I mean, if folks think that we could have gotten Ben Nelson, Arlen Specter and Susan Collins to vote for additional stimulus beyond the $700 billion that we got, then I would just suggest you weren't in the meetings.
This notion that somehow I could have gone and made the case around the country for a far bigger stimulus because of the magnitude of the crisis, well, we understood the magnitude of the crisis. We didn't actually, I think, do what Franklin Delano Roosevelt did, which was basically wait for six months until the thing had gotten so bad that it became an easier sell politically because we thought that was irresponsible. We had to act quickly.
There are so many things wrong with this--as well as so many things wrong with that surrounds it. For one thing, as Ron Thompson added:
It's Not True It's not only narcissism gone mad, it's historically inaccurate on any number of points. FDR took office on Saturday, March 4, 1933, and called Congress into special session to meet five days later on March 9th. That was unusual at that time: the pattern up until then was that Congress didn't meet until thirteen months after the election: the first sessions of the preceding five Congresses met on December 3, 1923, December 7, 1925, December 5, 1927, April 15, 1929, and December 7, 1931.
By June 15, 1933, at the end of the "Hundred Days" almost all of the early New Deal financial legislation had been passed.
It's increasingly a mystery how people can view Obama as an intelligent man. He's articulate, and a good schmoozer, but it's plain that he has no depth of understanding, and doesn't know what he doesn't know.
Indeed, FDR's "100 Days" is the most famous period of legislative activity in American history. We might take for granted that George W. Bush would be totally ignorant of it, but a Democratic President? It blows the mind. Such staggering ignorance cannot be simply explained. It reflects membership in an alien culture with an alternative history, and that's just what it is: America's oligarchy. Indeed, Obama's naive, unquestioning embeddedness in the oligrachy explains virtually every kooky thing in quote above: Obama's insistence that all truth resides inside the meeting rooms he was in, for example. (Did Martin Luther King know that? If he had, would Obama be washing dishes somewhere? Or shining shoes?)
But simply evoking the oligarchy is not enough of an explanation. One needs to understand it, and why and how it shapes things as it does. One of the best relatively short explanations is last year's Atlantic magazine article, "The Quiet Coup" by former IMF Chief Economist Simon Johnson, who I'll be quoting from in just a minute. But first, I want to note that this article was linked to in a passage of a Sunday DKos diary, "An unlearned lesson about neoliberalism ", in which Laurence Lewis talks about this period in Obama's Presidency from a decidedly different perspective. This quote picks up just after Lewis has quoted Stiglitz talking about the dismal record of neo-liberal policies in developing nations, which is the "phenomenon" referred to in the first sentence:
A phenomenon from which the United States has not been immune, with an income gap steadily growing and now greater than ever before recorded. And as Stiglitz continued:
Neo-liberal market fundamentalism was always a political doctrine serving certain interests. It was never supported by economic theory. Nor, it should now be clear, is it supported by historical experience. Learning this lesson may be the silver lining in the cloud now hanging over the global economy.
But there was no lesson learned. The Obama economic team seriously underestimated the severity of the crisis they inherited, and were ideologically incapable of perceiving it as the transformative moment it should have been. A depression may have been averted, but a real recovery did not begin. And as Paul Krugman explained, the morning after the election:
What actually happened, of course, was that Obama failed to do enough to boost the economy, plus totally failing to tap into populist outrage at Wall Street. And now we're in the trap I worried about from the beginning: by failing to do enough when he had political capital, he lost that capital, and now we're stuck.
The link to "The Quiet Coup" comes at "ideologically incapable", but as Johnson explains it, it's not ideology in the way Americans commonly think of, as a set of beliefs possed by an individual. Instead, it's a shared outlook of an entire self-organizing oligarchic class. And he's seen it up close and personal in economies in crises all around the world:
One thing you learn rather quickly when working at the International Monetary Fund is that no one is ever very happy to see you....
The reason, of course, is that the IMF specializes in telling its clients what they don't want to hear....
Every crisis is different, of course....
But I must tell you, to IMF officials, all of these crises looked depressingly similar. Each country, of course, needed a loan, but more than that, each needed to make big changes so that the loan could really work.... Naturally, the fund's economists spend time figuring out the policies-budget, money supply, and the like-that make sense in this context. Yet the economic solution is seldom very hard to work out.
No, the real concern of the fund's senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis.
Typically, these countries are in a desperate economic situation for one simple reason--the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit--and, most of the time, genteel--oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon--correctly, in most cases--that their political connections will allow them to push onto the government any substantial problems that arise....
Which, of course, is precisely what Wall Street did. But there's nothing terribly new about that. America has been run that way for an awful long time. Ever since we embraced Voodoo Economics, in fact, as shown by these contrasting graphs of income growth comparing the top 1% to the rest of us, pre- and post-1975, from IRS data compiled by Emmanuel Saez. For three decades after WWII, the people as a whole made income gains more than the top 1%, reducing the level of inequality between elites and the rest of us:
The pattern persisted roughly until Ronald Reagan became president, and the reverse pattern of rapid elite growth, and general mass stagnation took over with a vengeance, with elites actually doing best under Clinton, and suffering sharp declines under Bush II before coming back:
These are clearly two different political/economic regimes, and Obama's entire adult life experience has been lived out in the later. Oligarchic rule is all that he knows, as well as all that his hand-picked advisors know.
But, of course, this is not just about Wall Street's dominance. It's also about the dominance of every entrenched economic elite interest--such as the pharmaceutical makers, hospitals and insurance companies that Obama struck backroom deals with to pre-compromise and neuter health care reform in advance. For true reform to happen in any sphere, there would have to be cut-backs in the obscenely high profits/earnings of the super-rich, and this simply cannot be, as Johnson points out:
Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or-here's a classic Kremlin bailout technique-the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk-at least until the riots grow too large....
From long years of experience, the IMF staff knows its program will succeed--stabilizing the economy and enabling growth--only if at least some of the powerful oligarchs who did so much to create the underlying problems take a hit. This is the problem of all emerging markets.
It's also the problem here in America, in what we might call a "submerging market."
Obama began his political career with ostensibly liberal credentials, values and priorities, and with a pragmatic desire to compromise in order to get things done. But this combination was highly dependent on the political environment in which he rose. The higher he rose, the more money he needed, and the need for more money inevitably brought him into deeper and more intimate contact with the oligarchs, whose contributions to the problems Obama used to care about became increasingly obscure, even unreal to him, as he listened to them, and learned to see things their way, in turn developing a deeper and deeper sense that his former allies (whom he still thought of as allies) just didn't understand the complexities of what was revealed to him in those meetings in the halls of power.
Simon Johnson, in his years at the IMF, has undoubtedly seen scores, if not hundreds of Barack Obamas, who are anything but ready to make the hard choices required to at least hold some of the oligarchs responsible for the vast destruction they have caused.
It's a pity, though, that Barack Obama appears not to have ever really met a single Simon Johnson.
STATE BLOGS
