[News] On Presidential Blindness and Economic Catastrophe
news at freedomarchives.org
Wed Oct 15 19:04:09 EDT 2008
Can Obama See the Grand Canyon?
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
Praise of Barbarians: Essays Against Empire
(Haymarket Books, 2008) and
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
Copyright 2008 Mike Davis
522 Valencia Street
San Francisco, CA 94110
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