In the economy, a series of financial booms and busts, dating back 20 years, has brought on the worst crisis since the Great Depression. Even defenders of free markets have come to acknowledge that markets can be manipulated or overwhelmed by investors, lenders, consumers and borrowers who act on the basis of emotion or incomplete information or act as part of an irrational herd.

And politics, a process that has come to be dominated by competition among narrow special interests has, for most of the past 15 years, produced stalemates on the country's most pressing domestic issues. Political markets, we now know, can be easily manipulated by money and legislative redistricting and parliamentary rules that thwart the will of the majority. And these markets have trouble resolving issues in which the benefits of doing something are widely shared but the costs are highly concentrated.

The essential insight of Barack Obama has been to see that these problems are inextricably linked. While his budget incorporates bold proposals to rescue the financial system, stabilize the auto industry, jump-start the economy, reform the health-care system and eventually bring down the federal deficit, he knows he's unlikely to win any of it if he cannot change the way business is done in Washington.

Read it all.

Filed under: * Economics, Politics • Economy • The U.S. Government • The National Deficit • Politics in General • Office of the President • President Barack Obama

1. Jeffersonian wrote: This column is so clueless, it’s hard to know where to begin. February 27, 11:34 am | [comment link]

2. evan miller wrote: “Change the way business is done in Washington.”  You know, the way Hugo Chavez has changed the way business is done in Venezuela. February 27, 11:43 am | [comment link]

3. Jeffersonian wrote: Obama appears to be changing the way business is done in Washington primarily by supercharging the game of round-robin purse-snatching. February 27, 12:21 pm | [comment link]

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