Obama promised change but prized continuity, chose Clinton’s economics over Roosevelt’s, and made historic rapprochements with some longstanding adversaries.
The curtain has rung down on the first black president of the United States. After an improbable victory, Barack Hussein Obama is leaving the White House. Some are elated but many are sad to see him go. On January 10, this impressive Harvard lawyer with roots in Kenya and Kansas gave a stirring farewell address in Chicago. He talked of many things—of “why the sea is boiling hot” and “whether pigs have wings.”
Well, not quite.
Obama did speak about the threatened state of democracy in the US. First, while acknowledging that democracy did not require uniformity, he declared that it did “require a basic sense of solidarity.” Second, Obama acknowledged that “race remains a potent and often divisive force” in American society. Third, he pointed out that “a common baseline of facts,” “healthy debate” and a culture of reason that values evidence, reason, innovation and pragmatism make democracy possible. It is values such as these that enable a battle of ideas and democracy possible. Today, “disaffection and discord” threaten these values.
POTENTIAL AND PERIL
In the September 11, 2016, edition of The World This Week, this author pointed out that we live in the age of the American Empire. The dollar is the reserve currency of the world, entrepreneurs like Elon Musk make the US their home, and elites from around the world compete to pack their children off to Harvard.
Obama rightly points out that the youth, drive, diversity and the openness of his country combined with its capacity for risk and reinvention should keep Uncle Sam top dog for the foreseeable future. Americans are pioneers and innovators. They have taken to the air at Kitty Hawk and landed on the moon. They have cured diseases, created new drugs and unlocked many secrets of human DNA. The internet, email, social media, personal computers and smartphones are all American creations.
Obama extolled his achievements in ending the Great Recession, rebooting the car industry and creating jobs. He claimed that wages, incomes, home values and retirement accounts were all rising. The stock market was booming, unemployment was falling, coverage of health care rising and the rate of rise in healthcare costs at its lowest. Add to it peace with Cuba, a nuclear deal with Iran, the killing of Osama bin Laden and a climate deal in Paris to get a country secure at home and confident abroad.
Yet even optimistic Obama admits that not all is well in the land of the free and the home of the brave. The shrinking world or globalization, increasing inequality, demographic change or an aging population, and the specter of terrorism have caused new strains in American society. Both inner cities and rural areas feel the burn or experience the rage of being left behind. Unlike Adam Smith and Barack Obama, many believe trade and the economy to be a zero-sum game. The fear of change and the suspicion of difference stalk the land.
ALL POLITICAL LIVES END IN FAILURE
Obama’s farewell address offers insights into the reasons why the country has voted for Donald Trump. The real estate tycoon-turned-reality TV star insinuated that Obama is Muslim, claimed that this black man was born in Kenya and demanded this Muslim Kenyan’s birth certificate. The brash Trump could not be more different to the measured Obama and has promised to “make America great again.”
Explicit in Trump’s promise is that the US or America, as Trump prefers to call it, is no longer great. In the May 1, 2016, edition of The World This Week, this author pointed out that the Americano Silvio Berlusconi had a point. Obama has long presented American as sunny side up. The reality is that the US is terribly scrambled and far too many Americans are hurting.
The fall in unemployment rate that Obama cites hides the fact that millions of men in the prime of their lives are dropping out of the labor force. As per a White House report, participation rates have declined most deeply for black men. No soaring rhetoric can gloss over the fact that jobs are scarce and no longer pay that well. The economy may be strengthening finally but wages still stay flat.
In the November 13, 2016, edition of The World This Week, this author explained why Trump won. Increasing income and wealth inequality have been accompanied with decreasing social mobility and rising debt. Workers are seething with rage in crumbling rust belt towns in states like Michigan and Pennsylvania. They hoped for change when many of them voted for Obama. That failed to transpire. Now, a great number have lost faith and trust in the political system itself.
Consequently, Americans have voted for a dangerous demagogue who promises to be strong, decisive and smart. Even as Trump’s scandals keep emerging like troubles from Pandora’s Box, Obama leaves office unscathed by scandal. Even critics like former US Ambassador Gary Grappo call him “well-intentioned but naive.” From health care to climate change, Iran to Israel, Trump threatens to reverse Obama’s policies. By voting Republicans into the White House and both houses of the US Congress, Americans might just have consigned much of Obama’s legacy to the dustbin of history. The president from Chicago who grew up in Hawaii might be yet another testimony to Enoch Powell’s words that all political lives end in failure.
BANKS DEEMED “TOO BIG TO FAIL” ARE NOW EVEN BIGGER
Obama was elected at a time of economic crisis. He supported the bailout of the big banks and went along with George W. Bush’s policies to stave off financial collapse. Debates rage among economists, legislators and citizens on the apt course of action during this period. Suffice to say, the big banks were bailed out using taxpayer money on the argument that they were “too big to fail.”
The bailout might have been expedient but it was certainly not equitable. It was a classic example of capitalism on the upside and socialism on the downside. The profits went to speculating financiers who created infernally complex derivatives on houses owned by people with neither income nor jobs. The losses were absorbed by the public. Such was the arrogance of the bankers that they used public money during the bailout to hand themselves millions in bonuses even as a record 3 million households were hit with foreclosure in 2009. In plain English, foreclosures were simply banks repossessing property from those who defaulted on their debts.
