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The Bad Deal
The debt agreement should finally make clear to Europeans that Barack Obama is not the progressive President they had hoped for. Instead, writes James K. Galbraith, he is a willful player in the Washington politics game.
Political news travels slowly, and in my casual observation progressive Europeans have held on to the myth of Barack Obama as a good man much longer than most progressive Americans did. How could a young black American from Chicago and Harvard be otherwise?
Over here reality has been evident for a while, thanks to the President's pattern of giving way to banks, lobbies, Republicans and right-wing extremists. Whether your prime interest is housing, health care, peace, justice, jobs or climate change, if you are an activist in America you have known for a long time that this President is not your friend.
Still, even on these shores disillusion often took a mildly forgiving form. The President was a “disappointment.” He was weak. He had “bad negotiating skills.” He had a tendency to “deal with hostage-takers,” to “surrender.” All of this fed the image of a man with a noble spirit, a good heart, the best intentions, but trapped by limited ability and the relentless and reckless determination of his foes.
Obama is no progressive
The debt deal will make things clear. The President is not a progressive – he is not what Americans still call a “liberal.” He is a willful player in an epic drama of faux-politics, an operative for the money power, whose job is to neutralize the left with fear and distraction and then to pivot rightward and deliver a conservative result.
What Barack Obama got from the debt deal was exactly what his sponsors have wanted: a long-term lock-in of domestic spending cuts, and a path toward severe cuts in the core New Deal and Great Society insurance programs – Social Security, Medicare and Medicaid. And, of course, no tax increases at all.
To see the arc of political strategy, recall that from the beginning Obama handed economic policy to retainers recruited from the stables of Robert Rubin. From the beginning, he touted “fiscal responsibility” and played up the (economically non-existent) “problem” of the budget deficit. From the beginning his team sabotaged economic recovery with optimistic forecasts and inadequate programs – in the clear interest of protecting the banking system from reform.
As the presidency moved along, false claims of economic recovery supported a transition toward obsessive focus on debt and deficits, validated by a federal commission and constantly reinforced by a Washington propaganda chorus funded by Peter G. Peterson, for many decades a billionaire campaigner against Social Security and Medicare.
Debt ceiling a pseudo-crisis
But it wasn't enough. Even with the Republican victory in the 2010 mid-terms there wasn't the political will-power simply to pass the cuts and make them stick. For it wasn't sufficient just to pass them: politicians need cover when they do ugly things.
They need an excuse, something that will offer protection from the anger of the victims, or more precisely from other politicians who might exploit that anger. In the well-practiced manner of organized crime, blood needs to be on everyone's hands. That way, no one can defect; no one can turn states' evidence and safely get away with blaming the others.
The debt-ceiling pseudo-crisis created the necessary panic.
The debt ceiling is a unique American law – no other country has one – a little travesty of democratic bad faith. It was first enacted in 1917, to allow congressmen to hoodwink the rubes back home even as they voted for a large issue of Liberty Bonds to finance the Great War.
It has been a vehicle for posturing ever since – but that it would be raised has never been in doubt. (Even this time the markets never showed the slightest worry.) It became a vehicle for blackmail because it was convenient. It was convenient, because Obama failed to insist it be his price for agreeing to extend the Bush tax cuts last December. Whether that omission was accidental or calculated at the time is, for the moment, unknown.
Obama's neglected options
Even as “crisis” loomed, the President had powerful options. The Constitution of the United States flatly forbids default on debt or any other public obligation. The President could have simply asserted his duty and refused to negotiate.
Even more cleverly, he could – under a quirk of existing law – have turned drama to farce by minting a large platinum coin – say for a trillion dollars – and using that to buy back public debt held by the Federal Reserve, so that the debt ceiling would never have been breached. (There would have been an uproar but no other economic effect.)
These options were rejected or not considered at all. From which, one has to conclude that the President really did want a big budget-cutting deal. He just wanted – like any politician – the appearance of being bullied into it.
So now the die is cast. Practically nothing to address any real economic problem can now get done. Actual austerity will come slowly – the cuts are not abrupt and some may yet be blocked – but unless there is a radical change of events or mood it will come. Meanwhile as the economy stalls and despair deepens, the deficits and debt will continue to climb.
Short presidencies
The deficit lobbies are shifting: their next step will be to raise doubts about the plan's credibility and about Congress's will to enforce it. They will then make the self-protective assertion that still stronger steps are needed. European observers of Greek/Irish/ Portuguese/ British/Spanish and Italian politics – not to mention Latvia or Hungary – will find all of this familiar.
