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Paul Street tells Paul Jay that in the first two years of Obama’s first term when the Democrats controlled both houses, the president “stood between the bankers and the pitchforks” instead of using the moment for real reform

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PAUL JAY: Welcome to The Real News Network. I’m Paul Jay. Well, we’re just a couple of weeks away from the end of the Obama Administration and the beginning of the Trump era. We were all expecting, I think, to be talking about the in-coming president Clinton and her promise to carry on the legacy of President Obama and that would have given us weeks to look at the Obama legacy and talk about what Hillary might do. Of course, that isn’t what happened and there’s been so much news about the in-coming Trump presidency that we haven’t spent much time at all reviewing the Obama legacy. But certainly, one of the major pieces of the Obama legacy is Trump himself. And as we’ve been saying on The Real News Network, it’s the policies of President Obama, and certainly Bush and also Clinton before him, that have helped set the table for the emergence of a Trump and the right-wing, what people are calling “populism”, and the resurgence of that. But now we’re going to take a beginning of a look, at least, at the Obama Administration over the next week or two — and most importantly the issue of the financial meltdown ’07/’08 and how President Obama handled that. And, within the context of that, the whole emergence, over the last few decades, of the power of finance — and the more parasitical finance seems to get, the more casino gambling it seems to get, the more powerful it seems to get politically. And President Obama is certainly part of that process and Trump a continuation thereof. Now joining us from Iowa City to discuss all this is Paul Street. Paul’s a journalist, an author living in Iowa City, as I said. His most recent book is “They Rule: The 1% vs. Democracy”. Thanks for joining us, Paul. PAUL STREET: Thanks for inviting me. Glad to be here. PAUL JAY: So, the one major, I would say, positive claim about President Obama’s Administration — and certainly not only, I’ll admit I have in front of me in my research here, 50 things that some people think were positive about the Obama Administration — and we’re not going to work our way through that. But usually number one or number two on that list is how President Obama handled the financial meltdown. And the phrase that’s usually used is that under his watch the crisis known as “The Great Recession” did not become “The Great Depression” — and he gets credit for that. So, what do you make of that claim? PAUL STREET: We’ve had sort of a very long, slow, weak, sort of pathetic recovery. It just came out recently in a high-level Princeton study that 94% of the jobs created under Obama have been part-time, contract, temporary, so-called gig jobs. There have been millions of jobs created. They’ve been incredibly bad, poorly paid, no-benefit jobs. We know that 95% of the new income nationally in Obama’s first term — I haven’t seen the studies for the second term — went to the top 1%. We reached the point by the time of the eve of the last presidential election where Bernie Sanders could accurately point out that the top 10th of the top 1% has as much net worth as nearly the bottom 90% of the entire US population. Sixty-eight people globally have as much wealth as the bottom half of the human population. Obviously, that’s international. I’ve seen on more than one occasion, and verified, the heirs of the Walmart fortune together — six or seven people — have as much wealth networked between them as the bottom 42%. So, it’s kind of like an on-going slow depression/recession for most of the population, anyway. Black net worth in this country now in the median household is at 1/13th of white median household wealth. So, it feels like a recession. It feels like a depression for many people, anyway. Yes, the system did not completely and thoroughly collapse. Yes, if a Republican had come in, in ’09 there might have been an even weaker stimulus. There might have been no regulation whatsoever of Wall Street. Maybe there would have been a collapse. Many analysts say right now we’ve been kicking the can down the road and are just looking at new asset bubbles and potential collapses. I’m not a financial analyst, primarily, or by any claim, have any kind of expertise in that, but I see that again and again. And that’s a sort of recurrent historical outcome of these absurd and obscene levels of over-concentration of wealth in a few hands without productive outlets for investment that they tend to feed that sort of thing — and any number of experts are predicting another financial crisis at some point under Trump. So, we