By Marc Seltzer; originally published on March 19, 2010, at care2.com
There is still a strong undercurrent of anger in the United States about bailouts and stimulus spending. Republicans, and even Democrats and Progressives, have reacted angrily to President Obama and his financial team. This is significant because President Obama lost political capital on the economic recovery plan, and has far less power now to push though health care, education and financial reforms than he would have absent these actions.
The common critique from the Right is that Mr. Obama is moving in a socialist direction, while from the Left it is that Geithner, Summers, Romer and Bernanke, the U.S. government’s economic chieftains, are corporatist and beholden to the bankers.
More puzzling than the conservative complaints about the administration’s stewardship of the economy, is the Left’s opposition to it. A significant part of the Democratic party seems to believe that our current leadership is on the side of the wealthy in a new class struggle, and that the government bailouts have effected a transfer of wealth from the little guy to the fat cats. To be fair, this antagonism towards saving the financial system is in part a more structural distaste for corporate political and legal power — unrelated to recent U.S. government actions. None-the-less, Obama is now trying to enact reforms in this across-the-spectrum, anti-government political climate.
To challenge the idea that Obama’s actions were pro-bank, pro-corporate, or designed to bail out the fat cats at the expense of the public, I want to compare the European response to the financial crisis with U.S. actions. European nations, often called “social democracies,” are respected by the American Left and cited as examples for their stronger safety net of worker protections, health care and liberal benefits.
Jean-Claude Trichet, the head of the European Central Bank, equivalent to our Federal Reserve Bank (Ben Bernanke), said recently about American and European government interventions:
“We had to put on the table on both sides of the Atlantic around 25% of taxpayer risk to avoid the Depression, a major Depression, which would have come had we not been that bold. When I say we, I mean the governments. Of course, the central banks also have been very bold, in engaging in non conventional measures — the Fed and us [European Central Bank].” (Bloomberg on Demand, March 12, 2010, from interview with Tom Keene)
What is insightful here is that European governments and related institutions behaved much as the American government did. As the New York Times reported in early 2009:
“So far, Europe’s largest economies, France, Germany and Britain, have been spared demonstrations. All three governments have introduced huge stimulus measures aimed at spurring employment and protecting banks.
Regardless of the outcome, the three countries will face large budget deficits and higher state borrowing, which economists say will be passed on to taxpayers. And in the case of France and Germany, the governments could find it more difficult to introduce bold reforms at a time of recession.” (New York Times, January 26, 2009.)
To be sure, European nations have faced public protests over the past year, including demonstrations in recent weeks against the Socialist government in Greece. And modern European nations are a mix of strong state intervention in industry and free markets. But despite their more left-leaning perspectives, European government actions to save banks and support their nations’ economies with emergency stimulus spending, resemble US approaches.
The underlying reason for this is plain: Healthy economies require healthy banking systems. The only other option for lawmakers in 2009 would have been to nationalize, through government takeover, the major banks and investment companies. This would not only have been too radical for a young American President in the first days of his Presidency, but was not favored by European nations, which, despite more Socialist political visions, prefer to keep most individual businesses in the hands of private owners.
It is as much of a stretch to believe that Barack Obama, community-organizer-turned-politician, attained the Presidency in order to embrace the rich and powerful over the little guy, as it is to draw the conclusion that the Socialist and left-leaning governments of Europe transformed in 2009 into standard bearers for corporate and special interests across the Continent.
Why the American Left should find itself so opposed to the positions of both European and American governments requires little guesswork. The greed, irresponsibility and power in the financial system made the public angry. The Republicans, with little post-election political power and prospects, turned anti-corporate anger into anti-government anger with some clever “grass roots” anti-Democrat marketing messages.
Now, instead of joining the administration and embracing reforms, many a Democrat flirts with anti-government energy, which is really just self-serving partisan manipulation pushed by the Republican party.
Democratic Congressman Dennis Kucinich, in discussing his last-minute decision to vote for the President’s health care reform, acknowledged the tension between pressing for progressive reform and falling into a trap laid by the opposition:
“With three years left in the Obama Presidency we have to continue to encourage him, but we’ve got to be careful that we don’t play into those who want to destroy his presidency and say, you know, the birthers and others who say he should never have been President to begin with. There is a tension that exists. . . . we have to be very careful about how much we attack this president even as we disagree with him because we may play into those who just want to destroy his presidency.” (Democracy Now!, March 18, 2010 (radio interview with Amy Goodman))
Careful indeed! It’s about time.
The US Government, in my opinion has become one of the most dysfunctional I have seen in all of my adult life. We have, as well – dysfunctional citizens – who are seemingly out of control. The “Tea Party” is an excellent example. When will both politicians and citizens realize there is power in unity?
I am so disgusted with the entire system, my next choice in voting will be one of apathy.
I have always voted for a candidate based on merit. The next election (be it local, state, or national), my choice will be either sending in a blank ballot or a write in vote(s). I feel at this time: what’s the use? Many with whom I have spoken to about this feel the same.
Hi Dee 🙂
While I share some of your disillusionment with government and politics, I have to disagree with your attitude of “what’s the use?”. Change for the better is always hard and never happens in a short period of time. This is exactly the reason it’s so hard to bring about. The general public is impatient and expects overnight miracles, when that’s just not possible. Our President promised change and he is doing the best he can, under the circumstances of right wing extremism and the lies spread by it, as well as the moderates and left wing who have become restless and impatient. He never said it would be easy. He never said it would happen overnight. He said it would be a long, hard struggle…so it’s crucial that we don’t give up, now, when we have begun to effect changes we have wanted/needed for generations. When we lose our momentum is when we lose our chance to change the system.
So, I would ask you to please reconsider your feelings of apathy; right now is when we need to stay the course. We have a voice…but we’re not going to change anything just by blogging…we must take the initiative to pay attention; learn everything we can, from legitimate sources, about what we are being told (whether it’s truth or not), then spread the truth to out the lies and vote as intelligent, informed citizens. If we don’t educate ourselves and vote responsibly, then we really have no right to complain when we don’t like what’s happening.
Your example of Tea Party extremism is excellent. But, don’t you see that, if we just throw up our hands and say, “What’s the use?”, we are handing those “out of control” extremists the nation on their own silver platter. And then what? Will we be better or worse off?
My sincere wish is that somehow, someway, logic and reason will win out, over extremism, hatred, violence and lies. But, if I don’t do my part to help stop those things, I’m standing in the way of those who are.
“The only thing necessary for the triumph of evil is for good men to do nothing.” -Edmund Burke
Please reconsider your apathy. The nation needs people who are willing to point out what is wrong and stay the course, no matter how long it takes, to do what we can to make things better. 🙂
I certainly share Dee’s disgust and sense of hopelessness. Sometimes I have imagined just “dropping out” whatever that would have meant. I am 63 so I’ve had lots of chances to be disgusted and repulsed by the twists and turns of our political process. But I am an activist by nature and the idea of doing nothing is equally repulsive to me as the notion that my participation might not matter. For me the bottom line is acting in accordance with my deepest sense of what is right and the world as I wish it to be. On the first day of the first Gulf War I stood on a street corner with a sign and my 3 year old, otherwise alone, because I kept thinking of those Iraqi women and children and men who were innocent but who were being killed with bombs I had sent my government money to build and deploy. It was all I could do. It was so little, but what else could I do with my horror of that day? So no matter how offended I feel at Obama’s choices (and some of them are SO WRONG!!!), I still want decent courageous people to be in positions of political power and responsibility in every office of government that I can affect. And every day I remind myself what kind of world we’d have if John McCain and Sarah Palin were in charge here.