The election on November 4, 2008 has brought us full circle from the events of September 11, 2001.
People all over the world mourned the destruction of the twin towers in New York City because this city is the universal city, a living experiment in coexistence. Likewise, people everywhere celebrated Obama's election last week because he embodies some of the most cosmopolitan trends in contemporary civilization.
What will Obama do as President of the United States? In my view, this is not the most pressing question of the moment.
Rather, the most fundamental questions right now are: one, do we really live in a democracy, and two, who is the President, or more precisely, what is the President's role in our society?
Take the events of October 13. That Monday afternoon, Treasury Secretary Henry Paulson invited the CEOs of nine of the largest U.S. banks to his office and presented them with a one page document to sign. This was not a request. The bankers had little choice but to sign.(1)
The document laid out the terms for partial government ownership of the banks through the purchase of stock by the Treasury. We could fairly describe this as a limited nationalization of the US financial system, though the government itself has been careful not to use the N-word.
We're all familiar with the events leading up to Paulson's meeting with the bankers. A global credit crisis threatens the economic health of individuals, communities, cities, and entire countries across the world. Now there is a recession in the "real" economy that has led to the highest unemployment rate in more than a dozen years, and that appears to be getting deeper.
Let's take up the first question in light of these events: Do we really live in a democracy? (2)
Consider the words of Keith Lenkowski, a barber in a small town in western Massachusetts. Lenkowski says his clients are "tired and scared." (3)
Consider the thousands of workers in Janesville, Wisconsin, who lost their jobs when General Motors announced, on the same day that Paulson met with the bankers, that it was closing its plant there. A local union official said the town's residents were willing to do virtually anything to keep G.M. there. "If G.M. wants to build lawn chairs in Janesville, we'll do it." (4)
Do we live in a democracy if its citizens are running tired and scared of their future? If they are reduced to begging their employer for the privilege of making lawn chairs just so they can survive?
Yes, we do live in a democracy. However, it is a capitalist democracy. It is a system in which we have some precious political and legal rights--not the least of which is the right to vote--but in which the most fundamental right is the right to make profits. Those with the greatest capacity to do so have the most political power in this kind of democracy.
Our elected government's primary function is to safeguard this system. By this I don't mean just that "the government favors corporations and rich people," though it often amounts to that. The government's job is to protect the system as a whole, not a given corporation or business, however powerful it may be. At a moment of profound economic crisis, it told the nine bankers they had to accept partial nationalization, even though they didn't want it.
Our government is, to paraphrase Karl Marx, the executive committee of the capitalists.(5)
This brings us to the second question: Exactly who is Obama, or more precisely, what is his or any president's job? He is the chief executive of this board of directors. His primary responsibility, regardless of what we want him to do, regardless of his own desires, is to safeguard the most sacred right in capitalist democracy, the right to make profits.
Obama appears to be on his way to becoming one of the great presidents. His leadership may yield substantial improvements in domestic conditions and a less openly warlike foreign policy. Ultimately, however, he and his party will operate within the constraints of capitalist democracy.
What we really need is an elected government that is an executive committee of the people, not of the largest capitalists. We need a people's democracy, not a capitalist democracy.
What will it take to make this happen? We will have a people's democracy only when the financial system operates primarily in our interests rather than in the interests of those with the greatest capacity to make profits.
Is this mere fantasy? I don't think so. The same economic crisis that now threatens to unravel our lives also shows the way to a more democratic future.
Consider again what the government did on October 13 and is continuing to do. It is using our money to buy equity in the financial system. We, the people, have become the lenders of last resort to the bankers.(6)
This gives us a once in a lifetime opportunity. If we are the ultimate lenders who keep the system going, we have the same right that all lenders do, namely to set conditions for our loan.
So the most important question now is not what Obama will or won't do as President. Rather, it is: What are we going to demand from the government in return for our money?
Our answer will determine whether the market continues to be our master or whether we take ownership of it. It will determine whether we remain a capitalist democracy or move closer to a people's democracy.
Next month: some proposals.
NOTES
1. Damien Paletta et al., "At moment of truth, U.S. forced big bankers to blink." Wall Street Journal October 15, 2008. Mark Landler and Eric Dash, "Drama behind a $250 billion bank deal." New York Times October 14, 2008.
2. See my previous posting and resulting comments for a lively discussion of this question: "Masters of the Universe II: The questions neither Obama nor McCain will answer." Huffington Post October 8, 2008.
3. Kristin Palpini, "Uncertain economy cuts closer to home." Daily Hampshire Gazette October 30, 2008.
4. Bill Vlasic and Nick Bunkley, "General Motors: Driven to the brink." New York Times October 25, 2008.
5. "The executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie." Karl Marx and Friedrich Engels, Communist Manifesto. First published in 1848.
6. The Treasury's actions are not being financed entirely through tax revenues. Like all governments, the U.S. government also borrows money by issuing bonds. The actual mix of taxes and bond issues used to pay for the Treasury's purchase of stock in the banks is difficult to determine. According to one source, individual taxes pay for about half of all federal spending.