A New Chief Executive has been Hired
by Efin Advisor | November 5, 2008
Yesterday, Barack Obama was elected to become the 44th President of the United States, with at least 349 electoral votes and about 52% of the population. Given the protracted length of the political campaign season, the American people have at least some idea of the policies that will shape the economic landscape over the next four years. Clearly, with change as a mandate, it is safe to say there will be some fundamental shifts ahead in our economic outlook. At the same time, new initiatives will be constrained by a large national deficit.
The expectation of greater cohesiveness in political circles and the notion of heightened government regulation may instill the necessary confidence to stimulate the lending and spending of money in the current economic environment. The steps a government takes are also reassuring to outside investors such as the refuge international investors have found in a strengthening U.S. dollar.
Will the Obama presidency be able to turn around the economy, and how quickly? Will investments in a national transportation infrastructure and alternative energy programs be part of the greening of America? And how might the U.S. government and president Obama buttress the automotive industry to save energy, jobs and the economy? What’s your view?
It’s obvious that it will take the Obama administration a long time to right the ship. The question is, how long? I honestly think it will take more than one term to truly get us back on track. I’d say for every year of damage done to the economy, it’ll take at least 2 to fix it. So, even if Obama’s around for 8 years, we might still be in bad shape by the time he’s gone. Which is a shame, of course, because if that’s the case then there might be a changing of parties in 8 years, even if Obama has done an admirable job. This economy could screw up this country even more than we thought if people’s expectations are unreasonable.
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We clearly need more regulation, but the question is, will Obama actually do it? I know Democratic candidates like to talk about increasing government regulation, but it’s possible Obama’s in for more than he can handle. I certainly hope he will do what he’s promised us, but let us never forget that every candidate is an idealist but every politician is a realist. Once he’s in office, he’ll have to temper the expectations he’s set for America, but hopefully he takes the right steps to make sure our country is indeed taken care of for a long time.
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Being in the small business group health insuance policy business, we are eagerly waiting to see what Mr. Obama does with healthcare legislation.
Jean Drogus
http://www.securefloridian.com
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I think health care will certainly be a priority of President Elect Obama and I have always believed that this would prove a strong benefit to our economy. If more people are healthy, people can work harder and take less days off from illness. I think it will likely strenghthen the morale of workers as well, if they are less fearful about on the job injuries. It’ll also make people less hesitant to spend money if they are worried about saving for a rainy day. These are all tangible benefits that a strong national health care system could bring.
Obama has always been a strong advocate of universalizing health care and concentrated much of his debates with Hillary Clinton on this issue. I think we are likely to see more people with the health insurance they need and a healthier economy as well.
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I think Obama is a very smart man, but I’m not sure how well his ideas will fit in with real world economics. For instance, I know he wants to heavily emphasize hybrids, but will doing this actually create jobs? I’m really unsure. I’m not sure if we can compete with companies from abroad in this area to begin with and I feel like these jobs will just be shifted from jobs that already exist to a different sector. I just hope he knows what he is doing and surrounds himself with great advisors.
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Even if Obama does nothing in office, I’m still glad we elected him because of the value of having a black man as president of the United States. I cannot imagine a bigger step forward for civil rights in this country, and while I don’t think this is the end of racism, I do think it proves that equality and humanity have won out over bigotry and hate in this country. Perhaps this will have a positive impact on the gay rights movement? One can only hope, although it did take a couple steps backward on Tuesday. But the fact is, we made history when we elected Obama and I think we deserve a pat on the back for that regardless of his policies.
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I think the past year or so is the best argument for lengthy election seasons I’ve ever seen. We got a chance to know the candidates, we now have a better sense of what to expect out of Obama than I think we’ve ever had out of a president, and we really knew who we were voting for when we went into the booth. I honestly don’t know how any voter could be undecided in the weeks leading up to the election– there was so much information being shared that it was impossible not to intimately know a candidate when you walked into the booth.
