The Obama years of squandered hopes

January 6, 2017

Lance Selfa, author of The Democrats: A Critical History, explains how the patterns of retreat and surrender were set in the early years of the Obama presidency.

PRESIDENT BARACK Obama is scheduled to deliver a "valedictory" address in Chicago this January.

No doubt he will tout his administration's accomplishments. He may even include his signature bromides about there being "no red states, no blue states, but the United States of America."

Obama's speech will be the first official attempt at shaping the perception of his presidency and its place in history. Many more gauzy portrayals will follow, and they will appear more and more attractive as the reactionary and endlessly corrupt Trump administration takes over in Washington.

Obama's 2008 election certainly marked a historic moment--the election of an African American president in a country that was founded and sustained for a lot of its history on slavery. A sense of hope and optimism pervaded the multiracial crowd of hundreds of thousands who rallied in celebration of Obama's win in 2008 in Chicago's Grant Park.

But a recognition of the importance of that history in time shouldn't blind us to a clear-eyed view of what the Obama administration did--and didn't--accomplish.

President Obama on the campaign trail

Obama assumed power at a time when the U.S. economy was in free fall in the worst recession since the Great Depression of the 1930s.

On the eve of President Barack Obama's inauguration in January 2009, Obama's popularity reached 80 percent, and large numbers of Americans had sky-high expectations for the incoming administration. A USA Today poll showed that seven of 10 people believed the country would be better off after Obama's first term.

After two straight national elections in which the Republicans took a beating, the largest Democratic majority since the 1970s looked like it would shift mainstream American politics away from three decades of conservative domination. The American right looked small, irrelevant to the concerns of most Americans, and likely to spend years in the political "wilderness."

Yet two years later, the previously discredited and out-of-touch Republican Party scored a historic landslide in the 2010 midterm election. In the largest congressional midterm shift since 1938, the Republicans captured 63 seats in the House of Representatives, ending a four-year Democratic majority.

MUCH LIBERAL commentary will portray Obama as a good and decent president who tried to accomplish big goals against unscrupulous opponents who used every dirty trick they could--including promoting the racist myth that Obama wasn't born in the U.S.--to undercut him at every turn.

Obama himself often compared implementing change in Washington to "turning an ocean liner." It's as if Obama, the most powerful man in the world for eight years, was a helpless bystander to historical events.

That's why any evaluation of the Obama years should focus on the first two years of his term, when the Democrats had huge majorities in both houses of Congress and a mandate to enact big changes in an atmosphere of national crisis.

The Great Recession, set off by the bursting of a Wall Street-engineered credit bubble, dominated every aspect of politics and popular consciousness through most of Obama's first term. The administration would rise or fall on how it dealt with the economic crisis.

But Obama was--and still is--dedicated to the pro-business neoliberal agenda that has dominated Democratic Party circles since the Clinton administration of the 1990s.

Millions of people voted for Obama hoping for a decisive shift in Washington politics and policy. But Obama and his elite backers were more interested in restoring the capital to its pre-2008 "business as usual." The gap between expectation and reality sapped Obama's overwhelming support.

Obama did push an economic rescue bill through Congress within a month of taking office, but it came in at less than $800 billion, about half the size that many independent economists estimated it should have been.

To win "bipartisan" support--even though the Democrats had a big majority in Congress--the administration limited the amount of money allocated to jobs creation and explicitly ruled out direct government jobs programs modeled on the 1930s-era Works Progress Administration. It dedicated upwards of 40 percent of the stimulus bill to tax cuts and credits to individuals and business, which were useless in creating jobs.

These concessions won the votes of exactly three Republican senators and no Republicans in the House. But they dramatically limited the bill's impact.

When the administration pushed for the stimulus bill, it released studies claiming that the legislation would bring the unemployment rate down to 7 percent by 2010. Instead, the unemployment rate kept rising to over 10 percent. The stimulus bill may have helped avert a plunge into depression, but it failed to reduce joblessness in any noticeable way.

THE OBAMA administration caused greater damage to itself when it became associated in the public's mind with coddling Wall Street.

Following a March 2009 meeting at the White House between Obama, Treasury Secretary Timothy Geithner and the CEOs of the largest 13 banks in the U.S., the president reassured the bankers that he had no intention of forcing a change in the way Wall Street did business. In his book Confidence Men, Ron Suskind quoted one of the CEOs who attended:

The sense of everyone after the big meeting was relief...The president had us at a moment of real vulnerability. At that point, he could have ordered us to do just about anything, and we would have rolled over. But he didn't--he mostly wanted to help us out, to quell the mob.

