When the United Kingdom's prime minister stands up in front of an elite audience and slams an old friend alongside of whom Britain is fighting the war on terror for its government waste and because too many of that country's richest are getting away without paying much tax at all, it's got to sting. But fortunately for Jeff Immelt and the rest of us here in the United States, David Cameron was in Islamabad and the broken, favoritism-ridden, inefficient system he was excoriating was not the one in Washington but the one that, at least nominally, is responsible for Pakistan.

That said, Cameron is among a rapidly shrinking number of folks who have yet to pile on to the revelations of GE's protracted tax holiday and, by extension, President Obama's appointment of Immelt to be his competitiveness advisor. In fact, my guess is Immelt will not be able to survive indefinitely in his capacity as an informal consultant to the president. When I spoke to two different senior economic officials in the administration about him this morning, they both rolled their eyes and wondered aloud what the White House was thinking when he was picked.

America has produced few better respected senior executives than Immelt. And for an administration that needed better ties with the business community in a hurry, he seemed like an excellent choice. But as one of the officials observed to me, he was a disaster waiting to happen even before the tax hubbub and GE's ties to the Fukushima nuclear calamity became hot topics. Why? Because with so much of GE's revenue coming from outside the United States, it was only a matter of time before the company made a decision to invest in an overseas project that would be seen as sapping American jobs or at least failing to create them.

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It says something about Gary Locke's tenure as secretary of commerce that it is clearly a promotion for him to have been named to an ambassadorial post and sent to the other side of the world. It also says something about the post he is being offered -- ambassador to China -- by far the U.S. government's most important diplomatic posting in the world. Locke is an excellent choice for the new job and will undoubtedly excel in the role. In fact, there is really only one thing the Obama administration can do to make this smart appointment even better: It can not appoint a replacement for Locke.

Locke is a soft-spoken, detail-oriented, thoughtful, lawyerly fellow, which is not surprising given that in addition to being the former governor of Washington, he is also a lawyer. As a Chinese-speaking, trade-smart Chinese-American from a state with important export ties to China and having the stature that comes of cabinet and state governor posts, he's an ideal choice for the Beijing job.

His tenure as commerce secretary was muted because his particular skill set was not particularly suited to being a cheerleader for U.S. industry. He has no bombast in him, and for a politician he is singularly devoid of the hail-fellow-well-met gene. But beyond his personal traits, one of the reasons he struggled as commerce secretary was that the Commerce Department itself is such a mishmash of agencies with competing missions that the reality is that the vast majority of people who have led the agency have disappeared without a trace into its bowels.

Frankly, it should be considered a destination of choice by the folks over at the federal witness protection program.

President Obama and those closest to him -- including one of the few people who have ever successfully led the Commerce Department and then gone on to bigger and better things, White House Chief of Staff Bill Daley -- recognize this and have very wisely and none too soon undertaken a review of whether or not to restructure the agency along with the other white elephants, redundancies, and lost causes of the federal bureaucracy. The effort is being led by former business exec Jeff Zients, deputy director of the Office of Management and Budget, and as a former management consultant, CEO, and very successful entrepreneur, an ideal choice for the mission.

While it is reported that Locke himself only heard of the president's intention to announce the initiative to rationalize the structure of departments including his own a few minutes before the announcement was made, the idea is a sound one that should be well-received by both parties in the current atmosphere of frugality -- or at least expressed frugality -- in Washington.

What Obama should do is appoint an acting commerce secretary to serve as a place holder. (Perhaps appointing Zients into a kind of caretaker role to oversee the change would be a good step. An analogy is the role Elizabeth Warren is currently playing re: the Consumer Financial Protection Bureau.) Putting someone new and "permanent" in the existing commerce job would a.) Immediately create an opponent to any meaningful restructuring and b.) Be quite tough if they knew there was a serious effort to dismantle the agency afoot. Then, the president and his team should take the steps that have been obviously called for by many of us who have worked at the Commerce Department and on the economic side of the U.S. government for years. They would include:

• Collecting all the trade-related elements of the U.S. government into a single, integrated agency. Instead of more than a dozen different such agencies, you would have one place where a cabinet secretary led a policy development team that would determine how to use the tools at its disposal. Those tools would include a trade negotiating shop (formerly USTR), a trade enforcement shop (elements of commerce plus bits and pieces from other agencies), a trade promotion shop (built around the International Trade Administration plus bits and pieces from more than 12 other agencies), and a trade finance shop (OPIC, Eximbank, TDA, etc.). Each such "shop" would be led by an undersecretary.

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While it is too early to assess the long-term outcomes of the uprising in Egypt, there are nonetheless a number of important conclusions to which we can reasonably come.

First, something profound has changed. It did not change because of the uprising in Tahrir Square. It changed and the uprising was the result; the power has shifted in the region. We have passed a generational and technological tipping point. While the dinosaurs cling to the levers of power in virtually every country in the greater Middle East, the under 30 majority is now the great force to be reckoned with. While the establishment has done almost everything conceivable to keep them down from denying them education to curtailing the spread of information technologies to gutting the economies, nonetheless, new information sources and technologies and ways of connecting and collaborating seeped in to these societies through every one of the cracks spreading across the Ozymandian edifices of the elite.

These changes are irreversible. They are seen in the cell phones that even the poorest carry with them, in the broadcasts of Al Jazeera, in the burgeoning Twitter feeds, the apps young Arabs create to provide work-arounds every time a government tries to curtail Internet access, and even in the technological use of some of the region's worst players.

These changes have remade the social and political fabric of the region. What they have yet to do is what they have done everywhere else in the world and that is to fuel economic change.

