sábado, 14 de março de 2009

Crise até 2012?


Paul Samuelson, 93 anos, Prémio Nobel da Economia em 1970, avisa, em entrevista à Visão (n.º835, de 5 a 11 de Março) para uma recuperação económica «extraordinariamente longa», talvez mesmo até... 2014. Preocupante, mas de leitura obrigatória:

-- A actual crise é comparável à Grande Depressão?
-- É muito semelhante e é certamente a pior experiência que a América e o mundo enfrentam desde o final da Segunda Guerra Mundial. Em alguns casos -- como no mercado imobiliário -- é ainda pior.

O período de recuperação será, parece-me claro, extraordinariamento longo, mesmo com grandes investimentos governamentais. Obama tem uma boa equipa -- incluindo o meu sobrinho Larry Summers. Mas como um velho veterano de batalhas na política económica, em Washington, estou seguro de que Obama enfrentará muita resistência.
A sua lua-de-mel será curta.

As projecções actuais, que apontam para alguma recuperação na segunda metade do 2009, são altamente implausíveis. Suspeito que não assistiremos à recuperação antes de 2012 ou, possivelmente, 2014. Um período que se assemelha ao que atravessou Roosevelt, desde a eleição, em 1933, até ao final da Segunda Guerra Mundial, em 1945.

sexta-feira, 13 de março de 2009

Michelle Obama na primeira pessoa, no «Good Morning America» da ABC*



* ainda restam dúvidas sobre qual será, verdadeiramente, o papel da Primeira Dama neste primeiro mandato de Barack Obama na Casa Branca. Michelle tem preferido, nestes primeiros meses, assumir um perfil discreto e consensual. Como gosta de referir, para já é, essencialmente, «Mom in Chief». Mas Michelle tem ideias próprias, é formada em Princeton e Harvard (não fica atrás de Barack nas habilitações literárias, aliás) e não é de excluir que, lá mais para a frente, Michelle seja mais interveniente nas questões políticas. Por enquanto, regista-se o headline da entrevista a Robin Roberts: «Um Presidente Obama é exactamente o que precisamos neste momento»

Obama, Biden e Geithner carregam na tecla da «responsabilidade»

Obama volta a pedir uma «utilização eficaz» do 'stimulus package'

quinta-feira, 12 de março de 2009

Demasiado cedo para começar a culpar Obama, diz Michael Hirsh


... em artigo publicado na Newsweek, sob o título «Obama's Job is Harder than FDR»:

«As the financial markets pause at the edge of the abyss, deciding whether to back away, we should take a moment to mull over all the Blame Obama rhetoric that's been building in recent weeks. Even some who were the president's most fervent supporters on Inauguration Day are now saying plainly that, halfway through his first 100 days, Obama hasn't delivered on the biggest thing that he promised. He and Treasury Secretary Tim Geithner pledged an overwhelming and powerful response to the crisis—an economic Powell doctrine that would restore confidence in the markets. Instead, we've had a hesitant if steady dribbling-out of new programs. What Obama has done is impressive in many ways, but it's hardly a New Deal.

The mood is summed up by Robert Johnson, former chief economist of the Senate Banking Committee and a former managing director of George Soros's firm. Johnson, who is well connected both on Wall Street and in Democratic Party circles, says some top banking types who knew Geithner and Larry Summers beforehand were so confident of that dynamic duo's ability to get on top of the crisis that they actually bet on a market turnaround when Obama took office. Many of these more sophisticated financiers, Johnson says, are "sorely disappointed" today. Also much poorer, given that the Dow has plunged about 20 percent since Obama's inauguration.

The New Deal is shrouded in myth—and considerable controversy—but there is little doubt that FDR swiftly restored confidence after he took office on March 4, 1933. He immediately announced a "bank holiday" and began a series of fireside chats. As Liaquat Ahamed writes in his wonderful new history, "Lords of Finance," the nation's mood shifted almost overnight: People were still lined up outside the banks, but they'd gone from running to returning as depositors. When the banks opened a week later, the Dow Jones average rose 15 percent in the first day of trading. It soared 75 percent (granted, from rock bottom) in the first 100 days of FDR's presidency. The problem today, 50 days into the Obama administration, is that despite the fitful market jumps this week, no dramatic change of mood has occurred. The bottom-line issue across the landscape—on Wall Street, on Main Street, in boardrooms and households—remains a lack of confidence. The entire financial system has failed, and until people start believing in the system again, credit will only dribble out, not flow freely.

