[News] On Presidential Blindness and Economic Catastrophe

Anti-Imperialist News news at freedomarchives.org
Wed Oct 15 19:04:09 EDT 2008



Can Obama See the Grand Canyon?

http://www.tomdispatch.com/post/174989/Tomgram:%20%20Mike%20Davis,%20Casino%20Capitalism,%20Obama,%20and%20Us

On Presidential Blindness and Economic Catastrophe
By Mike Davis

Let me begin, very obliquely, with the Grand 
Canyon and the paradox of trying to see beyond 
cultural or historical precedent.

The first European to look into the depths of the 
great gorge was the conquistador Garcia Lopez de 
Cardenas in 1540. He was horrified by the sight 
and quickly retreated from the South Rim. More 
than three centuries passed before Lieutenant 
Joseph Christmas Ives of the U.S. Army Corps of 
Topographical Engineers led the second major 
expedition to the rim. Like Garcia Lopez, he 
recorded an "awe that was almost painful to 
behold." Ives's expedition included a well-known 
German artist, but his sketch of the Canyon was 
wildly distorted, almost hysterical.

Neither the conquistadors nor the Army engineers, 
in other words, could make sense of what they 
saw; they were simply overwhelmed by unexpected 
revelation. In a fundamental sense, they were 
blind because they lacked the concepts necessary 
to organize a coherent vision of an utterly new landscape.

Accurate portrayal of the Canyon only arrived a 
generation later when the Colorado River became 
the obsession of the one-armed Civil War hero 
John Wesley Powell and his celebrated teams of 
geologists and artists. They were like Victorian 
astronauts reconnoitering another planet. It took 
years of brilliant fieldwork to construct a 
conceptual framework for taking in the canyon. 
With "deep time" added as the critical dimension, 
it was finally possible for raw perception to be 
transformed into consistent vision.

The result of their work, The Tertiary History of 
the Grand Canyon District, published in 1882, is 
illustrated by masterpieces of draftsmanship 
that, as Powell's biographer Wallace Stegner once 
pointed out, "are more accurate than any 
photograph." That is because they reproduce 
details of stratigraphy usually obscured in 
camera images. When we visit one of the famous 
viewpoints today, most of us are oblivious to how 
profoundly our eyes have been trained by these 
iconic images or how much we have been influenced 
by the idea, popularized by Powell, of the Canyon 
as a museum of geological time.

But why am I talking about geology? Because, like 
the Grand Canyon's first explorers, we are 
looking into an unprecedented abyss of economic 
and social turmoil that confounds our previous 
perceptions of historical risk. Our vertigo is 
intensified by our ignorance of the depth of the 
crisis or any sense of how far we might ultimately fall.

Weimar Returns in Limbaughland

Let me confess that, as an aging socialist, I 
suddenly find myself like the Jehovah's Witness 
who opens his window to see the stars actually 
falling out of the sky. Although I've been 
studying Marxist crisis theory for decades, I 
never believed I'd actually live to see financial 
capitalism commit suicide. Or hear the 
International Monetary Fund warn of imminent "systemic meltdown."

Thus, my initial reaction to Wall Street's 
infamous 777.7 point plunge a few weeks ago was a 
very sixties retro elation. "Right on, Karl!" I 
shouted. "Eat your derivatives and die, Wall 
Street swine!" Like the Grand Canyon, the fall of 
the banks can be a terrifying but sublime spectacle.

But the real culprits, of course, are not being 
trundled off to the guillotine; they're gently 
floating to earth in golden parachutes. The rest 
of us may be trapped on the burning plane without 
a pilot, but the despicable Richard Fuld, who 
used Lehman Brothers to loot pension funds and 
retirement accounts, merely sulks on his yacht. 
Out in the stucco deserts of Limbaughland, 
moreover, fear is already being distilled into a 
good ol' boy version of the "stab in the back" 
myth that rallied the ruined German petite 
bourgeoisie to the swastika. If you listen to the 
rage on commute AM, you'll know that ‘socialism' 
has already taken a lien on America, Barack 
Hussein Obama is terrorism's Manchurian 
candidate, the collapse of Wall Street was caused 
by elderly black people with Fannie Mae loans, 
and ACORN in its voter registration drives has 
long been padding the voting rolls with illegal brown hordes.

