Narrowing the bounds of the possible: the US election

Issue: 136
Posted: 8 October 12

Alex Callinicos

In November 2008, after Barack Obama had won in the presidential election in the US, Slavoj Žižek wrote one of his very best pieces: “The reason Obama’s victory generated such enthusiasm is not only that, against all odds, it really happened: it demonstrated the possibility of such a thing happening.” The election of America’s first black president, in other words, showed that the boundaries of what is socially possible are wider than had hitherto been thought. This was a demonstration that could have much more broadly liberating consequences, though Žižek wisely warned: “The true battle begins now, after the victory: the battle for what this victory will effectively mean”.1

His words seem full of irony now. For Obama’s presidency seems to have been designed to suppress the dangerous truth his election revealed and to narrow down the limits of the possible. He took office in January 2009 in the wake of the financial crash following the failure of Lehman Brothers the preceding September-the most dangerous moment for American capitalism since the Great Depression of the 1930s. Obama invited, and sometimes still seeks, comparison with Franklin Roosevelt, who entered the White House in March 1933, when the US banking system was in complete disarray and one in four American workers was unemployed.

Obama today doesn’t come out well from this comparison. It would be a huge mistake to idealise Roosevelt. He was a cynical New York patrician whose aim was to rescue American capitalism from a life-threatening crisis; during the Second World War he acted ruthlessly to make the US the dominant global power. Nevertheless, Roosevelt was willing in the 1930s to take on powerful bastions of the American establishment, from Wall Street to the Supreme Court, in order to reconstruct US capitalism along lines that involved a much higher degree of political control of the economy, along with elements of a welfare state (measures that were taken considerably further during the presidencies of Lyndon Johnson and Richard Nixon in the 1960s and 1970s).2 Compare this bitter recent judgement by the critical theorist David Bromwich: “The Obama presidency has gone far to complete the destruction of New Deal politics which began when Bill Clinton brought Wall Street into the White House”.3

Elsewhere in this journal Alex Anievas, Adam Fabry and Robert Knox demonstrate the continuities between Obama’s foreign policy and that of his Republican predecessor George W Bush. Rather than reining in the imperial presidency, Obama has revelled in the expansion of a global machinery of assassination executed by Predator drones and Navy Seals. A new profile by Michael Lewis focuses admiringly on his decision “effectively [to] invade another Arab country”-ie Libya-last year.4

Exactly the same can be seen on the domestic front, where the Obama administration’s response to the 2008-9 slump essentially continued the policies hastily put in place by treasury secretary Hank Paulson during the dying days of the Bush presidency. The main thrust of the massive Troubled Assets Relief Programme was, as Thomas Frank puts it, to give “the banks an open-ended guarantee against failing without restricting their activities”.5 The Dodd-Frank Act 2010 reorganised and tightened the regulation of financial markets, but successful lobbying by Wall Street and the White House’s timidity ensured that nothing saw the light of day comparable to the Glass-Steagall Act 1933, one of the central planks of the New Deal, which forced the separation of investment and retail banking.

Obama instead focused his energies on healthcare reform, where he ended up caving in to the private health industry’s opposition to a public insurance scheme and pushed through a plan modelled on measures introduced in Massachusetts by his eventual Republican presidential opponent Mitt Romney. And in subsequent manoeuvres against the Congressional Republicans over cutting the budget deficit, Obama has essentially accepted their agenda that (in Ronald Reagan’s words) government is the problem, not the solution, and must be shrunk.

It is too easy to excuse Obama’s caution by citing the objective constraints imposed by the increasingly dysfunctional US political system. Taking office, as we have seen, at a moment of profound crisis, Obama at first enjoyed room for manoeuvre that could have allowed him to act more adventurously-like Roosevelt, to reconstruct the dominant model of capitalism in the US. And he was aware of this power. Frank reports: “When he met with a delegation of Wall Street bankers in April of 2009, the new president told them: ‘My administration is the only thing between you and the pitchforks’.”6

Obama’s refusal to throw the bankers to the mob was a matter of political choice, not merely a structural necessity. We can’t say we weren’t warned. In The Audacity of Hope he disarmingly acknowledged his gradual assimilation as a senator to the worldview of the corporate rich he increasingly mixed with:

