Obama Agonistes

Revised, 2/6

The forgettable State of the Union speech occupied the press a few news cycles, and its place was quickly taken by the new budget, a document which has a certain entertainment value of its own. But the really significant thing that happened caused only minor comment: it was that Ben Bernanke was reappointed. This did gather some brief commentary because there were a total of 30 votes against him, an unprecedented number when dealing with a Fed Chairman. This raises the question of why the congress should be so kind to Fed chairmen in general, and this Chairman in particular. In a town were everything is contentious, and in a Senate where everything requires a super-majority but nothing gets it, the re-appointment got it with room to spare.

The President who promised change could not even change the Chairman, not even one who had failed so badly, and who continues to fail. The Senate for its part admitted that they were united in one thing only: their cluelessness on economic policy. Because the Fed provides the reserves to the banks, and because the banks provide credit to the economy, and because the economy cannot function without credit, the Fed is the most important institution in the economic life of the country, arguably more important than the Congress or the President. Yet both have been reluctant to control the Fed. This is not new. Banking and credit is supposed to be a “technical” matter, best left to the technicians and isolated from the politicians. This means that in our democracy, the democratic institutions have little control over the institution that makes the most difference in the economic life of the country.

The same problem has afflicted presidents back to Carter, at least. They felt they were not able to confront the Fed Chairmen. Volcker single-handedly wrecked the Carter administration, and nearly did the same to Reagan, until the White House finally found the guts to get him to stop. Both Volcker and Bernanke are Monetarists, who believe (believed, in Volcker's case) that money problems could be cured by controlling the money supply. Volcker tried to cure inflation and Bernanke deflation using the same philosophy, and both failed. Volcker raised the fed funds rate to 20% in an effort to reign in lending; it failed. Bernanke has created unimaginable piles of money to get banks to start lending again, and he has failed. You would think by now that Monetarism would be thoroughly discredited. But Bernanke got 70 votes.

Without making substantial changes at the Fed, there is little change that Obama—or the congress—can make. But then Obama has found that he has little enough room for maneuver. The Senate requires a super majority which he cannot command, the Fed is out of his control, and the Supreme Court has formally turned the political process over to the plutocrats. He has nowhere to go and nothing to do, save have lunch with Pelosi and fly about the country in Air Force one. He has the trappings of power, but none of the substance. He can make speeches about bipartisanship, but he knows that no one is listening. His own base has abandoned him, and his administration seems clueless about the crises.

The new budget is a sign of his impotence. He boldly proclaims an austerity program, which turns out to concern at best the 17% of the budget that is deemed “discretionary.” At what point, we may ask, did the bulk of our budget escape our control? But it has certainly escaped Obama's, and he hasn't a means to take the reins of power. The Democratic Party has proven a weak support at best; even with majorities larger than any that Bush or Reagan could command, they have not been able to impose their will upon the country, for the simple reason that they have no will. As Paul Craig Roberts noted,

Obama and the Democrats cannot be an opposition party, because Democrats are as dependent as Republicans on corporate interest groups for campaign funding.
The Democrats have to support war and the police state if they want funding from the military/security complex. They have to make the health care bill into a subsidy for private insurance if they want funding from the insurance companies. They have to abandon the American people for the rich banksters if they want funding from the financial lobby.
Now that the five Republicans on the Supreme Court have overturned decades of U.S. law and given corporations the ability to buy every American election, Democrats and Republicans can be nothing but pawns for a plutocracy.
Most Americans are hard pressed, but the corporations have only begun to milk them.

So far, the President has nothing to show for his tenure but a failed stimulus and an empty Peace Prize. The recent job numbers were revised to show that the economy lost 1.2 million more jobs than was previously thought. And the unemployment lines are getting longer, not shorter. That the stimulus has failed must come as a great surprise to his economic team, since stimulus has generally worked in the past. However, that past was one in which we made more of the goods that we consume. In an economy that imports so much, much of the stimulus leaks off-shore. If stimulus was going to work, it would have worked for Bush, who ran up $6 trillion in debts, but all we got for that was two wars and a housing bubble.

