The expectations from Barack Obama are fantastic. He is perceived as a symbol of hope, a prophet of change, the man who will save the world. He is not just a political leader. The whole attitude toward him is based on emotions, on love. To the American people, he is the great savior who will bring deliverance to the world, especially to minorities and the underprivileged.
The process of salvation will begin not in Iraq or Iran, not with a solution to the problem of greenhouse gas emissions and not with shutting down the Guantanamo Bay detention camp, but with the economy. It is here that Obama will devote his energies in his first months in office, in light of the complex and volatile legacy that has been handed down to him. George Bush is leaving behind two ticking bombs: a massive budget deficit of a trillion dollars and a financial hurricane in danger of triggering a dire recession.
The citizens of the United States and the whole world are now paying the price for the good life indulged in by the U.S. administration and the American people, who partied beyond their means, relying on credit without a second thought. The result was the collapse of the dollar, the crash of Wall Street, corporate firings and recession.
On the stump, Obama pledged over and over to change things. He declared that he would redistribute wealth in America - less to the rich, more to the poor. He promised a tax hike on the wealthy, i.e., those who make over 250,000 dollars a year. In the Clinton era, the marginal tax rate was 39.6 percent. Bush lowered it to 36 percent. Obama plans to bring it up again, to 40 percent. On the other hand, he said he would reduce taxes on low-income workers.
He has similar plans for capital gains and corporate tax. Bush cut taxes in these sectors and Obama says he will raise them. Ditto for the estate tax, which Bush cut gradually and Obama wants to bring back to its former rate.
Obama says he will channel large sums of money into welfare programs, raise the minimum wage and offer a state health insurance plan similar to the one that Hillary Clinton tried to launch during her husband's presidency. This plan will provide minimum health coverage for all citizens. Today, 46 million Americans have no health insurance and 25 million have only partial coverage.
In keeping with his worldview, Obama will work to strengthen labor unions and allow workers to vote openly on the issue of unionizing at their workplace. Until now, these ballots were secret. Other promises include federal rescue funding to various industries that are now facing downsizing and lay-offs, and mortgage assistance to homeowners. Obama has also pledged to subsidize green industry. So rescue funding will not be limited to $700 billion in aid to the financial sector, but will include another $175 billion in aid to the general public, industry and infrastructure.
Also, Obama is not a fan of free trade. In the election campaign, he spoke out against those who take jobs away from America by outsourcing them to foreign countries. He was talking about manufacturers that move their plants to countries where labor is cheap, like China and India. He believes he can stop this by imposing protective tariffs and other restrictions on free international trade.
If these programs are implemented, the American economy is going to look very different. The United States will not become a social democracy a la Sweden, France or Germany, but it will be transformed from a capitalist country into one that is much more sensitive and considerate of the weak. The big problem is that these proposals are not going to be implemented anytime soon. They will require gargantuan sums of money that are simply out of the question in view of such a gaping hole in the budget. Likewise, it is highly unlikely that Obama will retreat from what has always been one of the cornerstones of American capitalism - free international trade.
So chances are we will be seeing only one item on this long list being put into practice in the coming months: higher taxes on the rich. Even tax breaks for low-income families will have to wait, not to mention all the rest.
And then we will see Obama start to sweat. Because the public is impatient. People want to see America change right now, this very instant. They want to see how poverty shrinks, the homeless get housing, the blacks and Hispanics become middle-class, the losses on Wall Street are erased, the strangulating mortgages disappear, the lay-offs stop and recession turns into growth.
But these are miracles that even the super-charismatic Obama cannot perform. Oratory, however brilliant, will not suffice. A very frustrating era thus lies ahead, as the American idol of today becomes tomorrow's punching bag.
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