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Can He Save Capitalism?

Posted by tothewire on December 23, 2008

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The new U.S. president will be judged by whether he can save capitalism.

The great sociologist Max Weber described the power of charisma as “a certain quality of an individual personality, by virtue of which he is set apart from ordinary men and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities.” Some of Barack Obama’s supporters have at times sounded as if they saw “the One” in these terms. His birth, background and eloquence, they believe, give him almost magical qualities. There’s no doubt that Obama is intensely charismatic and that it provides him with unusual political capital.

But very soon—say on Jan. 20, 2009—his powers will start to mutate, and they will derive less from his persona and more from his office. He will shift, in Weber’s terminology, from wielding charismatic authority to legal authority.

In January, Obama will gain the authority to run the government of the United States of America, and that is why he sits atop this list. No matter how charismatic, were he the president of Kenya, he would not be in this position (or, like the real president of Kenya, not even on this list). For all its problems, for all the battering it has taken, the United States remains the single most important country in the world—able to exercise influence in every realm and on every continent in a way that no other major power can. It remains, in the words of the German writer Josef Joffe, “the default superpower.” Add to this Obama’s special qualities, and the relief much of the rest of the world feels at seeing the end of the Bush administration, and you have a heady combination.

But presidents cannot simply remain charismatic symbols. They are forced to tackle the problems at hand, and their influence then grows— or ebbs—based on how they handle those challenges. However impressive they were as human beings, it was not in being but in doing that George Washington, Abraham Lincoln and Franklin Roosevelt built their enormous reputations. Whatever Obama may have thought when he began this journey, at a time when the war in Iraq was foremost in many voters’ minds, whatever his campaign promises, his presidency will be judged on how he handles the economic crisis that now envelops the United States and the world. For Obama to be remembered as a great president, he has to do nothing less than rescue capitalism.

The first task is perhaps the most difficult: to restore confidence to Americans, and indeed to the world. While there has been much elation over Obama’s election, there remains a deep pessimism across the country that is having adverse effects on the economy. People and corporations are still not doing much by way of buying, borrowing or lending —the heartbeats of modern capitalism. The political system has moved on to the automobile bailouts and the fiscal stimulus, but the original problem of trust in the financial system has still not been fixed. “Credit markets are still fundamentally broken,” says David Swensen, chief investment officer of Yale University.

How to restore confidence? It’s not as easy as it sounds. After all, George W. Bush has pretty consistently projected an air of confidence, one that tends to get people even more worried than they need to be. Perhaps this is because Bush’s calm often seems utterly disconnected from the realities around him; he appears thoroughly unaware of the facts on the ground, whether in Iraq, Louisiana or Afghanistan. Like Bush, Franklin Roosevelt also projected optimism, but he took great pains to recognize and describe the depth of the difficulties the country faced. In his first fireside chat, Roosevelt explained the basics of banking to the American people and then asked for their help in getting the system working again. “It is your problem no less than mine,” he said, enlisting them in the cause at hand.

The next step is to give people a sense that the financial system is stable and predictable. Swensen, who after Warren Buffett is perhaps the most successful investor in recent decades, argues that this has been the crucial flaw in the Bush administration’s actions. “Markets need certainty and predictability,” he says. “And the administration’s actions have actually increased uncertainty and unpredictability. Its measures have been ad hoc, its response to each institution has been different, its reasoning has been opaque—all this creates confusion, and that drives capital away.” Swensen’s own solution is a simple and systemic one: have the government guarantee all money-market funds, with no limits, for six months. He argues that the government has to eliminate some degree of risk in order to get people to borrow and lend again. “Right now the government is not facilitating private capital flows; it is substituting for private capital flows. That doesn’t solve anything.”

The final way that Obama can create confidence is to reform the system itself. His administration will inherit a government that has taken on an extraordinary set of obligations in the private sector—ownership in banks, guarantees of commercial debts, loans to the automobile industry. Carefully retreating from these obligations to restore a market economy will be as complex an exit strategy as the one from Iraq. But if Obama is able to reform government rules and regulation—and thus the American economy—it will give people around the world renewed confidence in the American system. It was only after Japan was able to put in place a new system of tough auditing, after all, that its own banking crisis abated.

Obama will find many dire challenges in his inbox, but none—not Iraq, not Russia, not Pakistan, China, Afghanistan—is as important as this one huge task: to restore confidence, certainty and reform to America. It’s a lot easier said than done. But if he manages to pull it off, people might well start wondering whether Barack Obama has some supernatural powers after all.

