Obama’s Choice Is Not Faith In the Market vs. Cardigans
WaPo op eds are getting increasingly irritating with the passage of time. Yesterday, this formerly great American newspaper in free fall ran an article by Matt Welch and Nick Gillespie called “What’s Next Mr. President – Cardigans?” Welch and Gillespie think that Obama’s less than stellar results thus far suggest that he may be reviewing the history of past Democratic administrations to find a “road map” out of his difficulties, and also that “he seems to be skipping the chapter on Bill Clinton and his generally free-market economic policies and instead flipping back to the themes and comportment of Jimmy Carter.” In this way, they begin a transparent framing exercise suggesting that Obama is at a turning point, and that he must stop “running government as a perpetual crisis machine,” and “. . . stop doing harm. Throwing money all over the economy (and especially to sectors that match up with Democratic interests) . . . “ And also that: “. . . there’s no question that Obama’s massively ambitious domestic agenda is at a fork in the road: One route leads to Plains, Ga., and early retirement, the other to Hope, Ark., a second term and the revitalization of the American economy.” And later they say:
”Finally, it’s time to connect the poster boy for hope to the original Man From Hope. After Bill Clinton bit off more domestic policy than even he could chew, leading to a Republican rout in the midterm elections of 1994, the 42nd president refocused his political intelligence on keeping his ambitions and, as a result, the size of government growth, limited. Though there is much to complain about in his record, the broad prosperity and mostly sound economic policy under his watch aren’t included.”
In addition, Welch and Gillespie offer many specific evaluations of Obama’s performance so far, some of which I agree with, and some of which I think are nonsense, transparently reflecting their own preference for the resurrection of the Clinton administration’s rather conciliatory approach to the trends of the 1980s, Reaganism, Thatcherism, and, above all, a free market fundamentalism that has led us to the economic, political, social, and cultural mess we have now. I won’t however, take on the details of Welch and Gillespie’s claims, because I’m much more interested in questioning the framing suggesting that Obama’s only choices are the road to Plains and early retirement, or the road to Hope, and a second term. Specifically, who do Welch, Gillespie, and WaPo, think they’re kidding? Why would anyone who voted for change in the last election want to follow either the road to Plains or the road to Hope? How about another road entirely, one that leads to greater economic and social democracy?
Jimmy Carter was hardly a Democrat at all by historical standards. We don’t have universal single payer health care now because Carter would not join with Ted Kennedy to take advantage of large Democratic majorities to pass it. Carter wouldn’t use price controls when he needed to. He appointed Volcker to the Federal Reserve and then did nothing to cushion the shock of high interest rates on working people and small business, or to rein in the Federal Reserve when Volcker tried to squeeze inflation out of the system. Carter clearly cared far more about balancing budgets than he did about main street and those in poverty, and I think he sacrificed his presidency on the alter of his fruitless quest for a balanced budget. He did nothing to defend working Americans against the efforts of business to swing American society to the right. He was the first Democratic President since Roosevelt to abandon Keynesian economics. And his views on economics seemed to harken back to Grover Cleveland.
To give Carter his due, his energy policy was innovative and had his initiatives been continued, we would probably have an economy based on alternative sources of power. But his foreign policy, while motivated by the right ideals can fairly be described as feckless and ineffective, and he was the first modern Democratic president of whom it could be asked “does he represent working people or not?” With his economic and political incompetence, and lack of capability to mobilize the American people against Congress, Jimmy Carter practically handed the presidency to a right wing operative who was at first distrusted greatly by the public, but, in the end, was elected, because many wondered whether he could really do any worse than Jimmy Carter.
Bill Clinton’s presidency is generally thought of as more successful than Jimmy Carter’s, as Welch and Gillespie assume. However, I think that is because we lack historical perspective on it. After all, it was Clinton who followed an economic policy laid out by mostly by Robert Rubin, working hand in glove with Alan Greenspan. It was Clinton who continued the movement toward de-regulation begun under Carter, accelerated under Reagan and Bush 41. Clinton’s economic successes were all short-term, and did not involve reconstruction of the American economy, but only a continuation of dangerous trends toward an unregulated globalism that was undermining the hard-won Democratic gains protecting against too heavy a reliance on markets that are never really self-regulating. Clinton was also responsible for the failure to secure health care reform. Instead of pursuing a Lyndon Johnson-like strategy with Congress trying to extend the very popular Medicare program to everyone, Clinton got cute to try to avoid the charge of socialism. Hillary and Ira Magaziner devised a health care program that was so complex that 1) no one could understand or explain it, and 2) it was easy to tag as socialized medicine, since to deny that charge you had to explain the unexplainable.
Like Carter, Clinton also did very little to improve the long term trend toward increasing inequality in American Society. He did nothing to reverse the long-term trend toward labor union decline, even though his Labor Secretary Robert Reich urged a much more aggressive policy on this front. He did nothing to introduce an industrial policy, and so he accelerated the trend to American manufacturing weakness that now threatens both the American economy and National Security. He also did nothing to return to Jimmy Carter’s initiatives in Energy Policy, even though it was apparent, even to the casual observer, that the growing dependence of the US economy on the oil producers was a long term danger to US security.
Clinton also fed the myth that one of the primary objectives of Government is to balance the budget, and he always prioritized budget balancing over investing in human capital, hardly a Democratic position, and also one that threatens our economic progress. Clinton may have been a better president than Reagan, or either of the Bushes, and he, aided, by the right wing mythologists, may have persuaded many people that he was “liberal”; but he governed far more like a Rockefeller or Eisenhower Republican than he did any 20th century Democrat before Carter. The difference between the Carter and Clinton administrations lies in the relative political effectiveness of their political operatives, and in the relatively greater charisma of a president who was believed when he said: “I feel your pain,” but the ideological orientations of the two administrations were not very different. Both were fundamentally centrist, and neither came close to fulfilling the historical mission of the Democratic Party to represent the interests of working people against concentrated economic power and its influence in politics.
Neither the road to Hope nor the road to Plains provides a map that Obama should follow. What he needs to do is to create his own road map that works for our time and our circumstances. But if he does look back toward anyone, I think it should be toward Franklin Roosevelt. No doubt FDR made many mistakes and his administrations engendered much partisan conflict. But there is no question that he is unequaled as a modern leader of the American people and the Congress. There is no question that his legacy towers above that of all American Presidents in modern times. There is no question that he united more people in greater endeavors and meeting greater challenges than any president after Lincoln. And even though Roosevelt’s presidencies were also often a “perpetual crisis machine,” people didn’t get tired of his continuous efforts to bring change. The reason why they didn’t, is because change was necessary, and FDR could always tell them what was at stake and why the Government needed to follow his policies. If there is a previous road map that Obama should study in developing his own road map to Hyde Park, Chicago, it is the road to Hyde Park, New York; the road of our greatest modern President.
Obama’s real choice Is not between faith in the market and cardigans, it is a choice among new alternatives that he has to figure out for himself. Whatever the alternative he selects is, I hope that, like Roosevelt before him, and alluding to his rumored words in private to Wall Street representatives, he will stop standing between the financial interests and populism and its “pitchforks.” The “pitchforks” of populism have a role in all this, and that is to give Obama the backing he needs to make the financial interests realize that the road they have taken, and continue to take, will lead to ruin for everyone including themselves, and that the best thing for them to do is to back financial system reforms that will leave them well off enough, but also support everyone else having decent lives fulfilling their aspirations for themselves and their children.