The election is over, but many issues, often unaddressed in this campaign, continue to challenge the nation. Here are some that were missed and that the president will have to face:
In the campaign, neither candidate was wholeheartedly for trade and neither against it. Listening to the debates and sound bites might have led one to believe the only nation we trade with is China. Mitt Romney said he will get tough about their currency manipulation the first day he is in office. Barack Obama said he got tough with them on our imports of cheap tires. Most economists turn thumbs down on either action. Now, the president needs to leave rhetoric behind and continue to deal, on a pragmatic basis, with the second largest economy in the world and one with which we have many other vital interests.
PARTICIPATION IN MULTILATERAL FINANCE AND TRADE ORGANIZATIONS
It is striking that during the third debate, supposedly devoted to foreign policy issues, neither candidate mentioned any multilateral institution in which our nation participates, not even NATO. Nor did they mention the World Trade Organization or the International Monetary Fund.
These are organizations both the left and the right love to hate. They also are organizations we helped set up after World War II that have worked to our own benefit repeatedly over the decades since, and with which every new administration eventually decides it needs to work, regardless of what prior campaign rhetoric implied. Yet listening to campaign debates, one might have concluded these two organizations had disappeared from the face of the earth. That was a mistake.
Why does it matter? The events of 2008 demonstrated how a financial crisis can propagate from one continent to another. The 17-nation Eurozone and the rest of Europe are balanced on a financial cliff right now, and they are not likely to be safe for at least a couple of years. The IMF cannot do much by itself to solve the situation, but it can play a vital role, primarily by giving governments political cover to take measures they could not otherwise do. Contrary to popular opinion, we dont have much money tied up in the IMF, and we long have had disproportionate say in its operations.
It is to our advantage that it continue to play a role in international finance. The president should reiterate our nations historic engagement in the IMF, particularly as it can act as a firewall to delay European problems migrating around the globe.
Ditto for the WTO. There is even more hatred on the political extremes for this organization than the IMF, despite the fact that trade liberalization under the aegis of the General Agreement on Tariffs and Trade, the WTOs predecessor organization, did more for post-WWII global economic growth and conflict reduction than any other single factor.
However, the WTO is misunderstood and hated in many countries beside ours.
The WTO is the forum in which disputes like currency manipulation best could be settled, but this wont happen until there is some international consensus on broadening its dispute-resolution powers to include exchange rate policies.
We could achieve a lot for ourselves and the world by exercising leadership, but the Obama and George W. Bush administrations went AWOL on this. It is time for the new administration to bring it back on stage.
This is another topic on which both candidates have said little. Polls show that citizens in both parties value a clean environment. Furthermore, a majority of Americans believe that human-caused climate change exists.
It is very likely that, based on past statements, Obama and Romneys personal views were very similar on this. The fact that both were too buffaloed to raise the issue in public shows how politically loaded the issue has become.
Nor was either willing to say much about the sorts of everyday pollution problems over which there is little controversy.
Obama favored continued subsidies in one form or another for green technology and wants to halt tax subsidies to crude oil production. He was not willing to note how long it will take for the first to have much effect or how small the latter are relative to either the federal budget or oil company revenues.
Romney decried excessive regulation and promised to reduce it. But he refused to embrace the policy approaches his own Republican economic advisers like Greg Mankiw and Glenn Hubbard advocate, namely taxes on emissions and tradable emissions permits. I am sure that in private, he understands why virtually all economists, across the political spectrum, favor these over our current approach and agrees with their logic. However, his party, with the exception of a few people like John McCain and Lindsey Graham, has fled economic sense on this for two decades. There are some others, indeed probably many, who are closeted supporters who would give the idea public support were it not so toxic publicly within their party.
Obama was no better on this issue, proving a stalwart vote for old-style command and control approaches and against either tradable permits or emissions taxes during his time in the senate.
Now, the president could best provide leadership on these issues by appealing to the pragmatic common sense of the center 60 percent of the electorate who understand that environmental problems do exist and that there are practical and effective ways to deal with many of them. But dont hold your breath waiting for this to happen.
GROWING ECONOMIC INEQUALITY
This may be the most important economic challenge we face. It underlies the discontent fueling many other issues. But neither candidate would say much that indicated any appreciation of the complexity of the issue. Raising taxes on those earning more than $250,000 per year was Obamas predictable response. Romney said tax cuts would foment miraculous growth in the economy, providing more jobs for the poor. Neither had substantive ideas beyond this, and neither was willing to discuss root causes in any depth. If the president has the courage to confront the issue squarely, not fleeing its complexity, it will be a service that will figure in the eventual historical legacy of his administration.
Economist Edward Lotterman teaches and writes in St. Paul, Minn. Write him at email@example.com.