By Fareed Zakaria

http://www.newsweek.com

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44 Responses to “Can He Save Capitalism?”

  1. Personally, I have no faith in Obama’s campaign of “change”. From his cabinet choices (and I include his science position choice as nothing but an excuse for carbon taxes vs. real environmental problem solving; not political sound-bite problems of “global warming”) to the very promises he made on the campaign; as more of the same. From endorsing the h monetary suicidal bail-out proposals to ending the drug war. He is the same “no change” as we’ve seen in politics as long as I’ve been alive. And I’m 48. However, this does not mean we cannot force him to enact the changes, We, the People need. And I urge all of us to do just that, in every manner possible. Thanks, Jim

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  2. Lawman2 said

    jim I agree with you. of course i didn’t vote for obama not that i liked the other pick much either.but he is our future president.

    anyway,we need less government and more WE THE PEOPLE but why are so few stepping up to the plate? SOCIALISM we have slowly become a nation so reliant upon our government…i could rant on but it would only offend tothewire hehehe

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  3. Rj said

    If you didn’t vote for Obama…what was your other option????LMAO

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  4. tothewire said

    lol Rj! I agree! I am proud to say I did vote for Obama, I am not too happy with some of his ‘picks’ but I still have faith in him.

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  5. Rj said

    I hope I wasn’t hoodwinked, or else I’m going to have to go to the White House, and kick Obama’s butt! It wouldn’t have been any fun fighting McCain….Palin maybe!

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  6. Just what change did Obama promise? A bigger commitment to Afghanistan with no real pullout in Iraq? More support for the bailout for the incompetent rich? His change was actually an increase in more of the same. Just my opinion. And no, I couldn’t stand the other party choice either. There is only one party, to acknowledge it’s legality by voting in it went against my own code of justice. Thanks, Jim

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  7. obama the antichrist said

    I highly doubt that a marxist can save capitalism but that is my opinion

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  8. Lawman2 said

    hey there ota! i see you have the same kinda thinking i do when it comes to obama…

    good to see you around man!

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  9. obama the antichrist said

    lawman it is funny how we agree on this when we disagree on religion!

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  10. Lawman2 said

    god i would pay money to see rj kick palins ass! hey there rj could you make it a mud wrestling thing with your cloths off for the caveman?

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  11. obama the antichrist said

    ….and apparently alot of other things we disagree on cuz i am a palin supporter…

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  12. Lawman2 said

    i hear that from time to time ota hehehe

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  13. Lawman2 said

    i love palin! i just would love to see them both naked and wrestling lol

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  14. Lawman2 said

    i would settle on seeing them both naked…hehehe
    palin is a smart lady, the only thing i don’t like about her is the whole religion down your throat.but her idea’s on economics is pretty centered, mccain and her both reminded me reagonomics and it worked then, just as it would now.less government.

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  15. obama the antichrist said

    gotcha!

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  16. Rj said

    Palin is smart? You must have been watching or reading something that I did not. Or maybe you don’t have enough brilliant women in your life–other than your wife!

    Unfortunately, I’d never do the mud thingy because I don’t like to get dirty. I’m not a gun-totin’, mud-slingin’ type of gal.

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  17. obama the antichrist said

    YOu reminded me of my favorite quote “stupid typical white person always clinging to their God and guns” i love it and i have a shirt with that on their too! 🙂

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  18. Lawman2 said

    damn it! thats the one thing i hate about liberal women…they just don’t live to please their man! LOL

    love the sassy talk and sexy ass though!

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  19. Rj said

    No, we can live to please our man, when we feel that we will get exactly the same, or more, in return. Preferably more. But I put up a good fight, something that conservative women probably do not do. No knee and neck problems here.

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  20. Lawman2 said

    flexibility… mm mm mm another fine quality to have lol
    merry christmas rj! visions of you and palin in my head…hehehe

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  21. tothewire said

    You’re such a nerd lawman! How about you and OTA get in the nude and mud wrestle for RJ and the rest of us ladies here to watch? LOL

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  22. Lawman2 said

    baby your ruining my christmas fantasy there…OMG that left a bad taste in my mouth.

    no more messin with the caveman’s mojo! hehehe

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  23. tothewire said

    Messin with your mojo?? ROFL brat

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  24. Lawman2 said

    yep my mojo!thats right the caveman has THE mojo and the ladies love it! hehehe
    they love me,i can’t help it baby…

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  25. tothewire said

    ROFLMAO Ok, Ok. I’ll leave you’re MUCH desired mojo a lone…and I will learn to live with all the lust from other women they secretly have for the caveman…

    My side hurts I am laughing so hard!

