(For previous posts in this series, see here.)
So where does Barack Obama fit into this picture? We saw him strike various populist themes during the campaign. But it should be clear from the people he has surrounded himself with on economic policy that he too is completely subservient to Wall Street interests. In fact, populist and supposedly liberal Democratic politicians like Bill Clinton and Barack Obama are far more useful to Wall Street in many ways, because they hide their subservience to Wall Street better. Liberal watchdogs tend to let down their guard and thus allow these politicians to give away the store in ways that Republicans, with their naked greed, would find hard to get away with.
For example, we saw how Bush’s dangerous plans to privatize Social Security (which was highly desired by Wall Street because it would have directed a huge gusher of money their way to gamble with) were stymied by strong popular opposition. We need to be equally vigilant when Obama talks of ‘reforming’ Social Security to make sure that he is not trying to achieve the same results using different language. It seems already clear that Obama’s health care reform plans are aimed at further enriching the parasitic health insurance industry, by pushing for universal coverage while not allowing the single-payer option to be considered.
Glenn Greenwald points out that while Obama has talked a good populist game against Wall Street, he has at the same time steadily subverted any real attempts to curtail its power and perks.
It was Obama, in the wake of various scandals over profligate spending by TARP firms, who pretended to ride the wave of populist anger and to lead the way in demanding limits on compensation. And ever since his flamboyant announcement, Obama — adopting the same approach that seems to drive him in most other areas — has taken one step after the next to gut and render irrelevant the very compensation limits he publicly pretended to champion (thereafter dishonestly blaming Chris Dodd for doing so and virtually destroying Dodd’s political career). And the winners — as always — are the same Wall St. firms that caused the crisis in the first place while enriching and otherwise co-opting the very individuals Obama chose to be his top financial officials.
Worse still, what is happening here is an exact analog to what is happening in the realm of Bush war crimes — the Obama administration’s first priority is to protect the wrongdoers and criminals by ensuring that the criminality remains secret.
As much as he campaigned against anything, Obama railed against precisely this sort of incestuous, profoundly corrupt control by narrow private interests of the Government, yet he has chosen to empower the very individuals who most embody that corruption.
This may be disillusioning for those who saw Obama as the knight in shining armor riding in to Washington to usher in a new era of clean government. But the signs were there long ago that Obama was hopelessly enmeshed in the same networks of influence peddlers as the previous administrations, and I warned back in February 2008 that we should not expect too much from him except on a few social issues.
Ken Silverstein wrote a prophetic article titled Barack Obama Inc.: The birth of a Washington machine way back in the November 2006 issue of Harper’s magazine about Obama’s rapidly growing links to Wall Street.
Yet it is also startling to see how quickly Obama’s senatorship has been woven into the web of institutionalized influence-trading that afflicts official Washington. He quickly established a political machine funded and run by a standard Beltway group of lobbyists, P.R. consultants, and hangers-on. For the staff post of policy director he hired Karen Kornbluh, a senior aide to Robert Rubin when the latter, as head of the Treasury Department under Bill Clinton, was a chief advocate for NAFTA and other free-trade policies that decimated the nation’s manufacturing sector (and the organized labor wing of the Democratic Party). Obama’s top contributors are corporate law and lobbying firms (Kirkland & Ellis and Skadden, Arps, where four attorneys are fund-raisers for Obama as well as donors), Wall Street financial houses (Goldman Sachs and JPMorgan Chase), and big Chicago interests (Henry Crown and Company, an investment firm that has stakes in industries ranging from telecommunications to defense).
[Mike] Williams [vice president for legislative affairs at The Bond Market Association that represents Wall Street firms] subsequently set up a conference call between Obama and a group of financial-industry lobbyists. That, too, went well, and in June of 2004, Williams helped organize “a little fund-raiser” for Obama at The Bond Market Association. “It wasn’t just the financial community. There was a broad cross-section,” he said of the 200 or so people who turned out. “There was overwhelming support, not just people from associations giving $2,000 but from individuals who just wanted to meet him, giving smaller contributions.”
It’s not always clear what Obama’s financial backers want, but it seems safe to conclude that his campaign contributors are not interested merely in clean government and political reform. And although Obama is by no means a mouthpiece for his funders, it appears that he’s not entirely indifferent to their desires either.
Consider the case of Illinois-based Exelon Corporation, the nation’s leading nuclear-power-plant operator. The firm is Obama’s fourth largest patron, having donated a total of $74,350 to his campaigns. During debate on the 2005 energy bill, Obama helped to vote down an amendment that would have killed vast loan guarantees for power-plant operators to develop new energy projects. The loan guarantees were called “one of the worst provisions in this massive piece of legislation” by Taxpayers for Common Sense and Citizens Against Government Waste; the public will not only pay millions of dollars in loan costs but will risk losing billions of dollars if the companies default.
In one of his earliest votes, Obama joined a bloc of mostly conservative and moderate Senate Democrats who helped pass a G.O.P.-driven class-action “reform” bill. The bill had been long sought by a coalition of business groups and was lobbied for aggressively by financial firms, which constitute Obama’s second biggest single bloc of donors.
All of this has forged a political culture that is intrinsically hostile to reform. On condition of anonymity, one Washington lobbyist I spoke with was willing to point out the obvious: that big donors would not be helping out Obama if they didn’t see him as a “player.” The lobbyist added: “What’s the dollar value of a starry-eyed idealist?””
So what can we, the people, do? We must not abandon the electoral process because of disgust at the way the rules have been rigged against us. People matter, candidates matter, and elections matter. On balance, it is better to have an elected official sympathetic to your position than one who is hostile. But we have to stop putting our trust in people, thinking that what matters is getting the “right” people, “our” people, in power, and that then they will do the right thing, at least from our point of view. We have to stop thinking that the labels ‘liberal’ and ‘conservative’, Democrat and Republican, signify anything other than where a candidate stands on a few social issues. We should stop spending so much time trying to figure out who the ‘good’ people are and who the ‘bad’ people are and instead focus on what they actually do.
Strong moneyed forces will constantly try to get elected officials to act against the interests of the public. Hence it is more important to look at the actions of elected officials, to support and praise those that are good and not hesitate to criticize, even strongly, actions that are wrong, irrespective of party or ideological labels, whether they are done by “our” people or “their” people. It means paying attention to and supporting those watchdog groups that keep track of important issues.
This means not getting distracted by the sideshows put on for our benefit by the media and political leaders, usually around social issues. Those are all smoke and mirrors. Right now there is genuine and widespread anger about what people see as the looting of the public by powerful interests. This is dangerous for the oligarchy and there will be attempts to deflect this anger away from the real culprits. The silly tea parties promoted by Fox News (a reliable water carrier for the oligarchy) are one such attempt at distraction, trying to make people think that raising the marginal tax rate from 36% to 39.6% and thus raising the taxes of those earning above $250,000 is the problem. As a result we had the bizarre spectacle of people being persuaded to protest that their taxes were being lowered, unless the people attending the tea parties constituted the top 2-3% of income earners.
In the case of financial issues, there is only one weapon that the public has to stop the relentless looting of the public treasury, and that is to be loud and vocal and demand that elected officials, even if (and especially if) we see them as “our” people, act in the public interest.
POST SCRIPT: Still waiting for Mr. Smith
In the classic film Mr. Smith Goes to Washington, James Stewart plays an idealistic person who goes to Washington as a US Senator and confronts the corruption he finds there. Sadly, Barack Obama is no Mr. Smith.