For European observers, one key to understanding how such things can happen in America is to remember that our presidencies are short. The professors who joined Obama for his opening act have already gone home. The advisers who remain face dreary futures in think-tanks funded by the likes of Michael Milken, our premier financial ex-felon.
Maybe, if they are especially loyal to their true masters, then like the former budget director Peter Orszag they can go to work for a bank. This surely accounts in part for their present actions.
And the President too is a young man. Unlike say Lyndon B. Johnson or Jimmy Carter, when his term ends he won't be able simply to go home. He'll need a big house in a gated suburb, with high walls and rich friends. And a good income, too, from book deals and lecture fees. He may be thinking about that now.
The good news is: it won't save him. For if and when he ventures out, for the rest of his life, the eyes of all those, whose hopes he once raised will follow him. The old, the poor, the jobless, the homeless: their eyes will follow him wherever he goes.
Editor: Michael Knigge
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120 Comments so far
Show AllWell, if I were a betting man, I'd say Galbraith just got boosted to the top of Obama's enemies...I mean "terror watch"... list.
I hope he was not planning to fly anywhere between now and the time when Obama leaves office.
I can tell you in three words why I have been a Democrat all of my life - Franklin Delano Roosevelt. What we are witnessing today is the greatest betrayal of FDRs policies in the history of the Democratic Party.
I was briefly ecstatic in December, 2008. I naively thought that Obama just might be another FDR. My ecstasy lasted weeks (or maybe even days) not months. By the Fall of 2009 I was thoroughly disillusioned. Since then his administration has been a series of disasters - largely of his own making. In 2010, thanks largely to Obama, the Tea Party took control of the House of Representatives. In 2011 we witnessed that disgraceful Debt Limit "compromise"( I got 98% of what I wanted crowed the Republican Speaker of the House - some compromise)
I don't think that Obama is a Republican mole but he might just as well be.
The irrepressible Gore Vidal had his number more than two years ago: "The President wants to be liked by everybody, and he thought that all he had to do was talk reason. But remember - the Republican Party is not a political party. It's a mindset, like Hitler Youth. It's full of hatred. You're not going to get them aboard. Don't even try. The only way to handle them is to terrify them. He's too delicate for that."
Thank you.
In all fairness, Vidal was admitting as early as September 2009 that he regretted ever having supported Obama -- in the same interview in which he said Obama's weakness was that he needed to be liked by everyone.
You speak the truth Jill.
Dear Jill,
That Gore Vidal quote is from the very beginning of the Obama presidency and I threw it out because I was amused by "Hitler youth" and "the only way to handle Repblicans is to terrify them." I don't think that, today, Vidal would describe Obama as "too delicate." We've all matured.
Alan -- thanks for the testimony & the Vidal quote to wrap it up.
Gore is truly one of the finest American essayists & wits of the last hundred years. I know some are already grinding their teeth because he was not absolutist enough in his denunciation of the President. However, Vidal's elegant and inspired mockery of Obama (and his foes) is worth a thousand monotone decrees.
Obama does want to be liked by everyone. But in the end he follows one credo -- Give the bankers what they want.
He just hopes you still like him after he has sold you out.
"Under the spreading chestnut tree I sold you and you sold me:
There lie they, and here lie we
Under the spreading chestnut tree."
I understood from the beginning that Barack Obama is an old-fashioned Chicago pol who specializes in horse trading for political advantage. He is also distressingly naive about Washington. That's why I voted for Hillary Clinton in the 2008 primary. I can't believe that she would have put up with all the crap the Republican reactionaries have thrown at this president.
Hillary works for the same people.
Of course Hillary would have responded differently to the Republican reactionaries, but she would have worked for the same ends as Obama.
Wake up. Hillary was the Corporation's candidate in 2008. But to hedge their bets they were also setting up the anti-Hillary candidate in Obama. If Hillary had won they'd have continue to groom Obama for 2016.
It's not a surprise anymore that when Obama, the supposedly anti-Hillary candidate, got in office he filled his administration with the same folk Hillary would have.
Obama was not a people's candidate. He was just sold that way. He actually was promoted by the corporations who financed his book tour in late 2006 so they could pump him up
Be ready. If there is another supposedly charismatic "people's candidate" who rises up soon as the anti-Obama candidate, be sure he or she isn't just another corporate puppet sent out to insure they get their way either way it goes.
Good response, LibWingofLibWing.
