Petit Julien welcomes you back to the Populist Pub.
Earlier this week, we passed a milestone of sorts. The Obama administration marked its first 100 days in office. In 1933, FDR, facing a full blown depression, made numerous and transformative changes in his first 100 days. Since then, the accomplishments of the first 100 days of every new administration have been symbolically compared. That is, until this year.
On Thursday, Day #101 of the Obama administration, Steve Lendman, author, blogger, radio co-host and activist, who lives in Chicago, wrote an excellent article contrasting the first 100 days of FDR to BHO. This was effectively a follow up to a scathing article he wrote two weeks earlier. In that article, published on April 18th, Steve Lendman was highly critical of the Obama economic team especially. It was provocatively titled Barack Obama: Crime Boss.
The essay begins,
Since taking office, Obama, wittingly or otherwise, has headed the largest criminal enterprise in history - the mass looting of national wealth to enrich his Wall Street benefactors. He assembled a rogue economic team of Clinton/Robert Rubin retreads - to fix the current crisis they engineered.
Thereafter, he gives a pretty thorough rundown of the main criticisms and accusations leveled by the likes of Kevin Phillips, William Black, Nouriel Roubini, Joseph Stiglitz, Willem Buiter and Martin Weiss.
Lendman gives an unrelenting assessment of the Obama administration plans, actions and glaring inactions to date. He recalls the Pecora commission of the 1930s and contrasts its mission to the COP headed by Elizabeth Warren. In conclusion, he writes:
We're clearly in early stage unchartered waters of what Michel Chossudovsky calls "The Great Depression of the 21st Century" heading America for "fiscal collapse" because of policies amounting to "the most drastic curtailment in public spending in American history" - directing most of it for militarism and foreign wars, Wall Street bailouts, and half a trillion for public debt service.
In an April 12 commentary, longtime, well-respected Chicago financial journalist Terry Savage headlined "Social Security Myth" in reporting on some of the fallout. Someone has to pay for "fixes" and militarism, that someone is us, and target one is Social Security. According to Savage:
"Most likely, Social Security will become a "needs-based" payout to low income, elderly recipients - not a return of the 'investments' you made with all those FICA deductions from your pay check every month over your working career." In other words, Washington intends to renege on the 74-year old promise FDR announced to the nation on August 14, 1935:
"Today a hope of many years' standing is in large part fulfilled....This social security measure gives at least some protection to thirty millions of our citizens (now over 56 million, including Supplement Security Income recipients) who will reap direct benefits....This law represents a cornerstone in a structure....by no means complete. (It) will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness. (The passage of this bill marks) a historic (achievement) for all time."
It's now in jeopardy, so here's what Savage advises. Prepare. "Save more money, (and) start from an honest assessment" of what's coming. What FDR gave will be taken away. "And that's The Savage Truth." A disturbing and outrageous one as well as all the other ways we've been betrayed.
Which brings me to Steve's latest essay, FDR's New Deal v. Obamanomics. It is interesting to note that Lendman first acknowledges the failure's and shortcomings of the New Deal.
The problem is what he did, how, what he didn't do; what he could have done better; and if he had, maybe the Great Depression might not have been as Great or, in fact, Great at all.
He failed to do what Jackson and Lincoln did - return money-creation power to the people, as the Constitution mandates, instead leaving it in private hands - the very "moneychangers" he denounced with the Federal Reserve atop its pyramid.
Rather than finance New Deal programs with interest-free money, he chose debt obligations to private bankers, left the Fed's power unchanged, and turned deep recessionary years into the Great Depression.
Notwithstanding these shortcomings, Lendman notes that progressive economists rightly have a postive view of FDR's New Deal programs. Additionally, while the Obama team embraces the money trust, FDR rhetorically challenged them. The list of accomplishments is breathtaking:
- The Emergency Banking Act
- The Bank Act of 1933 - Glass-Steagall
- The Reconstruction Finance Corporation (RFC)
- The Securities and Exchange Act of 1934 - Following the Securities Act of 1933
- Home Owners' Loan Corporation (HOLC)
- The Economy Act
- The Beer-Wine Revenue Act
- The Civilian Conservation Corps (CCC)
- Civilian Works Administration (CWA)
- The National Industrial Recovery Act (NIRA)
- Public Works Administration (PWA)
- Works Progress Administration (WPA)
- The Tennessee Valley Authority (TVA)
- The Agricultural Adjustment Act (AAA)>/li>
- The Farm Credit Act of 1933
- The May 1933 Emergency Farm Mortgage Act, established during the time of the Dust Bowl, provided refinancing help for farmers facing foreclosure.
Not bad for the first 100 days! And Lendman adds an even longer list of other programs enacted later in the New Deal.