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I think the answers to these questions is largely incumbent upon who is chosen to be secretary of the Treasury. Thanks to the bailout, the secretary of Treasury is probably one of the most important cabinet positions and this person will direct much of the economic recovery that we experience, if any. I have heard rumors that Larry Summers will be chosen. I do not know much about him other than he is an economist who was president of Harvard. I know Obama mentioned that he would like to appoint Warren Buffett during the debates. Buffett would probably be a good choose because he understands economics especially on a practical level. Then again, I do not know much about economics, so I just hope Obama picks the person he truly believes will help fix our economy
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I know Obama will not take this action, which I think is a mistake, but the best way to help the economy would be to give tax cuts to everyone. The people who are least likely to save the money they get back in taxes are the rich since they have no reason to save. They will likely invest in very direct ways which will boost confidence in the economy. If the richest people in America see their money being taken away to a larger degree, they may be less hesitant to invest since they know their money could be taken away. Thus, I think our economy’s direction will take a turn for the worse, with the people who have money that could be invested not actually investing.
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I think people are overstating the “crisis” our economy’s in. Obviously it’s a serious problem, but I think Obama will be able to turn it around in a reasonably short length of time. Impose tougher regulations, give out lots of tax breaks, and start to reduce unemployment and the economy will start to right itself again. These banks and companies we’re talking about are helmed by CEOs who are some of the finest business minds on earth; I think we can trust them to work with this administration to cause enough positive changes to get us out of this recession.
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I think this is really the time for change in the U.S. For at least two years, Democrats will have majorities in both houses of Congress, plus the presidency. How can they go wrong? I know things didn’t work out in 1992 like many had hoped, but that was a different time filled with different politicians. I think the reason why Congress has stagnated to such a degree is because they’ve had to answer to Bush and tailor their legislation to his whim. Now that Obama’s in the hot seat, there’s no telling how much we could improve this country.
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I think the impact of the president on the economy is very overrated. Yes, the president is very powerful and his presence alone can influence the market (see market fluctuations after presidential elections and executive actions). But I would challenge that presidents are really more responsible than Congress for the state of the economy at any given time. It’s really been up to Congress to improve things for some time, and they’ve yet to do it, so why will Obama’s presidency change that? Maybe it’ll make it easier for them to pass legislation, but even so, I haven’t heard of Bush opposing any Congressional measures to help out the economy (aside from early versions of the bailout). This just seems like a copout for a liberal system that has so far failed to do its job.
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Jimmy I disagree with your assessment. The President does several things that make a huge impact on the economy: they project an air of confidence to the American people which gets them investing (Obama certainly knows how to inspire people), they appoint and essentially control the Secretary of Treasury who has immense power concerning the bailout, can issue executive orders about the economy, and propose the federal budget which obviously has effects on the economy. I trust Obama to fulfill all of these duties in a way that can help the economy. I think we can expect big changes soon.
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I do not know how any particular industries will be affected. Green technology will probably see a lot of increases in employees and revenue as Obama is likely to create executive orders creating incentives for these fields. Other than this, I do not know what will actually change. The democrats have been in power for two years now and I do not think we have seen the change they represent. Maybe strong majorities will allow them to project their ideals to a greater degree, but if change occurs, Obama will likely be the instrument of it. Even if the President has little power, Barack Obama has become a rock star in America, and I think people will follow him
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Obama is going to try and do everything he can to turn the economy around by April. It his first 100 days and his presidency will be remembered by his efficacy then and his approval will also be determined by it. Do I know what he will do? No. Do I know if it will be successful? Absolutely not. I have no idea what is to come. Radical economic stimuli and discussion is likely to ensue. Lets hope something good comes out of it.
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I just heard on CNN that Obama is trying to get a stimulus package put through congress before he even gets into office. They did not give much detail, perhaps because the details haven\’t been laid out, but I think we need to be talking more about this. Do we really have the money to give out another stimulus package, no matter who its going to? I really do not know. I think we need to talk about this more than what Obama is going to do and who he appoints and should instead shift to what we can propose. The man has ideas, but so do we. We need to be talking stimulus and we need to be figuring out what to do about this mess.
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Jimmy: overrated? Yes, perhaps the president doesn’t have all-encompassing power over everything that goes on in the economy. But the president has many powers that allow him to severely help or hurt the economy. The budget basically goes through him. He appoints economic advisors and departmental appointees who control economic regulations. He has control over pork spending (especially if he has a line-item veto, which every president should). But of course, Obama will have extra power because Congress will essentially do what he says. I think that in and of itself means Obama has his work cut out for him.
