Sunday, November 7, 2010
Obama Was Used, And Is Now Used Up
by Robert Freeman
Barack Obama was used. Of course, he knew he was being used when he made the deal. But what he didn't know was how quickly he would be used up. Now he has to face two years of humiliation knowing that he betrayed the people and the country he claimed to champion - and knowing that everyone else knows it as well - but also knowing that he's gotten what's coming to him.
Obama made a deal to get the job in the first place. The deal was that he would carry on with Bush's bailout of the banks, with Bush's two wars, with Bush's suppression of civil liberties, that he wouldn't prosecute or even investigate any of the enormous fraud that had brought down the country, or the lies that had railroaded it into war.
Even before he took office, he began fulfilling his end of the bargain. He appointed Larry Summers head of the National Economic Council. It was Summers, more than any other person, who was responsible for dismantling the Glass-Steagall regulations that had acted as a firebreak against banks looting the country since the Great Depression. Summers had made millions consulting for hedge funds before taking the office.
Obama appointed Timothy Geithner Secretary of the Treasury. Geithner had been head of the New York Federal Reserve Bank, another central actor in the hear-no-evil-see-no-evil-speak-no-evil dereliction that passed for financial oversight in the Bush administration. He had been a major architect under Bush of the financial bailout that passed trillions of dollars to his former banking cohorts on the pretext of saving the system.
Obama re-appointed Ben Bernanke chairman of the Federal Reserve Board. Before becoming Fed Chair, Bernanke had been Bush's Chairman of the Council of Economic Advisers. Together with Geithner, Bernanke is the person most responsible for the collapse, the one person who could have slowed the asset bubble while it was still possible. He had been at the helm of the Fed since February 2006 and a member of its board for years before that.
Obama re-appointed Robert Gates, Bush's Secretary of Defense, signaling that there would be profitable continuity with Bush's wars, gulags, and other military expressions of empire. And then, of course, he quickly tripled the number of U.S. forces in Afghanistan even without a coherent strategy or even statement of goals.
He put together a "stimulus package" of $787 billion when reputable economists were screaming that the collapse in demand from the Great Recession was at least four times that amount. Then, in an attempt to appease the Republicans, he made one third of it business tax cuts, despite the notorious ineffectiveness of such policies in generating jobs. When states cut back their payrolls and spending in the slump, it effectively neutralized the impact of Obama's program. Yet he never seriously attempted to get more.
He proposed no jobs program to employ the seven million people who had lost their jobs. No infrastructure program to repair the failing roads, bridges, tunnels, water and sewerage systems of the country. His anti-foreclosure program was a joke. Some three million homes will go into foreclosure this year alone while one in four mortgages are under water. The share of equity that middle class Americans own in their homes is now lower than it was before World War II.
And now the conspicuous, embarrassing truth is that he's not needed any more except as a tilt-up dummy sustaining the illusion of democracy. And you can see why. The rich owners of the country who put him into office in the certainty that he would be a smooth liar, able to sell the masses on the empty opiates of "hope" and "change" - they certainly don't need him any more. Do the rundown.
The owners of the banks don't need him. They got their buddies, Obama's appointees Geithner and Bernanke, to buy their trillions of dollars of toxic sludge with taxpayer money, saving them from imminent bankruptcy. They've got the Fed loaning them money at zero percent interest so they can loan it back to the government at three percent and to payday borrowers at hundreds of percent. It is literally a free, no-risk license to print money.
The same bankers, the ones who caused the Great Collapse, got Obama to create the fiction of financial reform that left them bigger than they were before the collapse and with their exotic derivatives - Warren Buffet's "financial weapons of mass destruction" - untouched. They are making the largest profits in their history and paying themselves the biggest bonuses on record. What do they need Obama for any more?
The insurance companies don't need him. They got him to create the fiction of health care reform by requiring 32 million Americans to buy their intentionally defective products and getting middle class chumps to pay for it. Their stock prices doubled as soon as the reform bill was enacted, a pretty clear sign of what the smart money boys knew about the deal.
They got Obama to abandon his campaign promise of enacting a public option that would have actually brought down the cost of health care. So we still have a system that costs twice what any other industrial nation's system costs and which delivers inferior results. It is still on track to bankrupt the country by consuming one out of every six (soon to be one out of five) dollars spent in the economy. What do they need Obama for any more?
The weapons makers don't need him. Since Eisenhower, they've been the king makers in American politics. They've gotten a continuation of the never-ending wars they have always been able to engineer. In fact Bush's Secretary of Defense Gates, now Obama's, commented recently that the U.S. was never going to leave Afghanistan. It's clear who's running that show. What do they need Obama for any more?
The oil and gas companies don't need him. They got the collapse of climate change legislation that they wanted at Copenhagen. Even as their products hurtle the earth toward inescapable calamity, they are left with effectively no restrictions on their poisonous products. What do they need Obama for any more?
Not having the guts to raise taxes on the rich who now corner a larger share of the nation's income than at any time since 1929, Obama has appointed a commission to recommend changes to Social Security. He loaded it with people who, even before it started, made it clear they would recommend gutting the most successful public program of the past 80 years. If past is prelude, they will likely try to turn it over to the renowned stewardship of the finance industry and the stock market, just as Bush had tried to do. It's like when only Nixon could go to China, or when only Clinton could end welfare as we know it.
From the minute he took office, he has carried out his designated role of pacifying a rightly restive populace about their economic security while shifting ever more of the nation's wealth to those who are already the most wealthy; of continuing the country's program to impose its empire on other nations by force; of dismantling historic constitutional protections of the people against intrusive and abusive government; of subordinating the people to their new corporate masters.
For a guy who's billed as a "Great Communicator" he has utterly failed to articulate any narrative whatsoever of national transformation or renewal, of rescuing the nation from the precipitous downward spiral begun under Bush, his predecessor. He couldn't even manage to pin ownership of the failed economy on Bush, even though the Great Recession started in December 2007, more than a year before Obama took office.
And finally, with legislative gridlock the only certainty for the next two years, the Federal Reserve has taken control of the nation's economic policy. Its new policy of "quantitative easing" (printing money) is not only despicable in its own right, the recourse of scoundrels and national failures (think Weimar Germany in the 1920s), it is completely undemocratic, carried out in secret by the most notoriously elitist, private institution in America. It is a capitulation to a self-anointed feudal-like autocracy without modern equal, an undisguised admission that it is the banks and their owners that run the country. And it is the inescapable result of Obama's policies.
It's hard to feel sorry for Barack Obama. When all the politics, posturing, posing and pontification are over, his party lost because he betrayed his base and they could not stomach voting for his people or his party again. He's proven himself a duplicitous executive and a feckless "leader" who has "led" the Republicans to their biggest pick-up in the House in decades. Now he has to live with it. But the damage is incalculable. It will last for generations. It will be an embarrassment to watch him try to pretend to be effective the next two years, with everyone - himself included - knowing that he is used up. But he is. Good riddance.
Robert Freeman writes on economics, history and education. His earlier pieces, "The Five Circles of Economic Hell," and “The U.S. is Facing a Weimar Moment,” were also published on CommonDreams. He can reached at email@example.com.