We are scarcely one week into the Obama presidency, and the carping has begun, from both the right and the left. From the right, the beef is that he is socializing the country. The left is sore that he is not moving faster to socialize the country. With a sky-high approval rating, the President can afford to ignore the snipers on the fringes, but it is harder to ignore the extremists in Congress.
Meanwhile, “W” has gone back to the ranch, to the accompaniment of a stirring “Ave Atque Vale” from Karl Rove, who says that Bush’s unforgivable sin, in the eyes of his detractors, is that he won in Iraq. I must have missed that news bulletin. The fact is that the country is worse off, by a mile, than it was eight years ago, and, though not all of the problems were of his making, too many were. To those who quibble about the WMD deception, the hawks shift gears, insisting that “the world is a safer place with Saddam Hussein gone.” But the world, in the eyes of many, is a safer place with Cheney, Wolfowitz, Feith, Perle et al gone. As for Bush 43, he will lie low for a while, remembered by the public much as Bill Buckner was remembered in Boston.
Obama’s problem is not the sniping, but the economy. The country will have to deleverage big time, and the process will take years and be painful. Although deflation is the immediate threat, eventually Government will react the way Governments always react to economic collapses: They debase the currency. China, holding a ton of our IOUs, watches anxiously, and one wonders what on earth possessed Timothy Geithner to yank China’s chain by accusing it of currency manipulation. One expects Senator Schumer to bash the Chinese, as demagogues are wont to do, but the incoming Treasury Secretary?
Of course, when you publicly insist that the yuan is too cheap and should appreciate, what you are really saying is that the dollar is too high and should depreciate. But you can’t say that, so instead, if you are the Secretary of the Treasury, you keep blathering that a strong dollar is in the national interest.
President Obama is a smart man who no doubt is going down the presidential learning curve very fast. Here is what I suspect he has already learned:
Much as the public is fed up with bank bail-outs, there is no way to avoid more of them. Like it or not, the banking system is the ship carrying the economy, and if the ship sinks, we all sink.
China and the U.S. are now joined at the hip. Their economy needs our markets, and our economy needs their financial support. But we need them more than they need us, because their people can endure hardship better than we can. Put another way, the last thing Obama needs on his plate is a flare-up in U.S. – China tensions. (BO to TG: Cool it.)
Much of the Arab world is aghast at what Israel has done to Gaza, but that was to be expected. The reaction in Europe is another matter. The fact is that Israel has only one real supporter of substance in the world: us. None of the other major players on the world scene – not China, nor Japan, nor Europe, nor India – is interested in cosponsoring Israel. So in the community of nations, not only is Israel isolated, but on this matter we are, too. Even more dangerous, Israel may believe that it can count on our support if it strikes Iran preemptively. The chances of such a strike will increase after February 10, when the hard-liner Benjamin Netanyahu will likely become Israel’s Prime Minister. “Peace is purchased from strength,” writes Netanyahu in yesterday’s Wall Street Journal, overlooking the fact that Israel has enjoyed overwhelming military superiority for decades, with no peace to show for it.
Obama has already made it abundantly clear that, whatever the truculent instincts of other countries and tribes, his preference is to cool off the hot spots with diplomacy. That is a hopeful sign. Besides, what’s the alternative? Shock and awe?
Our new President also faces tough choices in Pakistan, Afghanistan, Somalia, North Korea, Russia, Ukraine, Georgia, and even neighboring Mexico, where drug wars infest the streets of Tijuana and Juarez. England’s economy is crumbling, and continental Europe is rethinking the wisdom of a common currency. In fact, few parts of the world do not have major problems. Why would anyone in his right mind want to be President at a time like this?
It’s the audacity of hope. The whole world is looking to the U.S. cavalry to ride to the rescue. Foreigners don’t like to admit it, but they really believe we are their only hope. That is why billions watched the inauguration on TV so hopefully. They saw more than 2 million Americans on the mall in Washington, being civil, no, friendly to each other. The week before, they saw more than 100 people standing on the wings of a half-submerged airplane in the Hudson River, as calmly as if they were waiting for a taxi at Grand Central. No pushing and shoving, no climbing over each other to get a seat on the ferry. Only in America, the world thought.
And the world was right.
