Obama’s Victory

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Obama’s victory marked by a wealth of opportunity
Posted: November 15, 2008, 10:30 AM by Kelly McParland
Conrad Black, Full Comment, U.S. Politics

Having confidently predicted the victory of John McCain, and having stuck with that until his blunderbuss campaign blew up, I will offer a few thoughts to the incoming U.S. administration. Rarely have such comments been so profoundly unsolicited. Barack Obama has ignited more excitement and positive curiosity than any incoming government leader in the world since John F. Kennedy. He starts with an immense and fervent public relations honeymoon.

As one who drove with university friends in the early and mid-Sixties for a few weeks each spring in the United States, and well remembers the racial segregation even in the North, and the idle hopelessness of the sprawling, surly, black slums of the great cities of the North and Mid-West, I can only render deep homage to the reformist conscience of America.

In my remarks published here on Nov. 5, but written before the polls had closed, I referred to Obama’s tax to soak the productive elements of the country and cash out those who do not pay taxes with the piffle of “refundable tax credits” as “Marxist” because it would enact the Marxist formula of “From each according to his means to each according to his needs.” No-frills editing seems to have left the impression with some that I was calling Obama a practising Marxist. I was not, do not, and regret the confusion.

The proportions of Obama’s victory were at the mid-point of the polls: about 52% for him to 46.5% for McCain; an unambiguous and solid victory, but not an epochal tidal wave that need presage a long or deep purgatory for the Republicans.

The president-elect appears to have a mandate to make health care more accessible and affordable, but not to discourage private medicine. The public seems to want him to regulate the financial industry more intelligently, but without strangling it in Sarbanes-esque pettifogging. The people also seem to want a higher comfort level than they have now that special interests and lobbyists do not have an unhealthy influence on the federal government; and they want improved government and public relations with America’s traditional and natural allies in Europe and the Americas. There is general recognition that infrastructure requires attention if the means can be found to do it, and there does appear to be a consensus for reduction of energy imports that will survive the usual OPEC wheeze of administering the anesthetic of tactical oil-price reductions.

There is no mandate for a substantial income tax increase, or to repeal secret-ballot trade-union votes. Any such effort will not pass and will squander the new administration’s political capital. The American people are worried, but they have not taken leave of their senses to the point of wishing to water the parched detritus of the Luddite American unionized labour movement.

Building upon my track record as a political seer, I predict help for the unemployed with a Roosevelt-style public works program that would address decaying transport and other public-services needs; a financial transaction tax to raise revenue; and some sort of non-protectionist fiscal incentive to sophisticated manufacturing.

The United States remains the world’s most technologically advanced, as well as its largest, manufacturer, but it has to stop losing factories to cheaper-labour countries, and good engineering and technology careers to the over-stuffed ant-hills of make-work in the fields of law, financial-brokerage and esoteric consulting. The government can’t start dictating careers to people, but it could incentivize certain types of specialized education of greater economic and social use to the country than others.

In addition to the acquisition of preferred shares from the treasuries of banks already happening, there should be some sort of obligatory clearinghouse for the trading of derivatives so there would be reasonable knowledge of the outstanding quantum of such instruments. Estimates of the outstanding volume of underwater real estate-backed or related assets varies from $7-trillion to a financial science-fiction figure of over $50-trillion. It is astounding that the world financial markets should be in such an uninformed state, which makes the re-establishment of confidence very difficult.

Debt-leverage in the hedge-fund industry will have to be addressed through international agreement on lending ratios in the world banking system. Alan Greenspan’s profession of faith in the spontaneous prudence of the U.S. lending banks was insane, and a fire bell in the night when he said it to the Senate Banking Committee 10 years ago. There will have to be some sort of principal-residence home refinancing plan, but this is already in the works.

The American-owned domestic auto industry should be delivered to an industrialist czar such as Lewis Gerstner (IBM) or George David (United Technologies), with a five-year unlimited mandate to produce two adequately-capitalized companies, with sensible designs, industrial relations and market targets; financed by the U.S. government as a preferred shareholder, which would then make a staged retraction from the investment. This investment would net the taxpayers huge profits.

If the president-elect is serious about bi-partisanship, his alleged invitation to Robert Gates to remain as defence secretary is a good start. So would be Cabinet invitations to Colin Powell and John McCain himself, if they can reach agreement over Iraq, as well as to Hillary Clinton, who did have almost as much support as Obama during the Democratic primaries.

It should be possible to make a bi-partisan agreement over Iraq strategy, now that the need for electoral histrionics is over. Obama could emulate Dwight D. Eisenhower, (“I will go to Korea”) and Richard Nixon, (“I have a plan” for Vietnam — he didn’t), and meet early with the Iraqi leader Nouri al-Maliki. Obama has complete liberty in Iraq from his voters, and can bargain from great strength. Ideally, a comprehensive agreement could be worked out, including a long-term alliance, a substantial withdrawal timetable, a payment out of accumulated surplus by Iraq for some of the U.S. financial costs of the war and a reconstruction plan in which the U.S. would build Iraq up to a modern standard as security conditions allowed, in exchange for large quantities of oil at pre-fixed prices. This would simultaneously address the current-account deficit, energy supply and Middle East stabilization problems.

Perhaps most important in this remarkable accession is that Barack Obama has moved African-Americans from reliance on the victim culture to recognition of opportunity. He is the first Western leader who can make effectively the same point internationally, to predominantly black and to Islamic countries.

In a way that even the most gifted and benign Caucasian leaders of the United States and the other western Great Powers could not, this president will be able, without appeasement or naïveté, to encourage black African and Islamic leaders and the vast masses of people behind them, to turn to a new page of genuine co-operation and away from misgovernment slightly masked by the tired platitudes of anti-colonialism. This may be what Senator Obama meant by talking to the likes of Iran’s Mahmoud Ahmedinejad, without, for obvious reasons, being able to elaborate on it during the late campaign.

If so, for this, and for much else, he deserves the admiration and the goodwill of all.

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