In other times, Sarah Palin's imitation of Father 
Charles Coughlin -- the priest who preached an 
American Reich in the 1930s -- in drag might be 
hilarious camp, but with the American way of life 
in sudden freefall, the specter of star-spangled 
fascism doesn't seem quite so far-fetched. The 
Right may lose the election, but it already 
possesses a sinister, historically-proven blueprint for rapid recovery.

Progressives have no time to waste. In the face 
of a new depression that promises folks from 
Wasilla to Timbuktu an unknown world of pain, how 
do we reconstruct our understanding of the 
globalized economy? To what extent can we look to 
either Obama or any of the Democrats to help us 
analyze the crisis and then act effectively to resolve it?

Is Obama FDR?

If the Nashville "town hall" debate is any guide, 
we will soon have another blind president. 
Neither candidate had the guts or information to 
answer the simple questions posed by the anxious 
audience: What will happen to our jobs? How bad 
will it get? What urgent steps should be taken?

Instead, the candidates stuck like flypaper to 
their obsolete talking points. McCain's only 
surprise was yet another innovation in deceit: a 
mortgage relief plan that would reward banks and 
investors without necessarily saving homeowners.

Obama recited his four-point program, infinitely 
better in principle than his opponent's 
preferential option for the rich, but abstract 
and lacking in detail. It remains more a 
rhetorical promise than the blueprint for the 
actual machinery of reform. He made only passing 
reference to the next phase of the crisis: the 
slump of the real economy and likely mass 
unemployment on a scale not seen for 70 years.

With baffling courtesy to the Bush 
administration, he failed to highlight any of the 
other weak links in the economic system: the 
dangerous overhang of credit-default swap 
obligations left over from the fall of Lehman 
Brothers; the trillion-dollar black hole of 
consumer credit-card debt that may threaten the 
solvency of JPMorgan Chase and Bank of America; 
the implacable decline of General Motors and the 
American auto industry; the crumbling foundations 
of municipal and state finance; the massacre of 
tech equity and venture capital in Silicon 
Valley; and, most unexpectedly, sudden fissures 
in the financial solidity of even General Electric.

In addition, both Obama and his vice presidential 
partner Joe Biden, in their support for Secretary 
of the Treasury Paulson's plan, avoid any 
discussion of the inevitable result of 
cataclysmic restructuring and government 
bailouts: not "socialism," but ultra-capitalism 
-- one that is likely to concentrate control of 
credit in a few leviathan banks, controlled in 
large part by sovereign wealth funds but 
subsidized by generations of public debt and domestic austerity.

Never have so many ordinary Americans been nailed 
to a cross of gold (or derivatives), yet Obama is 
the most mild-mannered William Jennings Bryan 
imaginable. Unlike Sarah Palin who masticates the 
phrase "the working class" with defiant glee, he 
hews to a party line that acknowledges only the 
needs of an amorphous "middle class" living on a 
largely mythical "Main Street."

If we are especially concerned about the fate of 
the poor or unemployed, we are left to read 
between the lines, with no help from his talking 
points that espouse clean coal technology, 
nuclear power, and a bigger military, but elide 
the urgency of a renewed war on poverty as 
championed by John Edwards in his tragically 
self-destructed primary campaign. But perhaps 
inside the cautious candidate is a man whose 
humane passions transcend his own nearsighted 
centrist campaign. As a close friend, exasperated 
by my chronic pessimism, chided me the other day, 
"don't be so unfair. FDR didn't have a nuts and 
bolts program either in 1933. Nobody did."

What Franklin D. Roosevelt did possess in that 
year of breadlines and bank failures, according 
to my friend, was enormous empathy for the common 
people and a willingness to experiment with 
government intervention, even in the face of the 
monolithic hostility of the wealthy classes. In 
this view, Obama is MoveOn.org's re-imagining of 
our 32nd president: calm, strong, deeply in touch 
with ordinary needs, and willing to accept the 
advice of the country's best and brightest.