Increasingly I found myself spending time with people of means-law firm partners and investment bankers, hedge fund managers and venture capitalists. As a rule, they were smart, interesting people, knowledgeable about public policy, liberal in their politics, expecting nothing more than a hearing of their opinions in exchange for their cheques. But they reflected, almost uniformly, the perspectives of their class: the top 1 percent that can afford to write a $2,000 cheque to a political candidate. They believed in the free market and an educational meritocracy; they found it hard to imagine that there might be any social ill that could not be cured with a high SAT score. They had no patience with protectionism, found unions troublesome, and were not particularly sympathetic to those whose lives were upended by the movements of global capital. Most were adamantly prochoice and antigun and were vaguely suspicious of deep religious sentiment… Still, as a consequence of my fund-raising, I know that I became more like the wealthy donors I met.7

Acting as president in the interests of this 1 percent, Obama responded to the crisis with the most limited possible measures. His most striking initiative was the bailout of Chrysler and General Motors (GM), which involved forcing the two auto giants into bankruptcy in April and June 2009 respectively and the US government taking a 60 percent stake in GM. Nevertheless, not only did this once again follow an initial bailout by the Bush administration in December 2008, but the rescue involved the administration extracting massive concessions from the United Auto Workers (UAW).

The administration’s attitude to the union, a longstanding mainstay of the Democratic Party, was summed up by Obama’s chief of staff, Rahm Emmanuel, when he said, “Fuck the UAW,” at a White House meeting in March 2009-exactly the same stance that Emmanuel has taken as mayor of Chicago toward the city’s teachers (whose strike was settled as we went to press). Steven Rattner, put in charge of the rescue by Obama, has revealed how weak the administration’s hand was in its negotiations with UAW president Ron Gettelfinger:

Suppose Gettelfinger had simply refused any or all of our demands? We could still force GM into bankruptcy, which would void the UAW contract and, in theory, free GM to start over, either with the UAW or by hiring replacement workers… We did not believe that hiring non-union labourers to replace skilled UAW members was practical. The assembly of cars by GM involved hundreds of teams of five to six people executing highly specific tasks at 45 to 50 second intervals. Nor did we believe that Barack Obama would have been willing to discharge the autoworkers the way Ronald Reagan had fired the air traffic controllers in 1981… I kept wondering why Gettelfinger didn’t call our bluff. We had no backup plan, no notion of what we would do in that event.8

But in the event Gettelfinger swallowed the concessions. Rattner says: “This was something of a “Nixon goes to China” moment”-in other words, the Obama administration could use its pull with the trade union bureaucracy to carry out a restructuring of the auto industry much more effectively than the Republicans.9 That restructuring, in the event, allowed a significant revival in the competitiveness of GM and Chrysler (which has been taken over by Fiat). Thus Obama deployed his political capital to rescue an economic system whose failure had been so dramatically exposed in 2008-9. As Frank argues, this allowed the Tea Party right-now represented at the very top of US politics by Republican vice-presidential candidate Paul Ryan-to capitalise on the anger created by the crisis, using it to mobilise in support of the neoliberal capitalism that had produced it in the first place. He calls “the conservative comeback of the last few years…something unique in the history of American social movements: a mass conversion to free-market theory as a response to hard times”.10

Frank exaggerates: the success of the Tea Party has lain less in its ability to win over new people to extreme versions of economic liberalism than in its mobilisation of an existing constituency.11 Nevertheless, there is no doubt that the Republican right have been making the running, using their success in the 2010 mid-term Congressional elections to attempt to roll back Obama’s very modest reforms and to win control of their party. Their inability to produce a strong candidate in the primaries has left them stuck with an establishment stuffed shirt who used to run a private equity firm, and whose only deviation from the Wasp norm (his Mormonism) makes Christian fundamentalists twitchy. But, to accommodate his base, Romney has shifted sharply rightwards in the course of the year, as is reflected by his choice as his running mate of Ryan, who is celebrated for, among other things, writing an article entitled “Down with Big Business” that denounced Washington imposed “crony capitalism”.12 Ryan, a devotee of the ultra-liberal ideologue Ayn Rand, tried to privatise Social Security (the federal pension system) in 2005.