Despite its flaws and failures, FDR's New Deal was remarkable in what it accomplished. It helped people, put millions back to work, reinvigorated the national spirit, built or renovated 700,000 miles of roads, 7800 bridges, 45,000 schools, 2500 hospitals, 13,000 parks and playgrounds, 1000 airfields, and various other infrastructure, including much of Chicago's lakefront where this writer lives. It cut unemployment from 25% in May 1933 to 11% in 1937, then it spiked before early war production revived economic growth and headed it lower.
To be fair, when FDR took office in March 1933, the country was suffering in the 4th year of depression. Unemployment was rampant and the population was devastated. The election of 1932 gave a clear signal for a change of direction and FDR had immense populist support. Obama's inauguration came just 4 months into our current crisis. And while he won a decisive electoral victory, there is no clear cut populist motivation in evidence.
Still, it is hard to argue with Lendman's criticisms.
As stated above, Roosevelt confronted "the money changers," even though mostly through rhetoric. Obama, like Bush, embraces them openly to the tune of $12.8 trillion "spent, lent or guaranteed," according to Bloomberg on March 31 while people needs go begging at a time they're most essential. He leads:
-- an imperial enterprise presided over by a war cabinet engaged in unbridled militarism, aggressive wars and occupation with a budget well above $1 trillion annually;
-- a bogus democracy under a homeland police state apparatus;
-- an anti-labor job destruction offensive, from 800,000 - one million a month since his inauguration, compared to FDR creating employment for most workers and reviving the national spirit; and
-- a criminal cabal in charge of the greatest ever wealth transfer in history - from the public to the top 1%, mainly powerful corrupt Wall Street institutions.
As Michel Chossudovsky explains, his budget reflects "the most drastic curtailment in public spending in American history." It's a "War Budget (affecting) all major federal (programs except): 1. Defense and the Middle East War(s and whatever new ones are planned); 2. the Wall Street bank bailout, (and) 3. Interest payments (approaching $500 billion annually) on a staggering (growing) public debt."
People needs don't matter. They get little more than lip service, and in his April 14 Georgetown University economic policy speech, Obama promised disappointment. When he should have been Rooseveltian, he defended bank bailouts, suggested more are coming, championed "free market" rubbish, and presented "five pillars (to) make the new century another American (one):"
-- no-teeth financial regulations;
-- education reform, meaning the Bush agenda to end public education;
-- renewable energy and technology investments, likely to be far less than needed and for the wrong things;
-- health care reform minus Medicare-for-all to assure profits trump human need; and
-- "restoring fiscal discipline (by) reduc(ing) discretionary spending for domestic programs" at the same time it's been recklessly abandoned for bankers and militarism....we (cannot solve this problem by trimming a few earmarks; (the) biggest (budget costs) are entitlement programs like Medicare, Medicaid, and Social Security all of which get more expensive every year....So if we want to get serious about fiscal discipline - and I do - we will have to get serious about entitlement reform" - meaning phase them out in future years, or something close to that.
Unless policies like these are reversed, this agenda is heading the nation toward insolvency, tyranny and ruin with ordinary people hurt most.
When one compares the cabinet and advisors, the real weight of Lendman's argument is felt.
He (FDR) had his "Brain Trust," notable figures like Felix Frankfurter, (a future Supreme Court justice), Justice Louis Brandeis, consumerist/labor supporter Frances Perkins, economist Rexford Tugwell, educator/author Adolph Berle, and close personal confidant Louis Howe, among others - officials and advisors dedicated to reviving the economy by putting people back to work. One other was prominent as well, his wife Eleanor.
On the other hand, here's the profile of Economic Team Obama.
Obama chose a financial coup d'etat "dream team" to address it. It includes a rogue's gallery of 1990s and earlier retreads, many of them proteges of former Treasury Secretary Robert Rubin who plundered world economies during his tenure, then led Citigroup close to collapse - disciples like Treasury Secretary Timothy Geithner, former New York Fed president who partnered with Ben Bernanke and Hank Paulson's Treasury-looting under Bush.
Reportedly he was also one of the architects behind the Bear Stearns bailout and various others, including Fannie, Freddie, AIG, Merrill Lynch, Washington Mutual, and Lehman Bros.' suspicious collapse that shocked financial markets globally. He now runs the Treasury and continues looting on a grander scale on the pretext of reviving the economy. Instead, he's wrecking it - by design.
Others like Lawrence Summers, a former Reaganite and World Bank chief economist before becoming Clinton's Under-Treasury Secretary for International Affairs, then Treasury Secretary from 1999 - 2001. He helped deregulate financial markets and played a key role in the 1999 Gramm-Leach-Bliley Act that repealed Glass-Steagall and opened the door to the kinds of rampant speculation, fraud, and abuse that created today's crisis.