That is the second inescapable conclusion we need to consider. The great challenges before this under-30 majority are economic, they are about opportunity. They are not about Israel or battles between Shiites and Sunnis or tribal divisions. Those problems still fester, but the unifying challenge for this generation is even more basic: They need jobs. They crave opportunity. And the failure of their leaders to provide them with these basic sources of sustenance and dignity is what has fueled the revolutions of 2011.

A corollary to this conclusion is that we in the United States have been sending the wrong people with the wrong approaches to solve the wrong problems in this region for decades. The problems of this region will not be solved by negotiators or generals. They require investors and entrepreneurs and educators. To the extent that we can contribute, we must do so by supporting the creation of economic opportunity. It is a massive undertaking but it is the only true peacemaker.

A third conclusion is related to the second, however. The role for the U.S. government in all this is very, very limited. We would do well to redirect what aid we provide to address this core challenge of creating jobs for the under-30s. We would do well to put our best economic minds in charge, perhaps even appointing a special economic envoy of real stature. But the only people who can ultimately solve this problem are in the Middle East. In fact, in the hierarchy of those who can help, if the people of the Middle East are first and by far foremost, it is the people of Europe, not the United States who must be second. They are the natural economic neighbors of the region and they must answer the question whether they want those under-30s employed in the Middle East or seeking employment in Europe. After the Europeans, it may even be the Chinese or Indians and others dependent on oil in the region and closer to its problems who should take more prominent roles in helping to solve the problem than the United States, which is a lightening rod and has problems of our own at home.

A fourth conclusion is that the hardest part is clearly still ahead of us. Egypt must make the transition to democracy and that means the military must really step aside after six months. Friends of mine who have met with them believe they understand the implications of the political earthquake that has taken place during the past month and that they will do so. But there are dinosaurs among their leaders so it is by no means a sure thing. Even beyond establishing a democracy is actually keeping one, and beyond that is addressing successfully the economic challenges alluded to above. Further, there are the problems of all the other countries of the region. They will be difficult to handle but we in the United States need to be confident enough in our core beliefs to let them work them out among themselves. There will be fights and setbacks and people we don't like will periodically gain the upper hand. But give me a duel between two guys armed with the Internet, Facebook, and Twitter feeds and let one offer the people the 11th Century and another offer the 21th and I know who I will bet on.

Finally, my fifth conclusion is that of all the big challenges ahead for U.S. foreign policy associated with this period of upheaval, the greatest by far lies with Israel and the Palestinians. Personally, I am not sure why the Palestinians have not yet unilaterally declared independence. The world would surely support them. But imagine what would happen if, perhaps on the road to such a declaration perhaps following it, a hundred thousand Palestinians took to the streets peacefully demanding real self-determination. With memories of Tahrir Square fresh in the minds of the world, how could the Israelis respond as they might have in the past? On what side of history would they appear to be as President Obama might put it? And in that vein, on what side of that history would President Obama and the United States want to be?

Until now, the fact that Israel was the region's only democracy was its "get out of jail free" card. It was used to excuse ... or attempt to excuse ... a multitude of sins. For this reason, no Arab military offensive could be as effective in undermining Israel's strategic advantages as real democracy taking root elsewhere in the region. The Netanyahu administration would be flummoxed if people power came to the West Bank and Gaza. They would be cast involuntarily with the dinosaurs. They would have no pages in their playbook indicating how to handle this. They would have very few good choices.

Actually, they would have only one. They would have to get out of the way. They would have to do what Mubarak did. They would have to step within the 1967 borders and let the Palestinians begin the job of building Palestine. And they would have to hope that the United States, Europe, and the rest of the world helped the Palestinians do it because once that happens, it will be of the utmost importance for Israel that its new neighbor produce real opportunity for its people ... because we have seen the alternative and it, for this generation who have both nothing and nothing to lose will not be contained by the tactics or the rhetoric of the past.

Every school child knows that the U.S. government has three branches: the Executive, the Legislative, and the Judicial. And, as recent international test results have demonstrated, every school child is wrong.

Because there is a fourth branch of government that operates alongside the other three and plays a central and increasingly active role in the system of checks and balances the founders designed to keep any one group from getting too much power.

This fourth branch however, has been gaining power in ways that the forefathers never imagined -- largely because they didn't conceive of it in their political calculus. You see they were focused on mechanisms that were created to reflect the will of the people and to advance their interests. This mechanism was created independently and serves only a comparative handful of individuals.

But make no mistake, it is as essential a player as the Supreme Court, either house of Congress or the White House. And when those players stumble or fail to provide leadership, this fourth branch quickly and decisively fills the void. Indeed, it has special powers that trump presidential vetoes, filibusters, judicial reversals, and all the other tools given government officials. It advises and in the end, it provides the necessary consents. It deliberates and decides and reserves the right to change its mind. It is not only where the buck stops, it is where it starts and where it goes round and round till it comes out here.

It's the markets and if you merely take the time to look over the news of this week and last you can see it flexing its muscles and sending a message that it is prepared not only to contradict governments and institutions, it is, if necessary prepared to topple them.

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The United States seem to be swimming in economic initiatives that are going to go nowhere. But are we really surprised? After all, as in the case of U.S. efforts with regard to Afghanistan, Iraq, Iran, and Israel and the Palestinians, we also seem to be swimming in foreign-policy initiatives that are very unlikely to produce much (positive) change to the status quo.

But seriously, if the United States is going to devote our efforts to empty symbolism and hollow gestures, couldn't we focus on some that were leavened by a little nobility, creativity or boldness? If we are going to float proposals that are doomed to failure or ineffectiveness, couldn't we float better proposals?

Let's take the four big economic initiatives making headlines this week.

