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US POLITICS
Politics 2012 ... and Policy
The progressive president America needs ... Barack Obama, though vastly better than Mitt Romney, is barely a shadow of the president America truly needs.
Politics 2012 ... and Policy
The progressive president America needs ... Barack Obama, though vastly better than Mitt Romney, is barely a shadow of the president America truly needs.
Obama's re-election is a 'big deal within the context of American politics today' [AFP]
Original article: http://www.aljazeera.com/indepth/opinion/2012/11/201211884535955659.html
Peter Burgess COMMENTARY
I have been doing a deep dive into some of the material that I have archived on the TVM website over the past decade or more. This AlJazeera piece written by Paul Rosenberg about Obama in 2012 still resonates a decade later. The big difference is that the political stakes are far higher in 2022 following the rise of a an increasingly powerful political community of people who have little or no respect for a popular democracy but support what I see as the flim-flam of populist autocrats like Trump in the USA, Bolsonaro in Brazil and others.
As I write this about three weeks before the US elections of 2022, I am impressed with the quite remarkable legislative accomplishments of President Biden and the strength of the US economy in spite having a razor thin majority in Congress ... and disgusted at how little the media seems to understand about these accomplishments not to mention many of the people who present themselves as knowledgeable about politics who find it difficult to give credit for any accomplishment of the Biden administration.
Would it have been nice for a bigger Biden agenda to have been passed? The answer is yes ... but what has actually been passed is more consequential for most of the ordinary people of the United States than anything that has been done in Washington for decades ... literally going back to Eisenhower with the Interstate Highway System and Johnson with the Great Society initiatives.
The Biden legislation is consequential though not spectacular because it is so essential and also somewhat boring ... repairing infrastructure that has degraded after decades on neglect ... reestablishing production capacity in the United States that has been outsourced for decades ... making a modest dent in the outrageous pricing of the US pharmaceutical industry ... and the list goes on.
And of course there is my pet peeve that is the reporting and general conversation about inflation. Hardly anyone seems to have much understanding of the big difference between the the inflation of the 1970s and the inflation of 2022.
At its core the inflation of the 1970s was 'cost-push' inflation brought on by the formation of the OPEC cartel in 1972 which succeeded in 'fixing' the international price of crude oil at $13.50 a barrel compared to a previous market price that had been in the range of $2.50 to $3.50 a barrel. OPEC was successful in increasing the price of energy in large part because some of the key industry actors that were not part of OPEC actually stood to benefit from the OPEC action including all the major international oil companies ... Shell, Exxon, Chevron, BP, etc ... as well as some counries, specifically the UK and the Netherlands that had invested heavily in North Sea oil and gas ... and of course, the infamous 'oil-patch' of the United States. By the end of the 1970s, the international price of crude oil had increased to around $30.00 and the profits in almost every sector of American industry had disappeared ... except profits in the oil based energy sector. President Richard Nixon tried to control prices ... invoking price controls to reduce inflation three times as I recall, and completely failing each time ... and the Federal Reserve tried as well increasing interest rates to as much as 20%, and making little impact of prices, in fact perhaps adding a further cost into the mix.
In the 40+ years since around 1980 the structure of US industry has changed dramatically. I refer to this change as financialization of the economy enabled by a massive improvement in productivity and management focus on business profit performance. Productivity improvement has been impressive over this time, but quality of life for society in general had improved rather little in this time, and the degradation of the environment has accelerated. This is an unhealthy state of affairs, and likely to be catastrophic unless there are changes. To his credit, President Biden has done more of substance than any past President and would have done more if there had been more support in Congress ... and of course, sadly, there was zero support from the Republican right!
Of course, one should not ignore the fact of quite virulent inflation in the 2021 / 2022 period and why it is unlikely to be controlled simply by Presidential haw-boning. While industry in the 1970s was generally stuck with the costs of the 'oil shock' imposed by OPEC, in 2022 consumers are stuck with increasing prices because of the suprisingly healthy state of demand in the global economy, and supply constraints caused by all sorts of imbalances in almost every part of production and the associated supply chains. Bluntly put, corporate management did a rather poor job of handling the changes brought about by the Covid pandemic. Very few sectors of the global economy had much resiliency because of several decades of profit optimization and a complete lack of flexibility to handle changes in demand. Though companies were the root cause of shortages, they remained in the driver's seat when it came to pricing and with strong demand ... surprise, surprise, prices got increased.
