News & Commentary Alain Paul Martin Shifting Gears to A New U.S. Leadership Change Executed: What Are the First Likely Moves? On education and health, major interventions will be at the earliest in the 2010-2011 horizon to give movers and shakers (Cabinet, Congress, precursor jurisdictions on States’ side and other stakeholders) the time to build a consensus on a hybrid public-private health system, “a road less travelled” in America. I do hope lessons from other countries and innovators like Dr. Paul Farmer, an Obama’s kindred spirit, will play a role in shaping the public health system. On defense, Mr. Obama should be non-partisan by keeping Bob Gates at the helm. As a War hero, Senator McCain could be offered Veteran Administration. President-Elect Obama sees innovation and energy independence as critical pillars, part of the urgent domestic focus. But on the economy, the rubber will immediately hit the road with more domestic and global bad news and the virtual certainty that November 15th Summit of the G20 countries will not reach a consensus on the urgent and concrete regulation framework proposed by the EU and President Sarkozy to revamp the world monetary system. This will further stack the odds against Obama Administration before January 21st Inauguration. Finding a Treasurer to navigate these uncharted waters is the most difficult task of all. Paul Volcker could serve for a year as did Lloyd Bentsen under President Clinton. Less known but unquestionably competent would be James Dimon and Timothy F. Geithner. Both should serve in Deputy-Secretary capacity in the U.S. Treasury to prepare for succession while temporarily avoiding the relentless pressure that comes with exposure at the top. Larry Summers would be a great choice as Secretary of Education For the next Administration, regulating to make decent capitalism work is another “inconvenient truth” that will be nothing short of a miracle to pull off. Washington has dug itself so deep in the misguided path of self-regulation advocated by Alan Greenspan, for twelve years, with the virtual acquiescence of all but a few members of Congress. Even though self-regulation has led to the worst brand of governance, not only in economics but in food inspection, health, transport and nuclear energy; the vast majority of academics and economists still have a flawed conception of capitalism, the sort of anomaly described Noam Chomsky’s “Manufacturing Consent” with respect to the press. Correcting this deeply-held misconception of economics is a daunting but a necessary task that will be met with a fierce opposition. Without understanding the fundamental causes that repeatedly cascades into widespread suffering on main street, economic policy founded on the current dominant paradigm will, at the best, yield short-term recovery and temporary relief, before succumbing to the ravages of another crisis. To rebuild the nation on solid grounds, a major surgery cannot be avoided to reverse the fast-ticking and global eco-social time bomb. Mr. Obama must work with Congress and the G20 countries to establish a corridor of navigation to prevent systemic risks that transcend corporate and national boundaries. They must appoint oversight commissioners to play the air-traffic controllers’ role, but let entrepreneurs, not unlike airline pilots, steer their business as they see fit in terms of risk/rewards within the established corridor of navigation. In addition to the external and internal auditors appointed by shareholders to safeguard their assets, and only where systemic risk warrants it, a small team of systemic-risk “watchdogs”, paid by the government, must reside, on a rotating basis, in each large bank and financial institution, as done in nuclear power plants to prevent meltdowns in the aftermath of Three-Miles Island and Chernobyl. This natural evolution to close the systemic-risk loopholes left by Adam Smith’s and John Maynard Keynes’ unfinished and outdated visions of capitalism, is brilliantly addressed by the upcoming book of Harvard’s Professor Bruce Scott titled Capitalism: A System of Governance. This book sheds the light on the flawed economics and beliefs that continue to drive legislative and executive policies and decisions; frequently incubating severe crises with dreadful socioeconomic consequences, increasingly on a global scale. Externally, the tensions that characterized and crippled world progress under current US administration will gradually diminish. The United States will steer away from the regressive path of the past eight years to play a role to tame carbon-footprint emissions. Globally, Al Gore is already eclipsing Maurice Strong’s in leading the fight to halt the ravages of the global-warming time bomb. With a natural alliance incubating on both sides of the Atlantic to bring more fairness and discipline to commerce, environmental covenants could be embedded in bilateral and multilateral trade to exercise overdue pressure on Australia, Canada, China, India and Russia who are now sitting on the wrong side of the fence. As a key architect of the global peace enterprise, the U.S. should also strenuously work on the roots of poverty, malnutrition, disease, terrorism and factional wars to reverse the alarming acceleration. In the process, it will serve its long-term interests because investing in the peace making does not cost, it pays in the long term. Obama will seek the help of Albright, the Clintons, Gore, Brzezinski, Powell and geopolitical think tanks. We hope to witness a renewed focus on building a peaceful world in the tradition of Lester B. Pearson, Kim Dae Jung and Dag Hammarskjöld. Obama’s openness and goodwill will bring a renewed hope for constructive dialogue to address many bilateral and global issues and hopefully encourage intelligent search for solutions from all sides. November 5th, 2008

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