Contradiction in Obama's Economic Philosophy

Commenting on Obama's health care 'summit,' Krugman identifies the pattern that dominates health care and pretty much everything else in national politics: "Democrats [offer] moderate plans that draw heavily on past Republican ideas, and Republicans [respond] with slander and misdirection."

Why do we see this same pattern of compromising Dims and savage Cons year in and year out?  One theory is that the Dims are actually Cons and so by losing to the Cons can get what they secretly want.  This theory works some of the time. But it doesn't explain the Dims tolerance for highly-visible losses, which are supposedly a bad thing. 

Another theory is that the Dims are not really Cons, especially in the sense that they are basically nice, humane people unlike Cons and therefore don't fight to kill and win. They actually like compromise, believe in everyone getting along, have faith in the high road, etc.  This theory is also more than partly true.

This blog has long interested itself in what allows people to formulate a strong position and then actually achieve it. This is equivalent in our terms to avoiding the pursuit of decline and failure, which has become so common in the vast but shrinking middle rungs of American society.

One central precondition is intellectual coherence.  Obama's political weakness is related to the fact that he lacks this.  His health care proposal, weak as it is, assumes an expanded role for government in the delivery of health care.  This in turn assumes that government plays a necessary regulative role in a market-based system dominated, to majoritarian distress, by a small number of large and powerful corporations.  This regulative role further assumes that government is a positive and constructive force in negotiating society's relationships with private entities like Blue Cross.

How does this fit with Obama's overall economic approach?  In a speech to the Business Roundtable last March, Obama offered a good summary of his economic philosophy, so to speak:

I’ve always been a strong believer in the power of the free market. It has been and will remain the very engine of America’s progress — the source of a prosperity that has gone unmatched in human history. I believe that jobs are best created not by government, but by businesses and entrepreneurs like you who are willing to take risks on a good idea. And I believe that our role as lawmakers is not to disparage wealth, but to expand its reach; not to stifle the market, but to strengthen its ability to unleash the creativity and innovation that still makes this nation the envy of the world.

But I also know this: Throughout our history, there have been times when the market has fallen out of balance. There have been moments of economic transformation and upheaval when prosperity and even basic financial security have escaped far too many of our citizens. And at these moments, government has stepped in not to supplant private enterprise, but to catalyze it — to create the conditions for thousands of entrepreneurs and new businesses to adapt and ultimately to thrive.

That’s why we laid down railroads and highways to spur commerce and industry — to stitch this nation together. That’s why, even in the midst of civil war, Lincoln launched a transcontinental railroad, and Land Grant colleges and the National Academy of Sciences. That’s why we initiated universal public high schools and passed a GI bill to nurture the skills and talents of all our workers. That’s why Eisenhower built an interstate highway system, and Kennedy pointed us to the moon, knowing that the exploration would lead to unimagined innovations here on Earth.

That’s what we’ve done in the past. And that’s why I’ve chosen to address education, health care, energy and this budget — because we can’t wait to make the investments today that will lead to tomorrow’s prosperity.

Such thoughts are why Cass Sunstein called Obama a "Chicago School Democrat" - the market creates all wealth, except when the market fails, at which point government must fix the market.  This also a "public private partnership" (PPP) philosophy, similar to that espoused by Blair and Brown Labour in the UK.

Unfortunately, Obama's position -- a common one among centrist Dim and Labour elements --  makes neither political nor conceptual sense.  If the market fails with any kind of regularity, then government is also a source of wealth and value. If government is a source of wealth and value, then the market is not the dominant if not the only source of wealth and value.  In the case of health care, if the market is the very engine of American progress, then America's free market system that has placed such enormous profits in the hands of HMOs and insurance corporations has been an amazing success, and we should not now be talking about bringing government in to regulate it.  Cons take continuous advantage of Obama's awkward stance.

The political problem with Obama's position is similar. How can he rally a mass base by chiding Wall Street bankers one day and praising their wealth the next? How can he be taken seriously by saying business should run the economy and then invoking the railroads to say government should help run health care?  The scope and timing of intervention is also always at issue, and you need some coherent principles to decide when and where.

The obvious solution is for Obama to say loudly and often that "government creates wealth" - in exactly the ways he describes in his speech, with quality education being at the heart of value-creation along with universal health care.   Society creates wealth, and government is one instrument and business is another, and in a democracy society gets to decide the scale and scope of the various instruments.  Government and businesses are co-generators, which means that public investments should be both ackowledged and compensated - which would reduce profits for companies that have gotten used to getting all sorts of public stuff for next to nothing, and would challenge American capitalism as it is, which of course Obama has to do if he wants a real recovery, except he thinks we already have one.

Obama's intellectual failure to expound a coherent social-democratic vision of society, which would also be post-capitalist in the sense of being post our inefficient, wasteful, crooked, silly current version of capitalism will, if it continues,  be yet another source of his political failure.

Monopoly Endgame and Middle-Class Decline

Yesterday the NYT ran a very good piece on the rise in the long-term unemployed. One of the featured people is Jean Eisen, out of work for two years. A former comic, she's turned to Christianity because prary offers the kind of health insurance she can afford.

Twice, Ms. Eisen exhausted her unemployment benefits before her check was restored by a federal extension. Last week, her check ran out again. She and her husband now settle their bills with only his $1,595 monthly disability check. The rent on their apartment is $1,380.

“We’re looking at the very real possibility of being homeless,” she said.

The piece states the clear implication:

Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.

And also offers a more candid-than-usual explanation of why:

Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.

“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”

Jobs used to grow at a 3.5% rate each year. After 1980, they grew during expansions at under 1% a year.  To make the point as directly as possible, U.S. economic leaders shifted the conditions of revenue growth so that they depended on the reduction of employment growth.  In other words, U.S. expansions become almost-jobless recoveries by design.   The actually jobless recovery after 2003 under George W. Bush was the holy grail of this economic policy.

The Obama Administration is doing what it can to draw a somewhat bent line from Bush to Hooverization.   Its money goes to big banks not small ones, who are not lending to the small businesses that produce the vast majority of new jobs in any recovery.  (See my Capitalist Pal on this crowding out.)  Small business is not recovering, and employment will recover that much more slowly.  Strategic sectors like green energy are on the ropes.  The federal stimulus will not rebuild enough of the crumbling country by in the process hire the hundred thousand a month required just to keep unemployment in place.   Instead, its unemployment bill will mushroom, as people are paid not to work on public projects but because they can't find work. Cash-starved governments will try to contain the mushrooming bill by throwing people off of "safety-net" programs that include welfare: "as of 2006, 44 states cut off anyone with a household income totaling 75 percent of the poverty level — then limited to $1,383 a month for a family of three."  The effect here obviously is to insure that welfare leads to paralyzing, unhealthy poverty.

