Wednesday, Dec. 17, 2008

Why History Can't Wait

You probably sat in a fancier conference room the last time you refinanced or heard a pitch about life insurance. There's a table, some off-brand mesh office chairs, a bookcase that looks as if it had been put together with an Allen wrench and instructions in Swedish.

To reach this room, you pass through a cubicle farm lightly populated by quiet young people. Either they have just arrived or they are just leaving, because their desks are almost bare. The place has a vaguely familiar feel to it, this air of transient shabbiness and nondescriptitude. You can't quite put your finger on it ...

"It's like the set of The Office," someone offers.


It is here that we find Barack Obama one soul-freezingly cold December day, mentally unpacking the crate of crushing problems — some old, some new, all ugly — that he is about to inherit as the 44th President of the United States. Most of his hours inside the presidential-transition office are spent in this bland and bare-bones room. You would think the President-elect — a guy who draws 100,000 people to a speech in St. Louis, Mo., who raises three-quarters of a billion dollars, who is facing the toughest first year since Franklin Roosevelt's — might merit a leather chair. Maybe a credenza? A hutch?

But he doesn't seem to notice. Obama is cheerfully showing his visitors around, gripping the souvenir basketball he received from Hall of Famer Lenny Wilkens, explaining a snapshot taken the day he played pickup with the University of North Carolina hoops team. ("They are so big and so fast and so strong, you know.") Then, since those two items basically exhaust the room's décor, Obama sits down on one of the mesh chairs and launches into a spoken tour of his world of woes. It's a mind-boggling journey, although he shows no signs of being boggled — unless you count the increasingly prevalent salt in his salt-and-pepper hair. By now we are all accustomed to that Obi-Wan Kenobi calm, though we may never entirely understand it. In a soothing monotone, he highlights the scariest hairpin turns on his itinerary, the ones that combine difficulty with danger plus a jolt of existential risk. (See pictures of the Civil Rights movement from Emmett Till to Barack Obama.)

"It is not clear that the economy's bottomed out," he begins, understatedly. (The morning newspaper trumpets the worst unemployment spike in more than 30 years.) "And so even if we take a whole host of the right steps in terms of the economy, two years from now it may not have fully recovered." That worries him. Also Afghanistan: "We're going to have to make a series of not just military but also diplomatic moves that fully enlist Pakistan as an ally in that region, that lessen tensions between India and Pakistan, and then get everybody focused on rooting out militancy in a terrain, a territory, that is very tough — and in an enormous country that is one of the poorest and least developed in the world. So that, I think, is going to be a very tough situation.

"And then the third thing that keeps me up at night is the issue of nuclear proliferation," Obama continues, sailing on through the horribles. "And then the final thing, just to round out my Happy List, is climate change. All the indicators are that this is happening faster than even the most pessimistic scientists were anticipating a couple of years ago."

Score that as follows: one imploding economy, one deteriorating war in an impossible region and two versions of Armageddon — the bang of loose nukes and the whimper of environmental collapse. That's just for starters; we'll hear the unabridged version shortly.

But first, there is a bit of business to be dealt with, having to do with why you are reading this story in this magazine at this time of the year. It's unlikely that you were surprised to see Obama's face on the cover. He has come to dominate the public sphere so completely that it beggars belief to recall that half the people in America had never heard of him two years ago — that even his campaign manager, at the outset, wasn't sure Obama had what it would take to win the election. He hit the American scene like a thunderclap, upended our politics, shattered decades of conventional wisdom and overcame centuries of the social pecking order. Understandably, you may be thinking Obama is on the cover for these big and flashy reasons: for ushering the country across a momentous symbolic line, for infusing our democracy with a new intensity of participation, for showing the world and ourselves that our most cherished myth — the one about boundless opportunity — has plenty of juice left in it.

See pictures of Obama's nation of hope.

See pictures of Obama's college years.

