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The Current Discussion: What's the first thing you hope Barack Obama does as President-Elect?
Today will inevitably turn into a day of expectations, forward presumptions and various kinds of games, guesses and guarded spin. It will not be a surprise to read forecasts about the next election in 2012, even though Job Number One for the president-elect will be damage repair.
The "recession" whose reality and outlines we see today is just the beginning of a decade-long test period that shall strip bare elements of raw, unregulated and highly leveraged Anglo-American markets crossed with short-term, destructive decisions. The highly interconnected global economy is now a force and a trend with its own downward momentum -- and America is both the primer and leader of it.
Those in the less leveraged EU will revise their assumptions on the spread of risks in trans-national markets and tighten controls, definitions and, if necessary, flows of capital. Other notable economies (Russia, China, Brazil and India) will reverse plans to discard the assured social safety net of socialism and may well label reduced state intervention as a bad experiment.
Americans will be busy with concurrent revisit of FDR’s New Deal, Johnson’s Great Society and a series of trial-and-error tools and means to put out the fire, de-leverage their finances and reinvent economic performance.
One ought not to be worried about Europe, including Eastern Europe, the Middle East or many parts of southeast Asia, as these regions are realists and used to cycles of boom and bust. The memories of tea and foreign currency rationing, nationalization of Leyland car factories and Newcastle coal mines (in Britain, circa 1970s), and deep bankruptcy and stark readjustments (in Eastern Europe, circa 1990s) have not faded. It took decades to re-train and return many to work from heavy industry, steel mills and shipyards to fast food, coffee franchises, the odd car parts plants and computers.
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