I have been told by a right leaning business person that Biden caused this inflation because of the American Rescue Plan Act of 2021 passed early in in the Biden administration. I think the story is somewhat more complicated. At the end of the Bush administration in 2008 there was a catastrophic disruption economy caused by all sorts of risky behavior in the banking and finance sector. The Obama administration did a fairly good job of getting the US economy back on track, but not without considerable economic pain.
Some of the lessons learned from that time helped the Federal Reserve to be more pro-active at the start of the Covid pandemic in early 2019. Specifically, in March of that year the Fed made it possible for banks to be significantly more lenient that was normal in order to cushion the economic shock from the pandemic and associated economic disruption. This was very different than anything done before, and was a game-changer.
In early 2021 the Covid pandemic was still causing economic disruption and the American Rescue Plan served to help maintain some aggregate demand in the economy and support a lot of society as the economic disruption continued. Without this stimulus it was likely that the economy would have degraded rapidly and gone into a deep recession. In fact, the stimulus was effective and aggregate demand was maintained ... but the global production sector was in disarray and unable to deliver what was in demand and do it on time. This gave opportunity for the imbalance of aupply and demand to allow price increases and profits to hit record levels. This was very good for stock markets and investors! Essentially in the modern economic free market world, a failure to supply enables prices and profits to be increased ... and not a damn thing that the consumer can do about it! The amount of embedded profit in the prices having to be paid by consumers is at record levels, with no signs it will stop any time soon.
There is something that ought to be done ... and can be done ... but it has been out-of-fashion for many many decades. It has to do with business taxation on what used to be referred to as 'excess profits'. It is very rare for economists and other reporters and commentators to talk about the role of prices and costs and profits ... what is reasonable and what is unreasonable in the relationship between these three key metrics. And there is little talk about the return on investment and the return on assets employed ... which can be very different. My impression is that much of economic (and investent) analysis purposefully avoids pointing out that much of modern profit now emerges from almost no investment because accounting and finance has been gamed for that to happen. More on that another time ...
I like what Paul Rosenberg has written about the politics and policies around Obama a decade ago ... an interesting read!
Peter Burgess
Barack Obama, though vastly better than Mitt Romney, is barely a shadow of the president America truly needs.
Written by Paul Rosenberg ... Paul Rosenberg is the senior editor of Random Lengths News, a bi-weekly alternative community newspaper.
Last Modified: 08 Nov 2012 12:05
Particularly in the last month or so of the campaign - beginning with the surprise unveiling of 'moderate Mitt' in the first debate - Mitt Romney tried to run as if he were Barack Obama, painting himself as the candidate of 'big change' while accusing Obama of destroying the US auto industry in a particularly mendacious series of statements and ads.
But as Mark Levine astutely pointed out here at Al Jazeera, the reality is precisely the opposite - it's Obama who has functioned as an idealised Mitt Romney would, smoothing out the rough edges and rationalising the overall operation of the Bush/Cheney operation which his 2008 supporters vainly hoped he would do away with entirely:
[R]ather than change the system, as so many who'd voted for him hoped he would do, President Obama has behaved much as we might imagine Mitt Romney would as President - ever the good manager, searching for new ways to trim the fat, increase efficiency, make the enterprise more sustainable and profitable for those with preferred stock and 'voting shares'.Levine goes on to say:
[W]e can imagine what might have happened if instead of spending four years designing a new playbook with 50 ways to dispose of potential enemies Obama had spent his efforts developing a new playbook with 50 new ways to fight poverty, global warming, environmental degradation and authoritarianism.Of course, Obama would have faced fierce opposition - his enemies might have even called him a socialist - but it would have helped establish 'a new space for resistance and protest' in which activists in the US and abroad could 'begin building elements of a new global order'. Perhaps, Barack Obama, community organiser 20 years ago, might have wanted to create such a space, but President Obama, today? Not a chance.
Let me be clear: Obama's re-election is a big deal within the context of American politics today. But what America - and the world - desperately need is not within the context of American politics today: it is a way out of, a way beyond that context. What would that look like, if Obama actually were to govern as a truly progressive president? Juan Cole at his 'Informed Comment' blog has posted a list of particulars, 'Top Ten Wish List Progressives should Press on President Obama', which is well worth reading, but we need a more broad-based vision as well.
