Friday, July 1, 2011

Obama the Fighter?

Consider the words in this presidential speech:
We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today.
These words could well have been spoken by President Obama since they are as relevant today as in 1936 when Franklin Delano Roosevelt delivered this campaign speech. While it is easy to think that today’s polarized political atmosphere is worse than it’s ever been, that is hardly so.  In times of economic stress, there is plenty of fear and worry to go around – along with those who would like to exploit these for their own political gain.  And what period in our history had more economic stress than the Great Depression?

Perhaps the biggest battle between those on the political left and political right is over how active the government should be in regulating the economy to make sure that it works well for everybody.  Those on the left usually subscribe to the Keynesian economics school.
Keynesian economics advocates a mixed economy—predominantly private sector, but with a large role of government and public sector—and served as the economic model during the later part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the stagflation of the 1970s. The advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought.
On the other side are those on the political right, most notably those in the Austrian School of economics who believe that less government intervention in the economy is better and more government intervention leads to socialism.
Austrian economist Friedrich Hayek criticized Keynesian economic policies for what he called their fundamentally collectivist approach, arguing that such theories encourage centralized planning, which leads to malinvestment of capital, which is the cause of business cycles.
What makes it so difficult to take sides on is that on one hand total government control of the economy doesn’t work as the downfall of many Communist nations has demonstrated. Even China has resorted to some free market economy ideas and its takeover of Hong Kong has not dimmed its free market vigor. But no government control whatsoever of the economy doesn’t work either. Lack of adequate regulation can cause large numbers of people to get hurt as the recent Wall Street meltdown demonstrated. And what about a safety net for those who are in distress through no fault of their own? So there is a middle ground that probably works best. But where is that middle ground? That is where reasonable people disagree.

But back to FDR and the Great Depression. The economy was in massive upheaval with huge numbers (even compared to today) of unemployed approaching 25%. FDR’s Republican predecessor Herbert Hoover’s agenda of letting the free market solve the crisis on its own clearly wasn’t working so FDR decided that the government had to get involved in the form of the New Deal which in effect, was a massive government injection of demand into the economy to get it running again. And while the New Deal certainly helped in those grim times, the country didn’t finally escape the Great Depression until World War II which although it was fought to preserve our liberty, it was in effect a massive government spending program that generated jobs.

But despite the crying need for government help in this dire situation, FDR still ran into bitter opposition from those on the political right. So what does he do? Reasoning and compromise are the first choices. But in the face of such intractable opponents, FDR decided that the only way to make progress was to fight as in these passages from the same speech.

They are unanimous in their hate for me—and I welcome their hatred.

I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master.
But while FDR chose to take the fight to those who were against him, President Obama has chosen to use reasoning and compromise to try and achieve his ends. And normally, this is the way the political process works. But he is dealing with a Republican party whose Minority Leader, Mitch McConnell said that “The single most important thing we want to achieve is for President Obama to be a one-term president.” And the parts of the Republican Party who may well be willing to deal with President Obama do so at their own peril when the even more militant Tea Party activists get done with them.

FDR did much to take his case to the people in the form of his famous fireside chats  back when radio was each household’s principal link to the world.

During his first term as Governor of New York, Roosevelt faced a conservative Republican legislature so during each legislative session he would occasionally address the citizens of New York directly. He appealed to them for help getting his agenda passed. Letters would pour in following each of these "chats," which helped pressure legislators to pass measures Roosevelt had proposed. He began making the informal addresses as President on March 12, 1933, during the Great Depression.
Today President Obama faces an economy that is generally considered to be the worst since the Great Depression. And like FDR he is facing equally bitter opposition, some of those who also hate him whether it is because of his race or otherwise. 

But fighting means occasionally losing and getting ones nose bloodied. However, it seems as though the president’s ego doesn’t allow him to be on the “losing” side of a fight even if it’s only temporarily.

A notable example that comes to mind was the so-called public option during the negotiations on health care reform. In the absence of a single-payer system (which former Illinois State Senator Obama supported but then later deserted as president) the public option was the only way that private insurance companies would have enough competition to keep the system honest. So he supported the public option until it became apparent that there would probably be enough votes in Congress to defeat it. Then he became strangely silent on the issue.

It’s easy to say that whatever President Obama is in favor of, the opposition party will be there to thwart him. But leadership is about fighting for what one thinks is right even if it means being on the losing side once in a while. Yes, he may well be voted down in Congress but the president also has the powerful bully pulpit at his disposal to take his case to the people, just like FDR successfully did with his fireside chats. If he were to get enough people on his side by using his considerable persuasive powers, he could well prevail on a number of important issues.

In addition, presenting his case to the people would have another tremendous benefit. It would engage the average citizen in the political process – something that is sorely lacking in this age of political control by the moneyed and corporate interests.

Right now those moneyed and corporate interests are having it their way. In the last decade, the rich have become much richer while those in the middle and lower classes have struggled. Large corporations have done very well, but those who work for them have struggled. For those on the right, their priority is now cutting government spending presumably to try and cut the deficit that they have largely created over the last 10 years.

But severely cutting government spending during a period of high unemployment only tends to create more unemployment. And make no mistake, unemployment is our most urgent short-term crisis in need of attention. In line with the Keynesian economics that worked for FDR, government has to be the spender of last resort to boost the economy and create more jobs. Simply putting more money into the hands of people at the top with the hopes of it “trickling down” simply hasn’t worked.

But those people at the top have somebody to fight for them. And that is usually those on the political right. Although they obscure things by raising social issues like abortion, gay rights, and gun control, the predictable result of their policies is that those on the top of the economic food chain are the beneficiaries to the detriment of others.

Those in the middle and lower classes need someone to fight for them too! President Obama was elected in 2008 as the man to do that job. But he has disappointed so many on the left who can only wonder if he is really on their side but is unwilling to fight for what he believes in. Or even worse, is he just more of a corporate centrist than the populist fighter for the middle and lower classes he claimed to be during the campaign?

Without a primary challenger, the question becomes irrelevant. For those who feel that electing a Republican president would be a disaster, like it or not, President Obama is the only hope for our economy getting any better.

A couple of crucial tests are coming up.

One is the August 2nd upcoming deadline on raising the debt ceiling. Most observers feel that not raising the debt ceiling by the deadline would place the US in default and have catastrophic consequences on the world economy. While President Obama must agree to some spending cuts, he must also fight to raise taxes on the wealthiest to help give the government the revenues it needs to operate. The Republicans will undoubtedly resist. But the majority of the electorate is in favor of these tax increases and will be on the President’s side.

And if the unemployment numbers do not markedly improve by the 2012 election season, our cool and calculating president may then decide that this may lose him the election and he will then be finally forced to fight for programs that will create jobs.

So we may well make President Obama into a fighter after all whether it is by his choice – or not!

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