It was a difficult year, 2009 – a year that will go down in U.S. economic history as one of the toughest. The economy came perilously close to seizing up in a way that would have made the Great Depression look like primary school. Heroic interventions by the Fed under Ben Bernanke and first Henry Paulson and then Tim Geithner at Treasury literally saved our economy. The current high unemployment rate is a concern, of course, but the alternative was catastrophic.
In a crisis one often cannot wait for consensus. What is needed is decisive action. We will look back at this period as one in which we were fortunate to have able, experienced, and decisive hands on the economic tiller.
Not that one would know this from the recent rhetoric from Capitol Hill -- land of short memories and modest capabilities. Perhaps "undue" pressure was put on Bank of America to acquire Merrill Lynch -- Thank God, I say, that someone had guts enough to hold things together. Had Merrill Lynch failed, the last two remaining investment banks -- Morgan Stanley and Goldman Sachs would have followed, with disastrous consequences. And yes, the Obama Administration has significantly added to the deficit. Again, most economists view this as being part of the reason the U.S. economy will show some growth in 2009 and, indeed, should be considerably stronger in 2010. Going forward we need a plan to bring deficits down as a proportion of GDP. However, in 2009 deficits are a part of the solution, not a part of the problem.
We have turned a corner with the economy. Recovery is likely to be slow in 2010 but recover we will. The manufacturing companies with whom I am involved are forecasting ten to fifteen percent top line growth in 2010, but it will be 2011 before they regain 2008 sales levels.
Our President has gotten quite an education in why governing is different from campaigning. The jury is out on whether Obama can translate his prodigious ability for energizing crowds into a force for effective governing. Henry Kissinger put it well recently when he compared the President to a Chess Grand Master playing six games simultaneously. "I just wish he would finish one of them", said Kissinger. The economy, financial regulation, Afghanistan, Pakistan, Health Care Reform, Global Climate Change, Iran's nuclear program, the Palestine-Israeli situation, and let's not forget Iraq where a fragile democracy seems to be faltering -- the number of issues requiring, even demanding, resolute action is as long as I can remember.
Obama, to his credit, has assembled a strong, competent team. If he figures out a way to manage the process that brings out the best in his team, he has a chance to make a mark. However, should he and the White House staff try to filter and control -- to micromanage -- then much will be lost. What worked in the campaign will not work against this array of problems.
Moreover, I have not mentioned the most significant national problem -- the decline of America's education system. The current generation of American students will be the first in the history of our country with less education than the generation that went before them. Education has been the foundation of American's extraordinarily vibrant economic record. That foundation is crumbling. Obama's Secretary of Education, Arne Duncan, has good ideas, but he is up against a powerful teacherss' union that tends to view new ideas as anathema. Watch this debate closely. While unlikely to have the profile of health care reform, it will be more significant in the long term.
Meanwhile, President Obama must get a form of universal health care passed. This is a moral imperative whose time has come. T.R. Reid's compelling book, The Healing of America, convinced me that the richest country in the world has an obligation to the 30 million of our citizens without health care. I will be sorely disappointed if the final bill is not supported by Maine's two Republican Senators. There will be much about the bill to dislike as it will be crammed with compromise and short on cost control. Nonetheless, it is a first step America needs to make.
From this one step, much can follow, and not just in health care. We are at an important time in our Nation's history. Those who take the narrow, partisan road at these times deserve to be marginalized.
I return to (Republican) Peggy Noonan's fine book Patriotic Grace: "But we are Americans and mean to make it better; to write something good on the page we sense turning. To me it is not quite a matter of rising above partisanship, though that can be a very good thing. It is more a matter of remembering our responsibilities and reaffirming what it is to be an American."
Peace be with you.