Obama and the Derivatives Merchants

Obama and the Derivatives Merchants
Wednesday, 15 October 2008
by BAR executive editor Glen Ford

http://www.blackagendareport.com/index.php?option=com_content&task=view&id=838&Itemid=1


Barack Obama's star shines brighter than ever (whose wouldn't, in comparison to John McCain?) despite his intimate association with "the very same individuals who brought about the current catastrophe." Former Clinton Treasury Secretaries Robert Rubin and Lawrence Summers, now top advisors to Obama, "labored successfully to safeguard ‘derivatives,' the exotic ‘ticking time bomb' financial instruments, from federal regulation" nearly a decade ago. "Be assured that this crew will deliver another catastrophe from their positions of influence, if Obama is elected."

Obama and the Derivatives Merchants
by BAR executive editor Glen Ford

"...in many respects, working with [Barack Obama] will be very much like working with President Clinton.... I think he will be just fine." - Top Obama adviser Robert Rubin, former Clinton Treasury Secretary and Goldman Sachs chair, currently an executive with Citigroup, August 28, 2008.

The "progressive" Barack Obama that many supporters imagine is itching to break free once his corporate host's body is securely in the White House, remains dormant. Not even the groans of finance capital's collapse can waken him - a strong indication that no such progressive inner Obama exists.

Certainly the progressive Obama was nowhere to be found when the candidate endorsed the $700-plus billion "cash for trash" Wall Street bailout. So eager was Obama to "save" the bankers, he forgot which party he was supposed to belong to and offered to allow Bush Treasury Secretary Henry Paulson to keep his job in an Obama administration. Although the offer was coached in terms of facilitating a smooth "transition" from one regime to another, it is yet another telling indication that, in January, the baton will essentially be passed from one finance capital team wearing red shorts to another finance capital team in blue.

"Obama performed the bailout functions expected of him by his biggest financial backers: Wall Street."

Goldman Sachs doesn't much care which of the big business parties wins, so long as the rich remain in power. Paulson is a former CEO of Goldman Sachs, as is Obama's top economic advisor, Robert Rubin, who served as Bill Clinton's Secretary of Treasury. Corporate politics is nothing if not incestuous. When Rubin says that working with a President Obama "will be very much like working with President Clinton," he means that the elected players are eminently replaceable, while corporate guys are permanent. Obama "will be just fine" as a front for finance capital's continued rule.

When the crunch came in September, Obama performed the bailout functions expected of him by his biggest financial backers: Wall Street. After the first attempted heist was thwarted when an outraged citizenry laid electronic siege to the U.S. Capitol, Obama smothered the holdouts with promises to make things right once in the Oval Office. All but eight members of the Congressional Black Caucus (CBC) sent up the white flag. This was not unexpected, since the CBC as a body had ceased to play a progressive role years ago - neutered by corporate influence. It is sadly poetic that the final collapse of the Black Caucus occurred under the ministrations of history's most successful Black corporate politician, Barack Obama - a player so masterful he was able to enlist, silence or co-opt virtually all of Black "leadership" before one primary vote was cast.

Now Obama picks up an imaginary sword to fight a phony battle on behalf of the victims of his investment banker friends' crimes. With his lead widening in the polls, Obama offers a 90-day reprieve on foreclosures to those homeowners who were working with lenders that are part of the bailout deal. Homeowners would also have to show that they were making an effort to pay their mortgages. But at the end of the 90 days the family would still be out of luck if there was no agreement on terms with the lender.

"Obama still can't venture any farther left than his corporate leash allows."

Earlier this year, Obama rejected moratoriums on foreclosures and a freeze on rates, measures supported by his primary opponents John Edwards and Hillary Clinton (Obama called Clinton's rate freeze "disastrous"). Nearly two million foreclosures and evictions later, after facilitating a trillion-dollar corporate raid on the public treasury, and caught in a bidding war with McCain on spending what remains, Obama still can't venture any farther left than his corporate leash allows. Obama derides McCain's proposal to spend up to $300 billion buying up homeowners' mortgages at face value and repackaging them at terms consistent with current home values, calling it too expensive and a boon to lenders (the latter part is certainly true). But he championed the original $700 billion "cash for trash" scheme that was designed as a pure bailout for speculators - his investment banker friends - and would save not a single family from losing its home.

How bizarre it is to observe Obama playing the people's crusader in the morning and colluding with his top economic advisers, Robert Rubin and Lawrence Summers, in the afternoon. In February 1999, Rubin and Summers flanked Fed Chief Alan Greenspan on the cover of Time magazine, heralded as, "The Committee to Save the World." Summers was then Secretary of the Treasury for Bill Clinton, having succeeded his mentor, Rubin, in that office. Together with Greenspan, the trio had in the previous year labored successfully to safeguard "derivatives," the exotic "ticking time bomb" financial instruments, from federal regulation. Less than a decade later, unregulated derivatives would expand - like the Mother of All Bubbles - to notional values 10 to 15 times greater than the world's total economic output. The global order would be brought to its knees, in a financial conflagration that has just begun to show its full dimensions and destructive potential. (See New York Times, October 9
, "Taking Hard New Look at a Greenspan Legacy,")

So you might want to thank Obama's main men on the economy, Rubin and Summers, for the current crisis. Be assured that this crew will deliver another catastrophe from their positions of influence, if Obama is elected.

"Thank Obama's main men on the economy, Rubin and Summers, for the current crisis."

The November 4 election will change nothing in the configurations of power in the United States. It is Barack Obama's mission to ensure that the political transition effects no substantive alteration of power relationships, but rather, provides a new (Black) face for the old, fast-failing system. To the extent that self-identified progressives attempt to ignore or obscure the facts of Obama's very public allegiance to finance capital, they objectively weaken the people's ability to resist - or even recognize - the overarching menace of continued corporate rule.

It is absurd to claim that a progressive "movement" with a potential for profound social change can coalesce behind a candidate who repeatedly and reflexively aligns with the worst corporate malefactors on the planet, the very same individuals who brought about the current catastrophe. The great damage that has been done to African American political coherence, may never be repaired. At this crucial juncture in human history, the Black Sampson plants himself firmly among the wobbly pillars of the rich man's crumbling edifice - to prop it up!

Obama can no more succeed than John McCain in resolving the contradictions of capital by feeding the beast the last remnants of the national wealth. But his "progressive" apologists, by papering over the "real" Obama in favor of the wishful one that only exists in their fantasies, politically disarm the people, and make the inevitable task of organizing against an Obama presidency vastly more difficult.

BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it