Barack Obama's victory is indeed inspirational. At last the Bush regime is gone and we patiently wait to see what sort of change our new leader has in mind. His appointments have already raised suspicion. They're not the ones progressives expected, those who would truly revolutionize Washington. We won't see Michael Moore as Secretary of Labor, Dennis Kucinich as Secretary of Defense, Joseph Stiglitz or Paul Krugman as Secretary of the Treasury! How enlightening it would be to have leaders who answer their consciences and respond to a cross-section of the people's concerns, not lobbyists and special interests. It's puzzling to see so many insiders and retreads.
But then Obama is hardly an outsider. He's an elite member of the establishment, a product brand, as Noam Chomsky claims, packaged by investors to sell and control the public. This is not to say we can't get progressive change during his presidency, or that he can't be unbranded. He's revived the spirit of our founding documents and principles with an empowering vision of democracy. It was Thomas Jefferson's notion of "participatory democracy" after all that inspired the 60s movements. But for now we have only lofty promises passed down in the absence of the grassroots energy that supported this last revival. And these principles seem distant indeed as we ponder the state of our far too unequal democracy. We must await a change of heart and mind from those insiders, many of whom got us in our messes.
The barriers to, at this moment at least a more equal democracy, are legion. Start with the two-party system. Every other industrialized country has well more than two, and in this mix is a labor party. How ironic that America, the perennial magnet for the disenfranchised common man, lacks a party to represent workers. This would be less of a problem if there was a space in one of the two we do have. But our two parties mostly represent the privileged.
So it's no mystery why they tend not to vote. They feel alienated from the system that denies them. The voting percentages in other advanced industrialized countries are much higher, and especially for workers, who feel they have a stake in the system. Their wages, not surprisingly, are also much higher. The numbers for the last election spiked up considerably, but workers are not a significant part of Obama's army.
Getting a third party is essential but also unlikely without substantial changes implemented by the insiders. Multi-party systems are parliamentary ones that work through coalitions. Ours is a winner take all scheme that mandates losers and restricts minority rights. Voters know they'll waste their vote and even help the opposing candidate win.
But just imagine if at least Ralph Nader could have participated in the debates! The effect would have been striking in terms of forcing issues into the public arena. This would have expanded the agenda and forced the two main candidates to talk about issues they so easily slighted. Obama would have had more difficulty remaining cool and evasive. His centrism might've moved to the left. It's the outsiders who shake things up, go for fundamental change and above all a more equal power sharing. They challenge all facets of the filter down mumbo-jumbo that saturate society and block real democracy, the ability of people to shape and control their own destinies.
Get the money out of politics that controls the parties and blocks change, and make elections a public interest event that lasts just long enough to encourage popular involvement. What better time, with the current exposure of "free market" hypocrisy, to equalize access to time and money so that candidates don't get a bump from simply spending more, or getting the best admen to craft the cleverest media hooks. Obama outspent everyone in the election, and while he tapped small donors in the vast untapped apathetic wilderness, he also went to the same feed trough of corporate endowment. Breaking the chain of dependency on elites for cash will kickstart the indie-mindedness needed to fertilize popular control of the process.
The idea that democracy and capitalism are natural mates is a myth. Sure, more people accessing power with their checkbooks rings true, but consumerism secures non-democratic trends. The one-man-one-vote notion becomes a caricature. Those with more cash own virtually all of it. And in an America where inequality is now epidemic, the number of votes being logged at the top is compounding faster than the interest rate on the lowliest sub-prime adjustable instruments. It's like saying that the problem with poverty in the US can be solved by simply getting all citizens to own stock, or houses, without providing the means. And it's the means that are limited by a system that securitizes elite interests.
The American Dream is a tantalizing idea, spurring folks to go beyond themselves and achieve success. And no question the conditions have existed here for people who couldn't make it elsewhere to secure a piece of the pie, stoking them to chase after scarce resources. But the energy devoted to this quest over the past 30 or so years has left too many believers in the chase holding Chase credit cards instead; a piece of the plastic rather than a piece of the pie. In scoring the Dream they fight over opportunities that are limited in the big scheme of things. Winners and losers play a game of trade-offs with each other, never seeing how its rules map out their options.
As Larry Bartels shows in his recent Unequal Democracy, supposedly high on Obama's list, mobility has plummeted for many in the middle class over this span, but also those yet to rise this far, mainly due to economic policies that have made them more unequal, especially under Republican administrations. More and more true believers in the American Dream, trying to keep up the pretense of equality, have had to secure it through platinum, thanks to the pre-approving credit policies of banks that diverted this business to Biden's Delaware, the usury capital of the global order.