shall see. PAUL JAY: When you talk to ordinary people — and this is certainly the narrative of the Democratic Party leadership as well — is that essentially President Obama was a progressive. That word got thrown around a lot during the recent Democratic Party Primary. But Obama is a progressive at heart, constrained by a Republican Congress. What do you make of that argument? PAUL STREET: Well, you know, the key moment… (laughs) Obama came in as Lyndon Baines Johnson did in his first term with Democratic majorities in both Houses of Congress. He was not constrained by an over-powerful right-wing opposition his first two years and could have very likely pursued far more actually progressive and aggressive left-wing liberal — genuinely liberal progressive policies — and chose absolutely not to, even with that electoral mandate coming in, in ’08. And Obama really did have a kind of electoral mandate for some sense of progressive change in ’08. Absolutely kicked single-payer health insurance, which had majority citizen support, to the curb. Couldn’t even invite noted single-payer advocates like John Conyers to his first summits on healthcare reform. Even a limited marginal(?) public option which was sort of thrown around as a political football for a while to sort of pretend — the Obama Administration pretended to be for it — was pretty much kicked to the curb and kicked to the curb from the inside. Obama campaigned on something called “card check authorization”, the Employee Free Choice Act, which would essentially have re-legalized union organizing. PAUL JAY: Yeah, that was his big promise to the trade unions that… PAUL STREET: Right, in this country. John Edwards campaigned in Iowa — I saw it in person — on the Free Choice in a very aggressive kind of way and sort of made Obama pick it up, and it was completely kicked to the curb from the beginning. There would have been significant popular support for strict regulation, even possibly nationalization, of the very financial institutions that had lead the economy over the cliff in an incredibly reckless and in dangerous kinds of ways. And, in fact, Obama ended up having a meeting in March of 2009 where he called in the top 13 financial executives of the United States, right from Blankfein and Jamie Dimon and the rest, all the way down. And they all came in terrified and, as one of them reported, “We would have been ready to roll over and do anything that the President had demanded of us,” and it turned out he said, “I’m here to help you. You guys have a public relations problem. We don’t want to see you nationalized, or taken over, or broken up. Let’s see how we can work together.” PAUL JAY: Yeah, in your recent article I think you quote Ron Suskind’s book where he says Obama apparently said to the bankers, “I’m between you and the pitchforks.” PAUL STREET: Right. PAUL JAY: “The unruly mob that might come and get you. But I’ll…” PAUL STREET: “And I’m here to help you.” And one of the bankers left and said, “We were all so relieved that he wanted to help us.” This is the quote, “He wanted to help us quell the mob.” And, of course, what followed in the wake of that was the continuation, and indeed the expansion into the many trillions of dollars, of the Federal bailout of the very parasites who had driven the economy into the ground, right? And you know, as William Greider, the great liberal journalist, wrote in the Washington Post not long after that, Obama continued the great blunt lesson about power, right, for the American people. The government has plenty of money to spend when the right people want it — and are ready to spend for everyone else, right. And the great joke around the country became, “Where’s my bailout?” PAUL JAY: Let me make a kind of counter argument which I expect, if you were to talk to President Obama, or some of the people close to him might make. Given the balance of political forces in the country, including very conservative elements in the Democratic Party — even though he controlled both Houses, a large number of the Democratic Party itself would not support a single-payer healthcare system. Given the balance of forces in terms of how powerful finance capital is, and what they can do in terms of rallying the media, and rallying electoral forces — which they did in 2010, the subsequent Congressional elections — that the demand of Obama to be a Roosevelt, with a kind of New Deal, with direct jobs program, really take on Wall Street and finance capital in terms of regulation, Glass-Steagall that was done during Roosevelt, or the legislation with the Commodity Futures Trading Commission where they regulated position limits in commodities trading, and so on and so on. PAUL STREET: Uh huh. PAUL JAY: That that wasn’t there to be had when Obama was President. That there was no mass movement at the