But crisis has a way of ushering even great events into the past. As Obama has moved with unprecedented speed to build an Administration that would bolster the confidence of a shaken world, his flash and dazzle have faded into the background. In the waning days of his extraordinary year and on the cusp of his presidency, what now seems most salient about Obama is the opposite of flashy, the antithesis of rhetoric: he gets things done. He is a man about his business — a Mr. Fix It going to Washington. That's why he's here and why he doesn't care about the furniture. We've heard fine speechmakers before and read compelling personal narratives. We've observed candidates who somehow latch on to just the right issue at just the right moment. Obama was all these when he started his campaign: a talented speaker who had opposed the Iraq war and lived a biography that was all things to all people. But while events undermined those pillars of his candidacy, making Iraq seem less urgent and biography less relevant, Obama has kept on rising. He possesses a rare ability to read the imperatives and possibilities of each new moment and organize himself and others to anticipate change and translate it into opportunity. (See pictures of Obama's nation of hope.)

The real story of Obama's year is the steady march of seemingly impossible accomplishments: beating the Clinton machine, organizing previously marginal voters, harnessing the new technologies of democratic engagement, shattering fundraising records, turning previously red states blue — and then waking up the day after his victory to reinvent the presidential-transition process in the face of a potentially dangerous vacuum of leadership. "We always did our best up on the high wire," says his campaign manager, David Plouffe.

Obama's competence fills him with a genuine self-confidence. "I've got a pretty healthy ego," he allows. That's clear when he offers a checklist for voters to use in judging his performance two years from now. It's quite an agenda. Listen: "Have we helped this economy recover from what is the worst financial crisis since the Great Depression? Have we instituted financial regulations and rules of the road that assure this kind of crisis doesn't occur again? Have we created jobs that pay well and allow families to support themselves? Have we made significant progress on reducing the cost of health care and expanding coverage? Have we begun what will probably be a decade-long project to shift America to a new energy economy? Have we begun what may be an even longer project of revitalizing our public-school systems?"

There's more: "Have we closed down Guantánamo in a responsible way, put a clear end to torture and restored a balance between the demands of our security and our Constitution? Have we rebuilt alliances around the world effectively? Have I drawn down U.S. troops out of Iraq, and have we strengthened our approach in Afghanistan — not just militarily but also diplomatically and in terms of development? And have we been able to reinvigorate international institutions to deal with transnational threats, like climate change, that we can't solve on our own?"

And: "Outside of specific policy measures, two years from now, I want the American people to be able to say, 'Government's not perfect; there are some things Obama does that get on my nerves. But you know what? I feel like the government's working for me. I feel like it's accountable. I feel like it's transparent. I feel that I am well informed about what government actions are being taken. I feel that this is a President and an Administration that admits when it makes mistakes and adapts itself to new information.'"

Can he really achieve all that? Plenty of voters will be happy if he aces only Item 1 on his list. But the essence of both Obama's strength and his promise is that, according to a recent poll, a strong majority of Americans believe he will accomplish most of what he aims to do. For having the confidence to sketch that kind of future in this gloomy hour and for showing the competence that makes Americans hopeful that he will pull it off, Barack Obama is Time's Person of the Year for 2008.

I. Simple Competence
In some tellings, Obama's journey to the white house started with his little-noticed but carefully nuanced speech against the Iraq war in 2002. In other versions, it began with his electrifying address to the Democratic Convention in 2004. Those moments blazed with potential, true, but something more was necessary: a certain appetite among the electorate. The country had to be hungry for the menu he offered, and in that sense, his path's true beginning lay in the drowned precincts of New Orleans in the sweltering, desperate late summer of 2005.

Hurricane Katrina blew away the last gauzy veil from an ugly specter of executive incompetence in American politics. When the people of New Orleans needed leadership, the Republican Administration in Washington proved useless. The Democratic governor and mayor were pitiful. At long last, our government was united — but under an appalling banner of fecklessness. The moral bankruptcy of the spin doctors was laid bare: no soul remained gullible enough to believe that Brownie was doing a heckuva job.

After Katrina, demand collapsed for the very qualities that Obama lacked as a candidate: empty boasts, finger-pointing, backstabbing and years of experience inside a government that couldn't deliver bottled water to the stranded citizens of a major U.S. city. Spare us the dead-or-alive bravado, the gates-of-hell bluster, the melodrama of the 3 a.m. phone call. A door swung open for a candidate who would merely stand and deliver. Simple competence — although there's nothing simple about it, not in today's intricate, interdependent, interwoven, intensely dangerous world.

See pictures of Barack Obama's campaign behind the scenes.

