Obama and the Derivatives Merchants
by BAR executive editor
Glen Ford
"...in many respects, working with [Barack Obama] will be very
much like working with President Clinton.... I think he will be just fine." - Top
Obama adviser Robert Rubin, former Clinton Treasury Secretary and Goldman Sachs
chair, currently an executive with Citigroup, August 28, 2008.
The "progressive" Barack Obama that many supporters
imagine is itching to break free once his corporate host's body is securely in
the White House, remains dormant. Not even the groans of finance capital's
collapse can waken him - a strong indication that no such progressive inner
Obama exists.
Certainly the progressive Obama was nowhere to be found
when the candidate endorsed the $700-plus billion "cash for trash" Wall Street
bailout. So eager was Obama to "save" the bankers, he forgot which party he was
supposed to belong to and offered to allow Bush Treasury Secretary Henry
Paulson to keep his job in an Obama administration. Although the offer was
coached in terms of facilitating a smooth "transition" from one regime to
another, it is yet another telling indication that, in January, the baton will
essentially be passed from one finance capital team wearing red shorts to
another finance capital team in blue.
"Obama performed the bailout functions expected of him by
his biggest financial backers: Wall Street."
Goldman Sachs doesn't much care which of the big business
parties wins, so long as the rich remain in power. Paulson is a former CEO of
Goldman Sachs, as is Obama's top economic advisor, Robert Rubin, who served as
Bill Clinton's Secretary of Treasury. Corporate politics is nothing if not
incestuous. When Rubin says that working with a President Obama "will be very
much like working with President Clinton," he means that the elected players
are eminently replaceable, while corporate guys are permanent. Obama "will be
just fine" as a front for finance capital's continued rule.
When the crunch came in September, Obama performed the
bailout functions expected of him by his biggest financial backers: Wall
Street. After the first attempted heist was thwarted when an outraged citizenry
laid electronic siege to the U.S. Capitol, Obama smothered the holdouts with
promises to make things right once in the Oval Office. All but eight members of
the Congressional Black Caucus (CBC) sent up the white flag. This was not
unexpected, since the CBC as a body had ceased to play a progressive role years
ago - neutered by corporate influence. It is sadly poetic that the final
collapse of the Black Caucus occurred under the ministrations of history's most
successful Black corporate politician, Barack Obama - a player so masterful he
was able to enlist, silence or co-opt virtually all of Black "leadership"
before one primary vote was cast.
Now Obama picks up an imaginary sword to fight a phony
battle on behalf of the victims of his investment banker friends' crimes. With
his lead widening in the polls, Obama offers a 90-day reprieve on foreclosures
to those homeowners who were working with lenders that are part of the bailout
deal. Homeowners would also have to show that they were making an effort to pay
their mortgages. But at the end of the 90 days the family would still be out of
luck if there was no agreement on terms with the lender.
"Obama still can't
venture any farther left than his corporate leash allows."
Earlier this year, Obama rejected moratoriums on
foreclosures and a freeze on rates, measures supported by his primary opponents
John Edwards and Hillary Clinton (Obama called Clinton's rate freeze
"disastrous"). Nearly two million foreclosures and evictions later, after
facilitating a trillion-dollar corporate raid on the public treasury, and caught
in a bidding war with McCain on spending what remains, Obama still can't
venture any farther left than his corporate leash allows. Obama derides
McCain's proposal to spend up to $300 billion buying up homeowners' mortgages
at face value and repackaging them at terms consistent with current home
values, calling it too expensive and a boon to lenders (the latter part is
certainly true). But he championed the original $700 billion "cash for trash"
scheme that was designed as a pure bailout for speculators - his investment
banker friends - and would save not a single family from losing its home.
How bizarre it is to observe Obama playing the people's
crusader in the morning and colluding with his top economic advisers, Robert
Rubin and Lawrence Summers, in the afternoon. In February 1999, Rubin and
Summers flanked Fed Chief Alan Greenspan on the cover of Time magazine,
heralded as, "The
Committee to Save the World." Summers was then Secretary of the Treasury
for Bill Clinton, having succeeded his mentor, Rubin, in that office. Together
with Greenspan, the trio had in the previous year labored successfully to
safeguard "derivatives," the exotic "ticking time bomb" financial instruments, from
federal regulation. Less than a decade later, unregulated derivatives would
expand - like the Mother of All Bubbles - to notional values 10 to 15 times
greater than the world's total economic output. The global order would be
brought to its knees, in a financial conflagration that has just begun to show
its full dimensions and destructive potential. (See New York
Times, October 9, "Taking Hard
New Look at a Greenspan Legacy,")
So you might want to thank Obama's main men on the economy,
Rubin and Summers, for the current crisis. Be assured that this crew
will deliver another catastrophe from their positions of influence, if Obama is
elected.
"Thank Obama's main men on the economy, Rubin and
Summers, for the current crisis."
The November 4 election will change nothing in the
configurations of power in the United States. It is Barack Obama's mission to
ensure that the political transition effects no substantive alteration of power
relationships, but rather, provides a new (Black) face for the old,
fast-failing system. To the extent that self-identified progressives attempt to
ignore or obscure the facts of Obama's very public allegiance to finance
capital, they objectively weaken the people's ability to resist - or even recognize - the overarching menace
of continued corporate rule.
It is absurd to claim that a progressive "movement" with a
potential for profound social change can coalesce behind a candidate who
repeatedly and reflexively aligns with the worst corporate malefactors on the
planet, the very same individuals who brought about the current
catastrophe. The great damage that has been done to African American political
coherence, may never be repaired. At this crucial juncture in human history,
the Black Sampson plants himself firmly among the wobbly pillars of the rich
man's crumbling edifice - to prop it up!
Obama can no more succeed than John McCain in resolving the
contradictions of capital by feeding the beast the last remnants of the
national wealth. But his "progressive" apologists, by papering over the "real"
Obama in favor of the wishful one that only exists in their fantasies,
politically disarm the people, and make the inevitable task of organizing against
an Obama presidency vastly more difficult.
BAR executive editor Glen Ford can be contacted
at Glen.Ford@BlackAgendaReport.com.
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