Monday, 9 February, 2009

No Honeymoons In The Time Of Recession

Barack Obama has an unenviable task at hand. Not only is he staring at the worst economic crisis that has hit the US since the Great Depression, but he has also to help America pull out of two unwieldy wars that is bleeding the treasury dry. And how Obama reasserts the economic and military might of America will decide if he can preserve the unipolar world in the face of the rising economic power of China and Russia. With the exception of Franklin Roosevelt, no American president has stepped into office with such odds to surmount. But the America of Roosevelt’s time was one content to leave the global stage to Britain and other European powers to dominate as she bided her time adopting a wait and watch strategy.

Obama’s first few weeks in office have been anything but spectacular. He began in a rash of policy initiatives, reversing several of predecessor Bush’s unpopular policies. His decision to shut down the Guantanamo Bay prison was welcomed. But his ambiguous stance on Iraq with regards to the pullout of troops while stating in the same breath that Iraq’s fate will be left to its citizens inspired little confidence. His continuance of the US stance of non-criticism of Israel’s attack on Gaza signifies how entrenched America’s foreign policy position vis-√†-vis the Middle East continues to remain.

On the domestic front, Obama’s appointments to the top political posts in his administration show his dependence on Washington veterans. Interestingly, he campaigned across the country as the outsider who promised a break from the politics of the past, which he said centred around compromises, deal-making and lobbying. His appointments like Hillary Clinton for Secretary of State, Rahm Emmanuel as Chief of Staff, Tom Dashle as Health Secretary besides his own Vice President, Joe Biden are all long-time survivors of the world of Congressional politics. While this indicates a measure of pragmatism on how Obama intends to survive in the rough and tumble of Washington politics by using these influential centrist democrats to win support for his policies, critics point out that the baggage that these politicians carry will ensure a watering down of several hard measures Obama intends to push forward.

For a president, who has never had any executive experience in governance, unlike several of his predecessors Obama’s actions in the first few weeks seems to be of a man very conscious of the fact that people are trying to gauge his abilities as a leader. The haste with which he made his appointments seems to have backfired as his two top political appointments had to be withdrawn in the face of tax evasion charges. The financial stimulus package that he has rolled out quickly, got mired in the quagmire of Congressional politics despite the bipartisan approach he preferred to take. Influential analysts like Paul Krugman have criticized the President for an act of “political naivet√©”; for fantasizing that the Republicans would be gracious to let his $937 billion package be ratified without a fight and without demanding changes to the bill that satisfy them.

Obama seems to have picked the cue after two weeks were lost in accusations and counter-charges and though belated, has come down hard on Republicans for their misplaced actions of the last eight years which caused the present crisis and for the time wasted in the last one year believing that Fed interest rate cuts and tax cuts would o the trick. In his weekly radio address he said, “We can't rely on a losing formula that offers only tax cuts as the answer to all our problems while ignoring our fundamental economic challenges." Obama and his democrat pack having summarily failed in the first weeks to nail the Republicans for the blame they have to cope for the crisis, have turned increasingly aggressive, with Obama even resorting to a campaign-style approach to selling his stimulus package to the American people.

Obama's inaugural address stood out for masterful oratory and a lot of rhetoric; his first weeks in office show a president fumbling but also learning fast.


Obama’s plans also include creation of jobs through increasing spending on public infrastructure works, a move which does not find approval with Republicans who call it “wasteful government spending”. The difficulty with which he got the stimulus package cleared by Congress bodes more trouble for him as he mulls a much bigger $1 trillion bailout package for banks and financial institutions (the Bush Administration’s earlier $350 million loan has been found to be woefully inadequate). The trouble for Obama is that Republicans are unwilling to shed their dogmatic belief on minimal state involvement and regulation of the economy, despite the crisis this approach has caused. Increasingly, the taunts are beginning to appear in the conservative media calling Obama a “socialist”.

Perhaps, what would be the greatest tragedy of the recession would be that Obama will be forced to temporarily defer one of his major election planks that called for a comprehensive reform of the country’s health system. A large population running into millions is unable to access healthcare because of the virtual absence of a public health system, the high cost of private healthcare and the failure of the medical insurance system to encompass poorer sections of the society. Coupled with job losses, wiping out of pension funds and home losses, the lack of health care adds to the worries of families caught in the recession. It would be foolhardy to ignore this constituency as they voted overwhelmingly for Obama to bring about the change he constantly promised. That his next campaign for a second term in office will have to begin in two years will be on the back of Obama’s mind.

The start of America’s financial crisis began with Bush’s invasion of Iraq and as the war stretched on, his administration ignored the visible signs of the recession, pumping dollars into the war instead of the flagging economy. The war also catapulted Obama’s meteoric rise with his consistent voting record in the Senate against the Iraq War winning him the Democratic nomination over Hillary Clinton and ultimately the US Presidency. But pulling US troops out of that country seems an impossibility as Iraq continues to witness sectarian clashes between its Shia, Sunni and Kurdish population while the NATO troops act as mediators in one sense and onlookers in another. The only feasible strategy for him is to pull the US out from a winning position somewhere down the line; 16 months he says, but Iraq’s peace that Saddam Hussein once ensured will remain shattered long after the US is gone.

Obama’s intensification of American involvement in Afghanistan holds little merit, as the Taliban will continue to resist the outsiders, with or without Pakistan support. Obama’s denial of the fact that America built the monster of Islamic fundamentalism signifies his inability to set a fresh agenda for US-Arab reconciliation. Its manipulation in some cases and indifference in others, on the pretext of fighting the USSR has thrown several Muslim nations into disarray and destroyed the secular political aspirations that promised to arise in these countries. Probably where Obama has a chance to leave a lasting impact on is Pakistan, by encouraging and actively supporting the nascent democracy that has taken shape once again there. His appointment of Richard Holbrooke, who helped resolve the Northern Ireland conflict, as special envoy to Afghanistan and Pakistan is hopeful indication of a creative solution arising in the trouble-torn region.

Obama’s foreign policy challenge lies in restoring America as the de-facto leader of the world, by engaging nations on an equal footing while getting them all to acknowledge that the unipolar world continues. For this, he will have to pull his weight in Europe which has successfully come out of America’s shadow. Bush lacked both the credibility and the chutzpah to hold under his wings Europe’s colourful but strong-willed political bosses like Angela Merkel, Nicolas Sarkozhy and Gordon Brown. With Russia’s resurgence and Europe’s new found closeness to Russia on the back of oil ties, Obama has to actively engage the formidable combination of Vladimir Putin and Dmitri Medvedev as equals – something he has managed to signal through Vice-President Biden at a security conference in Munich, and to which the Russians responded positively.

To be fair on Obama, his current term in office and probably his next too will be entirely taken up dousing the fires, fed and then left untended by the previous regime. Obama’s inaugural address probably showed the true face of the man – a pragmatic politician, who was able to address all classes of people in American society - the whites, black, women, aged, the patriots, the capitalist, the labour class, the middle class, soldiers and war veterans. But his speech also had several mentions of ideas that are socialist in nature – ideas that a lot of America equates with communism. The conservative media potshots have already begun, the Republican war cries are out, and every policy, every word of his is getting more scrutiny than any previous president. Clinton tried to please everyone, Bush refused to engage anyone – the tightrope Obama has to walk needs to find that middle path between conciliation and assertion. He can’t afford to fall – if his policies fail, the multi-polar world of yore will return; and with it a host of new problems.

P.S - An early assessment of Obama's tenure written for the magazine format. Still figuring out how to write for a mag!