In particular, we need bold alternatives to the constricted visions that have to dominate our thinking. The morning after the election, Corey Robin, author of The Reactionary Mind, wrote, '[L]ast night, Barack Obama claimed that reducing the debt and the deficit - elsewhere they call that austerity - will be a top priority of his second administration,' which he said, 'confirms another thing I said in the conclusion to The Reactionary Mind: Conservatism is dead because it lives. It has triumphed. It may lose elections, but its basic assumptions, going back to the reaction against the New Deal, now govern both parties.'
A truly progressive president would not just challenge, but overturn those assumptions. Here are a few examples of what that could mean:
1. Right-sizing, rather than perpetually shrinking government:
As the response to Hurricane Sandy vividly reminded us, government workers aren't worthless greedy parasites, as the Tea Party would have us believe. They're everyday heroes who regularly do the largely invisible work that keeps our modern society going - and do it twice as long and hard in times of dire emergency.
What's more, the most vital tasks governments take on are precisely those that businesses don't want - that are too uncertain, too costly, take too long to pay off, or that produce too many benefits for others versus those who undertake them. In short, governments need to be judged by different criteria than businesses do. We need to sharpen those criteria and then meet them, rather than impose inappropriate business criteria on them.
But above all, we need to determine the size and scope of our government by the size and the scope of the threats, challenges and opportunities we face that government is most appropriate to deal with in order to 'promote the general welfare', as stated in the Constitution.
2. A green new deal:
As Hurricane Sandy so forcefully reminded us, we are decades behind in responding to the threat of global warming, and we have an ageing infrastructure, inadequate for existing needs and conditions, much less for the sort of world that climate change will bring.
What's more, this neglect is extremely costly, in lives as well as treasure. 'An ounce of prevention is worth a pound of cure,' as the saying goes. That's why it makes great sense to invest now in a massive public works programme to build energy-efficient infrastructure and clean-energy transportation systems, and to restore or create a new protective ecosystem that provides better, more flexible protection than traditional dikes, levees, seawalls, etc.
As articulated in the first point, right-sizing, rather than shrinking government should be our overall guideline. Obama's retreat from publicly talking about global warming has facilitated ongoing corporate/conservative framing in terms of fantasies such as 'energy independence', 'clean coal' and the like.
This retreat does nothing positive, even as it leaves the field open for special interest/status quo framing. A progressive presidential stance on protecting future generations would help fundamentally reorient the political discourse, grounding it in scientific reality and realistic concerns, rather than ideological fantasies.
3. Progressive budget-balancing:
In the sense defined by convention wisdom today, budget balancing is neither possible nor desirable. Like a sensible 30-year home mortgage, the basic concept of long-term government debt is a good thing, particularly when it shrinks over time relative to the ability to repay - as America's federal debt did almost without exception from the end of World War II until the election of Ronald Reagan, when our current budget deficit problems began in earnest, abating only under Bill Clinton, who raised taxes in 1993 without a single Republican vote.
A progressive president would seek to balance income and expenditures over the long haul - the length of a business cycle in most cases, but longer when it comes to dealing with global warming - so that total debt increased no faster than the growth of our economy.
Spending should rise during economic downturns, to sustain demand and hasten a return of economic well-being while meeting long-term needs that private markets undervalue or entirely neglect. Spending should decline during economic good times, reducing public deficits and replenishing government's ability to respond to the next emergency.
In the (relatively) short-run, dealing with existing budget imbalances created by Bush and the GOP since 2001, when Clinton left office with a record surplus, there is a comprehensive progressive budget plan, which produces a balanced budget within a decade - roughly 20 years faster than Paul Ryan's celebrated shell game would.
The House Progressive Caucus 'People's Budget' 'protects Social Security, Medicare and Medicaid and responsibly eliminates the deficit by targeting its main drivers: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession'. Its 2012 incarnation invests in putting America back to work and building America's competitiveness via job creation, clean energy and broadband infrastructure, housing and R&D programmes. It creates a fairer tax system, including:
- Ending the recently passed upper-income tax cuts and lets Bush-era tax cuts expire at the end of 2012
- Extending tax credits for the middle class, families and students
- Creating new tax brackets that range from 45 per cent starting at $1m to 49 per cent for $1bn or more
- Implementing a progressive estate tax
- Eliminating corporate welfare for oil, gas and coal companies; closes loopholes for multinational corporations
- Enacting a financial crisis responsibility fee and a financial speculation tax on derivatives and foreign exchange.