No wonder more and more Americans came to see the Obama White House as a bankers' administration--in the same way that the preceding Bush-Cheney regime was seen as an "oil and gas" administration.

A September 2009 Economic Policy Institute poll asked a national sample of registered voters to say who they thought "been helped a lot or some" by the policies that the administration had enacted. The result: 13 percent said the "average working person," 64 percent identified "large banks," and 54 percent said "Wall Street investment companies."

The sense of restoring the status quo pervaded much of Obama's response to the crisis that the Bush administration left behind.

With the economy teetering on the brink, Obama continued to implement the Bush team's bailout of Wall Street and reappointed Bush's Federal Reserve chairman, Ben Bernanke. With the U.S. bogged down in two failed wars in Iraq and Afghanistan, Obama reappointed Bush's Defense Secretary Robert Gates to run the Pentagon.

Using only executive action, Obama could have unwound the Bush administration bailouts for the bankers and pressured bankruptcy judges to reduce or wipe out mortgage holders' debt. At the very least, he could have refused to allow executives from the bankrupt insurance giant AIG to collect their multimillion-dollar bonuses from the taxpayers' dime.

Yet he did none of these things. Billions of dollars appropriated to help homeowners avoid foreclosure remained unspent. And after using the excuse of the "sanctity of contracts" to justify allowing the AIG bonuses, the administration's bailout of the auto industry tore up union contracts and imposed drastic concessions on autoworkers.

AND WHAT of Obama's signature health care law that looks destined to be repealed in 2017?

The Affordable Care Act (ACA) did result in some significant reforms to health insurance that benefited working people. But at its origin, "Obamacare" was modeled on reforms that the conservative Heritage Foundation promoted and that Republican Gov. Mitt Romney--Obama's presidential opponent to come in 2012--implemented in Massachusetts.

Supporters of genuine health care reform knew that the "compromise" bill was a huge gift to the insurance industry--and that Democrats got far less than they could or should have, in large part because they didn't even try.

Indeed, the Obama administration worked with lobbyists from the insurance, hospital and pharmaceutical industries to craft a bill that would be sufficiently pro-corporate to keep the industry from opposing it. Health care advocates pressed for a public insurance component to Obamacare, but Obama batted them away.

As journalist Glenn Greenwald pointed out at the time, Obama's support for the "public option" was always more rhetorical, than real:

The evidence was overwhelming from the start that the White House was not only indifferent, but opposed, to the provisions most important to progressives. The administration is getting the bill which they, more or less, wanted from the start--the one that is a huge boon to the health insurance and pharmaceutical industry.

Almost seven years later, the ACA has reshaped the health care industry along neoliberal lines, but it has failed to win the popular support that Obama thought it would. That's because it retains the role of the private insurance industry, which has continued to shift costs to individuals, while still leaving millions uninsured. Opinion polls have consistently shown that a substantial number of people who say they oppose Obamacare do so because they think it doesn't go far enough.

Because Obamacare never reached the level of popularity of programs such as Medicare or Social Security, Republicans are confident they can repeal it without much consequence.

AFTER THE Republicans took back the House in 2010 and until they won a Senate majority in 2014, the Obama administration helped drive an austerity agenda that further cut into working-class living standards.

In 2010, the administration and Congress agreed to extend the Bush administration's mega-tax cuts for the rich for two more years--something Obama had promised again and again that he would never do. In 2012, when the tax cuts were set to expire, Obama agreed to allow most of them to remain.

In 2011, Tea Party-addled Republicans in the House threatened to plunge the U.S. government into default to force through huge cuts in government spending. Instead of calling their bluff, Obama agreed to $1.5 trillion in federal spending cuts over the next decade.

Ultimately, the GOP had to rely on Democratic votes to pass the deal that lifted the debt ceiling. Noting this, Greenwald commented:

Therein lies one of the most enduring attributes of Obama's legacy: in many crucial areas, he has done more to subvert and weaken the left's political agenda than a GOP president could have dreamed of achieving. So potent, so overarching, are tribal loyalties in American politics that partisans will support, or at least tolerate, any and all policies their party's leader endorses--even if those policies are ones they long claimed to loathe.

During the negotiations over the 2011 government shutdown, Obama offered the Republicans unprecedented cuts to Social Security and Medicare. Feeling perhaps that Obama was on his way to becoming a one-term president, the GOP rejected him.