See pictures of Obama on Flickr.

His official theme was change, but a specific kind of change: the nuts-and-bolts kind you can see and measure. Voters were invited to believe because Obama kept delivering the goods. Certainly he made mistakes and gave up on some ideas while doubling back on others — his promise to stick to the existing campaign-finance system, for example. On the whole, though, he was a doer. Obama told people that a black man could win white votes. In Iowa he proved it. He said a broad-gauge campaign could win in GOP strongholds; along came Indiana and Virginia and North Carolina. He declared that a new approach to politics would topple the old Clinton-Bush seesaw, and topple it he did. He sank the three-pointer with the cameras rolling. Made a speech in a football stadium feel intimate. Some might say these are not exactly Churchillian achievements, but in the land of the hapless, the competent man is king. In the end, his campaign e-mail list numbered some 13 million people, of whom more than 3.5 million put actual skin in the game — money, volunteer hours or both. Obama's most formidable opponent, Hillary Clinton, tried to convince voters that he was all talk and no action, a vessel empty but for intoxicating fumes. Yet he was the one whose campaign ran like clockwork, while hers was a fratricidal mess. And by Nov. 4, the strongest party in the U.S. was no longer the Republican Party or the Democratic Party; it was the Obama Party.

II. Filling the Vacuum
"A presidential campaign is like an MRI of the soul," says David Axelrod, Obama's chief strategist. "And one of the great revelations of this process, certainly the most thrilling revelation to me, was to learn what a great manager this guy is. We had no way of knowing that when we started. When he decided to run, we had no political infrastructure at all. There was just a handful of us, and we were setting off to challenge the greatest political operation in the Democratic Party."

Keep in mind that Obama, as Rudy Giuliani put it at the Republican Convention in September, had "never led anything, nothing, nada" — certainly not a sprawling organization spread from coast to coast. But he did have a philosophy of leadership, which he explains like this: "I don't think there's some magic trick here. I think I've got a good nose for talent, so I hire really good people. And I've got a pretty healthy ego, so I'm not scared of hiring the smartest people, even when they're smarter than me. And I have a low tolerance of nonsense and turf battles and game-playing, and I send that message very clearly. And so over time, I think, people start trusting each other, and they stay focused on mission, as opposed to personal ambition or grievance. If you've got really smart people who are all focused on the same mission, then usually you can get some things done."

Stop and look back at those last few words, because they are a telltale sign of Obama's pragmatism. A persistent question during the campaign — it became the heart of John McCain's message in the closing weeks — was whether Obama was some kind of radical, a terrorist-befriending socialist masquerading as Steady Freddy. As he builds his Administration, though, he is emerging as a leader who just wants to "get some things done." (Read "The New Liberal Order.")

Obama is a businesslike boss. He prefers briefing papers tightly written and shows up for meetings fully prepared. He expects people to challenge him when they think he is wrong and to back up their ideas with facts. He's not a shouter — "Hollering at people isn't usually that effective," he explains — but if he thinks you've let him down, you'll know it. "What was always effective with me as a kid — and Michelle and I find it effective with our kids — is just making people feel really guilty," he says. "Like 'Boy, I am disappointed in you. I expected so much more.' And I think people generally want to do the right thing, and if you're clear to them about what that right thing is, and if they see you doing the right thing, then that gives you some leverage."

Again, take a second to reread, this time the bit where he says "people generally want to do the right thing." Trust of this kind has been in short supply for many years in American politics, where the dominant attitude is that every disagreement is a sign of bad faith and every opponent is assumed to be malevolent. Obama's attitude was ridiculed as kumbaya naiveté during the campaign, but trust proved to be essential to his victory. His campaign entrusted millions of volunteers with unprecedented authority to download information about prospective voters, to assign themselves to make phone calls and canvass their own neighborhoods and apartment buildings, and to keep the campaign abreast of their progress. A typical presidential effort is top-down, intensely protective of its data and strategies. Obama's approach seemed to court mischief or even chaos. "There was a lot of snickering among the political pros," says Plouffe. "They couldn't believe that we were giving people we didn't know access to our data and trusting them to handle it honestly. But it was enormously important because it made people feel that much more accountable: 'These are my three blocks, and everyone's counting on me.'"

