I began reading Robert Kuttner's latest book, "Obama's Challenge," three weeks ago. Then, amid the last two weeks' pandemonium - the plummeting stock market, the huge banks tumbling toward death - I put it aside. I finished it over the weekend. My timing was soberingly ironic.

    As I turned the final pages of "Obama's Challenge," Congressional leadership was cinching a deal on a $700 billion bailout plan for the country's wealthiest financial institutions - a plan that wallowed universes away from the innovative proposals put forward in Kuttner's book. Where Kuttner challenges Obama to utilize deficit spending to finance job-training programs, living wages, public works initiatives and - eventually - universal health care, the bailout plan would bypass low-income Americans. While Kuttner asks Obama to dip into debt to get Americans back on their feet from the bottom up, the bill cobbled together by Paulson and Congress would dip even deeper into the deficit in order to, for the most part, prop up the very top.

    "Obama's Challenge" warns against doom-mongering fiscal conservatives who'd block far-reaching programs, prioritizing "virtuous" frugality over regular Americans' basic needs. In the face of Paulson's $700 billion request, those fiscal conservatives did rear their shaking heads - though this time in opposition to a plan that would neglect regular Americans in favor of Wall Street.

    The bill failed in the House, but not primarily due to progressive Democrats backing a Kuttner-like alternative. It failed because of hard-line conservatives, the folks who would no doubt raise a ruckus if a President Obama started getting all New-Deal-y after inauguration.

    The creation of, and response to, the bailout plan showcase some of the barriers an economic change-seeker would face in today's political climate. However, those barriers are no match for the "transformative presidency" Kuttner has in mind for Obama.

    The book begins by asking readers to take two leaps of faith. One: Obama will be the next president. Two: Obama, despite his driftings toward the center-right in recent months, has the imagination, the heart and the know-how to steer the nation in a wholly new political direction.

    These leaps may seem unduly risky. During my first hour of reading, I couldn't turn off the whiny little voice in my head, squeaking, "Don't get your hopes up! Don't get your hopes up!" Kuttner himself calls his assumption of an Obama victory a "slightly cheeky exercise." But he also shows that it's a highly useful one. Only by mentally catapulting Obama into the White House can we fully address the question of what he should do when he gets there.

    Also, Kuttner demonstrates that Obama does in fact have the potential to initiate Roosevelt-like reform. At one point, by piecing together excerpts from several of Obama's speeches and writings, Kuttner constructs a sample speech on the economy that praises the capacity of expansive government to serve its citizens, rejects the Republican infatuation with tax cuts for the wealthy and proposes broad new investments in public education, scientific research, jobs programs and renewable technologies. Kuttner notes that, using the same process, he could have constructed a speech full of conciliatory, "bipartisan" rhetoric and overly cautious proposals.

    "Those who become excited about a particular candidate are at grave risk of getting their hearts broken," he writes, noting that his book is intended as a "sober counterweight to a lot of bad advice [Obama] will receive to govern as a post-partisan, pragmatic centrist."

    But at heart, Kuttner says, Obama seems more a "principled idealist than a cynic." That idealism sets him apart from the triangulation and weak standards that have marked the last two Democratic administrations. Unlike Jimmy Carter or Bill Clinton, according to Kuttner, Obama has all the makings of a "great president," should he have the true audacity to undertake that goal.

    This means taking full advantage of the authority afforded the executive branch. Strong use of executive power may seem a terrifying prospect on the heels of the Bush administration's train of abuses, scandals and lies. Yet, Kuttner notes, this power is what gives the president a unique ability to quickly incite large-scale transformation.

    To explore Obama's possibilities, Kuttner delves into the workings of three former presidents he considers "great": Abraham Lincoln, Franklin Delano Roosevelt and Lyndon Johnson. Each took incredible political risks to advance his vision, while connecting deeply with the public and working to transform stale opinions and status quo assumptions. Each accomplished colossal goals - the freeing of the slaves, the preservation of the union, the overcoming of the Great Depression, the passage of the Civil Rights Acts - and won the trust and collaboration of the American people to accomplish them.

    They took advantage of the opportunities their position granted them; in fact, they took their election as a mandate to seize those opportunities. Kuttner notes that when Johnson's aides initially warned him against pushing hard for civil rights, he responded, "Hell, what's the presidency for?"

    Obama has gained a reputation for "reaching across the aisle," a habit that it's currently fashionable to praise. However, if he's going to be a transformative president, Obama needs to stop being so goshdarn politically friendly, according to Kuttner. "Compromise" should not be a leader's goal; at best, it should be an "endgame" strategy used when necessary to further big change. Being a great president, then, is not about getting everyone to like you. In fact, if you've got some haters, you may well be on the right track.

    At the same time, to be a great president, Obama need not steamroll into the White House and announce an immediate revolution. Kuttner points out that both Lincoln and Roosevelt grew significantly more radical in office. Pre-presidency, Roosevelt was viewed as an "affable lightweight," according to Kuttner, while Lincoln entered office promising not to interfere with slavery.

    In other words, Obama's sometime-hesitance does not mean he's hopeless.

