BARACK Obama has convincingly won a second term as US president because his opponent was unconvincing — as a leader, a thinker, a doer ... as anything, really. Mitt Romney just wanted to be president, that’s all.
The US markets had a mild "certainty rally" on the day of the election as the result became clear. This was immediately followed by a huge sell-off as everyone realised they were left with the same old problems they had before, the same old people to solve them and a lame-duck Congress incapable of making decisions — in particular those necessary to avoid the fiscal cliff.
The Republicans’ strategy was to destroy the nation’s faith in Obama, and his credibility, to ensure easy passage of their fiscal-cliff plans. That didn’t happen, so now what? Many people are worried — the number of people looking up the definition of "fiscal cliff" on Google has increased tenfold since the election. In essence, it relates to a $607bn combination of government spending cuts and tax increases scheduled for 2013, created as part of an agreement to increase the federal debt limit.
It is feared this could send the US into recession unless something is done about it before then. There is also a more general fear, and perhaps more serious, that the same old teams will not be able to agree on a solution and the same old deadlocks in government will prevail.
Uncertainty is worse than bad news. Investors hate uncertainty almost more than anything — if you know the rules, you can at least play the game. So, the talk in Washington is about reserved compromise, about a united America. They’d better be serious; we’ll see. We’d better take note.
Second chances don’t come often. A golfing companion of mine once suggested he would write a book on how to play your second shot first (after working out how you bungled the first). There aren’t third chances, especially for elected presidents in proper countries.
President Jacob Zuma will probably get a second term.
We have our own cliffs to deal with, not all economic, but a strong economic current could carry us through a lot. I have often said our challenges will more readily be solved by spending money than by printing it. A step in the right direction for all of our current issues, such as strikes in the mining industry and others, education, the infrastructure backlog and unsecured lending bubbles, would be to put the country back to work. Let’s build things together rather than fight about what we can take out of old things that have been around for ages. Common cause will overcome fractious decision structures and disparate interest groups, which lead to indecision.
So, Mr President, here are my top three recommendations for the beginning of your second term (start now?):
1. Change the team
Surround yourself with competent people who are different from you. Create a new common cause beyond only the allegiances of the past. Celebrate the differences of opinion. Meeting like-minded people with identical backgrounds will limit the scope of alternative solution discovery. The Financial Times put it rather succinctly in an article last week, suggesting Obama appoint a "team of rivals" to face the challenges of the impotent US Congress.
2. Shorten the agenda
There are just too many things to solve all at once. Here are my top three:
• Education: I know this investment doesn’t pay obvious dividends early, but it sure does eventually, and without it we’ll continue to lease foreign skills (ugh!). Set targets for how many engineers, welders and nurses we need in 20 years’ time and then build, build, build. It is not possible to have a too highly skilled population. Many of us in business would be happy (I, for one) to serve on the bodies of new schools, colleges, technikons and universities. Many of us could help raise capital from the private sector as partners. Maybe the South African Revenue Service can also come to the party?
• Infrastructure: please start repairing and building things we know will keep South Africa first world — it will have the best unintended consequences.
• Healthcare: can we become a world centre of excellence in research into African diseases? Imagine that. We’d probably discover cures for any number of things along the way, which we could export to all those clever people in China and the US.
3. Move early
Let the first 100 days start now. By almost any measure in the financial markets, the world’s perception of South Africa is high, arguably higher than our view of ourselves. As they say in the world of finance, if the ducks are quacking, feed them. We could raise almost unlimited amounts of foreign direct investment into South Africa for the right capital projects at the moment. Surely there are a number that just need a "go".
As my mom always said, there’s no time like the present.