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A Presidency in Peril: Warnings from Robert Kuttner
Like most progressives, Robert Kuttner had great hopes following President Obama's election in 2008. However, Kuttner also has been around long enough to realize the risk that President Obama might not live up to his potential in bringing about progressive change. His new book, A Presidency in Peril, documents how the Obama administration has been falling short.
The basic story is both straightforward and depressing. President
Obama surrounded himself with advisers that were close to Wall Street
and business in general. This undoubtedly reflected his disposition; he
had always been a political moderate. However, it was also partly
determined by his political backers. Wall Street's generosity with
campaign contributions was an essential part of his rise to the top of
the Democratic field in the presidential primaries. This guaranteed
that Obama would pursue a cautious business-friendly path.
Much of the book focuses on the response to the economic crisis, in particular the bank bailouts and the stimulus. In both cases Obama took a centrist path that that largely protected the interests of the wealthy. This is most clear in the case of the bank bailout. In the closing weeks of the presidential campaign Obama took time out to push for the TARP, a huge wad of money for the banks that came largely without strings. After TARP, the bailouts continued, with Citigroup and Bank of America nursed back to life thanks to the generosity of the taxpayers.
By contrast, the government could have taken a hard line, temporarily taking over insolvent banks, including these giants. This would have wiped out shareholders. It also would have meant giving bondholders a haircut, and sending the top executives packing. While this route was derisively termed "nationalization," including by some top Obama officials, the point was not to have the government own the banks. Rather the point was to do a quick clean-up operation that would involve selling the banks, possibly in smaller pieces, back to the private sector as soon as possible.
The Obama administration has boasted that its path prevented a second Great Depression and has allowed for most of the bailout money to be repaid. Of course, avoiding a second Great Depression is a rather low bar (this spectre was an invention of the Wall Street crew - it was never a serious possibility) and repaying the bailout money is essentially meaningless.
By telling private markets that it would support Citigroup and Bank of America in spite of their insolvent state, the government was giving these corporations a gift of enormous value. (Imagine that the federal government announced that it would guarantee all the debts of a corner lemonade stand. The lemonade stand could make billions from this guarantee.) Their profits are really just a portion of the dividend they received from this fairly explicit government guarantee. In other words, we gave them the money they used to repay us.
Kuttner points out that the stimulus was woefully unambitious and inadequate. The amount that they requested from Congress was only a bit more than half as large as Obama's top economists felt was necessary. Of course, they ended up with even less as Congress pared back the request. The result is that the unemployment rate is still close to 10 percent and is not projected to return to near full employment until 2016.
Kuttner also attacks the administration's strategy on health care. He argues that there were major failings of both timing and approach. On timing he argued that Obama would have been better off waiting until he established a record of accomplishment to give him the standing to press his case. On approach, he criticizes Obama's chief of staff Rahm Emanuel for taking an approach that involved cutting deals with the major business interests at the onset. This limited the opportunity for cost savings and therefore meant that the resulting health care plans would still be expensive for middle-income families.
In the wake of the bill's passage (after the book went into print), a bit more generosity might be appropriate here. The bill will extend coverage to 30 million people who did not have it. And it will give the rest of us real insurance, since we will still be able to get coverage if a serious illness causes us to lose our jobs and our insurance. But, Kuttner is absolutely right that the bill does not come close to fixing the health care system. We will have to go back and discipline the drug industry, the insurance industry, the hospital lobby and the other bad guys in the medical-industrial complex or we will end up with a health care bill that bankrupts the government and the country.
Kuttner's book does not give much cause for optimism. We are sitting in the middle of the worst downturn since the Great Depression listening to Robert Rubin lecture us about the need to cut Medicare and Social Security. Given that Rubin earned more than $100 million from the mortgage games that sank Citigroup, and set the economy on a glide path to disaster as Treasury Secretary, there is something seriously wrong with this picture.
