Part IV: From Candidate to President-Elect and a Financial Crisis
I most shared with Obama his conviction that diplomacy had been neglected in favour of military solutions, especially in Iraq when the alleged problem was a chimera. “[T]he Washington foreign policy establishment got things backward – taking military action without first testing diplomatic options, observing diplomatic niceties in the interest of maintaining the status quo precisely when action was called for. It also indicated the degree to which decision makers in Washington consistently failed to level with the American people.” (99) But if Obama believed all of this, I looked forward to his explanation of why he re-appointed Robert Gates, a Republican, as Secretary of Defense.
Of necessity, Obama wrote of the petty fights between the competing campaigns and after reading those pages, I wished I had skipped them. To me it was like taking a bath in gossip and the worst politics has to offer. But my intolerance for this dimension of the enterprise was just another reason why I could never be a successful politician, a calling which I consider the most ennobling in spite of its terribly rough edges.
At the very opposite end of the spectrum was Obama’s analysis of why the organized Black community in good part held back from endorsing him, Part of the reason was the trust in and loyalty they felt towards Hillary Clinton. But perhaps a greater reason is because they just did not believe that America was ready for a Black president. They were, instead, “Unconvinced that victory was possible.” (117) They were also imbued with a “protective pessimism.” They did not want to see Barack Obama hurt. Instead, even his Black supporters often saw his race purely in symbolic terms.
This is where Obama’s audacity stands out. This is where his willingness to take risks shines. This is what actually provided the ground for his victory – he believed he could do it and America was ready for a Black president. Almost for that alone, he deserved to be elected. “I needed to use language that spoke to all Americans and propose policies that touched everyone – a topflight education for every child, quality healthcare for every American. I needed to embrace white people as allies rather than as impediments to change, and to couch the African American struggle in terms of a broader struggle for a fair, just, and generous society.” (118) Most of all, I liked the depiction that Obama belonged to the Joshua generation while those Black leaders who came before him belonged to the Moses generation as part of the unbroken chain leading Blacks back to a promised land. Just as when Moses sent his spies ahead and then most reported back that a return would encounter too much opposition, Obama was “running against the implacable weight of the past, the inertia, fatalism and fear it produced.” (127)
Most important of all, Barack had Michelle. She was “funny and engaging, insightful and blunt” (133) and, I would add, unencumbered by either vanity or ambition. Michelle, however, made one major gaffe that Obama took the blame for when she said that she had finally come to believe in America. It was a rhetorical error, not comparable to the three major mistakes Obama took responsibility for in the final stages of seeking the nomination:
- He failed, or his team failed, to do their research on Reverend Wright, Obama’s own pastor, who, in sermons, characterized America in the most offensive terms and which Obama handled by making the gut-wrenching decision of resigning from his church, thereby stemming the hemorrhaging of support.
- He himself made a more important rhetorical slip, perhaps not as bad as when Hillary Clinton referred to the supporters of her Republican opponent as “deplorables,” but almost as bad when he described the same constituency as “bitter’ and “clinging” to guns and religion.
- He made a very serious tactical error when he had almost clinched the presidential nomination, but then spread his campaign energies and resources across late primaries in Texas, Nebraska, Idaho and Iowa where Hillary ended up winning clear victories in both Texas and Iowa.
Obama, however, recovered. He went on to win the nomination. The next challenge, and the most important, was the election.
Obama’s first and last job as a candidate had to do with Hillary Clinton. Though the Democratic Party needed unification – as it does after every leadership campaign – Obama convinced me that the last and most important post he filled, that of Secretary of State, was with Hillary, but not primarily for the purpose of healing the party but because he admired her so much. Perhaps this is because Obama is a good salesperson. He convinced Hillary that this was his motive. He convinced me.
His first decision was to choose a running mate. He presented the arguments for choosing Joe Biden over Governor Tim Kaine of Virginia. He chose Joe because of the breadth of his experience, his detailed knowledge of Washington and the warmth of his empathetic character. “On domestic issues, he was smart, practical and did his homework. His experience in foreign policy was broad and deep.” (163) Obama was impressed with his skills and discipline as a debater. He did not know how absolutely loyal he would be. He did know that his own marital partner, Michelle, would also have his back, as much as she was wary of any political involvement on the national stage, and, when given the chance, would reveal her own star power.