It's all getting to be too much even for some of the Summers-Rubin Lexus worshipping fans of unhinged business.  Tom Friedman's column is titled "The Fat Lady Has Sung," and has the quip that sums up pretty much everything.

But now it feels as if we are entering a new era, "where the great task of government and of leadership is going to be about taking things away from people," said the Johns Hopkins University foreign policy expert Michael Mandelbaum. 

Ms. Eisen's life story is a history of So. Cal deindustrialization, as she energetically jumps from one industry to the next with a cheery entrepreneurial spirit, only to see that entire industry die or get sent abroad (aerospace, a travel agency, then beauty product sales . . .)

The worst comes nearly last.  Another successfully member of the middle class who hasn't been able to find a job in two years remarks, "“What is going to happen? . . .I worry about my kids. I just don’t want them to think I’m a failure.”  The worst is that many of those on the front lines of middle-class decline don't see the structural problems.  It's hard to imagine, given the incredibly low mental level of most US media, that they ever will.  But without a reason or a will to revolt against this dead-end system, all they can do is spiral wagewise to the bottom.

There's a direct connection between the U.S.'s monopoly-prone economy and wage / employment decline.  It won't change unless members of the ex-middle class start to realize the removing jobs has for thirty years been the U.S. economy's dominant recipie for revenue success.

Obama Heart Banks

When Obama praises the spirit of piling money higher and deeper as the great Spirit of America, and absolves the bank bonusers of any wrongdoing, he makes no sense ethically or economically - finance and its grotesque incomes is grossly inefficient, really unaffordable in our struggling world. But on the level of simple tactics he makes his alleged crackdown on the banks into a joke.  Henceforth all of his stern fingerwaggings will be greeted with a wink and a nod - except in middle America, where the pitchfork crowd signs up for Tea Party populism and waits for the chance to run Obama out of town.

I never thought I'd be seeing him as simply dumb but I am starting to.

Global Hoovermania

The national debt crisis in Greece is an example of a case where a combination of Eurozone rules and financial market pressure will force huge cuts in public spending, damaging both living standards and delaying economic recovery.  On Sunday, the New York Times reported that some of Greece's hidden debt was concealed courtesy of instruments sold to it by Goldman Sachs in 2001.  In November 2009, Goldman Sachs tried to do it again. The Financial Times reported today that EU authorities have requested information about the swaps.

Greece's national debt is over 100% of its annual GDP.  But this is not so horribly out of line with other countries, as can be seen at left and here.

"High" debt is a matter of interpretation, and 40 years of attacks on the existence of government, the public sector, and public debt as a source of public investments has greatly reduced the markets' tolerance for debt levels that are still well below what seemed normal in times of crisis like World War II. Markets put up with high debt levels during war.  If we were serious about, say, decarbonization, we would run 200-300% deficits in gigantic crash programs in solar power, total transportation system reengineering, weatherproofing every building on the planet, you name it, so that there will be great-great grandchilren around to pay the debt we left them.

The interpretation of debt levels as too high is threatening the recovery, since it will force governments to cut spending when they should be increasing it.  This is the plan for Greece, the famous land of Generation 800 Euros (youth salaries per month) and meager economic development outside of coastal estates built on land removed from government protection by arson-set forest fires.

Government employment is a pillar of the middle class everywhere in the world.  It is also being squeezed everywhere: in Sacramento, California, a moron's consensus reigns on the virtues of cutting state employee salaries 5%.  In all countries, public service employment is the crucial gateway to the middle class -- as it was in the United States from the 1940s to the 1960s, for African Americans in particular who faced ongoing discrimination in the private sector. Countries like Argentina that were forced into IMF-style austerity programs that slashed the public sector have one common feature: an incredible shrinking middle class.

Most pundits seem to have learned nothing in all these years. Thomas Friedman recently contrasted two years in the Middle East. 1977 was good -- neoliberal policies implemented in Egypt by Sadat.  1979 was bad -- the Iranian revolution, Whahabi-reaction in Saudi Arabian Islam, etc.  But "liberalization" and "modernization" were themselves the source of the radicalization of mass Islam that Friedman deplores.  They impoverished the great majority in Egypt, ruined Cairo's public systems for starters (on my recent trip there an archictectural institute informed me that 60% of Cairo's housing is "informal" - built by occupants because the private and public sectors both refuse.) 


Krugman points out that the bigger debt problem in the Eurozone is Spain. But for some reason he spends his column attacking the very idea of a single currency in a variable region rather than attacking austerity politics, though he knows in the U.S. case that the focus on debt will kill the recovery.

Since the world needs both recovery and stable currency and debt arrangements across diverse national economies - both of which the financial system has not delivered - Krugman et al. need to figure out how to avoid screwing the populations of countries like Greece.  The world has to learn how Greece can have a modern, efficient, green infrastructure with its current economy, and then discover how to provide the same to about 130 other countries that are in even greater need.

If the EU can't fix Greece, it can't fix anything that needs fixing.

Hitting the Iceberg on Purpose

The simplest summary of President Obama's State of the Union message is that the Wall Street bailout was a success, and the Main Street bailout must stop.  Why else would he point out ongoing suffering and then call for a 3-year freeze in the federal funding that is the only meaningful source of support and social development money in the United States?

For the pre-limbic thought processes that are leading the Democrats into a deliberate steering of economic recovery and their own political power onto the iceberg, see this dismal collection  of inane forgetting of basic politics and economics not to mention the basic purposes of the Democrat party.

The Dismal Collection gets to the backstory behind Krugman's excellent slam of Obama's "deficit-peacock strut." Obama has produced too small a jobs program and too weak a health-cost containment because "our political system doesn’t seem capable of doing what’s necessary." Behind the political failure is mass mental failure: learned and extremely astute people like Obama have their options shaped by 8th grade arguments and personal attacks that wouldn't score any points at all on most issues in most educated countries.

Afghanistan is a good example, and the NYT's London bureau chief John Burns perfectly articulates the incoherent strategy for which Obama is risking his presidency.  "Winning" Afghanistan means winning hearts and minds, but the actual US strategy is to win on the battlefield by killing a lot of Taliban, thus demoralizing them, at which point they will accept our money to switch sides forever to the Stars and Stripes.  This is as dumb as it gets, but Obama is racing down this road because of dimwit beltway concerns about "Obama the man."

Obama is letting himself get blown around by the gale-force winds generated by airhead Repubs and Dims all calling for him to move to a center that is well to the right of Richard Nixon.  He went from the US inventing the world's cheapest solar cells to "building a new generation of safe, clean nuclear power plants in this country" from one paragraph to the next.