However, we have real populist anger that will not go away as long as the economy is being run for the benefit of Wall Street. We also have the benefit of the Internet, which makes it impossible for the elites to shut out populist arguments in the way they did twenty years ago. This is not much to go up against the near infinite money commanded by the Wall Street crew and their lackeys, but it's a start. It also sometimes helps to be right.
- Posted in
77 Comments so far
Show All"We also have the benefit of the Internet, which makes it impossible for the elites to shut out populist arguments in the way they did twenty years ago."
yes, but for how long? Net nutrality is in jepordy, and Obama is advocating against it.
Baker drank the kool aid if he believes Obamacare will "extend coverage to 30 million people". "Extend coverage" is the euphemism the Obama Regime and media have been using to soften the individual mandate that requires Americans to buy a defective product from purveyors that will provide an ever more defective product, thanks to the protected monopoly status Obamacare gives them.
I just don't undertstand why people call Obama a "centrist." This makes no sense at all.
If Obama were continuing the policies of Dwight D. Eishenhower, he could be accurately called a centrist.
But Obama is continuing--and expanding--the policies of the most right-wing, proto-fascist, neocon President ever. By any reckoning, the man is a neocon.
neocon is the new "center," thanks to our bipartisan depravity.
When people ask me why the Tea Party is so far to the right I tell therm that Obama has moved so far to the right that he has satisified many of the demands the far right had five years ago. the far right therefore needs to keep moving further right to distinguish themselves from Obama.
or, you could say that the Tea Partiers keep moving farther to the right because people like Obama keep on legitimizing the right.
You uncovered the scam! This is all by design. At this rate, the country will fall to fascism in no time.
Jerry D. Rose, are you here! I read your recent very excellent article in the Progressive Populist calling for a new third party strategy! I love it!
Beware, the little bones will be dispersed and the weak minded will, again - sigh - fall for it. We need to keep the list of Obama and Democrats' sellouts in our pockets so we can refer to it when the MSM begins to work its charms on us! They will again use us as hostages to the duopoly.
Kuttner is a fool who ignored all the signs.
The “new Democrat” Barack Obama engaged in the exact same “juggling act” as the “old Democrats” i.e. Clinton.
Obama is a company man. He knows the language, the subtle and overt signals, and emits them like a beacon. Ruling circles got the message, and that is why they made him a contender, and corporate billfolds financed him.
What's a "progressive" anyway?
While some of us here know that modern-day liberalism was founded to be a capitalist-friendly "third way" between socialism,and conservatism, most people do not. If they did and truly understood this history they would not waste all of their time and effort into trying to make "liberals", and The Democratic Party in particular, into the socialists they might want them to be.
A "progressive" is someone who cannot admit to the systemic failure of the society. Through this stubborn blindness, they reveal their own fundamental loyalty to the social system as a whole. The solution to the "anti-democratic" turn in American politics is not to question its foundations but to proscribe "more democracy" or "real democracy", without evaluating for a minute whether the ""turn" is really an aberration.
All too often "progressive" has come to mean someone who will offer unconditional support to The Democratic Party no matter what.
A progressive is someone who believes in the system.
One could say that people like Kuttner are bleeding any remaining meaning from the term "progressive." "Progressive" is, more than ever, the new "liberal" -- a status quo accommodationist.
mcoyote
An excellent post, speaking directly to the point.
Especially helpful is this reminder..."While some of us here know that modern-day liberalism was founded to be a capitalist-friendly "third way" between socialism,and conservatism"
A progressive is someone who recognizes that regulating and protecting the oppurtunities of small businesses against corporate abuses and political corruptions benefits all of our citizens. He recognizes that gov'ts do not have to humongous enterprises to be effective regulators of the marketplace. Court systems, as well, should not be usurped by the the executive branch or the voters but vetted by elected representatives. Progressives can be democratic/socialists in certain areas of our lives. They also recognize that individual iniative should not be stifled by those whose goal is merely to flatten and not level the playing field. While you continue to fiddle with definitions our chance of change, as is pointed out in the article, goes up in flames. As is often the case true progressives are getting their noses cut off by those who find their political face unacceptable.
The title PRESIDENCY IN PERIL makes no sense.