Regardless of whether Clinton is harder-nosed than Obama, she's just another politically ambitious, opportunistic, narcissistic corporate lawyer serving her overclass masters and allies.
"Hillary was the corporation's candidate of 2008"
Theh why did Wall Street backed Barack Obama over Hillary Clinton?
"The sordid unholy alliance between Barack Obama and Wall Street is extensively well documented.
Starting with a secret meeting in June 2007 (about the time of the demise of the financial firms Bear Stearns and Lehman Brothers), in a Washington, D.C., restaurant's private dining room, an inexperienced charismatic Sen. Barack Obama assembled a group of leading executives from Lehman Brothers, Merrill Lynch, BlackRock, Bear Stearns, Goldman Sachs, and former Federal Reserve chairman Paul Volcker to enlist their support to put him in the White House.
That meeting actually was a turning point, since Hillary Clinton was the favorite at that time. But Wall Street had misgivings about Hillary and had concerns that after the election she would not be an easily pliable supporter of their interests.
As the financial crisis grew during 2007, Hillary started to bash Wall Street as a means to gain votes in the primaries which really bothered Wall Street. Liberals on Wall Street love to have friends in high places particularly in big government. The Democratic fundraisers on Wall Street had found their "guy," Obama understood their importance and would do little to dismantle their power and influence over the nation's economy."
Fom "Bought and Paid For by Charles Gasparino*
"That meeting actually was a turning point, since Hillary Clinton was the favorite at that time. But Wall Street had misgivings about Hillary and had concerns that after the election she would not be an easily pliable supporter of their interests."
Maybe. But they also knew that Killary had lots of baggage, and had been galvanizing Rethug hatred for nearly two decades. She just wasn't electable without massive fraud.
Good points Lib........
Hillary enjoys too much being Secretary of State, considering the tragic nature of her job: all the misery in the world she has to deal with.. She's in it for herself.
Yeah, she would have probably been tougher than Obama. No illusions about the fair, well meaning, far right representatives of the common people there. She and her husband should know how they work. And she appears to have picked up some tricks from them herself, judging from her campaign against Obama, which was shamelessly dirty. But her husband believed in triangulation, compromise, and deep economic reforms: from welfare to Wall Street. Signing the destruction of Glass Steagall. NAFTA. Dismantling aid to the poorest. A new Democrat? Hillary may indeed be that, cozying up to the support new Democrats get from Wall Street. She would undoubtedly be tough, but on whose side would she be on?
The American people just amaze me, In Florida, where so many people go to retire in the sun, the people voted Rick Scott in as governor. Rick Scott was convicted of the largest most ruthless Medicare fraud ever tried, and paid the largest fine ever in a Medicare fraud sceme, yet these people voted him into the Governors office. I too get upset when Obama caves but voting in Michelle Bachman for president won't fix things. Get the lobbies and Roberts court out of our government, that would start to turn things, get rid of the bush tax cuts, fox news lies where are the jobs.
Too many people believe what they see on the TV and vote accordingly.
Too many people believe the vote counts they see reported on TV.
b i n g o
"Too many people believe the vote counts they see reported on TV."
Far too many.
Rewarding the Democratic Party, for governing far to the right of Republicans under Ronald Reagan, is not a long term strategy for moving governance to the left.
So you would vote for Obama, even after HE put the New Deal programs on the chopping block?
The meme, that standing for principle – and voting against Obama ( either not voting for him, or voting a more progressive candidate such as in the Green Party) because he has become anathema to anything progressive – somehow equates to supporting someone as right wing as Bachman, is unfair to the extreme.
Not only unfair, but the logic when distilled down to just politics, also doesn't add up. Proving to the conservative and right wing Democrats, that once again, they can move even further to the right, and still get elected, would just further entrench the path to even more extreme right wing policies.
If we end up with some crazed "tea bagger" as president, don't blame anyone but the centrist, and right wing Democrats that made it possible.
Don't forget who brought us Ronald Reagan. It was the so-called Reagan Democrats, not leftists.
Obama is a man without a BASE. It will be interesting to see how much Corporate cash matters without one. Don't downgrade Independents, given our choices I don't know what to do either.
You are correct, sir, and these Democrats are banking on this lack of logic. But voting for the crazed tea partyer is just as bad as voting for the Dem. No one should vote FOR evil, even if supposedly "lesser."
