Salesman of the Month for Wall Street

The bankers will soon begin collecting their $700 billion ransom from taxpayers. And they can thank Barack Obama for helping them get away with it.

“Democratic presidential nominee Barack Obama spoke to many in the Congressional Black Caucus and helped persuade 13 to switch their votes,” the Associated Press reported, describing Obama’s efforts to salvage the Bush administration plan to use government funds to bail out Wall Street by buying up bad debts from banks and other firms. “Nine freshmen Democrats also switched to yes votes after a conference call with Obama in which he promised an economic stimulus bill would be a top priority if he is elected.”

In other words, Obama was personally responsible for swinging the votes needed to reverse the House of Representatives’ initial rejection of the bailout at the end of September.

Ultimately, dozens more House Democrats and Republicans also switched their votes after coming under enormous pressure from virtually every business lobbying group. But it was Obama who provided the political cover for Democrats to brave the backlash of voters who are furious about this gigantic transfer of wealth from the working class to the rich.

The passage of the bailout bill has once again laid bare the pathetic realities in the “world’s greatest democracy.” There was no question what the fate of the legislation would have been if there had been a referendum of the U.S. population. But the politicians in Washington were responding to the sentiment among those they really represent–in the boardrooms of Wall Street and Corporate America–not the ordinary people who put them in office.

On the campaign trail, Obama played to the anger over the bailout, even as he justified it as necessary.

“We are now in a very dangerous situation where financial institutions across this country are afraid to lend money,” he said at a campaign stop in Nevada. “If all that meant was the failure of a few big banks on Wall Street, that’d be one thing, but that’s not what it means. What it means is that if we do not act, it will be harder for you to get a mortgage for your home, or the loans you need to go to college, or a loan you need to buy a car to get to work.”

“There will be time to punish those who set this fire,” he added, “but now is the moment for us to come together and put the fire out.”

Certainly the 777-point drop in the stock market after the first House vote on September 29 also created political pressure for a “yes” on the bailout. It seemed to give credence to dire warnings by Treasury Secretary Henry Paulson, Federal Reserve Chair Ben Bernanke and George W. Bush (remember him?). The message: Give Paulson dictatorial authority to spend $700 billion virtually any way he wants, or, as Bush put it, “this sucker could go down.”

The problem with that argument is that the bailout may do little to stop “this sucker” from going down anyway. In fact, as this editorial was being written, world stock markets suffered through another day of huge losses on October 6, as a result of a banking crisis in Europe and skepticism among U.S. business that even a $700 bailout can solve the credit crunch that is slowing the economy to a crawl.

A more direct government intervention in the crisis–including nationalizing the banks–would have a much greater chance of alleviating the credit squeeze. And any bailout plan aimed at helping working people would have included a moratorium on home foreclosures and a program to allow homeowners to renegotiate their adjustable-rate mortgages based on today’s lower home values.

If Obama was sincerely campaigning on a promise of “change,” he would have used his clout to push for measures like these. Instead, he promoted the Senate version of the bailout bill, which, though packed with tax cuts for business to win Republican support, will do nothing to help homeowners and the great majority of workers. (The only progressive part of the bill was unrelated to housing–a measure to require health insurance companies to cover mental and physical health care equally.)

Politically, though, Obama knows he’ll come out a winner, no matter what. That’s because Republican presidential candidate John McCain’s inept attempts to intervene in the crisis only reminded people that corrupt and incompetent Republicans presided over this descent into the worst financial crisis since the Great Depression. However much McCain and running mate Sarah Palin try to posture as being independent of Bush, they’re inevitably catching blame for this debacle.

As a result, Obama can have his cake and eat it, too. He can slam McCain for declaring that the “fundamentals” of the economy are strong, even as he positions himself as the “responsible” candidate who will tend to the interests of capital.

However populist Obama may sound in the closing weeks of the campaign, Corporate America will be reassured by the economic advisers on his flank: billionaire investor Warren Buffet, the richest man in the U.S.; former Fed Chair Paul Volker, whose high-interest rate policies drove up unemployment in the early 1980s; and Robert Rubin, the Wall Street executive who, as Treasury Secretary under Bill Clinton, imposed the bankers’ priority of slashing government spending.

With advisers like these, you can be sure that when Obama’s promises to voters conflict with the business agenda, voters will get the shaft.

If you listen closely, you can hear Obama signal as much. “People have asked whether the size of this rescue plan, together with the weakening economy, means that the next president will have to scale back his agenda,” Obama said. “The answer is yes and no. With less money flowing into the treasury, some useful programs, and programs that I have proposed on the campaign trail, will have to be delayed. But there are some certain investments in our future that we cannot delay precisely because our economy is in turmoil.”

One “investment” that won’t be delayed is the further growth of the Pentagon budget, already bloated by wars in Iraq and Afghanistan and spending on outlandish new weapons systems. Richard Danzig, who was Navy secretary under Clinton and a possible defense secretary in an Obama administration, told the Wall Street Journal that he doesn’t “see defense spending declining in the first years of an Obama administration. There are a set of demands there that are very severe, very important to our national well-being.”

