On Monday, General Motors spooked the entire economics community, financial and academic, when it reported that it was hemorraging $2 billion a month and might be forced to declare bankruptcy.  If their cash reserves dip below $10 billion, the company said it will be unable to pay its health care obligations or even finance its dealerships.  Shares in General Motors (GM) plummeted to $2.92 the next day, their lowest price since 1946.  As an employer of over one million people, a failure would have a horrendous domino effect on the economy.  Not surprisingly, it’s bad when an American corporation with the word “General” in its name goes under.

Although General Motors already received a $25 billion bailout from the government in September, the reality of the situation is that only further state intervention will save the troubled giant.  Democratic congressional leaders are pushing the Bush Administration to give additional funds to GM, but they have been unable to gain ground on the issue.  Barack Obama also fought for the additional bailout and pressured President Bush to that effect during their White House rendezvous.  Without altering course, the Bush Administration plans to let GM fail, much like Lehman Brothers.  It does not yet appear as though Obama has enough of a bully pulpit to substantially influence Treasury policy.  Congressional Republicans also refuse to support a bailout, on the grounds that bankruptcy arbitration will be positive for the flailing company.

The Bush Administration and Congressional Republicans are not likely to change their minds on the issue and General Motors will most likely declare bankruptcy in the next quarter or two.  In my opinion, GM deserves to fail, as their painful lack of innovation and horrendous corporate management structure is a death-knell for any company.  While Congressional Democrats are trying to get in good with Detroit, saving GM in its current incarnation would only stagnate American business culture.  It is very unfortunate that GM’s poor business practice will result in many thousands of layoffs, but it would be better to tear the band-aid off now and spare taxpayers the bill of future bailouts.  It should be noted that a large portion of GM’s fiscal instabilities have come from their extremely expensive health care plan.  As Thomas Friedman already noted in his most recent opinion column in the New York Times, “spare me”.  Universal health care probably would have saved them, but GM has previously denied support for any such measure.  In other words, they asked for it.

While certainly dire economic news, this situation also presents a major opportunity for the incoming Obama Administration.  If and when GM goes into bankruptcy, only then should the federal government present a bailout to them.  This bailout, far from the unsupervised check-cutting of Treasury Secretary Henry Paulson, should come with strict and unconditional terms that require GM to manufacture environmentally friendly and energy efficient automobiles within a reasonable amount of time. Speaker of the House Nancy Pelosi, that damn San Francisco liberal, has already voiced her intentions to make those environmental reforms a stringest component to any automotive bailout. GM should be forced to cut its production of all fuel inefficient trucks and SUVs, whose sales have tanked anyway, in order to form the manufacturing base for Obama’s energy infrastructure revolution.  GM would be highly subsidized by the government and would bear little risk in the structured venture.

John F. Kennedy gave NASA ten years to get to the moon, Mr. Obama should give GM five.  The technology is already here, GM simply has to implement it within their production structure.  Indeed, GM, through their Chevrolet line, already plans to introduce an electric car, the Volt, by 2010.  If cars like the Volt and Prius-like hybrids were to fill GM’s production schedule in post-bankruptcy restructuring, an American car company could finally compete with the foreign operations like ‘recession-proof’ Honda, which just opened another fuel-efficient automobile manufacturing plant in Canada.  Once the immediate effects of the recession have ceased and consumers start spending again, albeit at probably lower levels than before, GM will have access to a huge market share.  It could revitalize Detroit and, if the other members of the Big Three followed suit and were equally successful, the entire Rust Belt.  Ford Motors already produces the fuel-efficient hybrid Prius, but continues to engage in poor investments with trucks and SUVs.

Cass Sunstein, a Harvard Law professor and former colleague of Mr. Obama at the University of Chicago, recently published a book with behavioral economist Richard Thaler called Nudge.  The book advocates that the government engage in a form of soft coercion with both the public and private spheres in order to gently shape behavior in a positive and progressive fashion.  For instance, they recommend legislation that auto-enrolls employees in a retirement account with the option to drop out at any time.  Because retirement accounts are unquestionably good investments, coercing people, by shifting the default option to the economically beneficial side, can have tremendously positive effects.  As long as the option to drop out is ubiquitous, there is no real mark left on our freedom of choice.  So, why do I bring this up?

Mr. Obama, already aware of the theories behind Nudge and the book itself, could use GM as a significant test case for soft coercion.  By giving GM the option to either collapse or take loans from the government in bankruptcy court with serious fuel efficiency conditions, the US could softly coerce the first stage of a multi-pronged energy revolution in the United States.  Consumers, instead of being given the default choice of gas guzzlers, would have the initial opportunity to purchase “green” automobiles.  If we were able to cut our dependency on foreign oil through the measure, in conjunction with infrastructural innovations like wind, solar and geothermal technologies to produce carbon-free electricity, there would be a chain reaction in the global political economy.  Indeed, there is a perfect storm brewing.

