In a short, surgically sharp article in the most recent New Left Review, Walter Benn Michaels examines the social perspective interwoven into the Obama campaign effort:

After half a century of anti-racism and feminism, the US today is a less equal society than was the racist, sexist society of Jim Crow. Furthermore, virtually all the growth in inequality has taken place since the passage of the Civil Rights Act of 1965—which means not only that the successes of the struggle against discrimination have failed to alleviate inequality, but that they have been compatible with a radical expansion of it. Indeed, they have helped to enable the increasing gulf between rich and poor.

Why? Because it is exploitation, not discrimination, that is the primary producer of inequality today. It is neoliberalism, not racism or sexism (or homophobia or ageism) that creates the inequalities that matter most in American society; racism and sexism are just sorting devices. In fact, one of the great discoveries of neoliberalism is that they are not very efficient sorting devices, economically speaking. If, for example, you are looking to promote someone as Head of Sales in your company and you are choosing between a straight white male and a black lesbian, and the latter is in fact a better salesperson than the former, racism, sexism and homophobia may tell you to choose the straight white male but capitalism tells you to go with the black lesbian. Which is to say that, even though some capitalists may be racist, sexist and homophobic, capitalism itself is not.

This is also why the real (albeit very partial) victories over racism and sexism represented by the Clinton and Obama campaigns are not victories over neoliberalism but victories for neoliberalism: victories for a commitment to justice that has no argument with inequality as long as its beneficiaries are as racially and sexually diverse as its victims. That is the meaning of phrases like the ‘glass ceiling’ and of every statistic showing how women make less than men or African-Americans less than whites. It is not that the statistics are false; it is that making these markers the privileged object of grievance entails thinking that, if only more women could crash through the glass ceiling and earn the kind of money rich men make, or if only blacks were as well paid as whites, America would be closer to a just society.

It is the increasing gap between rich and poor that constitutes the inequality, and rearranging the race and gender of those who succeed leaves that gap untouched. In actually existing neoliberalism, blacks and women are still disproportionately represented both in the bottom quintile—too many—and in the top quintile—too few—of American incomes. In the neoliberal utopia that the Obama campaign embodies, blacks would be 13.2 per cent of the (numerous) poor and 13.2 per cent of the (far fewer) rich; women would be 50.3 per cent of both. For neoliberals, what makes this a utopia is that discrimination would play no role in administering the inequality; what makes the utopia neoliberal is that the inequality would remain intact.

Such a perspective is not markedly different than the one presented by the hip hop artist Immortal Technique in his incendiary rap video The Poverty of Philosophy, posted here in February 2007:

My enemy is not the average white man, it's not the kid down the block or the kids I see on the street; my enemy is the white man I don't see: the people in the white house, the corporate monopoly owners, fake liberal politicians those are my enemies. The generals of the armies that are mostly conservatives those are the real Mother-Fuckers that I need to bring it to, not the poor, broke country-ass soldier that's too stupid to know shit about the way things are set up.

In fact, I have more in common with most working and middle-class white people than I do with most rich black and Latino people. As much as racism bleeds America, we need to understand that classism is the real issue. Many of us are in the same boat and it's sinking, while these bougie Mother-Fuckers ride on a luxury liner, and as long as we keep fighting over kicking people out of the little boat we're all in, we're gonna miss an opportunity to gain a better standard of living as a whole.

In other words, I don't want to escape the plantation I want to come back, free all my people, hang the Mother-Fucker that kept me there and burn the house to the god damn ground. I want to take over the encomienda and give it back to the people who work the land.

Immortal Technique may have voted for Obama in the New York primary because of Obama's refusal to scapegoat immigrants, but, as his remarks during this London appearance indicate, he refuses to romanticize him.

Obama does not hide the neoliberal emphasis of his candidacy. Quite the contrary. As the election nears, he highlights it, consistent with a strategy of placating the elites that he fears could deny him the presidency. During the debate on Tuesday night, he played along with the socially conservative bias of the moderator, Tom Brokaw, who exalts the primacy of sacrifice within the American experience because of his infatuation with the World War II generation that he profiled in his book, The Greatest Generation. Hence, he accepted Brokaw's premise that the next President must have the ability to motivate Americans to sacrifice, a premise crystallized in Brokaw's insistence that entitlement reform, more properly understood as the curtailment of social assistance to the middle and lower classies, is a major issue of concern.