Obama came to Washington as a Samson, ready to do battle with the Philistines who controlled all the levers of power. Or so his supporters imagined. They invested all their hope in him as a person capable of rousing the Democrats to battle and the country to real change. Yet, instead of doing battle with the Philistines, he invited them into his cabinet, he gave them what they already had. It is possible, I believe, to locate the precise moment when Obama failed: it was the moment that he appointed Timothy Geithner and Larry Summers to head his economic team. These men have their fingerprints all over the crash, Summers by being a strong advocate of financial deregulation and Geithner as the primary engineer of the AIG bailout. This is to say that Obama stacked the deck against himself even before he took office. He abandoned the change he had promised to embrace the policies of his predecessors. I'm pretty sure he didn't see it like that; he thought that these were technical matters and he got the best technicians he could. Indeed, this is probably the best set of resumes ever to serve in government, but their skills are in all the wrong areas; they are trying to solve the problem with the tools that created it. Obama has no workable economic plan; he can only hope that the recession runs its course. But this is unlikely.

Nor will he get much help from the Republicans. One, they don't have any plans of their own, and two, they understand that their success depends upon his failure. There is simply no incentive for cooperation. As the economy sinks, their fortunes will rise; they expect, not without reason, a sweeping victory this year and a return to power in 2012. But when President Palin, or Brown, or Cheney, or Jindal takes office, he or she will find that power ain't what it used to be. They will be in a somewhat better position than Obama, since they will be able to command super-majorities in the Senate based on blue-dog Democrats, or else they will simply ignore the rules. But lacking any plans, they will not have much they can do. They will get some income and corporate tax decreases and some payroll tax increases; they will find new privileges for the powerful and new subsidies for the rich. In return, they will receive endless benefits and lifelong employment. And their campaign coffers will never run dry.

I cannot recall a president who has made himself so irrelevant so quickly, one who so easily took a haircut. He lacks a base, he lacks a party, he lacks a program. It will be interesting to see how Obama responds to his own impotence, to the realization that he is the prisoner of powers he cannot control, powers he himself invited into his administration. Samson became the laughingstock of his captors, but found the strength to pull the whole wicked structure down upon both himself and his enemies. The best Obama can propose is to appoint a commission to study the problems, a commission that will, no doubt, consist largely of the Philistines. This will not move the pillars of power very much, but it will amuse the Philistines.

Obama's accomplishments will be limited to things like “don't ask, don't tell.” On other issues, he will be a mere observer, like everyone else. The real rulers of the land, represented by Geithner and Bernanke will continue to loot the country, until there is no country left to loot. Unless something changes, he is likely to be a one-term President who will leave office with a Peace Prize and a wrecked economy. And gays in the military.


Chris Campbell Friday, February 5, 2010 at 1:47:00 PM CST  

Good comments on fallacy of "Change we can beleive in" and the Republicans.both godless, elitist and not a friend to Catholics.

Keep plugging them professor!

Chris Campbell Friday, February 5, 2010 at 2:33:00 PM CST  

John, not sure if you get the Adventus publication from Dallas U, the Allen article is worth reading, would be some fertile field in "Global Southern Hemisphere" for our cause...implies their are against plutocracy/globalism and may have finally shed last vestiges of Liberation Theology...before the capitalist/oligarcy machines roll through as thouroughly they did in Russia,may get our points in there too.

John Médaille Friday, February 5, 2010 at 3:30:00 PM CST  

Chris, I am not familiar with Adventus; it is published by my university?

Anonymous,  Friday, February 5, 2010 at 5:52:00 PM CST  

"Our one-term President is likely to leave office with a Peace Prize and a wrecked economy. And gays in the military."

As they say "3 strikes and your out". That will be a good thing. The "peace prize" is the real winner - he just upped the Pentagon's budget by something like 88 Billion. Unfortunately the Republicans have nothing better to offer.

Here in Ohio John Kasich is running for Governor against the flaming lib Ted Strickland who never met a government handout he didn't love, and in fact is actually campaigning on how much stimulus money he's brought to the state. He wears it like a badge of honor.