With the international economy is a tailspin, global demand for oil has drastically fallen off.  China and the United States have driven down consumption and forced OPEC to reduce production by as many as 1 million barrels per day in each member country. Oil prices on commodities markets plummeted to a 22-month low yesterday, hitting $52 per barrel. OPEC states, many of which are hostile to the United States and its allies, have specific requirements for the price of oil in order to balance their national budgets.  According to PF Consulting, a wholly owned subsidiary of Deutsche Bank, this fiscal year Venezuela needs oil to be priced at $97 per barrel in order to balance its budget.  Iran requires a price of $58, Saudi Arabia $62, Kuwait $48 and United Arab Emirates $51.  For the next fiscal year, Russia requires the price of oil to stay above $70 per barrel.  With oil at $52, Hugo Chavez, Vladmir Putin and Mahmoud Ahmadinejad are freaking out. Each rely on massive social programs, financed with petro-dollars, to maintain their hold on power.  Putin and fake-Russian President Medvedev are so worried that they told European Union member countries at an economic summit this week that Russia and Europe, together, “speak with one voice.”  Russia and its stock market have been rocked by the financial crisis, occasionally suspending trading to keep volatility down. Ahmedinejad has already written Mr. Obama to express congratulatory sentiments.  Every state with a large stake in oil prices has gotten quite friendly all of a sudden.  Mr. Obama will never need preconditions for diplomatic meetings with any of these leaders, as long as he keeps the price of oil down.  That price sanction, issued at the consumer level, would speak for itself.

Economic interconnectedness is a double-edged sword.  OPEC may have sway over us when oil prices are high, but man do we have sway over them when oil prices are low.  Oligarchies only work when you can fund them.  Considering our immense opportunity to permanently diminish OPEC’s resource returns with a restructuring of Detroit, globalization is looking pretty good right now.  In one fell swoop, the Obama Administration could improve environmental conditions by creating a profitable, competitive and job-producing green manufacturing base, while simultaneously draining the capital from our self-declared enemies and increasing our national security.  That’s a win-win-win-win situation.

Let’s turn Detroit into Cape Canaveral.  The Green Revolution might blow up on the launch pad a few times, but eventually, it’ll get us to the moon.

David Blaine, watch your back.  Despite your impressive resume of awe-inspiring street magic and death-defying physical exploits, a far better illusionist is attempting to complete his last and most astonishing trick.  A vanishing act, so incredibly unbelievable, that it will forever be considered one of the greatest acts of deception ever displayed to an audience.  No, I am not talking about Criss Angel hovering across the stage in his Las Vegas smash success, “BeLIEve”.  The performer of which I speak is none other than the sitting President of the United States, George W. Bush, who successfully made both the United States and, now, himself utterly invisible. Allow me to explain his grand illusion.

Like the exceptional film “The Prestige” tells us, a magic trick consists of three parts.  First, there is ‘the pledge’.  You show the audience something completely ordinary, in this case a seemingly traditional conservative president presiding over the United States during peacetime.  Next, there is ‘the turn’.  Here, Mr. Bush earned his universal reputation as a skilled magician by making the America we knew and loved completely disappear.  It was one hell of a turn.  Through war profiteering, the torture of prisoners in secret military prisons, the corruption of domestic civil liberties and a collapsed economy, Mr. Bush succeeded beyond his wildest dreams.  But, as Michael Cain so pleasantly narrated, to make something disappear is not enough.  You have to bring it back.  Otherwise, the audience is simply confused and disappointed.  The remedy to this disillusionment, the final part of the trick, is quite appropriately entitled ‘the prestige’.  Mr. Bush, however, encountered a serious problem.  He has, in more ways than one, no prestige to give.  So, to pull off the greatest trick of all – to disappear America and then return it – Mr. Bush has engineered a great and final vanishing act.  He has convinced the world that Mr. Obama is already the President.  For then, we might be able to have the prestige everyone so desires.

Although the President still has until January 20th to preside over our much besieged Union, it has become remarkably clear that he no longer believes he has any duty to lead.  I cannot say that I am entirely surprised by this development, as it perfectly coincides with the empirical record.  Nonetheless, the degree to which everyone is comfortable with Mr. Bush’s prestige, or lack thereof, is remarkable.  Having only won the presidential election days earlier, Mr. Obama has already begun talking with foreign leaders, conferring with top business executives about the financial crisis, recruiting a crack team of advisers, receiving invitations to direct diplomacy from our enemies and affecting the outcome of our military adventure in Iraq.  No President-Elect in modern history has had so great a burden forced onto his lap months before assuming office.

We the people, the shocked and horrified audience of the greatest magic trick ever performed, demand our prestige.  Whether or not Mr. Obama can pull off the final act of President Bush’s grand illusion remains to be seen.  If he does not, we will be left with a dead bird called America, crushed by the collapsing cage of neoconservatism.

On Tuesday night, with the resounding selection of Barack Obama as the 44th President of the United States, the latest test case in the trial of idealism successfully earned a place back on the American docket.

