Obama3. Obama as One of the Greats 31.01.13

Obama’s harshest critics continuously and mindlessly repeat that Obama is one of the worst presidents in American history – comparable to Jimmy Carter. Under Cater, there was virtually no economic growth while interest rates rose to 19%. Under Carter, the mullahs took over Iran and created a base for anti-Americanism for the next four decades. Carter gave away the Panama Canal and failed to prevent the Russians from invading Afghanistan. Merrill Matthews who advertises himself as exploring exposing liberal nonsense wrote a piece for Forbes (14 September, 2012) “Obama’s Jimmy Carter Redux On Economic and Foreign Policy”. “Carter inherited a bad economy, just like Obama, and then promptly proceeded to make it worse by adopting Keynesian spending policies. In four long years of the Carter presidency, the economy floundered.” As Robert Schlesinger scribbled in U.S. News and World Report, “Carter was a bad president, Obama is an awful president.” (12 September 2012)

Linking Obama to Carter carries a message well beyond the assessment of Obama. First, Bill Clinton, who remains highly popular, is bracketed. Second, the characterization allows Republican George W. Bush, who has the reputation as one of America’s worst presidents, to escape notice so one can conveniently forget that his ratings fell precipitously from the highest ever given an American president after 9/11 to one of the lowest by the end of his presidency. Third, the characterization allows Ronald Reagan, another Republican and initiator of supply-side Reaganomics, to be ranked among America’s greatest, thereby reinforcing the mantra of the economic right in support of tax “relief” to produce greater government revenue.

What ensues is the war of the Dung beetles, a war between the conservatives and the liberals in American politics. The evening before last I listened to an episode on CBC’s As It Happens (also heard on Public Radio in the USA). The host was interviewing Eric Warrant, an Australian zoology professor and researcher at Sweden’s University of Lund. His research focuses on dung beetles at the edge of the Kalahari Desert. In an ingenious experiment that involved putting dark visors on one set of dung beetles and see-through visors on another group, his team made the amazing discovery that dung beetles, after first dancing on their dung balls to get the lay of the land and establish a direction, then use the milky way to guide themslves. This allows them to roll their dung balls across the desert floor in a straight line to ensure that the results of their hard work are not stolen by lazy predatory competitors. Dung beetles that could not see the milky way ended up rolling their dung balls endlessly in a circle. Are you a blinded dung beetle who cannot see the milky way and end up circling the wagons endlessly, or are you clear sighted enough to be guided by the stars to move forward in a straight line? Which is the party of mythos and which the party of logos?

From the outside, the war over labelling who is the best and who is the worst president is a war between policy nerds playing with dung. But that is the appearance. Underneath is a war about which set of players has the advantage of celestial guidance so that a clear goal can be set and followed more or less in a straight line based on stamina, strength, persistence and determination to preserve what has been gathered through hard work and ingenuity. These are the measures of a successful president. Can the president lead a team that can roll the shit he encounters into dung balls and get those orbs of dung as far away in as fast a time to ensure that the lives of beetles can be sustained and improved?

Before we look at the record of Obama’s first term and the account of his cheerleaders that praise him as a heaven-sent leader, it is helpful if we first measure his task against the shit left behind by his predecessor. Whether one ranks George W. Bush with James Buchanan, Zachary Taylor, Warren Harding, Calvin Coolidge, Franklin Pierce — or whomever you choose as America’s worst president — there is a wide consensus among historians, though not among his defenders, that George W. Bush, unlike his father, was a bottom feeder. Ignore the one-off failures, such as his inept response to Hurricane Katrina. Do not overlook Bush’s successes – the provision of prescription drugs for the elderly and the prevention of any other attack after 9/11 by al-Qaeda terrorists on American soil. His intentions on educational reform in the No Child Left Behind program were widely applauded, though leaving its implementation totally in the hands of states was questioned. Bush Jr. tried to get immigration reform through Congress but failed. He was a free trader unable to get Doha supported. He even initiated a successful large six trillion dollar stimulus package when the economy got into trouble soon after he was elected. These successes are often overlooked and even buried because many of the other goals were viewed as misguided and the failures were so outstanding and egregious.

Though Bush won office on a program as a domestic policy president, and he initially instituted tax cuts, including large tax cuts for the rich, the general consensus is that Bush’s worst error was to take America into Iraq on the ostensible grounds that Iraq was building nuclear weapons and was in cahoots with the terrorists. Even if one accepts the argument that Bush sincerely believed Saddam Hussein had a program of producing weapons of mass destruction, Bush clearly spun some of the evidence. He also avoided taking the relatively small amount of extra time needed to test and falsify his beliefs.

