Limited Terms: Would It End Unlimited Spending?

Limited terms is a concept that has both good and bad aspects. Most states are run that way and seem to have survived so why not the federal government?

With every concept there are trade offs, some good, some bad. There is always a price to pay.

These are some thoughts that one could say would be in the good category:

Might make politicians become more realistic, serious minded and focused on problems of the nation rather than their own re-election.

Brings in fresh blood and thinking

Might return us to a more 'citizen administered' form of government

Might possibly reduce corruption and reduce influence pedalling by lobbyists

Might strengthen the office of the presidency whose term is already limited and thus even the playing field

These are some thoughts one could say would be in the bad category:

Probably would strengthen the bureaucracy

Would reduce, maybe even eliminate, some of the positives that comes with instiutionalized continuity

Would throw some good legislator babies out with the bath.

Might strengthen the presidency to the detriment of the legislative body

In truth this concept is not likely to become law because few politicians will vote to vote themselves out of office so the prospect of it ever becoming an Amendment that can be voted upon is bleak at best.

So we have to rely upon voters to exercise the privilege of voting and rotate those in office out when their collective judgement is they have begun to underserve. Every once in a while, when things really get bad, voters become outraged and desparate and this happens but infrequently because inertia is a powerful force - a boulder at rest kind of thing.

I suspect the next election cycle could be one such because Americans, by and large, are an impatient lot, we like/demand and solutions. Our current problems are not readily solvable, are of long duration and systemic. I am not sure we fully comprehend that. Furthermore, I am sure our politicians do not and even if they did, they fear inaction on their part will be mis-interpreted as indifference.

The next two and four years should prove very interesting and though the entire world has some reckoning to face, how America responds will be critical for the world.

I am not in the camp of those who believe the second half of '09 will find us on a significant upswing but I do believe matters might stabilized by then.

Certainly time and the enormous amount of money being thrown at our intractable problems will have an ameliorating effect. However, the actions and policies of the new administratrion and Congress, if implemented as I understand them to be, could also have a blow back and/or loop feed back effect which might delay the recovery and add more unwanted logs to the fire.

Furthermore, longer term problems like Social Security and repaying the enormous deficit and the escalating interest cost of same, will be impacted and shaped by the resolution of how the administration and Congress resolve the current recession. See 1 below.)

President Obama's speech set forth some guiding principles but politics is politics and I doubt bi-partisan comity will last beyond the first few months.

I hope I am proven wrong.

A gentle editorial reminder that Obama's political character remains opaque and undiscovered. (See 2 below.)

One of the best analysis contrasting Obama and GW. (See 3 below.)

Inaugurals are associated with hype and hope that is normal, even good. Americans, by an large, are an impatient people. We like action we expect results. Unlike GW, who was attacked unmercifully and often despicably, President Obama enters office with a reservoir of good will. This will serve him well but it will fade unless evidence of economic improvement a reality.

A risk President Obama understands is that the 'rock star' status he acheived during the campaign can lead people to believe he alone can solve our intractable problems and time cuts both ways. Furthermore, Obama understands he must lower expectations. I suspect he will continue to pursue this goal.

The new president obviously feels comfortable with himself, is a gifted orator, is smart, street wise and his term as president can go a long way towards serving as a role model for our youth who, justifiably, must feel past generations have deprived them of economic options.

Furthermore, it appears once elected Obama has moved to the center and, in some ways, is acting more Republican than Republicans themselves. It would be ironic but effective politics were Obama to remain and govern as a centrist all the while presiding over a party decidedly left leaning when one considers the espoused tactics of its leaders - Pelosi and Reid.

Finally, my deceased father tirelessly and effectively fought segregation, he helped change the form of government in Birmingham and lived to see his antagonist, 'Bull' Connor, go down in flames. My father worked closely with Bobby Kennedy, who was then the Attorney General,and several of Kennedy's key lieutenants

My father would have been thrilled by today's event.

Good things happen when good people refuse to remain silent. That was the essence underlying Obama's speech from my perspective and I could not agree more.

Dick


1)Banks Pull Dow Under 8000 State Street, U.K. Bailout Rattle Investors Anew
By ROB CURRAN, GEOFFREY ROGOW and PETER A. MCKAY

As Washington paused for pomp and ceremony Tuesday, the financial sector's slide refused to relent.