Naturally, Americans were not too pleased with such manifestly unjust and unethical practices. Two movements of the left and the right emerged to challenge the status quo. Occupy Wall Street and the Tea Party had widely divergent ideals but were united in their opposition to bailouts. To add fuel to the fire, Washington not only bailed out the big banks, but it also merged them. The big bosses of the economy deemed this less risky than breaking up the banks or nationalizing them for a temporary period.
Today, too big to fail is not quite the past. Banks are now even bigger and the failure of even one bank could lead to total financial meltdown. No government could stand by and allow that, making future bailouts inevitable. Such a situation leads to moral hazard, a situation where one party takes more risks because another bears the costs. When this author raised the issue of moral hazard with Tim Geithner, Obama’s former treasury secretary responded with sophistry.
The issue of the big banks is an apt metaphor for the limitations of the Obama presidency. This man of soaring rhetoric, cool temperament and admirable decency shied away from bold, tough and contentious decisions. In his first two years in office, Obama’s party controlled both the Senate and the House of Representatives. The callow Obama blew away those two crucial years by not pushing through important reforms when he still had the chance. Like most presidents, Obama was obsessed about not ending up as a one-term wonder. He was conservative in all his decisions, including the big one on health care that he only belatedly pushed for after Ted Kennedy died.
Obama had come to office promising change without really defining this change. As a result, he was many things to many people. The Norwegian Nobel Committee promptly gave him the Nobel Peace Prize in 2009 on mere promise alone, before he had a chance to do anything to earn it.
Truth be told, Obama favored continuity over change. This set him on a collision course with his rhetoric. In his first term, Obama relied on Clintonistas. The foul-mouthed Rahm Emmanuel, the supremely arrogant Larry Summers and the imperious Hillary Clinton were all key members of the Obama administration.
It was under the Clinton Democrats and not Ronald Reagan that the Glass Steagall Act of the Franklin Delano Roosevelt era had been repealed in 1999. The Clintonistas had freed commercial banks from cumbersome regulations and allowed them to engage in the risky investment business that proved to be their downfall.
As the first black president of the US, the cool and measured Obama was careful to avoid the image of the angry black man who functioned on colored people’s time. This Harvard lawyer also protested that he was not socialist, a dirty word in the US. For many Americans, a socialist is merely someone who robs hard working people through high taxes and then gives away the money to the lazy undeserving poor. Of course, most hard working people tend to be white, and lazy ones are largely black. While patrician Roosevelt relished taking on the big banks, plebeian Obama lacked the conviction, confidence and courage to do so.
The Clintonistas around him continued their incestuous relationships with Wall Street. Geithner is president of Warburg Pincus, Summers earns big money from financial institutions and the Clintons are infamous for their love of la dolce vita, which makes them hop into bed with the rich and the famous. Americans rejected Obama’s embrace of the Clintonista economic ideology and his offer of more of the same.
SURVEILLANCE CONTINUES BUT BIG FOREIGN POLICY BETS
Obama has been unable to check the surveillance state that spies on its people incessantly. He has also presided over an administration that has prosecuted whistleblowers like Edward Snowden more vigorously than all previous administrations in US history.
In the realm of foreign policy, Grappo damns Obama for leaving no legacy in the Middle East. Many blame him for the current troubles in Syria. John Feffer has called him a visitor both from the future and the past. In building a cooperative relationship with former adversaries such as Vietnam, Iran and Cuba, Obama evoked the future. In containing Russia, managing the rise of China and ordering drone strikes in Pakistan, this complex man evoked the past.
Truth be told, this author’s respect for Obama’s foreign policy has grown over the last four years. Obama demonstrated real steel in going against Congress to negotiate a multi-party nuclear deal with Iran. He has been similarly courageous in visiting Cuba to salsa with Raúl Castro and “urging the people of the Americas to leave behind the ideological battles of the past.”
Obama displayed real foresight in attempting the Asia pivot even if he was ultimately unable to pull it off. Perhaps no president could have done better when the US military is stretched after years of war in Iraq and Afghanistan. The economic slowdown did not give Obama too many cards to play. Domestic opposition from both parties sank the Trans-Pacific Partnership treaty that was a cornerstone of containing China in its own backyard. Reconciliation with Vietnam was a big step forward, but Obama never had the time, money or energy to give Asia the focus he really wanted.
President Obama could have done better in the Middle East but he was dealt a toxic legacy by Bush. In the December 18, 2016, edition of The World This Week, this author analyzed the terrible tragedy afflicting Aleppo, and called it a new low in the Middle East’s counterpart to the Thirty Years’ War. Burnt by memories of Iraq, Obama was certainly hesitant, uncertain and mistaken in Syria, but a Bush might have fared worse.
In the Middle East, this author would fault Obama for being soft on Israel for far too long. He let its right-wing government get away with its aggressive settlements policy, which is de facto annexation of the Palestinian Territories. Only at the very end of his administration, John Kerry told some hard truths to Israel, which for many was too little too late.
Obama leaves office with dignity and disappointment. He could have done much more.
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