His second largest error was in implementation. His administration dismissed both the Iraq civil service and the army, creating legions of well-trained enemies and reducing Iraq to anarchy and a horrific civil war. The third charge was that he mismanaged the economy, piled up deficit after deficit and failed to reign in runaway stock brokers and bankers. Then he went into Afghanistan, all the time authorizing torture techniques, including waterboarding (enhanced interrogation), and failed to prosecute these alleged terrorists in accordance with American law and principles of human and legal rights. Bush did very little about the almost two million refugees and IDPs in and from Iraq and failed to protect what was once a population of two million Christians now reduced to less than 100,000. (Obama has continued that neglect – Richard Russell “Obama Ignores the Fears of Middle Eastern Christians,” Crisis Magazine, 28 January 2013.) Iraq continues to be unstable as is Afghanistan.

Bush can be fairly charged with putting politics before sound policy processes and to have fumbled as badly on Iraq and terrorists as Buchanan did in the Dred Scott Case that denied rights to Blacks. Bush’s indecisiveness and procrastination over years and failure to fire Donald Rumsfeld as Secretary of War perhaps was not at the level of Buchanan’s indecisiveness and inaction on slavery and secession, but it came close. Bush went into Afghanistan which Obama characterized as a war of necessity in contrast to Iraq as a war of choice and a wrong one. It is difficult to know whether the failures in foreign policy can be considered greater than the economic mess he left behind.

By the time Obama was inaugurated, the US was in a downward economic spiral. The deregulation introduced under a democratic president, Bill Clinton, morphed into a financial wild west show under George W. Bush. So Obama entered office in a year in which the numbers of unemployed grew by two and a half million. The unemployment rate reached 10%. (It has since receded to 7.8%.) GDP shrunk. Instead of hovering around the average growth rate of GDP of just over 3%, by the last quarter of 2008, GDP went down by 8.9%. The housing market collapsed. Home values shrunk dramatically. Banks fell. Brokerages closed.

Instead of lauding the legislation that saved the auto industry and that launched the largest ever infrastructure program since the post WWII period under the Republican Eisenhower administration, Conrad Black bemoaned that a $10-trillion of national debt accumulated from 1776 to 2008 became a $16-trillion debt, ignoring that this is less as a percentage of GDP than the debt incurred during WWII and without acknowledging that the debt was an investment (admittedly a risky one) to save the nation from past follies to allow the country to grow in the future. Black left out the fact that $1.6 trillion of that debt was largely due to lower revenue because of the Bush tax cuts. $1.4 trillion of the debt was due to the higher interest charges because of the growth in the debt. Almost $3 trillion was the consequence of the costs of Bush’s wars in Iraq and Afghanistan without requiring the American taxpayers of the time to pay for those wars. Obama included those expenditures in the budget instead of expending those amounts as supplemental appropriations. The major changes in how indebtedness was recorded, not just the costs of war but future medicare liabilities and other obligations, alone accounted for a $2.7 trillion increase in the cost of the debt. The Obama stimulus was responsible for less than a trillion of that debt.

Further, Black failed to note that former Democratic Party presidents Truman, Kennedy, Johnson (even with the Vietnam War and the Great Society Program), Carter and Clinton all reduced the public debt, while the two Bushes, Reagan and Ford all increased it. At the end of the George W, Bush administration, David Stockman, a stalwart Republican who had served as Director of the Office of Management and Budget in the Reagan administration, opined that the ideological tax cutters were to blame for the deficit. (“Four Deformations of the Apocalypse,” The New York Times, 31.07.2007) The extra funds bailed out the financial sector, rescued the auto industry, invested in infrastructure (roads, bridges, etc.) in a way not seen since the Republican Eisenhower post-WWII administration, and invested as well in education and in clean energy. Obama appears at least to have led America back from the brink of a second great depression. But it is difficult to prove a harm that never took place or, to put it more positively, an unseen benefit. But like Black Matter, the evidence for its existence can be indirect.

So the economic war was a domestic one. On one side were the Democrats rooted in Keynesian counter-cyclical economic theory who voted for The American Recovery and Reinvestment Act. On the other side were Republicans who under George W. Bush’s first administration supported a stimulus to spur job creation and growth – that also worked -but were now wedded absolutely and strictly to trickle-down economics, tax cuts characterized as tax “relief”, reliance solely on the private sector to spur economic growth and, with the exception of the defence budget, offer dramatic cuts in the government sector. They promised that the debt would come down through extra tax revenues. It never did.

What were the results? Obama’s champions claimed his stimulus worked magnificently. It would have even worked better if it had not been shortchanged. In compromising with magic fears and protestations of the Republicans, the Democrats eliminated more funds for the Head Start and more investment in infrastructure, specifically high speed rail transportation (support was only $10 billion) that would have created even more jobs and allowed the economy to recover more robustly. The high-speed rail program nevertheless remained moribund until 2012 because of the resistance of Republican state governors. Instead of 13 high-speed rail corridors in 31 states, Americans will only have two – in California and in the Boston-Washington corridor. But if the Republicans were going to vote with ideological solidarity, and if Republican state politicians were going to ally with their Washington colleagues, why did the President not go for broke and push through a $1.2 trillion stimulus package?

