Wednesday, November 5, 2008

CHANGE! What is it good For?

I have a favorite joke about change...

You see there were these men who were incarcerated as prisoners of war... One day the head of the prison assembles them all in the prison square and announces, " Men, after two years as prisoners, I have for you some good news and some bad news".

"First, the Good News. This is a simple pleasure, but after two years, I finally have for you, a change of underwear." At this mention, the men look down at their feet and shuffle them. Some weep. It was an act of kindness... "Now," the prison-master goes on, beginning to point, "I have some bad news...You will change with you, you will change with you, you will change with you..."

So, not all change is for the better... and for some the change is better for some than for others.

As we ponder the changes we will see under Barack Obama, I can't help but notice the Russian announcement that they are moving new short range missiles into the Baltic region. Wow! That was a short honeymoon, Barack! I guess Biden was right about Barack getting tested. There is still a pending Russian statement about helping Cuba to set up a 'space launch center." and then there is our friend Mr Chavez in Venezuela who wants to divert more oil revenue so he can have THE BOMB.

In pre-election polls a number of foreigners had registered preference for Mr Obama as the new US president. I don't know why. Did they truly think he would be better for us Americans, or that he would be better for them? Did they want republicans out because Bush had tainted his party with a vision of an uncontrolled military? We don't know. Beware of at least wary of the way foreigners have embraced Barack, it may be the good news that it seems or it may not.

Nor do we know why Obama was elected in America. Exit polls will never tell us what made those few percentage points of difference in the overall vote. OK. Tell me young people and black people voted overwhelmingly for him and that the black voter share of the total electorate rose by about two percentage points in this election. That alone is worth more than one percentage point of this 'small ' popular vote margin over McCain. That is a bit part of the story. Putting that aside you see how close the race was elsewhere. While the electoral victory is huge, the popular vote is nowhere close to what polls said: eight to to nine points of difference? What crap! Had the democrats not spent so much money and so much effort in registering new voters it seems to me at least that Barack may not have won at all - at least not the popular vote. McCain got far more votes per dollar spent. As great a win as it is for Obama it seems to have been more hard fought and hard bought that it was a gain that was a rejection of the republican candidate. Political pundits can say Barack won by associating McCain with Bush but that does not seem to be the case. He won on getting a huge proportion of the young vote and the black vote and by registering a lot of new voters. Then he edged McCain in the remainder of the electorate - he edged him- he did not clobber him. Small things made the difference. Did Palin cost McCain THE JOB?

But the electoral gains in the House and Senate seem to be more in the vein of an old-fashinoned beating. Remember the electoral landslide comes from a winner-take-all contest, state by state. When Ross Perot ran for the office of president he got about 28% of the popular vote and NO electoral votes. The democrats did get break-through wins in some states where they had not won in a long time. But they outspent McCain by about two to one overall. Money matters. Still, there is a further question of where democrats beat republicans in the House and Senate of who won: did liberal democrats win or conservative ones? The party head count may exaggerate the extent oft the sea -change in Washington. For example, Bush-hater and former SNL comedian and democrat radio figurehead Al Franken lost his bid for office in Minnesota.

In the works
On domestic policy we look for changes without being certain what they will be. Obviously we have some framework. A stimulus package is sure to be in the works - a big one. Corporate excess is sure to be on the way out and under assault. We are not in the know about what he will do in terms of foreign trade policy and NAFTA, which he threatened to 'take another look at.' Some of his social policy goals may be hard to achieve because they compete with the ongoing crisis that remains JOB ONE for any president. Obama has a good chance of making a clean break with the past four years on foreign policy but the world remains a dangerous place and we will have to see how he positions himself and us. Changing our interface here will be a more delicate job than the campaign rhetoric suggested. From 'day one' of his election and two and one-half months ahead of his inauguration Barak's first foreign policy challenge has emerged in the Baltic. and it's not just the huge drop in the Baltic Dry index.

Change? Never mind?
There are many opportunities for change. But let's remember that over the past four years the democrats controlled the House and the Senate and held the top slots at the Senate banking Committee and on Financial Services in the House. Dodd, a democrat who headed the Senate banking committee, long opposed republicans that had sought more aggressive regulation of Fannie Mae. He also stonewalled appointments to the Fed making that regulator operate short -handed before and during the crisis that broke out. The view should not be that the republicans are out of leadership and now the fox is no longer guarding the hen house. These overseers are the same 'foxes' that were overseeing things before. It remains to be seen with all the monies Barack raised and all the 'debt' he has amassed to donors how large an engine of change he will be. Sure a lot of it was grassroots money, but not all of it.

As we said above.

Money matters. And that is true for republicans as well as for democrats.