On November 5th

British elections are shorter, less money-driven and generally less dramatic than the Wagnerian opera of a US presidential election. But there is one aspect to a British general election that provides an electric theatrical moment. On the Friday morning after an election (British elections are held on Thursdays), the new prime minister and his/her family walk into their new home, 10 Downing Street.

The efficient moving vans have already hauled away the previous incumbent’s possessions and the transfer of power is immediate.

There are many reasons, not least the Constitution and the difference between a parliamentary and presidential system, why the US doesn’t have such a quick switch of administrations. But on November 5, 2008, the US is going to be facing an odd and potentially dangerous time. Economic challenges are going to be piling up on the docket, but there will be an uneasy interregnum with only a semblance of leadership. Robert Kuttner has an interesting reflection on the problem.

Assuming Obama wins, there will be a Democratic successor to Paulson and that Treasury will doubtless use the powers granted Paulson far more aggressively. But that will be after January 20. And at the rate that the financial system is collapsing, even three months is an eternity.

The two other key players in this morbid interregnum are Fed Chairman Ben Bernanke, whose tenure will continue into the Obama administration, and House Speaker Nancy Pelosi. Bernanke continues to expand the emergency powers of the Fed, now venturing into uncharted waters by having the central bank go into markets and buy unsecured short term commercial loans, a power not even granted Paulson by the recent legislation. It would be far better if Bernanke worked in concert with an overall strategy devised by the incoming administration.

Pelosi is on board for an emergency second stimulus package, to be enacted right after the election, this time in the range of $250 billion. At the rate the economy is cratering, she will get little of the usual resistance from Democratic blue-dogs and Republican foes of big government. Even “earmark” will become a good word again, since the whole country will be earmarked for help. But if the banking system goes down the drain, and housing foreclosures intensify, a fiscal stimulus will not be sufficient.

Obama, Bush, Bernanke, and Paulson would do well to avoid the mistakes of the Hoover-Roosevelt interregnum, a stand-off that made it even more arduous to climb out of the Great Depression once Roosevelt finally took office. As difficult as it may be, they need to negotiate a much bolder emergency program that Obama can carry out. And they should move right after Election Day, and begin the planning right now.

Bernanke, of course, will outlive the Bush administration so his role will undoubtedly be constructive. I suspect Paulson will be generally non-partisan in his desire to do the best for the country. But how much cooperation will there be from Bush? On past performance, my hopes aren’t high.

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