Whoever is declared the winner, the outcome of the Massachusetts senatorial election is neither a mandate for President Obamaís liberal agenda nor a license for a return to status quo ante of George Bush.
The fact that a conservative put Ted Kennedyís seat at play is a repudiation of Democrats recent partisan governing style, and an agenda that is simply out of step with the real change Americans want.
From health care to jobs to the banks, itís time for Democrats to stop accusing critics of deceiving the public and to step back ask what voters will accept.
On health care, Americans donít want a comprehensive federal takeover and higher taxes. To cover the uninsured, they would support reforms that make Medicaid and other federal programs for the poor much more cost efficient, and changes that lower prices and donít more-severely ration access for middle class Americans already paying for health care.
A new health care bill should focus on lowering drug prices to those paid by health systems in other high income counties like Germany and Canada, ending the inefficiencies imposed by a mindless malpractice system other advanced countries donít have, and aligning doctors pay and insurance company administrative costs with those in Europe.
Real reform should not require new taxes or higher premiums, but rather should lower the cost of health careóthatís the yardstick the president should use, not budget neutrality.
Regarding unemployment, the president needs to acknowledge that the stimulus package will not deliver the four million jobs promised, and that fanciful dreams of replacing eight or nine million jobs over three years with new opportunities in green industries and smart buildings are just thatófanciful dreams.
The president may be right that American leadership in green industries is essential to American economic leadership in the future, but in the here and now, green industries will only provide one-tenth of the jobs needed, at best, to get unemployment down to acceptable levels.
Obama must tackle the trade deficit. For many years to come, Americans will still use oil and buy traditional manufactured products like cars, computers and coffee makers. Unless Americans export more of those products, or import few of them, consumer spending cannot create enough demand for U.S. products to provide enough jobs for Americans.
Alternative energy is important but Americans will continue using fossil fuels for a long time. The United States has abundant, untapped offshore oil and huge on-shore natural gas. Developing those would raise taxes to reduce the federal deficit and create jobs in drilling, refining and supporting industries.
Donít abandon new green technologies, but donít forget that medium-term choice is between importing oil and borrowing from China to pay for it, or using what we have and becoming more self reliant.
China undervalues its currency to subsidize its products on U.S. store shelves, and keep out U.S. exports. Itís time to bite the bullet. Either China agrees to revalue the yuan to rebalance trade, or President Obama should tax the conversion of dollars into yuan to effect the same change.
Finally, the banks are not lending to worthy homeowners and businesses. Wall Street is again recklessly trading in derivatives and questionable securities, and paying huge bonuses. All of this accomplished with $1.5 trillion in near zero interest loans from the Federal Reserveóan amount much larger and more important than the TARP.
Itís time to separate real banks, who take deposits and make loans, and whose solvency the public must guarantee, from the casinos at Goldman Sachs and other financial houses of questionable ethical judgment.
Regulate the banks and their pay, and let the casinos pay executives what they like but donít let them have access to the Federal Reserve or issue money market accounts or anything that looks like a bank account. Require those writing derivatives back those up with adequate funds to pay out potential losses and donít let banks own securities.
There you have itóbank reform in less than 100 words, not 2000 pages.
If the President lived up to his promise and embraced such an agenda, the drug companies, insurance executives, doctors, tort lawyers, and bankers would make Washington lobbyists the richest people on the planet.
It would also leave aghast, Ivy League liberal and conservative economists, who alternate advising Washington, but they have given us enough bad advice.
Itís time the President the champion the folks that elected him. Thatís the message of from Massachusetts.
Peter Morici is a professor at the Smith School of Business, University of
Maryland School, and former Chief Economist at the U.S. International Trade