Obama's former enthusiasts are getting desperate.  Cenk Uygur says that if the Dims reappoint Bernanke the great Titantic captain  "there’s no helping them and there is no hope in them."  The great summary of this dead end is Jon Stewart's:  "No matter what you do, the Republicans are not going to let you into the station wagon. . . .and you're the majority party. It's your car!"  Later Assif Mandvi explains, "The Democrats are going to need bipartisan support if they're ever going to see Bush's agenda enacted."

Finally: "you can't hurt us anymore. We're already dead."

Stewart's stuff about the Repubs not letting the Dims into their own car gets at some deep Democrat yearning for approval from authoritarian dickheads on the Right, and from the same elements in their own constituencies.  How can their survival do more that degrade us further?

Obama Takes the Wake-Up Call

My hope for Barack Obama always rested on the fact that he was a smart politician in the old school sense - that he would listen to majoritarian pressure and respond to it.  He may have figured out via the loss of Kennedy's seat via a "centrist" Dim to a Republican that economic oligarchy isn't popular.  There seems to be supportive polling data that Coakley didn't lose because she's too liberal.

This week, Obama offered a direct attack on the Supreme Court's neo-feudalist decision to give corporations the free speech rights of citizens, calling it "a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.”   And his "populist" shift against banks, read as a shift from Geithner to Volcker,  upset the moderate Financial Times (which called Obama's move both a "declaration of war" on Wall Street and a "Maginot line", and the trading of bank stocks. (Sen. Barbara Boxer also announced her opposition to the reconfirmationl of Ben Bernanke at the Fed.) Again there was strong language:

My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see record profits at some of the very firms claiming that they cannot lend more to small business, cannot keep credit card rates low, and cannot refund taxpayers for the bailout.  It is exactly this kind of irresponsibility that makes clear reform is necessary.

Still, the proposal itself has no specifics at all.  Obama has never had trouble making a good speech. The trouble is always whether anything comes next to back it up.  I'm doubtful that he has any interest in turning banks back into something more like a service to the public economy.  But at least he's not still asleep.

ADDENDUM.  See this good overview of Bernanke's two failures  - to have seen the housing bubble for what it was and helped deflate it, and to continue to privilege "fighting inflation" over fighting unemployment.

- Fr. Frank offers a definitive summing-up of where Obama is right now.  Offering many useful details, he says, "The president is no longer seen as a savior but as a captive of the interests who ginned up the mess and still profit, hugely, from it."  His muddled non-direction, Fr. F notes, is Dim party is adding to the existing weight of Dim centrist pro-biz confusion and pulling it under  "the Obama administration is so overstocked with Goldman Sachs-Robert Rubin alumni and so tainted by its back-room health care deals with pharmaceutical and insurance companies that conservative politicians, Brown included, can masquerade shamelessly as the populist alternative."

Rocket to the Bottom

The loss of Teddy Kennedy's Senate seat to a Republican is being greeted in France a clear sign of Obama's fall from grace and perhaps from influence.  In the midst of the avalanche of commentary came this poll about how Americans think Obama has done with improving race relations and the position of African Americans.  The WaPo reports that "On the eve of President Obama's inauguration a year ago, nearly six in 10 Americans said his presidency would advance cross-racial ties. Now, about four in 10 say it has done so."

There's far more agreement about this between the right and left than between black and white.  70 percent of "Americans" think Black folks have achieved social parity.  11 percent of Blacks folks agree.  The existential gap persists between those who actually experience being American while Black and those who don't.  So does a deficit in cultural capacity, which I define here as the majority's ability to credit "minority" experience.  The U.S. majority is bad at this, though it must be said that the majorities of most countries also are.

The main race debate in Obama's first year revolved around the arrest of the Harvard professor Henry Louis Gates, Jr. in his own home in Cambridge Massachusetts.  Obama retreated from his initial explicit outrage at police behavior, leaving the outcome as a public teaching moment murky at best.

But race relations are obviously also at stake in Obama's escalation in Afghanistan and inability to reduce the meddling and swaggering and support for tyrants that intensifies rather than suppresses the violence. He's maintained what is widely perceived as a war on Islam, a war on Arabs and on other middle eastern peoples - on non-Western brown folk who object to U.S. sovereignty over their own region of the world. 


The saddest example in the U.S. rescue effort in Haiti.  Haiti is the litmus test of Black conditions in the world as a whole - the first and last successful slave revolt created it as the first Black republic, and its neighbors starting with the U.S. haven't given it a break since.  When Port-au-Prince and many other Haitian cities were flattened in last week's earthquake, Iceland arrived first, and Cuba and Venezuela were there, and France sent various planes including one with field hospitals. The U.S. then arrived, took over the airport, turned back the French plane with field hospitals among others, injected 11,000 heavily-armed troops into the country, with the visuals looking a lot like the U.S. a military occupation. The mainstream media has copped to the fact that the U.S. is not really helping the rescue effort so much as policing an effort that "needs gauze, not guns."  Obama's most visible moment was appearing with former Presidents Clinton and Bush II in a weird show of solidarity not with Haitians but with the white presidents who meddled constantly in Haitian political affairs.  Bush backed the current government's perverse privatization efforts, which resulted in the closing of the country's only cement company and the closing of the country's only flour mill.  That was the kind of American support Obama reflected in posing with those two guys in his ride to the rescue.


It's no wonder Black racial optimism is back where it was before Obama's election.  I still see those lines with hundreds of people waiting in the rain at 5 in the morning to make sure their vote got to count.

Financial Crisis as Mental Problem

The financial crisis continues to foreground a crisis of knowledge: what are people allowed to know? When is what they know allowed to be true?

The financial industry has never faced the extent to which its analyses are skewed by its own financial interests, or how completely the uses of bailout money remain secret.  AIG remains a black box, and more generally we have no idea what any of it is worth once semi-detached from the government guarantees that float it now, and sink the rest of us.

Anne Enright has a nice piece in the London Review of Books on the universal mental unreality.  Called "Sinking by Inches," she writes about Ireland's meltdown as caused in part by Ireland's mental paralysis.

I can understand the denial at the end of the boom; what worries me is the denial that made it. From 2001 to 2007 it was not possible to be off-message about the Irish economy or, especially, about the housing market. You would barely be published. . . . It was no fun being informed, either then or later. People don’t like you for it, and why should they?
One of the strangest feelings, living through a housing boom, is that you are rich or poor not because of the money you earn, but the year you started earning it. It is not a question of effort, but of luck. This was part of the impotence and panic that drove Irish people to buy overvalued houses towards the end of the boom; it was the feeling that we were running up a down escalator and had to grab hold of whatever we could, to stop being swept away. . .
Telling the truth was, in the circumstances, not just boring, it was also unlucky, hexed, taboo. It might even be unclean. Careless talk costs jobs. If the bubble burst it would be your fault for calling it a bubble, because, at the end of the day, it’s not an economy, it’s a mood.

