Finance Capitalists, the CFR, and the Obama Administration
The Obama administration, together with assorted “neo-leftist supporters,” is attempting to use the state capitalist cards of imperialism abroad, massive deficit spending, giveaways to finance capital, and cuts in working class “entitlements” such as wages and retirement benefits to stop the potential collapse of capitalism and create a renewal of accumulation under conditions that serve overall capitalist interests. Such an effort comes up against opposition abroad and divisions among the capitalists themselves at home, splits that the Obama government is in the process of trying to overcome. The main such division domestically is between the state capitalists who want some level of Keynesian-type government spending and those who favor the “old time religion” of “free market” competitive capitalism, a belief that is mainly mythological. Obama is trying to split the difference between these contending capitalist forces, finding a middle way that includes a large measure of state capitalism to help the substantial sectors of the capitalist class that depend upon government largess while trying to listen to and compromise with the Chamber of Commerce/Republican Party believers in the virtues of the supposed “free market.”
Obama is a marketer’s dream, “the best brand in the world,” promoting “hope” and creating oceans of illusions, making these serve as modern-day opiates of the people. But Obama’s success will only be temporary, since his policies offer more of the same capitalism that created the current crisis. The capitalist class, led by finance and the Council on Foreign Relations, hopes that the supposed “solutions” proposed by Obama will both restart the accumulation machine and keep at bay the ideological crisis that always accompanies a systemic crisis of capital. The Obama phenomena is best understood by a detailed review of the personnel and two key policies—foreign policy (the war on Afghanistan) and domestic policy (the auto bailout).
The Bush administration started the war on Afghanistan, but the Obama administration is continuing it and following the same overall foreign policy as Bush. The Wall Street Journal, a key mouthpiece of the capitalist class, labeled Obama “Barack Hussein Bush” in an editorial on June 5, 2009, stating that “one benefit of the Obama Presidency is that it is validating much of George W. Bush’s security agenda and foreign policy…[with] artfully repackaged versions of themes President Bush sounded with his freedom agenda.” The Journal also approvingly stated that Obama is offering a “robust defense of the war in Afghanistan,” calling it “a war of necessity,” while also following the Bush policy on Iraq. While continuity with Bush policies, especially in regard to goals, is a key theme, it is also clear that Obama and his team are exploring new tactics in their attempts to control Afghanistan, Iraq, and the broader Middle East. Besides creating illusions through Obama’s soothing rhetoric, bribery, “soft power” and “nation building,” alongside the usual imperialist terror and “counter-insurgency” barbarism, have been added to the policy mix. Following Bush’s second term policy of involving imperialist allies in the destruction of Afghanistan, Obama and his advisers have also stressed expanding NATO’s new role of junior partner in conquest, offering the Europeans a share of the spoils. This amounts to trying to substitute NATO for the UN as the world’s main “peacemaker.”
To work out and implement the goals and combination of strategy and tactics (hard and soft power) for the world’s most important current war, Obama has turned to the Council on Foreign Relations (CFR), a key private think tank of the collective capitalist ruling class, for ideas and personnel. The New York-based CFR is made up of a complex combination of old and new money, the Wall Street financial oligarchy, top corporate leaders, intellectuals, college presidents (especially from Ivy League universities), journalists, and lawyers from leading New York law firms. For almost a century the CFR has worked hard behind the scenes to provide ideas, policymakers, and a bipartisan consensus for the drive for U.S. world hegemony, expanding capitalist exploitation and dispossession, and the terrorism of endless war using advanced technology. It is telling that Obama has turned to the CFR to run the war on Afghanistan. This gives him abundant ruling class cover if something goes wrong, since the CFR is, in the words of one journalist, the “citadel of the Establishment.” In September 2009, the current president of the CFR, Richard Haass, wrote an op-ed for the New York Times that put the CFR stamp of approval for pursuing more war in Afghanistan: “My judgment is that American interests are sufficiently important, prospects for achieving limited success are sufficiently high and the risks of alternative policies are sufficiently great to proceed for now, with Mr. Obama’s measured strategy.”
