When I began writing this piece its focus—and the act that earned Barack Obama the moniker “Great Capitulator”—was his decision to cave into Republican senators and Wall Street fat cats and withdraw his nomination of Elizabeth Warren to head the new Consumer Financial Protection Bureau. The CFPB, conceived by Warren in 2007, was a key component of the Dodd-Frank financial reform bill and has been vilified by big money interests and their toadies in Congress from the moment it was proposed.
Professor Warren, who chaired the TARP Oversight Committee and was fiercely critical of the too-big-to-fail banks and brokerages that raked in billions in bailouts funded by working-class tax dollars, is widely recognized as the nation’s premier consumer advocate and most persuasive voice for reform of the financial and credit markets. Along with being an outspoken fighter for working-class families victimized by predatory lenders, Warren is the Leo Gottlieb Professor of Law at Harvard, where she has taught bankruptcy, contract, and commercial law since 1992. By any measure she was, as Mr. Obama noted in announcing her appointment, the person most qualified to chair the CFPB.
Republicans and Wall Street shared that view, as was made obvious by their vehement opposition to her nomination. The last thing they wanted was a loud and coherent voice for reform—especially because the only other regulators with enough guts and independence to speak truth to Wall Street’s power, the FDIC’s Sheila Bair and the SEC’s Mary Schapiro, no longer held their positions. It seems Mr. Obama, who appears to cower in the shadow of Alan Greenspan and Robert Rubin, didn’t want to hear her voice either.
While his surrender on health care, his abandonment of the Employee Freedom of Choice Act, and his decision to “stimulate” the economy by directing more money to Wall Street than Main Street were all slaps in the face to working-class Americans, I was prepared to argue that allowing the GOP and the financial industry to kill Warren’s nomination was the most egregious of the cowardly acts that have characterized this presidency, because it ended any hope that the institutions who are blithely destroying the American Dream would finally be forced face a worthy adversary with a bully pulpit who knew how to use it.
Man, was I wrong.
I was wrong because the Faustian bargain Mr. Obama struck with John Boehner and the modern day Know Nothings who comprise the Tea Party in order to gain an extension of the nation’s debt ceiling makes his previous betrayals seem piddling. And don’t be mistaken, the betrayal doesn’t lie in the fact that he caved on the issue of whether deficit reduction should be achieved via spending cuts alone or through a combination of cuts and revenue increases. It lies in the fact that he engaged in the debate at all.
Rather than lending credence to the specious argument that the deficit is the most pressing economic problem facing the nation today, the president should have said that the best, the only way to deal with our long term fiscal dilemma is to grow our way out of it by doing what it takes to put people back to work.
He should have embraced the philosophy that has guided Democratic presidents for nearly 80 years: that tough economic times call for more spending, not less. Spending on infrastructure projects, the development of alternative energy sources, research and development, job training and education. He should have demanded that we invest in America’s greatest asset: Americans.
Instead, by embracing the ridiculous notion that cutting trillions in spending is the cure-all for what ails the body politic, the Great Capitulator has all but guaranteed that the investment needed to fuel both recovery and deficit reduction will never be made.
Whether wittingly or unwittingly—and it’s hard to say for sure which because this administration has a penchant for committing tactical errors as well as for turning its back on its core constituency—Mr. Obama has now put himself in a rhetorical box that will make it impossible for him to credibly argue that the government should spend money to stimulate the economy, even as working-class families find themsevles staring into the barrel of double-dip recession.
While some may compare Mr. Obama’s decision to join the Republicans in attacking the deficit to Bill Clinton’s partnering with Newt Gingrich to substantially alter the welfare system, there is one very critical difference between the two: Mr. Clinton never abandoned the core Democratic principle that government had an essential role to play in making life better for the American people.
Mr. Obama, for reasons known only to him, has done exactly that. He is now in league with idealogues whose real goal has nothing to do with reducing the deficit and everything to do with dismantling what’s left of the social safety net that has been woven by a succession of Democratic presidents and Congressional leaders since 1933.
In so doing, he has abandoned the constituency that played a key role in his 2008 victory and renounced the principles and philosophies that constituency holds dear. Throughout 2010, Working-Class Perspectives warned Democrats for ten months that they could not expect working-class support and that people would stay home. Guess what happened.
The Democrat operatives running the Obama reelection campaign calculate that the working class has no place to turn politically, and they are trying to gather narratives to place a positive spin on his capitulation. No doubt, how the members of the working class, people of color, seniors, women, and union members react to this latest betrayal may well determine who occupies the Oval Office in January of 2013.
If it’s not Mr. Obama, the Great Capitulator will have no one to blame but himself.