The Korea-U.S. Free Trade Agreement
We were greeted this morning with the unsurprising news that the efforts by U.S. Trade Representative Ron Kirk and his Korean counterparts to hammer out a new and improved version of the Korea-U.S. Free Trade deal had foundered on beef and automobile issues. I lead with this news because it is one of those rare proposals that actually have the opportunity to fail twice -- in addition to this week's setback, it could also fail in the negotiating phase. That's not very likely (the White House promises a deal "within weeks"). But even if the deal is reached, the likelihood that a free trade deal is going to make it through the U.S. Congress any time soon seems slim.

While conventional wisdom has it that Republicans are warmer to free trade than Democrats, the reality is that centrists are warmer to trade. The real opposition lies in the growing right and left wings in each party. A story in today's New York Times highlighted a Pew poll that 44 percent of Americans feel free trade deals have been bad for the country, while only 35 percent feel they have been beneficial. While some deals are viewed more favorably, others -- like deals with China or Korea, countries viewed with more unease -- are not. The article also notes that, "Republicans and Republican-leaning independents who were aligned with the Tea Party movement had a particularly negative view of the impact of free trade agreements." In the last election cycle something like 4 out of 10 voters identified themselves with the Tea Party or Tea Party candidates -- a group that now has 110 members of Congress.

With the Blue Dogs slaughtered in the last election, the power in Democratic caucus has also shifted solidly to the left; between that fact and the growing importance of unions as 2012 nears, the idea that a trade deal might get approved anytime soon should provoke some skepticism.

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In today's Financial Times, Gideon Rachman has written a compelling piece called "Sweep economists off their throne." You can guess at the substance from the title, but the thrust is that Rachman was trained as a historian with a resulting bias toward basing conclusions on things that actually happened and that he has grown tired of the claims of economists that theirs is a field that "resembles hard science such as physics or chemistry" concluding, "maybe it is time for an alternative to the brash certainties, peddled by those pseudo-scientists, otherwise known as economists."

His use and reuse of the term "science" underscores just how abused it is by economists who claim rigor and scientific method but regularly produce work that is seldom more than guess-work clouded by politics. Evidence is everywhere to support this view, which is precisely why so many economists seem to have missed the point given that evidence-based analysis has never been their forte. If it was, perhaps there might be a consensus among them on even one of the great economic issues of our time. But there is not.

Take this weekend's suggestion by President Obama that the U.S. ought to spend more on infrastructure as a way of strengthening the U.S. economy. He was immediately assailed by Republican economists and their spokespeople for going back to stimulus approaches that have already proven to be failures (see the editorial in today's Wall Street Journal.) Yet over the weekend, we heard, for example, from CNBC reporter Erin Burnett on "Meet the Press," that in speaking to Wall Street economists she found widespread agreement that the stimulus program had actually helped avoid even more dire outcomes for the U.S. economy than we have already seen.

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Normally, were I to find myself inclined to agree with John Boehner, my first impulse would be to call a neurologist and arrange for a CAT scan. There are few more compelling reasons for America to resist turning the House of Representatives back to the Republican Party than the prospect of Speaker John Boehner. What could be more cynical than elevating a man to the third most powerful post in the land whose primary contribution as a politician -- beyond illustrating the perils of over-tanning -- has been his vigorous commitment to doing nothing?  In the chamber that made Daniel Webster great, he is the Jerry Seinfeld -- except instead of creating a sitcom about nothing, he seems dedicated to an effort to create a Congress about nothing.

Yet, today, by accident, he stumbled upon an idea that had some merit.  He advocated the resignation of Tim Geithner as treasury secretary. Boehner's reasoning was, as usual, not reasoning at all but pure, undistilled partisan boojwah. But the idea that the time has come for a change atop Obama's economic team is absolutely right.

Obama made a concerted effort to hire the best and the brightest and I consider both Tim Geithner and Larry Summers to be members of that group. What he neglected to do, however, was to hire the most compassionate or empathetic. (As I have said before, when David Halberstam coined the phrase "the best and the brightest"  it was not a compliment but a cautionary term.)

This county is in a dark place economically unlike any I have seen in my half century or so of life. While I worry about the fiscal deficit and the trade deficit, we have seen those before and handled them. The more serious deficit we face is one that cuts to the very core of America's character: it is an optimism deficit.

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As promised -- trumpet fanfare -- "The Winners and Losers of the Decade." Or, as I like to think of it, "The Winners and Losers of the Oughts," in deference to the zeros in each year of the decade's numbering, the zeros who were in charge and all that we ought to have done that we did not do.

The Losers

George W. Bush: It almost seems too easy. But upon reflection, it's not even close. Bush wasn't just born with a silver spoon in his mouth -- he inherited America, the world's sole superpower, with a budget surplus and clear skies ahead. When we were attacked on 9/11, the immediate consequence was unprecedented support for him and for the country. And yet, almost immediately thereafter, he started on a catastrophic set of missteps and bad decisions that had alienated the world by the end of his term. George W. Bush was not just the biggest loser produced by the American political system in the past decade, he was in all likelihood one of the worst presidents in American history and he presided over what was almost certainly the worst international relations calamity since, I don't know, maybe the Alien and Sedition Acts.

How did he get there? What was the worst of all the bad choices he made? Was it invading Iraq or picking Dick Cheney to be his vice president in the first place -- or more properly, letting Dick Cheney choose himself? In the literary biz, we call that foreshadowing ... but in the history biz they will almost certainly call it the beginning of the end for a president who undercut American stature like no other, compromised our historic values and at times, seemed like he could barely speak English.