level that there was in the 1930s, and given the control of mass media by finance, that Obama really couldn’t do more than he did. And so, by at least managing the global capitalist crisis in a way that it didn’t become the Great Depression, he did as much as could be done, given the circumstances. I’m trying to become an Obama defender here. What do you make of the argument? PAUL STREET: (laughs) Well, you know that may be the case and there’s all kinds of evidence for it, you know. And I remember in ’09, Obama’s former colleague in the US Senate from Illinois, Richard Durbin, throwing up his hands and saying basically that the bankers owned the whole government. They own the whole place. They own Congress. I remember Sanders, during the last Presidential campaign, the Primaries, pointing out that the Federal government doesn’t regulate the bankers. Congress doesn’t regulate the bankers — the bankers regulate Congress in numerous kinds of ways, including the offer of job opportunities for people who do a couple years in the Federal government and then go out and make eight times more money than they could ever make in so-called public service while they’re in Congress or in the Securities and Exchange Commission. And they behave accordingly during that time in the office. So, there’s all kinds of evidence for that with the campaign contributions, control over the media, and career opportunities outside of public service in Wall Street, in lobby, all of that is true. But we don’t know until a president actually comes in committed to being a progressive and finds out, and tries, and attempts to build an active citizens’ network and uses the presidency as a bully pulpit and tries to actually govern in accord with progressive campaign promises — as I suspect Bernie Sanders, for example, would have tried to do if he got in. It’s kind of an existential argument. The real proof in the pudding would be if Obama actually tried — and there were all kinds of indications from people who had paid attention to the Barack Obama — not the Barack Obama who spoke to labor audiences or spoke to sort of campus town, anti-war progressives — but the Barack, the candidate Obama who wined and dined, really from 2002 and 2003 on and up through his presidential candidacy, with the movers and the shakers, the power brokers, the lobbyists who spoke to the business roundtables, who gave the keynote address at the neo-liberal Hamilton Project, you know, as set up by Robert Rueben at the Brookings Institution in ’06. You know, the Obama who spoke to the Council on Foreign Relations and the Chicago Council on Global Affairs. If you’d paid attention to the speeches Obama gave to concentrated wealth and power, you would have known in advance that there was never the slightest chance of him ever making that existential decision to try and see, to find out — to try and rally the populace and use the presidency as a bully pulpit to do, you know, sort of Rooseveltian kinds of things. I mean, you know, forget Franklin Roosevelt, I mean, even Teddy Rooseveltian times. He wasn’t going to do that. And a lot of us — this is another topic, I guess — but a lot of us who studied Obama and knew Obama from early on — I did in Chicago, where I was based in the late 20th century and early 21st century — knew that was never going to happen. So, we really don’t know. He never tried and he never was going to. PAUL JAY: Yeah, we were reporting the same thing during the primaries on The Real News Network. If you actually read his speeches and looked at the actual content — and not the brilliant delivery and the wonderful smile and the charm and the wit and so on — and you actually just read the substance, you could see. There’s no reason to expect anything other than what we got. PAUL STREET: And you talk to Chicago area and Illinois-based lefties — this really goes way back. I will never forget that the great left political scientist Adolph Reed described Obama in “The Village Voice” in, get this, January of 1996, right after Obama had just been elected to the Illinois Senate. And Reed, who I believe was at Northwestern at the time and knew Obama, described him without naming him, immediately, as a vacuous, too-repressive, neo-liberal who was sort of coming up out of the liberal foundation world, who sort of epitomizes the convergence of a middle class sort of a pseudo-progressive cultural reform and identity politics, and so– PAUL JAY: Yeah, I think the real critique — even if you give him the narrow limits of what’s possible in today’s politics in getting nominated, getting elected, within very narrow confines — that he didn’t push the limits of those very narrow confines at all. And maybe the issue that’s most representative of that is that issue of public option in the healthcare reform. Yes, he didn’t give any voice