A Few Guiding Principles for President-Elect Obama

Barack Obama's historic victory has given many in this country, and across the world, hope for a brighter future. But make no mistake; the President Elect is facing a global political and economic landscape more hostile and challenging than it has been in a generation. He has to lead with confidence and decisiveness, but with actions that are grounded in facts, common sense and broad-based support wherever possible. While it is tempting for him to completely distance himself from the policies and practices of the current administration, the fact is that abrupt shifts, if ill-considered, could do immense damage to the economy and the country at such a delicate time.

There are a few guiding principles I believe President Elect Obama should follow, some of which might not comport with Democratic dogma but which are necessary to deal with a perilous social and economic situation that could plague us for a decade - or more.

• Do not raise taxes. For anybody. Individuals. Corporations. Anybody. Period. We need economic stimulus. We need to encourage investment. We need people and companies to re-build over-leveraged balance sheets. Economic activity is going to slow, and the last thing individuals and corporations (which are simply an amalgam of individuals) need to be burdened with are higher taxes. If anything, tax rates should fall. Further, the tax code needs to be dramatically simplified. Complexity increases costs, and distorts the power of tax policy. Investment should be encouraged and rewarded. Rules should be very straightfoward and broadly applicable across industries to mitigate the effect of lobbyists and special interests.

• Do not allow "free riders." The way TARP funds are being disbursed, with a "come one, come all" spirit, is nothing but a squandering of U.S. taxpayer dollars. That money should be used to close weak firms, restructure ailing firms whose failure poses real systemic risks and increase deposit insurance thresholds. It should also be used to recapitalize critical institutions whose assets are marked-to-market, leaving a gap in regulatory capital levels that can be filled - temporarily - with TARP funds. TARP should be about building confidence in the U.S. banking system, not providing cheap capital for any bank that wants it.

• Insist on financial statement transparency and support a push towards exchanges. The integrity of financial statements needs to be unimpeachable. Problem is, with the incredible latitude provided by current accounting rules investors simply lack confidence in the veracity of bank income statements and balance sheets. And this says nothing about the trillions in off-balance sheet liabilities plaguing the system. Push for greater clarity and transparency in accounting rules, such that investors will once again be willing to buy the shares of our financial institutions and hold them for the long haul. This also speaks to the moving of over-the-counter derivatives obligations on to exchanges, to address both counterparty risk issues as well as valuation issues that have damaged our financial system.

• Be ready to invest in core infrastrucure. As the global deleveraging kicks in and economic activity slows down, millions of people - factory workers, service professionals and the like - will be out of work. Unemployed people spend very little money. It is also true that this country's aging infrastructure has acted as a millstone around our necks, curtailing current growth while moving the obligation into the future. This culture of deferral of pain has to stop. Monies that would be spent providing capital to healthy banks and financing distant wars can be used to support state and federal projects to upgrade our airports, roads, ports and waterways. This is a real long-term investment with an attractive ROI. But our new President needs to rise to the challenge and work with both state and federal officals to prioritize projects and get them done quickly, efficiently and with the greatest bang for the buck.

• Support education at all levels. We need both a strong public school system as well as robust independent school alternatives. Local accountability. More flexible work rules. Merit-based promotions and raises. Better pay. Vouchers for those needing tuition assistance. We can't get this wrong, as we have done consistently during my lifetime. Our educational system is an embarrassment on a global scale. Smart, curious, confident, well-rounded citizens are what's going to make this country, and our world, strong. We are not doing our part. The President Elect needs to make this a very high priority.

• Fight against short-termism. This means making hard choices and tackling seemingly intractable problems. JFK had it right - "...what you can do for your country." What President Elect Obama can do for our country is to take the long view, to prioritize the most pressing immediate issues (e.g., economic weakness and credit crisis) but to make real progress on a few critical long-term problems (e.g., social security, health care costs, etc.). These steps will not be politically popular. But they will help get dialogues going around issues that most politicians are simply too scared to talk about. It's always about the next election cycle. Someone needs to stand up and say "NO." And that person can and should be Barak Obama. Right now.

• Re-establish U.S. credibility on the global stage. This doesn't mean being everybody's best friend, but it does mean regaining the respect of our allies and others as a smart, thoughtful, humane but strong people. And this perception will have to originate from our Commander-in-Chief. We need to be led not by gut but by reason, not by emotion but by thoughtfulness, not by unilateralism but by a desire to work and build like-minded coalitions wherever possible. The problems of today, both economic and political, are far too large for us to handle alone. We need our friends and allies, now more than ever.

President Elect Obama has his work cut out for him. His first term will be among the most challenging in the past 30 years. But what he will have is a clean slate, a fresh start, a chance to enact policies and to lead with a confidence and clarity that has been so lacking from our leaders this millennium. And he will have the support of the American people.

He has a mandate to lead a people starving for leadership. His chances are few, the risks are great. But hopefully he will rise to greatness by focusing not on party but on all people, by shedding dogma and orthodoxy and making the hard decisions without bias or fear. This is a very special time in our country, which is unfortunately mixed with one of the most difficult and scary times in recent memory. I am confident that we, as citizens of the U.S., can help the new President achieve greatness. And we will all be the better for it.