While a majority of Americans continue to be in peril as a result of Obama consistently gunning for corporations and against the rest of us, Obama's presidency is not in peril and when the Republicans take over Congress later this year it will be even easier for Obama to gun for the corporations. Life is good for Obama.
By contrast, the government could have taken a hard line, temporarily taking over insolvent banks,...
-----------------
This isn't the hard line at all, it's the law.
According to William K. Black, senior regulator during the Savings and Loan crisis, nationalization of a bank in crisis is required under the Prompt Corrective Action Law (12 U.S.C. 18310).
The size of the bank is irrelevant.
According to Black:
"...The law mandates that the administration place troubled banks, well before they become insolvent, in receivership, appoint competent managers, and restrain senior executive compensation (i.e., no bonuses and no raises may be paid to them). The law does not provide that the taxpayers are to bail out troubled banks."...
Full and unedited at:
http://www.washingtonsblog.com/2009/04/bush-and-obama-administrations-both.html
The law also mandates that torture is a criminal offense with the maximum penalty of death under the War Crimes Act of 1996. It is a presidential crime warranting impeachment for lying to the public to bring the USA to war, like was done in Iraq. It is an international crime to attack within another country with air power, like is being done in Pakistan.
It is a crime to make insider deals with the financial community without Congressional approval, like is being done by Treasury Secretary Tim Geithner.
The government is acting without regard to the laws, and few really care.
We don't have a government as much as we have a collection of criminals operating with impunity.
Sioux Rose
DCH: Well-said! You left off the no-bid contracts to political big whigs with interests in the likes of Haliburton... and the LACK of regulation on such things as oil rigs with results so disastrous and painful that I am beginning to think of the Gulf of Mexico as the 21st century rendition of "The Black Death."
I took issue with the "framing" used in this article that depicts Obama as a centrist. Since when is catering ONLY to the well-to-do the mark of a centrist? The political spectrum, thanks in part to ownership both of media AND politicians, has moved so far to the right that as some have previously commented in this forum, Richard Nixon would be seen as a liberal today! Woe is U.S.
funny how so many confusing things line up quickly once the criminal frame is invoked...
Why did they do that? Oh, yeah...they're criminals...duh!
the 'respect' factor must be surmounted before clarity can carry the day...
self-respect, too, as many feel, wrongly, emotionally connected to the current political process...
remove emotion, and simply look, and see...criminals...
not difficult to comprehend, not even terribly difficult to face...
difficult to resolve? with votes, yes...with action? less so...
Global Start Date: September 22, 2012...take the land back...
"It is a presidential crime warranting impeachment for lying to the public to bring the USA to war, like was done in Iraq."
Yeah, but we only impeach now for blow jobs in the Oval Office.
How can anyone seriously suggest that Obama had any intention to give the middle class a hand up during his presidency?
He was raised in a well off white family. He was schooled at the best schools in the USA. His friends are rich and connected business magnets.
Obama is a shill of the ruling elite, and he wants to be that tool.
Good Grief.
You're right, DCH! I can't imagine that Obama every had a needy moment in his entire life!!!
A "Centrist" is someone who helps the wealthy and leaves the rest in peril?
Baker is way to generous on a Obamacare that forces citizens to buy a corporate instruement ( a faulty instruement at that).
Only 70% coverage of medical expenses, high copays, triple premiums for seniors , overweight and preexisting, still denial possibilty, yearly increasing premiums and all financed by mostly Union Workers benifits and Medicare.
I saw a bumper sticker --- " I will keep my Freedom Guns and Money you can keep the change"
Where the heck is the change for the better?
Satre play "NO EXIT"
I have to agree. Health Care Reform was a complete betrayal of the people and a giveway to Big Insurance and Pharma.
Baker claims that Kuttner should go easier on ObamaCare because "it will insure 30 million people who currently lack insurance." This is the Big Lie. Obamacare will criminalize the 40 million uninsured. The government insurance premium subsidies will prove inadequate and will be the object of deficit hawks looking top cut spending.