That may be changing, slowly. The heart of the confidence problem remains the banks, and on that score the various pieces of Obama's and Geithner's sprawling program could be starting to cohere. Among the most important of these pieces: the promise of a TALF-regenerated (that's Term Asset-Backed Securities Loan Facility) securitization market and the stabilization of the mortgage market could make toxic assets less of a dead weight dragging major banks to the bottom of the abyss we all fear. No less a personage than Warren Buffett says these assets—which have been radioactive since the market crash last year—are now the most salable assets the banks have. That may mean the nation's most revered investor is ready to be among the first to jump big time into that market himself, which would be a major stimulus for Geithner's sagging rep. (Buffett is a director of The Washington Post Company, which owns NEWSWEEK.)

The reduced toxicity level in turn may narrow the gap between what private funds want to pay for these assets and what the government is trying to induce them to pay—the main obstacle to selling them off right now. It's all a complicated series of causal effects. But as a senior administration official argues, "This is not like Roosevelt's day, where you can shut down the banks and declare a holiday. In the old days, assets were deposits. Now banks are doing zillions of things. You got five or six major problems all occurring at the same time."

And finance is global in a way it wasn't during FDR's day, which means the Obama administration and Congress can't simply impose new regulations or Glass-Steagall restrictions such as the “two tier” system Paul Volcker boldly proposed the other day, getting way ahead of the president he's advising. If this is done unilaterally, finance could simply decide to depart our shores. So Geithner has to fly off to the G20 and wait his turn to speak.

No, Obama does not resemble FDR at the midway point of his first 100 days. There are some legitimate beefs with what he's done and how he's done it. "Given that they had two and a half months to get it ready, the first thing should have been kind of a 10-point plan articulated two hours after the inauguration," says Johnson. "Summers with Geithner at his side. Ten principles, details to follow. Then shut down a couple of big banks—there was plenty of time to do an orderly restructuring. And the last thing is, don't let Capitol Hill do the stimulus program. Now the money's going out too slowly. It's designed like a time release for reelection campaigns in 2010." Johnson also says the mortgage-restructuring proposal should have included a reduction in principal rather than just interest rates.

Still, many of these criticisms will fade into irrelevance—along with the grim jokes about Geithner's imminent dismissal—if the banking problem starts to come around. We've got 50 more days to go—time enough for Obama to come out looking Rooseveltian yet.»

Antes da Carolina do Sul, o duelo Obama/Hillary ficou ao rubro*



* foi há pouco mais de um ano e visto desta distância, parece quase inverosímil: hoje, um é Presidente, a outra é a sua secretária de Estado. Mas antes da Carolina do Sul, a tensão entre os dois principais contendores das primárias democratas chegou ao rubro. Obama havia ganho o Iowa, Hillary renascera no New Hampshire e somou novo triunfo no Michigan (que acabou por não contar). Se vencesse na Carolina do Sul, a nomeação não lhe escapava. Mas Barack arrasou num estado onde metade dos eleitores democratas são negros, vencendo por 55/27. Foi aí que ganhou fôlego para a Super Terça-Feira e para a ultrapassagem final, nas 11 primárias que venceu seguidas, até ao duplo teste do Texas/Ohio. Foi há tão pouco tempo -- mas já cheira a História

'Despite crisis, it's still politics as usual'


Um artigo (muito crítico...) de David Ignatius, no Washington Post:

«For all the legislative commotion surrounding the economic crisis, we are still living in the equivalent of "the phony war" of 1939 and 1940. War has been declared on the Great Recession, but it's basically politics as usual. The bickering and mismanagement that helped create the crisis are continuing, even though we elected a president who promised a new start.

History tells us that phony war doesn't last forever, and that when it ends, all hell breaks loose. World War II officially began with Germany's September 1939 attack on Poland, but for months it was just skirmishing on the sidelines. That hiatus ended on May 10, 1940, when Hitler invaded Belgium and its neighbors. Neville Chamberlain was out as British prime minister and Winston Churchill arrived as the avenging angel.

We're still in the Neville Chamberlain phase when it comes to the economic crisis. The government is talking about sacrifice and solutions, but it hasn't yet made the tough decisions that will put the economy back together. Economist David Smick had it right in The Washington Post this week when he said the administration had a three-pronged strategy: delay, delay and delay. The administration announces a rescue package but doesn't deliver details; it promises budget discipline but saves the hard decisions for later.