Bank stocks led the broader market sharply lower, including the worst daily drop in the Dow Jones Industrial Average so far this year, following glum announcements by several bellwether firms and stepped-up bailout efforts by the British government.

The developments underscored the depth and global breadth of the economic challenges landing in the lap of the new U.S. administration even before the first bottle of champagne was uncorked at any of the evening's inaugural balls.

The Dow slid 332.13 points, or 4%, to 7949.09. All 30 of its components fell, with financial names especially hard hit. Bank of America fell 29% and J.P. Morgan Chase fell 21%. Citigroup declined 20%. The S&P 500 fell 5.3% to 805.22. All its sectors fell, led by the financial group, which plummeted 16.3% to close at a new record low.

State Street shares plunged 56% after it said Friday in a regulatory filing that it is sitting on billions in unrealized losses. Kevin Kruszenski, director of equity trading at KeyBanc, described the announcement as a "blockbuster."

"People had been seeing State Street a little differently, as a little safer," he said.

Elsewhere, Regions Financial reported a $6.2 billion loss. Its shares slid 24.2%.

The U.K. government announced an aggressive expansion of its financial-rescue plan amid continued signs of pain at major British firms. The New York-listed shares of Royal Bank of Scotland, which forecast a 2008 loss of up to $40.5 billion, plummeted 69.3%. Barclays tumbled 42.6%. HSBC Holdings slid 15.3%.

"Everyone was anticipating problems, just not the size of what happened in Britain," said Doug Roberts, chief investment strategist for Channel Capital Research Institute.

About 1.7 billion shares changed hands on the floor of the New York Stock Exchange, slightly above the recent daily average.

The inauguration, scheduled according to a 75-year-old constitutional amendment to install a leader elected more than two months ago, offered no specific surprises to sway investors' trading decisions. Nevertheless, many were curious as citizens or observers of U.S. politics.

Just before noon, a crowd gathered outside the NYSE to watch President Obama's inaugural address on a large outdoor screen. On the floor of the exchange, located just across the street from the spot where George Washington took the first presidential oath, traders began to cluster around smaller screens to listen.

Some simultaneously executed trades on handheld devices. Although the Dow at first pared some losses during Mr. Obama's address, the index slumped again as the speech proceeded.

"There is so much pressure," said Warren Meyers, managing partner at W.J. Dowd Inc. "There's too much negative financial news."

Problems with overseas banks contributed to weakness in U.S. stocks, said Alan Valdes, a floor trader with Hilliard Lyons. "It's an aberration -- I think we're going to get an Obama honeymoon rally," he said.

Traders see few banks that can survive without more government intervention. After performing as one of the best large banking stocks in 2008, Wells Fargo declined 24%. Preferred equity fell sharply across the banking sector Tuesday, with many preferred shares issued by Bank of America, Wells Fargo and Citi experiencing double-digit percentage declines.

With banking weakness again taking center stage, so did fear over the global economic landscape. Sectors as diverse as consumer discretionaries, materials and technology were all off more than 4% on the Standard & Poor's 500, with names such as General Motors, Alcoa and Textron all off roughly 10%.

"At this time, a retest of the November lows appears inevitable," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "We had the false breakout on the S&P 500 above 920 two weeks ago, and since then the bears have been in complete control. Couple that with the fear that no bank is safe, no matter how much money the government throws at them, and we are once again in a 'sell first, ask questions later' environment," Mr. Detrick said.

Other market yardsticks swooned on Tuesday. The Nasdaq Composite Index fell 5.8% to 1440.86. The Russell 2000 fell 7% to 433.65.

Treasurys recovered from early selling recently on the persistent worries about the banking sector. In recent trading, the two-year note's price was flat at 100 10/32 to yield 0.71%, the five-year note was down 3/32 at 100 4/32 to yield 1.47%, while the 10-year note was down 19/32 to 112 1/32 to yield 2.37%.

The dollar weakened against major rivals. One euro cost $1.2905, up from $1.2882 late Friday. One dollar fetched 89.74 Japanese yen, down from 89.77 yen.



2) The Opacity of Hope: A President of great personal talents but public elusiveness.

Barack Obama takes the oath of office today amid a sense of expectation and opportunity rare even for new Presidents. Partly this is due to his heritage and the historic nature of his triumph, partly to our current economic troubles, and partly to a nation looking for a fresh start after the difficulties of the Bush era. The paradox is that in order to succeed Mr. Obama will soon need to turn the opacity of his hope into clear and often difficult choices, some of which will upset his most passionate supporters.