Comments

[Mafeking:]

"Barack Obama's historic victory has given many in this country, and across the world, hope for a brighter future"

WTF does this mean? It is just this type of flatulent thinking that has got us into this mess. Obama, like all politicians, has done the old bait and switch promises trick, but like all politicians in this mess will be constrained by reality.

Obama is lucky. He will ride the climb out of the recession / depression, claim responsibility and get the second term.

Bright future my a**

2008 Nov 06 07:35 AM

[Abdullah al...:]

He's going to be a one-termer. Biden had it right: some creep in the Middle East is going to test this guy and he's going to fail miserably. Maybe W screwed up a lot of things, but at least he realized that it's impossible to negotiate with nutjobs who believe it is their historical imperative to put the world under the banner of radical islam.

Everything in Obama's past indicates that he is going to govern as a hard-core leftist. He was one of the most partisan members of the Senate. He was an amorphous blob whose positions changed by the hour and most of the stuff out of his mouth was so vague and meaningless that anybody could read anything into what he said.

Mr. Ehrenberg reminds me of those "thoughtful" members of the bourgeoisie in Russia, Iran or Cuba who thought that they could work with radicals and ended up losing everything.

2008 Nov 06 08:48 AM

[woodwardchiro:]

There is no doubt Obama has a tough row to hoe. Campaigning is definitely different that running a country and based on what we have seen, Obama is great at grass roots and uniting. We all hope he does the right thing and he seems interested enough in a long political career to keep the masses happy. Let’s hope!

2008 Nov 06 09:05 AM

[G. Johnson:]

You, your buddies and Bush ruined Wall Street and have nearly destroyed our Country. Now you are telling Obama what to do--why don't you guys just shut up and go away.


On Nov 06 07:35 AM Mafeking wrote:

> "Barack Obama's historic victory has given many in this country,
> and across the world, hope for a brighter future"
>
> WTF does this mean? It is just this type of flatulent thinking that
> has got us into this mess. Obama, like all politicians, has done
> the old bait and switch promises trick, but like all politicians
> in this mess will be constrained by reality.
>
> Obama is lucky. He will ride the climb out of the recession / depression,
> claim responsibility and get the second term.
>
> Bright future my a**
>
>

2008 Nov 06 09:55 AM

[Roger Ehren...:]

Mafeking, I don't know what happened to you, but you are one angry dude. Sorry, the majority in this country agree with me on the issue of hope in light of a much-needed regime change. You don't see it that way, fine. It is the current administration that has dug us into a deep, deep hole, and I'm not confident that Senator McCain could have gotten us out of it. Will Obama? Not sure. But I think he has a better shot at it than McCain would have.

Abdullah, you and I simply disagree. I think Obama will lead from the center and will do so with open-mindedness, intelligence and common sense, three things that were sorely lacking over the past eight years. So I take issue with the very premise of your comment. Oh well, two people can respectfully disagree.

G. Johnson, you are reading a blog. if you don't care what people think, lock yourself in a room, turn off the computer and TV and go to sleep. In short, you go away. I further have no idea who "You" and "your buddies" are, so I really don't understand where you are coming from, except that you are plainly hostile.

2008 Nov 06 11:40 AM

[xmplary:]

Mafeking, You may not realize this, but the election of Barak Obama does bring a lot of hope for this country. People voted for change, without regard to racial boundaries, from dammage done by the Republican rednecks over the past 8 years to destroy this country. The people have elected the best candidate for the job, whereas we made a huge mistake electing Bush twice. Give the president Obama the benefit of the doubt. He has a lot of challenges to fix this damage. He cannot be worse than what the past 8 years have been. If nothing else, this election shows that the American Dream is well and alive.

2008 Nov 06 02:33 PM

[Mowog:]

President Obama will be Carter II, and a one-termer, but he'll probably not be threatened by swamp rabbits (if you're old enough to remember that).

Granted, Bush did plenty of damage, but no Democrats fought seriously against the flagrant irresponsible spending and new entitlements. Obama earlier had taken on as an economic advisor Raines, the fraudster who ran Fannie into the ground--bodes ill. There's plenty of bipartisan blame to go around, but the Dems (e.g., Franks, Waters, and Dodd) never get their fair share of it. I hope Obama will change himself into something, because he's so far just been a suit filled with buzzwords.

Public education in the US stinks; Dems run most teachers' unions and school boards; ed schools turn out Dem "activists" not teachers. The sooner the useless Dept. of Ed. is annihilated and vouchers or school choice programs put into place, the better. Obama's former co-worker (and unrepentant terrorist) Bill Ayers loves public education. The Annenberg Project for reforming education, with which Obama and Ayers worked, was a total flop, and an expensive one--bodes ill.

I have a feeling WealthSpread is going to taste pretty bad.

2008 Nov 07 08:30 AM