Henry Paulson said recently that our economic inequality is due to global market forces that have made the world we live in much more competitive. And this requires educating those left behind so they can better compete. But this process is a restrictive one, allocating highly sought after slots. The game itself will hardly be altered by prepping more for the chase. Only the interchangeable faces.
"More education" is the panacea for politicians who rarely upset the elite applecart. Obama's promise to expand education is a welcome change after so many years of restrictions. It will send more bodies off on the chase. Get more kids in college from the middle class, the mass of apple pie-aspirants he courts. But this ignores the privileges that curtail the game's options. What will the newly educated do? The flirtation with universal education in the 60s, when the cost was minimal and there was at least an egalitarian ethic in vogue, led to much unemployment and alienation. Corporations were just beginning to use think tanks and the media to attack unions and escape to overseas sweatshops and avoid taxes. These are the very changes that have kept the game going and restricted options, securing the unfree-market system that excludes aspirants.
The system needs inequality. And so it needs the ideas about it to circulate. Elites have no stake in truly expanding education since this might lead to an undermining of their power, and the erosion of top-down "democracy." Many may start turning to those inspirations from the founding fathers and take seriously the mandate to get active in the political process. This might lead to the kind of change we've witnessed recently in Bolivia, where an indigenous Llama herder rode to the presidency on waves of grassroots energy.
One of the major reasons why the Republicans, and elites generally, have been able to act without fear of recrimination -- fake the WMD case and laugh it off; pass bailouts to their friends despite overwhelming opposition -- is that their moves go largely unseen by a populace not trained to grasp them. Bartels shows that the main reason why the Republicans have been so successful in winning elections over the past half century is that average Americans have been ignorant about the issues involved and voted against their interests. They simply don't connect the dots. This despite the fact that Republican policies have made them worse off, extended and deepened their inequality.
There's much blame to go around. The media puts opulence in our faces, celebrates the inflated success of the fraction at the top who've mostly gained from these policies. This gets many to accept their version of reality. We owe this to the post-60s increase in corporate power as well, particularly the concentration of media into fewer entities whose sole purpose is profit-making. The rise of celeb and entertainment culture has dwarfed journalism, especially its investigative side. Digging up the truth is expensive. It's no wonder then, as Robert McChesney has shown, that the media fails to evaluate important issues, and mostly avoids the economy and foreign policy.
Education, since it's so thoroughly married to job training and credentialing, has failed to give students the knowledge base to evaluate the system's performance. Critical thinking courses have been casualties of the budget ax ever since the idea began to resonate in the Reagan years that monies spent on education and other public matters are not that important. Yet it's an educated populace that's the cornerstone of a vital democracy, an idea not lost on the founding fathers.
Inequality is the cause and the consequence of our limited democracy. Its increase over time has given excessive power to elites who've used it to get even more. How do we break this viciously unequal cycle?
Now Americans are conflicted about what equality means. They give lip service to its abstract idea in founding documents like the Declaration of Independence. It's hard to badmouth equality. But few really want blanket equality. From surveys it's clear that when it comes down to specific policies most want inequality, or at least to be more equal than the next person. Yet there's also much anxiety about the wealth gap, as seen in reactions to the "bailout." A CNN poll on 1/16/09 reported that 86% believe it didn't work. People know unfairness when they see and feel it.
Will Obama initiate change that will begin to reverse this trend? He has few debts to the mass that elected him. They're mostly to his Wall Street funders rescued with public funds. The filter-down stimulus plan reflects this.
There's already reneging. Before the election the rhetoric about the failed Bush policies was vitriolic. Central to this failure was a tax system that had inordinately benefited the rich. Now Obama was never very ideological about it, that is calling for some wholesale overhaul of the tax system by returning, for example, to the days before Reagan obliterated its progressive structure. His calls are for some nebulous fairness to change course but not all that sharply or abruptly. So he's said recently that given the economic downturn we have to put any revision of the Bush tax cuts on hold; that it would be unwise at this time to raise taxes on the rich!
We need bold initiatives, unwelcomed by Wall Street, that confront the root problems of inequality. The tax system is crucial. Why can't the media educate us about it? Why is it that proposals to reverse the Bush tax cuts are called tax increases, which of course the masses will reject? No one wants their taxes to go up, least of all the lower and middle sectors who've bore the brunt of the shift that's followed these tax cuts in the first place!