What he did not control was the choice of his Republican opponent. John McCain was a formidable choice – a genuine war hero, a man of principle and insight, a man who would silence his own supporter’s boos at the mention of Obama’s name, insisting that his opponent be treated with the respect that he deserved. McCain, however, had three fatal flaws. First, George W. Bush had left him with a political and military mess in the international arena – both in Iraq and Afghanistan. Under the push from Dick Chaney and Donald Rumsfeld, American had invaded Iraq under the lie that the country had weapons of mass destruction.
That invasion and conquest were compounded by a dismantling of both Iraq’s predominantly Sunni army and civil service. On 11 May 2003, Paul Bremer was named to head the Coalition Provisional Authority. Twelve days later, he issued the order to dismantle the entire Iraqi military apparatus instead of just weeding out Saddam Hussein’s henchmen. He did this without the authority of either the Pentagon or the White House. In fact, that action ran contrary to Anthony Zinni’s contingency plan as Chief of the Central Command up until 2000. In case of an invasion of Iraq, the U.S. was to use the army to build a new regime should the U.S. choose to take Saddam Hussein out. As a consequence of dismantling the Iraqi military, the Americans were left without a local military force to combat an insurgency while, at the same time, providing those insurgency forces with military-trained leadership and recruits. The new Shi’ite Prime Minister of Iraq, Nouri al-Maliki, filled the new army with untrained (and corrupt) cronies as he used American military financial support to fill his and the pockets of his friends.
The United States was left with managing a Shi’ite dominated state fast becoming a satrap of America’s sworn enemy, Iran. It was a horrific situation for America which had become embroiled in a war that seemed it could only extricate itself by leaving behind a thoroughly corrupt government increasingly beholden to Iran.
The 43rd President of the United States also bequeathed to his successors the worst economic crisis for the United States since the Great Depression. Unfortunately, McCain knew nothing about fiscal and economic policy. Further, he did little to learn, even once he had been nominated as the candidate for the Republican Party. This was particularly difficult when he led a party distrustful of big government intervention and a deficit recovery at precisely a time when both were sorely needed.
Third, McCain headed a much more divided party than Obama did. After all, he was identified as a RINO – a Republican In Name Only – in a party increasingly dominated by rightwing populism, the part of the party most needed to rouse the passion of its supporters – with all the dangerous consequences that we observed yesterday in the storming of The Capitol. With inadequate vetting, McCain chose as his running mate, Sarah Palin, an exemplar of that wing who immediately upon her selection brought a bracing wind behind the sails of the GOP, attracting and rousing the same crowds to whom Donald Trump would eventually appeal. However, her basic knowledge of both foreign and domestic affairs indicated even more ignorance, if that is possible to imagine, than the candidate who would win the primaries for the 2016 election. “And what became abundantly clear as soon as Sarah Palin stepped into the spotlight was that on just about every subject relevant to governing the country, she had absolutely no idea of what the hell she was talking about.” (170)
Paired with a partner who was the epitome of stupidity – not a fatal flaw as Donald Trump would demonstrate – but exacerbated by two foreign wars which America did not seem able to win and an economic crisis that threatened the very viability of the U.S. without sufficient economic smarts to deal with the crisis, Obama could effectively stroll from being the Democratic candidate to becoming the president-elect.
Obama, in contrast to his Republican opposition, became a sample of a fast learner who could travel abroad and earn a degree in a short and intense course in international affairs. He could also study what had happened to the economy advised by an economic brains trust. But his learning simply covered up but did not eliminate his ignorance in both foreign affairs and in economic and fiscal policy.
