By Ben Cohen
The gravity of the economic crisis means that every move Obama makes now could define his legacy as President. As Robert Scheer points out, if he gets this wrong, Obama’s platform of meaningful change could evaporate into meaningless words:
Only a week into the new administration,
and yet there is this nagging thought that Barack Obama’s legacy
already hangs in the balance. Sounds absurd, I know, given the brief
time, but his early response to the financial meltdown is just that
important. Despite a terrific start in so many directions, Obama is up
against an economic crisis that, although not of his making, will, if
handled improperly, spell his—and the nation’s—undoing.
Obama is in these early weeks making
trillion-dollar decisions that will cast the die for the rest of his
promising agenda. Unfortunately, while the new president has already
proved to be a brilliant and super-competent agent of change in so many
ways, in matters of economic policy he has relied excessively on the
financial “experts” who helped get America into this mess.
The prominence of Clintonite economists like Geithner and Summers does not bode well for Obama, as the stucture of the economy must radically change if the awful mess is to be reversed. Geithner and Summers were part of the deregulation frenzy that started under Reagan, so their passion for change must be questioned seriously. Also, the scale of the crisis is so big, the measures needed to fix it are really an unknown quantity. Noam Chomsky points out:
What is happening with the economy is not well understood. It is
based on extremely opaque financial manipulations, which are quite hard
to decode. I mean, the general process is understood, but whether the
$800 billion, or probably larger government stimulus, will overcome
this crisis, is not known.
The first $350 billion have already been spent — that is the
so-called part bailout but that went into the pockets of banks. They
were supposed to start lending freely, but they just decided not to do
it. They would rather enrich themselves, restore their own capital, and
take over other banks — mergers and acquisition and so on.
Whether the next stimulus will have an effect depends very much
on how it is handled, whether it is monitored, so that it is used for
constructive purposes. [It relies] also on factors that are just not
known, like how deep this crisis is going to be.
Paul Krugman has outlined
exactly what Obama is up against, and what he thinks Obama must do to restore the
economy – and there are no guarantees that will work either, or whether Obama will take his advice. Obama’s move today condemning the $18 billion in Wall St bonuses today was a welcome move, but it would have been better if Obama had demanded the entire amount be paid back to the tax payer. Scheer holds out hope, saying:
The good news is that the message coming from the mouth of the new
president is that he intends to make a significant departure from the
Bush bailout, by placing emphasis on preventing foreclosures,
curtailing bank lobbying and holding the recipients of federal funds
responsible for opening the tap of loans to the public. The structure
of the stimulus package is also reassuring, with its emphasis on
spending money in ways that will improve the quality of life for
ordinary Americans and its ban on bonuses for corporate execs who
utterly failed in their responsibilities.
Let’s hope Obama puts his money where his mouth is, for our sake, and his own.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.