Thursday, March 19, 2009

All said and done. Obama will have to certainly move away from rhetoric now and focus on pragmatism.

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Obama is planning to work on both ends. On one hand, he has promised a tax structure, which will cushion the middle class Americans to deal better with the recession, on the other, he is looking for long term solutions to bail out the economy. For this, he has plans to invest in US infrastructure to create jobs in the long term and also reduce dependency on oil for mobility. The plan is to create a National Infrastructure Reinvestment Bank and infuse $60 billion over 10 years, to finance transportation infrastructure projects across the US. As per estimates, these projects will create up to two million new jobs (direct and indirect). At least infrastructure companies would not have much reason to worry. All said and done. Obama will have to certainly move away from rhetoric now and focus on pragmatism. Reality bites hard when it does. Take his tax policy for instance. An analysis by the Tax Policy Center estimates that without cuts in government spending, Obama’s overall tax plan would increase the national debt to around $3 trillion (including interest costs) by 2018! And outsourcing of services and manufacturing is an instrument of competitiveness; discouraging it would only make America Inc. more uncompetitive. Also, his rhetoric on promoting more green business in the US is noble; but it’s not an easy horse to ride; and can’t take priority over the economy as of now.

You cannot overstate the fact that Obama stands for quite a lot – in particular, his election is the fruition of Martin Luther King’s dreams of a promised land; and an ode to Abraham Lincoln’s legendary endeavours to end slavery in US back in the 19th century. But as the euphoria dies down, it’s time for Obama to read Franklin D. Roosevelt far more than Lincoln. There’s a famous saying he must not forget, “What got you here won’t get you there!”

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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).


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