On November 15, President Bush will host a "Summit on Financial Markets and the World Economy" at the National Building Museum in Washington, D. C. Great Britain's Gordon Brown, China's Hu Jintao, and Russia's Dmitri Medvedev are among the 20 heads of state who will attend what's being billed as "Bretton Woods II." But there's one world leader, a soon-to-be head of state, who will be sitting out the proceedings: Barack Obama plans to spend the weekend in Chicago.
Ever since winning the White House on November 4, Obama has kept a wary distance from the financial crisis that began in September. Although many expected him to name the key members of his administration's economic team, including the new Treasury secretary, in the immediate aftermath of his election, transition officials have now indicated that no cabinet appointments will likely be made before Thanksgiving. Next week, when Congress reconvenes and Democrats attempt to pass emergency legislation to help the ailing auto industry, Obama won't be there, having announced that he'll be resigning his seat just before the lame-duck session begins. And then there's the aforementioned global financial summit, to which Obama will merely send envoys Madeleine Albright and Jim Leach, neither of whom is expected to play any substantial role in his administration.
To be sure, Obama has good reasons--both constitutional and political--for keeping this distance. As Obama and his aides have been saying since the moment he became president-elect, there's "only one president at a time." Having been attacked for being presumptuous during the campaign, Obama now seems loath to exceed the limited authority he has at the moment. What's more, without any official power at his disposal, it would be risky for Obama to take positions on matters over which he has no real control. As almost every president-elect soon learns, the thrill of an electoral victory almost immediately gives way to the tedium of a transition that, for all its hustle and bustle, often seems as if it was devised by some bureaucratic Beckett.
But this, of course, is no ordinary transition--and Obama must not treat it like one. The cautionary lesson here comes from the Herbert Hoover-Franklin Delano Roosevelt transition of 1932-1933, during which neither man acted with any real decisiveness on economic matters and what looked like the beginnings of an economic recovery instead became the single worst stretch of the Great Depression. Hoover, mindful that the voters had rejected him and believing that the mandate for any action rested with Roosevelt, was reluctant to implement any policies without FDR's endorsement. Meanwhile, Roosevelt, not wanting to squander any of his political capital on the policies of the man he'd just defeated, refused Hoover's entreaties. "It's not my baby," FDR said of the economic crisis. By the time Hoover left the White House and FDR was sworn in as the thirty-second president on March 4--the last time a president would be sworn in after January 20--hundreds of banks had failed and unemployment had skyrocketed. The baby FDR inherited was in much worse shape than it was when he was elected.
The challenge now for Obama is to avoid a similar fate. While Obama is certainly not impeding the auto-industry bailout plan congressional Democrats are currently crafting--and is probably pushing it on the margins, as during his recent visit with President Bush in the Oval Office, when he reportedly lobbied for it--he should be making a more public show of his support. Although he can no longer vote for the legislation, he should use his new bully pulpit to advocate its passage, and he should pledge that, should Bush not sign the legislation, he will once he is in office. Similarly, Obama should make a forceful public case for a new stimulus package. It's doubtful such a package would be passed before January 20 or, if it did pass, that Bush would sign it; but it's crucial that Obama generate enough momentum and support that he can get such a bill through Congress and onto his desk shortly after he's sworn in. Finally, Obama should name his Treasury secretary and his White House economic advisers during Congress's lame-duck session and authorize them to begin working in concert with the Bush administration on any policy actions Bush plans to take in the waning days of his presidency.
Obama should do all this not only to avoid a global financial meltdown; he should do it to ease the political challenges he'll face next year, as well. Although the conventional wisdom holds that a president would rather take over when things are at their nadir instead of trying (and possibly failing) to get things moving in the right direction before taking office, these are extraordinary times. Even before Obama's election, Americans had stopped looking to President Bush to solve the financial crisis. Now that Obama has been elected, it's only natural for Americans to turn to him; it doesn't matter that he has yet to actually take office. (Indeed, Obama stepping up to the plate as president-elect might actually increase Americans' confidence in the economy, if only because they'll see that someone is actually minding the store. ) And, with 70 percent of American voters believing that the economy will get better during Obama's first term, according to one recent poll, Obama shouldn't be doing anything that will make that task more difficult. President Bush, with his decision to invade Iraq, ignored what Colin Powell called the "Pottery Barn rule" of "you break it, you own it." Obama did not break the economy, but, alas, even before he's been sworn in, he does own it. For the country's good--and his own--he needs to start acting like it.
This article originally ran in the December 3, 2008, issue of the magazine.