Here’s a provocative quote from moderate conservative Financial Times columnist Clive Crook:
“If the top White House appointments the president announced last week were not calculated affronts to progressive Democrats, they might as well have been. William Daley, who replaces Rahm Emanuel as Mr Obama’s chief of staff, and Gene Sperling, who succeeds Larry Summers as head of the National Economic Council, have credentials to arouse the disgust of every left-leaning liberal.”
Well, let’s take a look.
In simple terms of class, Obama has re-united with the liberal wing of Wall Street in an effort to “triangulate” the resurgence from the right. To do so, he has brought back one implicit (William Daley) and one explicit (Gene Sperling) protegé of Robert Rubin, secretary of the treasury under Bill Clinton and pretty much the liberal architect of the Clinton era’s trade and financial policies. In full disclosure, I am not a Robert Rubin hater.
Take trade policy. Trade agreements always involve complex, and often uneven, tradeoffs, some of them very ill conceived. But globalization is an objective process which is fundamentally irreversible, barring world war. It is an inevitable component of capitalist development, foreseen by Karl Marx way back in 1848. Thus removing barriers to trade must also be an irreversible process. Sometimes, for example in the case of NAFTA, serious miscalculations are made. Whether these were deliberate or accidental in the case of NAFTA, who knows, but the agricultural terms of trade were disastrous for Mexican agriculture, and thus, ultimately, for undocumented immigration into the U.S. Nonetheless, to assert that trade has not played an overall powerful and positive role in U.S. economic growth, and that it is not even more important to less developed nations with more dependencies on foreign materials and resources, flies in the face of reality.
It’s natural that labor unions, typically on both sides of a trade agreement, tend to oppose each one. Every trade agreement, even the fairest, creates winners and losers. The losers know it immediately and make a lot of noise about it. The winners usually only emerge after the agreement is in effect and working for some time as expected under the terms of trade. Further, while unions on both sides of an agreement tend to oppose it, they do so usually for opposite reasons. Finding common ground across borders on trade questions is a profound question for the left and the labor movement. However, this is not something liberal finance capital is likely to try solving. Obama will not do this either – that’s up to us!
For example, Clinton and Rubin, like most on Wall Street, both seriously underestimated the downside of “irrational exuberance” in the financial sector. But, to be fair, most of the waste and exuberance took place after the tech meltdown, after Bush took over, and before Wall Street drove off the cliff with securitized mortgages, and became dominated by useless speculation.
Yet Rubin proved himself an able manager of the 1990s globalization crises (the peso crisis, the Asian meltdown) and a man able to draw serious intellectual and scientific people into economic and financial policy, and train them to be effective at both policy and theory. He was able, also, to prove that drawing down debt during a growth period provided a very large stimulus in the private sector, and played a large role in isolating the Republican-Gingrich forces in Congress on economic policy.
Rubin, and his disciples, took middle ground on many of the neo-liberal disasters associated with the counter-productive policies and practices of the International Monetary Fund (IMF) in the ’90s. He played a strong role in maneuvering Alan Greenspan away from obstructionism. And on social issues, including matters of race, nationality, diversity – his record and that of his protegés stands up.
Given the paralysis in Washington on further government stimulus, rekindling private investment has become, let’s admit it, a practical necessity, perhaps the only realistic path to reducing unemployment. At the same time, while alliance with liberal private investment forces may peel off Republican support, its economic impact will be too slow to alleviate the suffering or apprehensions of millions of workers, nor prevent them from panicking over sustained unemployment and low incomes and succumbing to tea party-like diversions created by the Republicans.
Many on the left may draw the conclusion that the new White House appointments are another sellout by the president. I submit the question is irrelevant, the wrong question. We have a serious challenge of left and grassroots unity preparing for the 2012 elections – and the president is not in the same position to be the architect of that as he was when he was a candidate three years ago. The coalition of progressive and center forces reflected in the Organizing for America formation, for example, will be unlikely to re-organize on the same basis it did in the 2008 campaign, since it is now attached to the Democratic National Committee. As a result, it is less the property of Obama the candidate than it is of the DNC leadership – a much narrower spectrum of forces than the original campaign. As important as trade and financial regulation are in the overall economy, our forces will not be primarily motivated by them, at least in any constructive direction. For us, it’s jobs, health care, retirement, education and peace – and grassroots unity is our responsibility.
Conclusion: the president’s move on Daley and Sperling is inevitable. For him, triangulation is a sensible tactic. Focusing criticism on it instead of on the obstacles to putting together the grassroots structures is a dead end. We need a hundred – or a thousand – candidates on OUR issues. I do not believe the president will be our enemy there. As FDR once said (approximately), “Make me do the right thing.”
Photo: President Barack Obama announces Gene Sperling, second from left, as the new director of the National Economic Council, while speaking about the economy at Thompson Creek Manufacturing, which makes custom replacement windows, Jan. 7, in Landover, Md. From left: Heather Higginbottom, nominee for deputy director, Office of Management and Budget; Sperling; the president; Katharine G. Abraham, nominee for member, Council of Economic Advisers; Jason Furman, principal deputy director of the National Economic Council. (AP/Charles Dharapak)