 This is still where the U.S. leadership seems to be, new bank tax or not.  Its main goal is to make the mistakes of the past into something bearable - at least for them.  While they continue to foucs on this, the country as a whole won't be able to tell the truth because it is still afraid of making it all worse.   And so we'll stay stuck with the combination of "impotence and panic" that got us where we are.

Ticking Time Bomb for 2010

There isn't enough commentary out there about how the "recovered" sector of the American economy - the banks - are recovering through continued and massive taxpayer subsidies.  One of my Capitalist Pals had a good piece on it earlier this week. Healthy balance sheets are coming from (1) free money guvmint money (effectively zero interest) for which the banks can charge 5% or whatever; (2) the use of higher-yield Fannie Mae and Freddie Mac securities, although these agencies are floated by bailout funds; and (3) the declaration of actual losses as income:

many of the same banks that received TARP funds were deliberately allowed to mask big losses in the 1980s after their loans to Latin American countries went bust.

Today, banks are doing the same thing by underreporting losses and delinquencies. This means that, even if banks aren't collecting, they can keep counting interest they're owed as if they are getting paid. This allows them to delay the write-down process, and casts doubts on their financial statements.

 The fact that the author of this piece depicts his view as controversial suggests we're living again in Kool-aid World, and that unpleasant surprises await.

Be sure to read the even scarier Part II.

HNY quandmême!

To a Better Next Year

One good thing about the 2000s was the expansion of the blogosphere - the quality of available commentary has never been better, and we can access expertise and insight that otherwise would have been limited to a particular college lecture hall or small-circulation speciality magazine.  So here's to folks I unambivalently celebrate as creators - Ted Newton and his conceptualization of hypertext, Tim Berners-Lee and the universal resource locator, and the thousands of others who put the Toile together as they say in French.

On the decade itself, Krugman's Zero Decade pretty much sums it up for me so nuff said.  Zero economic progress, intellectual suspension between paradigms, no answers to 1990s questions about how to have a productive economy and decent, sustainable life without monopoly rip-offs and exploitation of the global South - actually questions barely asked by the ones in power.  The gap between intelligence and leadership seems as large as ever in my lifetime, and I'm old enough to remember Richard Nixon.

On the absence of establishment intelligence in the United States, Jane Hamsher puts it well:

the right, whose numbers are relatively small and whose views are generally far outside of the main stream, has dominated politics for the past 30 years because they made an alliance with the corporations. It’s only natural that Democrats have sought power by replicating that model, even at the price of destroying the illusion that they’re the “party of the people” and fracturing the support that put Obama in office.

The Democrats are trying to secure their political ascendence by tying up the money, no different than Tom DeLay did. But whereas the Democratic Party represented a net to collect and unite those disaffected with the kleptocracy of George Bush, the actions of the Democrats since securing the White House this time around have dimmed the hopes that the Democrats present a real alternative.

The Bush Republicans flogged social issues in order to obviate the need for populist economic measures. They satisfied the base by treating them to a banquet of God, guns and gays while they looted the taxpayer trough. The Democrats, however, are making a sacrifice play on social issues and enabling corporatism by triangulaing against their own base.  . . . the White House positioned themselves as “centrist” after the widely popular public option was dispensed with, simply because it was something “liberals” seemed to want too.  What they’re forcing, however, is a situation where there is no place for populist liberal discontent to rationally go.

Hamsher ends by seeing a populist alliance opposing "kleptocracy"of the republocrats, but given the 2-party lock this can only be a domestic "war that will last for years."

On the coming War Decade, one need only extrapolate from Glenn Greenwald's piece on the Five Wars and the absence of clear thought about what to do. See also Juan Cole's Top 10 Middle East Crises, which are a fitting epitaph for the decade overall.  Obama seems even more manipulable than Bill Clinton by any accusatory nonsense the Right can dream up about his lack of masculine will to kill the terrorists and their infinite threat.  I'm also old enough to remember the Cold War, when the hysteria could at least base itself in a opposition to a real superpower, the Soviet Union, and its utterly unconquerable unappeasable ally, Red China.  Today's global mobilization against a crazy college dropout who lit his pants on fire only to be subdued by his fellow passangers, all of whom landed safely, and this deranged young man's several dozen committed al-Qaeda allies in Yemen, is frankly pathetic.  Some sorryass superpower we turned out to be, shouting and ranting and flagellating ourselves in public over a security lapse, and making ourselves feel better with threats of world war. 

The worst part is the shock and rage each time that someone obsessed with the US presence in the Muslim world tries to kill some Americans.  What exactly do we expect?  Either we are trying to rule the Muslim world by supporting dictatorial governments and reactionary monarchies everywhere, deploying dozens of military bases and advising local governments in the arts of political repression, scrambling for resources in competition with Europe and Asia, and backing Israel no matter how much it colonizes and mistreats its neighbors, in which case a portion of the affected populations will naturally try to kill us.  Or we will try to get them not to kill us by creating relations of economic equity, sustainable development, and political democracy with real local control (and hence disagreement with U.S. policy and favoring of local rather than U.S. businesss).  Can we grow up enough to even see that there is a choice here?  Not very soon, since the rage that suppresses thought is in sync with the loss of collective intelligence we suffered during the Cheney Years.  Obama doesn't have the chops to escape.

Hopefully, however, we do. Happy New Year no matter what.

The Era of Permanent Discontent

Thanks to Juan Cole for writing up the Top-10 "worst things about the wretched period" of the 2000s - for me the Top-10 signs of decline.  Yes, it was a truly bad start to the new millennium for which we have many dumbass electorates and self-serving elites to thank.  The decades' leaders replaced negotiation with belligerence wherever they found it convenient to them - really, with Iraq, whenever it felt right.  The same goes with finance now and the end - Cole's top 1% who reaped 2/3rds of the gains of the 2000s are getting a free pass from the Obama admin to do as they like.  The same goes with the environment, where the failure of Copenhagen to produce targets and timetables in an utterly quantified management culture that responds only to these will mean the reinflation of fossil fuel use - oil sands, clean coal, the whole 9 yards.

The decade began the Era of Permanent Discontent.  There were mass protests and opposition to policies like the Iraq war that political and business leaders systematically ignored.  Individuals like Dick Cheney were more openly contemptuous of public opinion than others, but it's hard to think of a national or state-level leader who has recently opposed his or her small inner circle or the Ring of Lobbyists - on any issue in order to back a majority view.

