Joe Klein sums it up nicely. It's not that the president is fixated with politics - that's what politicians are about. It's just that he's not very good at it.
The President simply isn't a top-draw politician. If he were, we'd be talking about the Obama tax cuts-there have been two big ones-instead of the "failed" Obama stimulus package; the Obama Senior Citizen prescription drug benefit (he closed the donut hole), universal health coverage that you can never lose instead of death panels; the Detroit auto boom as a path to a revival of manufacturing. Most important, we'd be talking about jobs instead of deficits. We would never have played the Republican deficit follies these past nine months. He would be defining the political arena. Instead, the Republicans are.
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The fact is, everything is political and Obama tries to pretend that isn't so. His decision to step back on new smog rules will be hated by the left, ignored by the center, and pocketed by the right. But what if he had saved the announcement for a dramatic moment-his jobs speech, for example. What if he had said, "I hate to do this, and environmentalists are going to hate me for this, but we have an economic crisis here and we're going to have to put off these regulations until we get things rolling again." The left would still hate it, but the center-the people who actually decide presidential elections-would find it harder to ignore. And it would provide a rhetorical balance for the infrastructure spending that he plans to announce.