The Politics of "Change"

November 18, 2008
Mike Hennessy

With the election now behind us and a new administration taking office in a few short weeks, now is the time to look at what the political and economic landscape might look like under President Obama and a substantial Democratic majority in both houses of Congress.

With the election now behind us and a new administration taking office in a few short weeks, now is the time to look at what the political and economic landscape might look like under President Obama and a substantial Democratic majority in both houses of Congress. President-elect Obama will take office with a popular vote mandate and an opportunity to be a great president.

Obama’s success during the campaign can be largely traced to his ability to do two things: Paint himself as the candidate who will reduce taxes for most Americans; and ride the momentum of a mandate for change. On the first point, it remains to be seen how Obama will raise the trillions of dollars the Wall Street Journal and others have estimated it will take to fund the initiatives outlined during the campaign while “cutting taxes for 95% of Americans.” Of course, it’s a statistical impossibility. But it will be interesting to keep an eye on how and when the promise to reduce taxes for all those who make under $200,000 edges inexorably downward. At this site, we’ll keep a close watch on how the new administration’s tax and healthcare policies affect you as a physician, a practice owner, and an investor.

On the second point, a candidacy based on changing the culture of “politics as usual” has devolved into a transition team of many of the usual suspects. President Clinton’s Chief of Staff, John Podesta, is running the Obama transition team. Madeleine Albright, Secretary of State under Clinton, was Obama’s choice to represent his incoming administration at the G-20 Summit of world economic leaders. And Clinton era enforcer and organizer Rahm Emanuel was chosen for the important role of Chief of Staff.

This is not a criticism of any of these selections individually. Emanuel, in particular, has distinguished himself in the private sector and may be a voice of reason in support of sound economic policy that limits restrictions on free markets. But the larger question is the apparent disconnect between “change” as campaign strategy and as a governing principle.

One risk inherent in this approach is that the landscape Obama is facing is dramatically different than the one President Clinton had to navigate. Clinton rode the early days of a dot-com boom and a bull market. (I am reminded of the investing adage, “Never confuse genius with a bull market.”) Policies and strategies that worked in the 1990s won’t work in this tricky economic environment. New leadership, fresh thinking, and calculated risk-taking will be required. If the Clinton veterans haven’t learned any new tricks, Obama’s reliance on them may turn out to be a big mistake.

When I was a kid, I remember the circus used to come to town every few years. Every year, it was breathlessly billed in posters as “New!” and “Exciting!” At the actual show, the ring master might have changed, but the performers were the same...just older. Here’s hoping the Obama Administration isn’t just the same old circus.