Continuing the cycle, obvious rejection of popular positions then produce further protests and widening gap between leaders and the vast majority they claim to lead.  Polling data picked it up: rulers implemented positions accepted by a minority of the public, and this is happening again with the health care "reform," where a "clear marjority" wants a public option (October 2009, December 2009), and where political leaders don't, and so there won't be one. In Europe they call this "post-democracy." In California, it is called minority rule, and a UC professor George Lakoff has started an initiative to end the Proposition 13-based supermajority rule for budgeting and taxes.  This is a great idea. But it needs to confront an electorate that has no experience with or trust in real majority rule.

The twin of permanent discontent is Permanent War.  Bush's "war that will go on for years" has become Obama's Afghanistan escalation and similar rhetoric of standing, dispersed dangers to global security.  Apparently no American executive can govern without Cold War-style insistence that the country is in grave danger from all over.  The benefits to the military and industry are obvious, and so are the benefits to executive authority.  Obama's Wars now involve escalating the drone attacks and secret military incursions into Pakistan that echo the Nixon-Kissinger incursions into Laos and Cambodia that hardened and widened the Vietnam war that they too claimed to be winding down.  In the context of majority demands for public health care, better infrastructure, cheaper higher education, green technology, more and better jobs, war has an important role to play.  The function of war i to make all popular things impossible.

It's worth nothing that finance has come to play a similar spoiling role. Its absorption of somewhere between $17 and 24 trillion has already killed off any new New Deal for the states and their outmoded intrastructures and social systems (the US ranks 12th to 16th in the social distribution of its own core technologies, broadband access).  Finance is increasingly acknowledged to invest largely in unproductive assets, so it's not like we need its domination over the economy because they are about to give back to society - give back new industries, high productivity growth, better living for all.

But the financial sector is good for the political executive function. It concentrates wealth and concentrates the power that goes with it.  Wall Street's importance magnifies Washington's importance, and the leaders of each get enormous personal benefit from the acute stratification of their sector, where all meaningful decisions are made at the top.  The concentration of finance into a few banks that are too big to fail is also good for the military, which operates on the same principle.  Having a superconcentrated financial sector run by insiders has long stabilized corrupt, crony-ridden governments in places like South Korea and Japan. It provides the same function in the United States.

The epoch battle now shaping up is between innovation and control.  Concentration and hierarchy are good for control and bad for innovation.  You can't spread broadband across income groups if you can't distribute and share because your broadband industry is a plutonomy of interlocking monopolists.  But most of our innovation industries, starting with IT, have become oligarchies built up around monopoly rents, and the innovation economist David Mowery has pointed out that software developed with market shares of 80 percent at home and 65% abroad (p 14).  Innovation depended on acquiring monopoly control in the post-war market environment - and on large amounts of military funding.

Where are the forces of innovation that can do without this kind of control?  Mostly lodged in our permanent discontent.  My hope - and fear - is that they will remain dormant until they enter into open revolt against the control-focused governance that now pervades every corner of politics and the economy.

In 1009, Egypt's Fatimid caliph al-Hakim leveled Jerusalem's Church of the Holy Sepulchre to the ground. He then "hacked the church's foundations down to bedrock."  The church was rebuilt in 1048, but it's initial destruction became the cornerstone of the crusade preaching of the Catholic Church. His successor would rebuild the church ing 1048, but Hakim's rash act stirs demands in Europe for a Christian crusade to recover the Holy Land from the "infidels." In 1096, the First Crusade would leave Europe for the Holy Land with more than 30,000 men, and would crystallize the anti-Islamic hostilities and salvific-warrior mentalities that seek to control our destiny today, a thousand years down the road.

Dissociation in a Bad Decade

A few posts this week get close to the heart of the problem.  Fr. Frank's Sunday sermon provides the frame - "As we say farewell to a dreadful year and decade," we have to recognize the following:

The men who played us for suckers, whether at Citigroup or Fannie Mae, at the White House or Ted Haggard’s megachurch, are the real movers and shakers of this century’s history so far.

Fr. Frank replaces Time Man of the Year Ben Bernanke - "as big a schnook as every other magical thinker in Washington" with Tiger Woods, the age's typical con man who piles up tens or hundreds of millions of dollars in personal wealth with a skill base prosthetically extended via an image fabricated by extremely expensive media machinery that is at complete odds with reality.

This blog's technical term for the state of mass suckerdom has been dumbness.  This is a word I also use for dissociation, the systematic though often unconscious concealment of intersubjective reality behind a screen image of the real.

The most effective means is obviously the mass media in general and its hyperdeveloped skill at producing idealized simulacra of reality - simulacra so perfectly cleansed of anomalies that they fit the definition of hysteria.  The source is often a trauma. Thinking of US history in general and of 9/11 in particular, I would say that dissociation is a response to a trauma that suppresses the subject's own role in having produced the trauma.

Everyday examples of dissociation can be found in Fr. Frank's descriptions of hero-worshipping of male sports stars and of faith in Weapons of Mass Destruction in Iraq.  The other huge example that we're very much living with is the securities industry, in which values for securities that brokers made up were assigned through exchanges via mimetic thinking and mutually reinforcing professional networks.

Fr. F rightly starts the dismal decade with the Enron scandal rather than 9/11: 2001 was the year in which its "assets" came gradually to be seen as accounting fabrications.  He gets good play out of the accounting firm Accenture's use of Tiger Woods as its sole emblem of all things virile and triumphant, and then its attempt to scrub Tiger Woods from every piece of company material as though the relationship never existed.  Fr. Frank doesn't mention that "Accenture" was the name that emerged when accounting giant Arthur Andersen had to scrub itself out of existence as the disgraced accounting firm for Enron Inc.

There is an Orwellian aspect to these total reversals: we worship Tiger Woods; we look down on Tiger Woods.  Enron is America's most innovative company; Enron is America's most fraudulent company.  As an educator, I notice first and foremost the absence of learning.  We just go onto the next thing: from Enron's "special purpose entities" to Lehman's "structured investment vehicles," from day-trading in equities to zero-down real estate investing.  The pattern is reinforced by our leaders, who depend on it to maintain their own position.  A recent example was Obama's justification of the escalation in Afghanistan by trying to suffocate reflection with a thick blanket of primal innocence: "unlike the great powers of old, we have not sought world domination."

In his amazing novel 2666, one of Roberto Bolano's main characters, a Spanish specialist in German literature and in particular the works of the elusive Archimboldi, returns to his hotel room in a Mexican border town, puts down

rugs on the bed he didn't sleep in, then . . . sat on his bed and for a fraction of a second the shadows retreated and he had a fleeting glimpse of reality.  He felt dizzy and he closed his eyes. Without knowing it he fell asleep.