Yet Obama, after winning re-election by a substantial margin in 2012, was back to courting the Republicans for a "grand bargain." Only belatedly did he give up, but he wasted years legitimizing GOP talking points about the need to working people to accept more austerity.

Ironically, Obama only won re-election in 2012 by adopting a pose as "fighter for the middle class" against the plutocrat Romney. Working-class voters of all races were willing to give Obama another chance, especially since--picking up on the sense of class inequality that the 2011 Occupy movement had highlighted--his re-election stump speech foregrounded inequality as "the challenge of our times."

Rolling Stone's Matt Taibbi was more than a little skeptical:

Hearing Obama talk about jobs and shared prosperity...reminded me that we are back in campaign mode, and Barack Obama has started doing again what he does best--play the part of a progressive. He's good at it. It sounds like he has a natural affinity for union workers and ordinary people when he makes these speeches. But his policies are crafted by representatives of corporate/financial America, who happen to entirely make up his inner circle.

Since the Republicans took the Senate in 2014, gaining control of both houses of Congress, Obama has been mostly a lame duck.

His main initiatives have come in foreign affairs, with an opening to Cuba and the Iran nuclear deal. The most recent progressive change--the Supreme Court's legalization of marriage equality in 2015--resulted from grassroots pressure that Obama officially defied until 2012.

Though official indicators show improvements in the economy, Obama will leave office with a majority of the U.S. population enduring lower living standards than when he moved into the White House.

In real terms, median household income has still not made it back to 2007 levels and is far away from its all-time high of 1999 levels. Perhaps more significantly, given how the 2016 election turned out, the unequal economic gains of the recovery meant that people in rural areas suffered a 2 percent decline in median income in 2015.

MUCH MORE could be written in assessing the Obama years. About how the president became the "Deporter-in-Chief." Or how his administration transformed the Bush administration's civil-liberties-shredding "war on terror" policies into accepted parts of the bipartisan consensus.

How his administration abetted a coup in Honduras or sold record amounts of arms to Saudi Arabia and Israel. Or how he let the union-supporting Employee Free Choice Act die in Congress and refused to comment when the right-wing state government in Wisconsin gutted public-sector unions.

How his administration tried to steer clear of speaking out on race, except when Obama lectured Black audiences about the need for "personal responsibility." Or how, after Obama promised to close it as a first order of business, the Guantánamo Bay prison camp remains open still.

Each of these topics demands an article in its own right, but the emphasis here has been on the first two years of the administration. This was a time when Obama and the Democrats held almost all the levers of political power in Washington.

And they squandered it.

Assuming power as the economic crisis hit with full ferocity, the Democrats were destined to face a difficult situation. Since the party now "owned" Washington, they were certain to be first in line to receive blame from voters looking for help from rising unemployment, poverty and foreclosures.

Voters perceived that "the government" wasn't doing enough, and "the government" was run by Democrats. So they paid the political price.

But if the Democrats were perceived as trying to help ordinary people while the Republicans stonewalled any relief, wouldn't the public at least give the Democrats credit for trying? If they had launched a bold jobs program or proposed a genuine national health program, the Democrats would have at least provided an answer to critics who charged them with ignoring the public's needs.

But this would have required a Democratic Party and a president willing to use governmental power to reorder the status quo of the last generation, rather than just give it a new lease on life.

However cynically, the Republicans managed to channel public outrage with that status quo into two "wave" midterm elections and an improbable presidential victory in 2016. In the meantime, the Democratic Party presence in state legislatures and statehouses has been reduced to levels not seen since the 1920s.

In the summer of 2009, when liberal commentators were waxing on about the potential of Obama to become another transformative president in the mold of Franklin Roosevelt, the writer Kevin Baker aired the unorthodox view that Obama was more comparable to Herbert Hoover, the Republican who Roosevelt defeated in 1932.

Much like Hoover, Baker wrote, "Barack Obama is a man attempting to realize a stirring new vision of his society without cutting himself free from the dogmas of the past--without accepting the inevitable conflict. Like Hoover, he is bound to fail."

Obama's penchant to reach for compromise and "bipartisanship" was exactly the opposite of what the dire situation he inherited required--and what the American populace was ready for. Obama's first term, Baker wrote, offered "one of those rare moments in history when the radical becomes pragmatic, when deliberation and compromise foster disaster."

In the wake of Donald Trump's election, Baker's analysis looks more prescient than ever.

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