While the Pentagon can expect the money to keep flowing, Obama is promising hard-pressed workers a modest tax cut that won’t undo the impact of high food and fuel prices and declining real (after inflation) wages.

And Obama’s proposed $50 billion economic stimulus package is two-thirds smaller than the Bush stimulus program implemented earlier this year. Compared to the bailout of the bankers, that’s chump change.

The economy issue is almost certainly burying whatever hope McCain-Palin had of eking out a victory–always a long shot for them anyway on the heels of the most discredited Republican administration since Herbert Hoover in the 1930s.

But anyone who expects an Obama administration will seriously challenge Corporate America and its priorities ought to take a closer look.

Lee Sustar writes for Socialist Worker. Read other articles by Lee, or visit Lee's website.

12 comments on this article so far ...

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  1. Erroll said on October 10th, 2008 at 10:54am #

    Cogently and persuasively stated. It should be pointed out that during these presidential debates there will be no third party or independent or socialist candidates on the stage to challenge Obama and McCain on their statements that they put forth to the American people in front of a national audience.

  2. HR said on October 10th, 2008 at 8:21pm #

    Well, folks, you had REAL choices back during the primary days, and you still do. Nader/Gonzalez is on the ballot in at least 45 states, or you can write in McKinney/Clemente. But, guess what, most of you won’t. You secretly want more of the same, I guess. A person would think that 40 years of deadly serious warfare waged against the working class might lead an oppressed people to change things … but I guess that characteristic only applies to people in places like Venezuela and Bolivia.

    Of course there won’t be any third-party candidates at the “debates”. The debate commission is owned by the two wings of the single ruling party, and it is funded by corporate donations. The League of Women Voters washed their hands of the putrid charade in the late 80s because of secret pre-debate agreements between the corporate candidates. Why anyone would waste time watching those farces is beyond me. All the corporate-puppet candidates — whose every word is a lie — do is pretend to answer carefully selected questions asked by propagandists.

  3. stevec said on October 11th, 2008 at 12:48am #

    Great article. Great comments. I think that deep down, most people know a third party is the path to real change (Nader/Gonzalez is an obvious and excellent choice if you want your vote to stand for something positive). But mainstream media continues to amplify the myth that there are only two choices. This maintains the division among American voters and aides both campaigns who thrive on the fear of the “other team”.

    It has been excruciating to watch so many intelligent people fall for the Republican vs. Democrat scam once again. I’ve been overwhelmed with frustration and confusion at seeing my friends and colleagues pledge their support to Obama. Are they glued to Fox or CNN? Is there something in the water?

    Slowly, it has become much more clear. Obama is there to make us feel good. He is there to make people who desperately want change FEEL like they are involved, that they can make a difference. Well let me remind you, simply voting for Obama or McCain does NOT count as “involvement” in our democracy.

    I finally understand: People everywhere are supporting Obama because it is EASIER than getting involved to demand real change. Voting third party, protesting, uniting behind progressive ideas, fighting back; these are all viewed by the corporate media-fed masses as either ineffective or just too difficult.

    Obviously, Obama is an intelligent person and a terrific candidate. His speeches and multi-million dollar marketing campaign make him appear better than McCain. But what’s really going on is this. We have been so beaten down by the abuses of the Bush administration that we will accept anything (including a Democratic candidate who supports war, bailouts for crooks, criminal corporate spying and the Patriot Act, and who helped protect Bush & Cheney from impeachment). We have been beaten into submission and now many are simply proving it by accepting the two-party system instead of taking a stand against a corrupt government.

    // Wave those campaign signs with pride, cause it’s easier than thinking. //

  4. Poilu said on October 11th, 2008 at 2:36am #

    For what it’s worth, this little advocacy campaign by the Democratoc contender merely reinforces my already well-establised conviction to vote third party rather than succumb to the worthless “conventional wisdom” of choosing the “lesser evil”..

    Thanks for nothing, Obama! Just another fawning agent of the ruling elite — “Change”, my foot!!!

  5. Poilu said on October 11th, 2008 at 2:37am #

    For what it’s worth, this little advocacy campaign by the Democratic contender merely reinforces my already well-establised conviction to vote third party rather than succumb to the worthless “conventional wisdom” of choosing the “lesser evil”..

    Thanks for nothing, Obama! Just another fawning agent of the ruling elite. “Change”, my foot!!!

  6. Poilu said on October 11th, 2008 at 2:39am #

    Ooops! Sorry for the duplication. The SECOND version is the correct one.

  7. bozhidar bob balkas said on October 11th, 2008 at 6:48am #

    as u say, a two-winged party. for 2 cent’s. to continue for decades. i dare guess.
    nazification of america is completed. nevertheless, workers r needed; thus, they have been allowed to think freely to their heart’s content.
    in short, u can look/think/say/ask questions, but don’t touch.
    u do s’mthing uncle doesn’t like and u’l be punished.
    sam has powerful military; ab 200td cia agents, 2mn police, 1mn fbi agents. what is all that for? is that for babysitting? i think, it is there
    to control amers by miseducation and threat and aliens thru missiles, occupation, invasions, sieges, sanctions, threats, etc. thnx
    oh, wldn’t have hitler been happy if he had half as much as the uncle?

