[TheMercenary]

An insightful commentary:

By Gerald F. Seib

A giant political gamble begins when President Barack Obama signs the economic stimulus plan into law Tuesday — and the fate of that gamble rests heavily on the shoulders of the man doing the signing.

Much as the success of the Reagan Revolution a generation ago depended on the resilience and credibility of the president who authored it, so too will the Obama Offensive rise or fall in voters’ eyes on the resilience and credibility of the president now putting his stamp on it.

In the 1980s, the real economy was so awful that Ronald Reagan’s supporters for almost two years looked in vain for proof that his gamble of a giant tax cut and a big increase in defense spending would work. Mr. Reagan signed his economic plan into law in August 1981, and unemployment promptly began to rise, and continued to do so for a year and a half. Three years later, it still was higher than when the Reagan plan was enacted. So nervous was his party in Congress that it decided to take back some of that Reagan tax cut a year after it was passed.

Only the personal popularity and sheer optimistic resolve of Mr. Reagan — the fabled Great Communicator — saw his party through the economic darkness and political turbulence and into the light that followed.

And thus it is today. Because the economy is so bad, gauging the success or failure of the stimulus will be hard to do for a long time. It’s likely that much of the argument on behalf of the stimulus in coming months won’t be that it has made things better, but that it has stopped things from getting even worse — a tough political argument to make.

Under those conditions, the public’s faith in the great experiment — and its political impact — will turn almost entirely on how much Mr. Obama is trusted. We are about to see whether we have the Great Communicator II.

It didn’t have to turn out this way. The politics of the economy would look vastly different if Republicans had bought into the Democrats’ economic stimulus plan, making it a joint undertaking, with political blame or credit spread more broadly and thinly as the months ahead unfold.

Instead, Republicans have stood in nearly unanimous opposition to the stimulus plan, and say they have rediscovered their voice and philosophical bearings by doing so.

White House aides, meanwhile, say Republicans have made a political mistake of historic proportions by opposing an economic rescue effort and appearing partisan in the process.

Obviously, both sides can’t be right. Just as obviously, neither side can know for sure right now. All that is certain is this: As a result of those diametrically opposed partisan calculations, the economic stimulus package now represents one of the biggest rolls of the dice of recent times.

Part of the outcome depends on whether there are glimmers of evidence that $787 billion in stimulus spending is having a real effect. The danger for the president and his party is that any such glimmers could be obscured by larger waves of bad news that Mr. Obama himself warns are still coming. In that sense, Republicans will have the easier case to make.

Part of the political equation will be determined by how effectively the two sides go about convincing the country of the virtue of their position. Already liberal groups have been pounding Republicans for standing in the way of recovery, and the Republican message machine has been in full attack mode against the stimulus package as an example of liberal ideology run amok.

Part of the political equation will be determined not by the stimulus plan at all, but by the effectiveness of that other big Obama initiative — the effort to spend more than $300 billion in remaining financial-rescue funds to stabilize the banking system and get credit flowing again.

And part of the outcome of this gamble depends on whether voters perceive Republican opposition as a principled stand against pointless spending, or an example of simple obstructionism. On that front the evidence is mixed, and Americans’ verdict may depend as much on how the two parties behave going forward as on anything in the past. For its part, the White House insists that it intends to reach out to Republicans so it isn’t seen as the cause of a breakdown in comity. “We are going to kill them with kindness,” says one senior Obama aide.

But ultimately, the partisan nature of the stimulus debate means Mr. Obama himself will do more than any statistic or maneuver to shape views of the great experiment. He starts with some significant assets. His job approval rating, despite recent rough sledding, continues in the mid-60% range, slightly above where Mr. Reagan’s was when he signed his economic package into law. The president has more credibility with voters than does Congress or either party.

But the sledding won’t be smooth. Mr. Reagan’s popularity dropped steadily through the year after his program was enacted, and his party lost 26 House seats in the next election. Have faith, Mr. Reagan asked his party and his country. Mr. Obama is about to try to make the same request, under conditions that are even more trying.

http://blogs.wsj.com/capitaljournal/...g?mod=washwire