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Flim-Flam Obama Man: The “New Democrat[ic]” President’s Wall Street Loyalties Get Clearer Every Day


"It’s time to put our differences aside. Will you be part of the solution?"

- Nightly Chevron commercial at the end of "The News Hour" on the "Public" Broadcasting System, March 12-March 25, 2009

 

Many on what passes for a left in the United States have been led to believe that Barack Obama is a “Mr. Smith-goes- to-Washington” character eager and ready to struggle against entrenched corporate and financial interests. A considerable number of so-called “left liberals” make curious bedfellows with right-wing noisemakers (including dangerous reactionary nut-jobs like Sean Hannity, Rush Limbaugh, and Bernard Goldberg) in fantasizing that a leftist has taken up residence in the White House. But, as Harper’s Magazine president John R. MacArthur notes, this “is an absurd reading of Obama,” who MacArthur rightly describes as “a moderate with far too much respect for the global financial class” and as “surely the unleft, unradical, president.” [1]

 

Look, for example, at the new administration’s recently leased “financial stabilization” program. Consistent with the president’s own recent description of himself as a “New [that is corporate] Democrat” [2], Obama will spend untold trillions of dollars on further taxpayer handouts to the giant Wall Street firms who spent millions on his campaign [3]. The in-fact “deeply conservative” [4] Obama is too attached to those firms and their so-called “free market” ideology to undertake the elementary bank nationalizations and public financial restructuring that are obviously required to put the nation’s credit system on an at once sound and socially responsible basis. His plan to guarantee the financial, insurance, and real estate industries’ toxic, hyper-inflated assets while keeping existing Wall Street management is (what liberal economist James K. Gailbraith rightly considers) a massive (and deluded) effort to “keep perpetrators afloat” [5].  The unradical liberal economist and New York Times columnist Paul Krugman is understandably “filled with a sense of despair” by Obama’s bank rescue format, which “recycles Bush administration policy – specifically the ‘cash for trash’ plan proposed, then abandoned, six months ago by then-Treasury secretary Henry Paulsen”[6].

 

The Obama-Geithner-Summers-Bush-Paulsen plan rewards reckless and selfish investor class behavior by channeling billions of taxpayer dollars to bankrupt banks. Under the scheme unveiled on March 23rd, 2009, the public is put on the hook to the tune of $1 trillion.  The  program amounts to what Krugman calls a coin flip in which investors win if its heads and taxpayers lose if its tails [7].  As the Times quickly noted, “the Treasury and the Federal Reserve will be offering a least a tablespoon of financial sugar for every teaspoon of risk that investors agree to swallow” [8] by buying up the toxic mortgage assets that the investor class created in the first place. The government (same as the people “in a functioning democracy,” as Noam Chomsky says) will take more than 90 percent of the risk but private investors reap at least half the reward. The underlying insolvency of the rotten but “too big [and powerful] to fail” financial institutions continues, a problem the new administration hopes we will forget about as we get dazzled and bamboozled by their elaborate and obscure plan.  “In the end,” even the Times’ editorial board observed, “there is no getting around firing the executives at failing banks, acknowledging the losses, wiping out the shareholders and then deciding how the government can restructure the institutions.”[9]

 

Beneath claims of allegiance to “free market” ideals and “private enterprise,” the administration’s “bank rescue” design – recently described by former U.S. Labor Secretary Robert Reich as a continuation of “the most expensive tax-supported fiasco in history”– boils down to a traditional exercise in Wall Street welfare: socialism for the rich, market discipline and capitalism for the rest of us. As Reich notes, the plan threatens to weaken “the public’s confidence that its money isn’t being thrown down a rathole,” potentially undermining Obama’s ability to undertake “other ambitious undertakings such as health care or education or the environment.” [10]

 

Obama briefly expresses calculated outrage against “excessive” executive bonuses at AIG.  He makes carefully orchestrated visits expressing concern about poverty and job-loss to hard-hit places like Pomona, California and Elkhart, Indiana.  But it’s all a public relations game. It’s about pricking the boil of citizen fury to more effectively screw the citizenry over.  The White House says mean things about capitalist parasites and then proceeds to give the financial overlords yet more of the public treasure – all in the name of restoring the "free enterprise" system.