  8. Beverly said on October 12th, 2008 at 5:44pm #

    It took probably 5 seconds per phone call for Fauxbama to get Congressional Black Caucus (CBC) members to sell out (AGAIN) their overwhelmingly black constituents.

    Like 90 percent of the black population, the CBC is drunk on Obama kool aid. Further, the CBC is as useless as the rest of the Democratic Congress. Check out for previous articles on the CBC – especially the ones where Congressional Black Monitor grades CBC members.

    Sustar is on point when he says Obama has his cake and eats it too. An unquestioning, enabling media perpetuates the myth of Obama being the uber progressive/liberal/FDR/MLK/Jesus that will lead us to the promised land – when in reality the man favors the same neoliberal/neocon, corporatist policies as McCain, Bush, and Bill Clinton – with a few tweaks thrown in to temporarily appease ignorant voters.

    Another example of having cake/eating too is the R word. Mr. “There is no black America/no white America/I transcend race” Obama runs as far away from any so-called “black issues” (jobs, housing, schools, prison system) as he can. The most he’s been seen around predominatly black groups is to chastise the “n’er do wells” for their babymaking, slackass, fattening foods eating, trifling ways. However, slick Willie II, er, Obama knows how to play the race card when needed, for example, to deflect criticism. And it works.

    No wonder he admires Ronald Reagan. He’s more Teflon proof than the Gipper.

    Vote Nader or McKinney.

  9. Sam said on October 13th, 2008 at 1:35am #

    Stevec writes:

    “We have been so beaten down by the abuses of the Bush administration that we will accept anything (including a Democratic candidate who supports war, bailouts for crooks, criminal corporate spying and the Patriot Act, and who helped protect Bush & Cheney from impeachment).”

    Yet earlier Stevec wrote:

    “Obviously, Obama is an intelligent person and a terrific candidate.”

    A “terrific candidate?” He’s a TERRIBLE candidate for the very reasons you listed and that doesn’t even begin to cover it. There’s nothing “terrific” about a candidate that has served as a Bush accomplice since he’s been in the senate.

    Nader/Gonzalez 2008, if there is an “election”
    Cindy Sheehan to replace Bush accomplice Pelosi

  10. Sam said on October 13th, 2008 at 1:50am #

    Stevec also wrote:

    “I finally understand: People everywhere are supporting Obama because it is EASIER than getting involved to demand real change. ”

    That’s part of it. The main reason most people are going to vote for Obama—not that they are necessarily supporting him—is because he has a D behind his name. That’s the #1 and only requirement.

    I saw a bumper sticker the other day that speaks to this mentality:

    “Vote Democrats. McCain = Third Bush Term.”

    So “vote Democrats” even when most of them are Repugs? That makes a hell of a lot of sense!

    Most people are programmed with party-line politics at a rather early age. That’s all they can think. I can’t begin to count the number of times I’ve heard people say such stuff as “I’ve always been a Dem. I’ll be a Dem until the day I die. My family is a good Dem family. We always vote Dem.” The same for Repugs.

    That’s what we’re dealing with. D and R party-line programming. It’s as cemented in people as the belief in a god is cemented in them. Most people will never deprogramme this shit without professional help.

    I share your frustration. Dem kool-aid drinkers drive me up the fuking wall. Can’t stand them and their blinders and denial. And they make apologies and excuses for ANYTHING their useless Bush-accomplice politicians do for the Bush regime. (Ex. They refer to “Bush’s war” rather than “The Iraq war started by Bush, the Repugs AND the Dems.” The partisan Dem hacks can’t bear to say that. (Denial.) The party-line people are pathetic.

    As soon as I realize I’m talking with some party-line hack who will go to any extreme to defend their indefensible politicians, I say to hell with them. I have absolutely no patience for these toe the party line people.

  11. Sam said on October 13th, 2008 at 1:59am #

    I wrote:

    “The main reason most people are going to vote for Obama…”

    I don’t know that most people are going to vote for Obama and we’ll never know the truth since the “election” (if there is one) will likely be fraudulent (just like the 2000 and 2004 presidential “election” since the voting system is the same today. Corrupt.)

    I meant to say “The main reason most Dem voters are going to vote for Obama…” is because of the D behind his name.

  12. stevec said on October 13th, 2008 at 10:43pm #

    Sam: well said.

    Sorry for the confusion about Obama being a “terrific candidate”. I didn’t mean that in a complimentary way, exactly. Perhaps I should have said “terrific contestant”. I don’t consider our two-party politics to be valid or even realistic. It’s a show, a SIDESHOW, a distraction. So Obama is a terrific contestant in the mainstream, reality TV show sense because his candidacy plays right into that role. He’s intelligent and inspirational when compared to Bush, but that’s not saying anything. He knows how to play the game, so millions are buying into him because the game is all they see.

    Well, our world is not a game, and I don’t want to support anyone who treats it that way. Not now, not ever. Nader ’08!