Change or continuity: Which way is Obama going?

By Barry Sheppard, San Francisco

Many people have high hopes that Barack Obama will led the US in a new direction. What can we say now about his likely course? Obama’s mantra during the election campaign was “change”. Now he is emphasising “continuity” and a seamless transition from the Bush administration. The only change from the current regime is to go back to the Clinton years.

Obama has surrounded himself with Clintonites, and even with Hillary Clinton herself. She is his pick for Secretary of State, the most important post in his cabinet, in charge of foreign policy. One of the reasons Obama beat Clinton in the Democratic Party primaries was his stance (vague to be sure) against the war in Iraq, while she stubbornly defended her vote in the Senate for the war. The war is deeply unpopular and the American people expect Obama to end it.


Complementing his appointment of the warmonger Clinton is Obama’s decision to keep Robert Gates as defence secretary. (The Department of Defense was more accurately called the Department of War until the Cold War — the US hasn’t waged a defensive war since the British attacked in 1812.) During the election campaign Obama made it crystal clear that he intends to expand the US war machine.

In one of his speeches he put it this way: “From day one of this campaign, I have made clear that we will increase our ground troops and our investments in the finest fighting force the world has ever known. Watching our soldiers, sailors, airmen and marines fight in Iraq and Afghanistan has only deepened my commitment to invest in 21st century technologies so that our men and women have the best training and equipment when they deploy into combat and the care and benefits they have earned when they come home.”

The “finest fighting force the world has ever known” is a hollow assertion. Without its airplanes, attack helicopters, tanks, heavy artillery, body armour and so forth, none of which the heroic resistance fighters have, this “finest fighting force” wouldn’t last a day in Iraq or Afghanistan.

It remains to be seen if Obama reverses course on how the Bush administration has treated the troops when they come home. They have been discarded as used-up cannon fodder. Over 400,000 have been waiting in line, many for years, for treatment of mental disorders caused by the war. It messes you up to kill people, including children, who are resisting foreign occupation. Some 30,000 troops have been severely injured. Personal relations have been torn apart for these troops. Suicides are up, as is drug addiction. Many have joined Vietnam veterans to swell the ranks of the homeless living on the streets.

Under the idiotic slogan that he will “kill Osama bin Laden”, Obama pledges to widen the war in Afghanistan. He is one with Gates and the Pentagon in supporting an increase of around 20,000 US troops and allied foreign forces there. They hope that this will somehow minimise the fallout of their political defeat in Iraq, but this risks digging deeper into the Afghan morass, and into Pakistan, resulting in a larger defeat.

From the point of view of the interests of the world working class and the oppressed nations, widening the Afghan war only deepens the crime of the war in the first place. The US wars in Afghanistan and Iraq have killed a million people and displaced many more millions, destroyed Iraq’s social infrastructure, wreaking horrible suffering. From our class’s standpoint, the only just solution is the immediate and unconditional withdrawal of all the foreign troops and bases.

On the front of Palestinian resistance to the Israeli jackboot, Obama has made his direction clear with the appointment of the ultra-pro-Israel Hillary Clinton. His appointment of Rahm Emanuel as his chief of staff goes in the same direction. Emanuel is a duel citizen of the US and Israel, and is a hard-line Zionist. He volunteered for the Israeli army in case Israel was drawn into the 1991 Gulf War.

Emanuel was recently embarrassed by his father in Israel. When asked by an Israeli paper whether his son would influence Obama to be more pro-Israel, Benjamin Emanuel said: “Obviously he’ll influence the president to be pro-Israel. Why wouldn’t he? What is he an Arab? He’s not going to be mopping floors at the White House.” Rahm apologised for his father’s racist remark, but only when called on it by the American-Arab Anti-Discrimination Committee.

Economic advisers

In the face of the worldwide collapse of the financial system, Obama has also appointed Clinton people to his economic team. His two most important choices have been Timothy Geithner as Treasury secretary and Lawrence Summers as director of the National Economic Council. Both have done stints in the Clinton administration’s Treasury department.

