Can Obama See the Grand Canyon?

Let me begin, very obliquely, with the Grand Canyon and the paradox of trying to see beyond cultural or historical precedent.

The first European to look into the depths of the great gorge was the
conquistador Garcia Lopez de Cardenas in 1540. He was horrified by the
sight and quickly retreated from the South Rim. More than three
centuries passed before Lieutenant Joseph Christmas Ives of the U.S.
Army Corps of Topographical Engineers led the second major expedition
to the rim. Like Garcia Lopez, he recorded an "awe that was almost
painful to behold." Ives's expedition included a well-known German
artist, but his sketch of the Canyon was wildly distorted, almost
hysterical.

Neither the conquistadors nor the Army engineers, in other words,
could make sense of what they saw; they were simply overwhelmed by
unexpected revelation. In a fundamental sense, they were blind because
they lacked the concepts necessary to organize a coherent vision of an
utterly new landscape.

Accurate portrayal of the Canyon only arrived a generation later
when the Colorado River became the obsession of the one-armed Civil War
hero John Wesley Powell and his celebrated teams of geologists and
artists. They were like Victorian astronauts reconnoitering another
planet. It took years of brilliant fieldwork to construct a conceptual
framework for taking in the canyon. With "deep time" added as the
critical dimension, it was finally possible for raw perception to be
transformed into consistent vision.

The result of their work, The Tertiary History of the Grand Canyon District,
published in 1882, is illustrated by masterpieces of draftsmanship
that, as Powell's biographer Wallace Stegner once pointed out, "are
more accurate than any photograph." That is because they reproduce
details of stratigraphy usually obscured in camera images. When we
visit one of the famous viewpoints today, most of us are oblivious to
how profoundly our eyes have been trained by these iconic images or how
much we have been influenced by the idea, popularized by Powell, of the
Canyon as a museum of geological time.

But why am I talking about geology? Because, like the Grand Canyon's
first explorers, we are looking into an unprecedented abyss of economic
and social turmoil that confounds our previous perceptions of
historical risk. Our vertigo is intensified by our ignorance of the
depth of the crisis or any sense of how far we might ultimately fall.

Weimar Returns in Limbaughland

Let me confess that, as an aging socialist, I suddenly find myself like
the Jehovah's Witness who opens his window to see the stars actually
falling out of the sky. Although I've been studying Marxist crisis
theory for decades, I never believed I'd actually live to see financial
capitalism commit suicide. Or hear the International Monetary Fund warn
of imminent "systemic meltdown."

Thus, my initial reaction to Wall Street's infamous 777.7 point
plunge a few weeks ago was a very sixties retro elation. "Right on,
Karl!" I shouted. "Eat your derivatives and die, Wall Street swine!"
Like the Grand Canyon, the fall of the banks can be a terrifying but
sublime spectacle.

But the real culprits, of course, are not being trundled off to the
guillotine; they're gently floating to earth in golden parachutes. The
rest of us may be trapped on the burning plane without a pilot, but the
despicable Richard Fuld, who used Lehman Brothers to loot pension funds
and retirement accounts, merely sulks on his yacht.

Out
in the stucco deserts of Limbaughland, moreover, fear is already being
distilled into a good ol' boy version of the "stab in the back" myth
that rallied the ruined German petite bourgeoisie to the swastika. If
you listen to the rage on commute AM, you'll know that 'socialism' has
already taken a lien on America, Barack Hussein Obama is terrorism's
Manchurian candidate, the collapse of Wall Street was caused by elderly
black people with Fannie Mae loans, and ACORN in its voter registration
drives has long been padding the voting rolls with illegal brown
hordes.

In other times, Sarah Palin's imitation of Father Charles Coughlin -- the priest who preached an American Reich
in the 1930s -- in drag might be hilarious camp, but with the American
way of life in sudden freefall, the specter of star-spangled fascism
doesn't seem quite so far-fetched. The Right may lose the election, but
it already possesses a sinister, historically-proven blueprint for
rapid recovery.

Progressives have no time to waste. In the face of a new depression
that promises folks from Wasilla to Timbuktu an unknown world of pain,
how do we reconstruct our understanding of the globalized economy? To
what extent can we look to either Obama or any of the Democrats to help
us analyze the crisis and then act effectively to resolve it?

Is Obama FDR?

If the Nashville "town hall" debate is any guide, we will soon have
another blind president. Neither candidate had the guts or information
to answer the simple questions posed by the anxious audience: What will
happen to our jobs? How bad will it get? What urgent steps should be
taken?

Instead, the candidates stuck like flypaper to their obsolete
talking points. McCain's only surprise was yet another innovation in
deceit: a mortgage relief plan that would reward banks and investors
without necessarily saving homeowners.

Obama recited his four-point program, infinitely better in principle
than his opponent's preferential option for the rich, but abstract and
lacking in detail. It remains more a rhetorical promise than the
blueprint for the actual machinery of reform. He made only passing
reference to the next phase of the crisis: the slump of the real
economy and likely mass unemployment on a scale not seen for 70 years.