at all to single-payer, you know, Medicare for All type model, when they… He allowed Senator Baucus to chair the Senate Committee that held the hearings and they wouldn’t allow one person to come forward and advocate a single-payer. But the public option at least did get on the table but Obama never — I mean, he never actually seemed to support it — but this bully pulpit, like if he had called on a million people to come to D.C. and fight for the public option and all this. But he didn’t. He didn’t want to let the genie of that mass movement out of the bottle. Quite the contrary, once that mass movement for Obama elected him, he wanted it to go away as fast as possible. PAUL STREET: I just think that’s absolutely right. And, I mean, I think the Ron Suskind account based on inside recollections from bankers who were at this remarkable meeting of March in 2009, really sort of summarizes the basic world view. And it shouldn’t have been surprising. PAUL JAY: Well, he raised more money on Wall Street than anyone else did. PAUL STREET: He set new records. Right. After I read the “Audacity of Hope”, which is this sort of fake progressive and sort of deeply reactionary Ronald Reagan-praising and 1960s disrespecting campaign book that Obama came out with in late ’06, it’s full of all kinds of peons and statements of fealty to sort of free market and neo-liberal American style top-down capitalism. And the same with numerous addresses he gave as a U.S. Senator, so very little surprise there, frankly. PAUL JAY: And the thing, just to sort of come to a conclusion here, because we could talk about this for a long time — and we will, we’ll do it again. But the thing is he knows better. I was watching a… the same with Bill Clinton. I saw a very interesting interview, I don’t think most Americans have seen. Bill Clinton, when Chávez went to the UN and talked about, “I smell sulfur in the air,” about George Bush having just spoken there and, of course, he got a lot of negative critique for saying something like that in the United States. But Bill Clinton was interviewed on Canadian television — CBC at the time — and he was asked what he thought of the Chávez speech? And Bill says, you know, “It wasn’t very good because it inflamed American public opinion on a kind of a nationalist, patriotic basis. If he wanted to make a critique,” says Bill, “He could have critiqued U.S. economic policy in Latin America.” And Bill Clinton went on to give one of the best critiques of neo-liberal economics as applied to Latin America that I’ve ever heard. Now, we know Bill was responsible for a great deal of this but his argument against it was extremely well worked out. Very fact-based the way Bill Clinton is very good at making arguments. And I saw a recent interview with Barack Obama where he talks, you know, very lucidly about how every modern economy has socialist elements to it and it’s a mixed economy and, you know, to use this kind of anti-socialist rhetoric is silly because everyone knows there’s these things… And, like, he understands the issues. PAUL STREET: But, unlike Ronald Reagan and unlike George W. Bush, who were just sort of half-moronic figureheads for real power brokers behind the scenes, both Bill Clinton and Barack Obama — highly educated, Ivy League law school, sophisticated, conscious articulators of neo-liberal and imperial ideology — know exactly what they’re doing and what they were about. And I sort of know this from inside information from Obama in Chicago long before he became the national Obama phenomenon. He’s sort of quite astute about these kinds of things. He knows a thing or two about class analysis, knows a thing or two about Marxism, knows what neo-liberalism is. And you know, in this wonderful book that just came out by Mike Lofgren, “The Deep State” right — Lofgren’s this sort of inside Washington character. He was a Congressional Republican staffer for three decades. And he describes Obama, I think, accurately as kind of a reluctant, at the end of the day, sort of, but self-conscious and ultimately committed articulator of the imperial system. You know, in sort of a diffident kind of way that ended up pissing off some elites. But he knew what he was about. He’s very different than Bush and very different than Reagan and I think the same applies to Bill Clinton. They know they’ve been managing state capitalism and they’ve been fairly good at it. I think this will be a difference with Trump, as well. PAUL JAY: Self-conscious and aware, but perhaps never expected that Trump would be his real legacy. We’re going to talk more about that in a future interview. Thanks very much for joining us, Paul. PAUL STREET: You bet. It was great. PAUL JAY: And thank you for joining us on The Real News Network. ————————- END

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