Monday, November 10, 2008 2:55 PM

Economy Requires 43-44 Cooperation

BY KEVIN FRIEDL


(Credit: Jim Watson - AFP)

It's not yet clear what the president and president-elect are speaking about this afternoon in the Oval Office, but with congressional Democrats poised to push a second stimulus package during the lame-duck session and the financial bailout grinding on, the economy must surely have been among the topics they discussed.

With its high stakes and daunting complexity -- not to mention the current jitteriness of investors -- the economic crisis perhaps more even than homeland security or the wars in Iraq and Afghanistan will require a careful transfer of power if President-elect Obama hopes to get a lid on the situation. In the Oct. 25 issue of National Journal, John Maggs delved into some of the ways the transfer could go smoothly -- or go wrong.

The financial crisis has raised the possibility of an unprecedented presidential transition, in which George W. Bush and the president-elect may need to cooperate more than the participants in any past interregnum.

Historians say that presidents-elect have good reason to stay far away from lame ducks and their decisions, but if this crisis gathers new momentum, such restraint may not be an option.

Even if things don't get worse, an international summit planned for November 15 may require Bush to coordinate with the president-elect and his government-in-waiting to avoid a stalemate that could threaten the financial system, say economists and experts on the presidency.

Maggs goes on to cite a cautionary example from the 1931-32 transition period -- the one this current handover is most often compared to.

In the precedent that is most comparable to the current situation, defeated President Hoover begged President-elect Roosevelt to join him in emergency actions to help revive the economy, which had slipped to its low point of the Great Depression.... But there is a cautionary dimension to this history. During that transition, a damaged but still-functioning banking system went into free fall.

The complete story is available to subscribers here.