It is now pointless to speculate whether, in case the American economy was not in such a shambles, Barack Obama could have smashed the colour barrier. More pertinent is to attempt to measure the intensity of expectations the American nation nurtures about him. He had sought votes on the issue of change; the electorate has given him the specific mandate to change the economic landscape. The circumstances are altogether strange to what generations of Americans have been accustomed to. Life’s coordinates are turned topsy-turvy. The economy, instead of growing, is shrinking. The collapse of banks and stock exchanges has reduced thousands of families to a state of penury. Should the current trends persist, living standards over a wide range of society are bound to decline precipitately. Unemployment, already at 6.5 per cent, could, who knows, zoom to Great-Depression proportions of 25 per cent or more. The United States of America would still remain the world’s mightiest power, but that would hardly be solace for a people drowned in joblessness and the turmoil of daily existence.

It hurts to admit certain facts even when these stare starkly in one’s face. Given the magnitude of the crisis, exclusive dependence on private enterprise will be incapable of reviving the system. The need once more is for the imagination and courage of a Franklin Delano Roosevelt who started, at the nadir of the Great Depression, massive employment-generating schemes in the public domain alongside the judicious injection of funds into banks, insurance firms and house-financing institutions under strict public vigil. Since the dimension of the crisis is much greater this time, the orthodoxy in public finance developed over the past decades has to be ditched and the Keynesian prescription of budgetary deficit-financed public works must, on the face of it, not only be restored to respectability, but also accorded the highest place of honour.

To show the private sector the door will be no easy task. At the time the Great Depression set in, the American capitalist class was not only a discredited lot, it was a desolate lot as well, forming gentle queues to jump to their death from the top floors of New York skyscrapers. The picture is different three quarters of a century later. While this year’s holocaust has left the capitalist establishment flustered and desperately seeking bail-outs from the State, it is ideologically a much more coherent entity and will offer stiff resistance to excessive official surveillance over its affairs. Some of the largest contributors to Obama’s campaign fund happen to be Wall Street tycoons and the New York law firms they lean upon.

It is not going to be easy economic engineering for another crucial reason. Technological progress is an inevitable adjunct of capitalist growth. Rising accumulation of capital in the US has led to productivity and production rising at a furious pace. Such accelerating growth itself is the progenitor of crisis: given the skewness of income distribution in a capitalist-society, what is produced cannot be fully disposed of; there is, in Marxian terminology, a “realization” problem. Capitalists compete among themselves to gain a larger share of the growing market. This goads them to invest in new technologies that would cut costs by saving on labour. But since every capitalist joins the cost-paring exercise, it only deepens the crisis. If interest rates are slashed — as is being done at present — to stimulate investment and thereby enlarge the scope of employment, the investment might, in fact, turn out to be even more labour-displacing. Unguided and unregulated percolation of liquidity into the system could therefore do more harm than good.

Outsourcing becomes a contentious issue in this context. The phenomenon of outsourcing is only a refurbished version of the slave trade introduced in the 18th century to develop and transform the North American economy. Cheap — or free — migrant labour for doing the dirty work either supplanted the need to employ high-wage labour available at home or fill the gap of workmen. In the present instance, cheap labour is not shifted to the US, they stay in their native places and serve the purpose of American capital through business process outsourcing. In case the crisis deepens in the coming months, capitalists will conceivably keep insisting on the continuance of outsourcing; they will be fiercely opposed by American labour. That will pose a major dilemma for Obama.

For the new entrant to the White House, assuming he intends to honour his pledge, there is no escape from making hard choices, choices which could alienate him from his past associates, many of whom are well know for their frozen thoughts about free will and laissez faire. An early mistake, history suggests, contaminates, irresistibly, the sequence of future events.

An equally onerous task will be to try to persuade the American public to move away from the grand illusion they have nestled in since the end of World War II. Their fond dream of a perpetual Pax Americana, with the moral authority as leader of the ‘free world’ and overwhelming military prowess, they have to be told, has to come to a surcease. It is a matter of budgetary arithmetic. The US administration has to cut back on defence spending, including spending on auxiliary and ancillary activities, if it were to gather together the resources necessary to put back the gravely imperilled economy to a reasonable state of health. Something has got to give. The nation cannot continue to pour money on foreign misadventures, as in Iraq and Afghanistan, while weaving an intricate network of so-called strategic alliances in the name of defending freedom and democracy, and, at the same time, take care of the stupendous restructuring of the economy. Other things apart, it is a matter of sheer common sense too: if the economic hinterland lies in ruins, it would in any case be impossible to sustain global military superiority.

None of this is to deny the reality of inter-dependence among nations that has, for good or evil, emerged as an inalienable datum in human existence, and has rendered the world vastly different than what it was in the 1930s. Europe, a large part of Latin America, and China too, thrive on exports to the US. India’s export breakthrough is again largely the outcome of domestic developments in the US. Persistent economic blight in the North American continent could therefore cause serious distress to a wide mass of the human population, leading even to conditions of anarchy and mayhem in many regions.

Obama, smartest of the smart, is still a product of the machine politics of Chicago’s Democratic Party, just as FDR initially came to public life as a tool of New York’s Tammany Hall thugs. FDR had the grit to discard his clan affiliation and apply Keynesian recipes to restore the American capitalist order. The challenge Obama faces is far greater; the ramifications of what he does or does not do will have major implications across the continents. His first priority obviously is to organize the most crucial change, the change away from laissez faire. He could do worse than have a close look at these lines from Keynes’s Essays in Persuasion: “It is not true that individuals possess a natural liberty in their economic activities. There is no ‘compact’ conferring perpetual rights on those who Have or those who Acquire. The world is not so governed from above that private and social interests always coincide. It is not so managed here below that in practice they coincide.”