The Death of Keynesianism

But even if we concede to the Illinois senator a 
truly Rooseveltian or, even better, Lincolnian 
strength of character, this hopeful analogy is 
flawed in at least three principal ways:

First, we can't rely on the Great Depression as 
analog to the current crisis, nor upon the New 
Deal as the template for its solution. Certainly, 
there is a great deal of déjà vu in the frantic 
attempts to quiet panic and reassure the public 
that the worst has passed. Many of Paulson's 
statements, indeed, could have been directly 
plagiarized from Herbert Hoover's Secretary of 
the Treasury Andrew Mellon, and both presidential 
campaigns are frantically cribbing heroic 
rhetoric from the early New Deal. But just as the 
business press has been insisting for years, this 
is not the Old American Economy, but an entirely 
new-fangled contraption built from outsourced 
parts and supercharged by instantaneous world 
markets in everything from dollars and defaults 
to hog bellies and disaster futures.

We are seeing the consequences of a perverse 
restructuring that began with the presidency of 
Ronald Reagan and which has inverted the national 
income shares of manufacturing (21% in 1980; 12% 
in 2005) and those of financial services (15% in 
1980; 21% in 2005). In 1930, the factories may 
have been shuttered but the machinery was still 
intact; it hadn't been auctioned off at five cents on the dollar to China.

On the other hand, we shouldn't disparage the 
miracles of contemporary market technology. 
Casino capitalism has proven its mettle by 
transmitting the deadly virus of Wall Street at 
unprecedented velocity to every financial center 
on the planet. What took three years at the 
beginning of the 1930s -- that is, the full 
globalization of the crisis -- has taken only 
three weeks this time around. God help us, if, as 
seems to be happening, unemployment tops the 
levees at anything like the same speed.

Second, Obama won't inherit Roosevelt's ultimate 
situational advantage -- having emergent tools of 
state intervention and demand management (later 
to be called "Keynesianism") empowered by an 
epochal uprising of industrial workers in the 
world's most productive factories.

If you've been watching the sad parade of 
economic gurus on McNeil-Lehrer, you know that 
the intellectual shelves in Washington are now 
almost bare. Neither major party retains more 
than a few enigmatic shards of policy traditions 
different from the neo-liberal consensus on trade 
and privatization. Indeed, posturing 
pseudo-populists aside, it is unclear whether 
anyone inside the Beltway, including Obama's 
economic advisors, can think clearly beyond the 
indoctrinated mindset of Goldman Sachs, the 
source of the two most prominent secretaries of 
the treasury over the last decade.

Keynes, now suddenly mourned, is actually quite 
dead. More importantly, the New Deal did not 
arise spontaneously from the goodwill or 
imagination of the White House. On the contrary, 
the social contract for the post-1935 Second New 
Deal was a complex, adaptive response to the 
greatest working-class movement in our history, 
in a period when powerful third parties still 
roamed the political landscape and Marxism 
exercised extraordinary influence on American intellectual life.

Even with the greatest optimism of the will, it 
is difficult to imagine the American labor 
movement recovering from defeat as dramatically 
as it did in 1934-1937. The decisive difference 
is structural rather than ideological. (Indeed, 
today's union movement is much more progressive 
than the decrepit, nativist American Federation 
of Labor in 1930.) The power of labor within a 
Walmart-ized service economy is simply more 
dispersed and difficult to mobilize than in the 
era of giant urban-industrial concentrations and 
ubiquitous factory neighborhoods.

Is War the Answer?

The third problem with the New Deal analogy is 
perhaps the most important. Military Keynesianism 
is no longer an available deus ex machina. Let me explain.

In 1933, when FDR was inaugurated, the United 
States was in full retreat from foreign 
entanglements, and there was little controversy 
about bringing a few hundred Marines home from 
the occupations of Haiti and Nicaragua. It took 
two years of world war, the defeat of France, and 
the near collapse of England to finally win a 
majority in Congress for rearmament, but when war 
production finally started up in late 1940 it 
became a huge engine for the reemployment of the 
American work force, the real cure for the 
depressed job markets of the 1930s. Subsequently, 
American world power and full employment would 
align in a way that won the loyalty of several 
generations of working-class voters.

Today, of course, the situation is radically 
different. A bigger Pentagon budget no longer 
creates hundreds of thousands of stable factory 
jobs, since significant parts of its weapons 
production is now actually outsourced, and the 
ideological link between high-wage employment and 
intervention -- good jobs and Old Glory on a 
foreign shore -- while hardly extinct is 
structurally weaker than at any time since the 
early 1940s. Even in the new military (largely a 
hereditary caste of poor whites, blacks, and 
Latinos) demoralization is reaching the stage of 
active discontent and opening up new spaces for alternative ideas.