 

The real point is to provide faux-populist cover for Obama’s corporate, Wall Street agenda. Meanwhile the “mainstream" (corporate) media continues to ignore the new administration’s related commitment to the amazingly unmentionable 1$ trillion-a-year Pentagon budget, a giant subsidy to high-tech industry that pays for more than 760 bases across more than 130 nations and accounts for nearly half the military spending on earth – all in the name of “defense.” The leading Wall Street investment firm and bailout recipient Morgan Stanley reported one day after Obama’s election victory that Obama has been advised and agrees that there is no peace dividend.” [11] 

 

At the same time, Obama’s tepid and undersized stimulus plan is deceptively described as “massive” in much of the business press.  It is dysfunctionally over-loaded with business-friendly tax cuts and too short on labor-intensive projects to put people to work right away. He says nothing about the overdue labor law reform he campaigned on, the Employee Free Choice Act. He speaks in support of the anti-union, teacher-bashing, and test-based corporate education agenda, advocating teacher “merit pay” and charter schools.  He makes a public visit (in support of his stimulus bill) to the headquarters of Caterpillar, a provider of bulldozers for illegal Israeli settlements.  Caterpillar was also the first large U.S. manufacturer in decades to break a major strike with scabs.

 

Praised by political and media elites for the skill with which he and his handlers are “managing [betrayed popular] expectations,” Obama fails to advance elementary and urgently needed  progressive measures like a moratorium on foreclosures, a capping of credit card interest rates and finance charges, and the rollback of capital income tax rates to 1981 (not just 1993) levels. Even before the inauguration, Obama committed himself to so-called “entitlement reform,” a term that is simply code language for claiming to cut the federal deficit by chipping away at Medicare and Social Security – by taking ”a pound of flesh from the incomes and health of the old” (Gailbraith). He refuses, of course, to advance the obvious cost-cutting and social democratic health care solution – single-payer national health insurance (improved Medicare for all). 

 

The unleft conservative Obama administration’s challenge right now is to soothe popular anger in the face of his profound accommodation of Wall Street. The meaning of his recurrent calm-down rhetoric (“we can’t govern out of anger”) and of related pacifying messages in the dominant media is clear: “Populist Rage” (corporate news magazine Newsweek’s cover story this week [12]) is dangerous and dysfunctional. If you are (quite reasonably) mad about inequality and corporate corruption, if you follow in accord with majority progressive public opinion by wanting elementarily democratic policies like national health insurance, union organizing rights, public control of the financial system, the discharge and expropriation of criminal Wall Street perpetrators, the prosecution of war crimes, the reduction of the bloated Pentagon budget, and a real peace dividend to go along with it…if you want all these things and are ready to fight for them beyond the plutocratic supervision of the Obama-Summers-Geithner team then you are a suitable case for psychiatric treatment . You are threat to civilized decency.  You are too “emotional” and “angry.” You don’t believe in “unity” and “progress” and “hope.” You are an “ideologue” and too “cynical” (“The power of accurate observation,” as George Bernard Shaw wrote, “is commonly called cynicism by those who have not got it"). You are not being “helpful.”  You are not staying properly quiet and respectful so that the new (supposedly non-ideological system) coordinators can “get things done.”

 

You are the Jack Nicholson character in “One Flew Over the Cuckoo’s Nest” – Randle Patrick MacMurphy. You need Nurse Ratchet to give you a tranquilizer and perhaps to schedule you for an Obotomy – a nice corporate-neoliberal Obama lobotomy. You need to listen more closely to what that Chevron commercial says at the end of “The News Hour” on the “Public” Broadcasting System each night: “It’s time to put our differences aside.  Will you be part of the solution?”

 

This is the United States’ “corporate-managed democracy” (Alex Carey, Sheldon Wolin) at work with a vengeance. It’s working overtime right now but success may not be guaranteed. I’m hearing a lot of angry Randle Patrick MacMurphys out these days (and not all of them are white and male). Thanks to the ongoing bailout fiasco above all, the bloom may be coming off the Obama rose. The pseudo-progressive Obama confidence game is being increasingly exposed. The new president is looking more like a Wall Street flim-flam man with each passing news cycle. By my day-to-day observation in the state that put him on the road to power in early January of 2008 (Iowa), more and more ordinary people (including some of his once fervent supporters) are starting to situate Obama in the world of power as it is instead of the world of power as they wish it to be.

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Paul Street is a veteran radical historian, political commentator, and author in Iowa City, IA.  He is the author of Empire and Inequality: America and the World Since 9/11 (Paradigm, 2004); Segregated Schools: Educational Apartheid in the Post-Civil Rights Era (Routledge, 2005); Racial Oppression in the Global Metropolis: A Living Black Chicago History (Rowman & Littlefied, 2007), and Barack Obama and the Future of American Politics (Paradigm, 2008). Street will speak on urban and institutional racism at North Central College’s Koten Chapel in Naperville, IL on Thursday, April 23, 2009, 7:30-9:00 pm.  He will speak on Obama’s First Hundred Days at the Urbana Civic Center on the evening of Thursday, April 30 (exact time pending) in Urbana-Champaign, Illinois.  

