Expectations exceeded only by scale of challenges

Wed, Jan 21, 2009, 00:00

THE CHALLENGES:The US faces huge problems but Obama has unprecedented goodwill, says Denis Staunton

BARACK Obama starts his presidency with his own party in control of both houses of Congress, the goodwill of most of the world behind him, and a domestic approval rating above 80 per cent. Conservatives who denounced him during the election campaign as a naive and possibly dangerous radical now praise their new president as a thoughtful pragmatist capable of uniting the country.

Meanwhile, progressives refuse to allow their faith in Obama to be shaken by any disappointment – from the president’s edging away from campaign promises to his calculated insults, such as the choice of anti-gay, conservative evangelical Rick Warren to deliver the invocation at yesterday’s inauguration.

The depth of the economic crisis has created, for the first time since the 1970s, a popular consensus in favour of using the power of government to generate economic growth and most Americans are eager for a change from the disastrous foreign policy pursued by George Bush.

Two out of three Americans expect Obama to be an “above average” president and one third believe he will be “outstanding”, according to an Associated Press poll last week Such popular confidence is encouraging but the new president may feel uneasy about some of the poll’s other numbers, including the two- thirds majority that expects unemployment to fall and their own economic situation to improve.

The United States has to create at least one million jobs each year just to keep pace with population changes; instead, it is losing jobs at the rate of half a million each month. Last weekend, Circuit City, an electronics retail chain, announced that it was closing all its stores with the loss of 30,000 jobs.

If the current trend continues, unemployment will be above 9 per cent by the end of this year (if you count those who have given up looking for work and workers who can only find part-time jobs, the figure could be 15 per cent). In Europe, an unemployment rate of 9 per cent is considered unsatisfactory but not a disaster because comprehensive social welfare systems can protect most workers from poverty until the economy improves.

In the US, however, a 9 per cent unemployment rate would drive millions of people into deep poverty, including many whose health insurance is linked to their jobs. It would mean more evictions as mortgage-payers default, driving house prices lower. Lower employment also means lower tax revenues for state and local authorities, causing further cuts in services to those in need.

Obama’s most pressing challenge is to halt his country’s slide into a catastrophic depression by investing hundreds of billions of dollars into government-funded projects that will put millions of Americans to work. During earlier recessions, the Federal Reserve has cut interest rates to encourage private borrowing and investment; today, with US interest rates close to zero but credit hard to come by, only massive government spending can make a difference.

With a federal budget deficit already above a trillion dollars (that’s $1,000,000,000,000) fiscal conservatives, including some Democrats, are sceptical about Obama’s plan to spend a further $850 billion on an economic stimulus plan. Some economists fear, however, that Obama’s proposal may be too modest to turn the economy around.

The new president has attempted to mollify conservatives by making tax cuts part of his plan, despite the fact that most experts agree that infrastructural projects like new roads and bridges are a more efficient way of stimulating economic activity.

Obama has insisted that his plans to expand access to healthcare and to encourage a move away from the use of fossil fuels will not be delayed by the economic crisis but are part of the solution to it.

The president’s progressive supporters were cheered by the flat declaration from incoming attorney general Eric Holder that waterboarding – a form of controlled drowning used in CIA interrogations – is torture. Obama has made clear that he will put an end to torture by US personnel, shut down the network of secret CIA prisons across the world, and close the detention centre at Guantánamo Bay.

Closing Guantánamo may take longer than he hoped, as the new administration seeks to persuade US allies to accept some detainees who cannot be sent home and Washington decides how to try those it believes have committed crimes. Since many of the detainees may have been tortured, much of the evidence against them could be inadmissible in a civilian US court.

A more delicate political problem is what to do about Bush administration officials who may have broken the law by authorising or practising torture.

Obama has hinted that he opposes prosecuting such offenders but civil rights campaigners believe that some form of accountability is essential to prevent a repeat of the excesses of the “war on terror”.

Closing Guantánamo will help to burnish Obama’s already glowing image among US allies, who are eager for a return to multilateralism after the end of the Bush years. Obama’s foreign policy and national security team is dominated by conservatives and centrists, led by Hillary Clinton as secretary of state, Jim Jones as national security adviser and Bob Gates, who is staying on as defence secretary.

OBAMA HAS PROMISED a rebirth of diplomacy, offering to talk directly to the leaders of Iran, Venezuela and Cuba and to restore Washington’s support for the United Nations. During the campaign, he threatened to ramp up the US-led military campaign in Afghanistan as American forces withdraw from Iraq.

In recent weeks, however, some of Obama’s advisers have suggested a different approach in Afghanistan that would seek to decouple the Taliban from al-Qaeda, perhaps as a prelude to a settlement with the Taliban and a withdrawal of US forces. Obama has retreated from his earlier rhetoric about the necessity of capturing and killing Osama bin Laden, declaring last week that it was enough for the al-Qaeda leader to be contained.

The new president has promised to make the Israeli-Palestinian conflict a priority but he has shown little sign of moving away from the Bush administration’s policy of boycotting and punishing Hamas while building up the security apparatus of Fatah in the West Bank.

Any softening of US support for Israeli government policy would be politically hazardous for Obama and could meet fierce resistance in Congress, where Democrats are often more supportive of the Israeli government than Republicans.

In both foreign and domestic policy, the danger for Obama may lie more in being too timid than in making a radical break with the era of conservative dominance in Washington that started in 1980. His direct, personal appeal to the American people and his vast network of supporters and volunteers offer Obama a greater opportunity than his predecessors to face down established interests and the inertia that often grips Washington.

In recent days, progressives have been recalling Franklin D Roosevelt’s remark to union leaders after his election in 1932 when they urged him to take radical steps towards economic justice.

“I agree with you,” Roosevelt told them.

“I want to do it, now make me do it.”