One reason this season feels so political is that Obama has stacked his administration with politicians and ex-government officials. You might think that with the greatest financial crisis of his lifetime, the president would want a few business leaders with experience managing large organizations in crisis. But no.

Here's the un-businesslike Obama Cabinet: At Treasury, a former government official; at State, a former senator; at Commerce, a former governor; at Defense, a former government official and university president; at Energy, a former professor; at Homeland Security, a former governor; at Health and Human Services, a former governor; at the White House as chief of staff, a former congressman; at the White House as economic czar, a former university president and government official.

All fine people, no doubt. But as thin on business experience as a Hyde Park book club. Maybe Obama sees business executives as too tainted by the financial crisis to be useful, or confirmable. The closest he comes is Paul Volcker's Economic Recovery Advisory Board -- which includes Jeffrey Immelt, chief executive of GE; Jim Owens, chief executive of Caterpillar; and venture capitalist John Doerr.

The culture of immobilism starts on Capitol Hill. These people are still working a four-day week, taking Fridays off so they can run home and tell constituents how diligent they are. They may talk about a crisis, but they don't act like it's real.

Republicans and Democrats are sticking to party-line votes on many key issues. The Democrats were egregious in packing the stimulus bill with pet projects that won't stimulate much except campaign contributions, and in sticking with earmarks -- a symbolic outrage that Obama promised during the campaign he would eliminate. But the Republicans have been even worse in their strategy of opposing recovery plans, which has given a legislative face to Rush Limbaugh's "I hope he fails."

The legislative pettifoggery was captured by a New York Times headline this week: "Obama's Budget Faces Challenge By Party Barons; Panel Chairmen Oppose a Tax Plan but Want to Reduce Debt." This nonsense has to stop, folks. The party's over.

What will happen if Obama's efforts fail? That's the question that really worries me when I remember my history. During the 1930s, European politicians failed to solve the economic crisis through normal democratic means. So the public turned elsewhere. People became so angry with bankers and business tycoons, and with the bickering parliamentarians, that they turned to authoritarian leaders who promised national action -- in the form of fascism. That nightmare scenario may seem far off today. But there's an ugly mood developing, as people start looking for villains to blame for the economic mess.

Obama administration officials are understandably nervous about taking a leap in the dark -- imposing emergency financial measures that could mean bankruptcy and nationalization for big automakers and giant banks. I hope they will find more creative, market-oriented approaches that break up the giants rather than patch them together under government ownership.

But the phony war has to end. The public is demanding action, and if this set of politicians doesn't provide it, they may turn to a scarier bunch.»

quarta-feira, 11 de março de 2009

Bill Clinton vê um «caminho mais claro» para a reforma da Saúde com Obama do que durante a sua Administração

Hillary Clinton e Sarah Palin também têm direito a biografias em banda desenhada



Durante a campanha, as vidas de Barack Obama e John McCain foram retratadas em banda desenhada, em pequenos livros sob o título comum de «Presidential Material» (e que chegaram a ser publicados em Portugal com a revista Visão).



A mesma série decidiu editar as biografias de Hillary Clinton e Sarah Palin, em mais uma prova de que a alta política americana se faz, também, no feminino. Também por isso, o título comum para Hillary e Sarah é... «Female Force».

Tim Geithner avisa: «O capitalismo vai ser diferente»...



... o poderoso secretário do Tesouro da Administração Obama deu uma entrevista a Charlie Rose e comentou: «O esforço de recuperação terá que ser global». Uma ideia já lançada, nos últimos dias, por Larry Summers, o conselheiro económico nacional de Obama

50 dias depois, a lua-de-mel ainda não acabou para Obama*



* mesmo com uma crise económica tão profunda, o Presidente tem uma taxa de aprovação acima dos 60 por cento, valor superior a Bill Clinton, Bush pai e Bush filho, quando estes três ex-Presidentes tinham cumprido 50 dias de mandato. Nos últimos 30 anos, só Reagan apresentava estes níveis de aceitação por esta altura. Mais significativo ainda: 66% dos americanos acreditam que Obama vai conseguir repor a economia no caminho certo. Veremos como corre a segunda metade dos fundamentais 100 primeiros dias

Subida fugaz ou já o esboço da recuperação?