- Deficit reduction of $5.6 trillion
- Spending cuts of $1.7 trillion
- Revenue increase of $3.9 trillion
- Public investment $1.7 trillion
4. A progressive alternative to the war on terrorism:
The quotes from Mark Levine at the beginning of this piece were primarily focused on Obama's foreign policy record refining, rather than reversing the Bush/Cheney war on terrorism approach. As I see it - and have publicly expressed since 2005:
'There are two keys to winning the war on terrorism. The first is to recognise that it is not a war on terrorism. It is a war of ideas, against people who use terrorism....What brings these two keys together is that staying true to our ideas and our ideals is precisely what would lead us to understanding and responding to the grievances that terrorists exploit. This is the great lesson of the Arab Spring: America's ideas and ideals really are its greatest strength, far overshadowing all the military might in the world. A truly progressive president would know, trust and believe in that - and inspire all of us to do the same.
The second key is to understand the situations in which terrorism flourishes, and act to change them. We need to understand the grievances - legitimate or not - that terrorists exploit, and do what we can to address them. We must enter into a dialogue with people who feel powerless and abandoned, for terrorism appeals most strongly to those who feel they have no other way.'
5. A progressive, values-based foreign policy:
The importance of America's ideas and ideals is not just limited to framing an alternative to the war on terror. It has a much more wide-ranging application. Indeed, the father of containment theory, George Kennan, specifically advocated such an approach, although his ideas were frequently garbled or misunderstood, as explained in detail in a paper, 'Kennan's Long Telegram and NSC-68: A Comparative Analysis', by Efstathios T Fakiolas.
Concerning his interpretation, in 2005, I wrote:
'While superficially similar - both warn against the threat of Soviet militarism - the two documents differ sharply in their conception of the nature of the Cold War struggle. NSC-68 sees it primarily as a military contest between two self-interested superpowers. The 'Long Telegram' sees it in terms of moral communities: we will win in the long run by being true to our values, and creating a global moral order that the Soviets will ultimate want to be a part of.'Kennan was right, as it turned out. But there's an even broader significance to a values-based approach, as discussed by cognitive linguist Goerge Lakoff in a 2001 paper for the Frameworks Institute, 'The Mind and The World: Changing the Very Idea Of American Foreign Policy'.
In that paper, Lakoff argues that a wide range of relatively new concerns - the environment, women's rights, labour rights, human rights, genocide and lesser levels of violent ethnic conflict, children's issues, indigenous rights, global public health, economic sustainability and global poverty and powerlessness - are not given the priority they deserve because they don't fit into the traditional framework of national self-interest. They sound like a laundry list of unrelated concerns, Lakoff notes. But they aren't.
Instead, Lakoff points out, they are part of a new framework, a framework of moral norms. Just as we want to live in a community governed by moral norms, he argues, we want to live in a world governed by moral norms as well. There is a practical side to this, as well as a purely moral one - we are safer, happier and more secure in case of adversity when we are part of a moral community guided by shared norms.
When we take off and act on our own - as we did when invading Iraq in 2003, for example - we threaten the whole fabric of moral norms among nations which represents our true best hope of long-term lasting peace and harmony among the nations and peoples of the world.
Our impulse to act first, based on our own short-sighted view of things in the moment - however understandable in a time of fear and uncertainty - is just one more thing that Kennan might tell us needs to be contained.
A truly progressive president would not just give lip service to our highest ideals, while wantonly violating them with targetted assassinations, drone strikes and the criminalisation of whistleblowers and dissenters, as Obama has done.
A truly progressive president would heed the example that Kennan articulated and embody the breadth of vision that Lakoff describes. He would defeat terrorism by defeating the darkness it feeds upon. And the same goes, one way or another, for all other threats, foreign and domestic.
America could really use a president like that. So say we all.
Paul Rosenberg is the senior editor of Random Lengths News, a bi-weekly alternative community newspaper.
The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.
Source: Al Jazeera