Tuesday, December 09, 2008

So is Obama going left, right or centre?

Business Times - 10 Dec 2008

By LEON HADAR
WASHINGTON CORRESPONDENT
LEFT-wing activists in the Democratic Party have been critical of the US President-elect's choices for the national security and economic teams whose members would be in charge of managing the policies of the next administration, including the handling of the financial crisis and the withdrawal of US troops from Iraq.
After all, presidential candidate Obama ran on a platform of 'Change' during both the presidential primaries and the general election. One of the main reasons for his successful challenge during the Democratic primaries to the20candidacy of Senator Hillary Clinton, the darling of the Washington establishment and an earlier backer of the Iraq War, was Obama's consistent opposition to the military adventure in Mesopotamia.
Yet, Obama ended up selecting Clinton as his Secretary of State while retaining Republican Robert Gates as Defense Secretary. Where is the promised Change in foreign policy, ask the critics.
Similarly, instead of bringing into his cabinet a group of economic advisers who would reverse the supposedly free-market oriented approach of the Bush administration, Obama asked Timothy Geithner, president of the New York Federal Reserve, to take the reins of the Treasury Department from Henry Paulson, and nominated renowned economist Larry Summers, a long-time Democratic proponent of free-market economics to serve as his top economic adviser.
Again, these choices suggest that Obama will be pursuing Continuity and not Change when it comes to the economy.
Ironically, mirror-imaging the criticism from the political left, several neoconservative pundits have been hailing the nominees for national security and economic teams, suggesting that Obama has decided to pursue a 'centrist' agenda as opposed to taking an ideological turn to the left, and that the policies pursued by his administration would probably be not very20different from those that a president John McCain would have adopted.
Obama and his aides have responded to this criticism from the left and praise from the right by insisting that the president-elect is the one making the decisions on the major policy issues and that when it comes to diplomacy, Obama remained committed to getting US troops of Iraq ASAP, to opening a diplomatic dialogue with Iran and to restarting Israeli-Palestinian peace talks. In the economic arena, he plans to promote a more activist government role in the economy, including an ambitious reform of the healthcare system and the development of 'green' industries.
The bottom line is that Clinton, Gates, Geithner and Summers will have to carry out Obama's policies.
But while it's clear that Obama is not an ideologue and that he tends to project a pragmatic modus operandi, it would be a mistake to suggest that his policy agenda would be committed to the maintenance of the status quo.
That the changes in policies we will be witnessing in the next four years may not be perceived as a dramatic shift to the left has to do with the fact that the ideological balance of power had started tilting to the left in the last two years.
Indeed, it was Gates who replaced Donald Rumsfeld in the Pentagon two years ago that, together with Secretary of State Condoleeza Rice, has been responsible for reorienting American foreign policy to a more 'realist' direction: pursuing diplomacy with North Korea, resisting the use of a military option against Iran and working out the pact for ending the US occupation of Iraq.
Similarly, the housing crisis and the financial crunch left the Bush administration no other choice but to adopt economic policies that a few years ago would have probably been denounced as 'socialist' by Republican and conservative critics. The Bush administration measures include the US$700 billion bailout of the financial markets which involved the takeover of segments of the financial industry, policies which were advocated and implemented by Geithner, and the huge increase in government spending in the form of economic stimulus packages that have been supported by Clinton and Summers.
So in a way, Obama will be occupying the driver's seat in a car that has already turned to the left a while ago, continuing the process of military retrenchment and diplomatic engagement while moving ahead to increase government spending.
Indeed, pundits debate now whether Obama's first deficit will come in closer to US$1 trillion or US$1.5 trillion and they expect his administration to pursue20more government directed industrial policy, starting with the auto industry which is probably going to be saved by Washington soon. You could describe all these policies as 'centrist' if you recognise that the political centre is located now where the left was situated a few years ago.
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