Obama and oligarchy

by: Paul Rosenberg

Tue Nov 09, 2010 at 13:30

Before the election, President Obama met with a number of liberal bloggers, and said some remarkably foolish things.  Perhaps the most foolish was highlighted in The Big Hurt's winning Chatty Cathy entry for October 30:

Obama says FDR was "irresponsible"
President Obama sat down with some progressive bloggers yesterday for a Q&A, and this was one of his more puzzling responses.
    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.

QH: http://www.openleft.com/showQu...
it's narcissism gone wild. next week Obama explains how he, timmy and larry cleaned up Wall Street...

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:  

Paul Rosenberg :: Obama and oligarchy

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.

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Obama and oligarchy | 17 comments
Most depressing--and dead-on--post-election diary I've read (4.00 / 1)
If this is accurate in reference to Obama--and I think that it is--then we are truly, completely screwed.  I can't even imagine what we can do at this point to try to persuade Obama to pursue a course that benefits the working class, rather than the oligarchs.

Forget Obama. (4.00 / 13)
Like LBJ back in the day, he'll be the last to get the news.

Do what's been done before to bring about deep change: educate, organize, agitate from the bottom up.

Looking for short-cuts is what helped get us into this mess.  It's how Obama sold himself.  Don't make the same mistake again.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Right--great points. (4.00 / 1)
Not having the President's ear may hamper us; but, recognizing that he is a lost cause, and moving on to focus on deep change, sounds like a good plan to me.

[ Parent ]
He's just an obstacle that can't be challenged frontally. (4.00 / 1)
Find a path of lesser resistance and go around it instead!

Perhaps there's a silver lining in not having his ears. His quasi-religious dogma constrains him--and thusly the oligarchy by extension--from making decisions that would help him/them down the road, by fixing the economy. Perhaps it's best to think past their stupidity and prepare for when they crash and burn. Because they will crash and burn, as that is their only option at this point, by their own choosing.

Forget post-partisanship. How about we focus on post-Neo-liberalism?

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

[ Parent ]
After Hoover, we got FDR (4.00 / 1)
And, as the prescient article in Harper's last summer noted, the parallels between Obama and Hoover are striking.

[ Parent ]
Yes, The Best and Brightest Blow it Again (4.00 / 1)
Very similar argument to this post and the most prescient article I've ever read

[ Parent ]
Maybe not (4.00 / 5)
But I do think, more strongly the ever, that progressives need to set their sights on Wall Street Democrats (don't say neo-liberal or Rubinitie or corporate or centrist). It's the labor wing vs. the Wall Street wing. I think that's both the proper rhetorical and strategic frame. It's a fight we can win, and in fact were winning, until Obama came along and set us back a few years with his blurring lines, marketing skill, and outright lying, but he'll soon be gone, and the fight goes on.  

[ Parent ]
Good point. The framing is clearer for voters. (4.00 / 2)

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

[ Parent ]
Great post (4.00 / 4)
It seems to me that Simon Johnson, Stiglitz, Krugman, Dean Bakers and the like should, I dunno, form a group, merge, try to amplify their voices, hold a rally to restore sanity. Something. It's no substitute for actual grassroots activism, but we have Nobel Laureates and former heads of international organizations essentially screaming from the rooftops -- to no effect.  

Terrific post. Sums it up nicely. (4.00 / 4)
Of course it's not just Obama, it's the entire corporate wing of the Party that we're really talking about here--Obama is merely a product of that social system, with all it's obvious defects. They have to go!

I'm a bit surprised that dKos diary wasn't HR'd into oblivion within ten minutes of it being posted. Perhaps they allow serious critique on Sundays. Perhaps the bots were in sleep-mode.

Stiglitz has given us the message that should be blasted from every hilltop:

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.

Simple, effective and also has the advantage of being true.  It's a shame this isn't being used all over the place.

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

We have to connect the dots (4.00 / 1)
I think this post connects to the discussion last week of the defects of the sixth party system.  A functioning political system would not have permitted this situation to evolve in the first place.  It would have found ways to manage the economy that didn't result in these massive distortions.  Within the Sixth Party System, the only real agreement was about neo-liberal economic theory - and that agreement was in the absence of other options.

The story goes something like: the 1970s proved that the Post War era economic theories no longer worked - stagflation "disproved" the validity of liberal economic theory and policies.  In response, people looked for a solution - and found one in the dishonest rantings of people like Milton Friedman - just deregulate it all and everything will be fine.  Add to that the myth (believed by too many on the right) that everything would have been fine if only that darn FDR hadn't instituted to the New Deal.  It's facts and evidence be damned.  

