Obama style change: everything remains the same, but his marketing is better

Posted: June 29, 2009 in society
Tags: , ,

“Business Liberalism”: The Real Meaning of Obama’s “Pragmatic” Reluctance to “Tilt at Windmills”

By Paul Street
Paul Street’s ZSpace Page / ZSpace


shadow bankingEarly last April the New York Times published an article with an ironic title: “In Cuba , Change Means More of the Same.”  This “news” item reported that “rather than dismantling Cuba ‘s socialist framework,” Cuba ‘s President Raul Castro “seems to be trying to make it work more efficiently.” Castro, the Times reported, sought to keep power concentrated “at the top.”[1]

But what has U.S. President Barack Obama – Mr. “Change” himself – tried to accomplish other than to make the American corporate profits system “work more efficiently” without “dismantling the [capitalist] framework” and with power (and wealth) still concentrated “at the top?” As the Times acknowledged last March in an article titled “English-Speaking Capitalism on Trial,” Obama and his neoliberal partner Gordon Brown, the British Prime Minister, have “focused on ways of revitalizing the [existing] system….  Even as both men have embarked on enormous increases in public-sector spending,” Times correspondents John Burns and Landon Thomas noted, “they have maintained that the solutions to the crisis lie in reawakening the markets and recapitalizing the banks rather than tearing at the system’s foundations.  And both, when they respond to private anger at the private sector, have seemed more geared to managing anger than stoking it.”[2] As the prolific Marxist geographer David Harvey observed on the left television news and commentary show “Democracy Now” last April, “what [the Obama team is] trying to do is to reinvent the same system” – to “reconstitute the same sort of capitalism we have had over and over again over the last thirty years in a slightly more regulated, benevolent form” that doesn’t “challenge the fundamentals.” [3]

Consistent with Burns, Thomas, and Harvey ‘s judgment, the Obama White House’s mild June 2009 plan to “re-regulate U.S. financial markets for the 21st century” left the basic power of the nation’s elite “bankster” class intact.  While praising the Obama plan’s efforts to create a strong consumer financial regulatory body, to reduce speculative betting with higher leverage standards, to prevent predatory and reckless lending, and to advance the White House’s power to takeover failing, systemically significant firms, the liberal Washington DC-based corporate and financial reform activist Robert Weissman noted the administration’s plan contained four basic flaws and would thus continue to leave the financial sector and the broader economy vulnerable to future crises.  First, Obama’s proposal does “not propose to do anything serious about executive pay and top-level compensation for financial firms.”  It fails thereby to address basic questions of economic justice and leaves intact a “Wall Street bonus culture” that “gives traders and executives alike an incentive to take big bets – because they get massive payoff if things go well, and don’t suffer if they go bad, or go bad sometime in the future.”

Second, Obama proposes no serious structural reform of the financial industry.  His refusal to return to “Glass-Steagall” principles by re-separating (on the model of the 1930s Glass-Steagall Act, repealed under Bill Clinton) commercial banking from other financial activities including the speculative world of investment banking and to reduce the size of gargantuan – “too big and interconnected [and powerful] to fail” – promises to leave the nation’s economy and politics far too beholden to concentrated wealth and power.

Third, the plan’s regulatory scheme includes a dangerous “regulatory exemption for customized derivatives — a loophole that will create lots of business for corporate lawyers ready to change terms in derivative contracts so that they differ somewhat from standardized terms.” It also fails to ban various unjustifiable and dangerous financial instruments like the notorious credit default swap (denounced by international financial mogul George Soros as a dangerous “weapon of financial mass destruction”) or “to require that exotic financial instruments be subjected to pre-approval requirements.”

Fourth, Obama’s financial plan contains no measure “for giving consumers the power to organize themselves to advance their own interests. Simply mandating that financial firms include in bills and statements (whether mailed or e-mailed) an invitation to join an independent consumer organization would facilitate tens of thousands of consumers – and likely many more – banding together to make sure the regulators do their job, and to prevent Wall Street from ‘innovating’ the next trick to scam borrowers and investors.” Advocates like Weissman have called for this basic mandate to no avail, predictably enough given the fact that, as Senator Majority Whip Richard Durbin (D-IL) recently noted, “the banks are still the most powerful lobby on Capitol Hill. And they frankly own the place.” [4] Wall Street has invested $5 billion in U.S. politics over the last ten years and was the leading campaign finance sponsor of Hillary Clinton, John McCain, and Barack Obama during the 2008 election cycle.