The Illinois Democrat brings impressive talents to the White House -- not least the self-confidence that he can do the job. Though only four years out of the state Senate, he seems remarkably undaunted by the task and the moment. His rhetorical gifts are formidable, no small virtue in a job whose influence depends chiefly on the power to persuade. The President-elect's transition has also gone more smoothly than most, certainly in contrast to Bill Clinton's in 1993.

Mr. Obama is likewise equipped with a first-class temperament. He wore the pressures of an epic campaign as lightly as anyone since Ronald Reagan. While his opponents lurched amid this or that headline, the man from Hawaii via Harvard and Chicago never lost his cool. This equanimity will serve him well amid the crises to come, assuming his confidence doesn't slide into an arrogance that sometimes attends 70% Presidential job approval.

Yet for all of those personal virtues, there remains an elusiveness, an opacity, to Mr. Obama's political character. This is in contrast to Reagan, who was personally distant but publicly well defined. Mr. Obama won the primaries and then the White House with a campaign based on the gauzy promise of change more than on a clear agenda. He became a political Everyman into whom Democrats, independents and even many Republicans could pour their great expectations.

This lack of definition has also marked his personnel choices. When given the chance to pick someone from one policy camp or another, Mr. Obama has typically chosen both: Free-trader Ron Kirk and protectionist Hilda Solis; command-and-control regulator Carol Browner and more market-oriented Cass Sunstein; Tim Geithner, who has voted to open the monetary floodgates, and Paul Volcker, who is worried about the dollar; Tom Daschle, who wants to nationalize all U.S. health care, and Peter Orszag, who believes current entitlements must be reformed.

Soon Mr. Obama will have to choose. That is especially true on the struggling economy, which is the main reason he won so handily. For 25 years from the moment the Reagan policy mix took hold in 1983, the U.S. has had a run of economic expansion marred only by two mild recessions. Younger Americans have grown accustomed to rising incomes and growing 401(k)s. Mr. Obama was elected on his promise to restore that middle-class prosperity. He can best serve the country, and his own Presidency, by focusing his political capital on policies that promote growth.

Yet over that same 25 years Mr. Obama's political coalition has amassed a wish-list of regulatory and redistributionist ideas that would undercut that effort. The global warming crowd wants a huge new carbon tax that would hit the South and Midwest especially hard. Big Labor wants to make union organizing easier, which would slow job creation. Speaker Nancy Pelosi is agitating to raise taxes immediately, even amid recession, to finance a spending spree we haven't seen since LBJ's Great Society. Part of Mr. Obama's success will depend on whether he says no to these liberal interests. If he does, he will make it easier for the economy's natural recuperative powers to work -- and he and his party will benefit.

Mr. Obama can also go a long way toward removing the bile from the debate over national security. For some on the left, the Bush era must be repudiated with prosecutions and a return to the pre-9/11 status quo. John Conyers and the New York Times want heads on pikes. Down this road lies wasted political capital for the new President, and risks for U.S. security.

Mr. Obama seems to recognize this, given his recent comments that he prefers to "look forward" rather than back; that Guantanamo may take his entire first term to close down; and that "Dick Cheney's advice was good" to assess Bush policies before leaping to undo them. Now that he is responsible for American security, Mr. Obama is in a position to validate the Bush programs that have kept us safe, perhaps with some political window dressing that mutes the opposition from the anti-antiterror left.


As a historic cultural symbol, Mr. Obama is also uniquely placed to ask Americans of all races and incomes to show a greater sense of personal responsibility. His own rise to the White House is a walking affirmation of American opportunity. His reaching out to evangelical pastor Rick Warren, both in the campaign and for his Inaugural, is a shrewd and welcome sign that he wants to temper the social furies. Our particular hope is that he will also find a way to take on the teachers unions as the main obstacle to inner-city opportunity. He could revolutionize the school reform debate in an instant.

As a matter of political character, many of these questions hang on Mr. Obama's toughness. We know he is intelligent and clever. What we don't know is if he can make a difficult decision in the national interest that is unpopular, and then endure the consequences. Reagan showed his steel by staring down the Patco strike at home and Soviet scare-tactics against missile deployments abroad. Whatever his mistakes in Iraq, George W. Bush's "surge" was a lonely call that has proven to be right. As far as we know, Mr. Obama has had to make no such decision in his short public life.