It's revealing that Obama, the candidate, was against the mandates and pointed out that people don't have coverage because they don't have the money for coverage. But then again, it is now obvious that Obama the candidate was a shameless liar and the creation of the banks, the media and millions of delusional "progressives."
I have news for Kuttner, O'Bomber's presidency is already a huge failure by progressive terms, but a great suceess for the supporters that Obama values, that is the Banks, Militray Industrial Complex, the oil companies, Big Medicine....
dreamjoehill has described Obamacare and its fabrication in a nutshell.
In addition to chastising the individual mandate during the campaign, Obama told us (all the way to the end of 2009 !) that a public option was needed to keep the insurance companies honest. By July 2009 he started suffixing that statement with "but I won't let the lack of a public option stop me from signing the bill".
The only logical conclusion to be drawn from Obama's conflicted statements is that Obamacare lacks the means to keep insurance companies honest.
Definitions:
Libertarian: Someone who says government should help no one, which of course results in the rich and powerful being in control of everything.
Conservative: Someone who says all government should do is help the rich and powerful and let the free market benefits of helping the rich and powerful trickle down to everyone else, which doesn't.
Centrist: Someone who *says* government should help both the rich and powerful and the regular people but then acts to help the rich and powerful with window dressing of helping regular people. (Different in style from Conservatives but not in action.)
Liberal: Someone who says government should help the regular person but doesn't want radical change that might upset the status quo, which of course is the rich and powerful, so then act in ways that give some help to regular people without reforming the system that continues to oppresses them.
Progressive: Someone who says government should help the regular person by changing the system that oppresses them, but believes this can be done by participating in the system and cooperating with it and supporting the Liberals and Centrists in the Democratic Party who when in power marginalize and ignore the progressives.
Democratic Socialist: Someone who realizes the system is the problem and needs to be changed radically through real democracy and not by aligning with the system, but through subverting it. People like this are extremely marginalized in the United States by the system that paints them as Authoritarian Socialists and also paints any system change that helps regular people being unfair help of minorities.
Nice spectrum of concise definitions. Well done!
While I'm not questioning your definitions sometimes when I read subverting the system I think of tax- dodgers and dope growers. It is why I support some form of national, state and local sales tax. A great many people who claim Democratic Socialist, and I would not be uncomfortable living in this system, don't realize their % of taxes and contributions would stay the same. They may even increase. Unless, of course, they work to shrink the DOD and other agencies. The true cost of Empire is the real skunk at this picnic. The majority have chosen to be risk averse and choose the quasi-police state over well reasoned liberty or justice for all. ( See Arizona today )
They may even increase. Unless, of course, they work to shrink the DOD and other agencies. The true cost of Empire is the real skunk at this picnic.
---------------------------------------
Speaking for my anarcho-socialist self, I'd rather go back nearly to the original conception: universal, lifelong militia service "well-regulated" by a career training cadre. No foreign adventurism except in the invited service of genuine(!) democracy and peacekeeping. Every state power devolved to the level at which its effects are felt. Government-as-network rather than government-as-pyramid. No career politicians or bureaucrats, no big salaries or perqs. Government service as calling rather than power trip.
I resent the opening lines of this piece, "Kuttner, like most progressives had great hope......"
Anyone who thought............oh, i am tired of my own disgust!
P.T. Barnum..."There's a sucker born every minute" Obama's past life, no doubt! ;-)
Oh, good Jeebus, what's with this crap about Kuttner being a progressive indeed? He publishes a rag that contemptuously dismisses anyone who questions the bailout of the health insurance industry (thanks, Paul Starr), and glorifies the soulless Eric Holder.
Most of his rag is full of happy happy joy joy wet dreams of what would happen if "progressives" just like themselves were in charge of things. But guess what: "progressives" just like themselves ARE in charge of things right now -- and our government is still torturing, still waging predatory resource wars, still bailing out fatcats, and still raping the environment.
Corvo, absolutely!
If this second-hand summary is right, then Kuttner is far too naïve for a person of his age and experience of the world.