See pictures of Obama on Flickr.

See the Six Degrees of Barack Obama.

Yes, Obama could talk — like nobody's business — but talk didn't win the election. According to the daily tracking polls, the tumblers clicked into place precisely at the moment the financial hurricane hit, when the wizards of Wall Street proved as incompetent as Oz and neither the President nor the leaders of Congress nor the Treasury boss nor Senator McCain could deliver a rescue package. When this group failure provoked a stock-market crash in early October, Americans asked, "Can't anybody here play this game?" Astounding as it would have seemed scant months before, their gaze fell on the one fixed point in the widening gyre: a guy named Barack Hussein Obama. (See pictures of Barack Obama's family tree.)

III. Fear Itself
As White House Chief of Staff during the final years of the Clinton Administration, John Podesta became accustomed to short nights and emotional roller coasters. Still, he found it a bit strange to be headed to the airport in the predawn darkness of Nov. 5 — just a few hours after the election of a Democratic President. Was Obama really going to chair a major strategy session the morning after winning the longest and most grueling campaign on record? How about a day off?

Long before Election Day, Obama decided that an ordinary transition wouldn't do. Given the shaky economy and two wars, he knew that the winner of the election — whoever it turned out to be — would face instant and daunting challenges. He wanted to be ready. "What I was absolutely convinced of was that, whether it was me or John McCain, the next President-elect was going to have to move swiftly," Obama recalls. He deployed Podesta in midsummer to lead an unusually elaborate preparation for a possible Obama presidency. McCain accused him of overconfidence and vanity, of measuring the Oval Office drapes. To Obama, it was simply a matter of prudence. (See pictures from the historic Election Day.)

Podesta had long been planning the return of a Democrat to the White House, and his think tank, the Center for American Progress, was already preparing detailed briefings on conditions in the various departments of government. As the financial system went into free fall in September, Podesta's team pressed the FBI to work overtime on security screenings of potential Obama nominees. Now, as he boarded a 6 a.m. flight to Chicago, Podesta carried a list of more than 100 candidates who had passed their background investigations and were ready for confirmation on Day One. Instead of taking a day off, the new President-elect celebrated his victory with a five-hour meeting.

Obama had been pondering whether he should step to center stage or wait in the wings as the turbulent last months of the Bush Administration played out. His aides were all over the map. Some advised him to go quietly about his business in Chicago and insist that America has just one President at a time. For Obama to succeed, they argued, the country needed to see his Inauguration as a clean break, a new sunrise. Others floated the idea of immediately starting the First Hundred Days, perhaps asking George W. Bush to appoint Obama's choices to key offices so that they could get to work by late November.

Obama was leery of appearing to shoulder responsibility for problems before he had any real authority to fix them. Bush's bank of political capital was busted, and Obama wasn't about to take ownership of the toxic assets. On the other hand, he didn't want to repeat the dysfunctional transition of power from Herbert Hoover to Roosevelt in the dark hours of the Great Depression. F.D.R.'s silence between his election and his Inauguration may have deepened the crisis. By 5 p.m. on Nov. 5, when Podesta walked out of that meeting — not 24 hours after the polls closed — Obama was far ahead of the normal transition process, having homed in on finalists for many of his key staff and Cabinet positions. But he hadn't yet decided how public to be about it.

Within two days, however, events forced his hand. On Friday, Nov. 7, Obama convened a meeting of his economic advisers in Chicago, and the tone of their comments was chilling. The stock market was plunging; credit remained tight; fresh unemployment numbers were shocking. "There was just a very dramatic deterioration" in the days after the election, says Timothy Geithner, Obama's choice for Treasury Secretary. On previous occasions when the group had gathered, someone could always be counted on to find potential upsides in dismal forecasts, while Paul Volcker, the 81-year-old former chairman of the Federal Reserve, reliably closed each meeting with a gloomy soliloquy. On this day, though, there was no positive scenario for Volcker to deflate. Everyone in the room was grim.

See pictures of the global financial crisis.

See pictures of Obama's nation of hope.

