Having led a campaign that was extraordinarily presidential, when it came to tackling his first major challenge in office, Obama was not presidential enough: he failed to take the policy by the scruff of the neck with the presidential hand on the tiller and see it through to approval every step of the way.

If ever there was a programme in U.S. history, which needed single-minded vision with a clear-cut outline of the future of the American economy and a determination to see it through, it was this.  But Obama was taken in by his own propaganda about the need for consensus. Certainly that is an admirable objective when setting national objectives or laying military plans but in most areas the Americans and their friends around the world are looking for leadership, firmness of purpose and a sense of certainty.

By handing over control of the package to his Democrat colleagues in the house he has allowed them and their Republican colleagues to prove not only that they do not fully understand the gravity of the situation but also that despite all the talk of the new politics they intend to govern in the same old way.

This they have done by tacking on billions of dollars in programmes and packages, which reek of the pork barrel, on to the main bill meeting the demands of local interests that have very little to do with rejuvenating and remodelling a flagging economy. This was a once-in-a-lifetime opportunity that could have set up the American economy for a new age.

In return for $787 billion in deficit-financed spending the president will achieve few, if any, of the objectives required to drag the U.S. economy out of the stupor created by the hangover from decades of over-indulgence in credit-fuelled spending.

Many of the provisions of the American Recovery and Reinvestment Act of 2009 will not feed through until 2011 and this will likely become apparent in time to make life difficult for Obama in the run-up to the mid-term elections due in 2010.

Certainly the line-by-line item spend produced by the president will fund some key objectives for the future of such things as energy policy with money for research into low-emission coal-fired power plants and $1.6 billion for work on high energy physics development and the creation of a smart power supply network.

But a vital opportunity has been lost to shift America into a more productive era of high technology activities and, perhaps most important of all, more productive manufacturing capacity to replace the highly unionised, high cost model it has at present.

When $15 million is slotted in for oversight of military spending and extensive funding for military housing and healthcare you know that local interests are at play and the Christmas Tree effect of attaching all sorts of unrelated spending provisions to a vital bill is alive and well.

This is where Obama should have taken a leaf out of the Bush playbook and gone for executive decisions unhindered by the concerns of either advisers or party. Sometimes consensus can be a drag on decisive policy making. Worse still, the new president is running the risk of arousing the worst fears of those concerned that the Democrats will slip back into old habits of spending unproductively. There are plenty of signs of that in this bill.
Unhappily, Obama has shed much of the radical clothing with which he won over the American people.

The American car industry would have been a good place to start to prove that he was really bringing new thinking to bear.

It does not require new thinking of any great profundity to realise that Detroit should be put out of its misery. That much has been clear for decades. Yet Obama has been suckered by General Motors and Chrysler into committing billions of dollars to 'saving' two dinosaurs that should have been broken down into more efficient units and reformed or allowed to die a natural death. The fact that both were seeking an additional $21.6 billion on top of the $14 billion the industry had already been promised last year should be a warning to Washington as if there were not already sufficient examples from around the world of why dying auto industries should be let go. The Chrysler cadaver has been resuscitated at least once before and yet the mummy is back again seeking rebirth. It is only a matter of time before the process is repeated.

The story is there in the figures.  How come no one in the Obama administration can read them in a nation rightly famed for focussing on the bottom line? Even in 2005 General Motors was taking almost a man/day — 6.4 hours — more than Toyota to make each car and it is hard to imagine that the position has not eroded since then. Of course comparisons are slightly unfair because GM is burdened by all sorts of legacy costs in healthcare and pensions that the relatively young Toyota company does not have to bear but who said life was fair? In any event, GM has been struggling to resolve these issues for decades without great success.

Health costs per vehicle for GM were $1,525 and for Toyota $201 in 2005 resulting in GM recording a loss of $2,331 per vehicle while Toyota made $1,488 on every car that rolled out the door. GM will halve its brand lines and cut back on the number of dealerships but it has a long way to go before it even approaches Toyota's efficiency in the latter department. Staffing levels, too, tell a vivid story with some 21,000 production workers in the U.S. employed by Toyota and 106,000 by GM while Toyota has fewer than half the white collar staff that GM employs.

With tax cuts and credits of $286 billion permitting the payment of cheques of either $400 or $800 per family, depending on income levels, the Obama plan seeks to put money back into the pockets of ordinary people. But the problem for the administration is that there is no guarantee that that money will be put back into the economy productively as opposed to being used to pay off credit card debt or to buy even more goods made in China.

Necessary though it may be from a political point of view, even the president's plan for the U.S. housing is not immediately going to put money back into the economy. Obama launched the programme in Arizona which has been one of the states worst hit in the sub-prime mortgage fiasco which first ignited the economic hiatus.

The latest figures for January showed the level of housing starts at a record low as the president pledged up to $275 billion to help stem a wave of home foreclosures helping an estimated nine million people to escape disaster; $50 billion of that is money already committed under the overall $787 billion plan but the scale of the sums on offer show how deeply the administration fears the potential fallout from housing as Credit Suisse predictions indicate that 8.1 million American homes could be repossessed by 2012. But isn't Obama just bailing out people who have behaved irresponsibly? Many critics claim that the programme will merely postpone the inevitable and say that it would be better and more efficient, in terms of correcting the market, to allow those who cannot afford their houses to lose them. It is hard to escape that impression: how could anyone being granted a 100 per cent mortgage when they were unemployed believe that it was a real-world transaction?

Ostensibly, the money will go to 'rescuing families who have played by the rules and acted responsibly,' by refinancing mortgages for homeowners who are now almost into negative equity.

So how does the bailout plan appear to the outside world and will its supposed benefits eventually feed through to a more vibrant U.S. economy? At this point no one really knows what will work but any spending seems better than a stand-pat stance by Washington.

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