Not only does he get my nod for loser of the decade in the United States, he takes the international crown as well. All hail George W. Bush. Thanks to his bumbling in the highest office in the land, he also achieved the rarest form of comic apotheosis: He became the punch line that didn't even need a joke. Sadly, for us all, it will always hurt when we laugh.

Al Gore and the American People: There are losers and then there are those who lost.  For the remainder of our lives we will always wonder what might have been. Seldom have there been forks in the road of history as clear as the 2000 U.S. presidential elections. The difference between the two candidates was as thin as the sheet of paper on which the politically stacked Supreme Court reached its compromised decision. In retrospect, it is ever more clear that the election was stolen and America, and countless victims worldwide, were sent hurtling toward a destiny that we and they did not deserve. Gore later would go on to win the Nobel Peace Prize for his work battling climate change and has handled the defeat and its aftermath with a grace that would warrant the prize had he done nothing at all. But we cannot help but think how much more we would have done by now to combat climate change had he been in office, how much stronger our relations would be with the world, how many innocents killed by our wars in the Middle East would still be alive. It is the decade's defining political defeat.

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Have they no shame? Have they no sense of responsibility?

Perhaps by now nothing that Wall Street does ought to shock us. After all, these were the people who told us to trust them with our life fortunes when even they did not know the risks to which they would expose them. These were the people who felt it appropriate to game the U.S. economy, force families into the street and then claim big bonuses for their actions. These were the people who told the U.S. government to stay out of their hair ... right up until the moment they needed a government handout. A when they didn't need the cash any more, what's their response? To kick the people who helped them back to the curb.

Come on, Baby! Didn't I show you the love when you needed it? Wasn't I there for you when no one else wanted you? You weren't so big and powerful then, but I gave you what little I had. I mortgaged everything I had to get you back on your feet. I crawled right into bed with you and held you all night long. And what happens the minute you get a little wind to your back? You're out the door and you don't even know my name!

It's people like this that guarantee there will always be country music, the blues and drunks in bars getting the lyrics wrong while they sink into their beers. You know what I mean, those songs like "You Done Me Wrong" or "I'll Never Get Over You (Getting Over Me)." Or maybe what I really mean are songs like "Dirty Pool" or "Chain of Fools." Songs about betrayal and abuse.  Muddy Waters:

Now look what you've done

You left me here, the lonely one

And all I could say, is look what you've done

A broken heart, a weary mind

And (just for a) few dollars baby, (every) time

I once had a dream, but now I have none

You've taken your love and see what it done

Oh sure, I never expected that the princes of Wall Street would actually change their stripes. I'm not talking about disappointment that they are not voluntarily foregoing the big bonuses for a year or two until the country is back on its feet. I'm certainly not suggesting that I ever truly expected them to use government resources to actually start lending again or to really take major steps to keep home owners in their homes. Taking smaller risks? Forswearing complex investment strategies that only benefit them while putting everyone else at greater risk? Expecting that would be like expecting a pride of lions to go vegan and open a nursery school for baby antelopes.

No, I just thought that they would do the right thing in the one way that it is surely in character, that they would say thanks in their own language, the language of money. But here President Obama is hosting a fundraiser tonight in New York City, right in their own backyard, and according to the New York Times, Wall Street is snubbing him, not forking over. In fact, according to the story, Wall Street donations to the Democrats are down since, oh, I don't know, back when the Democratic controlled Congress and the Democratic President were saving their bacon. 

Apparently,the Masters of the Universe have concluded that the same Dems that bailed them out are now actually considering reforms that might mitigate risk and save the taxpayers for having to dig deep into their wallets to ensure the Wall Streeters could keep sending their kids to Dalton and Spence. And so no more soup for you, Barack. 

Personally, I think they miscalculate. They finally may be undone by their greed. Except it won't be because they stole too much or blew up the international economy. It'll be because they stopped paying off the people who set the rules. And nothing puts a politician back in touch with his principles like a failure to keep up payments by the banker to whom he has mortgaged them.

So it is that the bankers of the most consequence at tonight's fundraiser at the Mandarin in Manhattan won't be the ones the news crews will be fussing about as they head into the $15,000 a plate gala. Rather they will be the ones who actually who don't show up ... and who, in so doing, "free" the President and the Congress to get aggressive about reforms in the way they should have been all along.

Perhaps that old Muddy Waters tune will go through the president's head tomorrow as he thinks back on his visit to the big city tonight:

Saw you last night, I was movin' around

With your new toys, paint the town

But it is ok, keep having your fun

Because someday, you'll pay for all you've done

And if you ask me, it couldn't happen to a more deserving bunch of guys.

Mark Wilson/Getty Images

As Barack Obama trotted the globe toward the end of last week, back home a story on the technology front was creating a bit of a buzz. Google announced its plans to introduce a new operating system called Chrome OS that tech sector experts saw as a frontal assault on Microsoft. Chrome would go after Microsoft where it lived, attempting to offer an alternative to its Windows franchise that has dominated since the dawn of the PC era it helped make possible. But Chrome would employ a new paradigm, the idea the future of computers is in harnessing the power of the web, that vast computing power, storage capacity and other resources can be found in the "clouds" of computers that are linked together in the Internet universe. 

Chrome's full potential is far off. It will first only be introduced for netbooks later this year. Laptop and desktop versions are many months away. But reading about the announcement and talking to a bunch of computer users, I came away with the sense that the market was viewing this introduction with great hope.

Why? Well, in large part because Microsoft is seen as having become a complacent bully. Microsoft was a tech darling in the 1990s, a symbol of American ingenuity and a likely engine of future American growth. When its market capitalization grew greater than that of GM, it made headlines. Ironically, this ascendancy came at the same time as America's post-Cold War assumption of its role of sole-superpower. In the mid-90s, America and Microsoft were clearly the future of the world. 