DOW SURGES NEARLY 6%
Artigo no Wall Street Journal, da autoria de Kejal Vyas e Rob Curran:

«Hope that fortunes may be turning for troubled banks and that regulators are moving aggressively to address disruptions in the markets helped drive a broad stock rally on Tuesday.

The Dow Jones Industrial Average rose 379.44 points, or 5.8%, to 6926.49, closing at its high for the day and recording its biggest point and percentage gains since late November.

Gains were paced by shares of Citigroup, which jumped 38% after it said it was profitable during the first two months of the year. Citi is generally seen as one of the more troubled lenders, and its upbeat comments sent other banks soaring. J.P. Morgan Chase gained 23% and Bank of America rose 28%. Citi shares still ended at just $1.45 and have fallen 93% over the last six months.

More than nine in every ten stocks on the New York Stock Exchange climbed. All 30 Dow components rose. General Electric climbed 20%, undoing some of the damage from a rout that has pushed its shares down by more than 45% this year. Alcoa and General Motors rose 13% each. Both have declined more than 40% so far in 2009 even after Tuesday's surge.

"This kind of broad-based move is encouraging, but the question becomes will it be sustained? At this point, it certainly feels that way," said Gordon Charlop, managing director at Rosenblatt Securities. Similar sharp stock-market rallies in September, October and November turned out to be fleeting. The market has still not had two consecutive sessions of gains since Feb. 5 and Feb. 6. And all three major indexes are still more than 50% below their October 2007 peaks.

Short sellers may have rushed in to the market to cover bets on Tuesday as the rally gathered steam. "On a day like today, when this thing gets some legs, the sellers decide to back off and the shorts start to get nervous, and you find yourself with a big fat move," Mr. Charlop said.

Rep. Barney Frank was reported to have said that the Securities and Exchange Commission may reinstate the uptick rule, which barred investors from betting against stocks that are already falling. The SEC eliminated the rule in July 2007 and some investors have pushed for its return.

Is the worst over for the stock market?If reintroduced, the rule will serve as a stabilizer of the market "because people can't pile on a stock all at once," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams. Still, the rule is not going to prevent failing companies from going under, Mr. Rovelli said.

Stocks rose sharply at the open and never wavered. The rally flushed investors out of safe-haven bets on Treasurys, gold and the dollar. The yield on the 10-year note briefly pushed above 3% while the two-year note's yield topped 1%. Gold futures slid under $900 an ounce.

Federal Reserve Chairman Ben Bernanke said in a speech it was important to address the valuation of illiquid assets. Banks want leeway in accounting for illiquid holdings, and investors were encouraged by Mr. Bernanke's statement, though he said that he wouldn't support the suspension of mark-to-market rules.

"Bernanke said the magic words -- that the Fed was considering looking at accounting standards," said Fred Dickson, market strategist at D.A. Davidson.

Andrew Mayers of LaBranche & Co. works on the floor of the New York Stock Exchange March 10. The market made its first big move upward in weeks.
The Fed chairman also signaled it isn't too early to consider longer-term reforms including putting responsibility for addressing possible systemic risks with one authority, such as the Fed.

"I think the market was waiting for some kind of comprehensive policy statement from the Fed, and this is the closest we've come," Mr. Dickson said.

Shares of United Technologies gained 8.6% after it said it would cut 11,600 jobs globally and spend an extra $600 million for restructuring, bringing to $750 million total restructuring costs for the year.

Rohm & Haas rose 5.4% after reaching a tentative deal to be bought by Dow Chemical for the original price of $15.3 billion in cash, or $78 a share. The two top shareholders in Rohm & Haas put up $3 billion to help close the deal, and Dow's banks agreed looser financing terms. Dow Chemical shares rose 8.5%.

Mr. Charlop noted that seeing a pick up in merger-and-acquisition activity has given some market watchers hope for a recovery but the current bear market is a "new paradigm" and all expectations of a reversion to past patterns have so far been fruitless.