The CFR leaders and members now in key positions advising the president and making decisions on the war include:
- Director Richard Holbrooke, who controls the political and economic aspects as Obama’s “Special Representative for Afghanistan and Pakistan”
- Member General Stanley McChrystal, the top military commander (supervised by another CFR member, General David Petraeus)
- Member Karl Eikenberry, the U.S. Ambassador in Kabul
- Member and Defense Secretary Gates has stocked his department and advisory boards with other Council members
- Secretary of State Clinton, although not a CFR member, is advised by a number of CFR members in positions of leadership in the State Department (her husband Bill is also a Council member)
Both Holbrooke and McChrystal have Council advisers—Ashley Bommer, Barnett Rubin, and Vali Naser in the case of Holbrooke, and Steven Biddle in the case of McChrystal. Holbrooke got his start in U.S. foreign policy as an “expert” adviser on Vietnam, trying to develop policies that could achieve a victory for U.S. imperialism in that war. He advised U.S. ambassadors, worked with the CIA on their assassination programs (first “rural pacification” in the Mekong Delta, then “Operation Phoenix,” which organized the murder of tens of thousands of Vietnamese), and was part of the U.S. advisory staff at the peace negotiations in Paris. Later he entered the world of finance capital and was managing director of Lehman Brothers, as well as a director of American Insurance Group (AIG), leaving the company with at least a million dollars in salary and bonuses just before it collapsed. He was President Clinton’s UN ambassador and the chair of the CFR’s terrorism task force in 2001. During Bush’s 2002 run up to a war on Iraq, Holbrooke strongly favored attacking Iraq. In secret meetings with congressional Democrats, he advised them in no uncertain terms to support the coming war. It is no surprise that he supports a wider war in Afghanistan.
Stanley McChrystal was an Army colonel in 1999 when he was selected by the CFR’s Military Fellow Selection Board, headed by Richard B. Cheney, to spend a year at the Council’s headquarters to, in the words of the CFR’s Annual Report, “broaden…[his] understanding of foreign affairs.” After making close connections with the capitalists in the CFR, the colonel was soon promoted to general. When the war on Iraq was started by the Bush administration, McChrystal played an aggressive role, commanding a Special Forces Group that carried out assassinations and torture at an U.S. Army base in Iraq called Camp Nama. After an expose of the war crimes at Camp Nama, lower level soldiers were prosecuted and convicted of torture, but the commander was promoted.
Why Afghanistan? Why Iraq?
A key question is what does the collective capitalist ruling class and its experts at the CFR and in the government see at stake in this war? The grand design or master framework behind U.S. foreign policy goals in Afghanistan is based on the same definition of the national ruling class interest that is operative in Iraq: “geoeconomics” and “geopolitics,” both imperialist conceptions of the world. In the realm of geoeconomics, the collective capitalist system of relational markets leads Obama’s policymakers to ask what regions of the world are minimally needed to maintain the efficient functioning of the political economies of both the U.S. and its key allies in Europe and the Far East—including capital accumulation, investment, trade, and strategic control of raw materials. In other words, what is the minimum and maximum economic “living space” for the American capitalist economy? The answer that has been given by the capitalists and the CFR has varied over time, but is always most or all of the world. In the case of Iraq and Afghanistan, they are key parts of a region which holds the great majority of the world’s oil and gas supplies. Both petroleum supply (Iraq) and transport (Afghanistan) are involved and if the U.S. does not militarily dominate these nations, rivals like China might, with potentially serious consequences to the oil and gas dependent U.S. economy.
Beyond the geoeconomics of oil supply, the Middle East is a key complementary trade area to the capitalist industrialized world. They have the hydrocarbons that the West requires and the NATO powers have the industrial goods (cars, machinery, refined products, etc.) that the Middle East needs. This makes the capitalist ruling class believe that this potentially very rich area of the world can be made secure by eliminating nationalist opposition and bringing in U.S. corporations. The Bush administration’s plan was to create a utopia for U.S. multinational corporations, which would monopolize the exploitation of Iraq’s oil resources and labor supply, violently dispossessing the Iraqi people. The various orders of CFR member Paul Bremer, who was Bush’s political and economic czar during the first phase of U.S. occupation of Iraq, clearly showed this plan in action—local Iraqi businesses were to be destroyed and workers made powerless in order to open the way for U.S. capitalists to make big profits. This failed because of the massive struggle of the Iraqi people, who refused to allow the total domination of U.S. capitalists over their nation. They continue to resist today.
