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In the space of a few short months, we have morphed from the citadel of free-market
capitalism and freewheeling consumerism — from a land of high-flying hedge funds,
Hummers and homes that doubled as ATMs — to a system in which the banks, insurance
companies, mortgage industry and auto manufacturers are quasi-socialized.
Adding to that shock is the fact that middle-class investors have seen their
portfolios, upon which they depended for retirement, diminished nearly by half.
The tax-and-spend epithet that defined America’s partisan politics for decades has
been replaced overnight with a bipartisan mantra calling for a nearly trillion-dollar fiscal
stimulus. No sooner had Milton Friedman been laid to rest (he died in 2006) than John
Maynard Keynes was resurrected.
Amazingly, even the historical aversion to state guided industrial policy in the United States
has yielded to urgent demands for political oversight of private enterprise, starting with
the Big Three automakers in Detroit.
Illustration by Jack Ohman / The Oregonian
The year 2008 is thus likely to go down in American history as an even more pivotal one
than 2001, when the 9/11 terrorist attacks occurred, because the life of the average
American is going to be shaped far more by the consequences. We’re not talking about the
inconvenience of lining up to go through metal detectors at the airport. We’re talking about the
transformation of the American model itself.
Nobel Prize-winning economist Joseph Stiglitz was not exaggerating when he quipped to me
earlier this year that "the fall of Wall Street is to market fundamentalism what the fall of the
Berlin Wall was to communism." Just like that, we’re in a different era.
In this circumstance, Barack Obama will not be judged by the color of his skin, or even the content
of his character. He will be judged by the quality of his leadership and the success of his policies in
staving off depression and putting America back on the path to prosperity.
A lot depends now on how deep the recession bites.
The harder you fall, the harder you come
back. Given the continually mounting bankruptcies, foreclosures and unemployment
levels, there seems little question that the years ahead will see such a vastly expanded
government role that the New Deal will look modest in comparison.
If the wise vision articulated so far by Obama and his team pans out in practice, we’ll come out
on the other side of the avalanche of new laws and the billions spent with a disciplined financial
sector constrained by the public hand, a refurbished and greener infrastructure, fuelefficient
cars, a radical expansion of broadband penetration, universal health care and a
reawakened housing market.
In the meantime, it will be no easy task to deleverage the American Dream.
Since the 1950s,
when Nixon bested Khrushchev in the famous "kitchen debate," our answer to the equalized
deprivation of socialism has been consumer plenitude beyond compare. Khrushchev may have
emptily blustered in those years about burying us, but it was the Communist Chinese, in the end,
who gave us enough credit to hang ourselves when our consumer society desired more than we
could pay for with our own savings.
"Unlike other times of turmoil in the market, the current stress wasn’t precipitated by problems
in the real economy," Treasury Secretary Henry Paulson told me at the outset of this crisis in
2007.
"The current problems were precipitated by excesses in the form of undisciplined lending
practices which came about, in part, because of great liquidity available from Chinese savings and
other sources, such as the Gulf states, as well as a strong American economy. In a number of
markets, lenders reached for yield at a time when risk premiums and interest rates were at historic
lows."
This was particularly true in the sub-prime mortgage market. It was the flow of Chinese
dollar reserves earned from trade back into U.S. Treasury bills and
mortgage-backed securities that held down long-term interest rates
in the U.S. and enabled and sustained the asset bubble.
Widespread single-family home ownership has long been proof of the superiority of our ideology, the brick-and-mortar
realization of the American Dream itself. Thanks to innovative finance and the easy credit Paulson
talked about, no dream need be deferred if it could be mortgaged. That is where
the problem began, though not where it has ended.
In a conversation with me in November, financier George Soros filled out the picture.
"The current situation is not just about the housing bubble," he said. "The
housing bubble was merely the trigger that detonated a much larger bubble. That
super-bubble, created by the ever-increasing use of credit and debt leverage across the
economy, combined with convictions that markets are self-correcting, took more than
25 years to grow. Now it is exploding."
As a result, according to Soros, we are now witnessing a power shift from the deeply indebted
American superpower to Asian creditors flush with cash, "a consequence," he says, "of the sins of
the last 25 years." (Already as I write this, waves of Chinese investors are scouring Southern
California in search of real-estate deals.)
Whatever else is on his immediate plate, Obama’s overarching challenge is to figure out the
conundrum of how to unwind this global imbalance, particularly with China, while at the
same time re-igniting American growth. Inevitably, as China shifts the investment of its vast reserves
to stimulate its own lagging economy instead of purchasing U.S. Treasury bills, the dollar will
start to plummet. If Americans are in shock today over how rapidly their fortunes can turn on the
domestic front, they will be no less stunned tomorrow when they realize the high costs on the
global stage of putting the house of the American dream back in order.
© 2009 Global Viewpoint Distributed by Tribune Media Services, Inc.
