Obama fixated on fate of Wall St.

Obama still preoccupied with Wall St., as American ‘Turbulence’ Grows

July 14
4:34 pm

The so-called economic recovery currently sounds like a sputtering airplane struggling to get off the ground, desperately needing a big surge of gas before it plummets into the treetops.

Yet rather than daring to simply put their foot down on the accelerator, neither President Obama nor the Dems in Congress are willing to take the needed action. They are petrified by talk about another, stronger economic stimulus plan, much less curbing rapacious corporate conduct that is acting as a serious counter-stimulus. Worse, many congressional Democrats are growing increasingly disoriented and spineless as the recovery fails to take off.

This lack of political courage should not surprise us, as President Obama is only facing significant political pressure from his right. This despite the fact that the GOP’s message is incoherent (albeit loud), Wall Street deregulation has been thoroughly discredited and free-market economics has been outed as a fraudulent façade for government subsidies.

Nonetheless, the Obama team is still humming “Bailout Wall Street To Save Main Street,” which sounds like a tune stolen from an oldie named “Trickle-Down Economics.” Obama is doing this because he feels tremendous pressure from Wall Street and insurance companies, while very little from the Left demands his attention.

Michigan’s official unemployment rate hit 14.1 percent in May; Ohio (10.8 percent), Indiana (10.6) and California (11.5) are hemorrhaging jobs even more rapidly. The average workweek is now just 33 hours, the lowest on record.

In my part of the country—heavily industrialized (or should I say de-industrialized?) southeastern Wisconsin—unemployment is at 16.3 percent in my hometown of Racine, 11.3 percent in Kenosha (which is watching a Chrysler engine plant, subsidized by taxpayer funds, relocate to Mexico, and 14.3 percent in Janesville (which lost a huge GM plant). Beloit’s jobless rate has soared to 18.1 percent.

Even as the crisis for working families intensifies, top Obama advisor David Axelrod minimizes the situation as a minor political trouble: “We have to fly through a little turbulence,” Axelrod said. “But the important thing is to keep going, understand where you are headed and not lose heart in the middle of the journey.”

However, the “turbulence” Obama’s passengers are experiencing is increasingly severe, as the unemployment rates can only hint. Far more telling is the near-tripling in the need for shelter for battered women in Janesville since March 2008 before GM began to shut down the plan. Meanwhile, an estimated 14,000 more Americans are losing their health insurance every day. Food pantries are facing unprecedented strains.

And the “journey” being led by less-than-trusty guides like Wall Streeters Lawrence Summers, Robert Rubin, and Timothy Geithner is traveling on an increasingly dubious course.

For example, the restructuring off GM and Chrysler, accomplished under the direction of Obama’s hand-picked team dominated by financiers, will mainly translate into massive but traditional corporate-style downsizing, complete with more outsourcing of U.S. jobs. Tragically, the Wall Street wise guys thereby blew a crucial opportunity to link rebuilding America’s productive base with Obama’s green economy agenda, by converting existing plants to high-mileage vehicles and mass transit.

Meanwhile, corporate America is showing, if anything, even more contempt for working people than when George W. Bush and his crew were in power. Giant steelmaker Arcelor Mittal is closing two profitable steel mills in Lackawanna, N.Y. and Hennepin, Ill., throwing a combined 900 people out of work, while imperiously refusing to consider offers by other firms interested in buying and operating the mills.

“These jobs aren’t coming back,” John E. Silvia, chief economist at Wachovia in Charlotte, N.C., bluntly stated:

A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, and fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.

In this increasingly grim context, labor and its allies on the Left need to be thinking much more boldly and refuse to accept the traditional doctrine of corporate supremacy over the needs of workers and the nation.

We need to forcefully challenge the notion that in the midst of the worst national economic emergency since the Great Depression, corporations still feel free to shut down profitable plants and export yet more jobs to low-wage, high-repression sites. Polling during the 2008 election showed more than three-fourths of Americans opposed to outsourcing. Why don’t we begin to give expression to that sentiment?

Specifically, how about the AFL-CIO declaring a total moratorium on arbitrary plant closings and outsourcing and backing the announcement up with organized support of occupations like the action taken last December by the United Electrical workers at Republic Doors and Windows in Chicago?

At that point, Main Street may finally seem like more of a priority to the Obama Administration than Wall Street.

Posted by Roger Bybee  ·  obama administration recession wall st.  ·  + share/save

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