It was a moment of emotional catharsis for idealism’s often denigrated liberal clerks, whose flowing tears and unrelenting exclamations of joy were on full display for all civilization to witness. For the first time since the collapse of the credit markets, international capital poured back into the United States, albeit of a different kind than expected.  The smiles we grinned were grinned right back – from Baghdad to New Delhi, from Tokyo to Nairobi, from Moscow to Tehran.  One of the darkest testimonies given in American history, ideologically defined by ruthless self-interest and brought to bear by the barbaric realpolitik of the Bush Administration, had finally lost its appeal.  That the victory was carried by the eloquence of a former-constitutional law professor over the deteriorating grandeur of an old soldier presents a symbolism that should be lost on nobody.  It certainly has not been lost to the international community.

After two years of partisan electoral chicanery, idealism prevailed. It survived the discursive barbs hurled by the Old Guard on both the Left (Hilary Clinton’s matter-of-fact statement to Democratic superdelegates, “He can’t win.”) and the Right (John McCain’s sad rhetorical decline into invocations of “Who is the real Barack Obama?”). Its opening arguments, spoken so mellifluously by Obama, were sometimes hard to pin down, resisting clear appropriation in favor of unrestrained creative potential and post-partisan unity. Idealism’s lack of ideological clarity has made Obama’s critics genuinely fearful of what could come to fruition if it reclaimed the reigns of American power.

Idealism, the hopeful pursuit of what-should-be instead of the cynical acceptance of what-is, spat upon by princes and presidents, has been granted another chance to triumph over the realism that has dominated the sad and lonely exceptionalism we have grown accustomed to.  Idealism is hungry for renewable energy independence.  Idealism is hungry for affordable health care.  Idealism is hungry for international law and multilateralism.  Idealism is hungry for proper regulation and equality.  Above all else, idealism is hungry for change.

We have seen idealism, channeled by Obama’s discourse, confront the same indictments it always has.  You just don’t understand how the world really works.  You just don’t understand, threats are everywhere. You just don’t understand. That idealism has been wholly rejected by the Kenneth Waltz’s and George Wallace’s of our time is neither a surprise nor a deterrent. We knew that they would not come around so quickly. We have to prove it to them.

The irony is that idealism’s detractors don’t realize the power of their own discourse. The world is exactly what you say it is and what you do about it. And idealism is ready to say and do something left unspoken and undone for what seems an eternity. For the last two years, Obama’s painstakingly confident and steady-as-he-goes approach won over the votes of nearly 70 million Americans.  Enough to win a presidential election, but not enough to permanently enact our liberal ideals.

Indeed, it has been a long time since anyone let idealism near the nukes.  In its lengthy absence from power, however, we have not forgotten the brilliant stewards that have steered idealism to reality – Kennedy, FDR, Wilson, Lincoln, Jefferson.  Obama is poised to add his name to that list and push forwards past their successes and failures.  They all faced tremendous challenges. They succeeded and failed. They all tried.  So, too, will Obama.  So, too, will we.

As a longtime student of idealism, Obama has brought the knowledge of history with him.  It speaks volumes.  History tells us that we must use what is at our disposal to make our ideals a reality, not just what we wish we had.  Our current shortcomings – a recession, two wars and declining American social capital – reinforce the necessity of the partnership between idealism and pragmatism.  Obama’s hero, another Illinois law professor turned President of the United States, understood that fact better than any that have followed him.  His challenge was the battle between reality and ideal.  Between a fractured and a more perfect union. His name was Abraham Lincoln.

Idealism has acquired another test case. This time its lawyer’s name is Barack Obama. We must be his devoted clerks, for the trial has only just begun.  It is time to win the case and make our idealism the law.  I am hopeful for the first time in my life that we might be able to do it.

Tonight, everything is up for grabs.

Who loses in that type of situation?  The status quo. Existing worldviews.

Who’s playing?

Insurers, universities, health care organizations, foreclosure markets, and more health care organizations.

To the media players, desperate to keep this election interesting and watchable, McCain is currently “winning”, but everyone knows he’s going to lose.  Who is going to spill the beans?

The geography.  The demographics. The makers of cool signage software. CNN is very confident with their technology, while Fox looks like they are working with Powerpoint.  Wolf Blitzer talked to a hologram of Will.i.am.

The democrats are going to take everything, and they don’t deserve any of it.  Everyone in the media knows this.  Obama is going to win and we might find out in the next hour.  Who is going to tell us first?

Will the Bradley effect be reversed?  Racism is celebrated by a community of people in less integrated areas.  If you asked my friend Joe from suburban Cleveland when his friends were around, he’d say he can’t trust Obama, but if you get him into a secret ballot, he’ll tell you what he actually thinks. Tom Friedman calls it the “Buffett Effect.”

Barack is outperforming any of the old red and blue candidates, because he is a purple candidate.

Meanwhile, CNN is projecting South Carolina with under 1% reporting…