The complicated nature of our world means that every modern Presidency is to some extent a leap into the unknown. Mr. Obama's meteoric rise makes him a bigger leap than most. We don't know if he is a genuine man of the left, or a more traditional pragmatist. The audacity of our hope is that as President he will use his considerable talents to return his party to the policies of growth, opportunity and the vigorous defense of U.S. interests that marked it the last time the country had such great expectations for a Democratic President -- under JFK.

3) Why the Uniter Divided Us
By E. J. Dionne

WASHINGTON -- For many of us, the end of George W. Bush's presidency could not come quickly enough. But as power changes hands peacefully, the result of a decisive democratic verdict, the most important question is: What can our new president learn from the one heading back to Texas?

The Bush administration's specific failures -- in foreign and domestic policy and on matters related to civil liberties -- are clear enough. Yet the deeper cause of the public's disaffection goes beyond these specifics.

From the very beginning of his presidency, won courtesy of a divisive Supreme Court decision that abruptly ended his contest with Al Gore in 2000, Bush misunderstood the nature of his lease on power, the temper of the country and the proper role of partisanship in our political life. His win-at-all-costs strategy in Florida became a template for much of his presidency, reflected especially in the way the Justice Department was politicized.

Bush did not respect the obligation of a leader in a free society to forge a durable consensus. He was better at announcing policies than explaining them. He dismissed legitimate opposition and plausible doubts about the courses he wished to pursue.

It is in part because of these failures that Americans reacted by selecting a successor with such a profoundly different political personality.

Barack Obama's first response to a political problem is to offer a detailed analysis and to put whatever challenge he is confronting into some larger context. He absolutely loves sparring with his intellectual adversaries. And his "if you have a better idea, I'll take it" approach is the antithesis of the my-way-or-the-highway politics of the last eight years.

Bush was capable of considerable charm, but he never really engaged his opponents. He rolled over them. He did not try to win expansive electoral majorities. Instead, he sought to build a compact, ideologically pure coalition that he could use on behalf of dramatic conservative departures. He claimed mandates he did not win.

Maintaining long-term support for the Iraq War required him to do more than just push a resolution through Congress on the eve of a midterm election with political threats and campaign trail rhetoric.

"It's better to fight them there than here" was not an argument that took the average citizen's intelligence seriously. Cutting taxes rather than asking citizens to pay for the war suggested that while the president might ask others to sacrifice their priorities, he would never sacrifice his own.

Ironically, the clearest evidence of Bush's larger failure can be found in the areas where he can claim genuine success.

Bush's prescription drug plan under Medicare and his No Child Left Behind education program were far from perfect. But they reflected broadly shared goals -- expanding health coverage, promoting accountability in education -- and involved actual bipartisan wrangling and negotiation. Aspects of both programs will endure.

Bush's dedication to the victims of AIDS in Africa and his dramatic increases in foreign aid were admirable, and surprised his fiercest critics. In the final days, his supporters were touting these least typical of his achievements.

For a few months after Sept. 11, 2001, the president governed as a truly national leader. At that moment, we saw the consensus-builder he promised to be in 2000. He might have built a durable majority for his party on the basis of more moderate, consensual policies. Instead, he moved to ridiculing those who doubted the wisdom of his Iraq adventure and used the war on terror for electoral advantage.

A hyper-partisan domestic politics of us versus them followed naturally from the president's instinct to confuse moral certainty for moral clarity. In his farewell address, he reminded his listeners yet again that "good and evil are present in this world, and between the two, there can be no compromise."

Yes, but the hardest moral decisions are usually not between good and evil but between competing goods (security versus liberty) or lesser evils (a draining war in Iraq versus a messy, long-term strategy to contain Saddam Hussein).

Our new president will make his own characteristic mistakes. He risks overestimating his capacity to persuade his most implacable foes. He may forget that a two-party system inevitably creates its own dynamic of loyalty and opposition.

But he is decidedly not an us-versus-them guy. He gets both the uses and the limits of partisanship. He has been known to quote the theologian Reinhold Niebuhr on the dangers of moral arrogance. He could make nuance and complexity cool again. It's not enough. But it's a start.