A recovery in financial stocks helped most overseas markets make gains. Hong Kong's Hang Seng Index climbed 3.1% as shares of HSBC Holdings rose 14%. Australia's S&P/ASX 200 ended up 1% after briefly touching its lowest level in five and a half years and South Korea's Kospi Composite Index climbed 1.9%. European markets were aided by gains for Deutsche Bank, Unicredit and Credit Suisse, among other banks.»

terça-feira, 10 de março de 2009

Pat Buchanan compara o fenómeno Obama aos tempos de Lyndon Johnson


Um artigo do radical conservador Pat Buchanan, publicado no Pittsburgh Tribune Review:

«Barry Goldwater had gotten only 38 percent of the vote, and his party had suffered its worst thrashing since Alf Landon fell to FDR in 1936.

Democrats held 295 House seats, Republicans 140. They held 68 Senate seats to Republicans' 32, and 33 governors to the GOP's 17.

Democratic registration was twice that of the GOP. The liberal press was gleefully writing the obituary of "The Party That Lost Its Head."

Decades might pass, it was said, before the GOP recovered from its fatal embrace of right-wing radicalism and foolish rejection of the leadership of Govs. Nelson Rockefeller and William Scranton.

Wrote Robert Donovan in the opening lines of his book, "The Future of the Republican Party":

"The devastating defeat of Barry Goldwater at the hands of voters in all sections of the country but the Deep South has damaged, weakened and tarnished the party. For years to come ... the two-party system will be crippled."

Donovan and all the rest were wrong. The GOP came roaring back in 1966 to capture 47 House seats and eight new governorships. In 1968, Nixon led the party out of the wilderness and into a White House it would hold for 20 of the next 24 years.

Full of hubris in 1965, Lyndon Johnson had seized his moment. He had launched a Great Society that would outdo his beloved patron FDR. He would dispatch 500,000 troops to Vietnam to "bring the coonskin home on the wall" and create a "Great Society on the Mekong." Those were heady days of "guns-and-butter."

By 1968, LBJ's coalition was shredded. Gov. George Wallace had torn away the populist right. Sens. Gene McCarthy, George McGovern and Robert Kennedy had rallied the antiwar left against him. LBJ and Hubert Humphrey were left to preside over a shrinking center.

Why did LBJ fail? He overloaded the circuits. He tried to do it all. He misread a national desire for continuity after Kennedy's death as a mandate for a lunge to the left and a great leap forward with the largest expansion of government since the New Deal.

By 1968, racial riots had torn apart almost every great city.
The most prestigious campuses had been rocked by student violence. Thousands of antiwar demonstrators had taken to the streets. And 100 to 200 body bags were coming home from Vietnam every week.

By the winter of 1968, Lyndon Johnson was a broken president.

History never repeats itself exactly. But Barack Obama is making the same mistakes today that LBJ made in 1965.

He has ordered 17,000 more U.S. troops into Afghanistan, as the situation deteriorates and the NATO allies pull out. He has no exit strategy. He has read a repudiation of George Bush as a mandate for a government seizure of wealth and power that exceeds anything attempted in the Great Society.

Fully half of the $3.55 trillion in spending Obama will preside over this year will not be covered by tax revenue but by red ink. The money will have to be borrowed from abroad or printed by the Fed.

Not only is Barack running a deficit four times as large as Bush's largest, he has called for $1 trillion in new taxes on America's most successful, who have already seen their savings and pensions ravaged.

He wants a cap-and-trade system to deal with a global-warming or climate-change crisis many scientists believe is a hoax. He is going to provide health care for all, including immigrants, millions of whom arrive uninsured every year. He is going to plunge scores of billions more into education, though education has eaten up the wealth of an empire, as SAT scores sink further and further below the apogee of 1964, before LBJ and the feds barged in. He is going to ask Congress for authority to spend another $750 billion rescuing the banks.

He is going to find the cure for cancer. He is going to ensure every kid gets a college education. He is going to drop half of all wage-earners off the tax rolls, while the top 2 percent, who already pay 40 percent of all income taxes, are forced to cough up more.

Obama is misreading the election returns. When America voted to cancel the White House lease of Mr. Bush, it did not vote Barack Obama a blank check.

By misinterpreting his mandate, Obama has accomplished something John McCain could not -- unite the Republican Party and instill in it a new esprit de corps. For the Obama budget is an insult to the core belief of the party -- that free people, not coercive government, should shape the character of society.

By daring Republicans to fight on the issue of a $1.75 trillion deficit, Obama has liberated the GOP from any obligation to him. He has come out of the closet as a radical liberal spoiling for a fight over an agenda of radical change.

Sooner than any might have thought, we have clarity.»