I'd love to know how well-off Kuttner is. That might suggest an explanation for his continued implicit support for the system, as it does for that economist whose name I can't remember.
There's an alleged Aleksander Herzen quote that's very nice, but that I've not been able to properly source: "Liberalism, austere in political trifles, has learned ever more artfully to unite a constant protest against the government with a constant submission to it."
Kuttner is certainly not a progressive, I'm not even sure he is a liberal, but thats a question for his own soul.
What is in question is Mr Kuttner's credentials as an intelligent writer or his attention to the truth.
A Presidency in Peril? This presidency has been over since the the health care bill passed for sure, probably before. Falling short? They never started. Obama has surrounded himself with the people that helped cause the problem? What a revelation! What analysis!
This tripe does not belong on CD. Thats the simple truth.
requiem, unfortunately i agree about the tripe not belonging here.
However, this is about half of the type of articles that are published here since CD came out as major obama supporters during the elections.
It has been a great loss. I only come here because of the posters whose responses are often of higher quality than the pieces that are published here.
The editors apparantly believe that people such as Kuttner *are* progressives.
But for truly progressive discussion/organization, as for U.S. "two-party" politics itself, the options are strictly limited. And that, too, seems more like design than coincidence. Leaving aside self-supporting solicititations, neither CD nor ICH provide any real "grass roots" organizational capability, and some other more or less progressive sites (e.g, CounterPunch) accept no comments at all.
Incidentally, today's CounterPunch includes a much more trenchant assessment of the underlying systemic problem in an article entitled Two Parties, One Politics. See http://www.counterpunch.org/rothenberg05042010.html
"Opinion polls reveal, not surprisingly, that the public has little confidence and trust in politicians. Politicians are overwhelmingly comprised of Democrats and Republicans, but this distrust has yet to manifest itself in a repudiation of these two political parties. No paradox here. The public, so far, is not equipped to shake off the grip that the Democrats and Republicans hold over society. In a pathetic twist, it is in these indirectly discredited parties that a nation’s hopes are eternally placed."
RV
You know, in thinking of what you said, where is it written that Parties can't change? Where is it written that the Republican party couldn't become more progressive? It was before.
Anything's possible in theory, I suppose, but in more practical terms it's largely a question of incentives. Under current circumstances, with electoral "viability" being largely determined by the financial support of capitalist "corporate personhood" interests, both parties clearly believe that catering to those interests is a matter of self-preservation.
They also seem to believe they can get away with ignoring the commonweal wants and wishes of "progressive" natural persons almost entirely, and so far they've not been proven wrong. If anything, they've been quite successful in using rightward extremism (not to mention "lesser evilism") to move the American "popular center" even further in the direction preferred by their sponsoring owners.
So what would be the likely incentive for any real change by either party, especially when any effective "grass roots" organizational effort appears quite problematic (perhaps even deliberately thwarted and diverted) as noted?
Free speech is great, but without some follow-up action it's just a "safety valve" for letting off steam and mostly "full of sound and fury, signifying nothing."
"and so far they've not been proven wrong."
Hopefully they will be proven wrong this November. On both sides of the aisle.
If that means the replacement of a significant number of members of both parties with so-called "third party" representatives (ANY third party or independents) it could be the most momentous development since the original American Revolution. It would certainly scare the crap out of certain "powers that be."
But perhaps you'll forgive me if I'm a bit skeptical. It appears that at least some of the "lesser evilist" party hacks have updated their sloganeering to encourage those who've seen through that futility to just boycott the election entirely. On the other hand, maybe that's a good indicator of their own growing concern. One can only hope that you're right.
RV
I doubt it will be Third party or Independents, but I'm hoping for better idiots at least.
With this Congress and this leadership, I'd take almost anyone because they would have to be an improvement.
Hmmm. That's what we were told about getting rid of the Bush/Chaney regime. But I suppose one has to hold on to whatever slim hopes are actually available.