The sheer ferocity of the renascent right is, of course, one of the main reasons for left liberals’ willingness to give Obama the benefit of the doubt. Thus Bromwich despairingly writes:

And yet there is no alternative to Obama. Supporters who realise that he is not what he seemed in 2008 are reduced to saying (as two of them, a historian and a lawyer, said to me separately in the last few days): “He’s not a good president, and doesn’t deserve to be re-elected, but he must be re-elected.” The short name for the reason is Mitt Romney; the longer and truer name is what the Republican Party has become. It is the party of wars, prisons and the ever expanding riches of the very rich. Romney’s foreign policy advisers are graduates of the workshop of Dick Cheney and the various American outworks of the Likud or the neoconservative American Enterprise Institute… As for Romney’s economic ideas, every backward step towards the finance economy of 1920 which Obama has worked half-heartedly to impede, Romney will push to achieve with the greatest vigour. Even if he were otherwise disposed, the ideology of his party commits him to policies of a regressive order that will surpass Reagan.13

This is simply the current version of the traditional left case for supporting the Democrats: that they represent a “lesser evil” compared to the Republicans. The argument is reinforced by the fact that the 2012 race is proving to be extremely narrow. The main reason for this is that unemployment remains persistently high, putting Obama at a constant disadvantage even against as clumsy an opponent as Romney. To some degree, he has only himself to blame: Martin Wolf, like other Keynesian economists, criticised Obama’s initial fiscal stimulus as “disturbingly modest”; he also warned that, by the time this became obvious, “Mr Obama may have lost the argument and his authority”.14

This is exactly what happened: since the slump bottomed out in the early months of 2009, the US economy has stagnated, while any further attempts at stimulus have been blocked by the Republican-controlled House of Representatives. The consequences can be seen in the grim announcement that US real median household income fell in 2011 to its lowest level since 1995, 4.1 percent lower than when Obama took office in 2009.15 Gridlock in Washington has left the Federal Reserve Board alone with the ability to stimulate the economy: in mid-September it followed the example of the European Central Bank and announced a new bout of quantitative easing-buying bonds as a way of pumping money into the financial system-in the hope of cutting unemployment.

The tightness of the race means it will be dispiritingly narrowly focused. After the two party conventions in late August and early September, the Financial Times predicted: “Polls show the presidential election in November will be exceptionally close, but the race is even tighter than it looks nationally. It hinges on nine swing states, which both candidates will be visiting repeatedly in the next 55 days”.16 The biggest of these are Florida and Ohio, the key battlegrounds in the 2000 and 2004 elections respectively. Vast quantities of money are being poured into the swing states: in a reversal of the pattern of 2008, the Republicans’ fundraising is running ahead of Obama and the Democrats, partly thanks to the January 2010 Supreme Court ruling that struck down limits on corporate political contributions as an infringement of free speech. Obama’s campaign is ahead in its use of social media and the like to “micro-target” voters, but the intention to vote of one key demographic-young voters-has fallen sharply compared to 2008 or even 2004.17

Do socialists have a dog in this fight? Bromwich’s arguments are unpersuasive. Romney certainly has a pack of neocons advising him, and has tried (on the whole ineptly) to outflank Obama from the right on foreign policy. But there is little evidence that he would diverge significantly from the more temperate defence of empire forced on a chastened Bush administration in its final two years-just as Obama has toed the same line, reneging on his promise to close down Guantanamo Bay and returning to Donald Rumsfeld’s original preference for air power and Special Forces as the chief instruments of US power-projection. On the domestic front, the renewed strength of the Republican right is a reality that a president of either party would have to handle. Romney has even recently slid centre-wards on “Obamacare”, the right’s ultimate hate object, saying that if elected he would keep elements of it.

In his classic critique of the lesser-evil argument Hal Draper wrote:

The point is that it is the question which is a disaster, not the answer. In setups where the choice is between one capitalist politician and another, the defeat comes in accepting the limitation to this choice … you can’t fight the victory of the rightmost forces by sacrificing your own independent strength to support elements just the next step away from them.18

This argument still seems relevant. What we see is fear of the Republican right (in the 1960s it was Barry Goldwater and Ronald Reagan; now it is Ryan and the Tea Party) used to shackle the left to a Democratic Party that constantly disappoints and betrays their hopes, thereby helping to feed the development of the very right used as a bogeyman to scare the left to hang onto nurse for fear of something worse.

