Obama’s First Priority Should Be The Economy

And on issues like, say, the Middle East, there's great expectations from all sides. Do you sort of sit back a bit and digest what the situation is and invite leaders to come to Washington?
I don't know why there are great expectations on the Middle East. Years ago I wrote a book around the theme of ripeness, and it's hard to see where the Middle East is poised or ripe for progress, much less a breakthrough. You've got a divided Palestinian leadership and you've got an Israeli polity that's moving toward elections in early 2009. I would actually not recommend this as an early area of major focus. I just don't see the pieces there to work with. What I believe ultimately the next administration needs to do is to come up with a policy that would, hopefully over months or years, develop that ripeness and that would set in motion a process where hopefully Israelis and Palestinians could get leadership that is willing and able to make compromises for peace.

The area in the Middle East where potential exists for some ripeness is on the Israeli-Syrian front. It's something certainly worth exploring early on in 2009. And obviously there will be a lot of attention paid to the Iran situation given the Iranian advances in uranium enrichment. There's a piece of interesting hope, which is, ironically enough, the silver lining in the recession cloud: The halving of oil prices has clearly created significant economic problems for the Iranian government. It means the financial sanctions are having a lot more traction, and it's possible that this will create an environment in which a new diplomatic initiative could have some promise.

There was talk that after the election the United States would go ahead and try to set up an interests section in Tehran. I don't know where that stands or even if the Iranians would welcome it.
It's been bandied about. To me it's secondary in the sense that what matters more is the context in which things go forward, and that, again, will depend upon the international economy, on Iran's economic situation and internal politics. Iran itself has a presidential election in spring 2009, so all of this has to play out. But if the current administration wants to establish an interests section, it would in some ways potentially be doing a favor for the new administration. The parallel historically is when the Reagan administration was in its lame-duck phase, it established a relationship and a dialogue with the PLO [Palestine Liberation Organization]. Then when the George H.W. Bush administration came in, it didn't have to expend political capital to start talking with the PLO because they inherited the dialogue. So the establishment of an interests section now would make it somewhat easier for a new administration to simply start from there.

"The United States can only have one president at a time, and for the next two and a half months, President Bush is the president. My recommendation would not be to get in the middle of [financial crisis] negotiations."

I want to come back to Iraq. How important is it to get this Status of Forces Agreement settled, or can he wait until he's president and then deal with it?
Ideally, it would be settled, but there are other alternatives. There's still the alternative of a new UN Security Council agreement authorizing U.S. troops beyond December 31, or there could be a bridging agreement, where the Iraqis and the Americans could conceivably agree to a three- or six-month temporary extension given the transition taking place in U.S. politics, simply to buy time. So I don't feel that this is a do-or-die-type situation.

Now he's going to have, of course, overwhelming majorities in the Congress. But could this paradoxically put a crimp in his foreign policy objectives like foreign aid?
The short answer is, quite likely, in those aspects of foreign policy that are resource dependent. And foreign aid is one such area; defense spending is another. So it's quite possible those will be two areas where Congress may decide they need to find some cuts because there's lots of other areas Congress will either be unable or unwilling to cut the budget-interest on the debt, entitlement, and so forth. It could well be that the national security area offers one of the few pots that Congress decides to cut. Another factor for the president's agenda could be constraints that Congress might introduce, say, in the trade area. And I would think that it might be difficult to get some of the pending foreign trade agreements through this Congress. More important is the question of whether the new president can regain trade promotion authority, the so-called fast track. I would think the argument for it is stronger than ever. There's all sorts of academic work that suggests that a new trade agreement would contribute as much as 1 percent to U.S. and global economic growth, and it would do so in a way that's non-inflationary. So here we are looking for stimulus; I can't think of any better stimulus package than a trade agreement.