Why are we still sleeping?

The effect of the Big Sleep appears in another great framing moment, Glenn Greenwald's continuation of his critique of the Obama administration on health care. He argues that Obama is systematically continuing Clinton's Third Way, which Greenwald defines as corporatism.

It's about more than just letting corporations do what they want.  It's about affirmatively harnessing government power in order to benefit and strengthen those corporate interests and even merging government and the private sector.  In the intelligence and surveillance realms, for instance, the line between government agencies and private corporations barely exists.  Military policy is carried out almost as much by private contractors as by our state's armed forces.  Corporate executives and lobbyists can shuffle between the public and private sectors so seamlessly because the divisions have been so eroded.  Our laws are written not by elected representatives but, literally, by the largest and richest corporations.  At the level of the most concentrated power, large corporate interests and government actions are basically inseparable.

The health care bill is one of the most flagrant advancements of this corporatism yet, as it bizarrely forces millions of people to buy extremely inadequate products from the private health insurance industry -- regardless of whether they want it or, worse, whether they can afford it (even with some subsidies).

Greenwald is right about this "centrist" Democrat philosophy, and about its authoritarian overtones. It's also important to figure out where this corporatism comes from.  Part of it is the media simulacra, of course, providing all the comforts of Babyland for an infantile population.  The deeper harder part comes from systematic and self-protective dissociation from anything that conflicts with an airbrushed image of America that helps us all confront absolutely nothing the country or its leaders actually do - like "seeking world domination" around financial markets, military power, UN climate policy, and so on.

The area where the country's middle classes are being continuously damaged is finance itself.  The financial system created untold trillions of dollars of assets that its own participants determined in the summer and fall of 2008 to be worth little or nothing.  Collapse was averted because governments led by the US Treasury and the Fed stepped in to provide unconditional guarantees that these assets would be worth close to face value.  This was the importance of Treasury Secretary Tim Geithner's "giveaway" (also here, here and here) of 100 cents on the dollar to AIG's counterparties. Even if it wasn't a giveaway, it signaled Total Commitment to whatever fictions finance had been using to pile it high and deeper.  In other words, to avoid collapse, the feds supported dissociation.  This meant the rapid forgetting of what we had momentarily learned about the non-value of financial values through their real support with taxypayer-supplied direct payments, loans, and guarantees. The forgetting continues to this day, when it is hard to find any commentary on the problem assets that remain on everybody's books, because we are now dissociatively engaged in an economic recovery.

How do we make it stop? The old Left mechanism was the exposure of false consciousness through immiseration.  The lie of prosperity (for the large majority) would be exposed through the truth of suffering.

We have plenty of suffering in the dying states.  In the Left Business Observer, Doug Henwood writes,

According to a new ABC News/Washington Post poll, one in three U.S. households reports that a member lost a job over the past year. The effects: 90% report higher personal stress; 62%, anger; 58%, depression.  That translates into 83 million Americans experiencing stress; 58 million, anger; and 52 million, depression, as the result of recen job loss. Not quite four in ten of the job losers report having foudn a new job - and of those who do, half say it's for less pay.  For those unable to find a new job, the emotional effects are severe: 70% are depressed.

The obvious problem is that suffering that leads to depression doesn't lead to change.  Anger is more useful, but can easily be reversed into depression, particularly in a culture like that of the U.S. in which everyone is held personally responsible for failure and there are no structural problems really or exploitative ruling classes etc etc - except the ones you see when you are really angry, and then even your friends avoid you for being the loser you are.

The Left is not doing well right now in defining a new architecture for a egalitarian economy that develops the whole society. It also needs to do better at confronting the psychological blockage to imagining what that would be, starting with acknowledging our own role in getting us here.  I think the key to ending dissociation is ending the threat of being a loser by confronting the fact that in the current situation that is exactly what nearly all of us are.

Getting Rolled AGain

Glenn Greenwald outdoes himself in this unrelenting slam of the Emmanuel-Obama Axis of Nixonism -  except Nixon was more of a New Dealer.  Here's a particularly nice summation:

In essence, this reinforces all of the worst dynamics of Washington.  The insurance industry gets the biggest bonanza imaginable in the form of tens of millions of coerced new customers without any competition or other price controls.  Progressive opinion-makers, as always, signaled that they can and should be ignored (don't worry about us -- we're announcing in advance that we'll support whatever you feed us no matter how little it contains of what we want and will never exercise raw political power to get what we want; make sure those other people are happy but ignore us).  Most of this was negotiated and effectuated in complete secrecy, in the sleazy sewers populated by lobbyists, industry insiders, and their wholly-owned pawns in the Congress.  And highly unpopular, industry-serving legislation is passed off as "centrist," the noblest Beltway value.

 Digby's quite nice on this too.  The key here is the middle section of the paragraph: Obama can directly and coercively give the taxpayer's money first to the "F" in FIRE (finance) and now to the I (insurance) because of the pathetic psychological state of progressives - so pathetic that it's hard to even know if they are progressives or not, or if they know. Would these people respond if exposed and pounded on by a thousand Greenwalds and 10000 Digbys?  How much more failure is it going to take? My only disagreement with Greenwald is that he doesn't sufficiently stress the apparent causal power of a mass mental break.

It's true that Obama is more to blame than Lieberman, but why is Lieberman able to act like one of the regional tyrants that could blackmail the emperor as the western Roman empire disintegrated (e.g. throughout all of the 400s).   This is a sign that Obama has already lost most of his authority, if he ever had it in the first place.  It's also more evidence for Fire Dog Lake's important claim for the practical failure of the Rahm Emmanuel strategy of crippling the left and even the center so they can cut deals with the right.  They have achieved almost nothing this way - unless what they want is in fact FIRE corporatism instead of government.

There are a lot of parallels with Clinton, of course, but it reminds me more of Tip O'Neill's disastrous accommodation of a not-yet-strong Ronald Reagan during the recession of the early 1980s, when instead of fighting him on the air traffic controllers and tax cuts, he found lots of local advantages in caving in. The Dems haven't ever really recovered on the level of strategy or of ideology, and that was almost 30 years ago.  And of course O'Neill was still running scared from the McGovern debacle, which they never analyzed correctly - as is Obama in his desire to be Nixon rather than McGovern (or Carter) in Afghanistan . . .

I like FDL's virtual whip project but am not sure how to scale up opposition to a DC that is completely off the rails and selling itself to the highest bidder as quickly and totally as it possibly can. (This view is compatible with Nick Silver's good rationalist analysis of progressive failure.)  Obama's vaunted Internet strategy was built to campaign the masses and not to rule the brokers in the capitol.  A starting point would be for Obama to engage in a public slicing and dicing of his enemies in a major national address - really hang them by their heels from the telephone poles on the road to Woody's Creek,  as Hunter S. Thompson used to say -  but he's already lost the spirit to rule in the midst of all his orthodox calculations  of compromise, to say nothing of implementing any actual renovative ideas.

