by Randolph T. Holhut
American Reporter Correspondent
November 18, 2008
OBAMA'S FIRST PRIORITY: STOP THE LOOTING
DUMMERSTON, Vt. -- President-elect Barack Obama clearly won the 2008 presidential election because of the market meltdown.
While John McCain and Sarah Palin were refighting the culture wars of the 1960s, Obama turned his campaign into a referendum on deregulation, trickle down economics and tax giveaways to the wealthy and corporations. He offered a break with the policies that have dominated mainstream economic discourse since Ronald Reagan.
However, now that the election has been won, Obama is under pressure to go back on his campaign promises. Countless pundits are chanting the familiar mantra that's been directed at every Democratic politician for the past 40 years - govern from "the center."
Now, the course of his presidency will be determined by whether he ignores that advice.
If this election showed anything, it was that a majority of Americans voted for a return to strong government action on behalf of economic fairness. This means raising taxes on the wealthy and corporations, imposing regulation and discipline on the financial markets. fixing a dysfunctional health care system and building an economy that creates new jobs while healing the environment.
But none of this is going to happen unless the grassroots movement that carried Obama to victory musters the same energy that elected Obama and a broader Democratic majority in Congress. It is up to all who voted for Obama and the Democrats to hold them accountable to their campaign promises, and make it clear that there will be a price to pay if they don't.
The first and most urgent task for the Obama team is to halt the economic coup known as the economic bailout.
Naomi Klein, author of "The Shock Doctrine" and a sharp observer of globalization, has spent much of her time over the past month uncovering the loopholes and conflicts of interest embedded in the Treasury Department's plans. What she found she compared to what the European colonial powers did when they no longer keep control over the indiginous population - "a final frantic looting of the public wealth before they hand over the keys to the safe."
Klein sees the $700 billion "rescue plan" as the Bush Administration's final heist. "Not only does it transfer billions of dollars of public wealth into the hands of politically connected corporations (a White House specialty), but it passes on such an enormous debt burden to the next Administration that it will make real investments in green infrastructure and universal health care close to impossible," she recently wrote for The Huffington Post. "If this final looting is not stopped (and yes, there is still time), we can forget about Obama making good on the more progressive aspects of his campaign platform, let alone the hope that he will offer the country some kind of grand Green New Deal."
The Bush Administration has not being tough enough on the banks that are receiving assistance from the bailout plan. It has already committed $250 billion for the purchase of bank stock, giving financial institutions an infusion of cash that the government hopes they will use to resume more normal lending operations, But instead of lending the money, they are using it to pay dividends to shareholders and salaries to top executives.
The supposed main point of the plan - government purchases of troubled assets - has been scrapped. While homeowners are struggling with mortgage foreclosures, another $40 billion was handed out this week to troubled insurance giant American International Group. Other sectors of the economy have their hands out also. When he met with President Bush at the White House on Monday, Obama urged him to support legislation being drafted by Congressional Democrats that would give General Motors, Ford and Chrysler access to $25 billion of the bailout funds.
These are the actions that support Klein's view that the bailout is one last spasm of looting by the Bush Administration. Unfortunately, in the change-over of Administrations, people may not notice that the departing Bush team are trying to lock into place far reaching pro-corporate policies. They want to dramatically restrict future possibilities for real change. That has been one of the subtexts of the bailout. But even that pales before the real motivations for the rescue plan.
"Every day it becomes clearer that the bailout was sold on false pretenses," she wrote in the Nov. 17 issue of The Nation. "It was never about getting loans flowing. It was always about turning the state into a giant insurance agency for Wall Street - a safety net for the people who need it least, subsidized by the people who need it most."
Klein believes Obama should use the moral authority gained through his election to call for "a freeze on the dispersal of bailout funds - not after the inauguration, but right away. All deals should be renegotiated immediately, this time with the public getting the guarantees."
The markets won't like it, but she believes it is critical not to reward the people who caused the economic crisis and to use this money for more pressing needs. If this does not happen, there is little hope for an Obama Administration to deliver on its promise of change.
Randolph T. Holhut has been a journalist in New England for nearly 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com.