Obamanomics: Redefining Capitalism After the Fall

[ClarkUSA]

THE recession will end. No one is marking the calendar, least of all President Obama, but the president is hinting at an audacious ambition as he waits for that inevitable if distant day: a redefining of American capitalism.

In a series of comments in recent weeks, Mr. Obama has begun to sketch a vision of where he would like to drive the economy once this crisis is past. His goals include diminishing the consumerism that has long been the main source of growth in the United States, and encouraging more savings and investment. He would redistribute wealth toward the middle class and make the rest of the world less dependent on the American market for its prosperity. And he would seek a consensus recognizing that an activist government is an acceptable and necessary partner for a stable, market-based economy....In beginning to articulate a long-term approach, the president is putting an early stamp on a debate of historic importance — and ideological underpinnings — just getting under way in the United States and around the world.... the president’s approach is based on a belief that recent economic cycles were driven too much by financial engineering; reserved most of the fruits of good times for the wealthy; relied excessively on foreign capital to finance domestic debt; and ultimately gave way to painful busts. Mr. Obama, they said, simply wants a more stable economic model... the prospect of a Democratic administration pushing the United States to the left is seen by many conservatives as a political rallying cry... Mr. Obama’s position brings the United States full circle from Ronald Reagan’s nostrum that government is the problem... He would be willing to use the usual liberal policy tools to redistribute wealth after a recent period in which the gains have gone primarily to a relative few at the top of the income scale. But he would stress personal responsibility rather than entitlement. He would promote trade, but codify the Democratic push of the last 15 years for more labor and environmental protections in trade agreements.

If more activist government is the most controversial aspect of his long-term approach, the most ambitious might be his aspiration to reduce the degree to which the United States is a consumer-driven economy — or at least to develop policies that recognize the likelihood that consumer demand cannot grow at the rates it has been without being accompanied by a growing and destabilizing mountain of debt.... Embedded in that approach is a far-reaching implication: that the rest of the world should no longer count on the United States to snap up imported goods or run up large trade deficits... To drive economic growth in the place of debt-fueled consumption, Mr. Obama is banking on the emergence of alternative fuels, pollution-limiting technology, health care technology and other new industries linked to broader policy goals.

Even with the economy and the financial markets showing a few tentative signs of improvement... it will be some time before Mr. Obama has the luxury of focusing on the long run. Still, in his first three months in office he has not been reluctant to think big — and there may be no better time to start redirecting an economy as huge and complex as this one than when it is in flux.

The author is not a member of Team O's economic team but this prospective blueprint for CHANGE sounds good to me. It's about time American capitalism gets redefined.