Obama did not challenge this, either, taking care to evade the notion that the wealthy, after, in many instances, profitting from the circumstances that caused this crisis, should bear some responsibility for paying for it. In other words, he has already internalized the newly emerging consensus that the we are going to have to lower our expectations, or, more bluntly, tighten our belts. With McCain joining him in a duet on this subject, it became very obvious that fiscal austerity looms just over the horizon, regardless of the winner of the election. Given that both candidates advocate even higher levels of defense spending, significant cuts in domestic spending are inevitable. If I had still been single, instead of married, with a young son, I would turned off the debate, and watched something more uplifting, like, say, Sid and Nancy.

Things only got worse, as you might have guessed. McCain, desperate to reenergize his campaign, proposed that we buy the mortgages of distressed homeowners so as to enable them to avoid foreclosure, thus stabilizing their communities. $300 billion of the $700 billion appropriated to the Treasury to bail out global financial institutions would allocated for this purpose. It was a rare moment of Keynesian pragmatism in a debate that otherwise stayed within a irrelevant discourse of abstract, regulatory solutions and voting records.

Afterwards, McCain's domestic policy advisor, Douglas Holtz-Eakin described the proposal in more detail:

. . . under McCain's plan, homeowners would get new fixed-rate mortgages based on the homes' current value with an interest rate of about 5 percent, a percentage point less than the average current rate. The government would pay the difference between the original mortgage amount and what the homes are now worth.

During the debate itself, McCain nailed it in regard to the urgency of this sort of approach, an approach that would reinvigorate the economy and communities around the country:

Is it expensive? Yes. But we all know, my friends, until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy, and we've got to give some trust and confidence back to America.

It was a shocking moment of candor. Of course, the proposal is not a complete solution to the financial crisis, but it does direct relief to a broad group of middle and lower income people who are being economically devastated by the crisis. And, the Obama reaction? Straight out of Goldman Sachs:

"John McCain wants the government to massively overpay for mortgages in a plan that would guarantee taxpayers lose money, and put them at risk of losing even more if home values don't recover," Jason Furman, Obama's economic policy director, said in a statement. "The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud.

This is the sort of corporate populism that made the Clinton campaign so offensive in the spring, the manipulation of resentment to generate support for corporate friendly policy, as manifested most clearly in her request for a gas tax holiday. It always relies upon cynicism and the susceptibility of the intended audience to emotional manipulation. In this instance, Furman is particularly brazen, because, after all, Obama had just voted, along with McCain, to deliver $700 billion to financial institutions in return for nearly worthless debt instruments, generously priced in accordance with hold to maturity valuations, instead of the much lower ones in the market.

Accordingly, it is not, as asserted by Furman, a question of unfairly enriching financial institutions, McCain and Obama have already agreed on that one. Instead, McCain, upon reflection, admirably decided that the government must do something to stimulate consumer demand in addition to providing supply side incentives to extend credit. So, he decided that it was necessary to allocate a substantial portion of the bailout monies to purchase mortgages and free borrowers from increasingly onerous terms of repayment.

Furman can't openly say that his candidate prefers a trickle down solution, so he must instead resort to obfuscation. But then, we shouldn't be too shocked. He is known for his assertion that Wal-Mart is a progressive success story, his willingness to consider private retirement accounts for Social Security and his close connections to Wall Street through Robert Rubin. In his current role, he is making sure that Obama never strays from the Wall Street line.

Having used his campaign to legitimize the delivery of $700 billion to the Street and the global instituions with which it does business, Obama, faced with what must have been a surprise, relied upon Furman to confront the threat. Obama didn't spend a day and a half at campaign appearances promoting the bailout to solidify his support in the financial sector just to turn around and hand nearly half of the money over to the middle and lower class. If you aren't a military contractor or a banker, the next four years don't look too promising.

Michaels sums it up pretty well:

There is a real difference between Obama and McCain. But it is the difference between a neoliberalism of the centre and a neoliberalism of the right. Whoever wins, American inequality will be left essentially untouched. It is important to remember just how great that inequality is. A standard measure of economic inequality is through the Gini coefficient, where 0 represents perfect equality (everybody makes the same), and 1 perfect inequality (one person makes everything). The Gini coefficient for the us in 2006 was 0.470 (back in 1968 it was 0.386). That of Germany today is 0.283, that of France, 0.327. Americans still love to talk about the American Dream—as, in fact, do Europeans. But the Dream has never been less of a reality than it is today. Not just because inequality is so high, but also because social mobility is so low; indeed, lower than in both France and Germany. Anyone born poor in Chicago has a better chance of achieving the American Dream by learning German and moving to Berlin than by staying at home.

Meanwhile, Immortal Technique is more succinct:

And they might even have a black president but he's useless

Cuz he does not control the economy, stupid!"

Labels: Bailout of Finance Capitalists, Barack Obama, Credit Crunch, Housing Bubble, John McCain, Neoliberalism, New Left Review