Changing course

Like an aircraft carrier, the US economy can only make incremental moves before it can completely turn around and as the captain of the ship, Barack Obama quickly realized the American people have become impatient on the slow pace of the economy. The results of the recent US midterm elections is a strong message sent by the American public to their president: They are getting weary waiting for the promised change to come true. They are eager to work but there are no jobs to be had. The Republican victory in Congress was clearly brought about by the widespread frustration among American voters at the dismal state of the US economy. One of the biggest complaints among Americans is that Obama was not focused on job creation and the economy but was distracted with too many other issues like health care reform. According to the International Labor Organization, the United States accounts for 25 percent of the rising unemployment since 2007 reaching a total of 30 million worldwide.

Just days before the midterm elections, Obama received the lowest job approval rating with 67 percent of Americans saying they are not happy with the way their president is doing his job, while 89 percent of the survey respondents said they do not approve of the performance of the Democratic-led Congress. Clearly, the hyped-up expectations at the start of Obama’s presidency have given way to disappointment and anger over the seeming inability of the administration to fast-track economic recovery. 

Obama points to the “ugly mess” in Washington as the biggest reason for the “shellacking” received by the Democrats at the polls, but he has to wake up to the harsh reality that he has no choice but to work within the system in Washington that he clearly despises — and that most probably means changing course and adopting compromises to get the cooperation of Republicans on numerous policies affecting the economy, security, foreign relations and others including the environment.

No one will argue that the change in the US political landscape will affect the global economy, particularly since America is still the largest economy in the world. As one US Senator said, “What happens in the US matters to everyone, everywhere.” Of particular concern is the possibility of political gridlocks now that Democrats have lost control of the House of Representatives. A house divided could spell disaster because needed reforms will be sidetracked by political infighting, which in turn could stall economic recovery. After all, popular consensus has it that total recovery from the current global economic impasse will not be possible if the American economy continues to remain weak.

While China was made a favorite “whipping boy” by both Republicans and the Democrats during the campaign period, accusing it of stealing jobs from Americans and manipulating its currency to keep the price of its goods cheaper, the fact is China is the biggest creditor of the United States holding close to $1 trillion dollars worth of treasury bonds. China recognizes this and is well aware that it is in their interest for the US economy to stabilize. They also know that they are very dependent on the US being one of the biggest markets for Chinese exports.

Even the European market is closely watching developments in the United States since a weakened dollar makes European products more expensive, hampering the recovery for countries that rely on exports. On the other hand, American trade partners are worried that the political shift in Washington could trigger “trade frictions” considering that most of the rhetoric during the campaign has been anti-trade, with Republicans likely sticking to protectionist measures such as imposing stiffer tariffs and restrictions on foreign goods.  

Without a doubt, what happens in the US affects the Philippines. The old saying, “When America sneezes, we catch a cold” continues to hold true. And like Obama, President Noynoy campaigned on a platform of change, with people’s expectations pumped up that he will bring about a new era in Philippine politics. But as later events have shown, change — and by this we mean the meaningful kind — is not an easy task.

While a majority of Filipinos still believe in the sincerity of P-Noy in bringing about change particularly in the way the government operates, it is the system which will eventually prove to be his biggest obstacle because of inherent loopholes that have allowed the perpetuation of corruption and incompetence in government. As multinational risk consultancy firm Pacific Strategies and Assessments pointed out, the continued hold on power by a few political families and traditional politicians has put into question the ability of the president to bring about genuine change. For one thing, the current Charter cannot even stop the proliferation of political dynasties because the Constitutional provision to this effect lacks an enabling law. “The trapos have continued to reign, and Noynoy can do little about it,” the PSA report said, adding that the most critical factor that can affect the country’s future has to do with change in the political system.

A sincere President can manage to make short-term changes but unless he takes measures to institutionally change the system — or more specifically the current Charter, backsliding will always occur. The 1987 Constitution was instituted by P-Noy’s mother, former President Cory Aquino, mainly as a direct offshoot of the high emotions prevalent during that time. Anything Marcos was considered bad. Perhaps the moment has come, and only fitting, to see Cory’s only son institutionalize meaningful changes and “update” our Constitution to bring it up to speed with the realities of the times. President Noynoy Aquino must seize the moment before the moment seizes him.

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