Outra aposta forte de Obama: melhorar a Educação

segunda-feira, 9 de março de 2009

Joe Lieberman, a mais recente aquisição da Obamania*



* foi um dos principais apoiantes da candidatura de John McCain; no auge da luta eleitoral, teceu duras críticas a Barack Obama, mas agora está do lado do Presidente, garantindo que «só tem a dizer bem» deste início de mandato; senador democrata, nomeado por Al Gore como vice na candidatura de 2000, Joe Lieberman parece, finalmente, ter traçado a reconciliação com o seu partido. Mais uma prova do toque de midas de Barack?

Obama cumpre promessa e levanta a probição de investigações em células estaminais

Barómetro semanal: 67 por cento de aprovação


O estado de graça parece intacto: ao fim de 7 semanas de Presidência Obama, a taxa de aprovação permanece altísima.

POPULARIDADE
-- Taxa de aprovação: 67%
-- Taxa de reprovação: 27%

(fonte: Diageo/Hotline)

Peter Orszag, o director do Orçamento, pede «paciência»...



... até que se façam sentir efeitos positivos do 'stimulus package', enquanto o republicano John Bohner, líder da minoria no Congresso, contrapõe dizendo que «o governo devia dar o exemplo e apertar o cinto». Duas visões bem diferentes sobre como se de enfrentar a crise, no «Face The Nation» desta manhã, da CBS

domingo, 8 de março de 2009

David Plouffe em Portugal


O director de campanha de Barack Obama, o homem que acertou em cheio na fifty state strategy e na aposta nos caucus, mais do que nas primárias tradicionais, vai estar em Portugal.

David Plouffe dará uma conferencia em Lisboa, na Universidade Católica, no proximo dia 30 de Março, pelas 11 horas. A não perder.

sábado, 7 de março de 2009

'The End of The American Exception?'


Um artigo de Clive Crook, no National Journal Magazine:

«During PBS's NewsHour With Jim Lehrer last Friday, the program's resident pundits, David Brooks and Mark Shields, had an interesting exchange about President Obama's first budget. They agreed that the administration aimed to be "transformative" -- and Brooks conceded, "I think we all want that." The real question, he said, is how transformative.

Brooks: "The debate will be over the nature of it. If it's a transformative relationship that basically keeps the American model with repair, you'll get a lot of people in the center for it. If it's a transformative relationship that turns us into France, with a consumption tax and a much bigger federal government, you will not."

Shields: "That's a straw man, turning it into France. That's not the case."

Is it really a straw man? I was hoping that Brooks would press Shields to say what exactly it is about France he objects to, what makes him recoil at the parallel. Where has France gone too far, in the view of an American liberal?

The policies that Obama is proposing have all been tried elsewhere. And we know something about how well they work.

Presumably, liberals approve of the universal health care, the generous and extensive welfare state, the comprehensive worker protections, the stricter regulation, the vastly more-generous subsidies for higher education, the stronger unions, the higher taxes, and especially the higher taxes on the rich. At least I assume they do, since they advocate all of those policies for the United States. Have I left something out?

As far as social and economic policies are concerned, Democrats really ought to be holding up France (or maybe Italy or Germany) as the model to which they aspire. The fact that they do not -- that they even deny the validity of the comparison -- seems revealing. No doubt it is partly a matter of tactical calculation. The idea that the United States should model itself on any other country, rather than offer itself as the model for the world, would be new to most American voters and would take some getting used to. But I do not think it is just that.

Perhaps some liberals privately long to make the United States over in the image of France, but the great majority, I imagine, are more interested in taking the things they regard as best in the European economic model -- all the things I just listed -- and combining those "socially enlightened" policies with the traditional economic virtues of the United States. Take French social policies and welfare-state institutions and add them to the American work ethic, spirit of self-reliance, and appetite for change. Et voila, the best of both worlds.

Color me skeptical. Culture shapes institutions and vice versa. Culture -- that bundle of traits of self-reliance, self-determination, innovation, and striving for success -- underpins the American exception. To state the obvious, it helps explain why this country has a markedly different form of capitalism than Europe, based on smaller government and lower taxes.

In ordinary times, this culture makes it hard for a government to push the United States in a European direction: Voters push back against bigger government and higher taxes. But now, maybe, the time is ripe. This unusually severe economic crisis has called American capitalism into question, highlighting its weaknesses and making it easier to forget its strengths. Liberalism has a rare opportunity. And just as this opportunity has arisen, American liberals also have, in Barack Obama, a remarkably popular and appealing leader to press the advantage.

