Obama Inauguration Starts New Era

PREV 2 of 2

Once the day's pomp and circumstance are over, Obama has difficult tasks ahead. Because of the financial crisis and what it's thrust on him, we’re likely to have a president who has a few known qualities that will matter greatly to business. They include:

Listening to the experts. More than any presidency in recent memory, the George W. Bush administration ignored expertise. In planning the occupation of Iraq, it tossed out the extensive planning done by the State Department with famously disastrous results. It ignored the scientific consensus on climate change and federal funding of embryonic stem-cell research. The president trusted his gut. Conversely, Obama relies more on expertise than any president in modern memory. Even Bill Clinton, with his notoriously wonkish tendencies, still took advice from a relatively narrow circle of advisers. Contrast that with Obama, who has brought in a large circle of economic minds to deal with the financial crisis. There's fiscal hawks like Bob Rubin, old lions like Paul Volcker, business sorts from Eric Schmidt of Google to Warren Buffett.
 
Not everyone is welcome at the table. You won't see supply-siders hanging with Obama. (And yet Larry Kudlow was at his dinner with conservative commentators last week.) More than most presidents, Obama seems content to listen to the experts and then respond accordingly. The good side of this is the respect for intelligence. The bad side, as David Halberstam documented so thoroughly in his classic, The Best and the Brightest—a history of the Kennedy and Johnson officials who led us into Vietnam—is that the experts can be wrong. Whiz Kid Robert McNamara was a trifecta of disasters—Ford Motor Co., the Defense Department and then the World Bank. Listening to experts isn't the same as leadership.

Having flexibility. If we've seen anything with Obama it's that he's not rigid. He's upped his stimulus package at each turn. He's signaled that he'll go slower both on closing the detainment facilities at Guantanamo Bay and withdrawing from Iraq. Obama's clearly able to change with circumstances. To some this will seem like flip-flopping, but wiser heads will likely see it as a reasonable response to circumstances.

Being a tax cutter. I'm wrong about many things, but during the Joe the Plumber kerfuffle, when Obama was being labeled a tax-happy socialist, I gamely predicted that he wouldn't raise taxes and would much more likely cut them. I think that's probably the road he'll go down at least for awhile. A lot of it is owing to the financial crisis, of course. Who wants to raise taxes in this environment? But tax-cutting has an intrinsic appeal. It's the easiest way to appease Republicans who still salivate like Pavlov's dog whenever tax cuts are mentioned, and it's become the way to govern under Democrats too.

The '80s idea of tax reform—fewer deductions, lower rates—had cachet when Ronald Reagan teamed up with Democrats like Bill Bradley and Richard Gephardt to pass it. But now the tax code is an ever-expanding mess of deductions, and Obama is no exception to these tactics.

The soaring rhetoric of this inaugural is past. The "age of responsibility" may enter the lexicon or it may not. But what surely matters as much now is the prosaic work of governance. Obama's shown he understands the gravity of what lay before us and the flexibility to adjust to changing circumstances. Those are skills he'll need on the morning of the 21st.

PREV 2 of 2