With baffling courtesy to the Bush administration, he failed to
highlight any of the other weak links in the economic system: the
dangerous overhang of credit-default swap obligations left over from
the fall of Lehman Brothers; the trillion-dollar black hole of consumer
credit-card debt that may threaten the solvency of JPMorgan Chase and
Bank of America; the implacable decline of General Motors and the
American auto industry; the crumbling foundations of municipal and
state finance; the massacre of tech equity and venture capital in
Silicon Valley; and, most unexpectedly, sudden fissures in the
financial solidity of even General Electric.

In addition, both Obama and his vice presidential partner Joe Biden, in
their support for Secretary of the Treasury Paulson's plan, avoid any
discussion of the inevitable result of cataclysmic restructuring and
government bailouts: not "socialism," but ultra-capitalism -- one that
is likely to concentrate control of credit in a few leviathan banks,
controlled in large part by sovereign wealth funds but subsidized by
generations of public debt and domestic austerity.

Never have so many ordinary Americans been nailed to a cross of gold
(or derivatives), yet Obama is the most mild-mannered William Jennings
Bryan imaginable. Unlike Sarah Palin who masticates the phrase "the
working class" with defiant glee, he hews to a party line that
acknowledges only the needs of an amorphous "middle class" living on a
largely mythical "Main Street."

If we are especially concerned about the fate of the poor or
unemployed, we are left to read between the lines, with no help from
his talking points that espouse clean coal technology, nuclear power,
and a bigger military, but elide the urgency of a renewed war on
poverty as championed by John Edwards in his tragically self-destructed
primary campaign. But perhaps inside the cautious candidate is a man
whose humane passions transcend his own nearsighted centrist campaign.
As a close friend, exasperated by my chronic pessimism, chided me the
other day, "don't be so unfair. FDR didn't have a nuts and bolts
program either in 1933. Nobody did."

What Franklin D. Roosevelt did possess in that year of breadlines
and bank failures, according to my friend, was enormous empathy for the
common people and a willingness to experiment with government
intervention, even in the face of the monolithic hostility of the
wealthy classes. In this view, Obama is MoveOn.org's re-imagining of
our 32nd president: calm, strong, deeply in touch with ordinary needs,
and willing to accept the advice of the country's best and brightest.

The Death of Keynesianism

But even if we concede to the Illinois senator a truly Rooseveltian or,
even better, Lincolnian strength of character, this hopeful analogy is
flawed in at least three principal ways:

First, we can't rely on the Great Depression as analog to the
current crisis, nor upon the New Deal as the template for its solution.
Certainly, there is a great deal of deja vu in the frantic
attempts to quiet panic and reassure the public that the worst has
passed. Many of Paulson's statements, indeed, could have been directly
plagiarized from Herbert Hoover's Secretary of the Treasury Andrew
Mellon, and both presidential campaigns are frantically cribbing heroic
rhetoric from the early New Deal. But just as the business press has
been insisting for years, this is not the Old American Economy, but an
entirely new-fangled contraption built from outsourced parts and
supercharged by instantaneous world markets in everything from dollars
and defaults to hog bellies and disaster futures.

We are seeing the consequences of a perverse restructuring that began
with the presidency of Ronald Reagan and which has inverted the
national income shares of manufacturing (21% in 1980; 12% in 2005) and
those of financial services (15% in 1980; 21% in 2005). In 1930, the
factories may have been shuttered but the machinery was still intact;
it hadn't been auctioned off at five cents on the dollar to China.

On the other hand, we shouldn't disparage the miracles of
contemporary market technology. Casino capitalism has proven its mettle
by transmitting the deadly virus of Wall Street at unprecedented
velocity to every financial center on the planet. What took three years
at the beginning of the 1930s -- that is, the full globalization of the
crisis -- has taken only three weeks this time around. God help us, if,
as seems to be happening, unemployment tops the levees at anything like
the same speed.

Second, Obama won't inherit Roosevelt's ultimate situational
advantage -- having emergent tools of state intervention and demand
management (later to be called "Keynesianism") empowered by an epochal
uprising of industrial workers in the world's most productive
factories.

If you've been watching the sad parade of economic gurus on
McNeil-Lehrer, you know that the intellectual shelves in Washington are
now almost bare. Neither major party retains more than a few enigmatic
shards of policy traditions different from the neo-liberal consensus on
trade and privatization. Indeed, posturing pseudo-populists aside, it
is unclear whether anyone inside the Beltway, including Obama's
economic advisors, can think clearly beyond the indoctrinated mindset
of Goldman Sachs, the source of the two most prominent secretaries of
the treasury over the last decade.

Keynes, now suddenly mourned, is actually quite dead. More importantly,
the New Deal did not arise spontaneously from the goodwill or
imagination of the White House. On the contrary, the social contract
for the post-1935 Second New Deal was a complex, adaptive response to
the greatest working-class movement in our history, in a period when
powerful third parties still roamed the political landscape and Marxism
exercised extraordinary influence on American intellectual life.

