It was the first full week of the Obama presidency. On Monday, January 26, 2009, U.S. businesses announced plans to lay off more than 55,000 workers—a huge economic hit for a single day. On Tuesday, the president journeyed to Capitol Hill for nearly three hours of meetings seeking support from congressional Republicans for massive economic stimulus legislation. On Wednesday, the House passed its $816 billion bill, with zero Republicans voting in favor. Thursday brought front-page news that that bill contained a provision requiring projects that it funded to use made-in-America steel, posing a frontal challenge to U.S. trade policy. On Friday, the Commerce Department reported that the U.S. economy had declined 3.8 percent in the fourth quarter of 2008, the worst performance since 1982, with expectations of an even greater decline for the first quarter of 2009. 2 That same day, the president was forced to telephone Chinese President Hu Jintao to disown a statement, submitted by his taxembattled Treasury secretary nominee during confirmation hearings, that the new administration had concluded that Beijing was “manipulating” its currency for trade advantage. Meanwhile, multiple global leaders—notably the premiers of China and Russia—were denouncing, at the world economic forum in Davos, Switzerland, the U.S. role in precipitating the worst international economic crisis since the Great Depression. All in all, it was a rugged week.
To address these matters, Obama had been assembling his own highpowered team, which would lead the eclectic welter of U.S. trade and economic policy agencies in some form of policy renewal. Yet his early presidency would exemplify a paradox. As a person, he was the epitome of globalization: father from Kenya; childhood years in Hawaii and Indonesia. Yet in the economic sphere, his focus was overridingly domestic. The international economic issues he would address in his first fifteen months were, by and large, not issues that he chose but issues that were thrust upon him. And his responses to these issues were minimal. He took care not to move backwards, not to seriously impede present and future international cooperation. In the words commonly attributed to the ancient Greek physician, Hippocrates, Obama would “first, do no harm.” But he would not embark on the type of bold new initiatives that were otherwise characteristic of his early presidency. To put Obama’s challenge in context, we must go back into history, into how the United States came to have the government he inherited for the conduct of international economic policy. At least four historical imperatives generated today’s official institutions.