Corporations: The Real Reason Obama is not Making Much Progress

Almost a year after Barack Obama ascended to the White House, many of his supporters are bemused. His healthcare bill is a hefty improvement but it still won't provide coverage for all Americans, and may not provide a public alternative to the over-charging insurance companies - if it passes at all. His environmental team is vandalising the vital Copenhagen conference by saying the US - the single biggest emitter of warming gases - will not sign up to any legally binding restrictions there. He has placed the deregulation-fanatics who caused the New Depression, like Lawrence Summers, in charge of the recovery. Despite the real improvements on Bush - such as the end of torture, the resumption of stem-cell research, and opposition to the coup in Honduras - many people are asking: why he is delivering so little, so slowly?

A pair of seemingly small stories about the forces warping American politics can help us to answer this question. At first glance, they will seem like preposterous caricatures, but the facts are plain. The institutions that are blocking progress on all these issues - Republicans in the Senate, and the mighty corporate lobbying machine that bankrolls both parties - have rallied over the past few months to defend two causes with very little popular support in the United States: rape and slavery. No, really. If we begin to explain how this came to pass, then we might see why the American political system is malfunctioning so badly, even after a landslide victory for change.

Let's start with rape. This story begins in Iraq in 2003. The private military contractors sent by the Bush administration to guard the oil pipelines didn't want to get bogged down in expensive legal cases if anything went wrong. When it came to Iraqis, the Bush team simply exempted them from all Iraqi law, in a move so sweeping one Senator called it "a license to kill". But what about if their employees attacked each other, or other Americans? The private companies insisted all their employees sign contracts saying that, whatever happens to them, they will settle it in in-house, through "arbitration". Why? While representing the company at a real legal trial costs hundreds of thousands of dollars, an arbitration panel costs a few thousand. It saves cash.

This policy came, however, with a different price tag. According to her later sworn testimony, Jamie Leigh Jones - a 20-year-old working for the contractor Halliburton/KBR - was hanging out with co-workers one night in Iraq when her drink was spiked. When she woke up, she was haemorraging blood from her vagina and her anus. Her breast implants were ripped. The damage was so severe she later needed reconstructive surgery on her genitalia. She surmised she had been gang-raped by the seven men she had been drinking with. When she approached Halliburton/KBR, she says they locked her in a metal container with no food or water for 24 hours. A doctor came to see her wounds and took DNA evidence, although it was later "lost." A guard took pity on her and loaned her his cell phone. She called her father, who called the American embassy - and only then was she released.

In an Iraq that was collapsing all around her, there was no chance of the Iraqi police investigating. Halliburton/KBR insisted that her contract required the alleged gang-rape to be addressed by the company's private arbitration process, forbidding any claim in the American courts. (If this was how they treated blonde English-speaking American girls, what did they do if Iraqis said they had been abused?) After Leigh Jones went public, many other American women came forward to say they had similar experiences working in Iraq. Her legal team argues the refusal to allow rape to be pursued through the courts created a climate where it was more likely to happen.

The Democratic Senator Al Franken, when he heard about this, was horrified, and tabled a simple amendment to the law. It demanded that no company that prevents rape victims from having their day in court should receive taxpayers' money any more. Rape is rape. A majority of Republicans in the Senate - including John McCain - voted against the amendment. Why? The private contractors are major donors to the Republican Party, but the Senators claim this didn't affect their judgement. No - they said that Franken's proposal was a "vendetta" against Halliburton/KBR with "political motives". Franken pointed out any company trying to stop rape victims getting justice would be treated exactly the same by this law. The Republicans ignored him. They voted to maintain a system where some rape is not pursuable in a court of law.

At the same time, a group of Democratic senators have tried to amend the latest customs bill to ensure that nothing produced by slaves should be sold in the United States. It sounds uncontroversial - as uncontroversial as punishing rapists, in fact. Yet corporate lobbyists are militating behind the scenes to oppose it. As the private subscription-only newsletter "Inside US Trade" reported: "Business groups are worried by the potential effects", and a source tells them there will be, "a push from lobbyists closer to the Finance Committee mark-up of the bill... US industry groups and foreign governments [ie those that use slave labour] could form ad hoc coalitions to help send a united message." They will fight for their right to use slave labour.

These examples are extreme, but they reveal a powerful undertow that is at work on all political issues (and both main parties) in the United States. To see how, you have to understand two processes. The first is the nature of corporate power. Corporations are structured to do one thing, and one thing only: to maximise profit for their shareholders. No matter how personally nice or nasty their CEOs are, if they put anything ahead of profit, they will be sacked, and replaced by somebody who doesn't. As part of a tightly regulated market, this can be a useful engine for growth. But if it is not strictly reigned in by the law and by trade unions, this pressure for profit will extend anywhere - from trashing the environment to rape and slavery, as these cases remind us. The second factor is the nature of the American political process today. If you want to run for elected office in the US, you have to raise a fortune from corporations or the super-rich to pay for TV advertising. So before you can appeal to the voters, you have to appeal to the corporations. You do this by assuring them you will serve their interests. Once you are in office, you have to keep pleasing them at every step, or they won't pay for your re-election campaign. This two-step overwhelms the positive instincts the individual politicians may have to do good - and drags the US government further and further from the will of the people.

Obama had to climb through this system, and he is currently imprisoned by it. It explains his relative failure so far. Healthcare is proving so hard because the insurance companies are paying both Republicans and right-wing Democrats in Senate to thwart any attempt to provide universal healthcare coverage. Yes, it would save the 17,000 Americans who die every year because they lack insurance but it would depress their profits. Reducing carbon emissions is proving so hard because the oil, coal and gas companies are paying Senators across the spectrum to crush any moves to reduce oil, coal and gas use. And on, and on.

So far, Obama has tried to co-opt the corporations into his agenda by ensuring they will profit from any changes, but this inevitably waters down the proposals, often to the point of uselessness. The Cap and Trade legislation before Congress, for example, will barely limit carbon emissions at all because it has been gutted to please the polluters.

He will only achieve significant progressive change if he reforms the political system itself - to make it accountable to the American people, not the corporations. He needs to change the rules of the game. Ban big business from making political donations, and replace it with state funding. Shut down the lobbying industry. Make a big populist speech announcing you are driving the money-lenders out of the temple of democracy: it'd be surprisingly popular in a country where people can see they're being ripped off every day. The alternative is to become rapidly complicit in a system where defending rape and slavery is seen as just another day's work in Washington DC.