Afghanistan is similarly seen as a potentially rich source of raw materials, but also as a key oil and gas transport route. The area of Central Asia lying to the north of Afghanistan has great reserves of hydrocarbons. For example, Turkmenistan has, in the words of CFR-member and sometime Obama adviser Zbigniew Brzezinski: “truly vast natural gas reserves…[and] has been actively exploring the construction of a new pipeline through Afghanistan and Pakistan to the Arabian Sea” (The Grand Chessboard: American Primacy and its Geostrategic Imperatives). Transporting this and other fossil fuels through Russia, Iran, or China is seen as against U.S. strategic interests. But pipelines through Afghanistan would allow the U.S. to pursue both its geoeconomic interests and its more narrow profitmaking goals while keeping control of key fossil fuel supplies out of the hands of its rivals.
The second part of the grand design of U.S. foreign policy is geopolitics, a desire to maintain U.S. global hegemony by controlling areas considered strategic for one reason or another. Geopolitics is, in practice, closely related to geoeconomics. It is the other side of the same coin. In the case of Iraq, the geopolitics of the 2003 U.S. invasion was aimed at establishing a base of operation for the American military in the heart of the Middle East. This puts the U.S. in a dominant position to strategically control the oil supplies that all of the industrialized world needs. Petroleum is key to maintaining an industrial economy and having such control assures that Europe, Japan, and India will remain allies and junior partners of the U.S. and that limits are placed on China. The attempt to control Iraq, which itself “floats on a sea of oil,” but also lies at the center of the Middle East, is an ongoing attempt by U.S. imperialism to dominate the entire world.
In the case of Afghanistan, the U.S. geopolitical interest is its geographical position between Iran and Pakistan. It is not possible for the U.S. to have a real base in either of these nations—the Iranian government is too independent and the Pakistani people are strongly against a large presence of American troops. But a major base is possible in Afghanistan, which, combined with bases in Iraq, puts the squeeze on Iran, as it lies between Iraq and Afghanistan. As with Iraq, this helps assure U.S. domination over the world’s main supplies of oil and gas, the control of which assures American world hegemony—since China, Japan and Western Europe all need these hydrocarbon supplies to operate their economies. Additionally, in the view of U.S. ruling class thinkers, what happens in Afghanistan seriously affects what happens in Pakistan, which has a large population, sizable economy, a large nuclear arsenal, and an active Islamic insurgency. The Obama administration wants to stabilize Afghanistan in order to assure the stability and security of a nuclear armed Pakistan.
It is a measure of its importance that America’s chief allies, in the form of NATO, have been drawn into the battle to secure Afghanistan, the first example of a war outside of Europe that NATO has been involved in. NATO is now on the road to becoming a substitute for the United Nations, a kind of global enforcer for the capitalist system worldwide.
In The Grand Chessboard, Obama adviser Brzezinski also stated that: “For America, the chief geopolitical prize is Eurasia…. America is now the only global superpower, and Eurasia is the globe’s central arena. Hence, what happens to the distribution of power on the Eurasian continent will be of decisive importance to America’s global primacy and to America’s historical legacy.” Obama has pretended to offer a facelift for U.S. imperialism, but it is only a mask that is now coming off, revealing the ugly and brutal reality of war crimes and mass murder through terroristic “shock and awe” bombing and invasion to maintain and expand U.S. imperial control and global hegemony.
Restructuring: The Auto Bailout
In May 2009, the Obama White House Press Office issued a statement on the federal government’s restructuring plan for General Motors, worked out by an “auto task force” headed up by finance capitalists Steven Rattner, Diana Farrell, and Steve Bloom working under the supervision of Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers. All of these Obama appointees are members of the CFR except Bloom, who has some union connections and was brought in to sell the program to the leadership of the United Auto Workers (UAW). Rattner, the leader of the task force, is a co-founder of the Quadrangle Group, a Wall Street “investment” (i.e., speculative) firm.