Draper also sought to explain the fact that in practice Democratic and Republican administrations pursued similar policies:

In the three and a half decades since 1932, and before, during and after a second world war which intensified the process, the capitalist system itself has been going through a deep-going process of bureaucratic statification… Under the pressure of bureaucratic-statified capitalism, liberalism and conservatism converge. That does not mean they are identical, or are becoming identical. They merely increasingly tend to act in the same way in essential respects, where fundamental needs of the system are concerned. And just as the conservatives are forced to conserve and expand the statified elements of the system, so the liberals are forced to make use of the repressive measures which the conservatives advocate: because the maintenance of the system demands it. Just as when Truman vetoed [the anti-union] Taft-Hartley [Act 1947] and then invoked it against striking workers. What is more, because the liberal politicians can point a warning finger towards the right and because the lib-labs will respond to it, they are even more successful than the conservatives in carrying out those measures which the conservatives advocate.19

Since the 1970s we have seen a further restructuring of capitalism that has involved, not the scrapping of what Draper calls “bureaucratic statification” (as is shown by the enhanced role of the state in response to the present crisis), but a shift in the balance towards globally integrated market capitalism. And so we see the Democrats and Republicans converging once again: each is equally “the party of wars, prisons and the ever expanding riches of the very rich”. The Democrats may be able to rely on the support of the bulk of the trade union bureaucracy, but they lack the roots in the workers’ movement that still distinguish genuine reformist parties. Bill Clinton’s administration in 1993-2001 marked their full embrace of the neoliberalism pioneered by Reagan during the 1980s; Obama, confronted with a much bigger crisis than Clinton had to deal with, has maintained this stance. As Simon Johnson (ex-chief economist of the IMF) and James Kwak put it, “By 2009, the economic policy elite of the Democratic Party was fully won over to the idea that finance was good”.20

But there is an important proviso to be added. It is essential to distinguish between the objective character of the Democratic Party and of the Obama presidency and the reasons why people support them. The worst thing about the lesser evil argument is that it works. Tens of millions of people will vote for Obama in November because they hate and fear the Tea Party movement and they want to defend Medicare and Social Security against the likes of Paul Ryan-and also, of course, because Obama is the first African-American president, confronting a Republican Party whose base continues to pulse with racism. 21 These are good reasons for loathing the Republicans. The mistake lies in believing that Obama represents a bulwark against them.

Those on the left who reject the lesser evil argument have therefore to make their case in a way that allows a dialogue with those who still accept it. For it is only from the latters’ ranks that a genuine mass radical left can develop in the US. In many ways this is a favourable moment to pursue the dialogue. The Occupy movement, short-lived though it was as a mass force, represented a powerful ideological challenge from the left to the neoliberal consensus, giving progressive expression to the immense anger at the banks and their bailout. The nine-day Chicago teachers’ strike, which held off Emmanuel’s assault on public education, is the latest sign of a revival in the US workers’ movement after many years of decline. Finally, disappointment with Obama is palpable, perhaps especially among those who will nevertheless vote despairingly for him in November. So, despite the dismal choice that mainstream politics offers, there is reason to hope that the opening of possibilities that Obama’s original victory represented can continue in forms that genuinely challenge the system.


Notes

1: Žižek, 2008.

2: Two interesting studies of the New Deal from very different perspectives are Aglietta, 1979, and Rosen, 2005.

3: Bromwich, 2012.

4: Lewis, 2012. See also Sanger, 2012.

5: Frank, 2012.

6: Frank, 2012.

7: Obama, 2007, pp113-14.

8: Rattner, 2010, pp68, 230.

9: Rattner, 2010, p152.

10: Frank, 2012.

11: See Megan Trudell’s careful analysis in Trudell, 2011.

12: Ryan, 2009. For an incisive analysis of Ryan’s politics and the Democrats’ role in facilitating his rise, see Selfa and Maas, 2012.

