Mixed Message and Outrage
In his first 57 days in office, President Obama has seemingly tried to play both sides of an issue with little concern by anyone listening, especially the initiated, that it is happening. When will the Daily Show, where most young people get their news these days, start picking up on these?
To be fair, taking that shot at Jon Stewart is a little cheap, he himself BEGS people to not use his show as a source of news. But it is hard because it has always appeared that the show was, for the most part, bipartisan in their attacks. But while they have gone after President Obama in a lighthearted way over the past year, it seems that only Lou Dobbs is pointing out any of these glaring inconsistencies, and then it is a short grumble and then they move on. That would perhaps tell people that these ‘inconsistencies’ are minor, but as you are about to see they are definitely not.
Fundamentals of the Economy
John McCain was beaten to defeat by stating what many feel is still true, that ‘The fundamentals of the economy are strong’. The Obama campaign hit hard and often that this signaled that John McCain was ‘out of touch’. Yet, now we hear from the president himself as well as his aides that this is indeed the case.
“IF we are keep focus on the fundamentally sound aspects of our economy”
Which parts of the economy are they again and why were they not sound a mere couple of months ago when John McCain said the very same thing that President Obama hit him hard on? Did the economy change or did President Obama’s vantage point change? Yet aren’t we told that we are on the verge of total economic collapse?
However, that can be chalked up to trying to ‘win an election’. Everyone knows its ok to ‘misstate the truth’ then, right? But there is more…
Speech to Congress
In the speech to Congress a few weeks ago, President Obama addressed the Congress, and us, and made a lot of great sound bites. But how many of us saw the duplicity of some of them?
“But I also know that in a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment. My job—our job—is to solve the problem. Our job is to govern with a sense of responsibility.”
Sounds good, but a few paragraphs later he tells us:
“This time, CEOs won’t be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over!”
Um… Angry much? Even today we are told that President Obama is ‘Outraged’ at the bonuses paid to AIG employees (not CEOs or upper management) in accordance with their terms of employment. But more on that later.
Reason Magazine has captured the Many Faces of Barak Obama well in their examination of the speech:
It was like this all night. The president’s stimulus package “will save or create 3.5 million jobs.” One of those, anyway! His administration has “created a new website called recovery.gov so that every American can find out how and where their money is being spent,” unless they try to use it to find out how and where their money is being spent. Importantly, Obama vowed to “act with the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times,” a pledge he took so seriously that later on he stressed, twice, that “it’s not about helping banks—it’s about helping people.”
The contradictions came flying even in his read-my-lips moment: “If your family earns less than $250,000 a year,” he said, “you will not see your taxes increased a single dime. I repeat: not one single dime.” But as recently as the previous paragraph the president vowed to “restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.” And a few paragraphs before that, he called for a “market-based cap on carbon pollution.” So: You will not see your federal taxes increased a single dime…unless you own a company that emits carbon or hires some of those dastardly Koreans.
The two faces of Obama reveal more than just a man hard-wired to work both sides of a room. There is an essential contradiction at the heart of his populist economics. He wants to jump-start the “flow of credit”—it’s “the lifeblood of our economy,” after all—but somehow surgically remove the “speculators” from the process. “I will not spend a single penny,” he promised, undeliverably, last night, “for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can’t pay its workers or the family that has saved and still can’t get a mortgage.” His press secretary, Robert Gibbs, declared last week that, “I think we left [behind] a few months ago the adage that if it was good for a derivatives trader, that it’s good for Main Street. I think the verdict is in on that.”
Here is one of the many problems with that line of thinking: Wall Street isn’t just some abstract pit of snakes that can be drowned in poison oil or otherwise given a wide berth—it’s the heart (if tattered) of the country’s financial industry. Which, among other things, does more to unleash the lifebloody “flow of credit” than any other power center in America. Not only does Obama get it wrong when he thinks you can best “help the small business” without involving the best single source of small-business funding, he also wildly misses the political and financial ethos of the abstraction he can’t stop campaigning against. “I understand that on any given day, Wall Street may be more comforted by an approach that gives banks bailouts with no strings attached, and that holds nobody accountable for their reckless decisions,” he said with a smirk. “But such an approach won’t solve the problem.” Nor will erecting a giant straw man in Lower Manhattan.
But there’s more: Not only is Wall Street going to be key to any recovery, the reviled “derivatives trader” is right at the clenched heart of the financial blockage. As Washington Post economics columnist Robert J. Samuelson pointed out earlier this month, “Contrary to popular wisdom, banks—institutions that take deposits—aren’t the main problem. In December, total U.S. bank credit stood at $9.95 trillion, up 8 percent from a year earlier, reports the Federal Reserve. Business, consumer and real estate loans all increased….The real collapse has occurred in securities markets.”
Securitized lending instruments, and the various insurance and pricing bets placed on them, sloshed hundreds of billions of dollars into the economy, but have now locked up. The point is not that the derivatives trader needs a bailout—he most certainly does not—it’s that inaccurately demonizing him is not the shortest route to economic wisdom.
