Robert E. Prasch

Today, I’m adding a guest post by the brilliant Robert E. Prasch, an economist at Middlebury College, who reflects on the Obama Presidency.

President Obama, Where Is My “Half Glass”?

By Robert E. Prasch

Since deftly managing the Congressional “debate” over health care to eliminate the public option, the White House has found itself criticized increasingly by voices from within the Democratic Party. President Obama and his spokespersons were irritated to discover the following: those Democrats who wrote the checks, pounded the pavement, and got out the vote for “Change You Can Believe In,” really wanted change.  Who knew?  Robert Gibbs, David Axelrod and the President himself have all made it clear that they view such critics as childish “purists” unsatisfied with a “glass half full.”  I have only one question.  “Where is my half glass”?

Let us briefly review the administration’s performance on four areas of great concern to those who supported Barak Obama in 2008.  These include the financial crisis & economy, the endless Bush wars, the shocking erosion of civil liberties, and increasing unaffordable health care.

Less than one month after the historic November 2008 election, we were informed that “Hope and Change” would include neither the financial sector nor the economy. This occurred on November 28^th with the announcement of two critical appointments.  The first was that of former Clinton Treasury Secretary Lawrence Summers, a chief architect of the policies that set the groundwork for the 2007-2009 financial crisis, to head President Obama’s National Economic Council.  The second was that of Timothy Geithner, former Clinton Undersecretary of the Treasury and then President of the New York Federal Reserve Bank (NYFRB), as the new US. Treasury Secretary.  Geithner informed the US. House of Representatives –very truthfully– that he “had never been a regulator.”  The sad part is that the Federal Reserve and specifically the NYFRB has a substantial role in bank regulation and regulatory policy, a role in which he clearly and most publically failed. Several months after taking office, President Obama declared that he would reappoint Ben Bernanke to chair the Federal Reserve System.  With these three leading the way, can we be surprised that the Obama Administration never devised serious policies or took substantial action on financial reform, “Too Big To Fail” banks, rampant mortgage and bank fraud, high and persistent unemployment, or mortgage relief?.  Can we be surprised to learn that his idea of a “jobs program” was to push through President Bush’s “Free Trade” agreements?  Is anyone surprised to learn that he is now considering cuts to Social Security?

By contrast to the economy, candidate Obama frequently stated his commitment to Bush’s Middle East wars.  His attachment to the status quo was signaled the day after the Summers/Geithner announcement when it was revealed that he would reappoint Bush’s Defense Secretary Robert Gates (This, of course, was the same Robert Gates who narrowly avoided indictment for lying to Congress over his role in the Reagan Administration’s Iran-Contra Affair).  Officially, the US war on Iraq ended this past summer, but that event occurred according to a timetable set up by Bush–and only because Obama could not negotiate blanket immunity for US soldiers in the wake of the Wikileaks revelations.   Before shifting to another topic, I would also advise readers to take a moment to review the size of the “training” and “security staff” that have been left behind in Iraq, along with the size of the forces stationed in Kuwait and the other Gulf States.  Do not think for a millisecond that anyone in the Middle East is unaware of the size and lethality of the army and naval armada the US has stationed in their midst.  (For those who may imagine that this is about “promoting democracy” in the region, I have a one-word refutation – Bahrain.  YouTube has numerous videos featuring Bahraini police, and their ally, the Saudi Arabian army, shooting peaceful protestors.  And let us refrain from discussing the almost daily atrocities occurring in Egypt, or the out-of-control predator drone program).

What of civil liberties?  Here the record is genuinely appalling.  The prisoners of Guantanamo Bay continue to languish without proper judicial hearings, and the extended pre-trial treatment of Bradley Manning is criminal by any standard of measure.  Obama’s vigorous attack on whistleblowers who shed light on the idiocy and mendacity of the bloated bureaucracies associated with the national security apparatus is an ongoing scandal.  In fairness, candidate Obama did “tip his hand” on these issues when he suspended his campaign so that he could fly to Washington to vote in favor of retroactive immunity for the telecommunications companies that violated the law, and profited mightily from, working with Bush and Cheney on illegal wiretapping programs.  Moreover, he has never deviated from Nancy Pelosi’s early insistence on blanket immunity for all Bush administration officials who lied to Congress, promoted or engaged in torture, war crimes, etc. The record, apparently, is not sordid enough.  On December 23^rd 2011 Obama signed a bill co-sponsored by Sen. John McCain granting the President, on his own whim, the ability to imprison anyone, anywhere — American citizen or not — for an indefinite period without an attorney, charge, jury trial, or any other kind or variety of review.  Goodbye 4^th Amendment, you will be missed.

Finally, a word about “health care reform.”  This bill neither “gives” nor “provides” anyone with health care or health insurance.  On the contrary, it mandates that everyone purchase his or her own policy.  There is a some commitment to providing subsidies to those who cannot afford a policy – but anyone who has ever followed politics knows what will happen to it when budget cutting season returns (they also know that when the subsidies go, the mandate will surely stay).  The bill also embodies a vague commitment to reducing health care costs that is not worth the paper upon which it was written.  Elementary economics tells us that if health insurance policies are subsidized they will rise in price.  This tendency will be even more pronounced if people are forbidden from deploying their single greatest negotiating tool – the threat to leave the market altogether.  Obama’s “accomplishment,” if we can call it that, is to provide even more money and market power to the single largest obstacle to affordable health care – the private insurance companies.

Alarmed by trends in the then-new administration, columnist Bob Herbert called attention to them while identifying a core flaw in the thought processes of its apologists, “Policies that were wrong under George W. Bush are no less wrong because Barak Obama is in the White House” (New York Times, June 22^nd, 2009).  Two years have passed since Herbert wrote these words.  So I ask again, if Obama’s 2008 supporters have received a “half glass” on the four issues summarized above, then where is it?  At this point, I can’t even see the glass.

Robert E. Prasch is Professor of Economics at Middlebury College where he teaches courses on Monetary Theory and Policy, Macroeconomics, the History of Economic Thought, and American Economic History.  His latest book is How Markets Work: Supply, Demand and the ‘Real World’ (Edward Elgar, 2008)