THE RESIGNATION

Today, President-elect Obama's campaign announced that he will be resigning from the U.S. Senate effective this Sunday, November 16th. By contrast, his Vice President-elect Joe Biden will be resigning "sometime before" Inauguration Day. Though it's been a while (48 years) since a sitting member of Congress was elected to the presidency, it still seems strange that Obama would resign this early, especially before the Electoral College votes and makes his election legally binding (Clinton resigned in mid-December 1992 after the electoral votes were counted). So what's the deal?

He's avoiding the lame-duck session of Congress beginning on Monday. In most years there wouldn't even be such a session, but this is no ordinary year: our economy continues to suffer as the FDIC fights to stem foreclosures, the Fannie and Freddie takeovers balloon in cost, and most alarmingly, the U.S. auto industry goes up in flames. The problems at GM and Ford are the most relevant issue facing Congress next week, as a new bailout has been proposed to protect the companies from filing for bankruptcy and thus threatening millions of jobs, as well as health care and pension plans. The incoming Obama administration's economic team has lent its support to such a rescue plan, with a string attached: an "auto czar" would be included to ensure that the funds are spent wisely.

My sense is that some sort of support for the auto industry is necessary, at a minimum to ensure that bankruptcy is even a viable option. At this point, it appears likely that the auto industry would not be able to continue functioning while in bankruptcy, unlike other industries. A complete shutdown of the Big Three would cause hardship at any time, but at a time when the economy is teetering on the brink of depression, a new wave of unemployment and restricted consumer spending would be disastrous. As such, I think the government should be willing to provide some sort of support to the industry, while simultaneously requiring re-organization and management changes that would otherwise occur under bankruptcy. Even so, quite a few people think this is a bad idea, and given the stigma attached to the last "bailout," it's not likely that the pill will be easily swallowed. Still, others seem to have concluded that it's a good idea. That appears to include the Obama team. But there's no doubt that if an auto rescue plan passes, all would not suddenly be well: the industry would take months to restabilize and years to retool and reorganize to be competitive in the modern market for energy-efficient vehicles. So anyone who supports this legislation is going to take a hard, short-term hit.

The President-elect of the United States simply cannot be counted in that "Yes" column. The worst thing for Barack Obama to do would be to take office on January 20th while simultaneously licking wounds from a final fight in the Senate. He needs the political cover that can be provided by a wall of his economists writing op-eds; the short-term political fallout for the bailout can be borne by the lame-duck Congress and the outgoing President Bush.

FDR steered clear of Hoover's last policymaking efforts in the waning days of his tenure. In the end, much of his success didn't lie in the righteousness of his policies; it was due to the fact that people thought he knew what he was doing. Obama should do the same, by cutting himself out of the upcoming political debate, letting his economic team fight out the auto bailout indirectly, and assuming the presidency without a cloud over his head and with the confidence of the American people that he will be able to take the country in a new direction. He's taking a step in the right direction by bowing out of the Senate on Sunday.