If at first you don't succeed... The election of Mr. Obama to the Presidency demonstrated something quite conclusive about the electorate. The Electorate is dominantly Center left. From this perspective reasonable "progressives" who tend to track left more than right should be pleased. The Demographics are clear and convincing and the diminishing of the Republican Party as it moves further right from center will continue if it does not change course.
The economy is improving, there's talk of nuclear disarmament, America continues to be blessed to escape loss of life from terroristic action, (there's a story here) there’s talk in the air about nuclear disarmament, and a "nuclear free Mideast", regulation is on its way to Wall Street, new home sales surged 22% and unemployment did not go up this month.
I am hopeful.
readytotransform
I KNOW he isn't a liberal.
"I only come here because of the posters whose responses are often of higher quality than the pieces that are published here"
Oh so true! I'm not a progressive, I'm a liberal and I'm informed (by the youngeer set here) I'm an old style liberal at that, but I learn an awful lot here and get some really interesting viewpoints. People that are in agreement on one thing can be entirely opposed on another topic and except for a few screwballs that slip in occasionally, many of the the postings are more worthy of publishing than some of these articles. Sometimes a couple of people will go at it in length and I find myself thinking about their views and conclusions the next day even.
Heck, even people that are serial imsulters occasionally give off a nugget!
I do wish the editors would pick some articles that reflect a different view than their own occasionally.
I'm not inclined to do this but someone - my choice would be Sioux Rose, I like her style - should compile a representative documentation of some of these important conversations we have here on CD, along with the articles, of course. For history's sake, progeny. Copyright laws would be a barrier, I suppose.
Professor- you are right to critisize healthcare deformed. I agree we will be getting substandard care without true cost controls. But I don't live in 50 states all at once. That said, changing the system incrementally is what we get in this money-driven political system. Merely pointing out injustices doesn't cut it any more. Demanding change thru efficient, small gov't, is our only hope. Big gov't is as popular as the Yankees are in Boston right now so our option appears to be hybrid form of Progressive/ Populism found in the early 1900's. Obama is wishy-washy to say the least but look at our fellow citizens: " low information voters " is truly the understatement of the 21st Century. Community by community, district by district, state by state is the only political reality my activist friends see as the answer.
I suppose there are some people who really do know how things are going to turn out over the next few years. I just don't know them. Law must meet the test of application and that is where we are now with health care reform. The response of the people to Health Care counts for something and will be the final arbiter of its value or lack thereof.
Obama is the second coming of Clarence Thomas. George H.W. Bush pulled a trick on the liberals by nominating an extremely conservative black man to the Supreme Court, daring the liberals to oppose him, risking the charge of racism. Of course the liberals backed down, because that is what liberals do. History repeats itself again.
The only thing I learned through this article is that Dean Baker read a book.
As long as one supports the System called Capitalism, wherein certain small groups of people control the wealth and means of production in a given society and feels that a few "tweaks and regulations" on them all that is needed...
You are NOT a progressive.
How small or large a group are we talking about here. Please don't tell people what they are and aren't. Labels are for products in a food co-op and hopefully you support the one in your community. Join your affinity group, raise awareness and some money and go for it.
A fascist is a fascist, a Capitalist a Capitalist , A murderer a murderer, a crook a crook.
These are all "labels". I guess we should just drop them all in your world?
I define people by their actions. Barack Obama is a Corporatist. If you do not like that "label" tough noogies.
(I found it rather hypocritical you can admonish someone for defining what a Progressive is because it a "label" then in another post define what a progressive is. )
I puposefully did not " capitalize " my use of the word in anticipation of a remark like this. Progressive as a word means moving forward in a thoughtful and beneficial way while recognizing political and economic pluralism as practised in our country for over a century. Radical Progressivism came out of my home state of Iowa in response to the monopolist practises of the railroads and other eastern interests. Then, as now, small businesses and entrepunerial efforts by individuals, properly regulated and morally fit, created the atmosphere to move forward to better communities and better gov't, etc. Though far from perfect this is what I strive to replicate, albeit with a dash of Oregon libertarianism, as a much better and truer American model for our children and grandchildren.