Nov 17, 2008 1:17 pm


The world is in the midst of an economic turmoil in a significant part due to trust deficit. There is nothing business hates more than uncertainty. That is the reason even a rumor of political or economic trouble leads to sharp stock markets declines. There can be no doubt but that the unusual volatility which accompanied the presidential elections added to market jitters. That is the reason President Bush chose to organize the international economic summit shortly after the elections and invited the president elect to participate. The idea was clearly to calm the markets as soon as possible.

Unfortunately, he failed to realize that he will be dealing with president elect Obama, a man who in his campaign speech may have said that he, too, puts the country first but in reality he puts it second, far behind his own political calculations in the same manner FDR did. Hence, World leaders hoping to meet President-elect Obama at an economic summit this weekend in Washington will be disappointed. More importantly, uncertainly is going to continue to reign for the next few months and the American people, indeed the entire world will continue to pay a high price for it just as they did in 1932. Amity Shales menind us in the The Forgotten Man:

The uncertainty of the interregnum took its toll. When the banking crisis grew yet worse, Hoover tried contacting Roosevelt, even sending at one point a lengthy personal letter. Historians would later note that Hoover’s sense of urgency even showed up in the way he addressed the letter, misspelling Roosevelt’s name “Roosvelt.” Roosevelt was cruising the coast of Florida;

Hoover expected to meet on his return. But Roosevelt was not interested in cooperation. We will never know all his motives, but it was clear that a crisis now could only strengthen his mandate for action come inauguration in March. Hoover became incensed at the silence, and took to documenting his own goodwill in the name of an accurate history.

In late February, one of the lowest moments — as the Dow stood at just above 50 — a manufacturer would leave a phone message for Hoover. He had had a meeting with [Roosevelt Brain Trust member Rexford] Tugwell, who had confirmed that the new administration had no interest in cooperating. Hoover wrote a formal letter to the manufacturer to put on record what the man had reported to his secretary: “I beg to acknowledge your telephone message received through Mr. Joslin, as follows: ‘Professor Tugwell, advisor to Franklin D. Roosevelt, had lunch with me. He said they were fully aware of the bank situation and that it would undoubtedly collapse in a few days, which would place the responsibility in the lap of President Hoover.’”

Hoover added his analysis: “When I consider this statement of Professor Tugwell’s in connection with the recommendations we have made to the incoming administration, I can say emphatically that he breathes with infamous politics devoid of every atom of patriotism. Mr. Tugwell would project millions of people into hideous losses for a Roman Holiday.”

O.K., Barack Obama is not about to go cruising. He is merely staying in Chicago to prepare to sell for profit the house Rezko helped him buy. Doesn't he know that three months of economic uncertainty in 2008 are bound to be costlier than 5 months were in 1038. So, why? So, that he can remain unaccountable.

He wants a clean, clear demarkation between the Bush administration and the Obama administration," said Thomas Mann, a scholar at the Brookings Institution public policy center.

John Podesta self righteously said that"We have one president at a time, and it's important that the president can speak for the United States at the summit." Yes, the moon is made of cheese. Which world leader will be daft enough to cut a deal with Bush at this juncture?

Ironically, as always, the poor around the world, the ones who celebrated Obama's elections with the greatest enthusiasm, will pay the most and there will be more of them:

The global financial crisis threatens to radically drive up the number of poor people around the world unless countries work together to control the contagion, says the head of the World Bank.

“We need to make sure the financial crisis doesn't become a human crisis,” Robert Zoellick told reporters after the first day of a two-day meeting of the Group of 20 finance ministers and central bankers.

“All countries are moving into a danger zone,” he warned – a zone where frozen credit is preventing global trade, hurting countries' balance of payments, and slowing down remittances from foreign countries that many families in developing countries depend on to make ends meet.

But do not worry. The media will insure that the ONE will not be blamed for adding to the global pain:

A new Associated Press-GfK poll found most people voicing confidence that Obama will be able to turn the sagging economy around when he takes office in January.

Let us hope that he will not follow in Roosevelt footsteps in this too. As he himself admitted, it took a most brutal world war for Roosevelt to turn the economy around. But, then, both he and the Democrats benefited politically from the disasters. In other words, by staying away from the Washington summit, Obama puts party first and country and world second.


Tom Friedman seconds the sentiment, though more gently:

Obama can’t wait until Jan. 20 to weigh in on this. If we don’t stimulate the global economy fast enough and big enough, some of Obama’s inaugural balls might be held in soup kitchens.

Obama praises FDR economic policies. UCLA economists do not. They claim FDR's policies prolonged Depression by 7 years, UCLA economists calculate O.K., given their track record, I doubt their model. Poor FDR history is catching up with him.

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