The next 100 days: setting a new agenda after a shotgun marriage of opponents

Think regulatory oversight of credit rating agencies is going to increase in the months ahead? Think Washington is going to put Standard and Poor’s through the ringer as a consequence of its downgrade decision? It is as certain as the fact that in lieu of vision, courage, and action, the political swamp rats of D.C. will play the blame game while trying desperately to change the subject from the current crisis.

Think the decision of Treasury Secretary Timothy Geithner to stay on through the election will fill the markets with confidence? Geithner is earnest, incredibly hardworking, and intelligent, but he has been snake-bitten from the start and the president is misreading the mood of the markets and voting public if he thinks that what this situation calls for is "staying the course." That’s a mistake that’s been made before … and it would be a stark irony if in his efforts to avoid being a one-term president like Jimmy Carter, President Obama instead became one like George H.W. Bush.

Think the intervention of the European Central Bank to prop up the debt of Italy and Spain is going to restore investor confidence in the eurozone, or is its action more like that of a drowsy emergency room doctor in the middle of a long shift waking just long enough to place a few Band-Aids on the gunshot wounds of several recently admitted critical-care patients?

Think the fact that the U.S. Congress being in recess at a time of great risk to the nation is a big story … or is it a bigger story that most Americans think that is a net positive, given how unlikely it is that the petulant children of the U.S. Congress would be likely to get anything positive done were they actually in their offices working?

Think that with the great economies of the world circling the drain that profound security and humanitarian concerns will fester and worsen — from famine in East Africa to Iran’s nuclear program to the mess in Afghanistan that took such a tragic toll this weekend (undoubtedly thanks to the support the Taliban receives from elements in the government of Pakistan)?

Moments like this will get you thinking. Unfortunately, most of the thoughts that are likely to cross your mind are unsettling ones. In many ways this moment is more complex and daunting than the crisis in 2008 and 2009. Because back then there was a pervasive sense that we would and should do anything in our power to avoid a global economic meltdown. Not that we actually did do what should have been done. But at least we felt like everyone was pulling in the same direction.

Now, not only is Europe as riven with political divisions as is the United States, but there is a widespread belief that certain types of actions are off the table either because we tried them and they didn’t seem to work the last time around or because they seem to be politically not viable. I would argue, however, that while this may be the conventional wisdom, we all need to work to undo it at the earliest possible moment.

First, while some may argue, for example, that we tried a stimulus and it didn’t work and therefore it is to be avoided again, they would be wrong. Here in the United States, the stimulus was both misdirected to the wrong kinds of projects, it was distributed too slowly, and it did not effectively address core issues of unemployment. But that just means it was the wrong stimulus administered in the wrong way, not that we should rule out government stimulus as a tool if the conditions call for it.

Others might argue that the issue is the size of the deficit and that therefore we should not undertake new stimulus because it would exacerbate that problem. But we can certainly undertake smart, thoughtfully targeted, near-term stimulative measures while also taking steps to offset our long-term debt program. Notably, we can address the long-term defects in our entitlement programs, our bloated defense budget, and tax reform now. But we can do it in ways that close loopholes, require fair contributions from the richest members of our society, and phase in essential new revenue sources like a value-added tax and/or a carbon tax so that they are phased in to really take root after the downturn but which send a message of seriousness regarding structural issues.

As importantly, those who argue that we can’t take these steps because of the political mood are making the mistake of focusing on the political mood of last week and today and not on the mood of next year and beyond. Politicians who think the obstructionism, pettiness, deception, gamesmanship, and failure to lead of the past of couple months in the United States (or Europe for that matter) can be allowed to set the tenor for the year ahead will soon be unemployed. Because if by next fall’s election in the United States it is apparent that this group has not introduced new measures to restore growth, job creation, and faith in the U.S. economy, they will not only be cast out but they will go down united in ignominy.

Yes, that’s right, the current circumstances have performed a shotgun marriage on the Tea Party and the radical center and the weather vanes and the poseurs and the champions of Change We Can Believe In. They are all in it together. Either they do one of the most radical midcourse corrections of mood and policy ever seen or they may all go down together, fingers pointing at one another, as among the very least effective groups of leaders Washington has seen since the Buchanan administration.

If the president and John Boehner better understood this, they would call right now for Congress to come back in session and to put forth a sweeping new economic package that called for investment spending in infrastructure, incentives to attract new investment, tax reform, and long-term deficit relief.

Typically new administrations take office talking about what must be done in the first 100 days. President Obama did, and given the crisis at the time it was a period marked by a shared sense of urgency throughout the United States and around the world. But, with a world economy weakened by the last crisis and the economic, political, and social toll it has taken, it is actually the next 100 days that are likely to be the most decisive in the careers of our leaders and in determining the kind of world in which we live for the foreseeable future.