Obama will inherit and economic and financial mess worse than anything the U.S. has faced in decades: the most severe recession in 50 years; the worst financial and banking crisis since the Great Depression; a ballooning fiscal deficit that may be as high as a trillion dollar in 2009 and 2010; a huge current account deficit; a financial system that is in a severe crisis and where deleveraging is still occurring at a very rapid pace, thus causing a worsening of the credit crunch; a household sector where millions of households are insolvent, into negative equity territory and on the verge of losing their homes; a serious risk of deflation as the slack in goods, labor and commodity markets becomes deeper; the risk that we will end in a deflationary liquidity trap as the Fed is fast approaching the zero-bound constraint for the Fed Funds rate; the risk of a severe debt deflation as the real value of nominal liabilities will rise given price deflation while the value of financial assets is still plunging. Nouriel Roubini

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On the day that Americans turned out in near record numbers to vote, a record was set halfway around the world. In Afghanistan, a U.S. Air Force strike wiped out about 40 people in a wedding party. This represented at least the sixth wedding party eradicated by American air power in Afghanistan and Iraq since December 2001.(...) So, after January 20th, expect Obama to take possession of George Bush's disastrous Afghan War; and unless he is far more skilled than Alexander the Great, British empire builders, and the Russians, his war, too, will continue to rage without ever becoming a raging success. Finally, President-elect Obama accepted the overall framework of a "Global War on Terror" during his presidential campaign. This "war" lies at the heart of the Bush administration's fantasy world of war that has set all-too-real expanses of the planet aflame. Its dangers were further highlighted this week by the New York Times, which revealed that secret orders in the spring of 2004 gave the U.S. military "new authority to attack the Qaeda terrorist network anywhere in the world, and a more sweeping mandate to conduct operations in countries not at war with the United States."(...) Domestically, it's clear enough that we are about to leave the age of Bush -- in tone and policy -- but what that leave-taking will consist of is still an open question.(...) All you had to do was look at that array of Clinton-era economic types and CEOs behind Obama at his first news conference to think: been there, done that.(...) How about former Treasury Secretaries Robert Rubin and Larry Summers, those kings of 1990s globalization, or even the towering former Fed chief from the first Bush era, Paul Volcker? Didn't that have the look of previews for a political zombie movie, a line-up of the undead?(...) You could scan that gathering and not see a genuine rogue thinker in sight; no off-the-reservation figures who might represent a breath of fresh air and fresh thinking (other than, being hopeful, the president-elect himself). Clemons offers an interesting list of just some obvious names left off stage: "Paul Krugman, Joseph Stiglitz, Jeffrey Sachs, James Galbraith, Leo Hindery, Clyde Prestowitz, Charlene Barshefsky, C. Fred Bergsten, Adam Posen, Robert Kuttner, Robert Samuelson, Alan Murray, William Bonvillian, Doug & Heidi Rediker, Bernard Schwartz, Tom Gallagher, Sheila Bair, Sherle Schwenninger, and Kevin Phillips."(...) What Obama looks to have are custodians and bureaucrats of empire, far more cautious, far more sane, and certainly far more grown-up than the first-term Bush appointees, but not a cast of characters fit for reshaping American policy in a new world of disorder and unraveling economies, not a crew ready to break new ground and cede much old ground on this still American-garrisoned planet of ours. Tom Engelhardt