Then both started to abuse their power. America, in the wake of 9/11, undercut the international system it built, rhetorically flaunted its hallowed values and then crudely and repeatedly undercut them in its behaviors. Microsoft went from a symbol of the garage-launched entrepreneurial energy of the tech revolution to being a ruthless crusher of competitors. In fact, it became so dominant, that it felt it could foist on the American public products that didn't work, were full of bugs, were vulnerable to security breaches and, as in the case of Vista, should never have been released in the first place.

Microsoft blew it. Today, consumers and specialists alike are rooting for it to fail. (Hence the love affair with Apple which is seen as the resilient insurgent, the better unconventional choice, even in its advertisements.) Fortunately, for tech consumers worldwide, the growth of Microsoft and the tech sector led to the birth of competitors like Google (founded just over a decade ago.) Google itself is now so large that many wonder if it will become complacent or employ ever-more unfair competitive practices. But it is also big enough that it actually has a chance to undo Microsoft's stranglehold on the inside of the world's computers (of all sizes and shapes), perhaps the most important real estate on the planet earth today (which is appropriately largely virtual).

Under George W. Bush, America also blew the opportunity to consolidate the position it achieved as victor of the Cold War. For years now, many have been rooting for America to fail as well. Certainly, this was never so clear as in the calls for an end to American capitalism during the peak of the financial crisis. But here is where America's fate has thus far diverged from that of its industrial doppelganger Microsoft (the fall of GM, Microsoft's predecessor in the flagship company role, echoes and amplifies many of the points made above...it too grew complacent, ignored the consumer...and invited the competition that has crushed it.) Because while the American brand endured untold damage during the previous administration and continues to be damaged with each passing week of this economic crisis for which we are seen to be responsible, there is still no alternative brand with anything like the appeal of our system, our values or, even today, our track record for creating opportunity for our people.

There is No Alternative (TINA) was a favorite watchword of Margaret Thatcher, used by her to indicate that market capitalism was the only way, and used by her supporters to indicate that she was the only viable option available for saving Britain from the slough of despond it had entered in the 70s. Her enemies were the socialist ideas that had grown so popular in Europe in the post-war era. Soviet communism cooperated by failing during her years in power. And she, of course, spoke for a perspective that was not just British, but was embraced by her soul-brother Ronald Reagan. In a way, it all seems very old-fashioned now. That world seems far away with the Cold War over, the G8 on its last legs, emerging powers rising, America's brand so damaged. And yet, search the horizon. America's greatest ally remains TINA.

Barack Obama can lose his star luster and conduct only marginally effective, workman-like diplomacy as he did last week, and still, post-Bush, post-Iraq, post-Guantanamo, post-Lehman America remains at the center of every critical discussion, the most important player, the basis for all comparisons. China, the rising rival, gains its power from descriptions of how it will have an economy equal to America's within decades...but it is no real alternative. Its political system is defective, fraying at its ethnic edges. Its economic growth is admirable but when we get to the far side of this crisis and the world is depending on China to pick up the slack in the place of diminished American demand, we will see that there are perhaps 50 million Chinese who are anything like Western consumers, a true addition to the market roughly the size of a mid-sized European economy. China with Russia and others seek to sell an alternative to the dollar and the response of world markets is deeply skeptical. Other revolutionary voices for the most part echo the failed approaches of the past.

Had there been a good alternative, now would have been a great moment for it to emerge. In fact, it is perhaps the most telling indictment of the alternatives that are out there...politically, economically, socially, in terms of world leadership...that after such a bad streak, that nothing is really taking hold as Plan B...which creates a terrific opportunity for Barack Obama and his team. We can learn from the Microsoft and General Motors examples. We can seek to adapt to new realities. The trick is going to be convincing the world that a United States that grows at 2 percent a year (which may well be the average for the next 5 years) offers a better approach than a China or an India that grows at 10. Or that the United States offers a better way of life for its people or is a country that deserves the leadership role it has.

It is clear to me that absent a strong recovery, real healthcare reform that meets the needs of all Americans, genuine leadership on climate, and an effort to address the flaws in our system that are exacerbating inequality, sooner or later a weakened, necessarily more inward looking U.S. will find that TINA has flown the coop. It is a telling irony that left-leaning development advocate Susan George offered as a successor to TINA, TATA...which means "there are thousands of alternatives" but also echoes the name of the Indian entrepreneur who now owns the auto brands that were among the British industrial flagships of the Thatcher era (Jaguar and Land Rover) and is the producer of the Nano, the small car designed for the emerging market demands of tomorrow. It is a reminder that things do change and that history suggests that almost certainly there will be alternatives.

But with some luck, America can play the role adopted by the innovators who last at the top, resisting the complacency that TINA's love brings and by seeking to become the even better alternative to ourselves the era requires.

Sean Gallup/Getty Images

Maybe the problem in the United States isn't that we're paying our business executives too much. Perhaps it's that we pay our government officials too little. 

The Obama administration has made headlines this week by appointing yet another czar, this one to ensure we don't pay too much to the executives of the financial institutions the United States has bailed out. They have also made noises about trying to tackle the broader issue of executive pay in the United States. The second point is idle posturing that almost certainly will amount to little constructive change. The first has already sent the companies we bailed out scurrying to the exits of the TARP program and it will be a while before we see whether this is a healthy step, getting them off the dole, or an unhealthy one, with institutions hopping out of their hospital beds before they were fully cured. I also can't help but wonder if cutting executive pay is the best way to attract the kind of brains and efforts that will be needed to fix our busted banks.

