Preparing A New President
President-Elect Barack Obama takes the office engaged in two foreign wars and faces the greatest economic crisis since the Great
Obama will face tough economic choices, and will need to demonstrate pragmatic leadership to solve these issues in the economy and our foreign policy. He must delay
increases in the capital gains tax and create an effective stimulus package.
He must work to create a clear distinction between government and corporate institutions, as well as work on selling large shares in major corporations. Obama must have responsible policies in Iraq, and take into consideration the conditions on the ground, before pulling out the troops.
In Afghanistan, Obama must help rebuild government institutions to fight terrorism and illegal drug production.
In Pakistan, Obama must act cautiously and demand real results from the Pakistani government. Americans have accepted their next President,and the whole world is
watching, people all over the globe support him; he must not fail and pursue the correct policies.
Obama's fiscal stimulus plans are well intentioned, but he must be cautious with his plans. The first stimulus package, with bipartisan support, failed to avoid a recession and sent mixed singles to our
Many people avoided spending, rather they saved their money. Obama's stimulus package
must be effective, and have people actually spend; otherwise it will be a failure.
In his first press conference President-Elect Obama announced bold spending measures, but when asked if he would delay the capital gains he said his economic team
would be evaluating the economy in the coming months.
His initial proposals to raise the capital gains are particularly troubling during these difficult economic times, last week unemployment hit a 14-year high of 6.5%, and wages are currently shrinking. His answer was vague, because his campaign has not made
a clear choice on this issue, which still leaves prospects of delaying an increase in the capital gains taxes, a great sign for the economy.
Delaying the tax would bring relief to corporations, and they will have better expectations for the future. Corporations, to reduce costs, may layoff many employees, if they forecast a higher capital gains tax.
Corporations see labor as a variable cost, and labor cuts create larger unemployment, which will reduce aggregate demand, and worsen this crisis.
Obama faces challenges dealing with the politicization of corporations - the government is now a large shareholder in many
corporate institutions. There will be times, where political interest and economic interest will collide, therefore the faster we can sell these institutions, the better.
Fannie Mae and Freddie Mac had a strange
mixture of government and corporate
interests, which ultimately led to its
demise. Obama should progressively work to take these corporations off the government books, or we will be doomed to deal with troubled institutions, like Fannie Mae and
Corporations need to have good expectations for future taxes and the stimulus must make people spend, otherwise unemployment will rise, and aggregate demand will continue
to fall. Obama must speedily work to sell the government owned institutions, or he will face a great dilemma in the future.
Obama understands we must carefully remove our troops in Iraq, to avoid widespread catastrophe.
He also correctly demands that the Iraqi government should be more engaged with more troops and money. Obama opposed the war, and the war has not reached its intended goals; we did not find WMDs, we did not stabilize the oil supplies and we did not help develop
democracy. However, we are still actively fighting this war and Obama's partisan stances lead him to oppose the surge, which brought stability we have in Iraq.
The results of the surge led to October having the lowest amount of U.S. troop casualties since the beginning of the war. Obama would like to leave Iraq in stability; ironically his administration will take credit for the stability, while he opposed
the surge that actually brought the stability. Obama must be pragmatic and take into consideration all of our options, even if his progressive base would disagree with his actions.
His policies to fight terrorism in Afghanistan and Pakistan are correct, but must he must be cautious to not exacerbate tensions in those fragile regions.
The U.N. Security Council warned that Afghanistan may become a failed state, because of Taliban violence, illegal drug production, and weak state institutions.
Obama should work on building Afghanistan's
government institutions, because the Afghans perceive most officials as weak and corrupt. According to a New York Times article, President Karzai's brother was involved in
illegal production of opium; amid the criticisms of corruption in his government led President Karzai to restructure his cabinet.
Afghanistan needs to appoint new leaders that
can bring legitimacy to the state, and create an Islamic Afghani force to combat terrorism and illegal drug production, which moderate Afghanis would favor.
Obama's fight against terrorism in the Pashtun tribal region in Pakistan needs more cooperation from Pakistanis. It is a nuclear state with 160 million Muslims and a history
of turmoil. Currently, Pakistan does not want to be perceived as weak by its citizens.
The chief of staff of the Pakistani Army, Gen. Ashfaq Parvez Kayani, said that Pakistan
would defend its border "at all costs." Pakistan is a fragile state, amid turmoil from the transitioning government, they want to show their people they are sovereign over
their territory and have claimed they will respond to America with force.
Less than a month ago, Pakistan pleaded with China for economic aid to avoid defaulting
on critical payments. Americans understand the insecurities of the ruling elite, but the Pakistanis also understand the extent of American aid.
In return for our billions of dollars in aid, Obama must demand real cooperation and substantial progress in fighting terrorism from the Pakistani government Bush said to Obama: "You are about to go on one of the great journeys of life. Congratulations
and go enjoy yourself."
The Bush administration is slowly
transitioning their power to Obama. The expectations are very high, and he must use his widespread support to actually bring bipartisan change. Obama has the majority
of Americans on his side, and he should focus his political capital on stabilizing the economy, by passing a responsible stimulus package and delaying future tax increases.
In regards to foreign policy he should leave Iraq in stability, rebuild Afghanistan's institutions and fight terrorism in Pakistan. If he chooses to govern with a stubborn idealistic progressive platform, he will fail and face the same fate as President
On the other hand, if he chooses to govern with centrist policies, he will very successful and potentially could have a
better legacy than his Democratic predecessor, Bill Clinton.