Will Obama Reboot Capitalism Anew?

Over six million people are now out of work, and unemployment figures released today show that now-record number is continuing to climb. Meanwhile, still-profitable American corporations manufacture goods for American consumption using Chinese labor and pay virtually no income tax by keeping their profits offshore.

A hundred years ago, Republican President Theodore Roosevelt tried to reign in some of the most toxic behaviors of capitalists that he found incompatible with modern democracy by pushing through congress a law that banned the practice of corporations giving money to politicians. He slowed down the robber barons a bit, but three consecutive Republican presidents in the 1920s led us straight into the Republican Great Depression.

Franklin Roosevelt, his distant cousin, rebooted capitalism in the 1930s, ushering in an era of regulated capitalism - embraced by Republicans like Eisenhower and Democrats like JFK - that brought us the largest, strongest, and most stable middle class ever seen. We also became the world's economic superpower, as the world's largest importer of raw materials, exporter of finished goods, and banker to the world. We imported iron ore and exported televisions and cars and washing machines. The rest of the world was in debt to us. A worker with a high school diploma could find a job that paid enough to raise a family and have a safe and comfortable retirement.

The Reagan Revolution of the 1980s was the third "rebooting" of capitalism in the 20th Century, and continues to this day. Scorning the "regulated" part of "regulated capitalism," economic Reaganites from the Gipper himself to GHW Bush to Bill Clinton to GW Bush flipped our economy upside down. Today, after just thirty years of "free trade" and "right to work" and other oxymoronic nostrums applied as policy, we've become the world's largest importer of finished goods and the world's largest debtor. We now export minerals to Asia, and import back from them televisions, cars, and washing machines.

So now the big question: Will Obama reboot capitalism anew? Will he move us into a new realm of capitalism, back toward regulated capitalism, or continue the slide toward a poverty-ridden Dickensian economy that Reagan started?

At the moment, nobody knows.

Reagan began the war on working people when he busted PATCO in the first year of his administration, and then began the process - largely uninterrupted right up to a few months ago - of dismantling the protections organized labor had enjoyed since the New Deal. When Bill Clinton totally abandoned the national industrial policy that Alexander Hamilton had put into place in 1791 with NAFTA, GATT, and the WTO, we made the shift from a "Made in the USA" to a "Do you want fries with that?" economy. And the near-total deregulation of the commodities (including energy) and financial sectors begun in the last years of the Clinton administration and put on steroids by Republicans during the GW Bush administration led to a shift from a "Do you want fries with that?" economy to a "How much would you like to borrow from us?" economy.

Now the manufacturing jobs are shipped overseas, and we're left with lousy jobs and maxed out of credit cards. Many of the few manufacturing jobs that will be created by the Obama stimulus plan will be done in American factories, but the profits will go back to Denmark, Japan, Norway, and other countries whose "green" companies are buying or building our manufacturing facilities.

All of this seems just fine with the Summers and Geithners of the world, and many of the Democrats who rolled over in the face of Republican opposition to the "Buy American" provision that was thus and then removed from the Stimulus bill. "Cheap credit" seems like a goal rather than a warning. And, tragically, several democratic senators have already signaled their fealty to the Robber Barons by refusing to endorse the Employee Free Choice Act.

One can only hope that - like the Obama reversal on the possibility of prosecution of Bush war criminals - our new president will change course and take us back to a "Made in the USA" economy. Like Franklin Roosevelt famously (and perhaps apocryphally) said, perhaps Obama is waiting for us to pressure him to "Make me do it."