Although both candidates have endorsed programs, 
including expansion of Army and Marine combat 
strength, missile defense (aka "Star Wars"), and 
an intensified war in Afghanistan, that will 
enlarge the military-industrial complex, none of 
this will replenish the supply of decent jobs nor 
prime a broken national pump. However, in the 
midst of a deep slump, what a huge military 
budget can do is obliterate the modest but 
essential reforms that make up Obama's plans for 
healthcare, alternative energy, and education.

In other words, Rooseveltian guns and butter have 
become a contradiction in terms, which means that 
the Obama campaign is engineering a catastrophic 
collision between its national security 
priorities and its domestic policy goals.

The Fate of Obama-ism

Why don't such smart people see the Grand Canyon?

Maybe they do, in which case deception is truly 
the mother's milk of American politics; or 
perhaps Obama has become the reluctant prisoner, 
intellectually as well as politically, of 
Clintonism: that is say, of a culturally 
permissive neo-liberalism whose New Deal rhetoric 
masks the policy spirit of Richard Nixon.

It's worth asking, for instance, what in the 
actual substance of his foreign policy agenda 
differentiates the Democratic candidate from the 
radioactive legacy of the Bush Doctrine? Yes, he 
would close Guantanamo, talk to the Iranians, and 
thrill hearts in Europe. He also promises to 
renew the Global War on Terror (in much the same 
way that Bush senior and Clinton sustained the 
core policies of Reaganism, albeit with a "more human face").

In case anyone has missed the debates, let me 
remind you that the Democratic candidate has 
chained himself, come hell or high water, to a 
global strategy in which "victory" in the Middle 
East (and Central Asia) remains the chief premise 
of foreign policy, with the Iraqi-style 
nation-building hubris of Dick Cheney and Paul 
Wolfowitz repackaged as a "realist" faith in global "stabilization."

True, the enormity of the economic crisis may 
compel President Obama to renege on some of 
candidate Obama's ringing promises to support an 
idiotic missile defense system or provocative 
NATO memberships for Georgia and Ukraine. 
Nonetheless, as he emphasizes in almost every 
speech and in each debate, defeating the Taliban 
and Al-Qaeda, together with a robust defense of 
Israel, constitute the keystone of his national security agenda.

Under huge pressure from Republicans and Blue Dog 
Democrats alike to cut the budget and reduce the 
exponential increase in the national debt, what 
choices would President Obama be forced to make 
early in his administration? More than likely 
comprehensive health-care will be whittled down 
to a barebones plan, "alternative energy" will 
simply mean the fraud of "clean coal," and 
anything that remains in the Treasury, after Wall 
Street's finished its looting spree, will buy 
bombs to pulverize more Pashtun villages, 
ensuring yet more generations of embittered mujahideen and jihadis.

Am I unduly cynical? Perhaps, but I lived through 
the Lyndon Johnson years and watched the War on 
Poverty, the last true New Deal program, 
destroyed to pay for slaughter in Vietnam.

It is bitterly ironic, but, I suppose, 
historically predictable that a presidential 
campaign millions of voters have supported for 
its promise to end the war in Iraq has now 
mortgaged itself to a "tougher than McCain" 
escalation of a hopeless conflict in Afghanistan 
and the Pakistani tribal frontier. In the best of 
outcomes, the Democrats will merely trade one 
brutal, losing war for another. In the worst 
case, their failed policies may set the stage for 
the return of Cheney and Rove, or their even more sinister avatars.

Mike Davis is the author of 
<http://www.amazon.com/dp/1931859426/ref=nosim/?tag=nationbooks08-20>In 
Praise of Barbarians: Essays Against Empire 
(Haymarket Books, 2008) and 
<http://www.tomdispatch.com/p/davis>Buda's Wagon: 
A Brief History of the Car Bomb (Verso, 2007). He 
is currently working on a book about cities, 
poverty, and global change. You can listen to a 
podcast of Davis discussing why the New Deal 
isn't relevant as a solution today by 
<http://tomdispatch.blogspot.com/2008/10/interview-with-mike-davis-contributor.html>clicking 
here.

Copyright 2008 Mike Davis




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