This is an article by auditor Gurumurthy about an year back but the question still lingers "Whether Obama can deliver?"
His other writeups are available on http://www.gurumurthy.net/

What can Obama deliver?
07-11-2008

Barack Obama has stormed into the White House in the US on the promise of change. The US is celebrating the change without knowing what it is. The world is repeating the Obama mantra of change. The Indian media is a leading trumpeter of the change. But, no one seems to know what that change is.What is the change the US needs, or the world needs from the US? And whether Obama can deliver that change? These are questions which, in the shock and euphoria of a black in the White House, no one asks.

Nor has Obama cared clarify either. The victorious Obama has declared: “The change has come.” If his election as President — the first black in the White House — is the change that he had had in mind, undoubtedly that change has come. But that is the change that the Americans have brought about. The question is: what is the change Obama will bring to the Americans in return for the change that they have brought to the White House? Obama is a great orator. But, a caveat here.

In ancient Indian literature, Srimad Bhagawatam says that, in Kali Yuga, orators are mistaken for the learned. His oratory skills have seen Obama into the White House.

From now on, he needs to understand what the US needs and what the world — that is held to ransom by a US, that is, profligate within and adventurous outside — legitimately expects the US to do. And more,what he does hereafter alone will matter. What overshadowed all issues — Iraq, terrorism, national security and the rest — in the last lap of the US Presidential elections 2008 is the financial crisis, that was kept carefully hidden finally hit the US in the final moments of Bush rule.

To save America from instant bankruptcy the George Bush regime had to step in to support the Wall Street. Even if Obama were where Bush is, he would have done only what Bush has. Yet, labelling Bush and McCain as mere Wall Street extensions, Obama turned the US Presidential poll into something like Indira Gandhi’s Garibi Hatao election of 1971 — a “Rich vs the Rest” contest.

Obama seized the critical US economic crisis as an issue of rich Americans vs common Americans, through his ‘Main Street Vs Wall Street’ argument. The Wall Street is the synonym for the US corporates, banks and stock markets and the Main Street is label of the common Americans. Obama summed it up in victory oration on Wednesday.

“Let us remember that if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while the Main Street suffers in this country; we rise or fall as one nation; as one people.” A touching oration indeed.

The change that Obama seems to mean is to give to the Main Street bounties like Wall Street bailout packages. So, as the Wall Street got a bail out of $700 billions from the Bush regime, Obama, who had first promised a middle class rescue plan at a cost of $115 billions, increased his promised amount to $175 billions just three weeks ahead of the final vote for Presidency. Result, the US Presidential elections turned more like India’s as to who the candidates should bribe to get more votes. But is the issue in the US as simple as Wall Street vs Main Street? Tax cuts and bailouts are issues that will have value for a year and little more or less.

Is the American crisis limited to handing out a few hundred billions here and there? It requires a deeper quest into the US, and greater introspection in the American leaders.

No US leader, the change agent Obama included, has the guts to talk about the real, deeper problems of the US. The US problem is that its present and its future is mortgaged to such a feeble mechanism as the stock market, which is in deep crisis. In 1980, just 5.6 per cent of US families were habituated to stocks; in 1990 some 25 per cent of the households got hooked to stocks; by 2001, over 51 per cent of US households had become obsessed with stocks. This is not the end of the story. This and the investments by pension and insurance funds in stocks — which is over 60 per cent of their total —have enmeshed Wall Street and Main Street. Wall Street is dependent on the Main Street’s spend; and the Main Street’s spend depends on the Wall Street values! This is not the case for example with Japan, or Germany or India,where the stock appetite is far less.

So the Wall Street vs Main Street divide which Obama has attempted is a sheer deception.

That the US as a nation is Wall Street-dependent is a fact of the US economy.

This Main Street’s enslavement to Wall Street did not come about in a day.

The American families’ addiction to stocks was brought about partly by cutting the interest rates on savings from over 20 per cent to just over a couple of percentage points in 2001. Result. The households shifted from stable and safe banks to unstable and unsafe stocks. The divide between Wall Street and the Main street was 95:5 in 1980; it narrowed to 75:25 in 1990; and it further narrowed 51:49 in 2001. In contrast just 2 per cent of Indian savings, just 6 per cent of Japanese savings is locked in stocks! The obsession of the US economy with stocks was also assisted by the disintegration of families — and the emergence of single parent families. Today over half the families in the US are headed by single parents.

Research shows that more government aid to single parent families increases, not reduces, their number. The decline of families has forced the government to nationalise family functions through state-provided social security schemes and privatise its own functions through corporates.With the result families have no incentive to save. Instead, they have all incentives to spend; even to borrow to spend. In his book “The Age of Turbulence” (2007) the ex-US Fed chief Alan Greenespan had glorified this quality of developed economies like the US to borrow to spend as the test of consumer confidence.

Result, American families are in debts of $2.8 trillions on some 1.2 billion credit cards, and the US is in debts of over $12 trillions to the rest of the world. Over the years the US banks have saddled on to Asia and Europe trillions of dollars of its sub-prime debts. That is how, as the French and German governments have accused, the US crisis has been exported as global crisis.

So, resetting the priorities between Wall Street and Main Street is no change at all or just a small change. Obama needs to understand why nations that have a strong family base and savings are safer than the US and its cousins in Europe.

For achieving economic changes, the US needs sociological changes, which, in turn, will need political changes. There is no sign of Obama thinking beyond the Wall Street vs Main Street issues. QED: Obama thinks within the paradigm; but what the US needs is a different paradigm.

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