Barack Obama Presidential Inauguration Articles
Reviewing Presidential Inaugural History
The inauguration of the first black president will long be remembered as a momentous day in history, but many past
inaugurals also have had their memorable moments. Inaugurals are a mixture of pomp, festival and gravity, the
American equivalent of a coronation. Their rituals are laden with symbols of national purpose, continuity and
unity. For 220 years, they have marked the peaceful transfer of power, a feat few other countries have achieved.
Obama Presidential Inauguration Schedule & Events
With all of the excitement surrounding the event, it’s easy to forget there have been many inaugurations before it. Over
the years, the inauguration has become highly formalized, with the day’s scheduled events taking on almost ritualistic
significance. A look at the Obama Inauguration schedule, events from past inaugurals and how & when certain inaugural
events became part of Inauguration Day.
Obama Inauguration Facts, Trivia and Information for Kids
Parade, luncheon, ball. Being inaugurated sounds like fun. But what exactly is an
inauguration? What happens? Here are answers to your most pressing questions. Plus Inauguration Trivia, Presidential
Pets and the Obama Girls
Obama's new Home was Slow to Integrate
Not too long ago, Barack Obama would have found when he moved his family to Washington that his daughters
couldn’t attend the same schools white children could. They couldn’t try on clothes or shoes at most
local department stores, or eat at downtown lunch counters. Or see a play at the National Theatre or a
movie just a block or two from the White House.
Obama Isn't the Only One Being Inaugurated on January 20th
Arianna Huffington
Barack Obama is not the only one being inaugurated on January 20. And that's not just because Obama has promised to make a call to service "a central cause" of his presidency.
Top 43 Hits - Memorable Lines from Past Presidential Inaugurals
On January 20, 2009 Barack Obama will stand before Supreme Court Chief Justice John Roberts and swear the
oath prescribed in Article II, Section 1, of the Constitution as the 44th President of the United States.
After taking the oath President Obama will give an inaugural address. Since George Washington's first
inaugural address, many memorable words have been spoken and are among the most enduring and frequently
quoted.
America Receives a Leading Man for the Dramas Ahead
Garrison Keillor
When President Obama takes his hand off the Bible and walks to the Capitol lectern, he carries real power in his pocket,
maybe more than any president since FDR, and some of it he has earned and some is a gift.
Don't Take that Oath, Barack
Mark Bazer
Personally, I'm hoping for a new piece of presidential trivia come Inauguration Day. I'm hoping Barack Obama becomes the
first person elected president to refuse to take the Oath of Office. In other words, I hope he turns down the job.
Don't get me wrong — I like and admire Obama. But that said, and for all Obama's clearly evident wisdom and sound judgment, I just don't
know if president of the United States is the ideal job for him.
Riding on the Wings of Change
Amy Dickinson
Our new president is offering us more than the promise of change. With his historic election, he offered us the
optimistic idea that we can do what we must do. In my experience studying the human condition, we only change
when there is no alternative. And now, there is no alternative. Our national challenges trickle down into our
households. We have family members at war, our jobs aren't secure, our retirement savings seem to be disappearing
and our material lifestyle is under assault.
America in Shock
Nathan Gardels
As we head into 2009, America is in shock. It is not because of the unusual sight of the first black president
taking up residence in the White House. Barack Obama's profile, after all, is familiar to the diverse
population of today's ethnically and racially hybrid America. America is in shock because our economic
and financial landscape is suddenly unrecognizable.
Great Expectations
Cal Thomas
With Barack Obama, it is the reverse. Perhaps because of his
eloquence, lithe body, handsome face and beautiful family (and because he is not George W. Bush),
expectations are so high that they are beyond the reach of any mortal. Perhaps that is why Obama
has been disparagingly referred to as "the messiah" and "the one."
Awaiting the Transformational Presidency
Arianna Huffington
President-elect Barack Obama is obsessed with Lincoln, who changed the country both by changing government policy and by
using the bully pulpit to help us change ourselves.
Europeans Love 'Alabama'
Rick Steves
With a new political era dawning in America, the world is paying attention. I remember the first time my Italian
friends expressed a curiosity and enthusiasm about some black politician named "Alabama." Now everyone knows
Obama's name, and we have a president whom people around the world want to look up to.
Is This the End of Black
Leonard Pitts
Those who claim we live in a post-racial America are guilty of no sin greater than wishful thinking. But
that doesn't make them any less incorrect. Not simply because people are still being pulled over for driving
black but, more fundamentally, because Obama's victory does not mean what some of us think it does. I don't
mean to suggest it does not embody breathtaking progress — it does.
A New Way of Being on this Planet
Robert Koehler
Something has to change about how we conduct our business and live our lives . . . no, that's putting it too mildly. A spiritual
awakening has to occur, the shock and awe of awareness as we look unblinking at the state of the world as it really is.
As the Decider, The True Barack Obama will Become Clear
Jonah Goldberg
Over the interminably long campaign, Obama's positions "evolved" to suit his political needs. This is hardly
extraordinary. Pretty much every successful presidential candidate embarks on a similar ideological migration
Special Inaugural Crossword Puzzle
Can you solve this special inaugural crossword with your mom, dad or your favorite grown-up?
Yes, you can! Kids solve the across clues while adults tackle the down ones.
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