Excerpt from "The Bad Deal" by James K. Galbraith:
The President is not a progressive – he is not what Americans still call a “liberal.” He is a willful player in an epic drama of faux-politics, an operative for the money power, whose job is to neutralize the left with fear and distraction and then to pivot rightward and deliver a conservative result.
* * * * *
My Comment:
So much of this article is right on the mark.
We should forward it widely as it is unlikely to be published at home.
Thank you, Mr. Galbraith, for not mincing words.....and especially for the "cherry on top" (or more accurately at the end) : your insightful last paragraph......almost poetic!
From now on, when one of those Obama apologetics articles are published by CD, there should be an editorial link to this one.
This author nails it.
The voters who refuse to accept responsibility for the way they voted are no better than Obama. It was well known that he was a member of the Democratic Party. What else did anyone have to know. Membership in a political party implies agreement with the policies of that Party. The Dems are just as pro war and anti economic justice as the repubs. Voting has consequences. Uninformed voting has disastrous consequences. Please, please stay at home on the next election day if you can't put forth the effort to study the issues and look at ALL the candidates. On my ballot there were 8 candidates for president plus a write-in option. Read my article CLUELESS AT CAMPAIGN HEADQUARTERS.
Too many people believe the vote counts they see reported on TV.
In the past few elections, I had a Democrat to vote for or a Republican. I held my nose and voted Dem but I guess, what's a disenfranchised American to do? I guess I am writing in Donald Duck next time. Either way it will make no difference as the monied interests have already bought all viable parties and used their power to crush any they couldn't buy. True Democracy, Amerikan style.
Maybe it's time you joined a non-corporate party...the Green Party.
Donald Duck Great! I was thinking Charlie Sheen! But we really need a better idea. Anyone?
Elizabeth Warren.
rosemarie jackowski,
The degree of ageement and uniformity of opinion among members of an organization depends upon a number of factors including the size and the nature of the governance of the organization.
There was a time decades ago when one could speak of moderate Republicans who had significantly different opinions about social issues for instance from more conservative Republicans. Dixiecrat Democrats were also distinctly different from so-called Limousine Liberals.
Now from the prospective of the Liberty Union Party of Vermont founded in 1970 such distinctions may still have appeared trivial, but I expect that not all voters saw it that way.
Politics has changed a lot since the 60s and 70s and the 80s and 90s. So have the two major political parties. According to polls neither the Democratic or Republican parties are highly regarded by people who live in the United States.
While, you have published your article "Clueless At Campaign Headquarters" on three Internet sites and have mentioned it on Common Dreams a number times, I have to say I don't find it very compelling.
It is nice that you acknowledge at the end of your article that voters are at a disadvantage because the media often do not report on poorly funded independent or minor party candidates. But perhaps that is a good thing. Certainly, if a candidate leads with the idea that voters are ignorant and irresponsible simply because they haven't heard of many of the obscure candidates on the ballot, many voters are likely to be put off and not take that candidate very seriously.
There is, however, a very serious problem with non-existant and, sometimes even worse, with bad media coverage of serious candidates like Ralph Nader. But I do not think Florida voters were done a disservice in 2010 because they had probably never heard of most of these candidates.
"Don’t like choices? Here’s a look at unknowns for Florida governor and Senate"
By Ryan Mills, Naples Daily News, October 30, 2010.
Article URL: www.naplesnews.com/news/2010/oct/30/who-are-unkowns-florida-governoir-US-Senate/
Obama, The Mallomar Man.
Best article I've read yet on the whole ugly truth. Clear, unvarnished and extemely well-laid out.
Prose worthy of that surname. Great piece.
"Whether your prime interest is housing, health care, peace, justice, jobs, EDUCATION, or climate change, if you are an activist in America you have known for a long time that this President is not your friend."
There, fixed it for you! ::smile::
Alright- I agree. Now what? How do we accomplish real change- not Madison Ave. farce?
James's father was a genius, a towering genius, but I don't believe he could have written a more powerful, concluding paragraph. "What does it profit a man....?"
It does profit a few though a nation fails; it profits them a tidy but short-sighted sum. We've now reached the height of globalization; from this moment fwd, as long as this system remains, we can only go down. All of us. Americans can no longer afford to be the consumer society they needed us to be, now that people struggle for the basics. Until trade is fair and things like justice exist, the plutocracy has created its own death trap; never having learned that greed is not sustainable. And if we here in America feel this way, imagine how the rest of the world must be. It's time for left and right to band together and circumvent their seesaw, electing only independents who answer to the people, like Sanders...
