What’s changed and what hasn’t changed

February 10, 2009

The new president seems to have forgotten that the majority of Americans have little tolerance for the Republican Party and its free-market nostrums.

BARACK OBAMA has been president for three weeks, and it already seems like he has lost his stride.

Several of his high-profile appointees, including his choice to lead an effort to reform health care, former Sen. Tom Daschle, were forced to withdraw over revelations that they had failed to pay their taxes. And the $800 billion-plus stimulus package that was to be Obama's first signature achievement stalled in Congress and came close to being defeated.

Some in the Washington media are already declaring Obama's "honeymoon" to be over. The White House decision to put Obama on the road to sell his stimulus package in Indiana and Florida was, according to the Washington Post's Michael Shear and Anne Kornblut, "an admission that Obama's honeymoon in Washington evaporated more quickly than his advisers ever imagined."

To be sure, Obama remains overwhelmingly popular, and his early tussles with Congress could quickly become old news. But his first days were instructive in what they tell us about what has changed--and what hasn't--since Obama's election.

For one thing, Washington hasn't changed. It's still a company town that thrives on influence peddling and the legalized bribery by which corporate interests buy politicians.

That's the main story behind Daschle's demise. Here was the former leader of the Democrats in the Senate, who in three years since losing re-election made upward of $5 million, much of it from "consulting" for various health industry corporations and associations. And he was the man who was going to be in charge of Obama's health care reform plans.

He was discovered to have failed to pay about $140,000 in taxes. But even this transgression--which would have landed any other non-influence peddling American in bankruptcy court or jail--didn't appear to have doomed him. Up until a few hours before he withdrew his name from nomination, neither Obama nor a single Democratic senator had pulled their support from him.

"Some asked why the president's vetting procedures missed crucial information," Shear and Kornblut wrote. "But the problem, aides said, was not that Obama's team was unaware of multiple tax problems of his nominees. They knew and dismissed them, thinking that the public and Congress would see the national crises the nominees were expected to confront as more important."

Barack Obama

During the 2008 campaign, Obama's team was adept at communicating the notion that the new administration would represent change from Washington's business as usual. But Obama's campaign advisers and the new administration are much more products of the inside-the-Beltway establishment than their campaign slogans indicated. And that establishment crowd was unable to see the sense of disdain toward it and its financial overlords in Wall Street that is building around the country.

Former Clinton Labor Secretary Robert Reich, writing on his blog, seemed to have a sense of this:

Typical Americans are hurting very badly right now. They resent people who appear to be living high off a system dominated by insiders with the right connections. They've become increasingly suspicious of the conflicts of interest, cozy relationships and payoffs that seem to pervade not only official Washington, but our biggest banks and corporations.

In short, many Americans who have worked hard, saved as much as they can, bought a home, obeyed the law and paid every cent of taxes that were due are beginning to feel like chumps...

The public wants change, real change, big change. There's no tolerance any longer for the way things used to be done.

AT LEAST in his initial moves as president, Obama also seemed to have forgotten that the majority of Americans have little tolerance for the Republican Party and the free-market nostrums that it and its Democratic Party imitators peddled for years.

Obama wasted the opening weeks of his presidency courting Republican support on economic stimulus legislation. The effort netted only a handful of votes, and at the cost of watering down the stimulus package.

As a result of chasing the chimera of "bipartisanship" so beloved among an American political elite increasingly disconnected from the everyday reality of its constituents, Obama may end up with a result that doesn't arrest the economic slide.

Commenting on the lousy compromise concocted by a bipartisan group of Senate "moderates" concocted, liberal economist and New York Times columnist Paul Krugman wrote:

[T]o appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts...The real question now is whether Obama will be able to come back for more once it's clear that the plan is way inadequate. My guess is no. This is really, really bad.

And as the crisis bites harder among working people, they are going to blame Obama and the Democrats--not the Republicans--for the economic disaster that results.

That anyone should pay attention to what the GOP and its acolytes have to say today is incredible given that the November election and the 2006 congressional elections delivered about as solid a blow against the conservative status quo as the American political system affords.

On some level, Obama belatedly came to understand this, too, as he amped up his rhetoric against the conservatives in early February. "Don't come to the table with the same tired arguments and worn-out ideas that helped to create this crisis," he said.

But despite his grassroots movement-influenced rhetoric and the hopes for change that millions place in him, Obama remains a capitalist politician. It wasn't because of his rhetoric of empowering working people that Obama became the favored candidate of Wall Street and other sectors of big business in 2008.

Corporate America had lost confidence in the Bush-led Republicans to restart the economy. As a result, it gave Obama much more leeway to propose and campaign for higher levels of stimulative government spending than had been considered politically feasible in the last generation. After all, big business stands to gain from investment in infrastructure and whatever rescue Obama's administration can engineer for the financial industry. But it has no interest in seeing a more fundamental restructuring of the economy.

Because Obama is committed to doing capital's bidding and because free-market neoliberalism remains well-entrenched among leading business and government circles, the administration tried to straddle the gap between the minimal change the corporate elite wants and the more far-reaching change that ordinary people need.

So Obama opened the stimulus debate with far more tax cuts and far less spending than he had initially promised. This wasn't done only to curry Republican favor. It also appears to conform to the policy preferences of his chief economic adviser, former Clinton-era Treasury Secretary Larry Summers.

Moreover, the administration faces an insolvent banking system that should be addressed with a full-scale nationalization. Yet in deference to business sensibilities, the administration and its supporters in Congress appear to want to go to any length--including pouring billions of dollars more into failing institutions--to avoid the specter of nationalization.

The result is a series of half-measures and ineffectual policies that, as Krugman argued, may end up making the problems worse.

WHEN IT comes to issues like health care for all or the Employee Free Choice Act (EFCA), there is no "bipartisan" easy solution that is going to satisfy both business and working people.

The Democrats and liberals' compromised position vis-à-vis big business means that there will be definite limits to how far they will go to fight for health care or labor law reform. And they are unlikely to challenge the main planks of Obama's foreign policy. So it will be up to people who want to see more far-reaching change to organize--push from below to achieve it.

Chris Kromm, director of the Institute for Southern Studies, a progressive think tank that deals with issues of race, poverty and workers' rights in the South, has it right:

What will happen when the Obama movement comes face to face with the disappointments that will come--and for some, have come already--as Obama makes the inevitable compromises and back-steps from his commitment to social progress? Real change will be possible if and when the Obama Generation develops the political maturity and self-confidence to realize they don't have to wait on leaders or symbols to bring about a better world: They can and must organize to make history on their own.

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