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I think that people greatly overestimate the power of a president to affect change in the economy. Certainly a collection of bad policies can make the economy less stable, and more susceptible to fluctuations (which has created our current crisis), but I think that it will be very difficult for President Obama to turn our economy around right away. Through better regulations, and carefully planned stimulus packages, we can turn the economy around, but ask any economist and they will tell you that economics is not an exact science- nobody can actually predict what will happen if a given policy is put into action. I wish President Obama lots of luck, but I am doubtful that even the most qualified economic policy experts can really fix our economy.
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President Obama has a mountain to climb regarding the economy, no question. The first few months of his presidency, and the way that he deals with certain key issues (the most important of which is the economy) will determine the rest of his presidency. Personally, I think that he can fix the problems, and set us on the right track to a stronger economy. He has shown a willingness to listen to experts, such as Warren Buffett, and to enact policies based on their advice. I think the most promising sign about President Elect Obama, is that although he is a very intelligent man, he is willing to admit that there are others who are smarter than he is, and is willing to listen to their advice. Contrary to a typical bureaucrat who surrounds himself with less competent people so that he can look good, I firmly believe that our policies over the next 4 years will be soundly based on good information, for maximum growth.
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I think it will be interesting to see which direction President Obama decides to go in weighing the national debt and our current economic crisis. Over the past few years, we have heard the Democratic party calling for greater accountability, and in some cases even a brand of fiscal conservatism with regard to the deficit. The recent problems with the economy seem to indicate that we should head towards greater government spending to compensate for the struggling economy. There are certainly benefits to tackling both sides, in the short term- spending to help the current problems will certainly be a benefit to all who are invested in our economy, and in the long term- solving the national debt will help our children, and their children. I think that given the exit polls, the new administration would be foolish not to tackle the current problems first.
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Thank goodness Americans came to our senses’ and elected someone who will help our economy. I have been struggling to make ends meet, and I worry for the future of my children. Now that Obama has been elected, I have hope that things will get better, and that my country will not continue to fall into more crisis. We should all stand behind President Obama, and allow him to make the drastic changes we need to protect our way of life. I am optimistic that we can save our country, and that we have just taken the critical first step.
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I think that we are about to see a fantastic attempt by the White House to walk the fine line between bolstering business/the economy, and protecting the environment. I think that, far from being opposed to each other, the two are intrinsically linked. For example: one of the main environmental protections that Democrats in congress have favored are the emissions standards for vehicles, which release greenhouse gasses and other pollutants into the atmosphere. Republicans have traditionally opposed these standards on the premise that they will hurt the automobile manufacturers. Now that we are facing an economic crisis, new emissions standards will not be effective- because people will not buy new cars. The crisis provides perfect cover to save both our environment and the economy.
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Kyle (second one): I disagree. I think that even if we save the economy, the environmental regulations will still hit the auto makers pretty hard. If we force auto makers to spend time and money on complying with complex government regulations, their business will be hit just as hard as if they were not in an economic crisis. Perhaps they will be even worse off, because of the hit they are taking right now. It is irresponsible to the people who make our economy go, to impose strict environmental standards to save a few caribou.
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Cyrus, you forget that current perception about environmental issues makes people want to buy cars which are better for the environment. The Toyota Prius is such a popular car that there are long waiting lists just to get one (or at least there were before the economic crisis hit). Cars which are not hybrid, but just get better mileage such as the Honda Fit, make great economic sense, and so people are buying them in droves too. The same arguments which are being made against the emissions standards, were made against safety standards- but now cars advertise how safe they are, and the auto industry has made millions off of coming up with BETTER safety features. Safety sells, and if we keep focus on the environment, soon low impact will sell too.
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Victor, I believe you are mistaken about the popularity of hybrid cars. Sure some people have bought them, but they are so pricey that they make no economic sense, even with the better gas mileage. If people want to save the environment out of the goodness of their hearts, that’s fine, but we’re in a recession and people can’t afford to do that anymore. With U.S. auto makers failing at alarming rates, we need to make it as easy as possible for them to turn profits and get out of this hole.
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