Take a Deep Breath

The Obama Presidency has failed.

14 months into it, that's the only conclusion you would draw based on the way the press has reported it. And I'm not talking about the vast right-wing noise apparatus. Listen to NPR or pick up any issue of the NY Times, and that's what they're reporting. The latest exhibit in this litany of doomsaying is yesterday's (Sunday) Times Magazine whose cover story is about the failure of Rahm Emmanuel to get anything done. (The Times, for its part, still cowers in fear from being slapped around by Dick Cheney for 8 years. I think they've changed their famous motto on the banner to read: "All the news we're not scared to print." )

But even given the cravenness of the mainstream press, someone ought to mention that this story line of failure and inaction is simply wrong. Obama passed an enormous stimulus bill, whose effects are now beginning to be felt (out here in Ohio we may even get passenger rail service because of it!); he has in fact ramped down the war in Iraq even as he has ramped up the war in Afghanistan, both exactly what he campaigned to do; he has signed a number of important Executive Orders which would have gotten my attention if not for the other larger issues. (I'll mention only that he did away with Bush Administration restrictions on stem cell research).

How soon we forget! And now there is serious movement on a financial reform bill, a real chance of fundamental change in the student loan system (those of us involved in higher ed ought to be cheering loudly about this one), and last week Obama launched an effort to re-write No Child Left Behind, which comes up for re-authorization this spring.

Oh yeah, and health insurance reform. Obama is right that we have never been as close as we are right now to getting a health insurance reform bill - never.

There are plenty of reasons to complain about the particulars of any of these. I certainly don't think the financial reform bill, as it currently stands, goes far enough, nor do I have any enthusiasm for the escalation of the war in Afghanistan. But a year into this administration and the economic arrows are starting, tentatively to point in the right direction and even the Pakistanis are now arresting terrorists.

Failure and inaction?

And while we're at it, let's put this in some historical context: no American president, with the possible exception of Abraham Lincoln, inherited as many messes as Obama has. The economy may well have been worse in 1933 when FDR took office, but he had few foreign policy issues to worry about (he didn't pay much attention to Europe for several years), much less two bungled and mis-managed wars; Vietnam was certainly a larger mess than Iraq in 1968 but the economy was still humming when Nixon took office. While we're at, for another point of comparison, George Bush II inherited a balanced budget, a budget surplus and a nation at peace. Heckuva job Georgie.

And remember too that when Abraham Lincoln took office the entire Southern congressional delegation left - Obama has accomplished what he has in the face of the most vicious, partisan and obstructionist opposition in American history.

The Times may well be hopelessly craven, but why are the rest of walking around with such a feeling of dread, convinced that a collection of aging white tea-partiers and Palin-ites will take over Washington in November? Let's all take a deep breath, realize how far we've come in the past year, and put the gloves back on. We should all be relishing the opportunity to take on the Party of No and hold them accountable for holding the nation back.

The God That Failed

When I was growing up, one of the feeble responses made by those who still clung to the hope that communism might still triumph as a system of political economy, in the face of all the evidence that it wouldn't, was to insist that it hadn't really been tried. That in the Soviet Union and in China (and in North Korea and Cambodia too I suppose) the real utopian dreams of communism had been perverted into the dystopian nightmares of the Gulag and the Cultural Revolution.

Those late-night dorm-room debates came back to me yesterday as I listened to Tennessee Senator Lamar Alexander (and to every other Republican who said anything) at the health care summit at Blair House. There they sat telling us the free market would really work, it really would fix the disaster that is our health insurance system. Really. See, the free market in health insurance hasn't really been tried, just like communism in China. There they sat, praying to the god that has failed so abjectly and insisting that the rest of us do the same.

These are free- market fundamentalists, after all, and like true-believers of any sort to acknowledge that something might be wrong with their world-view would be to have the whole edifice come crumbling down. And just like Mao's apologists a generation ago, these people will never permit reality to intrude on that world-view.

The fact that we already have a market (and profit) driven health insurance system and the fact that it has failed is beside the point. Since the free market must always generate the best outcome, the state of our health insurance system must be our fault, not the fault of the models that get generated by free market fundamentalist economists.

President Obama deserves credit for taking what looked like a piece of pure political theater and attempting to turn into something more substantive. And it certainly did make clear that the substance of the Republican position is to obstruct, to object, to critique and to put nothing of substance on the table.

So yesterday's event has left us exactly where we have been for some time. Bi-partisan compromise on health insurance reform was never a live option. Two questions remain. First, will Democrats, who enjoy bigger majorities than George Bush ever did in both houses, straighten up and fly right on this issue? And second, will the White House turn the health insurance issue to its political advantage as the November elections approach. At the moment, I don't feel good about either of those things.

Time for Hearings

Hear that sound? something between a buzz and a whine? That's the sound of the finance industry lobby revving its engines (and mobilizing its membership) to kill the Obama administration's ambitious plan to overhaul how the industry is regulated.

This legislation has been flying under the proverbial radar to a certain extent because of the even more contentious battle over health care reform. While our health care system is certainly broken beyond the point of applying band-aids, it was not responsible for the economic mess we are now in (and will be in for some time). The banking/investment industry was, and bringing it to heel must be the centerpiece of an economic recovery.

It comes as no surprise that the banks and the hedge-funds would oppose any effort to regulate their behavior - though doing so requires them to deny that anything has gone wrong, that they bear any responsibility for what has happened, or that the Federal government has an obligation to protect the vast majority of Americans who aren't investors in hedge fund from their greed, dishonesty and down-right stupidity. Despite all this, they remain a powerful and effective lobby - especially with craven Congresspeople - and they have no counterweight on the Hill.

Which is why I think Congress needs to hold hearings on the financial collapse of 2008. Congress needs to investigate what happened and who was responsible for it, not so there can be indictments and trials and jail terms (though I would sorely love to see all of that). Rather, hearings are necessary to create a narrative through which the Treasury's plans for regulation can be understood by the public.

The banking industry has already framed the issue in a way which it feels will kill it: a few bad apples; don't stiffle financial innovation; regulation is unnecessary interference in the free market. The Obama administration, therefore, needs to offer a different frame: bankers and investment houses got fabulously rich at the expense of the rest of us; much of what they did was unethical; markets work best with clear and effective rules. Hearings are a way to establish that frame and to write that narrative. In other words, hearings may be the best way to generate the public anger necessary to overcome the influence of the banking lobby.

Instead, roughly 200 members of Congress have signed on to a petition (authored by -who else - Ron Paul) to create a congressional audit of the Federal Reserve. That may or may not be a fine idea, but the notion that the Fed is responsible for the Great Recession, rather than AIG, Countrywide, BoA etc, is patently absurd. Instead of directing its anger at the Fed, Congress needs to direct it those private sector players who are really to blame.

We won't get serious reform of the financial sector without public anger to support it. And if we don't get it, we can all look forward to more of the credit-default-swapping, mortgage-backed-securitizing, derivative-selling shenanigans that landed us where we are now.