Assessing the
gigantic new budget proposed by Barack Obama is hard enough, but the
$3.6 trillion behemoth turns incomprehensible when left- and
right-leaning journalists assigned to analyze it seem unable to
separate wishful thinking from political reality.
An early
skeptic about the left-handed phenom from Chicago, I've never had any
illusions about Obama's commitment to left-wing "change." Yet that's
exactly what pundits across the political spectrum say Obama is putting
forth.
Of course, we heard it all before in the Clinton
administrations - "Ah know you voted for chaiinge" - but the change
Clinton had in mind was realigning the Democratic Party to the right of
center, where he could raise more money for his political campaigns.
Millions were thrown off welfare - while millions of unregulated
"derivatives" were hurled into the debt markets, anti-union, anti-labor
"free trade" pacts were passed and a pre-emptive war was launched
against Serbia without U.N. consent.
Now Obama, a product of the
non-ideological Daley machine and advised largely by Clinton retreads,
has presented what ought to be described as a cautious, centrist
budget, albeit one with a huge deficit. Sure, it's a lot of money, but
given the severity of the recession, it's hardly excessive. Indeed,
such unradical liberals as Paul Krugman have criticized Obama's
pre-budget stimulus package as not being nearly aggressive enough.
The
same could be said of the new budget, and yet "liberals" and
"conservatives" alike insist that Obama has set into motion a bold
leftward shift in thinking. From the official left, The Nation magazine
calls the budget proposal "an audacious plan to transform America." In
the center, Clive Crook, of the staid Financial Times, calls the new
budget "a liberal's dream of a new New Deal" and Obama himself
"conservatism's worst nightmare." On the official right, The Wall
Street Journal warns ominously of "The Obama Revolution" and asserts
that the president is "attempting not merely to expand the role of the
federal government but to put it in such a dominant position that its
power can never be rolled back."
From these commentaries, you
might think that a crypto-socialist had taken up residence in the White
House. But such a reading of Obama is absurd.
First, the
"soak-the-rich" aspect of the proposed tax changes is vastly
overstated. Obama wants to reduce the deduction that top earners take
on their charitable giving, but he timidly declines to raise the
highest marginal-income-tax rate immediately, preferring to let the
Bush tax cuts expire in 2011. Not until 2012 would the president's rich
Wall Street and corporate-executive campaign donors be forced to pay
39.6 percent on part of their income - hardly confiscatory when one
recalls that the top marginal rate remained above 90 percent through
both Eisenhower administrations and part of Kennedy's. Similarly, the
top rate on capital gains was as high as 36.5 percent during the
Nixon/Ford era; Obama aims to raise it to just 20 percent from the
current 15.
Fiddling with the tax code (not reforming it) is
supposed to help pay for better health care. Already, Obama's health
plan doesn't cover everyone, but it does ensure that insurance
companies and HMOs will continue reaping profits off illness and bad
luck. President Truman, hardly a radical left-winger, proposed
authentic national health insurance in 1945 in the form of an optional,
federally administered fund to which anyone could pay a modest monthly
fee and be guaranteed payment of all their medical bills. Participating
doctors would have been reimbursed by the government, but such
participation was to be voluntary. Such a common-sense "single-payer"
program is not even being considered by Obama and Democratic leaders.
Even
so, left and right persist in the fantasy that the president is a Mr.
Smith Goes to Washington character prepared to "take on" the powers
that be. It's one thing to rationalize the vast sums that Obama raised
for his campaign from commercial and investment banks ("Well, you have
to get elected," etc.). But rationalizing the laissez-faire beliefs of
Lawrence Summers and Timothy Geithner - exhibited most notably in their
scandalous opposition to derivatives regulation in the Clinton
administration - borders on the idiotic. The left pretends that Summers
isn't really Obama's chief economic adviser, while the right pretends
the former Treasury secretary has converted to left-wing Gaullism. In
reality, Summers and Geithner are in place precisely to prevent real
reform of a banking system that helped put Obama in the White House.
On
budget matters, so far, Obama's economic "brain trust" is brain-dead.
Comparisons with FDR are spurious, given that the administration so far
won't even discuss restoring some form of Glass-Steagall, the New Deal
law that separated investment banks and commercial banks. Meanwhile,
Obama seems to have forgotten his proposed "reform" of NAFTA or of our
cheap-labor investment agreement with China (so-called Permanent Normal
Trading Relations). And he's certainly not calling for higher tariffs
to protect American industry and wages, or for bank nationalizations.
The
Wall Street Journal's Big Brother socialist bogeyman is a canard.
There's no authentic national economic planning in the Obama budget,
just the usual hodge-podge of programs that sound good to this or that
constituency, congressman or columnist.
Here's one little bit
of central planning that could have helped, but isn't seriously
addressed: rebuilding the nation's passenger- and freight-railroad
network, badly weakened by deregulation and mismanagement. The stimulus
bill has $8 billion for high-speed rail lines and the proposed budget
adds another $5 billion over five years. This is chump change compared
with the cost of occupying Iraq and Afghanistan, and paltry next to the
typical cost-plus Pentagon boondoggle.
Why not spend $50
billion on railroads? It would make the country more energy-efficient,
put lots of people to work installing and upgrading track, and
encourage General Electric to rehire the 1,200 people it just laid off
at its locomotive plant in Erie, Pa. With faster, better trains
(including urban rapid-transit lines), American companies could get
back into the passenger-train-car building business, now lost to Canada
and Europe, and American steel mills could profitably use some of its
excess capacity.
Obama, a moderate with far too much respect
for the globalized financial class, is surely the unleft, unradical
president. Which makes you wonder why left and right find common cause
in saying otherwise.