In a recent Fortune article on the auto bailout, Rattner calls Diana Farrell a “star deputy” of Summers. She is a Harvard Business School MBA who worked for Goldman Sachs on Wall Street before joining McKinsey and Company, a global corporate consulting firm. Before joining the Obama administration, Farrell was a senior manager at McKinsey and part of the firm’s Financial Institutions Group that advises leading finance capitalist firms. She was the co-author in 1996 of Market Unbound: Unleashing Global Capitalism, which argues that as a part of “the global capitalist revolution,” an increasingly powerful global capitalist market, especially the fast growing financial sector, is dictating the actions and policies of all governments. In the future this market, says Farrell and her co-author, will “defy the control of virtually every government in the world,” reshaping the world’s political systems. They add that unless taxes are raised, entitlements (such as Social Security) currently claimed by working class people will have to be cut “on the order of 25 to 30 percent.” The UAW and its workers are among the first to feel the cuts that Farrell and the Obama administration plan to make so that she and her wealthy capitalist friends can prosper as part of their “revolution.”
In its press release about the auto bailout, the Obama administration said: “In virtually every respect, the concessions that the UAW agreed to are more aggressive than what the Bush Administration originally demanded in its loan agreement with GM.” These concessions amount to a “slave labor contract” according to one retired UAW shop steward, another retiree called it an “armed holdup,” while the number of jobs will be cut dramatically. Due to prior, as well as current, concessions by the union, newly-hired auto workers will now be working for about one-half the hourly wage they used to receive. Benefits will also be slashed and givebacks include no overtime after eight hours of work, no pension, and each worker will have to pay more for health care. Retirees who worked hard all their lives and were promised certain benefits, will likely not receive those benefits.
Once militant and proud, the UAW has gone from being a junior partner of the capitalists to a sidekick to a hanger-on, and now to near oblivion. An understanding of where the UAW, and by extension other U.S. unions, went wrong could be helpful in developing a plan for real change. As part of the Cold War and the desire to be free to make deals with the bosses, the UAW leadership destroyed the militant left wing and internal democracy in their union. Then they gave up the fight for a class-wide, national-level social safety net for all workers, settling for winning benefits piecemeal from each employer. This tied the UAW to the competitive success of “their” capitalists for jobs, living wages, health care, pensions, and good working conditions. The UAW and its workers then sunk with the fortunes of “their” corporations. Additionally, the UAW, like other U.S. unions, subordinated the independent political interests of workers to the electoral needs of a Democratic Party dominated by sectors of capital, especially the financial oligarchy.
The Way Forward
The way forward begins with the promotion of key principles of class solidarity, internal democracy, equality, independence from the capitalists and their kept politicians in the Democratic and Republican parties, education, and environmental responsibility and sustainability. Implementation of these principles requires a fundamental and revolutionary cultural change within unions and the wider working class towards rebuilding working class communities. This can be done by mobilizing both the employed and unemployed to fight for inspired alternatives, including an end to alienated labor and structural reforms which cannot be realized without a large and fighting revolutionary movement. Proposing such reforms is a needed first step toward building such a social movement. Some of the structural reforms worth organizing and fighting for include:
- organize communities to create workers assemblies to investigate their needs and act upon them
- solidarity strategies to protect and share jobs
- democratically administrated public programs for all in healthy jobs at living wages, and with adequate pensions
- a nationalized banking and financial sector run by democratically elected bodies as a public utility
- production and trade operated by democratically elected planning bodies producing environmentally friendly goods at union wages
- an ecologically sustainable system of mass transit, with reuse and recycling, alternative energy, and new forms of living collectively
Rebellion against capitalism, its corporations, and ruling class must be put on the agenda for the American people and the people of the world. This must include rebellion against the Obama administration, which is proving to be just as much an agent of the ruling capitalist class as the Bush administration.
Laurence H. Shoup has taught U.S. history at several universities and written three books, including Imperial Brain Trust: the Council on Foreign Relations and U.S. Foreign Policy(with William Minter), first published by Monthly Review Press in 1977, reprinted by iUniverse in 2004.