This has been a providential month for teachable moments. They have included the details of the government's civil fraud case against Goldman Sachs; the gruesome and needless corporate murder of miners in West Virginia; the BP oil blowout in the Gulf of Mexico; and then to complete the circle, the stock market going berserk because a technical error caused a domino effect of computerized automatic selling.
What do these events have in common? Every one of them demonstrates why the private profit motive cannot be relied upon without some steering or harnessing mechanism by government. A president committed to rallying public opinion to the cause of a more balanced economy would be all over these teachable moments, connecting the dots, rebuilding the ideology of managed capitalism, making the case for tougher government action in the public interest, and rallying the citizenry to his cause.
Let's review how President Obama has actually done. He gave a pretty good speech in New York April 22, on the Wall Street origins of the crisis. Reform efforts in the Senate are moving in a constructive direction, mostly thanks not to the White House but to the leadership of a couple of dozen progressive senators and the fact that Wall Street is so unpopular that even some Republicans have voted for strengthening amendments.
Though Obama did help steer Sen. Chris Dodd, the Banking Committee Chairman, off his earlier course of negotiating a weak bipartisan compromise with his Republican counterpart, Sen. Richard Shelby, the president has been mostly hands-off when it comes to the key amendments. His senior staff has been on the wrong side as often as not, with Rahm Emanuel and Tim Geithner actively lobbying key Senators to oppose Bernie Sanders' amendment to require an audit of the Fed. A slightly weakened version of the original Sanders measure was approved by the Senate last week.
On derivatives reform, Geithner was opposed to Senator Blanche Lincoln's amendment for greater transparency in derivatives trades and limits on the ability of large banks to trade for their own accounts. This in fact was the effort of Lincoln and Senate progressives to carry out a major part of the so-called Volcker Rule that Obama himself embraced last January in a desperate moment of populism after Scott Brown won the senate seat once held by Ted Kennedy. But Obama is not lending his own personal support to make this principle a reality, and his own Treasury Secretary is mostly on the wrong side of the issue -- working to protect Wall Street's lucrative derivatives book at the expense of the public interest in honest and transparent markets.
After the West Virginia mining disaster, which was caused by the company's repeated violations of mine safety orders, Obama gave a moving eulogy April 25 for the 29 lost coal miners. But the administration is too caught up in the politics of "clean coal" (a non-existent category) for the White House to have jumped on the tragedy to enlist public opinion to on behalf of a crackdown on a notoriously scofflaw industry and a more rapid move to renewable energy.
There are few silver linings to the Gulf oil spill. But one of them is that several billion dollars in public relations spending to re-brand BP as Beyond Petroleum is now about as effective as the company's ruined oil rig. Beyond Shame would be more like it--a gift for the public understanding of the risks of offshore drilling and inadequate safety enforcement, and the need to move even more quickly to renewable energy. Did I miss that speech? Obama's May 2 remarks in Venice, Louisiana, had exactly one line well down the speech on BP's responsibility for the mess.
"BP is responsible for this leak; BP will be paying the bill. But as President of the United States, I'm going to spare no effort to respond to this crisis for as long as it continues. And we will spare no resource to clean up whatever damage is caused. And while there will be time to fully investigate what happened on that rig and hold responsible parties accountable, our focus now is on a fully coordinated, relentless response effort to stop the leak and prevent more damage to the Gulf."
Well, yes....but this was--is--surely a moment to point out the gross irresponsibility of the oil industry and its Republican defenders, and the need for adult supervision as well as a post-petroleum economy. Rush Limbaugh, for one, has had a difficult time with the oil disaster. He initially suggested that this might be the work of enviro-nazi saboteurs ("What better way to head off more oil drilling, nuclear plants, than by blowing up a rig? I'm just noting the timing here.") When this proved too preposterous even for Limbaugh, he then both minimized the disaster and faulted Obama for not moving to assert leadership more quickly. Curiously absent from Limbaugh's rants was criticism of BP. But then, such criticism was largely absent from Obama's speeches as well, perhaps because of the president's awkwardly timed embrace of drill-baby-drill, in March.
