Yes we can (unless we have to pay for it)

Someone asked me what Obama's election means for America and the world. For America, the most important thing about Obama's victory is that it signifies that Americans are finally willing to move beyond the rivalries of the Vietnam era to embrace a new direction - an uncertain one, yes, but a decidedly different course than that set by the baby-boomer generation. We have a leader now for an America run by people too young to have fought in Vietnam, whose newest workers were born after the fall of Communism and whose ancestors were increasingly not European. America's ideological walls are tumbling.

It is also a milestone that America, or at least a little over half of it, has returned a candidate that did not win because of his appeal to mediocrity. In Obama, America has shown a willingness to choose a leader who they believe and hope is smarter than they are. This is significant in that it reopens the notion that America can solve its problems by devising a future of its choosing, and pursuing through leadership, rather than waiting for the whim of the free market to dictate its future for it. For the world, therefore, Obama's election represents the revival of America as an ideological icon. The inclusiveness and social mobility that Obama's win embodies rekindles the best and most cherished values of American democracy, one that resonates through the world. America is the pinnacle of that dream, of that opportunity, one that makes tyrants tremble. And Obama is the first person in a long time to become the leader of the free world that the free world actually admires and accepts. America has the opportunity now to rebuild its image and prestige in the world.

But it is, as I have mentioned before, a much more difficult world that Obama now has to navigate. His calls for change and hope risk being muffled by a global recession. The world yearns for repair now more than reform, and Obama is not a restorative leader. Costly change may be too dear even if the cost of not changing is much, much higher. And so it is a more dangerous world in many ways. Obama's popularity abroad will buy America some good will, assuredly, but the truth is we still know very little about what he stands for or what he will do. With Obama's party in firm control of Congress, the door is open for government to take a much larger, and potentially more damaging, role in the lives of America's citizens. Now that the flames of the credit crisis have been largely extinguished, Washington and the rest of the world's governments will need to start spending to revive the global economy. The devil will be in the details.

With hopes so high for Obama's presidency in America and abroad, the shorter odds are on disappointment. He will need to take painful decisions on the economy - spending, taxing, regulating - that could cost him support. He is also unlikely to support submitting America to any kind of global regulatory authority, something Europeans are already calling for. Another area of potential disappointment may be the Middle East. Obama has supported a rapid withdrawal of US forces from Iraq. That may now be what Baghdad also wants, but the rest of the region does not want to see a rapid withdrawal of US forces, particularly in the Gulf. We still don't know how Obama will handle the deteriorating situation in Afghanistan, or the spreading conflict within the borders of Pakistan, a US ally. [e-mail]