http://www.harpers.org/archive/2009/03/hbc-90004581
Obama is Far From a Radical Reformer
By John R. MacArthur
John R. MacArthur is publisher of Harper’s Magazine and author of the
book You Can’t Be President: The Outrageous Barriers to Democracy in
America. This column originally appeared in the March 18, 2009
Providence Journal.
Assessing the gigantic new budget proposed by Barack Obama is hard
enough, but the $3.6 trillion behemoth turns incomprehensible when left-
and right-leaning journalists assigned to analyze it seem unable to
separate wishful thinking from political reality.
An early skeptic about the left-handed phenom from Chicago, I’ve never
had any illusions about Obama’s commitment to left-wing “change.” Yet
that’s exactly what pundits across the political spectrum say Obama is
putting forth.
Of course, we heard it all before in the Clinton administrations—“Ah
know you voted for chaiinge”—but the change Clinton had in mind was
realigning the Democratic Party to the right of center, where he could
raise more money for his political campaigns. Millions were thrown off
welfare—while millions of unregulated “derivatives” were hurled into the
debt markets, anti-union, anti-labor “free trade” pacts were passed and
a pre-emptive war was launched against Serbia without U.N. consent.
Now Obama, a product of the non-ideological Daley machine and advised
largely by Clinton retreads, has presented what ought to be described as
a cautious, centrist budget, albeit one with a huge deficit. Sure, it’s
a lot of money, but given the severity of the recession, it’s hardly
excessive. Indeed, such unradical liberals as Paul Krugman have
criticized Obama’s pre-budget stimulus package as not being nearly
aggressive enough.
The same could be said of the new budget, and yet “liberals” and
“conservatives” alike insist that Obama has set into motion a bold
leftward shift in thinking. From the official left, The Nation magazine
calls the budget proposal “an audacious plan to transform America.” In
the center, Clive Crook, of the staid Financial Times, calls the new
budget “a liberal’s dream of a new New Deal” and Obama himself
“conservatism’s worst nightmare.” On the official right, The Wall Street
Journal warns ominously of “The Obama Revolution” and asserts that the
president is “attempting not merely to expand the role of the federal
government but to put it in such a dominant position that its power can
never be rolled back.”
From these commentaries, you might think that a crypto-socialist had
taken up residence in the White House. But such a reading of Obama is
absurd.
First, the “soak-the-rich” aspect of the proposed tax changes is vastly
overstated. Obama wants to reduce the deduction that top earners take on
their charitable giving, but he timidly declines to raise the highest
marginal-income-tax rate immediately, preferring to let the Bush tax
cuts expire in 2011. Not until 2012 would the President’s rich Wall
Street and corporate-executive campaign donors be forced to pay 39.6
percent on part of their income—hardly confiscatory when one recalls
that the top marginal rate remained above 90 percent through both
Eisenhower administrations and part of Kennedy’s. Similarly, the top
rate on capital gains was as high as 36.5 percent during the Nixon/Ford
era; Obama aims to raise it to just 20 percent from the current 15.
Fiddling with the tax code (not reforming it) is supposed to help pay
for better health care. Already, Obama’s health plan doesn’t cover
everyone, but it does ensure that insurance companies and HMOs will
continue reaping profits off illness and bad luck. President Truman,
hardly a radical left-winger, proposed authentic national health
insurance in 1945 in the form of an optional, federally administered
fund to which anyone could pay a modest monthly fee and be guaranteed
payment of all their medical bills. Participating doctors would have
been reimbursed by the government, but such participation was to be
voluntary. Such a common-sense “single-payer” program is not even being
considered by Obama and Democratic leaders.
Even so, left and right persist in the fantasy that the president is a
Mr. Smith Goes to Washington character prepared to “take on” the powers
that be. It’s one thing to rationalize the vast sums that Obama raised
for his campaign from commercial and investment banks (“Well, you have
to get elected,” etc.). But rationalizing the laissez-faire beliefs of
Lawrence Summers and Timothy Geithner—exhibited most notably in their
scandalous opposition to derivatives regulation in the Clinton
administration—borders on the idiotic. The left pretends that Summers
isn’t really Obama’s chief economic adviser, while the right pretends
the former Treasury secretary has converted to left-wing Gaullism. In
reality, Summers and Geithner are in place precisely to prevent real
reform of a banking system that helped put Obama in the White House.
On budget matters, so far, Obama’s economic “brain trust” is brain-dead.
Comparisons with FDR are spurious, given that the administration so far
won’t even discuss restoring some form of Glass-Steagall, the New Deal
law that separated investment banks and commercial banks. Meanwhile,
Obama seems to have forgotten his proposed “reform” of NAFTA or of our
cheap-labor investment agreement with China (so-called Permanent Normal
Trading Relations). And he’s certainly not calling for higher tariffs to
protect American industry and wages, or for bank nationalizations.
The Wall Street Journal’s Big Brother socialist bogeyman is a canard.
There’s no authentic national economic planning in the Obama budget,
just the usual hodge-podge of programs that sound good to this or that
constituency, congressman or columnist.
Here’s one little bit of central planning that could have helped, but
isn’t seriously addressed: rebuilding the nation’s passenger- and
freight-railroad network, badly weakened by deregulation and
mismanagement. The stimulus bill has $8 billion for high-speed rail
lines and the proposed budget adds another $5 billion over five years.
This is chump change compared with the cost of occupying Iraq and
Afghanistan, and paltry next to the typical cost-plus Pentagon boondoggle.
Why not spend $50 billion on railroads? It would make the country more
energy-efficient, put lots of people to work installing and upgrading
track, and encourage General Electric to rehire the 1,200 people it just
laid off at its locomotive plant in Erie, Pennsylvania. With faster,
better trains (including urban rapid-transit lines), American companies
could get back into the passenger-train-car building business, now lost
to Canada and Europe, and American steel mills could profitably use some
of its excess capacity.
Obama, a moderate with far too much respect for the globalized financial
class, is surely the unleft, unradical president. Which makes you wonder
why left and right find common cause in saying otherwise.
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