Front-Page Surprise From David Sanger: Is Obama Over-Reaching on Govt. Takeovers?

Has David Sanger, a veteran reporter whose opposition to Bush's supposedly reckless foreign policy seeped from his stories, been reborn as an Tea Party activist? Not quite, but Sanger's Friday A1 "news analysis" was surprising, especially from a reporter who usually concentrates on foreign affairs: "Strong Steps Or Oversteps? BP Is Latest Example Of Tactic by Obama."

Sanger took a wide view of Obama's first 18 months in office and the many and varied ways the administration has insinuated itself into the private economy.

First there was General Motors, whose chief executive was summarily dismissed by the White House shortly before the government became the company's majority shareholder. Chrysler was forced into a merger. At the banks that received government bailouts, executive pay was curbed; at insurance companies seeking to jack up premiums, scathing criticism led to rollbacks.

But President Obama's successful move to force BP to establish a $20 billion compensation fund that the company will have no voice in allocating - just a down payment, the president insisted - may have been the most vivid example of what he recently called his determination to step in and do "what individuals couldn't do and corporations wouldn't do."

With that display of raw arm-twisting, Mr. Obama reinvigorated a debate about the renewed reach of government power, or, alternatively, the power of government overreach. It is an argument that has come to define Mr. Obama's first 18 months in office, and one that Mr. Obama clearly hopes to make a central issue in November's midterm elections.


The Wall Street executives who needed the government to prop them up, but still thought their services were worth millions a year, were cast by Mr. Obama as a shameless privileged class. Toyota was described as seeking profits over safety; Wellpoint, the insurance giant, was castigated for seeking to insulate itself from the new health care legislation by taking actions that the law will soon prohibit.

Against that backdrop, forcing BP to take a $20 billion bath - even before the inevitable lawsuits are filed - seemed an easy decision. Mr. Obama had no legal basis for the demand, but concluded he did not need one. "He had a power other presidents have used - you call it jawboning," Mr. Emanuel said.

The question is whether the cumulative effects of these actions create an impression that, over the long run, may make it harder to persuade both American and foreign corporations to cooperate with Mr. Obama's program to reinvest and reinvigorate the American economy.

Sanger compared Obama's strategy to that of FDR Franklin D. Roosevelt, who claimed that "forces of selfishness and of lust for power" had "met their master" under his administration.

It is in the "master" role, however, that Mr. Obama and his advisers know he is on dangerous ground. He has responded to his critics by making the case that every time American business predicted ruin from government intervention - that "Social Security would lead to socialism, and that Medicare was a government takeover" - American capitalism survived.

Sanger's concluding sentence has a skeptical tone - has Obama overreached? - that one hardly ever encounters in the Times.

Along the way, he will have to avoid painting with such a broad brush that foreign and domestic investors come to view the United States as a too risky place to do business, a country where big mistakes can lead to vilification and, perhaps, bankruptcy.

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