As Bartels claims, the amount of money transferred from the public purse in the '01 and '03 tax cuts -- trillions of dollars -- is in effect the value of the increased inequality we now face, enough to wipe out deficits and pay for a stimulus package with teeth. And adding the Wall Street bailout into the equation, a direct transfer of value to the elite that has not filtered down, the deficit vanishes! Why isn't Obama calling for a reversal of this colossal unfairness, even demanding a payback?
Revisiting the tax issue is simply not on the agenda. The status quo is the state of fairness, and any change means raising taxes and of course redistributing wealth and, in John McCain's demagogic misrepresentation, "Class warfare!" Redistribution is an idea that only applies to policies that attempt to correct top-down redistributions that initiate the warfare. It's a one-way process, and this is largely why poverty persists.
To what extent does this reflect the lack of progressive appointments in Obama's cabinet?
Can Obama create a new mindset? As Robert Reich argues, unless there's a frontal assault on inequality, nothing much will really change. There's so many out there who simply don't have the spending power to kick-start this economy. They are so deeply in debt, as a result of the erosion of actual wages over the past 35 years, that they will continue to be a drag on the economy for some time to come.
The whole issue of debt has to be rethought. The windfall profits from usurious credit card policies need to be paid back in the form of debt cancellation. Obama needs to revisit the bank-backed bankruptcy law change from a few years ago that blames the victims of failed policies, and then restrict the amount of interest these companies can charge. And there has to be a change in how credit is evaluated. These policies have turned reliable consumers into unqualified borrowers overnight, but the rating agencies, themselves owned by elite corporations, blame the victims. This exclusion of potential consumers will retard the recovery.
Mortgage modifications are crucial. They will stabilize the market and fuel the recovery. Increases in property values are needed to fuel consumer confidence. Home ownership after all is how average Americans have tried to beat inequality. That notorious bailout is actually debt cancellation for the elite, not the spur to liquidity for mortgage borrowers it's claimed to be, as the evidence shows. Corporations have merely propped up their balance sheets and made credit more difficult to obtain, even eliminated parts of its work force. Bank of America recently announced the layoff of 35,000 employees, and is now asking for additional billion in bailout money!
Universalize debt cancellation and kick-start the process! We need a policy that overrides the greedy banks and socializes the process. As Roosevelt acknowledged when confronting the crisis of the early 30s, uncoordinated private profit-making interests can repress the productivity of the larger society. Greed can puncture the public welfare. This doesn't mean socialism, as the talk-radio rant claims. Now we have a "socialism" that marries corporate power to the state and disenfranchises people.
If foreclosures repress values and are bad for the economy, why does the elite resist this? The banks want to extract every bit of excess interest they can for as long as possible. Those with more of a stake, who have the resources to weather the storm, can buy up cheap assets and properties to secure new fortunes. As Naomi Klein has shown from her study of similar crises, it's during these downturns when the elite seize opportunities to shore up its position. The auctions of foreclosed properties are a boon!
The downturn in housing values is all-too real, but it's no natural "market correction" like Paulson and the "free" marketers say. How many Wall Street companies are now under investigation for fraud! Unregulated speculation has allowed the cash-rich to bid up housing prices all over the land, but especially in attractive coastal states like California. And as long as prices kept going up the usurious sub-prime loan practices were ignored. But these practices were clearly fueling the inflation, while providing access to first-time buyers who could never have qualified under "normal" conditions. The adjustable teaser rates could be absorbed since the continued rise in prices offset them by allowing refinancing options to bring payments way down and, in effect, provide the down payments few had in the first place. It worked for many and substituted for a housing policy that not even the Democrats could come up with!
This might have continued if defaults in the sub-prime market hadn't suddenly begun. But why did they? Because too many bought homes who couldn't afford them, the media that loves to personalize issues tells us, a sentiment echoed by many. It singles out the case of the clerk who bought a mansion on a part-time salary and should have known better! It's these bad apples who are to blame, we are told, and alleged to be quite numerous. It's these "irresponsible types" who've brought down the pyramid by withholding their payments, sending us on a downward spiral. There's no mention of how they got fruited. No investigation of the fraud that permitted the speculative gouging. No discussion of the changes over time that have altered homeowners' circumstances.
Why are rates teasing and adjustable in the first place! As Greg Palast has shown (AMASS #29), these rates are exploitation pure and simple. They mandate failure. The amount of interest a bank makes on a loan at even the lowest of rates is astronomical on even a moderately priced house. What is too high or low? Who says so and why? Built into these reactions, once we get beyond the gobbledygook about supply and demand in an unregulated industry, is the culture of privilege. It's the same unwritten code that puts CEO salaries in the stratosphere. Banks have priority. They get the "bailouts" and we get "welfare!" Shareholders get priority over those who don't own stock.