He was also instrumental in the passage of the 2000 Commodity Futures Modernation Act (CFMA). It legitimized "swap agreements" and other "hybrid instruments" at the heart of today's problems by preventing regulatory oversight of derivatives and leveraging that turned Wall Street into a casino.
Now he does for Obama what he did earlier - as Director of the National Economic Council where he's part of a criminal cabal triumvirate in charge of economic policies along with Geithner and Bernanke.
Another Rubin protege, Peter Orszag, heads the Office of Management and Budget. Earlier he was on Clinton's Council of Economic Advisors, then was Congressional Budget Office Director from early 2007 to late 2008. He's for destroying Social Security through a combination of payroll and "benefits adjustments" as a way of cutting retiree payouts.
Most of the rest of the cabinet, and advisors, don't impress Lendman either.
- UC Berkeley economist Christina Romer chairs the Council of Economic Advisors where she's close to the president but with less clout than Geithner, Summers and Bernanke. Her idea of good government - the less the better, except for handouts to the rich. In praise of Ronald Reagan she once wrote: "The costly wrong turn in ideas and macropolicy of the 1960s and 1970s has been set right, and the future of stabilization looks bright," meaning, of course, to take from the many for the few.
- Paul Volker (former Fed chairman, Trilateralist, corporatist and no friend of working people), now serving as 1st Chair of the President's Economic Recovery Advisory Board, a position with lots of bark and little bite, but enough to pay attention to nonetheless, especially when he differs on public policy.
- Former Washington governor Gary Locke is the new Commerce Secretary, hailed as "safe (and) strait-laced," but his record shows otherwise. He skirted campaign finance laws; handed Boeing a $3.2 billion tax break; paid Boeing's private consultant and outside auditor $715,000; and arranged favors for his brother-in-law's business above and beyond what's ethical.
- Ken Salazar heads the Interior Department. He backed the worst of Bush administration appointments, including Alberto Gonzales for Attorney General and right-winger Gale Norton for Interior. He's an anti-environmentist and is staunchly pro-business, clearly why he was appointed in the first place.
- Tom Vilsack, former Iowa governor, chair of the right wing Democratic Leadership Council (DLC), now new Agriculture Secretary. Agribusiness loves him. He's for ethanol and other biofuel production, big subsidies for the giants, and the proliferation of harmful GMO seeds.
- As new Education Secretary, Arne Duncan will do for the nation what he did to Chicago - preside over public education's destruction by privatizing it for profit, and in the process, destroy the futures of millions of youths in the country.
- The 1934 Securities and Exchange Act created an SEC with teeth and, for a while, it worked. At least since the 1980s, it hasn't, and under George Bush it became a travesty of non-enforcement.
Mary Schapiro is its new head, hand-picked by the industry she'll regulate so there's no doubt where her allegiance lies. She's a high-level insider, former FINRA and NASD head and earlier CFTC chairperson. In each job, she was a facilitator, not a regulator, credentials making her perfect for SEC where industry interests matter, not enforcing the nation's securities laws.
Lendman's essays are a hard-hitting, sobering look at the reality of this administration's approach to the nation's problems. There is much, much more in each of them and I hope you will find the time to read them in their entirety.
The only thing I would add is to highlight a couple of remarkable comments the President made during a press conference on his 100th day.
First, he candidly said he was humbled by the power of the presidency but
... I can't just press a button and suddenly have the bankers do exactly what I want or, you know, turn on a switch and suddenly, you know, Congress falls in line.
Then, just seconds later, he curiously said,
This metaphor has been used before, but the ship of state is an ocean liner. It's not a speedboat. And so the way we are constantly thinking about this issue, of how to bring about the changes that the American people need, is to -- is to say, if we can move this big battleship a few degrees in a different direction, you may not see all the consequences of that change a week from now or three months from now, but 10 years from now or 20 years from now, our kids will be able to look back and say, "That was when we started getting serious about clean energy. That's when health care started to become more efficient and affordable. That's when we became serious about raising our standards in education."
With all due respect, this is the kind of enigma that makes Obama so wonderfully frustrating and disappointing. FDR had long range goals and I'm pretty sure he was "humbled" by the stubbornness and intransigence of the bankers too. But he realized that the "ship of state" had been hijacked and the pirates had run the ship aground. He knew his first job was to take the helm, fix the leaks and save as many of the passengers and crew as possible, as quickly as possible. To continue the metaphor, make it seaworthy, with a healthy working crew, before sailing off for the horizon.
On Obama's ship , the pirates are left at the helm and they are confiscating all of the lifeboats. It must be the kids of the pirates and other elites he was referring to in his comment, because most of the passengers, and their kids/grandkids and future generations as well, are being sealed in below decks.