Then came another gift from the progressive gods. Computerized trading of the kind that helps insiders get extremely rich, and does nothing for ordinary people, caused the stock market to lose more than a thousand points before it recovered to a loss of over three hundred. A more rudimentary version of this auto-pilot disaster was banned after the stock market collapse of October 1987. But in the intervening 22 years, the wise guys have figured out new ways to enlist computers to play the role of sorcerer's apprentice. The practice cries out for regulation.
So let's pause for a moment to review the bidding. The market economy has had a meltdown and regular people are still suffering. The administration is getting little credit for the half-steps that it has taken. The public is still uncertain whether government is part of the problem or part of the solution.
You might think, with these well timed gifts, that a progressive president would demonstrate leadership. Had the tables been turned, and the government rather than the private market perpetrated a series of disasters, you can just imagine how Ronald Reagan or George W. Bush and their strategists would have gone to town.
But after 16 months of pummeling by the right, this presidency is still pursuing his Quixotic quest for common ground. Obama's most notable speech in recent weeks was his May 1 commencement address at the University of Michigan. The White House had plenty of time to decide what message the president wanted to send. It was characteristic Obama and the president had some very good lines about the importance of government:
"Government is the police officers who are protecting our communities, and the servicemen and women who are defending us abroad. (Applause.) Government is the roads you drove in on and the speed limits that kept you safe. Government is what ensures that mines adhere to safety standards and that oil spills are cleaned up by the companies that caused them. (Applause.) Government is this extraordinary public university -- a place that's doing lifesaving research, and catalyzing economic growth, and graduating students who will change the world around them in ways big and small. (Applause.)"
But then he said this:
Now, the second way to keep our democracy healthy is to maintain a basic level of civility in our public debate....[so] if you're somebody who only reads the editorial page of The New York Times, try glancing at the page of The Wall Street Journal once in a while. If you're a fan of Glenn Beck or Rush Limbaugh, try reading a few columns on the Huffington Post website. It may make your blood boil; your mind may not be changed. But the practice of listening to opposing views is essential for effective citizenship. (Applause.) It is essential for our democracy. (Applause.)
Now, while we should appreciate the plug for the Huffington Post, there is something profoundly offensive about the presumption of moral equivalence....as if we are fringe left the way Limbaugh is fringe right. The fact is that Limbaugh, Beck, and the Wall Street Journal routinely lie. HuffPost and the New York Times editorial page don't. And while writers like me push Obama to be more resolute and more effective, we don't demonize him. Obama's juxtaposition of the moderate left and the lunatic right as both worthy of attention reminds me of Robert Frost's definition of a liberal as the fellow who is so high minded that he won't take his own side in an argument
Where is a speech like this?
"My fellow Americans, in the past weeks we have witnessed a string of avoidable tragedies caused by the excesses of corporations and their executives. Millions of innocent people have suffered economic losses and dozens have lost their lives. The heedless rapacity of BP will cause suffering to the fishing industry, damage to the Gulf's fragile ecology and new economic losses to a region that is only beginning to recover from Hurricane Katrina.
"The mining disaster is another reason why we cannot rely on corporations to act in the public interest. Unless government vigorously policies mine safety, more miners will lose their lives, more wives will lose husbands and more children will lose fathers. But better enforcement of oil and coal safety will never solve the entire problem. We as a nation must do what BP cynically professed it was doing. We must move beyond petroleum and beyond carbon.
"And the mother of all economic catastrophes, the financial collapse, is further proof that markets must not be left to their own devices. We need the toughest possible regulation of Wall Street so that the rest of the economy can recover.
Gentle reader, presidents on occasion have actually made speeches like this. Roosevelt did. Lyndon Johnson did during the civil rights era. You could look it up. They used events to move public opinion. They built popular support for progressive interventions.
This president has the capacity to be a great teacher. But we are still waiting for him to seize the moment and the moment is passing him by.
Robert Kuttner's new book is "A Presidency in Peril." He is co-editor of The American Prospect and a senior fellow at Demos.