Obama and the Oddsmakers
January 31, 2009 § 1 Comment
The times they are a-changing. Even Alexander Cockburn appears to be tempering his cynicism with cautious optimism.
A betting man, the morning after Obama’s inauguration, would surely have found odds-on stakes that the new president’s first daring cavalry charge would be an assault on the economic crisis, worsening day by day. Our Wednesday-morning gambler would have found much longer odds being offered on any surprising moves in that graveyard of presidential initiatives sign-posted “Israel-Palestine”.
But there’s been no exciting surprise or originality in Obama’s opening engagements with the reeling economy. His team is flush with economists and bankers who helped blaze the path to ruin. He’s been selling his $819 billion stimulus program on the Hill, with all the actors playing their allotted roles and many a cheering Democrat not entirely confident that the House Republicans may not have had a point when, unanimously, they voted No on the package
America’s economy may be so hollowed out, its industrial base so eroded by twenty years of job exports to China and other low wage sanctuaries, that a bail-out may not turn the tide, Then the Republicans will have their told-you-so’s primed and ready to go in the mid-term elections.
But Obama can scarcely be blamed for putting up his $819 billion pump primer. It was a given, from the moment he got elected, and indeed probably owes, both in its good and bad components, more to Rep Charlie Rangel, chairman of the House Ways and Means Committee, than to Geithner or Summers.
Obama’s timid folly comes with the impending $2 to 4-trillion bailout package for the banks, signaled by Treasury Secretary Geithner. If anything can make Wall Street smile bravely through the hail of public ridicule for the way it’s been handing out the previous wad of bail-out money in the form of bonuses, it’s the prospect of getting further truckloads of greenbacks to lend out to Americans already crippled by debt.
As the economist Michael Hudson puts it in his trenchant piece on this site this weekend, “The government’s solution, placed in its hands by the financial lobbyists, is to bail out the bankers and Wall Street while leaving the ‘real’ economy even more highly indebted. Families, businesses and government are having to spend more wage income, profits and tax revenues on debt service instead of buying goods and services. So why is the solution to this debt overhead held to be yet MORE debt? Is there not something crazy here?”
Worse still, Obama’s economic team is alerting reporters to the administration’s increasing enthusiasm for a so-called “aggregator” bank that would take over the banks’ worst assets. Thus would the new administration play along with the Bush-Paulson script, allowing Wall St to dump its problems in the taxpayers’ laps and go on its merry way.
This is not a long-term cure, and leaves ordinary Americans drowning in debt, as before. It provides temporary relief to the big financial outfits on Wall Street which are, after all, the largest political campaign contributors and lobbyists. No doubt the unusually harsh denunciation by Obama of Wall Street’s $18 billion bonus payouts as “shameful” and “the height of irresponsibility” derive some of their edge from the fact that the bonuses make it harder for him and Geithner to sell yet another vast, extremely shameful multi-trillion giveaway to the banks.
So Wall Street can feel satisfaction that its investment in Obama seems to be paying off. Can the same be said of the Israel lobby which rewarded Obama’s tireless blandishments last year with enthusiastic pre-election endorsements, to the effect that here was a true friend of Israel.
In his inaugural speech Obama proclaimed that “We are a nation of Christians and Muslims, Jews and Hindus – and nonbelievers.” Muslims were ahead of Jews in that line, which caused some eyebrows to twitch. The next morning, in his opening round of phone calls to Middle Eastern leaders Obama placed the first call to Mahmoud Abbas, and only the next to Olmert. Uri Avnery pointed out on this site that Ha’aretz twice adjusted reality, reporting wrongly that Olmert was first in line. Hardly had Obama settled in before he appointed a fellow Democrat and former US Senator, George Mitchell, as his peace broker between Israel and the Palestinians. Mitchell’s mother came to America from Lebanon at the age of 18, and Mitchell himself, orphaned from his Irish father, was brought up in a Maronite Christian Lebanese family.
Then Obama gave his first formal tv interview to the Dubai-based cable station Al Arabiya, where he remarked at the outset that “I think it is possible for us to see a Palestinian state — I’m not going to put a time frame on it — that is contiguous, that allows freedom of movement for its people…” Contiguous? You can read that a number of ways, bad and good, including the possibility that Obama is obliquely criticizing Israel’s strategy of corralling Palestinians into mini-Bantustans on the West Bank, divided by military roads, walls and Jewish settlements.
As Avnery, whose biography stretches back to Israel’s earliest days, remarked, “These are not good tidings for the Israeli leaders. For the last 42 years, they have pursued a policy of expansion, occupation and settlements in close cooperation with Washington. They have relied on unlimited American support, from the massive supply of money and arms to the use of the veto in the Security Council. This support was essential to their policy. This support may now be reaching its limits.”
