[ US POLITICS ]
OBAMA’S Difficult 100 days in Office

US President Barack Obama with Vice President Joe Biden

On the occasion of US President Barack Obama’s 100th day in office, the White House organized a press conference in which the steward of a wobbling economy wooed Americans that recovery and prosperity will come. One of the tricky questions that seemed to put Obama off guard at the event was about what had humbled him the most in his first 100 days. His reply was a giveaway of behind-the-scenes jockeying as the US economy keeps shrinking quarter by quarter.

Obama responded that although he held the most powerful position in the country, “there are a lot of different power centers, and so I can’t just press a button and suddenly have the bankers do exactly what I want, or turn on a switch and suddenly Congress falls in line.” His assertion that the American legislature is a power centre which cannot be railroaded into falling in line with the executive was not novel. The American system of government has since inception been designed on the idea of ‘separation of powers’, in which Congress, the judiciary, and the presidency check and balance out each other to prevent excess concentration of authority in a single institution.

Many presidents before Obama have felt the heat from uncooperative Congresses. But Obama has the satisfaction of a solid Democratic Party majority in both houses of the US Congress. While there may be dissenting voices within his own party, the legislature is overall in no shape to frustrate or block Obama’s agenda for ‘change’.

But what has indeed bogged down Obama as he attempts a grand rescue of the US economy is the first category he mentioned, i.e. bankers. Although founding fathers of the US constitution never foresaw a small class of financiers morphing into a thorn in the flesh for the presidency, Obama is admitting that this is the case today.

In the mid-19th century, the financial industry’s share in US GDP was barely 1.5%. In 1947, it was only 2.5% of GDP. It stabilized around 4% until the late 1970s. The capital needs for the information technology boom from the 1980s up to 2001 pushed the share of finance in US GDP upwards. But the real takeoff happened between 2002 and 2006, when the real estate derivatives trade shot up to astronomical heights. At its peak before the housing bubble collapsed, the financial sector accounted for 8.3% of US GDP.

(Sreeram Chaulia is a researcher on international affairs at the Maxwell School of Citizenship and Public Affairs in Syracuse, New York)

“Many presidents before Obama have felt the heat from uncooperative Congresses. But Obama has the satisfaction of a solid Democratic Party majority in both houses of the US Congress. While there may be dissenting voices within his own party, the legislature is overall in no shape to frustrate or block Obama’s agenda for ‘change’.”

[ BY SREERAM CHAULIA ]