As the world muddles its way through history's worst economic disaster, US leaders are finding that the mess is much worse than it had seemed initially. Part of that is because they were caught unprepared and part of that is because people are psychologically disabled after years of extreme prosperity and certainty to adjust to difficult times. The West is a victim of its own boom-bust cycle economic model. During boom, nothing is sweeter but it's the bust that embitters and it tastes much more sour than people thought.
That the world has fundamentally changed was expressed in the words of George Bush at his final international event at the APEC summit. He said that economic focus of the world had shifted from the West to the East where economies have grown by a staggering 55% while the Western economies have stagnated. Of course, it also means that the emerging markets had space to grow while the West had reached its economic saturation point. Unfortunately for them, it was fuelled by speculation and not real wealth as is being witnessed everyday as banks and financial companies stagger and fall like the proverbial nine-pins.
Western economies have already gone into recession and no one really knows how deep and difficult that will be. The situation in the UK is very bad and its recession is expected to be the worst in the European Union. Much of the crisis is a product of it's over dependence on US stocks to fuel its non-real wealth making.
Obama as the recession messiah
The result of all this is the enormous hope that is pinned on Barack Obama who is seen as a messiah of sorts or more likely an angel who will pick up the mess and throw it out of the room and clean the home in one magical sweep. Knowing this, Barack Obama has been trying to caution people and cushion himself against over-expectation. In his last speech to the media, he outlined his plans as well as named some key players of his economic team.
Obviously, it is leading to a new stimulus package for the real economy other than the huge bailout already on for the financial recovery. Without a boost, it seems, the US economy as well as that of the rest of the world will not start up. "We are going to do what is required to jolt this economy back into shape," Obama said, although he refused to put a figure on the cost of the stimulus package. Reports say there has been much speculation about the price tag, with some US politicians saying it could be as much as US$ 700 billion.
Speaking of the challenges ahead, Obama said: "We are facing an economic crisis of historic proportions. Our financial markets are under stress. While we can't underestimate the challenges we face, we also can't underestimate our capacity to overcome them." The problem was "no longer just an American crisis, it is a global crisis -- and we will need to reach out to countries around the world to craft a global response". Obama has also declared that he would 'honour' the public commitments made by President George W Bush -- who leaves office on 20 January -- to support the US economy.
George Bush; The last pathetic lap
Meanwhile George Bush remains a pathetic figure, the lame duck President whom no one wants to be identified with. Even Republicans are shying away from him and while John McCain has assured his support to Obama, Bush is the person nobody wants to be seen with. Bush's address at the APEC meeting was a summing up of the change that has come during his years in White House. He took power as the most powerful man in US history and also the man ready and willing to prove to the world that this was a brutal fact. He was in office when the 9/11 took place and he took that opportunity to apply the ideas of the neo-con projects to make the US the ultimate power in the world, largely through military means. Not one thought that either the Iraq or the Afghan project would fail.
The titling terms of this adventure was called 'Shock and awe'. Yet today, it's the US which is in the midst of shock and slowly discovering that nobody may be in awe of them anymore soon as their seat as the only power in the world is gone to be replaced by many countries led by China. Bush pleaded to the world that the free market system was the best and it had contributed to the prosperity of the East as well arguing that 'protectionism' would hurt everyone. No US President has ever stood in front of the rest of the world and admitted the fragility of the system and no American had ever thought that they would have to listen to the description of the change of guards of the world. The neo-con dream has collapsed under the debris of its own flaw.
Will and can Obama be different?
But how different will Barack Obama be. Ever since he appointed Rahm Emanuel, an extreme Clinton loyalist, people have doubted his 'independence'. This feeling of course is the result of high expectations emerging from his election rhetoric. People believe in his slogan of 'change' and that means they think he would bring absolute fresh blood to his Presidency. That seems a farfetched demand as he has to run the country as they are used to, its shattered economy as far as possible without upsetting everyone and also govern politically with allies from all sides.
That means he has to hire experienced veterans who are aware of the way Washington is politically manipulated and the Wall Street is run. He has tried to choose his people from them. He also has to pick his team from his own personal loyalists and Democrats. That means they will be largely from the last Democrat Presidency which is that of Clinton. And that is capped by his appointment of Hillary Clinton as his Secretary of State. It's not a cabinet of ghosts past; it's a cabinet of Democrats who had been resurrected after nearly a decade. Obama has always referred to the Clinton era as the best time of America's economic history so it's only fair to expect that he will fill up his cabinet with those people whom he considers successful.
Obama's team of course is the cause of much speculation and expectation. His announcement of the finance team has even pushed the stock market up significantly even as everyone worries about the recession. The person who has drawn most words is of course Rahm Emanuel, his Chief of Staff, his deputy at the White House. It's a very pro-Israeli, pro-Democrat partisan, pro-Chicago choice. It's no secret that many in the US think of Obama as a Muslim because of his father and Obama has tried to shed that identity for long. His appointment of Rahm will greatly help that. The US conservative magazine, Spectator, has this to say on the matter. "Barack Obama sent a reassuring signal to Jews who doubted his commitment to Israel by choosing Rahm Emanuel as his Chief of Staff. Rahm's father is an Israeli who fought for the Irgun under the late Menachem Begin. Rahm himself went to Israel to volunteer on an army base during the Gulf War of 1991, making sure the weaponry was in a functional state."
So US policy under Obama will be that of continuation. It's going to be the same friends, same attitude and same methods. They will however be more moderate and orderly and in one case, that is the environment, it will be more forward looking because without investments in the green sector and alternative energy, the US economy can't survive.
The biggest change that will impact on the US is not coming from Obama but from China, who without much fanfare have changed far more than the US political imagination is capable of grasping. Obama, reports CNN, has already been handed an assessment that the US will no longer be the sole player in the global events. It heralds the end of the unipolar world that existed since Soviet Union fell and in the next phase of shared supremacy, the US will have to consult China and even Russia and India along with Brazil before it takes any steps. |