In the days since Barack Obama’s election there has been quite a bit of talk about his reaching across party lines to seek the advice of elder statesmen. Today in the Washington Times (in a column by the deputy editor of the paper’s op-ed section, Benjamin Tyree), a man who is as accomplished and admired a statesman as they come, George P. Shultz, Secretary of Labor and Secretary of the Treasury in the Nixon Administration (and Secretary of State under Ronald Reagan), offers his suggestions and perspective on a range of issues.
Mr. Tyree reports that Mr. Shultz believes the President-elect should lose no time in making “an early major address to the American people, spelling out his program and how the current economic bind will be eased. And Mr. Shultz thinks such a speech should also take into account the present state of the trade balance:

“We don’t save enough to finance our investments. The federal budget needs ultimately to be brought back into balance, and then the trade balance will fall back into better shape and we’ll be paying of our own investments.”

From the perspective of his six-plus years at the State Department when he witnessed the futile Soviet effort to subjugate Afghanistan, Mr. Shultz also argues that Obama’s talk of increasing our military commitment in that nation

“raises some big questions. We should think much more carefully about putting more troops in there. We succeeded pretty well initially in 2001. Why? Because we made common cause with various tribes for whom the only common theme is the expulsion of foreigners, to deny al Qaeda the safe haven it previously enjoyed in Afghanistan.”

Where the economy is concerned, Mr. Tyree reports that Mr. Shultz thinks that the “key problem” in the current crisis

is that the “value of assets underlying” the mortgage credit freeze-up “is uncertain and changing, and was leveraged to beat hell. There is a huge mass of uncertain value sitting there, making banks more hesitant to deal with each other[…]”

Directing capital to the banks might help the credit market, but Mr. Shultz suggested it will not mend the damaged mortgage market. There remains the problem of assessing true value in the absence of a reliable and stable market valuation of the properties.

He said there should be a distinction between homebuyers who made down payments and those who did not. The latter, he suggested, might be more appropriately re-established as renters with an option to buy.

Mr. Shultz also recounts an experience from his days as Secretary of Labor, when

[H]e recommended that then-President Nixon stand back from intervening in a Gulf Coast Longshoremen’s strike that former President Johnson had prevented in the name of national security. “The strike will produce a kerfuffle, but not a national emergency, and will create pressures on both parties to settle the dispute. Staying out will help the collective bargaining process to work,” he advised Nixon. The recommended policy of disengagement proved effective. “The president was not hanging his shingle out” as a recourse for all with financial woes.

There is a lot more of interest in Mr. Tyree’s interview, and this reader, at least, came away from reading the column with the feeling that the President-elect would find it much to his benefit to have Mr. Shultz pay a visit to the Oval Office in January – or to Chicago before then.