Obama opened the meeting by reflecting on his dilemma: act now or wait until January? By the end of the session, he had concluded that, like it or not, he must "accelerate all of our timetables," as he put it, "in appointments not just on the Cabinet but also our White House team, in structuring economic plans so that we can start getting them to Congress and hopefully begin work — even before I'm sworn in — on some of our key priorities around the economy, on laying the groundwork for a national-security team that can take the baton in a wartime transition." There was no time for the "traditional postelection holiday." Vacations would have to wait until Christmas.

Transition is such a gentle word. We make the transition from youth to adulthood or from the dinner table to the den. For Obama, though, the concept was freighted with danger. "He was very focused on the basic perils of the gap between the election and the Inauguration, at a time when the economy was clearly deteriorating and the markets were very fragile," Geithner explains. In certain powerful respects, Obama felt compelled to begin his presidency immediately. Markets needed to size up his economic team and hear what he planned to do. Congressional leaders, contemplating a colossal economic-stimulus package, needed to know where he was headed. Military leaders, key allies and opportunistic enemies were all keen to know just how dovish the anti-Iraq-war President intended to be. Obama concluded that hanging back would create a dangerous leadership void in the short-term and compound his troubles come January. And nothing that has happened since that Nov. 7 decision — the crisis at Citigroup, the drama of the automakers or the assault on Mumbai — has made the transfer of power look any less perilous.

He could not have predicted when he set out to become President that he would face such circumstances. The distance from the birth of his campaign to these first days of his fledgling presidency could be counted in months but measured in light-years. When he announced his candidacy on a frigid morning in Springfield, Ill., in 2007, Iraq was a disaster, and the Dow was still headed upward past 14,000. So this moment was a test not only of his speed but also of his flexibility. Obama proved lithe, indeed, persuading Robert Gates, Bush's Secretary of Defense, to remain in his post and asking Clinton, a constant critic of Obama's foreign policy views during their primary battle, to be his Secretary of State. Priority 1 was the economic team, however. There his task was to find a mix of people familiar enough to signal stability but fresh enough to promise change, and to design a stimulus strategy dramatic enough to inspire markets to swallow their panic. (See pictures of Obama's White House team.)

In the days leading up to Thanksgiving, Obama delivered. Having promised to govern from the middle, he rolled out a bright purple team of economic advisers, neither red nor blue. Geithner had served in various posts under both Bush and Bill Clinton. As president of the New York Fed, he was well known to Wall Street but relatively unknown on Main Street — just the blend of experience and newness that Obama was seeking. His budget director, Peter Orszag, had fans across the political spectrum, and his in-house oracle, Volcker, was a Democrat who fought inflation alongside Ronald Reagan. Larry Summers, named to run the economics team from the White House, was a Clinton stalwart.

Unveiling these and other picks at a series of daily press conferences, Obama assured the public that he wanted to move fast, so fast that trainloads of money might be ready for him to dispatch across the country with a stroke of his pen on Inauguration Day. The idea of another wave of spending horrifies America's surviving conservatives, but most economists support it — some with enthusiasm, some with resignation. Obama realized that the stimulus package could be a vehicle for launching his broad domestic agenda. His ambitious campaign promises — to reform health care, cut taxes for low- and moderate-income earners and steer the U.S. toward a new energy economy — had seemed doomed by the yawning budget deficit (some $200 billion a month, according to the latest projections). But call these projects "stimulus," and suddenly a ship headed for the reef of economic disaster might sail through Congress flying the flag of economic recovery. With even Republican economists talking about hundreds of billions in new spending, the sky's the limit. A dream of health-care reformers — electronic medical records — is now economic stimulus because Obama will pour money into hospitals for computers and clerical workers. His tax cut is stimulus because it puts spending money in the pockets of working Americans. His pledge to repair the nation's infrastructure is a stimulus plan for construction workers, while his energy strategy is stimulus for the people who will modernize government buildings, update public schools and improve the electrical grid.

See pictures of Obama's nation of hope.

See pictures of Obama's college years.

Of course, the bullet points are easy to list; far harder is the task of spending vast sums — perhaps $1 trillion over two years — efficiently, effectively and quickly enough to spur the economy. Washington's three goblins — waste, fraud and abuse — are watching with hungry eyes. Obama has cast Orszag as a flinty keeper of the purse strings, but he has no intention of letting his opportunity go by. "I don't think that Americans want hubris from their next President," Obama says, noting that McCain received nearly 47% of the vote last month. However, "I do think that we received a strong mandate for change. And I know that people have said, 'Well, what does this change word mean? You know that it's sort of ill defined.' Actually, we defined it pretty precisely during the campaign, and I'm trying to define it further for people during this transition," he says. "It means a government that is not ideologically driven. It means a government that is competent. It means a government, most importantly, that is focused day in, day out on the needs and struggles, the hopes and dreams of ordinary people."

