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Superman Obama

Robert Peston | 10:19 UK time, Monday, 8 December 2008

During assorted meetings with hard-bitten business leaders and politicians last week, I was surprised by how star-struck they are with Barack Obama.

Barack ObamaIn these fraught economic times, the world needs a hero. And whether he likes it or not, the floundering global elite appears still to be looking west, and to the US president-elect in particular, for the white-hatted cowboy who'll save us all.

You can see these hopes and expectations in the way that stock markets soared across the world after Obama announced on US television that he plans to invest in US infrastructure on a scale not seen since the US highway-construction programme of the 1950s.

Although he gave more details of his proposals than is normal in these transition weeks - making it clear that his first priority is to stimulate economic activity and that reducing colossal US public-sector debt will have to wait - the reaction of stock markets is largely emotional.

As I write, the German and French markets are up well over 6% and the London Exchange is 4.6% higher.

Also, sterling has recovered slightly, which may be more rational in that the UK's vast and rising indebtedness looks trivial in absolute terms compared with the ballooning borrowings of the US. But sterling's resilience may not last, in that the more the US government under Obama has to borrow, the less appetite and capacity there may be among investors for the colossal sums our government has to borrow.

The big and obvious point is that an extraordinary, frightening responsibility is being placed on Obama. At a time when most would say that globalisation has undermined the power of most elected politicians, there appears to be a widespread belief that one newly elected leader will have near-magical powers.

And he looks strikingly relaxed, in spite of an economic reality that's dire.

Here in the UK, that's confirmed (yet again) by a CBI survey this morning showing that the contraction of the UK's all-important service sector is accelerating.

The next big decision for politicians in the US and UK who actually have their hands on the reins of power, rather than one about to take over, is how to help the devastated motor industries.

What's being discussed in Congress looks awfully like direct state control of GM, Ford and Chrysler, as the price of any financial rescue.

Here in the UK, the Treasury and the Business Department are also assessing requests for loans from car makers.

I'm absolutely certain they - or rather we, as taxpayers - will provide succour.

What ministers and officials will wish to do is simply fill the financing gap created by the malfunction of the banking system and of financial markets, rather than propping up lame ducks.

Governments normally get these judgements horribly wrong - and doubtless you'll shout at me if I were to even suggest that this time it might be different.

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