As buttress for Avnery’s claim that US “support may be reaching its limits”, we can instance a report on CBS’ “60 Minutes”, the most widely watched news show on US television. CBS’ reporter Bob Simon’s filmed report of the arrogance and brutality of Israelli soldiers and settlers was, at least in the memory of your CounterPunch editors, the single most savage indictment of Israel ever broadcast on U.S. network television. At one point Simon’s crew got footage of a Palestinian home in Nablus, seized by the IDF,for use as as a lookout post. They kicked the family downstairs, while the Israeli soldiers took over the kids’ bedrooms. When the kids came home from school, they couldn’t get into the house. The piece also featured a fanatical settler leader, Daniella Weiss, pledging that never again will any settlement be dismantled by the IDF.
Simon concluded this fierce report as follows:
“Demographers predict that, within ten years, Arabs will outnumber Jews in Israel, the West Bank, and Gaza. Without a separate Palestinian state, the Israelis would have three options. They could try ethnic cleansing, drive the Palestinians out of the West Bank. They could give Palestinians the vote. That would be the democratic option, but it would mean the end of the Jewish state. Or they could try apartheid, have the minority Israelis rule the majority Palestinians. But apartheid regimes don’t have a very long life.”
Newsweek’s current edition has a story titled: “Israel Has Fewer Friends than Ever”. Huge numbers of people here can tune into Jon Stewart’s Daily Show or go on line and visit sites such as CounterPunch and get fierce reporting on Israel’s monstrous conduct.
So the media context has changed, and this change has to be factored in to overall assessments of what is possible politically. Of course the range of options entertained in Washington and in the tottering official media remains mostly, and obdurately, tilted to Israeli rejectionism. There are endless instances, cited recently on this site in the interview of Noam Chomsky by Afshin Rattansi of Press TV and by Norman Finkelstein, of Israel’s successful sabotage of peace initiatives, decade after decade.
Obama may well be smarting from the criticism across the world he incurred from keeping his mouth shut about Israel’s bloody rampages in Gaza. The furious public letter denouncing US-Israeli conduct from Prince Turki al-Faisal, Saudi Arabia’s ambassador to the United States and former intelligence chief probably also prompted Obama to “reach out”, as they say, to the Arab world – particularly since the US needs all the customers for its Treasury bonds that it can get.
So far the Israel lobby here has held its peace. The Jewish Forward newspaper, a useful bellwether, has editorialized positively about Obama’s moves.
“But time is running out. Most Israelis know that if Israel doesn’t reach a peace agreement and leave the West Bank very soon, it will find in another decade that it is no longer a Jewish democracy. Israel’s pro-Western Arab neighbors, led by Egypt and Saudi Arabia, fear that if Israel and the Palestinians don’t settle their differences soon, then anger on the Arab street will boil over and force those moderates to abandon the peace option.
“Total victory is no longer an option, if it ever was. This is a time to put war aside and give diplomacy a chance. Friends of Israel, those who care about Israel’s future, need to cast off their doubts and give full-throated support to George Mitchell.”
But the minute Mitchell comes up with a concrete proposal discomfiting to Israel and to its likely new leader, Benjamin Netanyahu, then the atmosphere could become sulphurous with blinding speed. That will be the testing time for Obama and a true test of leadership and hard-nosed cunning. If he is going to get anywhere constructive, his position has to evolve beyond ongoing efforts to write Hamas out of the picture and stick with the utterly discredited Abbas. That will be Mitchell’s hardest negotiating job, reconciling his president with the facts on the ground.
In other words, Obama – to offer yet again one of my favorite quotes from Lenin – has to become as radical as reality itself. The economy, if not the Middle East, may force him willy-nilly in that direction. It will take further disasters to force Obama and his economic advisors to kick the corpse of the present banking mess into the grave and push towards the creation of a rational system under public control. It will take resources of political cunning and courage that Obama has yet to evince, for him to shape US policy towards Israel/Palestine in a positive direction.
A prudent bettor would still have to wager that Obama simply won’t want to spend that kind of political capital. But a prudent bettor wouldn’t have predicted the moves he’s made so far.
And Yes, it was Mostly Bad News
In the current issue of our newsletter you’ll find a detailed and unsparing review by your CounterPunch editors of Obama’s cabinet and subcabinet picks. Alas, the news is mostly bad. The Secretaries of Interior and Agriculture were are far worse than Clinton’s. You’ll also find part one of Paul Craig Roberts’ three-part Guide to Economics in the 21st Century. This weekend’s your last chance to start with this issue and thus have Roberts’ full series \ in your files. And you’ll find Alexander Cockburn’s TransAmerica Diary and in it, at long last, homage to a conspiracy even he believes in – the Secrets of Jekyll Island, and the dawn of the Federal Reserve.
Alexander Cockburn can be reached at email@example.com