But again, we’re just nitpicking here, right? What about real policy issues?
Well, many anti-war and pro-freedom people who were overjoyed to see Obama win the election last November are now chagrined at the seemingly warp-speed about face that has occurred.
First, the war in Iraq. Only two small things have changed in Obama’s plan on bringing the troops home. First, it won’t take 16 months, it will take longer and second, we aren’t bringing the troops home. Again, from Reason Magazine:
Instead of May 2010, the target date has been pushed back to August of that year. Nor will he bring back one or two combat brigades each month. Instead, The New York Times reports, Obama plans to withdraw only two between now and December, or one combat brigade every five months.
The administration claims it will speed up the pace of withdrawal next year. But if someone says he’s going to sober up tomorrow, it doesn’t mean he will definitely do it tomorrow. It just means he definitely won’t do it today.
What we can deduce from the new timetable is that for now, we are staying put. As for what happens next year—well, why cross that bridge before we come to it?
Assuming the president adheres to this backloaded schedule, a large U.S. force will remain for some time. After August 2010, the administration plans to keep as many as 50,000 troops in Iraq. That’s 16,000 more than we currently have to fight the war in Afghanistan. We’ll also be spending $50 billion on the effort in 2011.
Oh, and remember that promise to remove all the combat brigades? Here’s the trick to it: leaving some of them there but under a different designation. They would be referred to as “Advisory Training Brigades” or “Advisory Assistance Brigades,” says The New York Times.
When administrations begin indulging in the generous use of bland euphemisms, we know what it means: They are not willing to do what the public wants and they are not willing to let the public know it. This “transition force” looks like a way of avoiding a transition, not making one.
Of course, this is not at all different than what Senator McCain stated and was blasted for during the campaign, and he supports this plan too.
However, the real mind-twister comes from a case involving torture. As NPR reports:
In the first major national security case of the Obama administration, lawyers representing the government took the exact same position as the Bush administration. Government attorneys asked a judge to throw out a torture case, citing the need to preserve state secrets. Some human rights activists now say they feel betrayed by an administration that had promised greater openness and transparency.
Bush administration lawyers had argued there was no way to try this case without revealing state secrets. Activist groups and newspaper editorial pages hammered the Justice Department for taking that position, but a trial judge agreed and threw the case out.
As the government prepared to argue the case again before three judges at an appeals court Monday, observers wondered whether the Justice Department would change course now that there is a new president and a new attorney general. The government did not change course.
ACLU attorney Ben Wizner, who represents the detainees, said in a phone interview after arguments, “The Obama administration, which came to office on a promise of greater transparency — on a promise of ending these practices — stood up and made exactly the same arguments that were made by Bush lawyers to throw out torture victims’ lawsuits. And that’s a profound disappointment.”
In fact, the judge was mystified. When asked if there was ‘Anything recently that occurred that might change the view of the government in this case’ (referring to the election and a new administration) the answer by the Justice Department was ‘no’.
But today provided a very good example of the duplicity we are seeing from this administration. Last week we saw a huge omnibus bill signed by President Obama even though it contained $5.5 billion in earmarks asked for by both sides of the aisle in Congress. Instead of saying ‘NO’ and telling congress that he would not sign the bill until the earmarks were removed, Obama signed the bill stating that this was ‘last year’s business’. Well, technically no. The deals may have been made last year but the bill was put foward THIS year and required THIS president’s approval to go ahead. $5.5 Billion, on top of over a trillion dollars in already approved spending.
Then, today, we are told of Obama’s OUTRAGE that AIG was fulfilling its contractural obligation to pay bonuses totaling $165 Million (getting our calculators out we see that that is 1/33rd of the amount that Obama felt was ‘last years business’ and not worth of standing up against, of getting OUTRAGED about). 33 times what he is OUTRAGED about today was ticked off with the sign of a pen (behind closed doors, mind you) without even a sign of concern on ‘last year’s business’, yet now he is seeing red about something AIG contracturally is bound to pay due to an agreement made in EARLY 2008?
I don’t like to see a company make bad decisions either, but didn’t these people do exactly what the company asked of them to do? They were directed and financially incented to sell derivatives. And they did! They did a lot of it. And according to their contract they should be paid their bonuses. But we are going to go after these individuals because of poor business judgment by a CEO that is no longer at the company? When the top executives have already stated they were giving up their bonuses? For an amount 1/33rd the size of earmarks that were considered by Obama’s supporters to be the tinest fraction of the budget and not worth dealing with?
The interesting thing will be see if Obama will actually do something about it. It is not like he has not changed his mind before and legally he has little leg to stand upon. But when a president is OUTRAGED at a relatively small number of our tax dollars compared to the huge numbers he has little concern spending, is it any wonder that hundreds of banks are suddenly finding themselves in much better shape and sending back their TARP funds? Maybe an overreaching, unhinged inconsistent leadership is exactly what those banks needed to squeeze out from under the fist of Uncle Sam. If we can survive it…