politics.” Instead, if new government programs seemed promising, “we intend to move forward.”

       If poll numbers were grades, Obama’s would be a D.

      Obama made only fleeting references to the world beyond our shores in the speech marking his assumption of the presidency, saying, “Our power alone cannot protect us, nor does it entitle us to do as we please. . . . [O]ur security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.” These pinched strictures about our foreign policy provided a dramatic contrast to Obama’s vaunting ambitions for domestic policy that seemed tempered very little by “humility and restraint.”

      When he presented his recovery program to Congress one month later, the president stressed looking beyond the immediate crisis: “Now is the time to act boldly and wisely - to not only revive this economy, but to build a new foundation for lasting prosperity.” He spoke in soaring rhetoric of “sav[ing] our planet from the ravages of climate change,” “launch[ing] a new effort to [find] a cure for cancer in our time,” and other grand projects.

      Obama seemed to view America’s dire economic straits not only as a challenge but also as an opening for programs that Congress and the public would reject in normal times. As his Chief of Staff Rahm Emanuel told The New York Times : “Rule one: Never allow a crisis to go to waste. They are opportunities to do big things.” The three “big things” that Obama had mentioned in his inaugural address were health-care reform, ending dependence on fossil fuels, and college education for all.

      Despite these visionary goals, Obama promised in his economic address that “if your family earns less than ^$250,000 a year, you will not see your taxes increased a single dime.” At the same time, he pledged “to cut the deficit in half by the end of my first term.” How he might square this circle was unexplained, but Obama topped it off by pledging “to restor[e] a sense of honesty and accountability to our budget.” This made it all the more embarrassing when, within months, the Congressional Budget Office (CBO) estimated that, despite Obama’s promise about taxes, the administration’s cap-and-trade energy tax would cost the average American household ^$1,600 per year, and his health-care plans would raise the deficit by hundreds of billions and the national debt eventually by trillions.

       Obama seemed to view America’s dire economic straits not only as a challenge but also as an opening for programs that Congress and the public would reject in normal times.

      Despite these daunting numbers, Obama decided to make health-care overhaul the centerpiece of his “new foundation” for the country. The size and cost of the plan was reduced after the CBO’s bombshell, but when polls showed unrelenting public skepticism, Obama made another major address to Congress to shore up support. This time he turned angry and combative: “I will not waste time with those who have made the calculation that it’s better politics to kill this plan than to improve it. I won’t stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what’s in this plan, we will call you out.” Thus, having traduced and threatened his opponents, he added with homiletic sanctimony: “[W]hen . . . we can no longer engage in a civil conversation with each other . . . [w]e lose something essential about ourselves.”

      “Given all the misinformation that’s been spread over the past few months, I realize that many Americans have grown nervous about reform,” the president said. But this only begged the question of why the electorate, which had not been swayed by the many attacks on Obama - both fair and foul - during the presidential campaign, could now be so easily manipulated, and why the public seemed to oppose Obama’s proposals more the longer the debate went on. The likely answer has nothing to do with “misinformation,” but rather with the fact that Americans simply do not share Obama’s underlying attitude about government or his appetite for a radical transformation of the country.

      The comprehensible motive for health-care reform is that some 50 million Americans lack insurance. Medicaid subsidizes only the very poor, leaving many other needy souls uncovered. A strong compassionate case can be made for subsidizing them. This would cost a lot, but Obama might have argued courageously that it was our moral responsibility.

      Instead, he claimed his proposals will save money. He played down benefits for poor people, insisting that the primary reason for health-care reform was to improve our budgetary and economic picture. “[O]ur health care problem is our deficit problem,” he asserted; “changes in the way we deliver health care . . . can reduce costs for everybody.”

      But how can this be? Covering the current uninsured means that our health-care system will be providing more and better services. This will cost more, not less. Costs can be capped by fiat, but this would inevitably reduce the quality of care. The government may be able to set fees, but it cannot require unprofitable private hospitals to remain open or compel talented people to become medical professionals.

      If providers are not to be squeezed, where will the savings be found? Obama has lambasted insurance companies, accusing them of “pad[ding] their profits” and of “excessive administrative costs and executive salaries.” But profit margins and salaries of insurance companies are not out of line with those of other industries.

      At times, Obama has gone as far as to suggest that profit per se is an unnecessary cost, a loss to the system. But a century of experience with every kind of socialism, from east to west and north to south, has provided abundant evidence that replacing the profit motive with government-run companies makes everything worse.

      If private, for-profit insurance is not to be eliminated, we are back to the question of how to finance the subsidies, not to mention how to produce Obama’s promised “savings.” Despite his attacks on insurance companies, Obama does not claim that they can be the main source of cost reduction. Rather, he says his plans will mostly be paid for by “eliminat [ing] . . . hundreds of billions of dollars in waste and fraud [and] unwarranted subsidies . . . to insurance companies.”