Those who craft the codes, written or not, and look the other way get their monies from the lenders, the financial elite. Their power thrives on policies that have fostered inequality for too long already. Power and resources beget more of the same, and especially the authority to frame the opinions about what it all means. And this means passing them down to us for approval. Eventually we get into the habit of accepting what's given to us.
A more stable financial system in the first place, driven by policies crafted from bottom-up with some vision about expanding home ownership, would've dampened the speculative boom and denied some of the ill-begotten gains to the elite whose actions further inequality. And if the rates had been more affordable in the first place, many would still be in their homes. Another circulating bit of media drivel is that it's simply unnatural for everyone own a home; there's a limit to home ownership and the market should dictate where the line is drawn. If home ownership was universalized, which should be central to democracy, we'd have crippling inflation. Therefore we need periodic market corrections!
This "free market" thinking will only ever restrict entry to Obama's middle class and keep the percentages constant. It's the same thinking that claims unions are a drag on business, that higher wages repress profits and make the economy less productive, and that we can't afford universal health care!
Well, markets aren't free in the first place. They're controlled by elite corporations who've grabbed excess market share thanks to the lax regulatory climate the corporate-endowed legislators maintain. They simply push the ideology that preserves their share, as Naomi Klein has shown.
Why is it that so many Europeans own their homes outright? A recent TA of mine, who couldn't afford to buy a house here, bought one in Germany! And he paid cash for it. Why is it that European states have universal health care, but we can't afford it? The myth here is that higher wages and more government involvement in the economy, what exactly these states have, are a drag on freedom and wealth creation. But as Bartels shows, it's the opposite. Elite-directed policies since WWII reveal that low wages go together with poorer overall performance; and stronger unions and higher wages are a spur to higher productivity. A better redistribution of wealth goes with policies that bring folks in and reward their contributions.
Unfortunately, as Bartels also shows, the folks whose fortunes are linked to this better redistribution vote against their interests. They don't make the connections!
So higher wages would, beyond making folks feel they're part of something, enable them to afford houses and contribute to the larger stability and productivity of the society. We need new partnerships between government, business and labor that release the power of performance for more citizens. Nothing less will bring the economy back. The only filter-down mechanisms we need now are those that initiate a multi-faceted assault on the culture of privilege.
Will Obama's team be up to the task? The rhetoric about solving the housing crisis, as with taxes, was stimulating before the election. It was claimed that a solution to this crisis was key to turning the economy around; that the structural problems in the housing market had to be cured before a real recovery could begin. Since then the rhetoric has changed. We await delivery of the Inaugural promises. The emotional investment of masses of people, especially Blacks, in this spectacle, and this person, portends many positives. Does it mean we'll get the change that matches these expectations, however diverse and conflicted they are? Certainly one common denominator is the belief in fairness and equality, those common hopes he constantly references. Will the power structure that got him here allow him to truly listen to the voices of the people he's vowed so often to carry with him? If he does, what will he do?
The persistent problem of our top-down democracy is that the elites are always to the right of the popular will and must continually manufacture consent. What is that "one nation" Obama believes he's tapped into? An imaginary network, a fantasy space, where we find our niches in a society riven with power imbalances; learn new ways to cope with and ignore the disparities? Interviewee after interviewee in the corporate press iterate the foregone conclusion: Obama's election means that anyone can realize their dreams in America. Certainly someone can! One gifted one, and one of the right ones, filtered up through the maze of barriers put in place by years of policies that distort the work ethic. He realized the American Dream. But will this experience lead to a quality education about what this "Dream" is really all about versus what it appears to be? The incredible and exciting emotional investment by so many in this image of success can immunize us from the fact that the "Dream" has become ever more elusive for too many. And it is a paradoxical idea at best anyway. If everyone out there with the potential and the drive to succeed like him goes at it, then what? They can do what?
The American Dream is an elixir that massages all of us with the idea that individual initiative is all we need. Those at the bottom can hope and dream and seek out all opiates to get them through the days of rage, while those at the top who might not have gone by the rules learn to forget how they got there. Policy makers must always have the idea in their heads as they craft legal arrangements for us that since they made it, the people do not deserve "welfare." Let 'em eat TARP!
While we, drugged on media experts, inevitably defer to the leaders who know better.