THE BLOG
12/20/2008 05:12 am ET Updated May 25, 2011

Bush Legacy

America has elected Barack Obama president and the entire planet is jubilant. People's hopes are high because this man promises change, a major departure from the policies of Bush neo-conservatives. Will Obama succeed in turning the clock back, will he bring America and the world back to the euphoric time of early globalization? The roaring 1990s? This is not the caption of a new PBS documentary, these are the questions that many ask themselves today. Good intention is not enough to achieve change, rhetoric is not sufficient to reverse policies, and this new president has been elected on promises not on experience. Until he proves himself, the world will hold its breath. What Obama needs is a radical plan of action - and the financial muscle to implement it.

At the moment Obama does not have either, and the risk is that he will be imprisoned by the legacy of his predecessor. The financial debt may be too great to be repaid or even renegotiated and the ideological damage too deep to be healed without a drastic departure from what America has stood for since the dissolution of communism: the centre of the post Cold War empire. The seeds of the economic and ideological chaos that plagues this country were sown in the early 1990s, while the cement dust of the Berlin Wall was still in the air.
Obama is just beginning to build his administration and the signs are that he will draw from Clinton old guard, people who in the 1990s promoted financial deregulation -- a process, we now know, that prepared the ground for the current credit crunch. The new president seems very conservative about what to do in Iraq, postponing any decision until after he sits down with the generals in January. Chances are that troops will not be heading home shortly. His strange relationship with former secretary of state, Colin Powell, a man who endorsed his candidacy, is also at odds with Obama's initial rejection of the war when it began. This is a world in which politicians have no shame, but let's not forget that if there is a war in Iraq, it is in part because Mr. Powell stood in front of the Security Council - and the entire world - showing false information about Al Zarqawi's role in Iraq and Saddam Hussein's weapons of mass destruction. Will Obama, as many believe, bring back such a man into the limelight of politics? Finally Obama's commitment in Afghanistan and Iran is well known, he has spoken frequently of his desire to send more troops in Afghanistan and to use force, if diplomacy does not work, with Iran.

In August 2008, the US Congress approved without any major discussion the Pentagon budget for the following 12 months a budget totaling $700 billion. US joint expenditure for Iraq and Afghanistan amount to about $12 billion per month. A month later, in September, the Federal Reserve and the US Treasury succeeded in committing another $700 billion of taxpayers' money to save Wall Street from a financial meltdown. The new president will take office with $1.5 trillion already committed by his predecessor. This is money he does not control, money that will be insufficient to win a war in Iraq and Afghanistan and save the world economy. These budgets will have to be increased.

The war will take priority over social reforms, because money is scarce and the US is running a $10 trillion deficit, which means that 70% of what will be produced in 2009 has already been spent. Obama has a few choices; 1) increase the debt hoping that the world in recession will continue to subscribe to US treasury bonds that have virtually no yield and 2) print money, worrying about inflation later; 3) drastically reduce social programs and 4) fail to meet expectations a la Clinton "sorry providing health care to everybody is a dream, so we carry on as usual," a move which will make him very unpopular. At the time of Clinton the economy was expanding and his excuse was expected, now it is contracting. Or President Obama could drastically cut military expenditure, bring the troops back home and focus on healing the country from the social holocaust of the Bush years.

Change will come only if this last option is be embraced. Change for a politician can mean many things, big changes, small changes, cosmetic changes. The change Obama promised is the real thing, a great transformation. Let's hope he has the courage to transform his magic words into facts.