But the interaction between culture and institutions works both ways. Change the system and, with time, you will change the culture. How much you will change it is debatable, and so is whether change of that kind would be good, bad, or indifferent for the country's economic and political prospects. But it would be an error to assume that the policy transformation that some liberals long for -- and which Obama, if his budget is any guide, appears to be aiming for -- would leave America's unusual cultural traits unaffected.

I had better declare an interest on this question of good, bad, or indifferent. As you may recall, I am a Brit who lives in the U.S. Politically speaking, I think of myself as an old-fashioned English liberal, a comically outmoded orientation that has little or no voice in modern European or American politics. In U.S. terms, you get a sense of where I stand if you think "liberal on social issues, conservative on economic issues" (but with exceptions, so do not hold me to that).

To put it mildly, I admire this country's instinctive suspicion of concentrated state power, its anti-collectivism, its veneration of the individual spirit and individual enterprise. At different times and in different ways, Democrats and Republicans alike have been at war with aspects of that mind-set, but as an admiring foreigner, I am here to tell you that this culture survives, that the American exception is alive and well, and that it is more than likely the secret of this country's awesome success.

If I were a citizen with a vote -- as one day, immigration authorities permitting, I hope to be -- I would need to think long and hard before casting it for "transformation." Repairs here and improvements there, of course, but transformation? It would be a shame to see America revert to the Western European norm. It would mean I had wasted a trip, for one thing, and I am not sure where I would go next.

Brooks's invoking France as a possible destination for Obama's social experiment does seem far-fetched. But the staggering breadth of Obama's ambition makes it reasonable to ask where all this is heading. Thoroughgoing health care reform would have been a bold undertaking by itself, one for which there is broad centrist support. But the budget and the fiscal stimulus also call for wide and ongoing commitments to public investment.

Obama is fond of saying that the question is not big government or small government, but what works. The fact is, whether his programs work or not, taken together they represent the biggest and fastest expansion of government since the New Deal. Moreover, the tax increases to pay for this expansion, he says, are to fall entirely on high-earning households. So his plan to enlarge government is married to an uncompromising assault on economic inequality.

And if all of this is not enough to remind you of Europe, Obama has also expressed strong support for the Employee Free Choice Act, arguing that bigger and stronger unions are a vital part of sharing prosperity more widely. To somebody who watched unions cripple the British economy, until voters elected Margaret Thatcher to sweep them away, this is the part of Obama's program that seems most in need of an international reality check.

This promised transformation is not a move into unexplored territory, after all. The policies that Obama is proposing have all been tried elsewhere. Ideas that look bold and new in this country are old hat across the Atlantic. And we know something about how well they work.

A strong case can be made for many of Obama's proposals, taken one at a time. I admire his ambition to mend the country's failing, unjust, and needlessly expensive health care system. I also applaud his focus on raising the incomes of the working poor, through tax cuts and wage subsidies (such as his "make work pay" tax credits). But trade-offs need to be faced. A good hard look at Europe makes this plain.

Bigger government requires higher taxes -- in the end, for most taxpayers and not just the rich. Europe shows that tax systems tilted too far against high earners stifle the incentives that spur economic growth. Welfare systems that are more generous and have fewer strings tend to raise unemployment. Stricter regulation can and does retard innovation. Stronger unions can raise unemployment and, in the aggregate, lower incomes.

The president cannot be accused of misleading voters. For the most part, he is planning to push through the policies he advocated during the election -- policies that the country voted for. His apparent determination to keep his word is unusual, and a little startling, but this is more a criticism of other politicians than of him. Although he cannot be accused, not yet, of breaking promises, I think it is fair to ask whether he has thought through the implications of his agenda taken as a whole. His style of explanation, or salesmanship if you prefer, is heavy on pragmatism and on mending one thing at a time. But the breadth of his program, and the connectedness of his ideas, belie that modest stance.

As the president said during his Inaugural Address, "It has been the risk takers, the doers, the makers of things ... who have carried us up the long, rugged path toward prosperity and freedom." That is a very American sentiment. It is fair to ask what the full scope of Obama's transformative agenda implies for the risk takers, the doers, and the makers of things. Aside from higher taxes if they succeed, obviously.»