Decline And Fall - For No Reason at All

Pretty much the whole sad story of Obama, War President of the Nobel Peace Prize is wrapped up by Glenn Greenwald, so no need to expend extra thought there.  This Greenwald is required reading on the foreign policy portion of the current rapid Democrat slide into Republican policy hell - all for basically no political reason, since the Repubs are widely despised. (See also David Cortright here.)

Same goes for Obama's Republican economic policy - Matt Taibbi this time on the" economic team made up exclusively of callous millionaire-assholes an economic team made up exclusively of callous millionaire-assholes [that] has absolutely zero interest in reforming the gamed system that made them rich in the first place."  Thank you.  Taibbi links the names, a simple way of showing the painful marginalization of any critical thought - finally as insidious and life-sapping a trend in modern America as the pervasive, half-veiled faith in violence. The sorry outcome is that all those Dems from Obama to Frank et al can't move ahead unless, as they were in Fall 2008, they are prodded by simple fear.  With the visible threat past for the immediate Finance Family, it's back to their laissez-faire.

The result with the Obama admin is, as one person puts it, ""Rather than having a team of rivals, they've got a team of Rubins."  How much clearer could it be that Obama is finished as an indepenedent force in US politics?  Rolled like that, you never recover.  At least he won't.

Amidst all the enforcing of progressive timidity by Rahm Emmanuel et al is the sheer timidity of the conventional wisdom here.

Why would leading congressional Democrats, working closely with the Obama administration, agree to leave one of the riskiest of all financial instruments unregulated, even before the issue could be debated by the House? "There was concern that a broad grant to ban abusive swaps would be unsettling," Frank explained.

On this point, Obama foreign policy is even worse than Obamanomics.  Greenwald wraps up the Nobel speech like this:

Indeed, Obama insisted upon what he called the "right" to wage wars "unilaterally"; articulated a wide array of circumstances in which war is supposedly "just" far beyond being attacked or facing imminent attack by another country; explicitly rejected the non-violence espoused by King and Gandhi as too narrow and insufficiently pragmatic for a Commander-in-Chief like Obama to embrace; endowed us with the mission to use war as a means of combating "evil"; and hailed the U.S. for underwriting global security for the last six decades (without mentioning how our heroic efforts affected, say, the people of Vietnam, or Iraq, or Central America, or Gaza, and so many other places where "security" is not exactly what our wars "underwrote").  So it's not difficult to see why Rovian conservatives are embracing his speech; so much of it was devoted to an affirmation of their core beliefs.

The more difficult question to answer is why -- given what Drum described -- so many liberals found the speech so inspiring and agreeable?

 And then the 64 dollar observation: "Yesterday's speech and the odd, extremely bipartisan reaction to it underscored one of the real dangers of the Obama presidency:  taking what had been ideas previously discredited as Republican or right-wing dogma and transforming them into bipartisan consensus."

Dissociation, fear, mindless nationalism, avoidance of solutions to economic problems that would require change, mindless nostalgia, cultural stupidity so deep that it endangers the country: what is it ?

Fr. Frank's Sunday sermon points out that our "particular darkness" is "the disconnect between the corporate culture that is dictating the firing and the rest of us."  And there is the total immunity from the "consequences of their actions."

There's some kind of death knell here for even the illusion of the Dims as a second and oppositional party. There's the Dead Zone politics to come, followed inevitably by far more unrest than we've seen in the US in quite some time.  See the U blog for the local versions unrest - or this poll report for majority desire for the New Deal now abandoned -  as the pseudo-recovery continues to squash the little people and their chldren.

With this in mind, we have to start facing the fact that Obama, who rapidly moved from "change we can believe in" to disappointment to sell-out (to Wall Street), may be entering the territory of "worst thing to happen to the Democrats in decades."

Oursource Traders and I-Banks Too

Dean Baker had a nice short bit called "Toyota's CEO Works for Less":

The NYT told readers that GM may have trouble getting a new CEO because of the limits the government has imposed on CEO compensation. It would have been worth mentioning that the CEO of Toyota and other successful auto manufacturers work for pay that would likely confirm to the government limits.

This suggests that CEOs in the United States have simply priced themselves out of the market. The obvious solution would be to outsource top management, as was done with Chrysler.

Same goes for the banks themselves. At some point we may tire of claims that huge bank bonuses during the Great Recession they caused are necessary because you can't get a trader to exert his god-like powers for less than 500x the median annual wage. We'd then ask that all trading be sent to back offices in Banglore and Ho Chi Minh City, just down the road from where the banks got industry to send US and UK manufacturing jobs years ago.

Obama Kills His Better Half

Obama's decision to escalate in Afghanistan was sad and stupid, and made stupider by the bollocks he talked in justifying the dumb murderous thing.

There was

• "the waving of the bloody shirt" - the oldest presidential gesture in US histor - around  9/11. 
  
• the repetition of Bush's fradulent claims of The Terrorists' immediate threats to American security.
• the phallic backdrop of West Point, the martial imagery, the sentimental militarism, the "using [of]American soldiers as props" by yet another president who feels insuffficiently martial for warrior nation, the grotesque ass-kissing - "it's an extraordinary honor for me to do so here at West Point" - hello, you're the elected president, we still have a civilian government don't we?
  
• the standard self-righteous vision of America's own saintly and hence preeminent leadership in all actions, thanks to its absolute innocence of selfish motives behind violent acts ("unlike the great powers of old, we have not sought world domination"). 
  
• no recognition of the failure and uncertainty of military interventions (cf Bacevich)
  
• no recongition of the absurd double standard of the US military presence in 130 or more countries - you must check with us about everything; we do whatever we want
  
• no recognition of blowback (Reuters found multiple expressions among Afghans within a few minutes of the speech's end)
• no recognition that the US, in escalating its occupation of a Muslim country, is doing exactly what a credible authority named Osama bin-Laden said provoked terror in the first place - occupying a Muslim country
• no ability to see that 130,000 US troups in a country is an occupation. For god's sake.
  
• no recognition of the mindless destructive waste, the death trip, the death drive.
• no recognition that noone in other countries believes any of this bullshit - strictly no one, none of it, especially not the pathetic washing of the blood off the hands at every public opportunity as though the whole world were a fundamentalist church.

Aside from the futility of the policy itself (see the whole Democracy Now broadcast December 2 for the many reasons why), it's also finished for Obama - he's cooked his own goose.

