Obama is not a Socialist

It's a testament to just how narrow the realm of acceptable public discourse about the economy (and politics) has become when you hear so-called serious news outlets question whether Obama is a socialist. But that's just what the mainstream media (MSM) is currently debating (I assume that means no celebrities have shaved heads or plumbers became jounalists this week).

This type of demagoguery, usually reserved for the likes of Fox News and Republican presidential campaigns, has become a serious topic of discussion on outlets such as the New York Times and ABC. There seems to be, among the MSM, a serious misunderstanding (either involuntary or willful) of what socialism is. It is not difficult to conclude that both Obama's budget and his free market tendencies quickly disqualify such a label. Both the NYT and ABC, often accused of being bastions of liberal propaganda, are not so subtely pandering to their corporatist agenda. Not only is this sort of labeling inaccurate and unfair (to both Obama and socialists), but is serves to stifle honest discussion of how to deal with the current economic crisis when the last thing we need is ideolgolical handcuffs preventing our government from doing what it should have done in November - nationalize the banks. Ironically, if we had done that from the start of the crisis, less capital would have been needed.

Interviewing with the NYT aboard Air Force One yesterday, Obama was asked the socialist question. He dodged the question but called back after the interview. His response is below:

"Just one thing I was thinking about as I was getting on the copter. It was hard for me to believe that you were entirely serious about that socialist question. I did think it might be useful to point out that it wasn’t under me that we started buying a bunch of shares of banks. It wasn’t on my watch. And it wasn’t on my watch that we passed a massive new entitlement – the prescription drug plan without a source of funding. And so I think it’s important just to note when you start hearing folks through these words around that we’ve actually been operating in a way that has been entirely consistent with free-market principles and that some of the same folks who are throwing the word socialist around can’t say the same."

And here is how it was discussed on ABC's This Week:

Iraq Body Count

In an emotional speech before the U.N. Human Rights Council in Geneva yesterday, General Assembly President Miguel d'Escoto Brockmann accused the U.S. of committing "atrocities" in Iraq and Afghanistan (Click here for the text of the speech).

"I urge the Council to focus on the profound problems that have been created by the massive violations human rights in Iraq. Even as the world absorbs the inhumanity of the recent invasion of Gaza, we see Iraq as a contemporary and ongoing example of how the illegal use of force leads inexorably to human suffering and disregard for human rights. It has set a number of precedents that we cannot allow to stand. The illegality of the use of force against Iraq cannot be doubted as its runs contrary to the prohibition of the use of force in article 2(4) of the UN Charter. All 12 pretended justifications not withstanding, the aggressions against Iraq and Afghanistan and their occupations, constitute atrocities that must be condemned and repudiated by all who believe in the rule of law in international relations."

That much seems obvious to the unbiased observer. What is debatable is the ensuing statement by D'Escoto - "Reliable and independent experts estimate that over one million Iraqis have lost their lives as a direct result of the illegal invasion of their country." The number of Iraqi deaths since the invasion in March 2003 is difficult to monitor (especially since neither the Iraqi or US governments keep a tally), and accordingly there are a number of widely divergent sums.

Fox News, the first news outlet to apparently run this story, is quick to refute D'Escoto's numbers by pointing to the estimates from both the World Health Organization (151,000) and (interestingly) Iraqbodycount.org (90-99,000). Other numbers worthy of mention are the Lancet Study (654,965 as of June 2006) and the Opinion Research Business (ORB) poll (between 946,000 and 1,120,000 as of August 2007). For a better understanding of these estimates, certain factors need to be discussed (i.e. methodology used, deaths included, margin of error).

World Health Organization - a large scale survey of 9345 households in 1000 neighborhoods, does not mention a specific margin of error but does clarify their estimate in real numbers to be between 104,000 and 223,000, focuses on violent civilian deaths, and notes that they could not interview several households due to a lack of security. This estimate does not count deaths from accident, disease or suicide.

IraqBodyCount.org - Copied from the website - "Data is drawn from cross-checked media reports, hospital, morgue, NGO and official figures to produce a credible record of known deaths and incidents. Essentially, it is not an estimate based on a projection (as in the others), but relies on the tallies of reported deaths in the outlets mentioned above. It is real time, and includes reports found in Arabic media translated into English. Ultimately, it is a tally including civilian deaths due to coalition and insurgent military action, sectarian violence and increased criminal violence. A flaw in the methodology, as admitted by the IBC, is unreported deaths remiain uncounted.

