WASHINGTON - As the US electoral college stands today, Barack Obama would win
this presidential election, even according to the Macchiavelli from Texas
himself, Karl Rove, Obama would win even across the Potomac, in northern
Virginia, once a Republican stronghold, now "communist country", according to
John McCain's brother Joe.
Red or blue, voters continued to flock to the Obama camp immediately after this
Tuesday's second presidential debate - a total cool, calm and collected Obama
wipeout, with McCain relegated to the role of a bewildered reptile, at times
neurotic, sycophantic, dismissively all-knowing or just plain mean (like
referring to Obama as "that one").
Voters also continue to flock to the Obama camp amidst the biggest state
intervention in United States history. Biggest if we
don't count another monster state intervention - the soon-to-become
trillionaire war in Iraq.
The Wall Street US$810 billion - and counting - bailout is being interpreted by
millions of angry Americans as no less than a class struggle weapon of mass
destruction. It may cost US taxpayers over $2 trillion after real interest
payments are added. Yes, this bailout is a second Iraq war.
Even the initial Bush/Paulson numbers - everyone remembers those $700 billion -
came out of nowhere. As a US Treasury spokesman told Forbes magazine, "It's not
based on any particular data point ... We just wanted to choose a really large
number."
So Americans will soon be listening to the sound, not of music, but of over a
trillion dollars of their future taxpayer earnings being sucked-up by
Goldman Sachs, Citibank, Bank of America and JP Morgan Chase. The Bank of China
will also collect. There's absolutely no guarantee any of these banks will put
the money back into productive US investments.
The US Treasury - that is, Treasury Secretary and former Goldman Sachs CEO Hank
Paulson - will print money like crazy, just like during the Latin American
crisis of the 1980s. And who is the Treasury hiring to decide which banks and
which debts to buy up? Wall Street experts.
So this is a new Iraq war in more ways than one. In Iraq, Washington
subcontracted the war to private military outfits, like Blackwater. Now it's
time for Wall Street to pull its own Blackwater.
Did the US Congress make at least an effort to appoint a group of independent
experts to analyze the whole mess? No, it didn't. The bailout ballet was staged
to perfection. Representative Marcy Kaptur, Democrat from Ohio, was one of the
few to denounce the intimidation tactics and the fearmongering atmosphere on
the House floor. Representative Brad Sherman, Democrat from California, warned
that martial law would be imposed in the US if the bailout did not pass.
Let's assume, for the sake of argument, Americans would want to vote out all
the politicians who supported the bailout. They simply can't. Because there are
not enough third-party candidates - or progressives - to replace them; this is
the realm of money politics, and they simply cannot compete with the Democratic
or Republican machines. Not to mention that two-thirds of the Senate - which
also approved the bailout - are not up for re-election.
The economists'
man The Economist magazine - the voice of the City of
London - says that economists are mostly Barack Obama cheerleaders. But what
was Obama doing before the bailout was approved? Both Obama - and McCain - were
frantically calling House representatives to change their "no" vote into a
"yes".
Were there other options apart from the biggest redistribution of wealth - this
one towards the top, not the bottom - since the 1917 October Revolution in
Russia? Of course there were. One of them was offered on the pages of the
Washington Post by two respected Yale economists. [1] Essentially, it says "pay
off all the delinquent mortgages".
John McCain, in a desperate Hail Mary pass trying to stop the bleeding in his
campaign, came up with more or less the same proposal ("It's my idea, not
Senator Obama's") at the presidential debate - stunning all the punditocracy.
But he didn't know how to sell it. He didn't explain where the funds - expected
to be upwards of $300 billion - would come from, he didn't say that the
bailed-out banks under Bush/Paulson could in fact buy up mortgages, and on top
of it, he incurred the ire of large sections of his already irate "base".
The Obama campaign, caught off guard, responded the next day via Obama economic
adviser Jason Furman: "The biggest beneficiaries of this plan will be the same
financial institutions that got us into this mess, some of whom even committed
fraud."
Obama, for his part, bought the bailout hook, line and sinker - and has been
busy trying to justify it on the campaign trail. He may be leading the polls -
even before the debate - but this has more to do, according to the Washington
Post, with "negativity about the country's financial prospects" than an Obama
plan B to deal with the financial crisis. Obama was never pro-active - he was
reactive to the Bush/Paulson plan, which then became the
Bush/Paulson/Pelosi/McCain/Obama bailout plan.
Obama could have called dozens of economists to educate him about the financial
crises in Mexico in 1997, Brazil in 1999 and Argentina in 2001. He could have
learned how Sweden dealt with its own crisis in 1989 - yes, they pay high taxes
but have one of the highest standards of living in the world.
All this when Paulson - Mr Goldman Sachs himself - revealed that the first bad
debts would be bought up only after the November 4 elections. So American
voters won't even evaluate if the bailout worked (the markets, for their part,
have already said "no") before they elect Obama or McCain and their new House
representatives.
