President-elect Barack Obama sounds progressive when he speaks about the economy, but his appointments to key economic positions raise questions about whether he is prepared to govern as one.
Lawrence Summers, in particular, who Obama plans to appoint as director of the National Economic Council, has what can best be described as a centrist if not center-right record on economic matters, advocating on behalf of NAFTA and banking deregulation during the Clinton administration.
The likely treasury secretary, Timothy Geithner, is a longtime bureaucrat and avowed political agnostic who, like Summers, is a disciple of free-trader Robert Rubin.
It is an economic team that is, as Chris Hedges wrote on Truthdig.com, heavy with “the elites who created the mess.”
Obama, by relying on Rubin’s disciples, is not offering change. He needs to “radically redirect the nation’s resources to assist the working class and the poor,” Hedges writes, or “we will become a third-world country.”
“We will waste gargantuan amounts of money we cannot afford on our military, our national security state and bloated corporations while we damn the middle and working class to the whims, idiocy and greed of an entrenched, corporate oligarchy,” he writes. “Obama’s appointments of Timothy Geithner as treasury secretary and Lawrence Summers as director of the National Economic Council are ominous signals that these elites remain entrenched.”
At the same time, Obama is preparing to push a rather aggressive economic plan that he says will create 2.5 million jobs. During a Nov. 24 press conference announcing his economic team, Obama unveiled the broad outlines of a “recovery plan for both Wall Street and Main Street,” one that he says “stabilizes our financial system and gets credit flowing again, while at the same time addressing our growing foreclosure crisis, helping our struggling auto industry, and creating and saving 2.5 million jobs—jobs rebuilding our crumbling roads and bridges, modernizing our schools, and creating the clean energy infrastructure of the twenty-first century.”
The stimulus package could carry a price tag of “between $500 billion and $700 billion,” according to the Washington Post, though the president-elect declined to estimate its cost.
He tasked his new team with developing recommendations with the goal of having legislation ready by the time he takes office in January.
“With our economy in distress, we cannot hesitate or delay,” he said.
Robert Borosage, co-director of the liberal Campaign for America’s Future, says the Obama recovery plan is far more important than the people he appoints to his administration.
“It’s not the personnel, it’s the policy,” he said in a Nov. 24 statement. “And on this, Obama has been clear. He’s announced a massive recovery plan based on putting people to work with public investment in areas vital to our future.”
He said the economic meltdown “makes Rubinomics irrelevant.”
“Deficit spending must go up, finance must be re-regulated, trade imbalances must be reduced and manufacturing can no longer be scorned,” he said.
“Obama is choosing experienced hands for the crisis, trusting that their experience does not impede the new thinking needed to get us out of this hole. He’ll set the direction. And so far, he’s on course.”
I think he may be overly optimistic. I want to give Obama the benefit of the doubt, but he has been sending mixed signals on the economy, his obviously progressive plan being at odds with his center-right appointments. Borosage may view these “experienced hands” as people who get things done, and Obama may like having people around him who challenge his thinking, but by burrowing Summers so deeply into his inner circle, Obama has given one of the architects of economic crisis precious access that populists lack.
That access—as previous administrations prove—is likely to result in a creeping centrism. “Rubinomics”—which called for balanced budgets, deregulation and free trade—took hold in the Clinton administration even though Bill Clinton talked of enacting a small public works program as a financial stimulus during his campaign.
The only way to counteract the access and to keep Obama’s eyes focused on the Keynesian approach is for progressives to press the issue—by organizing and creating a momentum for public investment that will give Obama the space to take the kind of bold initiatives he has been promising. It is up to us to make sure he keeps his promises.
Hank Kalet is a poet and online editor for the Princeton Packet newspaper chain in central New Jersey. Email grassroots@comcast.net. See his blog, Channel Surfing, at www.kaletblog.com.
From The Progressive Populist, December 15, 2008
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