Today is the one-year anniversary of the landmark stimulus bill which most economists agree has staved off a second Great Depression. The evidence that the stimulus has worked is overwhelming – the New York Times has an in-depth article looking at its actual impact on jobs, and an indispensable graphic showing a timeline of key economic indicators before and after its passage. There’s another beautiful chart based on job loss data from Dec 2007 to Jan 2010 which also makes the impact of the stimulus crystal clear. The recognition of the stimulus’ success isn’t just data-driven – Republican lawmakers who have publicly denounced it for political gain have been quietly and hypocritically scrambling for stimulus money for their districts – as documented by the Wall Street Journal and by the Washington Times.

The only real flaw in the stimulus bill was that it wasn’t big enough – and in a wasted effort at seeking bipartisan Republican support, included some of the largest tax cuts in the nation’s history (but no Republicans voted for it anyway).

And yet, not only is public opinion largely hardened in the perception that the stimulus is a failure, but Obama himself has suffered a major drop in his approval ratings, even to the point that a majority of respondents in a recent CNN poll felt he didn’t deserve a second term. That anti-incumbent attitude is largely the result of a perception that there hasn’t been enough change, that the new Administration hasn’t made progress on fixing the economy (undeservedly so) or health care (deservedly so).

Why hasn’t Obama been able to make his case for his achievement in his first year? It seems largely due to his reliance on the “Chicago Core” – a tiny coterie of four powerful advisers who see everything in “campaign mode” political calculation rather than “governing mode” policy and communication. The main argument and description of the structural problem is laid out in a massive insider piece by Financial Times bureau chief Edward Luce. It’s far too comprehensive to summarize in a few excerpts, but one anecdote is very illustrative of the problem – “the Obama Campaign goes to China.”

On Mr Obama’s November trip to China, members of the cabinet such as the Nobel prizewinning Stephen Chu, energy secretary, were left cooling their heels while Mr Gibbs, Mr Axelrod and Ms Jarrett were constantly at the president’s side.

The White House complained bitterly about what it saw as unfairly negative media coverage of a trip dubbed Mr Obama’s “G2” visit to China. But, as journalists were keenly aware, none of Mr Obama’s inner circle had any background in China. “We were about 40 vans down in the motorcade and got barely any time with the president,” says a senior official with extensive knowledge of the region. “It was like the Obama campaign was visiting China.”

Supplemental evidence to the Luce piece is provided by Steve Clemons, who concludes and summarizes:

…one thing essential to understand is that the kind of policy that smart strategists (…) would be putting forward is getting twisted either in the rough-and-tumble of a a team of rivals operation that is not working, or is being distorted by the Chicago political gang’s tactical advice that is seducing Obama towards a course that has not only violated deals he made with those who voted him into office but which is failing to hit any of the major strategic targets by which the administration will be historically measured.

President Obama needs to take stock quickly. Read the Luce piece. Be honest about what is happening. Read Plouffe’s smart book again. Send Rahm Emanuel back to the House in a senior role. Make Valerie Jarrett an important Ambassador. Keep Axelrod — but balance him with someone like Plouffe, and get back to putting good policy before short term politics.

Set up a Team B with diverse political and national security observers like Tom Daschle, John Podesta, Brent Scowcroft, Arianna Huffington, Fareed Zakaria, Katrina vanden Heuvel, John Harris, James Fallows, Chuck Hagel, Strobe Talbott, James Baker, Zbigniew Brzezinski, and others to give you a no-nonsense picture of what is going on.

And take action to fix the dysfunction of your office. Otherwise, the Obama brand will be totally bust in the very near term.

Another of the very few political commentators who have been talking about the Luce piece is Mark Schmitt at The American Prospect, who also offers his own insightful thoughts on the problem, namely that the Obama white house has embraced a “momentum” strategy instead of a patient grinding approach to governing. And Leslie Gelb in The Daily Beast also takes on the core dysfunction, making a solid case for Obama to replace Rahm as chief of staff.

Recall that Obama talked on the campaign trail about how he admired President Lincoln for his “team of rivals” approach to governing. There’s merit in that idea, as long as the team of rivals are interested in governing. Unfortunately, it seems that Obama’s team is more interested in campaigning – and that short-term tactical attitude is going to hurt Obama in the long run. It already has.

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