As depicted in detail in Michael Grunwald’s 2012 volume The New New Deal: The Hidden Story of Change in the Economic Era (New York: Simon & Schuster), Obama’s champions lauded the stimulus package for its outstanding accomplishments in saving the financial industry, rescuing the auto industry, and creating 2.5 million private-sector jobs. The Obama Administration revamped the Student Loan Program and saved $62 billion while, at the same time, making the loans cheaper for students and making provision for repayment based on future earnings, a proposal we made as a University of Toronto student council before the Bladen Commission in 1960. According to Grunwald, the long term economic transformation was broad, deep and of unprecedented historical proportions both in relation to the past but, more importantly, as a new foundation for the future. According to Grunwald, the stimulus provided the: “biggest and most transformative energy bill in history”; “biggest and most transformative education reform bill since the Great Society”; “biggest foray into industrial policy since FDR”; “biggest expansion of antipoverty initiatives since Lyndon Johnson”; “biggest middle-class tax cut since Reagan”, and, of course, the greatest revolution in health care policy in America since WWII, an innovation that had been defeated so many times before. Obama managed to pass The Patient Protection and Affordable Care Act, but that Act did not even make provision for a single payer system as in Canada even as a test case. Support for new infrastructure was huge as it was for new green initiatives.

Of course the program greatly increased the economic power of the government in direct counterpoint to Republican ideology. But, according to the Republicans, economic growth was only a “meagre” 2.2% in contrast to growth which Obama’s critics claim was at double that rate under Republican presidents and even the Clinton administration. In fact, the growth rate under Reagan was almost the same as that under Jimmy Carter – 3.4% compared to 3.3% – while the growth rate under Bush Sr. was 2.2% and under Bush Jr. was 2.0%. (See the data quoted from the Bureau of Economic Analysis in the right-wing Liberty Bulletin “The Reagan Years: A Sobriety Test,” 26 January, 2012.) Unemployment rolls dropped by a million, though it still hovers at 7.8%, but Republicans complain that the real rate of unemployment is much higher as indicated by the drop in the labour force participation rate from just over 66% in the beginning of 2008 to 63.6% at the end of 2012. In any case, Obama had promised a maximum unemployment rate of 9% and it reached 10% for one month in October of 2009 and averaged 9.6% in 2010. In 2011 it hovered for most months at 9%, finally dropping to 8.5% in December. After that, the decline proceeded steadily. (U.S. Labour Board Statistics, US Department of Labour) Conrad Black could have contrasted the 50 million on food stamps with the 18 million before he took office. For in the process, the USA has become a much deeper and wider welfare state — but without the European tax revenues to support it.

So the Republicans agree that Obama has expanded government programs but Republicans characterize these as creating a more powerful, larger and more intrusive federal government that compromises the individual’s rights to life, liberty and the pursuit of happiness. Though it is difficult to argue from what did not happen, the Great Recession did not become the Great Depression which lasted longer with almost four years of steady decline compared to the 18 month decline in this recession (recall that the 1973-5 and 1981-2 recessions each lasted 16 months). In the Great Depression, GDP fell an unbelievable 27% compared to only a 5% decline in the Great Recession. Unemployment rose to 27% in the Great Depression and not the one month maximum of 10% of the work force in the Great Recession.

According to his cheerleaders, Obama has emerged as one of America’s greatest presidents whatever else he does in a second term facing an intransigent Republican controlled House of Representatives. He is great, not because he introduced more rather than less regulation that Black favours. He introduced regulation reform where it was needed: pay discrimination to protect women and unemployment benefits that did not discriminate against gay couples; regulation of automobile credit cards and tobacco advertising. Obama updated hate crime regulation to bring real criminal activity more in line with the way Canada treats (or used to treat) criminals. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 tightened capital requirements on banks and restricted predatory lending to prevent the abuses that were the catalyst of the 2008 crash in the housing market. One of the most forceful and pithy defences of Obama’s record can be seen and heard in a replay of Rachel Maddow’s rave on MSNBC on the eve before the election. See also the editors’ Comment in The New Yorker of 29 October 2012. Obama has certainly had many articulate champions.

If the economic stimulus was so successful and so revolutionary, if the defence was so clearly made, why did it not gain greater support, especially since the election campaign ignored the advice of James Carville and Stanley Greenberg not to run on his economic record but only on his economic promises for the future? (http://www.huffingtonpost.com/2012/10/19/james-carville-stanley-greenberg-obama-economy_n_1990403.html) Why did Obama’s approval just simply correlate with the votes he received unlike the situation of any other president on inauguration? If Obama had convinced voters to support him, including many as I will show tomorrow who did not agree with his economic package, why has his approval rating not improved?

Tomorrow: The Reluctant Obama Supporter

[Tags Obama, President, USA, Great]

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