IV. Into the Breach
More than 75 years ago, a new president took the oath of office amid economic catastrophe and admonished the nation that "the only thing we have to fear is fear itself." Today generations of Americans are experiencing a harsh tutorial in the true meaning of that resonant diagnosis. Fear is kryptonite to the economy, which cannot operate efficiently without broad and well-founded confidence — that wise investments will gain value, that balance sheets mean what they say, that contracts will be honored and bills paid.

The events of the past autumn produced the sharpest drop in consumer confidence ever recorded, and a similar wave of fear cratered credit markets. Obama notes the very real structural flaws in the economy, but he is also aware of the role that fear plays. "Nobody trusts other people's books anymore. And people decide, 'Well, I'm just going to hold on to my cash for a while,'" he explains. "And that compounds the crisis. And all that results in a contraction in lending, in consumer spending, which then has a real impact on Main Street. And so what starts off as psychological is now very real."

Just like our banks and our carmakers, America's shattered confidence is in serious need of a bailout. And the thing about competence is that it nourishes fresh confidence. "Yes, we can" is both an affirmation of optimism and the essential claim of the competent. When the slogan is rooted in a record of accomplishment — when tomorrow's yes-we-can is backed up by yesterday's yes-we-did — confidence and competence begin to feed on each other. This virtuous cycle of possibility isn't the whole of leadership, but it is an important part and perhaps the element most needed in today's sea of troubles. (See pictures of Obama's nation of hope.)

After the election, veteran Democratic pollster Peter Hart convened one last focus group to ask Virginia voters why a state that gave Bush an 8-point victory four years ago chose Obama by 6 points this time. Their responses clustered around the crucial connection between competence and confidence. They told Hart they were drawn to Obama's self-assured and calming personality. They felt he was "honest," a "straight shooter" — in other words, a person who does what he says he will do. Their confidence in Obama wasn't starry-eyed; they hadn't been swept away by his stadium speeches. They saw a man who can get some things done, at a time when so many of their leaders, from Pennsylvania Avenue to Wall Street, cannot. He made moderates feel hopeful, and even among many core Republicans who did not ultimately vote for him, Obama inspired admiration. Viewing these comments through the results of his national surveys, Hart discerned a surge of good feeling that he had not seen in a generation: "a sense of real hope," he says, "and the kind of broad bipartisan support that has not been in evidence since the 1980 Reagan election."

Obama has begun to turn his thoughts to his Inaugural Address. According to strategist Axelrod, he is looking for the right mixture of bracing and boost in a speech that will be "both sober and hopeful." He may signal a new day by announcing a plan to stem the foreclosure crisis, which aides say is in the works. As the gray Chicago sky frowns outside his conference-room window, Obama rehearses his message. Americans "should anticipate that 2009 is going to be a tough year," he says. Then he adds, "If we make some good choices, I'm confident that we can limit some of the damage in 2009. And that in 2010 we can start seeing an upward trajectory on the economy."

A few days after this interview, Illinois Governor Rod Blagojevich reminded the country that some aspects of politics will never change. Government is a human enterprise, after all, and Obama, like everyone else, is bound by its limits and subject to human frailty. Nevertheless, if he has shown anything this year, Obama has made it clear that he knows how to write new playbooks and do things in new ways. Which is a compelling quality right now. His arrival on the scene feels like a step into the next century — his genome is global, his mind is innovative, his world is networked, and his spirit is democratic. Perhaps it takes a new face to see the promise in a future that now looks dark. What's in store for Obama's America? "I don't have a crystal ball," he says. But the measure of his success in menacing times can be found in the number and variety of people who consider the question with eagerness alongside their dread.

with reporting by Massimo Calabresi and Michael Duffy / Washington

See pictures of Obama's college years.

See pictures of the Civil Rights movement from Emmett Till to Barack Obama.