Kasich (who is leading in the polls) was an 8 term Republican congressman from Columbus who instituted the PayGo system with Gingrich in the Contract On America, retired and then went to work for Fox News and... drum roll please... Lehman Brothers !

He's all about recruiting big business to bring jobs to the state and will hand out corporate welfare like candy. They're all one trick pony's - just different colored pony's.

papabear Friday, February 5, 2010 at 8:19:00 PM CST  

Dr. Médaille, I found this link for Adventus. I am guessing this is what Mr. Campbell is talking about.

Coll Saturday, February 6, 2010 at 2:50:00 AM CST  

We have a saying in Australia (and other places I'm sure): we get the politicians we deserve. A sad statement, but when we have an election that is all about what hair cuts or tracksuits people have we get mediocre results. When the public are aware enough of geniune issues you get better than mediocre results. But, either way, you normally get politicians.

John Médaille Saturday, February 6, 2010 at 11:08:00 AM CST  

Chris, you are right. The John Allen article nailed it. Two points especially: the cultural tribalism that we now have, and the shift in religious power from the North to the South. Most of the "liberal/conservative" arguments that wrack the churches are really European and American affairs; the so-called "third world" doesn't care. But this world is now 2/3rd of the Church.

It is odd that you had to direct me to this article for two reasons. One, the magazine is published by my University, and two, my wife was at this conference. Talk about being unaware of things...

Now, where did I put my glasses...

Septeus7,  Sunday, February 7, 2010 at 6:57:00 AM CST  

That was best summary of the Obama residency to date and hopefully all he will leave us with is gays in the military because we could always start another war.

I really think we step the missionary effort to Asia because west seems stuck on stupid and going nowhere quick.

American's done, Europe's done because of the PIIGS default, and so now it's all about the BRIC.

I think Russia and South Korea good starting point for introducing beaming Catholic influence into China and let's remember Confucians are our friends.

Maybe we should start translating John's book into Chinese or Russian in hopes that they more intelligent and likely to listen.

Mr. Piccolo,  Sunday, February 7, 2010 at 2:09:00 PM CST  

Interestingly, I have actually heard people argue that the West will have to be re-evangelized by missionaries from places like Africa or Asia.

That being said, my understanding is that the rich countries in Asia, such as Japan and South Korea, are suffering from many of the same problems we are (family breakdown, alienation and loneliness, out of control materialism, etc).

I think this is the great double-edged sword of modernity. We have all kinds of material benefits, things like indoor plumbing, electricity, advanced medicine, abundant food, etc. but at the same time we are poor in things like family life, spiritual life, close-knit communities, etc.

I am not sure how this kind of double-edged system can be fixed, so that we can perhaps have both the material goods of modernity without the bad things. Maybe it is impossible? I am not sure.

Chris Campbell Monday, February 8, 2010 at 8:06:00 AM CST  

John, dont feel bad, you are a busy guy...me, I used to write articles at the drop of a hat, multi-paged iwth tones of footnotes,eyou name it...now, I lack energy to do a simple article...dont feel bad at all...was planning to write some thoughts on the Allen piece, hopefully will get some time and energy..trying to move and right now, waiting for java to kick in.

Papabear, thanks for link!! Adventus is often a very liberal slant to it, but Allen did hit some good points and kudos to him..!!

Coll Monday, February 8, 2010 at 5:41:00 PM CST  

Mr Piccolo. Yes, HH PJPII spoke at length about it in crossing the threshhold of hope. Basically it is the materialism of the society that can lead to disengagement from reality. Many "less developed" countries are as materialistic but just don't have the resources to drown themselves in materialism for materialism's sake.

Mr. Piccolo,  Monday, February 8, 2010 at 6:57:00 PM CST  


Thank you for the information. I will have to track down "Crossing the Threshold of Hope." I have a Catholic bookstore by me that might have it.

Besorge Tuesday, February 16, 2010 at 5:41:00 PM CST  

John, this is amazing. Great job. I might just go study in Dallas, you guys seem like a great bunch.

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