Meanwhile, I have arrived in Singapore, home according to one count, of the 30 highest paid government officials in the world. And trust me, given the extraordinary success this city state has enjoyed, none of the people with whom I met today were complaining that those officials were overcompensated. This country wants the best minds in the government and recognizes that they have to pay to get them there otherwise they go work in the financial community, sell their souls and ultimately add to the overcrowding problem that is currently one of the biggest social issues facing Hell.

Come to think of it, the overcrowding in Hell probably plays directly into the hands of management down there. I know this because I was in Mumbai airport last night. And for all my enthusiasm for India, Mumbai airport, thronged with people as the late night flights prepare to depart, hot, fetid, and chaotic, would have had Beezelebub feeling right at home and Hieronymus Bosch reaching for his paint brush. In fact, I think I may actually have seen the Prince of Darkness himself there. He was manning a security line and he gave me such a thorough pat down that I think we are now engaged.

It would have been unbearable were it not for the staff of Singapore Airlines who met us, mere ticket holders albeit of premium tickets, at the door and whisked us through the crowds and ultimately onto the plane. And once on the plane, I knew exactly how Dante felt once he left Virgil behind and had reconnected after all those years with his old squeeze Beatrice. 

Suffice it to say that it does not appear that Singapore Airlines is even in the same business as American Airlines or United. From the meticulous, exceptionally well-appointed aircraft to a seemingly enthusiastic commitment to service, the airline that was one of the first of the businesses created by the Singapore government when it gained its independence in 1965, is achieving its strategic goal. It makes you want to travel through Singapore on every flight. Treat me like they did last night and I'd be happy to have a Singapore Airlines connection on my next flight to New York from DC. Especially when the only other option is travel on run down U.S. airlines whose flight attendants seem to have been trained under some footbridge somewhere by a particularly obnoxious family of trolls. 

Then you arrive at Singapore's Changi Airport and you are powerfully reminded that the excellence of the airline is not a fluke. This is the best airport in the world, spacious, efficient, and attractive. As such, it is the perfect preparation for Singapore itself, almost certainly the best run political entity on the planet. Admittedly, the country, led from the start by the man who is now known as its Minister Mentor Lee Kwan Yew, has practiced what I would characterize as constrained form of democracy but few places have ever so compellingly made the case that what is trade away in terms of the occasional citation for spitting gum on the sidewalk is more than made up for in a society that is prosperous (Asia's second richest), innovative, and safe.  

It is a government that has led the way by behaving in many ways like a corporation, taking ideas like competitiveness and strategic planning seriously. (At dinner tonight with a senior business executive who is one of the country's great entrepreneurial success stories, she said, "In the beginning, in Singapore, the state was the entrepreneur." And that was said with a genuine appreciation for all the state achieved in that role.) Even in the midst of a global recession it has been seen as not just responsive, but creatively responsive, promoting retraining of workers and focus on new growth industries. 

Part of the credit must go to its unique system of senior government official compensation. Ministers are paid via a formula: two thirds of the average of the eight highest salaries in six key professions (lawyer, accountant, banker, multinational executive, local manufacturer, and engineer). As a result in recent years the president and the prime minister have made in excess of $2 million a year in salary and other ministers in excess of $1 million. The result is that many of the best minds will be found in the government, zero corruption and terrific results. Want an example of the innovation? The president, prime minister, and ministers took an almost one-fifth pay cut this year because of the recession. What? Accountability among public officials? Real incentives? Imagine the loud "gak" you would get out of the U.S. government as they choked on those ideas. 

I could go on regarding the innovation here, and perhaps I will tomorrow, but while we're on the subject of incentives, one last thought. Yesterday, I noticed that in exchange for taking those 17 Uighur terrorists, Palau was getting $200 million from the U.S. government. That's $14 million or so per terrorist. And incentives being what they are, I immediately concluded that I want some of that terrorist action.

I will take 100 of them or however many they have left. 100 will fetch me $1.4 billion. With this I will spend maybe $200 million on a small island on which to house them (and my appropriately comfortable warden's compound). Maybe I could buy Devil's Island from the French space agency -- which apparently currently controls it -- for about that much. Then I would set aside another $200 million to care for the prisoners (at $50K per year for an average of 40 years each that would cover it). And I'll pocket the billion as my fee. Secretary of Defense Gates or his representatives can contact me at FP to work out the details.

luxtonnerre/flickr

Now that all the ecstatic moaning of the press surrounding the president's first hundred days has subsided, we can return our attention to the fact that things are worse in Pakistan, Afghanistan, and Iraq, the global economy is still deteriorating, the U.S. deficit is still ballooning, and I am experiencing sudden dizziness and a slight fever (although I think it is just from listening to replays of the Vice President's remarks on the Today Show this morning.)

So, to stay on top of the news, let's start with a few questions about the auto industry:

Is anybody stopping to work the numbers on this Chrysler deal? How much did we have to pay for the privilege of having Chrysler go bankrupt in springtime rather than winter? Isn't it true that bankruptcy was always the best outcome and that this was just a very costly stall to make the unions feel their members were being taken care of?

Aren't the unions getting a disproportionately large chunk of Chrysler and GM at the expense of creditors and shareholders? What'll happen if the companies go belly-up again in a few years and the unions lose the stake they got in exchange for the pension money that they were owed? (Hint: The taxpayers will cover it again after having shelled out a fortune now to protect them. )

Wouldn't it have been cheaper to let the companies go bankrupt, sell off their good assets, pay off the workers who got fired, retrain them and invest the billions in incentive programs to develop new, green transportation technologies? And are the unions really the people we want to be the dominant owners of these companies? Do we really think it is either right or in our collective interests to reward union leaders (as opposed to rank and file workers) who played a central role in forcing into place the unsustainable business models that essentially killed GM and Chrysler?