Revealingly enough, Obama’ financial plan won approval from the leading neoliberal Anglo-American paper The Financial Times. Praising Obama’s proposals for “marry[ing] dynamism and safety,” the financial organ notes that “they work largely with the grain of the market as it exists today, seeking to make it more stable and better at pricing risk by increasing capital…The plan does not ban dangerous financial products, break up complex financial institutions or enforce any structural division of the industry along the lines of the Glass-Steagall Act that followed the crash of 1929.”

According to Financial Times correspondent Edward Luce, the Wall Street-friendly Obama plan “embodie[s] the art of what is politically possible,” with the boundaries of acceptable change determined through “months of scrambled consultation between the administration of Barack Obama, U.S. president, and industry representatives” and by “a skillfully threaded series of compromises between a diverse galaxy of regulators, Capital Hill barons, and industry lobby groups.” Luce is pleased at the absence of any proposal to “return to a two-tier banking system” and of “any trace of the original plan to produce a drastic consolidation of banking regulators.” The paper’s editors praise Obama’s regulatory reforms as “comprehensive and careful.”  “Certainly,” Luce exults, “most of the financial sector lobby community is happy with what has
emerged.” [5]

According to Obama the day before his financial reform plan was rolled out, it’s  all about getting the best deal possible for the American people in the real world.  “We want to do it right,” Obama said, “But we don’t want to tilt at windmills” [6] – a rather graphic statement of his belief that the lords of finance represent a higher power than the U.S. presidency, the federal government, and, dare we say, the American people (identical to the government in democratic theory).

In a Harper’s Magazine article that appeared on news-shelves right before Obama’s June 2009 financial regulation proposals were made public, Kevin Baker provided some interesting historical reflections on Obama’s distinctly un-radical taste for deliberation, compromise, and incrementalism.  In Baker’s view Obama’s policy is being driven by false realism and fake pragmatism in “one of those rare moments in history when the radical becomes pragmatic, when deliberation and compromise foster disaster.” Like the Republican U.S. president Herbert Hoover (1929-1933), Baker argues, “Barack Obama is a man attempting to realize a stirring new vision of his society without cutting himself free form the dogmas of the past – without accepting the inevitable conflict.” Further:

“Just as Herbert Hoover came to internalize the ‘business progressivism’ of his era as a welcome alternative to the futile, counterproductive conflicts of an earlier time [the Progressive Age of 1890-1916 – P.S] , so has Obama internalized what might be called Clinton’s “business liberalism” as an alternative to useless battles from another time [the 1960s – P.S.]  – battles that liberals, in any case, tended to lose.”

” Clinton ‘s business liberalism, however, is a chimera, every bit as much a capitulation to powerful and selfish interests as was Hoover ‘s 1920s progressivism. [It] espous[es] a ‘pragmatism’ that is not really pragmatism at all, just surrender to the usual corporate interests.  The common thread running through all of Obama’s major proposals right now is that they are labyrinthine solutions designed mainly to avoid conflict.  The bank bailout, cap-and-trade on carbon emissions, health-care pools – all of these ideas are, like Hillary Clinton’s ill-fated 1993 health plan, simultaneously too complicated to draw a constituency and too threatening for Congress to shape and pass as Obama would like.  They bear the seeds of their own defeat.”

“Obama will have to directly attack the fortified bastions of the newest ‘new class’ – the makers of the paper economy in which he came of age – if he is to accomplish anything…..But for the moment, just like another very good man [Herbert Hoover], Barack Obama is moving prudently, carefully, reasonably toward disaster.”[7]

Whether or not Barack Obama is a “very good man,” hoping for him to someday meaningfully molest the elite bankster class is somewhat like wishing for a lemon to be an apple. “On condition of anonymity,” the investigative journalist Ken Silverstein reported in the fall of 2006, “one Washington lobbyist I spoke with was willing to point out the obvious: that big [Wall Street] donors would not be helping out Obama if they didn’t see him as a ‘player.’ The lobbyist added: ‘What’s the dollar value of a starry-eyed idealist?'”[8.] Obama wouldn’t have been selected as a viable presidential contender if big business had not determined his utility for the corporate and Wall Street agenda.