    Finally, Obama shares a key talent with Kuttner's three "great presidents": he is a gifted and passionate communicator. The best presidents are teachers, according to Kuttner. Today's economic mess, he says, calls for an FDR-like president who will sit down with the American people for fireside chats - who will talk them through the crisis, reassure them that government is on their side and instill in them the hope that their world can change.

    If there's anything we know about Obama - no matter how tired we are of his campaign slogans - it's that he has the ability to inspire hope for change.

    Amid the financial upheaval of the past few months, we'd all do well to take a hint from Robert Kuttner and try out his "cheeky exercise." A revolutionary tide change just may be hovering on the January horizon.

    Interview With Robert Kuttner

    MS: As I was reading your book, I couldn't stop thinking about this $700 billion bailout plan. If it eventually passes in some form, would it tie Obama's hands?

    RK: Not if he plays it right. Obama can use the fact that Paulson and Bush are willing to spend $700 billion to bail out Wall Street. He can argue that we need to spend money on that scale for everybody else.

    In my book, I said spending would have to go up $600 billion a year. For the first year, a lot of that's going to have to be recapitalizing financial institutions, but after that, a lot of it can go for things like public works, and good jobs, and universal health insurance. In order to get out of this recession or depression - whatever it turns out to be - public spending's going to have to go up by maybe four percent of GDP for a few years.

    The meltdown completely transforms politics. Things that never could've been discussed are on the table. That's why it's such an incredible moment.

    MS: But, if a bailout plan passes, might the fact that we've just spent $700 billion actually strengthen the fiscal conservatives' case? They could say, look, we've already spent this much - how can he ask us to spend more? How do you deal with that?

    RK: Well, you raise taxes on wealthy people, you restore tax enforcement, you add a transactions tax on stock transactions, you wind down the war, and maybe you raise the deficit a little bit in the short run. All of a sudden, the usual conventional wisdom - that "oh my God, the most important thing we need to do is cut spending" - well, you don't do that in a serious financial crisis, because the government is the one source of public spending that you can count on when the rest of the economy is pulling in its horns. No serious person right now could argue for cutting spending.

    MS: In your book, you paint Obama as a kind of teacher-president, like Roosevelt. Do you think the events of the past month, and the bailout effort, change the lessons he should teach once he gets in office?

    RK: He's going to have to be a more radical - and I mean "radical" in the best sense of the word - president than he was a candidate. Events have become more urgent. And I think he has the character to do that. I think you're seeing him, with every passing week, rising to the occasion and using a stronger voice. To be successful in this kind of a crisis, he's going to have to be very bold, he's going to have to transform the assumptions about what the government needs to do. And you know, he's getting there. He's not getting there quite as fast as I'd like him to, but I think events are forcing his hand.

    MS: I want to talk a little bit about the role the Democratic Party can play in all of this. You depict Obama as a "party builder," someone who's really dedicated to the core beliefs of the Democratic Party. Is there anything that his fellow Democrats in Congress can do before Obama is elected, to pave the way for the changes he wants to initiate?

    RK: There's something this week that's the single most important thing they can do. The bailout plan is going down because there aren't enough Republicans supporting it. Republicans are trying to pose as the friends of the taxpayer, saying too much money is going to Wall Street, not enough money is going to Main Street. They're trying to pretend that they're more populist than the Democrats. So, when this plan goes down, the Democrats can propose and enact a much gutsier plan, where most of the relief goes to homeowners and communities rather than to Wall Street. You can help the people that own the bonds indirectly by helping the homeowners and stopping the slide in housing values and stopping the epidemic of foreclosures - do it bottom up rather than top down.

    The other thing the Democrats can do is, when the government gives aid to a failing financial institution, do it the way it was done during the New Deal: the government takes it over and purges the bad management along with the bad investments. Then it recapitalizes it with public money, and then, after a time, sells it off and gets its money back. That would be a much, much, much better plan.

    The Republicans have done the Democrats a favor by blocking this plan, because we could have a plan with better economics and better politics. And I think if the Democrats did that, you'd have a better chance of solving the immediate crisis, it would be much better for ordinary people, and it would put Obama in a much stronger position as president.

    MS: One of the things that struck me, in your book, was the idea that a great president can be defined by the presence of a great enemy. Do you think Obama has it in him to make enemies?

    He's either going to do it or he's going to fail. It's interesting - he likes to view himself as the bridge builder. But if he's president, and he's trying to pass a bill to put people back to work or to get universal health insurance or to refinance homes for millions of people who are losing them, and right-wing Republicans and Wall Street try to stand in his way, then yes, I think he's capable of defining who the enemy is.

    You really have to do that. Clinton was not willing to define the private insurance industry as the enemy, the last time the Democrats tried to get universal health care, and he failed.

    MS: How does that tie in with compromise? You brought up the idea of compromise in your book - using compromise as a strategy for the endgame, and not as the overall goal.

    RK: I think this bailout bill is a perfect example of that. Democrats ought to be clearer about what they think is the right way to do it, and then if the Republicans oppose that, draft a Democrats-only bill. If they have to compromise a little in the endgame to get the last few votes, [they] can do that. But don't compromise going in. I think that, because events are forcing it, Obama is getting better at this.

    Assuming that he's elected, he'll have a working Democratic majority in Congress. So, the question will be how effectively he leads.