Truly genius: "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." -- John Kenneth Galbraith
my satirical analysis: What Would Jesus Cut? http://thewashingtonfancy.com/?p=3778
The Last Tea Party, Jim Jones Edition: http://thewashingtonfancy.com/2011/08/wf-editorial-the-last-tea-party/
The goal of our rulers is apparently, from what we can gather from their actions, to reduce the average American's lot, rather than to raise others' lot. And, Americans are being used as the global police force for the Corporations and as their modern feudal debt slaves, Follow the off-shored jobs to find the projected growth markets for consumer goods. Ultimately keeping most of us low in the New World Order.
The way I see it the blame game needs to be shut down and the ugly news shows to. This country was scammed by a small contingent of new comers in Washington. Enough said on that. It is also very coincidental that the only rating service to downgrade us is the S & P. The GOP vowed to get the President unelected in 2012 and that was their goal and obviously still is.
I am angry with what transpired in Washington and the worst deal that helps nobody but the rich.
What really galls me is the constant cry that our President is completely at fault. Well folks we all in our own way put this Congress and this President in office.
Time is now to right what ever ails us and start to get this mess behind us and move forward. We have lots of smart and successful men and women in this country and Washington could sure use their input now. Obviously a dysfunctional government needs to go back to school and let the business and academia into our tent, right, left. middle and maybe on the fringe. We are at war with ourselves and the ugliness is getting us nothing but divisions and not progress.
That' s how this voter and American sees it and I really hope more do.
Like a co-worker said to me recently, was that we are becoming a third world country and I want to prove him wrong.
If the President didn't constantly doublecross his populist base then he wouldn't have to worry about being reelected.
Your so-called "small contingent" ruling Washington is a powerful elitist one.
I know you wish your co-worker were wrong, but vote for a president who abuses us in his first term and then see what you get.
The Ryans, the Bachmanns, and yes the Conrads of this nation do not understand the nature of what they so mistakenly call "entitlements". Social Security and Medicare in their present form are fully justified hence necessary as a "thank you" message from the younger to the much older folks. We raised you, we fed you, we clothed you, we bought you toys and often first cars, for many of you we paid your way through college, and for many we paid your marriage costs for which we often incurred great debts. And for all of that you, the Ryans, the Bachmanns, the Conrads, and yes Mr. Obama yourself have the chutzpah to call Social Security and Medicare "entitlements"? Let me tell you what a real entitlement is. It is only the right of inheriting a title and nothing else. Calling Social Security and Medicare "entitlements" is more than an vile Orwellian trick. Your pronunciamentos befoul the air of our nation worse than the noxious emissions from automobiles and coal-fired power plants. Your breath is a main cause of global warming. You are lucky that right now I do not remember wonderfully appropriate lines from Shakespeare's plays.
Crows nest you are so right, they say screw the middle class after we created them, screw us in the name of god! May they rot in hell!
"The debt ceiling is a unique American law – no other country has one – a little travesty of democratic bad faith. It was first enacted in 1917, to allow congressmen to hoodwink the rubes back home even as they voted for a large issue of Liberty Bonds to finance the Great War."
What about Woodrow Wilson? This sumbitch and his policies are still killing this nation. Not only was he responsible for the creation of the Federal Reserve, he was responsible for the debt ceiling law.
Why isn't his turncoat named when his passgae of laws way back at the turn of the 20th century come back to bite us in the ass at present? This sumbitch is responsibe for so many of our existing repressive laws that he should have been shamed endlessly in the history books.
I wish I could dig him up and whop him in his the empty head of his with the shovel for all of the curses he bequethed us with.
Galbraith never disapoints
Neither did his dad.
The debt ceiling and the driving up of the deficit are two distinct and separate matters!
The debt ceiling vote was the artificial crisis designed to get wanted results.
Driving up the national debt IS a crisis for all but the rich. The debt is run up by giving our treasury away to the elites and then making us pay an exorbitant interest rate to the owners of the Federal Reserve for the money that was "borrowed" by us at Congress' behest to do so.
I almost skipped this article. "The Bad Deal"...oh, yeah, I thought, probably another article saying Obama caved to the Tea Party.
This is prime stuff, right on target. Thank you James Galbraith, and thank you CD for picking it up.
"The good news is: it won't save him. For if and when he ventures out, for the rest of his life, the eyes of all those, whose hopes he once raised will follow him. The old, the poor, the jobless, the homeless: their eyes will follow him wherever he goes."
Like the rest of them, he'll be laughing all the way to the bank.
Direct democracy