Lancet Study - an epidemiological study, and as such not only accounted for violent deaths but the lingering effects of the war/occupation has had on health and illness (usually used to chart the long term effects of a natural disaster). There were 1,849 households interviewed, and the study found that 601,027 were due to violence, and 31% of those were attributed to the Coalition, 24% to others, and 46% unknown. The primary criticisms of this study is the smaller sample size, and underestimating the pre-invasion rate of death.

Opinion Research Business (ORB) - a representative sample of 2,414 adults in both rural and urban areas, with projections based on Iraq's 4,050,597 households. The poll indicates a 2.4% margin of error, and estimated that half of all Iraqi households had lost at least one family member to war-related violence, and does not seet to include non-violent deaths.

Obama's budget, Iran, Afghanistan

I have often heard others wonder aloud why we seem to get so little for our taxes - "Other first world countries have universal health care, universal day care, tax funded education through college, significantly better maternity care and unemployment insurance, etc.." That's when the conversation inevitably seems to veer towards our bloated military budget. Progressives are quick to label Obama and his budget proposal as a wide and refreshing change from politics of the last two or three decades - and much of that is well founded. However, as I mentioned in previous blogs, we can't go into this with our eyes closed. There are aspects of Obama's proposal to worry about, and to criticize.

A very interesting article from Paul Craig Roberts, a Republican who was Assistant Secretary of the Treasury in the Reagan Administration and worked at the CATO Institute in the mid 1990s, yet has been widely critical of the Iraq War (from the start), had called for Bush's impeachment, detests neoconservativism - arguing it is pushing us towards a nuclear showdown, is extremely critical of NAFTA, and is very skeptical of the Bush (and now Obama) stance towards Iran. This willingness to stick to his beliefs only serves to add credibility. That being said, Roberts labels Obams's proposal as "the most irresponsible budget in US history." While, it may be premature to speak in such superlatives, he is much much more analytical when discussing the ramification of the size of Obama's budget. He raises a valid point - very soon we will no longer be able to borrow from the Japanese, Saudis, and Chinese. As a result of "Clinton/Bush financial deregulation and Wall Street and bankster greed, the rest of the world is in financial turmoil and hasn’t $1.75 trillion in savings to lend." Inevitably, Roberts argues, this would trigger a level of massive inflation with which US citizens could not cope.

One way to combat this is by attacking the aforementioned bloated military budget. Instead, as Roberts points out, "Obama is requesting $130 billion for wars in Iraq and Afghanistan during 2010 plus a $75 billion supplemental request for the wars during 2009. This $205 billion is on top of $534 billion for the Pentagon in 2010, for total military spending of $739 billion." We spend more on the military than every other country on the globe combined. For every dollar we pay in taxes, about sixty cents goes towards defense spending. This is at the same time progressives and some moderates are pressuring Obama to cut the military budget. And now we are facing another (or is it continuing?) boondoggle in Afghanistan and Pakistan, as well as a showdown with Iran - who we even admit do not have nuclear capabilities, and are only using low enriched uranium (unsuitable for usage as a bomb). It's difficult to fully understand Iran's stance toward us when as Americans, we don't fully understand the destructive role the US has played in Iran since Kermit Roosevelt helped to overthrow Mossadegh after WWII(a Time Magazine slideshow history ignores everthing before 1979 - only casually mentioning the Shah was a puppet to foreign influence).

Essentially, Obama is trying to eat his cake and have it too. Perhaps I'm missing something, but he simply can't propose a sustainable, progressive, and stimulus budget while maintaing our current military spending. It's not enough to attack the ineffeciency of the defense budget. If the moral implications of US hegemony (i.e. blowback, race to the bottom, anti-Americanism, US support of several horrific regimes) have not been enough to stop our juggarnaut, then one would think this would do it. If Obama is the change many purport him to be, he would be using the current economic crisis as a way to shrink the military budget AND to significantly alter the global purpose of the US and its military. He could free us from the financial obligations necessary to maintain hegemony, and divert those funds towards more appropriate expenses. In fact, even Obama's plan to end the war in Iraq involves maintaining 50,00 US troops in Iraq, and possible a permanent military base in Kirkuk. Grouped with Obama's cryptic stances on state secrets and his refusal to completely end rendition, we have rather ominous signs that Obama seeks to maintain US hegemony at the expense of the US taxpayer - when we need some real change.

Pre-Bush = Progressive?

