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For now, Obama's focus is on assembling a team to run the executive branch, and so far there have been few surprises.
Drawing mostly from old, experienced hands, Washington re-treads and even some Republicans, he has surrounded himself with those with more than a modicum of experience, people on whom he can count to conduct the business of government with a minimum of supervision. Despite arousing the predictable ire of the assortment of anti-establishment types, aging left-wing baby-boomers and young idealists who initially fueled his campaign, Obama has followed the path of most successful politicians by recognizing that progress is most often the result of governing from the center. Ideology is useful for winning elections, but governance is a product of surrounding oneself with smart operators.
Perhaps the most startling event of the past political week is not that he has reportedly asked Hillary Clinton to serve as Secretary of State but that she seems poised to accept. With palpable, dysfunctional leadership weakness in both houses, Clinton could quite easily become the dominant legislative force in Washington. She could wield substantial muscle, becoming a pivotal figure, perhaps ultimately rivaling in strength such legends as Lyndon Johnson and Everett Dirksen and securing both a legacy and a springboard to either future office or lifelong influence. Service as Secretary of State may be attractive from a number of perspectives, but there has been none in that office in recent memory who did anything after vacating the office other than make money on the lecture and influence-peddling circuit. Then again, maybe that's what it's all about.
As difficult as some of our national security challenges seem to be, few problems seems more intractable than the current economic situation. By the time Obama takes office, things are liable to be much worse, and it's not entirely clear that the federal government will be able to do much about it. The massive losses in the markets and the dislocations they have produced---trillions of dollars in personal and corporate wealth have literally evaporated---are less the result of mechanistic processes that can be remedied in some econometric manipulation than they are a crisis of confidence. There is potentially plenty of money around, but neither institutions nor investors are inclined to make it available until they have some confidence that their investments will not go down the drain.
Meanwhile, Washington is currently inclined to generate this confidence by supporting large-scale institutions like selected Wall Street firms and perhaps the auto industry. So far, this largesse has produced nothing positive, and more losses, deflation, and increased unemployment are all imminent. Foreign markets are also reeling, and we are witnessing a worldwide economic erosion. In late January, the situation will either have improved on its own or, more likely, the new American government will be forced to pass wide-ranging legislation of the type not seen in 75 years. Indeed, Obama's plan now calls for an enormous public works program that will employ millions of people. That will take the creative thought, cooperation and the enormous courage of both the White House and Congress, and it will cost plenty of money.
One of Barack Obama's major campaign promises was to raise taxes for those most able to pay them, but there is likely to be much less enthusiasm for this legislation than there was when he first started talking about it. For one thing, there will be far fewer households in the income bracket he targeted, and the hinge-point, originally $250,000 annually, will have to be lowered if he is to generate anything like the tax revenues originally anticipated. For another, while there is a simple and satisfying attractiveness in soaking rich people, it is often forgotten that wealthy people and corporations employ the rest of us, the ones whose taxes will not go up.
Other progressive proposals such as increasing capital gains tax rates or eliminating capital gains treatment entirely have proved to be counterproductive in weak economic situations like we have now. Higher taxes are a particularly corrosive disincentive to invest in people, equipment and business in general, and one possible outcome is that many of us will pay no taxes because we are unemployed.
All programs require money and none as much as universal health care. As attractive and desirable as free or inexpensive health care may seem to be, it is difficult to envision how the American economy, in pretty bad physical shape itself, can pay for it. Some savings may be realized from the military budget, but the Army and Marine Corps are slated to increase in size, and that will cost money. So will an increase in the force in Afghanistan. So will replacing the billions of dollars of equipment lost in Iraq. Even if most of the forces in Iraq will redeploy to their home stations and some savings thus realized, those troops will have to live and train somewhere, and huge savings are unlikely.
Improvements in medical and scientific research, raising the quality of education, perfecting technology for alternative energy, repairing our crumbling infrastructure and many other vital programs need to take place now because our well-being and security depend on them, but all of them cost money---and lots of it.
A decade ago, Bill Clinton grabbed the nation's attention with the observation, "It's the economy, stupid." It looks like it still is.
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Thanks. As much as an extremist as I am---and as we all tend to be on some subjects, especially as we get older---I find it useful to cut to basics, something we all learned as brand new soldiers.