The latter ignorance began with his own personal finances. He was a state Senator, a university professor and a part-time legal practitioner. His wife was a successful lawyer and subsequently an administrator. Yet with their combined income on top of their student debt, all they could afford was an older condo apartment for themselves and their two children. It cost them $227,500. They paid 40% down with financial help from Obama’s grandmother, Toot. (172) “[W]hile the principal on our college and law school; loans never seemed to decrease, money was perpetually tight, our credit card balances grew, we had little in the way of savings.” Obama had to be talked into the benefits of paying off his high interest credit card loans using credit from his home equity by a mortgage broker. Would or should anyone trust putting the American (and the world) economy in the hands of someone so abysmally ignorant of the role of credit and debt in accumulating assets?
I ask this question of a man that I admire, even revere. But, as I will try to show, I was very critical of the way he handled the economic crisis, even though his Republican opponents would have been so much worse. My distrust was confirmed with the way he handled his personal finances. I speak out of some experience.
When I was sixteen, my older brother, Al, and I bought my mother a story-and-a-half house, our first owned home, at 89 Ranee Avenue in Toronto. It cost $15,900. If my mother and my youngest brother used the dining room on the first floor as their bedroom and my brother and I slept in the finished basement, we could rent the second floor with a separate entrance from the side to a couple and the income could cover the taxes and the mortgage costs. The mortgage was $10,000 and a CMHC insured mortgage interest rate was then 5 3/8% with a twenty-five year amortization rate. It meant that our monthly mortgage payment would be just over $60. With heat and electricity, taxes and water bills, if we rented the apartment for $90 a month, we could live almost rent free – which is how my mother got by as a single mother with three kids when we rented entire houses and sublet sufficiently to pay our rent plus most of the expenses.
Where did we get the down payment? We had been saving my brother and my earnings since I was twelve. We always had jobs. We had paper routes, We ran the second largest syndicate selling ribbons at football games. We scalped tickets at football and hockey games. I remember the Christmas of 1952 when I was still fourteen and we lived at 592 Palmerston Avenue. We counted our earnings for Christmas week; we had netted almost $300 for the week:
Paper routes $ 30
Prize money for new subscriptions – 2nd prize 50
- 3rd prize 25
Christmas tips 30
Ribbon business 45
Football ticket scalping 45
Hockey ticket scalping 65
Total $290
It was cash income. My brother and I spent almost nothing on personal expenses. It helped that we did not have cell phones in those days. Over four years, with the big boost from summer earnings when my paper route alone expanded to 560 papers per day or when we got full time summer jobs, we managed to save $3000 in cash and secured an interest only loan of $3,000, now called a line of credit, the payment on which we could finance out of our earnings.
After I moved downtown when we went to university, my mother remarried, sold the house, repaid the $3,000 and was left with a little nest egg. Al and I were in the same grade. We both went to medical school. We accumulated no debts from university since one way or another we managed to live rent free and earn enough money for food. Fortunately, my school fees were covered by scholarships.
I also became the manager of the student co-op residence at the university which owned four houses when I took over in the summer of 1957. Eight years later, the co-op owned 28 houses and we were building new residences in Waterloo and Toronto. In the meanwhile, I had married. By the time I was a 27-year-old and just finishing graduate school, my wife and I had four children over a five-year period. We always lived well by following the same pattern as my mother had – renting houses and subletting parts to pay the rent and running costs. Finally, when I got my appointment in 1966 at York University and, our rented farm hose had burned down, we had collected $3,000 for the loss of all our possessions. We borrowed money from banks and got a mortgage to purchase an enormous house for $80,000 cash and with mortgage and bank loans managed to still have $1500 when we moved into 51` Wells Hill Avenue where we rented out three separate apartments.
This is all said to indicate my practical bona fides. In spite of all my involvement in social causes, we acquired assets by knowing how to borrow money to acquire assets. Even though he was a brilliant student, Barack Obama had no clue how to do this. When he became a U.S. Senator, they sold their East View Park condo “at a price high enough to cover our mortgage and home equity loan and make a small profit.” (173)
This personal financial naivete affected how he handled the inherited financial crisis.
Part V: From the Personal to the Political Economic Crisis
Howard Adelman 