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  26. Lawman2 said

    hey baby come here to me and i’ll show you some mojo…

    but as you know every woman who ever has experienced my mojo falls madly in love with the caveman.i’ve learned to live with it and yes babe you should just except the fact…i am a lean mean lovin machine hehehe

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  27. Lawman2 said

    damn she went to bed without me…night all! i’m off chasing my pretty little liberal wife to bed… guess she didn’t fall for the mojo stuff? damn! liberal women never fall for the mojo line! damn them liberal women gettin their education and learnin and keepin the caveman on his toes hehehe

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  28. obama the antichrist said

    TTW…ew….ew…..EWEWEWEWEWEWEWEWEW….EEEEEEEEEEEEEEEEEEEEEW!!!!! NEVER IN MY LIFE WOULD I MUDWRESTLE WITH ANOTHER DUDE!!!! rJ, you should see my mother (a conservative woman) she can hold her own its crazy…its a bit scary…BTW MERRY CHRISTMAS

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  29. tothewire said

    Good to see you OTA!
    Merry Christmas OTA!!! and Merry Christmas to your holdin her own mother!!! God Bless you and your family this most Holy Day!

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  30. tothewire said

    OTA here is lawman’s manifesto…

    https://tothewire.wordpress.com/2008/12/08/this-cavemans-manifesto/

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  31. obama the antichrist said

    well we certainly take a different view of the world dont we Lawman??!! ahahahshaha i love it! I love ppl who disagree with me cuz i love to debate! anyway…….
    this page went on a tangent!!!

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  32. Rj said

    Yeah, we were supposed to be talking about Obama saving capitalism…but it would be a site to see some guys mudwrestling! Conservative women can hold their own…on their knees…but they’ll never amount to the fire contained in us liberal women.

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  33. kathy (kayms91) said

    Believe me, I (a conservative woman) can match and surpass any ‘fire’ you liberal women have… the fire you guys have goes out before mine ever does when we are debating…. case closed!!

    See there’s my ‘fire’…but, that aside… I hope all of you had a great Christmas!!

    And I have to agree with OTA… guys mudwrestling …. EEEEEEWWWWW!

    Like

  34. tothewire said

    lol Kay point well taken! Did you have a good Christmas?

    Like

  35. kathy (kayms91) said

    Hi TTW… yes, my Christmas was very nice, thanks…but I have to admit that I did indulge this year in the materialism part by surprising my daughter with one of the best presents I’ve ever gotten her…sometimes, when the timing is right… I think it is a great way to say “I love you”!
    I still have to celebrate with my brother and his family tomorrow… which alludes to the ‘forgiving’ subject on another page… there are always mixed feelings about this part of the celebration… ;o( but anyway… I hope you both had a great Christmas… it sounds like you did… giving is truly good for the soul and of course, spending time with loved ones… did you all have a white Christmas?

    Like

  36. tothewire said

    That is good you bought her something she really wanted! And it is a great way to say I love you!

    Forgiving sometimes is one of the hardest parts for us all.

    We had a great Christmas! Well I hope Lawman did too…lol

    No white Christmas for us, just another cold day in Missouri! lol

    Was your Christmas white?

    Like

  37. tothewire said

    Well time for me to head back over to help dad. Hope you have a great Christmas with your brother and his family…or at least a civil one! I have a friend who’s family does not get a long AT ALL. They never spend Christmas together, and I find that so sad.

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  38. lawman2 said

    ota i don’t know if we do or not.what parts of my manifesto do you disagree with?

    Like

  39. kathy (kayms91) said

    Hi TTW.. no.. no white Christmas here… the only way to have a white Christmas here is to drive 2 miles to the beach… our sand is among the whitest in the world! But is just isn’t as good as the real thing… we had to turn the air on this year! ugh!

    I’m glad you both had a great first Christmas together!

    Like

  40. obama the antichrist said

    a rainy day in indy was our christmas XP

    Like

  41. obama the antichrist said

    Lawman i dont believe in the illusion of seperation of church and state and i dont believe in obama and i dont believe in your first part of evolution and those are at the top of my list of things i dont believe in

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  42. Lawman2 said

    hey now ota i didn’t vote for obama…i don’t like him i think he is a socialist. the rest i guess we disagree about lol

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  43. Lawman2 said

    thanks kay! maybe now we will go check out some white beaches…hehehe

    Like

  44. obama the antichrist said

    o nm then. i thought you voted for obama my bad…he is a socialist/marxist there is no thinking envolved just pure facts 🙂

    Like

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