Historical evidence for this unpleasant conclusion was nicely condensed by Rep. David Obey in his honorable attempt to impose an Afghan wartax (squashed by House Speaker Nancy Pelosi):

if we don’t pay for it, then the the costs of the Afghan war will wipe out every other initiative that we have to have to rebuild our economy. That’s what happened with the Vietnam War which wiped out the Great Society. That’s what happened with the Korea War that wiped out Harry Truman’s Square Deal. That’s what happened to the progressive movement back before the 20s when we went into World War I. In each case costs of those wars shut off the ability to afford anything else.”

Obama has deliberately embraced the wiping out of his own domestic policy. And that is what he will get.

Obama is going down.  During our latest undeserved ordeal, try at least to enjoy Onion stories about our most recent Teleprompter President. The big question remains:  how will we avoid going down with him?

Ye Olde Split Between Top and MIddle

"Top" here means the White House and the Congressional leadership, whom Krugman describes as being pulled away from job creation and other recovery politics by the banks, who in a growing number of accounts have conquered the U.S. Government.   Max Keiser's "Goldman Sachs are scum . .. they've basically coopted the US Government, the US Treasury Department, the US Federal Reserve functionality, they've coopted Barack Obama" -the second part, about banker cooptation, apprears on the pages of many daily newspapers.

The middle - here rank-and-file Congressional Dems - rebelled a bit.  They passed a measure in the House Finance Committee requiring an audit of the Fed's many enormous bailouts of insolvent banks, whose sums and recipients remain undisclosed. They passed the measure over the opposition of House Finance Committee Chair Barney Frank.

There are lots of good ideas around about how to fix things.  One of many examples is Dean Baker's idea of how to actually go about revaluing the Chinese yuan. The problem isn't that nobody knows what to do, that it's all so complicated. The problem is that the top doesn't want to do the things that could be done to fix things.  These things would cost them money.  

The outcome is the sort of phony helplessness that now pervades US policy in finance, job creation, higher education - take your pick.  It only works on the assumption that most of us are pretty dumb.

Disaster in Plain Sight

It's interesting to see the category "financial elites" used as a natural object by the New York Times. On top of that, Bob Herbert nicely summarizes the clearly visible problem with the current "recovery":

It was the financial elites who took the economy down, and it was ordinary working people, the longtime natural constituents of the Democratic Party, who were buried in the rubble. Mr. Obama and the Democrats have been unconscionably slow in riding to the rescue of those millions of Americans struggling with the curse of joblessness.

Amidst an underemployment rate of about 25% for Blacks and Latinos, and a poverty rate of 35% for Black children, "Wall Street can boast about recovery all it wants, [but] much of America remains trapped in economic hell."

I think it's worse than that, actually.  The "investment" and "employment" economies have been divided for some time: attempts to save the company by firing workers, the national stroke of managerial genius of the 1970s, became attempts to loft the stock price by firing workers.  The markets divorced the industrial employment base a long time ago,and they have long gone in opposite directions.  The crisis has given the financial sector the chance to perform the most complete dumping of the employment economy in modern history.  It's not sustainable, but finance doesn't care.  Without some kind of upheaval, by the time the political sector shifts a little emphasis back to the employment economy,  all of the political sector's money will be gone.

Dismal Dems

Driving the point home about the failing Democrats, John Nichols blogs in the Nation that Obama and the Congressional Dims "continue to make the mistake of treating unemployment as an afterthought rather than the most serious issue facing the nation."  Writing about last week's Republican victories, he points out that " in New Jersey and especially in Virginia, where Republican candidates in high-profile races focused tightly on economic issues and job creation, they won." And Fr. Frank's Sunday sermon notes,

The system is going back to the way it was with a vengeance, against a backdrop of despair. As the unemployment rate crossed the 10 percent threshold at week’s end, we learned that bankers were helping themselves not just to bonuses as large as those at the bubble’s peak but to early allotments of H1N1 vaccine.  . . . both parties have their own delusions, not the least of which is the Republicans’ conviction that Tuesday was a referendum on what Obama has done so far. If anything, it was a judgment on just how much he has not.

Unhappy Obama Anniversary

It's Obama's one-year birthday as president and I like many others am not celebrating this week.  Afghanistan escalation, Guantanamo closure, the ongoing fiasco in Honduras,  non-existent financial reform, health care with no public option, you name it.   The middle-classes are shrinking and falling as before.  Obamanomics has split Main Street off from Wall Street in order to protect Wall Street, which is busy reinflating various bubbles and is back paying its people like an aristocracy superior to everyone else on earth.  Public higher education is sinking fast.  As Avery put it, what in practice is better after a year of Obama than before?

There are no doubt federal institutions that are better because they are no longer being run by sworn enemies of government.  There are many many fewer appearances by George W. Bush. There are no doubt improvements in the judiciary.  But the top-level decisions have been uniformly disappointing.

This impression is beginning to circulate in Europe as well.  The American economist Jeff Madrick had an interview published in Le Monde on November 4 in which he deplored Obama's reflexive attempt to find the middle way even if it is a dead end.   The problem is not that Obama compromises too easily, but that he is what Cass Sunstein a while ago called a "Chicago Democrat." He wants government to set some rules for a "market" that he conceives to be the source of all economic value and which therefore must be as free as possible. In practice this means as unregulated and as unaccountable as possible.  This is exactly what we are getting.

See Paul Krugman's mournful description of Obama's strategy, which might be called "one bridge too few."  "The Democratic base, so energized last year, has lost much of its passion, at least partly because the administration’s soft-touch approach to Wall Street has seemed to many like a betrayal of their ideals."  538.com discusses statistically visible "democratic disgruntlement" -

Current data showing strong disapproval of the Democratic-led Congress by rank-and-file Democrats could be given voice as follows: I realize that when Democrats first took control of Congress, Bush was still President, and Congress, even though dominated by Democratic partisans, had their hands tied. But now, with Obama as president and increased majorities in Congress, you're still not getting stuff done that I care about? And, when are you guys (expletive deleted) gonna focus on what we need most—jobs! You wanted complete control, and that's what you finally have. And this is what we get?!

I stick to my description one year ago of Obama One, a near-reincarnation of Bill Clinton.  The proposed gutting of Sarbanes-Oxley this week - by Democrats - may become a fitting monument.  When we face this fact, we may really get back to working on something better.  Grace Lee Boggs had a nice passage on this.

I think that the only answer to the counterrevolution . . .  is to begin creating a new concept of hope, not to talk about recovery. We don’t need to go back to a society that is concentrated on economic growth, that dehumanizes us, that makes us consumers only and is threatening all life on this planet. We need to be thinking about something new.