It also reflects the basic ideological problems of the Sixth Party system - fundamental distrust of the government and the parties.  So deregulate the economy, allow policy to drift for decades. Then with Republicans doing backflips to explain the problem is that government failed to prevent the crash proving that means government is the problem it all becomes a neat and tidy ideological package.

Add to that a sizble contingent of Dems who simply refuse to accept the notion of an actual liberal policy or liberalism in general, Conserva-Dems and Blue Dogs who are opportunists not ideologues and you have a recipe for disaster.

When the eagles are silent, the parrots jabber.  Winston Churchill

Another plug for "Winner-take-all Politics" (4.00 / 4)
Read this book!  If you read nothing else the next year, read this book.

It describes in full gory detail what "Hegemony" looks like.

Paul says upthread "Forget Obama".  I'm not sure what he means but I think it means do what we have to do and can do and don't worry about what he thinks - even if, perhaps, in two years we have to hold our nose and vote for his re-election.  It's not about him.

What the book does is de-personalize the whole question of Obama and the Democrats.  Who knows what's inside their minds?  More importantly, on some level, who cares?  His heart may even be in the right place.  If so, it doesn't matter much.  The point is that every step we had to make to get THIS far involved seriously debilitating compromises.  There was no purer path that would have gotten us this far.  There may have been a purer path that got nowhere.  None of your choices are good.  That is hegemony.

I'm not even sure that the bolder approach that Paul is advocating, that Paul Krugman advocates every column would have worked.  It may have failed also.  But it certainly might have succeeded, and certainly deserved more of a look than it got.  But that's all water over the dam now.  It's an argument about the past.  

This doesn't mean we have to be satisfied.  We shouldn't. be.  It means we have to be chastened though, and serious.  There is no easy way out.  And it's not particularly about our feelings.

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.

Yes (4.00 / 4)
I am saying that the President is just a part of the picture, and a rather passive part, too, in fact. Worry about the whole, not the parts in isolation. Worry about the oligarchy, not the individual oligarchs or those who serve them.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Its "both/and" (0.00 / 0)
Systems science is clear about that - so emphasize the whole over the parts, if you prefer, but don't ignore the individual parts.  

"It sounds wrong...
     ...but its right."

[ Parent ]
25th Amendment (4.00 / 1)
This portrait of Obama is someone who is politely described through the symptoms as insane.  He creates his own history.  He lives in an alternate universe where facts have no meaning and the lives of 99% of the public don't exist except for his glorification.  Whatever it is, some "ideology", class bias, snobbery, who cares.  This does not sound like a man who is capable of protecting and upholding the Constitution of the United States or of promoting the general welfare.

Impeachment?  High crimes and misdemeanors exist (see grabbing the authority for killing American citizens in the US without a trial or court order)but this is more fundamental.  He is unable to "discharge the Powers and Duties of the same office" (Article II, Section I Clause 6).  The Vice President and a majority of the cabinet can declare him unfit.  I can't see this happening. Then again I can't see him seeing the light and being transformed.

Holding your nose and voting for Obama may be fine (4.00 / 4)
In the General Election, but unless we primary him, there is no point to any of this.  If you build a lego set but try to use the wrong lego pieces, you don't get what you are looking for.  For my money, Obama is the wrong lego piece.

If we are to build a system to oppose the "oligarchy" system, whatever we build must not be an ipod.  That is, it can't just sit in your ear and make noise.  It has to do something.  It must take an action, and this is where progressives always fail.  Take a look at the recent MSNBC fiasco.  We were arguing over whether to boycot MSNBC for a short period.  

Paul's idea to build from the bottom up is 100% spot on.  But you must realize that will only happen under two situations: decades of work (i.e., the GOP conservative movement) or complete and overwhelming economic disaster (the New Deal).  And even in the New Deal we were still refining it in the 1960's.

"Oh. My. God. .... We're doomed." -- Paul Krugman

In defense of Obama . . . (0.00 / 0)
I think he's including TARP in his personal timeline.

That is, he's saying that by pushing for TARP in October 2008, he prevented things from getting as bad as they might have had he waited until his inauguration to begin addressing the meltdown.

Of course, that means that he's taking responsibility for TARP, which I would guess almost everyone else in his party would prefer to blame on the Bush administration.

Obama and oligarchy | 17 comments

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