13: Bromwich, 2012.

14: Wolf, 2009. See the detailed critique of the stimulus in Krugman, 2012, chapter seven. Elsewhere in this issue, Guglielmo Carchedi argues that Keynesian measures to stimulate effective demand can in certain circumstances increase output and employment, but in doing so merely postpone the resolution of the underlying crisis of profitability.

15: Politi, 2012.

16: Fifield, 2012.

17: McGregor, 2012, Gallup, 2012.

18: Draper, 1967.

19: Draper, 1967.

20: Johnson and Kwak, 2010, p185. For a critique of Clinton’s economic policy, see Pollin, 2003, especially chapters one to three.

21: Younge, 2012.


References

Aglietta, Michel, 1979, A Theory of Capitalist Regulation: The US Experience (NLB).

Bromwich, David, 2012, “Diary”, London Review of Books (5 July), www.lrb.co.uk/v34/n13/david-bromwich/diary

Draper, Hal, 1967, “Who’s Going to be the Lesser Evil in 1968?”, Independent Socialist (January-February), www.marxists.org/archive/draper/1967/01/lesser.htm

Fifield, Anna, 2012, “US: And Then There Were Nine”, Financial Times (11 September), www.ft.com/cms/s/0/775e860c-fc03-11e1-af33-00144feabdc0.html

Frank, Thomas, 2012, Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right (Vintage Digital).

Gallup, 2012, “Young US Voters’ Turnout Intentions Lagging” (13 July), www.gallup.com/poll/155711/Young-Voters-Turnout-Intentions-Lagging.aspx

Johnson, Simon, and James Kwak, 2010, 13 Bankers: The Wall Street Takeover and the New Meltdown (Pantheon).

Krugman, Paul, 2012, End this Depression Now! (W W Norton & Co).

Lewis, Michael, 2012, “Obama’s Way”, Vanity Fair (October), www.vanityfair.com/politics/2012/10/michael-lewis-profile-barack-obama

McGregor, Richard, 2012, “Inside Obama’s HQ”, Financial Times (14 September), www.ft.com/cms/s/2/0df7cc4a-fd35-11e1-a4f2-00144feabdc0.html

Obama, Barack, 2007, The Audacity of Hope: Thoughts on Reclaiming the American Dream (Canongate).

Politi, James, 2012, “US Median Income Lowest since 1995”, Financial Times (12 September), www.ft.com/cms/s/0/ed14fc70-fc51-11e1-aef9-00144feabdc0.html

Pollin, Robert, 2003, Contours of Descent: US Economic Fractures and the Landscape of Global Austerity (Verso).

Rattner, Steven, 2010, Overhaul: An Insider’s Account of the Obama Administration’s Rescue of the Auto Industry (Houghton Mifflin Harcourt).

Rosen, Elliot A, 2005, Roosevelt, the Great Depression, and the Economics of Recovery (University of Virginia Press).

Ryan, Paul, 2009, “Down with Big Business”, Forbes (11 December), www.forbes.com/2009/12/11/business-government-politics-reform-opinions-contributors-paul-ryan.html

Sanger, David, 2012, Confront and Conceal: Obama’s Secret Wars and Surprising Use of American Power (Crown).

Selfa, Lance, and Alan Maas, 2012, “How a Right-Wing Fanatic Got to Centre Stage” (14 August), http://socialistworker.org/2012/08/14/right-wing-fanatic-at-center-stage

Trudell, Megan, 2011, “Mad as Hatters? The Tea Party Movement in the US”, International Socialism 129 (winter), www.isj.org.uk/?id=698

Wolf, Martin, 2009, “Why the G8 Must Focus on Sustaining Demand”, Financial Times (11 March), www.ft.com/cms/s/0/b05253d6-0ddb-11de-8ea3-0000779fd2ac.html

Younge, Gary, 2012, “This is Shaping to be the Most Racially Polarised Election Ever”, Guardian (9 September), www.guardian.co.uk/commentisfree/2012/sep/09/us-most-racially-polarised-election-white

Žižek, Slavoj, 2008, “Use Your Illusions”, London Review of Books (14 November), www.lrb.co.uk/2008/11/14/slavoj-zizek/use-your-illusions