Isn't a pattern becoming apparent here? Can't people see that the deals the government cuts -- whether it is forcing Merrill and B of A together or "bailing out AIG" or the auto deals -- are actually lousy? Isn't anyone other than Ken Lewis going to argue for a discussion about what is the appropriate thing for the government as an owner to do when the national interest conflicts with their fiduciary responsibilities to other shareholders? 

And when is anyone going to notice that the "white knight" that is going to save Chrysler is one of the world's crummiest car companies, one just back from the brink itself and that they are getting their stake in Chrysler for a song? Or that much of the benefit from this deal will accrue to stakeholders outside the U.S.? Also, for the fun of it, ask yourself if we would be doing all this to secure this deal if the purchaser in question were Chinese car manufacturer Chery? (Hint: we would not.  Even though it would likely be a much better deal for all concerned.)

Another question is who are the creditors and if any of them are financial does the U.S. have a stake in any of them? Is it using its clout in the financial services sector to influence the outcome of the auto deals? If so, how, with whom, and in whose interests in the long-run?

After we get answers to these questions, I will offer my opinion of the deal. In the meantime, as with everything else right now, I am just hoping for the best (and, like the proverbial Bavarian at lunchtime, expecting the wurst.)

Bill Pugliano/Getty Images

I wrote this last night. (Actually the day before. It's a long story that involves trains, planes, snow, and an incident in a parking garage with an Eskimo that I just don't have time to go into here.) In any event, after I wrote it, I noticed that my colleague Dan Drezner has written an FP article called "13 Unexpected Consequences of the Crash." What am I supposed to do, shoot myself?

No, we'll just pretend it was all planned and maybe the editors can link them together and have it look like a carefully conceived symphony of in-depth perspectives on what is going to happen to us all at the end of this economic death spiral. 

And in that vein, just to help you with your planning, here are some people and things that won't survive the economic crisis:

1. Japanese Prime Minister Taro Aso
   There are items on today's sushi menu that probably will stay fresh longer than he is in office. Nobody had much confidence in him to begin with. But with the Japanese economy dedicated to disproving the theory that things never get as bad as you fear, expect his departure and a parade of successors that will make Japanese voters yearn for the stability of say, post-war Italy. (What does the Japanese market downturn have in common with a bunch of super-models? No bottoms.)


2. Illinois Senator Roland Burris
   Here's my bet: he is convicted of a crime long before Rod Blagojevich's pompadour is in the hands of a prison barber. I know this has nothing to do with the crisis, except perhaps for the fact that the American people are hungry for people to blame and punish -- for anything.


3. Chrysler
   We already know that GM and Chrysler are putting a bunch of lousy brands out of their misery. (Although the Chinese will probably buy Hummer and make a fortune selling them as mobile homes given that they meet Chinese housing standards for a family of 12.) I think the last Pontiac fan died of old age during the Truman Administration. There are probably a few beauticians in Union, New Jersey who still think the PT Cruiser is anything other than the automotive equivalent of a mullet. But for the most part the makes consigned to the scrap heap the other day will not be missed. Neither will Chrysler once it is clear its management is doing too little -- it's too far gone. Congress is tired of bailing out the private equity fat cats that own much of it and everyone realizes that its plan for being saved by Fiat is like having someone throw a drowning man a cinder block. After them, other car brands will go. There are simply too many. The market has spoken. And no White House task force is going to be able to persuade consumers otherwise.


4. My 401-K
   I hope you will all come visit me in the refrigerator box in which I plan to spend my sunset years. I'm thinking of some place nice, maybe under a bridge somewhere in Florida.


5. Retiring at Age 65
   In a more serious vein, while I may be content to live in a refrigerator box by a canal in St. Pete wrestling alligators for scraps of food, other harder-working Americans are going to realize that they've got to keep working. Fortunately, this crisis coincides with the demographic realities of an aging society in which there are just too many old people for the government to support anyway. And older people are still vigorous so why waste the economic value they can produce. Besides, the retirement age of 65 was set by Bismarck back in the day when few people lived that long. (And you think politicians are cynical today. How about those social security programs that don't begin until you're dead?)


6. The Career of Gordon Brown
   He was on the ropes but then as the crisis deepened, he stepped up and the U.K.was comforted by his competence (which is really all he has to offer because personality he ain't got.) But now that the crisis has further unfolded and precious little the government has done has seemed to work, you can hear the sounds of electoral blades being sharpened. The problem for the U.K. is that his likely Tory successor David Cameron would be the least original thinker at a convention of insurance salesmen.


7. Citibank
   Of course it is too big to fail. So was the Soviet Union. But the brand is so damaged and worse damage is almost certainly on the way when the consumer credit crisis hits that it'll be further broken into bits and pieces. And it won't be the only bank to tank. In fact, in an ironic twist, it's entirely possible that before this is over the government may start giving away one of the banks it owns with every toaster you buy.


8. Thousands More Afghans
   Civilian death tolls in Afghanistan are mounting. Escalating the war won't bring this number down. Sadly, one thing that is almost certain to survive the crisis is the war in Afghanistan and Pakistan.


9. Stability in Mexico
   For more on this, see the Axis of Upheaval series elsewhere on this site. More on that in a day ortwo.
   
   (In which I will focus on the Axis of Instability -- the coalition of the unhinged that is the most direct link between Kim Jong Il and Joaquin Phoenix.)


10. Unilateralism
    While The New York Times reports that the Obama administration is maintaining many of the draconian anti-terror policies of the Darth Vader Administration, some old favorites will have to be scrapped. Unilateralism will be the first to go. Not necessarily as a matter of principle. Rather, we simply can't afford it any more.


