PETERSIDE ECONOMIC REVIEW

Chamberlain S. Peterside, Ph.DFriday, January 16, 2009
Cpeterside@aol.com
New York, NY, USA

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…CAN PRESIDENT OBAMA’S TENURE RE-CALIBRATE THE USA?

Change Is Upon Us…

here’s no gainsaying that when Mr. Barack Obama takes office next week, US and indeed the world would have crossed a major milestone. The first leg of change that he strenuously campaigned for and we all craved would have materialized. However being sworn in as the first non-white US president is one thing, ultimately achieving sweeping change is a different story.


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When I mean “true change”, am speaking about the sort of transformational shift we have seen before in the history of this country (key ones worth mentioning like; attainment of independence from United Kingdom, abolition of slavery, winning the ensuing civil war, building the so-called “great society” after WWII, and passing of civil rights act). Can change this time enable US turn a new leaf in the 21st century and continue to live up to its enormous prowess?

Lets recall lessons of history - long after the emancipation proclamation was adopted, free slaves never had access to equal opportunities in this country, nor could women vote, talk less of former slaves (blacks) being able to exercise that inalienable constitutional right. Not until enactment of civil rights bill in mid 1960s did things begin to crystallize. Little over 40 years later we see a new horizon opening up with the recent election. So in effect, great progress is constantly being achieved in this country, albeit painful and long.

…How Will It Affect You?
So how will Obama stepping into the oval office truly make for change? How long will it take for us to feel new lease of life? Some are already heralding the birth of post-racial America, while Earl Grave founder/publisher of Black Enterprise magazine made bold to say – there’s no more reason for excuses”. The excitement is palpable, but before we get carried away in the momentous euphoria lets pause and ask – Will President Obama’s tenure of office actually succeed in re-calibrating America?

The beauty of US is its diversity as will increasingly be recognized, thanks to which America knows how to reinvent itself. But make no mistakes, some things will never change – the fact that different racial groups must co-exist on the face of this country and their self-perpetuation in midst of the commonalities will remain a driving force, not withstanding recent census prognosis indicating that in 50 years, racial minorities in the US will constitute larger chunk of the population.

Right now the country remains mired in unprecedented economic funk, just as we see pockets of geopolitical skirmishes around the world. All that will be waiting for Obama to tackle, but look deeper, you will notice bitter socio-economic chasm and political angst confronting US, reflected in such bread and butter issues that will influence it far into the future, toward which direction remains to be seen - like the incestuous relationship between lobbyists and elected officials that drives policy-making in Washington DC, growing poverty, widening income-disparity, falling standard of public education, foreclosure crisis, spiraling cost of healthcare, soaring consumer/national debt, bloated budget deficit in the face of rising unemployment. Are these simply fall-out of cyclical economic malaise or symptoms of deep-rooted decline? You be the judge.

…From Neo-con Ideology to Neo-Pragmatism
The biggest concern of course is – whether social security benefits will be there when you and me and are ready to retire. Therefore, the question is - what genuine strides will Obama make to bring these yearnings to the front-burner and make it “mainstream affairs” rather than “your problem” (if you are not part of the privileged few).

Blind ideological leaning at all cost in the past had nothing to do with tackling your most pressing problems, yet everyone is now paying the price. Its no secret that middle to low income families as well as people of ethnic minority bear proportionately greater brunt of socio-political and economic problems (mostly resulting from flawed policies and other times by their own misfortune), by virtue of level of education, income, family background, place of domicile etc.

So will this change during Obama’s presidency or will it be business as usual? In course of the campaign, Obama spoke eloquently about the need for everyone to band together in the spirit of change based on commonalities and not differentiating factors, in other to tackle challenges so we all can be lifted in the resultant prosperity that must impact not just the high echelon of society but all classes and shades of people – empty rhetoric or actionable vision? Time will tell.

Focus of Obama’s economic objectives as we heard (tax policy, education and alternative energy plans, job creation etc) does say great deal about his mindset and efficacy of mainstream approach by the government at this stage of America’s history. This is in sharp contrast with failed supply-side “Reaganomics” and tax-cuts that seek to target the privileged class, in the spurious conviction that they will in turn lift everyone else.

…Middle Class In Peril
Data on plight of middle class families during current economic downturn is quite grim. Already, unemployment is edging toward 9%, rising to double-digit in some poor neighborhoods/regions and especially amongst certain disadvantaged population groups (elderly, youths, ethnic minorities and less educated). The rate of foreclosure has left some neighborhoods totally decimated as families battle high cost of living and healthcare expenses without jobs. Yet you wonder how long skyrocketing budget deficit, principally financed by foreign sovereign investors can sustain this country – if you are in doubt check out the new documentary, I.O.U.SA.

Evidence suggests that most of the traditional high-paying manufacturing and technology jobs are long gone abroad as some people cant even find low-paying service jobs to make ends meet. In the face of this all, we are cognizant of bailout packages earmarked for financial institutions and auto companies, without targeted widespread program to bail-out middle and lower income homeowners. As credit tightens for small and mid-sized companies, their ability to create jobs and participate in expanding the economic pie becomes impaired.

Thankfully, the sweeping mandate for President Obama will help demystify notion that US is divided along ideological orientation, i.e. Red and Blue States or based on racial lines. This hypothesis was somewhat evident in two last elections, where the politics of fear and “we versus them” was perpetrated by republican operatives and driven hard to elect President Bush Jr.

...More Unites America than Divides it
The reality of America is that the country has become divided along socio-economic threads and that is very self-fulfilling with Obama’s election. Who could argue that a rural white poor welfare-mom doesn’t have more in common with an urban-dwelling black single-mom than a middle class white family in the south? The same way that a white middle class family struggling to make ends meet in the mid west is not necessarily different or better off than a Black, Hispanic or Asian middle class family that is worried about their job, healthcare bill or how to put their children through college (no matter where they live).

Deeper analysis of US demographic data and social dynamics will quickly reveal this underbelly of “new America”. Already one great achievement of Obama is that he succeeded in unmasking it. But now that we have crossed the rubicon in electing a president not based on racial divide or ideological bias, but rather along key issues that unite rather than polarize America, can the new administration chart a mainstream course and remain on that trajectory?

…Free America’s Mind, the Rest Will Follow
This philosophy was aptly epitomized in Martin Luther King Jr. famous speech, when he said he dreams of a time when his children will live in a society and judged by the content of their character rather than the color of their skin. This should underscore the direction and measures that President Obama must pursue. By refocusing on a centrist agenda Obama could re-energize America’s spirit, rebuild its decaying infrastructure and catalyze a new competitive streak that will keep the country charging ahead strong for the next 100 years and beyond, while creating wealth of opportunities.

Otherwise as a modern capitalist democracy, US could be toying with infamy where the interest of negligible corporate stalwarts, lobbyists and political operatives will propel and totally undermine the whole country, depriving the larger population of any voice and dampening enthusiasm of mainstream America (who constitute majority population anyway) to strive harder, knowing that there’s no reward waiting at the top of the ladder.

The last time I checked, there were countries in history that attained great heights but outwitted themselves and floundered due to parochial and narrow-minded focus of leadership.

Chamberlain is a New York based financial professional and member of Rivers State Economic Advisory Council.

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