So there was no US national debate. Could it be because, according to the
nonpartisan Center for Responsive Politics, those who voted "yes" had received
41% more money from the financial sector over their congressional careers than
those who voted "no"? As the Center points out, "election after election, the
finance, insurance and real estate sector has been the top campaign contributor
in federal politics, giving more than $2 billion to federal candidates and
political parties since 1989."
Whoever is elected, Obama or McCain, will inherit this supreme Bush
administration-made toxic mess - which includes the biggest fiscal and foreign
deficits in US history, a fiscal debt currently at 70% but bound to explode to
about 90% of US GDP, and no control of monetary policy.
Both Obama and McCain, during the debate, have adamantly refused to admit that
the US economy will get much worse before it gets better. McCain has already
admitted, on the record, that he knows virtually nothing about the economy -
his top economic adviser was uber-deregulator Phil Gramm, the eminence grise
who said America is a "nation of whiners".
As for Obama, these are some of the questions he is not answering at the
moment:
How deep will the recession be?
Will the US invent another bubble to try to dribble the recession?
And, if that is the case, will that be an military-industrial complex bubble?
Or a disaster-capitalism bubble?
'A new world is coming into
being' The McCain campaign strategy in the
face of all this is simple: more sleaze, in the form of a barrage of
unsubstantiated attacks on Obama on the campaign trail (he's a dangerous black
man, maybe a Muslim, and maybe a terrorist) by the lipstick pitbull from
Alaska, mooseburger-eating creationist hockey mom Sarah Palin, who seems to
have better things to do than reading the Constitution, or picking up a
dictionary, or stop winking, or ending her habit of misquoting people. In the
words of a McCain strategist, "If we keep talking about the economic crisis,
we're going to lose."
And why don't they want to keep talking about the economy? Refer, for instance,
to the new Obama campaign strategy - a 13-minute documentary posted on the net
about the late 1980s Keating Five savings and loan scandal, a deregulation
fiasco in which McCain had a starring role.
Both campaigns are not even trying to really debate the pitfalls and the
seriousness of it all. Remember that low-level functionary who came up with
that sub-Hegelian concept of the "end of history" after the fall of the Soviet
Union - one Francis Fukuyama? Even he is alarmed.
Once again, it's up to those pesky Europeans to tell it like it is. Jean-Claude
Milner, former president of the International College of Philosophy, puts it in
stark terms. The European bourgeoisie worries about savings security. The
American bourgeoisie worries about credit security. In Western Europe, credit
is a means to acquire assets. In America, it's the opposite: an asset is a
means to obtain credit. The whole thing works, as long as there's no
depression.
Then there are the enormous Pentagon budgets. They aren't solely dedicated to
facilitate "preemptive wars"; they are above all a means of permanent support
to the economy. So, American capitalism is in fact state capitalism - where the
state is not an entrepreneur, or an owner, but a larger-than-life client.
Therefore, this client must intervene in times of crisis. In Milner's lovely
formulation, the US state is "the invisible hand behind the visible credit".
Milner goes beyond the military-industrial complex. He identifies a
"military-financial complex". That's how the snake bites its own tail: "Wall
Street relies on credit. Credit relies on the absence of depression. The
military budget makes a depression impossible." It's this idea of capitalism,
based on credit and disconnected from natural resources, that is today on fire.
And not only because of the subprime crisis. Miller stresses how the US Army is
above all an economic tool, and much less a traditional army (which the
neo-cons, drunk with power, imbued with the mission of bringing democracy to
the Middle East).
The other key factor is that owners of natural resources don't accept this
financial capitalism disconnect anymore. The best example is Russia. That's
also where al-Qaeda's logic fits in. Al-Qaeda reasoned that what causes the
disconnect is financial capital. The symbol of financial capital is the Twin
Towers. So the towers must be destroyed. Whether al-Qaeda is, or is not, a
US-controlled cipher is beside the point; the fact is bin Laden and
al-Zawahiri, in their writings, have always stressed their strategy of bleeding
the empire through its overextended Achilles heel.
Milner is somewhat apocalyptic. For him, if American financial capitalism
collapsed, it would drag most developed and emerging markets. The other main
protagonist left on stage would be Russian capitalism - which follows a
completely different logic: excess of natural resources, and state control over
how they reach the market.
Another pesky European, John Gray, professor of European Thought at the London
School of Economics, author of crucial books like Straw Dogs and Black
Mass, and one of Europe's most brilliant intellectuals - of course,
Bush, McCain, neo-cons, they all hate intellectuals - says the financial crisis
is the American equivalent to the fall of the Soviet Union. As he wrote on the
London Observer,
Having created the conditions that produced history's
biggest bubble, America's political leaders appear unable to grasp the
magnitude of the dangers the country now faces. Mired in their rancorous
culture wars and squabbling among themselves, they seem oblivious to the fact
that American global leadership is fast ebbing away. A new world is coming into
being almost unnoticed, where America is only one of several great powers,
facing an uncertain future it can no longer shape.
A new world,
coming into being almost unnoticed. You betcha.
1.
The Trickle-Up Bailout, by By Jonathan G S Koppell and William N
Goetzmann, Wednesday, October 1, 2008, Washington Post
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