Some of Obama’s unwillingness to buck the money class likely reflects political calculation relating to the grossly outsized political influence exercised by concentrated wealth under the United States’ plutocratic “dollar democracy.”  But it probably also reflects his basic and “deeply conservative” [9] faith in the business-ruled capitalist order and in existing class hierarchy – a problem that I documented at length in my 2008 book Barack Obama and the Future of American Politics [10]. It’s who he is. It’s also what his political party – once accurately described by the former Nixon strategist Kevin Phillips as “history’s second most enthusiastic capitalist party” [11] – is all about. There are no anomalies or surprises here. Progressives should acknowledge and process these harsh realities and act accordingly, without illusion.


  1. Ian Urbana, “In Cuba , Change Means More of the Same, With Control at the Top” New York Times, April 6, 2009.
  2. John Burns and Landon Thomas, “English-Speaking Capitalism on Trial,” New York Times, March 29, 2009, section 4, p.4.
  3. “Marxist Geographer David Harvey on the G20, the Financial Crisis, and Neoliberalim,” Democracy Now (April 2, 2009), read at http://www.democracynow.org/2009/4/2/marxist_geographer_david_harvey_on_the
  4. Robert Weissman, “The Good, the Bad, the Ugly: Financial Sector Regulation,” Huffington Post (June 17, 2009), read at http://www.huffingtonpost.com/robert-weissman/the-good-the-bad-the-ugly_b_216825.html
  5. Krishna Guha, “US Seeks to Marry Dynamism and Safety,” Financial Times, June 18, 2009, p.2; Edward Luce, “White Paper Sets Out Skilful Compromises,” Financial Times, June 18, 2008, p. 3; editors, “Redesigning the Financial Rulebook,” Financial Times, June 18, 2009, p.10.
  6. Quoted (with approval) in Luce, “White Paper.”
  7. Kevin Baker, “Barack Hoover Obama: The Best and the Brightest Blow it Again,” Harper’s Magazine (July 2009), p.37.
  8. Ken Silverstein, “Barack Obama, Inc.: The Birth of a Washington Machine,” Harper’s (November 2006),
  9. As the New Yorker’s Larissa MacFarquhar noted in a May 2007 Obama portrait titled “The Conciliator,” the solutions offered in Obama’s book, speeches, and town-hall meetings were “small and local rather than deep-reaching and systemic….When he talks about poverty,” MacFarquhar noted, “he tends not to talk about gorging plutocrats and unjust tax breaks: he says that we are our brothers’ keeper, that caring for the poor is one of our traditions.” Such refusal to advance large reform – e.g. single payer health insurance on the Canadian model – reflected what MacFarquhar found to be Obama’s “deeply conservative” take on history, society and politics: “In his view of history, in his respect for tradition, in his skepticism that the world can be changed any way but very, very slowly, Obama is deeply conservative. There are moments when he sounds almost Burkean. He distrusts abstractions, generalizations, extrapolations, projections. It’s not just that he thinks revolutions are unlikely: he values continuity and stability for their own sake, sometimes even more than he values change for the good.” See Larissa MacFarquhar, “The Conciliator: Where is Barack Obama Coming From?” The New Yorker (May 7, 2007).
  10. Paul Street , Barack Obama and the Future of American Politics. Pp. 34-58. For some remarkable statements of Obama’s faith in capitalism (which he called “our greatest asset” and “a system that for generations has encouraged constant innovation, individual initiative and efficient allocation of resources” in his 2006 campaign book The Audacity of Hope) and in “the market” (whose core virtues he called “beyond question” in his Inaugural Address), see Barack Obama, Barack Obama, The Audacity of Hope: Thoughts on Reclaiming the American Dream (New York: Crown, 2006), pp. 149-50; Paul Street, “‘ We Will Not Apologize for Our Way of Life:’ Left Reflections on Barack Obama’s Not-So Non-Ideological Inaugural Address,” ZNet (January 24, 2009), read at http://www.zmag.org/znet/viewArticle/20356.
  11. Kevin Phillips, “A Capital Offense: Reagan’s America ,” New York Times Magazine (June 17, 1990), quoted in Lance Selfa’s excellent left study The Democrats: A Critical History ( Chicago : Haymarket, 2008), p.12.
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