Geithner is currently head of the Federal Reserve Bank in New York, and has worked closely with Bush’s Treasury secretary Henry Paulson in providing trillions of dollars of government funds for Wall Street bankers. Worried editors of the New York Times wrote on November 25: “Both men … have played central roles in policies that helped provoke today’s financial crisis.” The NYT editors pointed out: “At the New York Fed, Mr Geithner has been one of the ringmasters of this year’s serial bailouts. His involvement includes the as-yet-unexplained flip-flop in September when read-my-lips, no new bailouts policy allowed Lehman Brothers to go under – only to be followed less than two days later by the ever costlier bailout of American International Group and last weekend by the bailout of Citigroup.”

The NYT editors pointed out that Summers, as Treasury secretary in 2000, “championed the law that deregulated derivatives, the financial instruments — a.k.a. toxic assets — that have spread the financial losses from reckless lending around the globe. He refused to heed the critics who warned of dangers to come. That law, still on the books, reinforced the false belief that markets would self-regulate. And it gave the Bush administration cover to ignore the ever-spiraling risks posed by derivatives and inadequate supervision. Mr. Summers will now advise a president who has promised to impose rational and essential regulations on chaotic financial markets. What has he learned?”

Summers also was on hand to advise Russia after the collapse of the Soviet Union on its criminal privatisation of state enterprises that created the new billionaire oligarchs. After leaving the Treasury, Summers did a stint as president of Harvard University. While there he became famous for his opinion that women just didn’t have the brains for mathematics and science. He also fired noted black scholar Cornell West. A nice choice to head up Obama’s White House economic advisers.

The other members of Obama’s financial team are cut from the same cloth — Clinton era deregulators and the markets-will-solve-all problems ideologues. Of course, that doesn’t mean Obama will deregulate further — that ideology (in the Hegelian sense of false consciousness) has been dealt a death blow by the crisis. But it doesn’t mean he will re-regulate, either. That remains to be seen, which is why the NYT editors are worried.

Obama and his economic team are 100% supporters of the obscene bailout of the rich that Paulson initiated. Now not only are the banks and other financial institutions lining up at the trough to stick their snouts into the trillions of dollars of Federal Reserve funds, but other sectors such as the auto industry capitalists want their piece of the pie too. While this grotesque credit-feeding frenzy of the capitalists is going on, the condition of working people continues to deteriorate. As housing prices continue their fall, mortgage foreclosures are rising. Unemployment is increasing at a rapid place. Some 30 million families now receive food stamps to help them scrimp by. Soup kitchens run by churches and other charities report they cannot keep up with rising demand by the hungry.

In a radio address on November 22, Obama warned of the possibility of a downward deflationary spiral. That would mean a world-wide depression. He also announced that he would initiate a fiscal stimulus package of some hundreds of billions of dollars. He said he would invest in rebuilding the nation’s crumbling infrastructure, in clean energy projects, and in healthcare and education. He claims this would create over two million jobs by 2011. This was the first time during the economic downturn that anyone in public office has proposed a fiscal stimulus and not just bailouts for the rich. It comes quite late, and if it isn’t in the order of a trillion dollars, it is unlikely to work.

Moreover, when Obama talks of investing in infrastructure, he avoids the term “public works”. In keeping with his conservative economic outlook, what he will do is hire firms like Halliburton, and shower them with money to do the rebuilding. He will also give some money to the states and local governments to do the same thing. More snouts in the trough. We can only hope they will do better than they did in Iraq.

What is needed is a true immediate nationalisation of all financial institutions, and other enterprises if necessary, to stabilise the economy. This would include insurance companies. A side effect would be to implement immediately a single-payer health insurance system covering everyone. Other steps would include a vast public works program where the government would directly and immediately hire the unemployed to truly rebuild infrastructure — from the dilapidated levees in New Orleans to dangerous bridges, underfunded schools, livable housing and so forth. We should recall that it wasn’t until the vast federal government spending on war goods leading up to the Second World War that the Great Depression ended. To be effective now a true stimulus package would have to be on that same scale.

Such steps could be done under capitalism, but because they point to the need for socialism, the capitalist ruling class is opposed to them. They could be forced on this path, but that would take both a massive new upsurge of the working-class struggles In the US and a growing threat of new socialist revolutions elsewhere in the world.