11. The Strong Dollar
    Face it, we may talk of a stimulus package today, but within a few years and after a few sequels, we may become known as the stimulus generation. The problem with stimulae is that they are like crack. Once you get a taste, it's hard to live without. What politician is going to take a weak economy that is has grown dependent on a few trill a year from the great money pot on the Potomac and put it at risk by turning off the spigot? So we either borrow or we print money. Other currencies step up. They won't replace us, but it will bea long, long time if ever before the dollar is what it once was.


12. The Miami Herald, the Detroit Free Press and...
    So here's how the course will be taught in business schools: once upon a time, the newspaper industry decided to give away for free what they once sold. They went out ofbusiness. Get it? If not, check the home page of FP's parent company in a few years and see if the newspaper isn't being primarily used as a promotional give away to sell pimply-faced teenagers SAT prep classes. (Kaplan is the profitable part of the Washington Post empire.)


13. $11 Billion Helicopters for the President Seriously? 
    $11billion for foreign built helicopters for a president who has made a signature issue taking corporate jets away from supposedly profligate CEOs? Not.


14. Barack Obama's Haircut
    Look at it closely. It is simply not presidential. We're not going to be able to make it through this crisis with something that looks like a six year old's first buzz cut. Remember Mr. President, it's not just your head anymore, it's a head of state.


15. John Boehner's Reputation as a Statesman
    Ahahaha. Just kidding. Boehner would need a reputation transplant just to have one. I suspect he is able to wander anonymously at his own family reunions. But other congressional reputations will surely falter as those wonderful folks on the Hill reassert their claim to being the least branch of the government. And if future stimulus packages contain any more pork than the last one, Nancy Pelosi is going to have to hand over her gavel to Jimmy Dean.


16. A Navy Built Around Carrier Battle Groups...
    ...and the current Army-Marine Corps contest to see which is really our expeditionary force of choice, and all the other obsolete or redundant military spending philosophies that are a vestige of America's Era of Deep Pockets. Welcome to the Era of Limits. It's not just an issue for defense spenders, either. It's everybody's new reality.


17. The Bail Out Reflex
    If the recent report that the top 20 bank recipients of Federal aid actually reduced their lending levels in the fourth quarter of 2008 doesn't do it for you, wait until the auto companies come back a third and a fourth time, or until you start looking at individual deals a little more closely. For example...where did the $150 billion we have pumped into AIG go?


18. The Idea That Green Was the Color of Expensive Oil
    To all those who says low oil prices and the recession would kill the green revolution before it arrived, I hope you are paying attention. The president made green energy the center piece of his stimulus signing ceremony, the bill contains more money for greener more efficient energy than any in American history, another energy bill is promised this year and, significantly, the decision this week by the EPA to reopen whether or not to go after carbon under the Clean Air Act is a clear signal that before the next Congressional election, America will have started to set a price for carbon and create permanent legal incentives to embrace a new energy paradigm. This isthe one area of stimulus on which both parties agree, and its quite possibly a game-changer for the U.S. economy and for U.S. national security.


19. California
    Not really. But it's a little scary that it has gotten this close. Scarier still when you consider that California is the seventh or eighth largest economy in the world (bigger than Canada). And they can't figure out how to generate enough revenue to run the government? Come on, it doesn't seem like they are really trying then, does it.


20. The Idea That You Can Change the Entire Mission of the U.S. Government Without Changing Its Structure
    You get it, right? We now own banks, run auto companies, manage a fairly complex national industrial policy, will have to reinvent the international system, etc... and we don't have the people or the structures to handle these developments. We will try to do it without adding new phalanxes of officials of course, which will only screw things up. And then, gradually, we will reshape the government to meet these new needs thus (in some cases unfortunately) institutionalizing them. 

Ok, that's 20. Now, over to you. Global changes? Careers that won't make it? Institutions that won't survive it? Don't leave me hanging here.

Images from Getty

Talked today with a brilliant investor I know who runs many billions of dollars more than you. He has been relentlessly bearish on the global economy and especially on the emerging world for the past several years. He just returned from Asia.

While he expects China to grow at 6.5 percent or so, not the 8 percent the Chinese are shooting for (and telling their enterprises to hit), he feels this will not cause a meltdown, that while the world has a liquidity problem, it's mitigated for China given its reserves, and that we may be at a kind of rough plateau. It's not a real bottom since he expects that a second "dip" in the crisis may come later this year linked to problems in U.S. consumer finance (the chairman of Bank of America testified yesterday that a rule of thumb they use for estimating credit card losses is unemployment plus one percent, so in the year ahead you are talking about 10 percent or more of credit card accounts defaulting). But he feels that after the dip China and Asia will recover to this level and then begin their growth out, which may come more rapidly than the developed world. (Younger economies -- in the sense of "emerging" economies  -- collapse faster and recover faster, like younger bodies vs. older ones.)

As China goes, so goes Asia. He also feels for this reason the commodity price dive is behind us and that might lead one to conclude that Latin America has, in fact, dodged the bullet thanks to better policies. Things are bad there now, but wholesale economic collapses may be avoided. It's not exactly like he was saying, "Hey, folks, we've hit a bottom and we're on the way up." But what he is saying is he expects the emerging world to recover in 2010 and that it will lead growth thereafter. In other words, maybe, maybe, here is one very credible observer who is glimpsing a little light at the end of the tunnel.

Since political leaders only got wise to the unfolding crisis when we were well into it -- responding to symptoms rather than to the first signs of the disease -- their reactions can only be seen as a lagging indicator. A conclusion one could draw from this is that when they say it's the end of the world, things may actually be starting to stabilize somewhere.

MIKE CLARKE/AFP/Getty Images