The Working Class and the Great Capitulator

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.

 

Leo Jennings

This entry was posted in Contributors, Issues, Leo Jennings, The Working Class and the Economy, Working-class politics and tagged , , , , . Bookmark the permalink.

10 Responses to The Working Class and the Great Capitulator

  1. jUAN says:

    First of all, very good post. As you likely know, until polnted out as a negative, Obama was a member of the neo-liberal DLC. A close look at his Illinois and then U.S. Senate record left no doubt about his rightist/reactionary tendencies. Hopefully there has been a learning experience and more people will refuse to vote rather than legitimize the ‘lesser evil’.

    More hopefully a mass movement such as Joan mentioned will develop, and if not organized at least one which understands the 1930s dictum of ‘march seperately but strike together’. Given the present global conjuncture, this is what will be required [and perhaps more].

    Germany is now passing through one of those great historic hours upon which the fate of the German people, the fate of Europe, and in significant measure the fate of all humanity, will depend for decades. If you place a ball on top of a pyramid, the slightest impact can cause it to roll down either to the left or to the right. That is the situation approaching with every hour in Germany today. There are forces which would like the bail to roll down towards the right and break the back of the working class. There are forces which would like the ball to remain at the top. That is a utopia. The ball cannot remain at the top of the pyramid. The Communists want the ball to roll down toward the left and break the back of capitalism. But it is not enough to want; one must know how. [December, 1931]

    BTW, I well recall Youngstown Sheet and Tube, what happened to it and why.

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  2. elecpencil says:

    I’d love to see Liz Warren be president. I can’t happen though as we never have anyone who understands the economy.

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  3. Leo Jennings says:

    As I was working yesterday afternoon MSN posted a notification saying the President was about to address the nation about the economy and the credit rating downgrade. I expected the shot he took at the ratings agencies–they surely deserve it, during my time in the Ohio AG’s office I got a close look at the role they played in setting up the securitized mortgage Ponzi scheme.

    Sadly, I also expected his less than inspiring remarks relaitve to job creation and growth. Payroll tax holidays and an extension of unemployment benefits just won’t get it done. But as I noted in the blog, he’s placed himself in a box and made it impossible to talk about making the type of massive investment we need to kickstart the economy. First of all, he’d have to admit that he was wrong to focus on deficit reduction, and folks that just ain’t going to happen.

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  4. Roy Wilson says:

    I wonder if Barack assumed that DC would be like Chicago when he was a community organizer. If so, perhaps he didn’t (hasn’t) realized that his success in Chicago was based on the power that he held (which he did not hold in DC). Good thing I’ve never unknowingly assumed that the present would be like the past, only to discover later that I was wrong.

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  5. Spending money on infrastructure is one of the few legitimate functions of this government, so it should have been priority one since day one, not a strategy that is only dusted off when needed to score political points.

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  6. Joan Sekler says:

    President Obama did not “cave-in” to the Republicans or the right wing and neither did the Democrats in Congress. As President, and as Congresspersons, they are in charge of defending the capitalist class at any cost and they are just doing their job. It makes no difference if the President is black or white, man or woman, old or young. What is really needed in our country is a mass movement in the streets for change, like the Egyptians did, and the formation of a new party out of that movement. There is no other choice.

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  7. Sara Appel says:

    Thanks, Leo– I’m sending this to friends and family, along with another article on the same sad situation that came out a couple days ago (“What Happened to Obama?”, Drew Westen, NYT). As a 2012 voter, I honestly don’t know what to do, or how to feel, about all this. We CAN’T vote for The Great Capitulator– but if not, then what?! With the (bat**** crazy) Tea Party now in power, we can’t afford to keep staying home either. I’ve been especially struck by a contrast that Westen points out:

    “In similar circumstances, Franklin D. Roosevelt offered Americans a promise to use the power of his office to make their lives better and to keep trying until he got it right. Beginning in his first inaugural address, and in the fireside chats that followed, he explained how the crash had happened, and he minced no words about those who had caused it. He promised to do something no president had done before: to use the resources of the United States to put Americans directly to work, building the infrastructure we still rely on today. He swore to keep the people who had caused the crisis out of the halls of power, and he made good on that promise. In a 1936 speech at Madison Square Garden, he thundered, “Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.” “.

    Where is our candidate who welcomes the hatred of the corporate elite? She or he has my vote!

    Sara

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  8. Tim Sheard says:

    I remember when Gene McCarthy challenged Lyndon Johnson, and later Hubert Humphrey and Bobby Kennedy, for the Democratic nomination for president. I wonder if anyone on the left will pick up the mantle and challenge Obama for the nomination – a hopeless quest, no doubt, but one that might push the Democratic party to the left, where it belongs. Tim Sheard, Brooklyn

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    • kitchenmudge says:

      Such a challenge won’t win the nomination, but it just might get a little air time on the msm for issues that would otherwise be ignored. It’s not like the networks pay any attention to “third” parties.

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  9. ekroczek says:

    Excellent analysis. Reposted.

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