 

 

NOTES

 

1. John R. MacArthur, “Obama is Far From a Radical Reformer.” The Providence Journal, March 19, 2009, read at www.projo.com/opinion/contributors/content/CT_rick18_03-18-09_1SDM2BF_v26.3e689c2.html

 

2. See Bruce Dixon, “President Obama Declares His DLC Allegiance: Says ‘I am a New Democrat,” Black Agenda Report (March 18, 2009), read at http://www.blackagendareport.com/?q=content/president-obama-declares-his-dlc-allegiance-says-i-am-new-democrat

 

3.  Obama received an astonishing, record setting $38 million from “FIRE” – the financial, real estate, and insurance industries, including $980,000 from Goldman Sachs alone.   See The Center for Responsive Politics campaign finance data at http://www.opensecrets.org/pres08/indus.php?cycle=2008&cid=N00009638

 

4. In the spring of 2007, journalist Larissa MacFarquhar came to an interesting conclusion about Obama in a carefully researched essay for that eminently bourgeois magazine The New Yorker. “In his view of history, in his respect for tradition, in his skepticism that the world can be changed any way but very, very slowly,” MacFarquhar found, “Obama is deeply conservative….It’s not just that he thinks revolutions are unlikely,” MacFarquhar wrote, “he values continuity and stability for their own sake, sometimes even more than he values change for the good.” The following year (last summer),The New Yorker’s  Ryan Lizza noted in The New Yorker last July, that career was “marked at every stage” by “an eagerness to accommodate himself to existing institutions rather than tear them down or replace them.” See Larissa MacFarquhar, “The Conciliator: Where is Barack Obama Coming From?” The New Yorker (May 7, 2007); Ryan Lizza, Making It: How Chicago Shaped Obama,” The New Yorker, (July 21, 2008).  For some detailed accounts consistent with these findings, see Paul Street, Paul Street, Barack Obama and the Future of American Politics (Boulder, CO: Paradigm, 2008); “Statehouse Days: The Myth of Barack Obama’s ‘True Progressive’ Past,” ZNet (July 20, 2008), read at http://www.zcomm.org/znet/viewArticle/18224;  “Obama’s Audacious Deference to Power,” ZNet Magazine (January 24, 2007), read at http://www.zcomm.org/content/showarticle.cfm?ItemID=11936; “Imperial Temptations: John Edwards, Barack Obama, and the Myth of Post-World War II United States Benevolence,” ZNet Magazine (May 28, 2007), read at http://www.zcomm.org/content/showarticle.cfm?ItemID=12928; "‘Angry John’ Edwards v. KumbayObama,” SleptOn Magazine (December 28, 2007), read at www.slepton.com/slepton/viewcontent.pl?id=1234;

“Obama Speaks: ‘Oh Great White Masters, you Just Haven’t Been Asked to Help America,’” Black Agenda Report (December 19, 2008); “The Audacity of Imperial Airbrushing and Why It Matters,” Black Agenda Report (July 9, 2008), read at www.blackagendareport.com/index.php?option=com_content&task=view&id=695&Itemid=1

 

5. James K. Gailbraith, “No Return to Normal,” The Washington Monthly (March 2008).

 

6.  New York Times, March 23, 2009, A19.

 

7.  “Public” Broadcasting System (“P”BS), “News Hour,” March 23, 2009, with coin-flip comment repeated the same night on “P”BS’ “Charlie Rose Show.”

 

8. New York Times, March 24, 2009, A1. 

 

9. New York Times, March 24, 2009, A24; N. Chomsky, “Elections 2008 and Obama’s ‘Vision,’” Z Magazine (February 2009). 

 

10. Salon, March 20, 2009.

 

11. Paul Street, “There is No Peace Dividend: Reflections on Empire, Inequality, and ‘Brand Obama,’” Z Magazine (January 2009): 24-28.

 

12. Newsweek, March 30, 2009. See the cover and p. 3, where Newsweek’s editors provide a condescending headline (“Give Us Someone to Blame” – as if there is no elite economic class to legitimately, well, blame) and explain that “the link between Americans and capitalism has always been a love-hate relationship.”

 

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