First things first

Officially, it's not yet over. Effectively, it ended past my bedtime. But even at the relatively early hour that a farmer retires, the outcome was obvious. Obama might only take a modest majority of the popular vote, but the electoral count was going to be pretty one-sided.

This morning, my good half told me about the speeches I'd missed. I went online and watched them. Each candidate, to my eyes and ears, gave the best speech of his campaign. (My wife said that if McCain had campaigned in the same tone as he conceded, he'd have won the election. She could be right.)

Now I've been watching national and local politics too long to put much faith in rhetoric. (Old joke: How can you tell when a politician is lying? His lips move.) (Any newer version is probably gender-neutral, but I've only heard the old version.) Still, one turn of phrase in Obama's oratory caught my ear. As he was transitioning to his section about the work ahead of all of us, he listed some of the major problems we face: "two wars, a planet in peril, and the worst financial crisis in a century." (The quant in me sat up at that last bit but, if you measure time in centuries, the statement is accurate as worded.)

Now good rhetorical exposition doesn't leave list sequencing to chance. You can put the items (problems, in this case) in order biggest to smallest, smallest to biggest, oldest to newest, whatever -- but put them in order, you do. Maybe the President-elect was putting them into chronological order, based on the point at which each became prominent in his campaign. I prefer to think that the order indicates his understanding of the sequence in which they are best addressed.

First, do something about the wars. The larger of the two (at least, currently) has been ideologically motivated, geo-politically disastrous, socially disruptive, incompetently administered, and economically unsustainable from its beginning. Sure, the war generates a certain level of economic activity, but the domestic multiplier is very low -- even if you look at war (and by "war" I mean massive military occupation half-way around the world) in cold-hearted investment terms, almost any other option is preferable. An orderly withdrawal will back us out of quagmire-without-end. Sure, the situation it leaves probably won't be pretty, but any realist will concede that all potentially pretty situations left the building a long time ago. And an orderly withdrawal will allow us to focus more of our national attention, activity, and investment domestically, where they're all needed.

Addressing the peril of the planet will take as much attention, activity and investment as we can muster. In the back of my brain, I'm working on a taxonomy of what that will mean to IHEs of various sorts, but the demands and the impact will be real. More to the point (in terms of national politics), all the investment and activity which results from addressing climate disruption will have large domestic multiplier effects. First, the vast majority of our immediate work can only be done in the USA -- whether it's upgrading electrical generation and transmission infrastructure (macro- or micro-); improving residential, commercial and industrial building performance; or decreasing transportation demand, each of those problems can only be solved locally to where it exists. That means the jobs get generated locally, and that means that the purchases made by the workers who get the jobs get made locally. Even if alternative fuel research (btw, there are some really interesting developments in the area of biofuels -- more later) takes place worldwide, industrializing whatever products result will need to take place where the demand is. And unlike strategic military research, alternative energy/sustainability technologies we invent here can be exported, leading to further economic stimulus and growth.

And economic growth is what it will take to solve the financial crisis. What we're all experiencing is called "global" because of its impact, but it had its origins right here at home. One of the watchwords of management is to be careful what you measure, because that's what's going to increase. For too long, we have measured only the size of the economy, without worrying much about the quality of the earnings which generated the increase in size. Slicing and dicing financial instruments may generate profits, but the profits have no underlying physical reality -- they're "paper". When the tide is rising and everyone has a boat, paper profits stand up pretty well. But when Gresham's law kicks in -- when bad profits drive out good ones by raising the required rate of return to the point that normal economic activity can't measure up -- then things go south. It's important that we remember that the purpose of economic activity isn't to see whose is bigger, the purpose of an economy is to provide goods, services, quality of life to the polus. Whatever sequencing of challenges allows us to achieve that on a sustainable basis is the one that works for me.