It is appropriate for many to breathe a sigh of relief that Obama has set a 19 month timeframe with which to withdraw from Iraq, re-affirmed dedication to a re-strengthened NATO (I am glad to have been wrong), and vowed to fight the DC lobbyist machine. However, with much of Obama's seeming reversal of former President Bush's policies, it is very important to maintin a level of scrutiny of Obama's policies, both to keep him focused on the agenda of change that earned him the election, and it's simply due diligence - this is a democracy. This task is especially important considering many of his supporters in November are far more progressive than his actual campain promimses, i.e., once you look past his mantra of change.



Note: This is not intended to be the same stale rhetoric of partisan bickering by Republicans who suffer from selective memory.

In a recent blog post, Robert Reich announces that we finally have a progressive budget proposal. And I agree that this is a very significant shift in the priorities of the oval office. There are reasons to be pleased with the budget. As Reich put it, "it represents the biggest redistribution of income from the wealthy to the middle class and poor this nation has seen in more than forty years." It should also be pointed out that the projected 2010 deficit, proportionally speaking, will still be roughly 1/4 of what is was in 1944. Having said that, it also can't be ignored that Obama's proposed tax increase on the wealthy is really just a return to Pre-Bush 43 tax levels. The tax rate will return to 39.6% (35% now), and the capital gains tax (where the wealthy make their real money) will return to 20% (15% now). Now that may provide a silence inducing talking point whe debating one who thinks Obama is attacking the wealthy; but a return to Clintonite Neo-liberalism is not the change that should be expected.

A simple glance at the US Department of Treasury's website puts this into historical perspective. In 1913, only 1% of the US paid taxes - 1% of their income, with those who made over $500,000 paying seven times that amount- and that covered ALL sources of income. In 1916, the standard rate was doubled to 2%, and those who made $1.5 million or more paid 15%. To help pay for WWI, the tax on the wealthy in 1918 was 77% (and went back down to 25% when the economy improved in the 20s). During the Depression the top rate reached 79%, and by the end of WWII, those whose income exceeded $1 million paid 94% in taxes. Shockingly, even Reagan's tax cuts brought the top rate down to a whopping 50%, which was 11% higher than Obama's proposal. What this teaches us is that in the past the wealthy were expected to carry more of the tax burden; not because us common folk begrudge their wealth. Aside from it being a moral question, the way in which wealth is often obtained, the radidly growing wage gap, and the influence over the electoral and legislative process precluces anything but a greater tax burden on the wealthy - certainly greater than what is being proposed.

A Few thoughts on Obama's Speech

Several of the comments/ideas in President Obama's speech to Congress this past Wednesday (2/25/09) need clarification - for now I will focus on one. Throughout his campaign Obama placed much of the blame for the current economic crisis on "the failed policies of George W. Bush." Former President Bush certainly does warrant a considerable share of the guilt for his lack of action and his vow "to spread the dream of home ownership," which played a large role in artifically inflating housing prices. But, a name often ignored is that of Bill Clinton. While the ideology of (mostly) free market economics was brought back from the grave of Hoover by Reagan, it was Clinton that added legal muscle. In 1999, he teamed with Congressional Republicans to repeal the Glass-Steagall Act of 1933, which in effect was enacted by FDR in his famous 1st 100 Days to separate the fate of commercial banks and the stock market, and was the result of the collapse of the banking system, as well as speculation and corruption in the banking and stock markets. The 1999 Gramm-Leach-Bliley Act, as it was called, essentially de-regulated the banks, and enabled them, among other things, to invest capital in the stock market - once again directly linking the volatile stock market to the banking system and the insurance industry. In other words, any signifacant plunge in any of those markets would have an immediate and catastrophic impact throughout the US and global economy. The facts outweigh Clinton's deflection of his role.

Even worse for Clinton, as Time Magazine points out in their piece on the 25 People to Blame for the Financial Crisis, he "also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods." Adding to his track record of de-regulation, Clinton also signed NAFTA and the Telecommunications Act of 1996 into law setting off a new and unprecedented era of de-regulation.

All this creates an uncomfortable situation for Obama, who was quick to highlight Hillary's husband's role in NAFTA during the primary campaign, but not since. Perhaps he does not want to seem hypocritical considering he surrounds himself with economic advisers (both before the election and after) who adhere to the Chicago School Friedmanite Free Market ideology. Our current Secretary of the Treasury Tim Geithner, and head of the National Economic Council Larry Summers were both proponents of the 90s free market capitalism, and Larry Summers was by Clinton's side when he repealed the Glass-Steagall Act, and his advice played a key role in keeping regulation far from the derivatives market - both of which could have gone a long way to preventing the current crisis. In sight of the facts, it's not very comforting to hear Obama claim that Summers' advice "will be the foundation of all my economic policies."