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Yash Gupta
Business School Dean

Yash Gupta

Yash Gupta is Professor and Dean of The Johns Hopkins Carey Business School.

Obama's authority is suffering

Question: In a high-stakes game of political chicken, President Obama appears to have bowed to Republican threats to block the extension of tax cuts to the middle class--and all other legislation--unless a similar tax cut for high-income households was also included. Is this realistic bipartisan compromise after a sobering election, or is it a sign of weak leadership?

Leaders working in any arena, whether the public or private sector, must know how to negotiate, how to find compromises, how to reach consensus. At the same time, the best leaders never compromise on their core principles. That's one thing that makes us admire our finest leaders--when the heat is on, they don't forsake their convictions.

Unfortunately for President Obama, we can recall how clearly he stated during the election campaign that he would block tax breaks for people making more than $250,000. Now he has retreated on this issue, and his moral authority suffers as a result. He's letting the minority party set his agenda. What's to stop them from continuing in this vein when they see that the president can be pushed to his limit and then beyond it?

Meanwhile, the Republicans argue against taxing people who earn more than $250,000 because, they say, it would hurt the small-business person. But most small businesses don't make that much. So what's their motivation, other than helping rich friends get richer? Then the GOP says we shouldn't allow the unemployment benefit unless we find a way to pay for it, so that's hanging in the balance while the jobless rate climbs. What does all this say about the values of our leaders in Washington? This isn't how we built the nation.

Independent sources such as the nonpartisan Congressional Budget Office have stated that tax cuts for the wealthy are "ineffective." It also believes that one of the most effective ways to get the economy back on track is to keep the unemployment benefits. Each dollar spent on unemployment adds a $1.61 jolt to the economy, significantly higher than tax breaks. Those checks get cashed and pay for essentials that are needed to keep this country going. Tax cuts have not been known to achieve this--especially in the upper echelon of society. That's why the president should have stood firm. Also, what about groups such as the Patriotic Millionaires for Fiscal Strength? This group of 40-plus millionaires has taken a stand for raising taxes. This appropriately named group realizes what it takes to solve the real financial problems we face. Our government can learn from them.

At the end of the day, it's poor leadership from both ends of Pennsylvania Avenue. The Republicans appear content to be the Party of "No". They seem to have given up on the idea of civil discourse, and we see no agenda of real substance from them. As for President Obama, even his supporters are wondering when he's going to take a strong stand for his convictions and principles. Where is the shared suffering for the sake of our society? The shared commitment to solving the very real problems we face, not the least of which is an ever-growing debt?

Maybe the president will learn a lesson from the past week, when he threw the GOP a bone by freezing federal wages, and then the next day the Republicans upped their demands on the tax breaks. So much for civil back-and-forth. The president looks bad for making sacrifices and gestures, as with the federal wage freeze, and getting nothing in return from the Republicans. All he got was the back of their hand. Who knows. Maybe this will be the slap that wakes the president from his state of placidity.

By Yash Gupta

 |  December 7, 2010; 10:13 AM ET
Category:  Accomplishing Goals , Congressional leadership , Crisis leadership , Economic crisis , Government leadership , Making mistakes , Managing Crises , Political leadership , Presidential leadership , Self-Sacrifice Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: Not the right deal to cut | Next: The tax cuts show progress


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The Republicans are willing to "work" with Obama the same way a five-year-old boy with a magnifying glass is willing to "work" with ants. Drink Your Alcohol, Watch Your TeeVee (Everything is True: that's why its on TeeVee), and above all.... FAITH IN THE SYSTEM. NOW you're defending the Homeland

Posted by: AlcoholTelevisionFaithintheSystem | December 12, 2010 12:57 AM
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Obama is a flop. I knew he had no experience for the presidency. He was a media driven event. The media were in the tank for Obama for one reason. He is black. Qualification did not matter.

I have yet to see any real leadership from Obama. It must be due to the fact that he cannot lead.

Posted by: mmm1110 | December 11, 2010 10:11 PM
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Dean Gupta criticizes the President for failure of leadership. Since the former is an academic one is prompted to ask if it appropriate for him to tell us as readers what to think rather than how to think about the problem. It seems to me that his contribution speaks volumes about the failings of many academics when they take one side in a controversy and do little to help the undecided learn how to think about the issue so that they can form their own opinions. We could use less indoctrination and more education in the art of critical thinking.

Posted by: jweley | December 11, 2010 10:43 AM
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I voted for President Obama. I offered to work in New Orleans for 3 years helping to coordinate a massive development effort that he would be able to point to as a major statement of American capability. However - it is now clear to me that President Obama does not have the vision to see how to make a statement - nor does he have the ability to hold someone's feet to the fire when needed. Unfortunately he is my worst nightmare and I can not vote for him again. I would rather SIT OUT THE NEXT ELECTION THAN VOTE FOR HIM.

Posted by: ken43 | December 11, 2010 10:39 AM
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The president is addicted to nicotine. Therefore he can not smoke in meetings, but can cut them short in order to get his next nicotine hit as soon as possible. So, he caves in at meeting so he can go suck his next cigarette. He can not stand tall for any of us. I am black and disappointed.

Posted by: sarahannson | December 9, 2010 3:02 AM
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Two comments:
1. We elected this man to change the way Washington does business. This is the first deal in two years that even comes close. To have him behave otherwise does not support that promise.

2. To me, this is an indication that Hillary was right. He was/is not "ready" to be president.

Posted by: Talltimber41 | December 7, 2010 12:24 PM
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The President lost the most important moment to stand tall and demand respect as our leader. The Republicans are laughing all the way to the bank (with their tax money in hand).

Posted by: fairness3 | December 7, 2010 12:22 PM
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