By Robert Scheer
It’s getting too late to give President Barack Obama a pass on the
economy. Sure, he inherited an enormous mess from George W., who whistled “Dixie”
while the banking system imploded. But it’s time for Democrats to admit that
their guy bears considerable responsibility for not turning things around.
He blindly followed President Bush’s would-be remedy of throwing
money at the banks and getting nothing in return for beleaguered homeowners.
Sadly, Obama has proved to be nothing more than a Bill Clinton clone triangulating
with the Wall Street lobbyists at the expense of ordinary folks.
That fatal arc of betrayal was captured by a headline in Tuesday’s
New York Times: “Soaring Poverty Casts Spotlight on ‘Lost Decade.’ ” The Census
Bureau reported that there are now 46.2 million Americans living below the official poverty line—the
highest number in the 52 years since that statistic was first measured—and
median household income has fallen back to the 1996 level. As Harvard economist
Lawrence Katz summarized this dreary news: “This is truly a lost decade. We
think of America as a place where every generation is doing better, but we’re
looking at a period when the median family is in worse shape than it was in the
The late 1990s, it should be noted, is when President Clinton,
working with Phil Gramm, the Republican head of the Senate Banking Committee,
pushed through two critical pieces of legislation ending effective regulation
of the banks. The Gramm-Leach-Bliley Act smashed the wall between high-flying Wall Street
investment firms and the once staid commercial banks entrusted with the
deposits and mortgages of America’s innocent souls. The next year Clinton signed the
Commodity Futures Modernization Act, banning any effective regulation of the
rapidly expanded trade in the collateralized debt obligations and credit
default swaps that have since haunted the world’s economy.
The collapse of those toxic securities led to the housing crisis and
resulted in 15.1 percent of Americans now living in poverty, the same level as
when Bill Clinton took office. But thanks to another one of Clinton’s grand triangulation strategies,
the one he called “welfare reform,” the impoverished are now denied the safety
net that existed before the Clinton presidency. Although 22 percent of U.S.
children are now below the poverty line, the Aid to Families With Dependent
Children program no longer exists.
Some of us who voted for Obama thought he was no Clinton, but he
was and is, as was demonstrated in his first days in office when he appointed
two key veterans of
the Clinton Treasury Department, Lawrence Summers and Timothy Geithner, to head
up the Obama economic team. Geithner, as treasury secretary, is the point man
for the administration’s push to pass the so-called American Jobs Act, which
the president hyped in his Sept. 8 speech to Congress and the nation. It was pure
Clinton bull: I feel your pain while I help the superrich pick your pocket.
Space permits only one example, that of General Electric CEO
Jeffrey Immelt, whom Obama selected to head his “Jobs Council of leaders from
different industries who are developing a wide range of new ideas to help
companies grow and create jobs.” Was that some cruel joke? GE under Immelt has
grown and created jobs, but they are abroad rather than in our own troubled
country. As a result, by the end of last year,
only 134,000 of GE’s workforce of 304,000 were based in the United States; the
remainder—and 82 percent of the company’s profit—were sheltered abroad.
Ironically, GE’s ability to avoid taxes was restricted by
President Ronald Reagan, who had once been a spokesman for GE but was outraged
by the company’s use of tax loopholes. It remained for President Clinton to
offer GE some new tax breaks. As a result of being able to shelter profit
abroad last year, GE had profits of $14.2 billion
but claimed a tax benefit of $3.2 billion. Immelt was the elephant in the room
when Obama said in his speech last week: “Our tax code should not give an
advantage to companies that can afford the best-connected lobbyists. It should
give an advantage to companies that invest and create jobs right here in the
United States of America.”
It has been a long time since GE was creating jobs here during its
“better light bulb” days, and the last spurt of GE participation in the U.S. economy
came through its unit GE Capital, which specialized in toxic mortgage lending
that once produced more than half of the company’s profits but ultimately led
to a taxpayer bailout.
Someone who knows agreat deal about that sort of scam is Elizabeth
Warren, the consumer advocate and Harvard law professor pushed out of Obama’s
inner circle. In launching her campaign for the U.S. Senate in Massachusetts this
week, Warren posted a video that clearly defined the enemy:
“Washington is rigged for big corporations. A big company, like
GE, pays nothing in taxes, and we’re asking college students to take on even
more debt to get an education?”
Obama in appointing Immelt last January praised him as a business leader
who “understands what it takes for America to compete in the global economy.”
Apparently, what Immelt understands is that what it takes to satisfy corporate
interests instead of national needs is conning a president into looking the
other way while you send jobs abroad.