[Peace-discuss] Who owns Obama?

[C. G. Estabrook]

[Lenin once said, "The capitalists will sell us the rope with which we 
will hang them."  That seems to be rather grudgingly the case with the 
New York Times in regard to Noam Chomsky, who's not too fond of either 
Lenin or the NYT. The "paper of record" is happy to syndicate Chomsky's 
popular columns around the world but won't publish them in the US! This 
is  a selection from Chomsky's latest syndicated article - more 
available in, say, an Indian newspaper than an American one. It's a 
concentrated and wide-ranging analysis - the whole thing (URL below) 
repays close reading. --CGE]

	Published on Friday, March 26, 2010
	by the New York Times Syndicate
	Globalization Marches On
	Growing popular outrage has not challenged corporate power.
	By Noam Chomsky

...In one dimension-military power-the United States stands alone. And 
Obama is setting new records with his 2011 military budget. Almost half 
the U.S. deficit is due to military spending, which is untouchable in 
the political system.

When considering the U.S. economy's other sectors, Nobel laureate Joseph 
Stiglitz and other economists warn that we should beware of "deficit 
fetishism." A deficit is a stimulus to recovery, and it can be overcome 
with a growing economy, as after World War II, when the deficit was far 
worse.

And the deficit is expected to grow, largely because of the hopelessly 
inefficient privatized health care system-also virtually untouchable, 
thanks to business's ability to overpower the public will.

However, the framework of these discussions is misleading. The global 
system is not only an interaction among states, each pursuing some 
"national interest" abstracted from distribution of domestic power. That 
has long been understood.

Adam Smith concluded that the "principal architects" of policy in 
England were "merchants and manufacturers," who ensured that their own 
interests are "most peculiarly attended to," however "grievous" the 
effects on others, including the people of England.

Smith's maxim still holds, though today the "principal architects" are 
multinational corporations and particularly the financial institutions 
whose share in the economy has exploded since the 1970s.

In the United States we have recently seen a dramatic illustration of 
the power of the financial institutions. In the last presidential 
election they provided the core of President Obama's funding.

Naturally they expected to be rewarded. And they were-with the TARP 
bailouts, and a great deal more. Take Goldman Sachs, the top dog in both 
the economy and the political system. The firm made a mint by selling 
mortgage-backed securities and more complex financial instruments.

Aware of the flimsiness of the packages they were peddling, the firm 
also took out bets with the insurance giant American International Group 
(AIG) that the offerings would fail. When the financial system 
collapsed, AIG went down with it.

Goldman's architects of policy not only parlayed a bailout for Goldman 
itself but also arranged for taxpayers to save AIG from bankruptcy, thus 
rescuing Goldman.

Now Goldman is making record profits and paying out fat bonuses. It, and 
a handful of other banks, are bigger and more powerful than ever. The 
public is furious. People can see that the banks that were primary 
agents of the crisis are making out like bandits, while the population 
that rescued them is facing an official unemployment rate of nearly 10 
percent, as of February. The rate rises to nearly 17 percent when all 
Americans who wish to be fully employed are counted.

Bringing Obama to Heel

Popular anger finally evoked a rhetorical shift from the administration, 
which responded with charges about greedy bankers. "I did not run for 
office to be helping out a bunch of fat-cat bankers on Wall Street," 
Obama told 60 Minutes in December. This kind of rhetoric was accompanied 
with some policy suggestions that the financial industry doesn't like 
(e.g., the Volcker Rule, which would bar banks receiving government 
support from engaging in speculative activity unrelated to basic bank 
activities) and proposals to set up an independent regulatory agency to 
protect consumers.

Since Obama was supposed to be their man in Washington, the principal 
architects of government policy wasted little time delivering their 
instructions: Unless Obama fell back into line, they would shift funds 
to the political opposition. "If the president doesn't become a little 
more balanced and centrist in his approach, then he will likely lose" 
the support of Wall Street, Kelly S. King, a board member of the 
lobbying group Financial Services Roundtable, told the New York Times in 
early February. Securities and investment businesses gave the Democratic 
Party a record $89 million during the 2008 campaign.

Three days later, Obama informed the press that bankers are fine "guys," 
singling out the chairmen of the two biggest players, JP Morgan Chase 
and Goldman Sachs: "I, like most of the American people, don't begrudge 
people success or wealth. That's part of the free-market system," the 
president said. (Or at least "free markets" as interpreted by state 
capitalist doctrine.)

That turnabout is a revealing snapshot of Smith's maxim in action...

[Noam Chomsky is Institute Professor (retired) at MIT. He is the author 
of many books and articles on international affairs and social-political 
issues, and a long-time participant in activist movements. His most 
recent books include: Failed States, What We Say Goes(with David 
Barsamian), Hegemony or Survival, and the Essential Chomsky.]

http://www.commondreams.org/view/2010/03/26-14

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