Obama: Yes We can

Obama's team has the right stuff | The Australian

The president-elect has political sense and policy nous

"YES we can" US president-elect Barack Obama assured everybody during the campaign. With his ministry of all the talents assuming its final form, we now know who the "we" is. And with Mr Obama pulling no punches about the state of the US economy this week, the expectations of what his team can accomplish are as large as the crisis they confront. Mr Obama inherits burdens of a size not seen since Franklin Delano Roosevelt became president in the depths of the Great Depression. But while Roosevelt assured everybody that they had nothing to fear but fear itself, there was plenty for Americans to be frightened about then. And there is now. Certainly, the US is not in anything approaching the crisis of the 1930s, when unemployment reached 25 per cent, when the economy shrank by a little less than half in the double-dip disaster of 1929-1933, and the second decline of 1937, which reversed three years of growth. But Mr Obama is still taking over a country in the mother of all messes, with an economy that could contract by 2 per cent this year. As he said this week, two million jobs have disappeared in the past year -- the worse figure in the lifetime of anybody who did not endure the Depression. And 2.8 million people who want full-time work are stuck in part-time employment. With manufacturing at a 28-year low, few of them are going to find the jobs they need. When declining taxes and increasing welfare expenditure are added to the vast amounts of money already spent bailing out banks and to the $US750billion stimulus Mr Obama has planned, it is obvious that Washington will fall ever deeper in debt. The federal budget deficit, which was $US450 billion in fiscal 2008, is expected to increase to $1.2 trillion in the 2009 financial year, accounting for 8.3 per cent of GDP, the highest share of the economy since the US funded the Allied war effort in World War II.

Even excluding the economic crisis, the Obama administration faces a plethora of problems that have defeated every president since Lyndon Baines Johnson launched his ambitious expansion of social services, "the great society" in the 1960s. Some 40 years on, the cost of pensions, plus relatively generous healthcare for the elderly, is about to hit the bottom line -- with the first of the baby boomers beginning to retire. According to the Congressional Budget Office, as the number of retired people increases, existing old-age welfare arrangements could lead to a public debt of 400 per cent of GDP by mid-century. But none of this upsets Americans as what happens to ordinary people who fall ill. The US devotes 15.9 per cent of GDP to medicine, the world's highest figure, yet 46 million people have no health insurance. It is a national scandal, which, everybody agrees, must be addressed, but nobody knows how. Incoming secretary of state Hillary Clinton thought she did, but the botched plan she came up with crippled her policy credibility and did a great deal of damage to her husband during his first term as president. The fact that Mr Obama has given his welfare secretary, former Democrat senator Tom Daschle, carriage of healthcare reform ensures there will be no repeat of Senator Clinton's mistake of trying to fix the system from the White House. Even so, there is one measure on which Americans will judge the president-elect -- the cost of medical care for people who are neither old nor affluent.

The expectations on Mr Obama are such that the first 100 days of his administration will go a long way to deciding whether, like FDR, he wins a triumphant second term or, like Jimmy Carter, another Democrat to govern in hard times, he endures the ignominy of being a one-term president. This does not mean that people expect Mr Obama to save the country by May and he is already warning that he will not work miracles in mere months. But it is also obvious he understands that, starting from his inaugural address in 10 days' time, the American people must have good reason to believe that the Obama administration is calm and competent and doing the best possible job to control the crisis. To prove it, he has already moved quickly to assemble an administration. Where previous presidents took many months to decide on key appointments, Mr Obama has filled almost all of the important posts before he actually enters office. And while some of his picks are not popular, notably the choice of Leon Panetta to run the CIA, the size of Mr Obama's election win gives him the credibility to demand that the Democrat majority in the house and Senate support his selections.

The speed and savvy of the selection process augurs well for the Obama White House. It demonstrates the president-elect's indifference to party allegiance, even personal loyalty in choosing his advisers. Certainly, there is a tradition of presidents picking people from their opponent's party, Roosevelt appointed former Republican secretary of state Henry Stimson to run the defence effort in WWII. However, it is still a bold move to leave Robert Gates, Defence Secretary in the outgoing Bush administration, in place. Mr Gates is not tainted by the incompetence of the early stages of the Iraq occupation. That shame falls on his predecessor, Donald Rumsfeld, but his presence at the cabinet table will offend Democrats. As will the way Mr Obama has demonstrated he intends to govern for the country rather than his early supporters from the Left. His economics appointments could have come from a Republican moderate. Timothy Geithner, the new Treasury secretary, now heads the Federal Reserve Bank of New York. Economics adviser Larry Summers was running the Treasury for Bill Clinton when the US government paid off debt for the first time since the 1920s. And Paul Volcker, head of the economic recovery board, is an econocrat rich in age and experience and famous for defeating inflation as head of the Federal Reserve under presidents Carter and Reagan. Nor will protectionists be pleased with the way Mr Obama looks like handling trade. While he has appointed Hilda Solis, a congresswoman from California who opposed a free trade deal with Central America, as labour secretary, he has matched her against a free trader, former Dallas mayor Ron Kirk as trade negotiator. But the strongest indication that Mr Obama is less interested in personalities than he is in policy is his appointment of Senator Clinton as secretary of state. The former first lady fought the president-elect long and hard in the primaries and his praetorian guard understandably abhors her. But Senator Clinton is endlessly energetic and ferocious in a fight, qualities the US needs to force Israel and its enemies to negotiate and convince the Europeans to pull their weight in Afghanistan.

The policy sense and political nous Mr Obama has demonstrated in assembling his team makes it easy to forget that he has never actually run anything larger than a campaign. But it confirms the evidence of the election, which took him from obscurity to the Oval Office in a bare four years from his first entering the Senate. Mr Obama is a politician of rare ability with some of the same skills and ideas that made Roosevelt the most electorally successful president in the nation's history. Just as Roosevelt commissioned vast public works programs to electrify rural America, Mr Obama is talking about billions for green power. Like FDR, the president-elect is already demonstrating that he understands how to use the authority of his office to put together the team he wants rather than the one that his party thinks he should have. Like FDR, Mr Obama is also an uncommon communicator --demonstrated by his speech in Chicago's Grant Park the night he won the election -- which signalled that his victory was also a win for the nation's values. If anything, the president-elect shows signs of becoming a more sophisticated communicator than his predecessor. Where Roosevelt promised to spend the US out of trouble, Mr Obama is warning that while he will increase government outlays, and even cut taxes, he will also reduce government spending. Inevitably, it is much easier to run an election than a nation, and Mr Obama may already be at the peak of his authority. While Roosevelt's popularity saw him win four presidential elections, every other American leader's political capital diminished from the day they earned it. But whatever occurs in the next 100 days, the president-elect has a plan, the people to put it in place and the ability to explain it. Mr Obama is running hard, even before he is in the Oval Office.