At a recent White House meeting, Paul Volcker, the 81-year-old former chairman of the Fed and a part-time adviser to Barack Obama, said the president should delay revamping the US regulatory system until he had quelled the financial crisis. "There's no point in trying to rebuild a burning house," he reportedly said. Mr Obama ignored the advice. The White House's re-regulation plans are proceeding apace.
The same applies to all the other plans Mr Obama has in the pipeline, of which there are many. Let us divide them between the urgent and the merely important. Among the urgent, today Tim Geithner, the Treasury secretary, will make a second attempt to launch a plan to relieve banks of their toxic assets following a botched first attempt last month.
On the outcome of this will hinge the viability of almost everything else Mr Obama wants to do. If it fails to win the confidence of private investors, Mr Geithner will have to go back to the drawing board, in addition to fending off even shriller calls for his resignation. If the plan, which will heavily subsidise private participation, clears the credibility threshold then maybe, just maybe, banks will start to lend again.
But even if it does, the markets will need to await the results of the Treasury's bank "stress tests" sometime within the next two weeks before the credit markets show signs of unfreezing. By then, presumably, the Treasury will also have worked out a formula for which banks it should save, the mechanism it would use, and how much money would be needed from Congress to recapitalise those deemed viable.
Also on the urgent list, Mr Obama must quell the uprising on Capitol Hill over Wall Street bonuses - a political fire that was sparked by the $165m "retention" payout to AIG executives. This qualifies as urgent, since the punitive mood in Congress, where the House last week passed a bill that would retroactively tax up to 90 per cent of bonuses on those earning more than $125,000, threatens Mr Obama's control of the agenda. At the moment, Mr Obama is trying to ride the tiger in order to tame it. It could yet devour him.
Then there is the merely important - Mr Obama's original reform agenda on which he campaigned and which he is determined will not be derailed (indeed, is necessitated) by the meltdown. Of these, the budget, which the White House will present in detail early next month, is the most critical.
The $3,500bn document is an unusual beast. Within its pages is a plan to move towards universal healthcare, a mechanism to set up a cap and trade system to combat global warming, and a host of other reforms, including redistribution from the top 5 per cent of earners to the remainder. Any one of these items on its own would generate a big fight with an increasingly do-or-die Republican party. Mr Obama is going to try them all.
Also on the important list, is Mr Obama's first big foreign trip next week, which will take in the London G20 summit to co-ordinate a global fiscal response to the meltdown (while hoping to avoid a rift with the Europeans, who want to emphasise global regulation) and two critical bilateral summits with Dmitry Medvedev of Russia and Hu Jintao of China.
After that is the Nato summit in Strasbourg, where Mr Obama will try and probably fail to get big European assistance for his 17,000 troop surge in Afghanistan, a stop in Prague for a meeting with European leaders and then a big speech to the Islamic world from Turkey - Mr Obama's first, much-awaited visit to a Muslim country.
And that is just the next three weeks. All the while the young president will doubtless be fending off more political crises at home. How manageable these will be depends very much on the credibility of what Mr Geithner has to offer.
It is academic at this stage to ask whether Mr Obama has taken on too much. America's most ambitious president in decades is faced with its worst economic crisis in generations. Let us hope Mr Obama knows how to run a marathon as well as sprint.
Copyright The Financial Times Limited 2009
