Obama to introduce radical reforms in economy

President-elect Barack Obama is promising to intervene in the economy in ways that United States hasn't tried since the 1970s, favouring some industries and products while hobbling others, a media report said today.    

Under his financial policies, the Wall Street Journal reported, banks seeking government assistance would be forced to lend and to halt foreclosures.

Automobile companies would be pushed to change their product lines to more advanced, fuel-efficient vehicles. Billions of federal dollars would promote solar, wind and biomass energy, while dirty coal power could be priced out of business.    

Obama advisers were quoted by the paper as saying that difficult times necessitate extraordinary measures.    

"We are in the midst of a massive reorganisation right now in autos but also other areas as well -- finance, information technology. All of this flows into...the new green energy economy we are living in, albeit in an embryonic stage," David Bonior, an economic adviser to Obama and proponent of a more interventionist industrial policy in the 1980s, told the paper.    

Asked if this was the industrial policy of the incoming Obama administration, he replied: "The answer is yes."    

Critics and advocates alike, said the Journal, see the re-emergence of government economic steering that was in vogue when Japan, South Korea and Germany embraced it three decades ago, then discredited after its key practitioners slipped into deep economic funks.

With the upheavals in world capital markets, pure free-market policies are facing more criticism, it noted.