The Torch Passes

This week saw President Barack Obama’s formal farewell – and further revelations about what Vladimir Putin’s relationship with Donald Trump portends for the future.

In A Legacy of Hope but Modest Change, published in the Aspen Institute’s Aspenia Online, I tried to provide a balanced assessment of Obama’s tenure, focusing on, in my view, the “two defining accomplishments of Obama’s presidency,” his response to the financial crisis of 2008, and Obamacare.

In the stimulus, as in everything to follow, Obama was intelligent yet uninspired. Most economists, and certainly those amongst Obama’s own advisors, argued for an even larger stimulus than the one he ultimately embraced; the “small-c conservative” argument – advocating caution because of political difficulties – prevailed with him then, as it did often thereafter.

But Obama also “left the details of the stimulus to Congress – which promptly loaded it up with pork-barrel spending,” which “debased the entire concept to the public, reduced its economic efficacy, and in fact resulted in a lot of waste. It also meant that, despite the administration’s own mantra of not wasting a crisis as a chance to accomplish major change, the stimulus package became merely a huge but uninteresting example of textbook Keynesian economics in action rather than a truly transformative event.”

Most crucially, the Great Recession was not simply the bursting of a speculative bubble: It represented a “phase transition” from the booming late-20th century economy to the new economy of the 21st century, which will eliminate large numbers of existing occupations and life-paths – like the transition from an agricultural to an industrial economy, except at about ten times the speed. … Obama’s stimulus plan reflected his understanding of the importance of this new economy, but his obliviousness to the fact that it was not an unalloyed good, in that half the country essentially would be obsolesced by it in their own lifetimes, caught between a recovery that would not reach them and a future that would not include them. The foundations for the coming, deepening division – and the politics of 2016 – had been laid.

A similar pattern followed with Obamacare:

[T]he main problem with Obama’s push was that it took his eye off the only ball that should have mattered at that point – the negligible economic recovery….  Ultimately, as with the stimulus, Obama did not care as much about the details as about making the history books. But the massive reform gave fodder to Middle Americans who believed they were being asked to pay for Obama’s (and liberals’) greater interest in the poor.  Again, the battle lines of 2016 were already forming.

So, what comes next? “The recent news sounds basically like a technologically-updated version of a Cold War-era political pulp thriller,” I wrote in Putin’s War on Information in US News: “The evil Ruskies undertake espionage and disinformation efforts to create a chaotic American election, spend years cultivating a useful stooge easily manipulated by flattery, greed and sex to help spread divisive views about US foreign policy, and then along the way suddenly realize they actually might get him elected president. All of this, however, concerning as it is, is neither novel – unless it turns out that Trump was actually colluding with Russia all last year – nor, even then, the real threat.” So what is the real threat? Putin’s desire

to return to a world predating the New Economy with its increasingly-liberal political norms and social mores … (the unconfirmed private intelligence reports underlying the latest Trump revelations assert that Russia’s “TRUMP operation should be seen in terms of PUTIN’s desire to return to Nineteenth Century ‘Great Power’ politics anchored upon countries’ interests rather than the ideals-based international order established after World War Two”)….

Putin has marketed his regime as the defender of traditional social values (including religious fundamentalism and vehement opposition to homosexuality), traditional national prerogatives, and traditional (heavy) industrial economies – more-or-less a return to the Good Old Days of the 1950s. … Does this sound familiar? Of course it does.

What Putin has realized, more than anyone else, is that this hated New Economy rests entirely on the ubiquity of information, and that is its point of weakness. Putin’s war on information – and, unfortunately, it’s not his alone – is a wager, like many before, that there’s a thin line between liberalism and chaos. Those are the stakes at issue here.

You can read the full analysis by clicking on the article titles above. Meanwhile, buckle your seatbelts.

As usual, I welcome you comments below!