Even with the greatest optimism of the will, it is difficult to imagine
the American labor movement recovering from defeat as dramatically as
it did in 1934-1937. The decisive difference is structural rather than
ideological. (Indeed, today's union movement is much more progressive
than the decrepit, nativist American Federation of Labor in 1930.) The
power of labor within a Walmart-ized service economy is simply more
dispersed and difficult to mobilize than in the era of giant
urban-industrial concentrations and ubiquitous factory neighborhoods.

Is War the Answer?

The third problem with the New Deal analogy is perhaps the most important. Military Keynesianism is no longer an available deus ex machina. Let me explain.

In 1933, when FDR was inaugurated, the United States was in full
retreat from foreign entanglements, and there was little controversy
about bringing a few hundred Marines home from the occupations of Haiti
and Nicaragua. It took two years of world war, the defeat of France,
and the near collapse of England to finally win a majority in Congress
for rearmament, but when war production finally started up in late 1940
it became a huge engine for the reemployment of the American work
force, the real cure for the depressed job markets of the 1930s.
Subsequently, American world power and full employment would align in a
way that won the loyalty of several generations of working-class
voters.

Today, of course, the situation is radically different. A bigger
Pentagon budget no longer creates hundreds of thousands of stable
factory jobs, since significant parts of its weapons production is now
actually outsourced, and the ideological link between high-wage
employment and intervention -- good jobs and Old Glory on a foreign
shore -- while hardly extinct is structurally weaker than at any time
since the early 1940s. Even in the new military (largely a hereditary
caste of poor whites, blacks, and Latinos) demoralization is reaching
the stage of active discontent and opening up new spaces for
alternative ideas.

Although both candidates have endorsed programs, including expansion of
Army and Marine combat strength, missile defense (aka "Star Wars"), and
an intensified war in Afghanistan, that will enlarge the
military-industrial complex, none of this will replenish the supply of
decent jobs nor prime a broken national pump. However, in the midst of
a deep slump, what a huge military budget can do is obliterate the
modest but essential reforms that make up Obama's plans for healthcare,
alternative energy, and education.

In other words, Rooseveltian guns and butter have become a
contradiction in terms, which means that the Obama campaign is
engineering a catastrophic collision between its national security
priorities and its domestic policy goals.

The Fate of Obama-ism

Why don't such smart people see the Grand Canyon?

Maybe they do, in which case deception is truly the mother's milk of
American politics; or perhaps Obama has become the reluctant prisoner,
intellectually as well as politically, of Clintonism: that is say, of a
culturally permissive neo-liberalism whose New Deal rhetoric masks the
policy spirit of Richard Nixon.

It's worth asking, for instance, what in the actual substance of his
foreign policy agenda differentiates the Democratic candidate from the
radioactive legacy of the Bush Doctrine? Yes, he would close
Guantanamo, talk to the Iranians, and thrill hearts in Europe. He also
promises to renew the Global War on Terror (in much the same way that
Bush senior and Clinton sustained the core policies of Reaganism,
albeit with a "more human face").

In case anyone has missed the debates, let me remind you that the
Democratic candidate has chained himself, come hell or high water, to a
global strategy in which "victory" in the Middle East (and Central
Asia) remains the chief premise of foreign policy, with the Iraqi-style
nation-building hubris of Dick Cheney and Paul Wolfowitz repackaged as
a "realist" faith in global "stabilization."

True, the enormity of the economic crisis may compel President Obama
to renege on some of candidate Obama's ringing promises to support an
idiotic missile defense system or provocative NATO memberships for
Georgia and Ukraine. Nonetheless, as he emphasizes in almost every
speech and in each debate, defeating the Taliban and Al-Qaeda, together
with a robust defense of Israel, constitute the keystone of his
national security agenda.

Under huge pressure from Republicans and Blue Dog Democrats alike to
cut the budget and reduce the exponential increase in the national
debt, what choices would President Obama be forced to make early in his
administration? More than likely comprehensive health-care will be
whittled down to a barebones plan, "alternative energy" will simply
mean the fraud of "clean coal," and anything that remains in the
Treasury, after Wall Street's finished its looting spree, will buy
bombs to pulverize more Pashtun villages, ensuring yet more generations
of embittered mujahideen and jihadis.

Am I unduly cynical? Perhaps, but I lived through the Lyndon Johnson
years and watched the War on Poverty, the last true New Deal program,
destroyed to pay for slaughter in Vietnam.

It is bitterly ironic, but, I suppose, historically predictable that a
presidential campaign millions of voters have supported for its promise
to end the war in Iraq has now mortgaged itself to a "tougher than
McCain" escalation of a hopeless conflict in Afghanistan and the
Pakistani tribal frontier. In the best of outcomes, the Democrats will
merely trade one brutal, losing war for another. In the worst case,
their failed policies may set the stage for the return of Cheney and
Rove, or their even more sinister avatars.