BILL CLINTON VS. OBAMA : A Continued Crisis in Leadership.(Part One)

Recent commentary on the first hundred plus days of the Obama administration have almost exclusively drawn comparison to those of FDR.  A closer and, it would seem, more accurate comparison would be that of Bill Clinton.

In 1992, “Change We Can Believe In”, was replaced with, “Putting People First”.  And, just like Obama, Clinton was elected for a number of political reasons that all equaled a campaign platform that promised sound social, economic and political change for the average American. As with Clinton it did not take long for  Obama to show his true colors.

“It’s the economy stupid”, was the mantra that kept Clinton focused on the path to the prize.  But in 1992 it was more than obvious to even the casual observer.  With an economy that was in the first throws of Reaganomics finally “trickling down” into his administration  Pres. G.H.W. Bush the incumbent President was about to have the prefix of “former” added to his title.  And all this was being handed to him by a previously unknown Arkansas governor who, like Obama, came out of national political nowhere and ran what was an unexpectedly slick and strategically planned campaign.

The Clinton victory was a classic populist victory.  The promise of “Putting People First” was a cry for change, change that would be far reaching and challenge the business as usual politics of Washington that was seen as being devastated by President Bush. Like Obama, Clinton promised to put the voters back in charge of the government and their elected officials.  Admittedly campaign promises are largely hyperbole, but within the context of the issues of the time, the assurances of Mr. Clinton needed to become law.  The voters trusted the man they cast their vote for.  It was not far beyond the first hundred days that President Clinton showed his true colors as being, too often, Republican red.  “Change We Can Believe In” has far too quickly been called into question as well.

The pitfalls of effecting legislation in a two-party system are obvious to even the casual political observer.  It would follow, one would think, that the newly elected President would also be familiar with these difficulties and as such, having a plan to overcome these political obstacles before attaining office, would be common sense.  But in both administrations opposition forces had, and have had to, exert little of their available procedural arsenal before promised legislation has been watered down.  Hard fights were not fought nor lost. Surrender, or at least acquiescence, has been the predictable result, yet both Presidents had recent historical precedents to warn them to be ready.

Clinton was a mere 12 years removed from the Carter presidency and its almost completely impotent four years of attempt after attempt at bringing various bills to the president’s desk.  Like Clinton Carter, too, was brought to office on a mandate of change. This mandate had less to do with the economy than the need for ethical reforms due to the Nixon fallout. Despite campaign promises, and his personal integrity to the cause, four years later Carter was out of office and practically in disgrace due to the Iran hostage drama.  12 years later these lessons regarding failed legislation seemed long forgotten by newly elected President Clinton

16 years hence, in the midst of one of the toughest, most divisive, expensive, and certainly longest campaigns in US history, and as the rhetoric and venom was thrown about, more and more voters turned their vote to “Change We Can Believe In”.  No one had the hind sight, however, to ask the historical question, “how are you going to get your promises through Congress, Sir”.  In a campaign that was at full speed for a full 16 months, and with the primal forces of nature being stronger than ever, this would seem a fair, if not essential question. In his promise for change, Obama was implicitly promising to do battle with these forces and hence their minions on the other side of the aisle.  Here, a few days beyond the hundred day honeymoon, Mr. Obama is probably glad the question did not come up.  Closer inspection of the signed legislation of President Obama, so far, shows that he too may not be prepared for the task ahead.

Both Clinton and Obama began their first 100 days by signing new legislation within days of their inaugurations.  Clinton signed into law, the Medical and Family Leave Act which stands today.  This bill was indeed a victory for the American worker and echoed the populist theme of Clinton’s campaign as it ran counter to the financial interests of big business.  This bill stands today and has been a great benefit for the American worker.

As with Clinton, Obama signed, with great fanfare, his bill closing Guantánamo Bay prison.  Despite the bluster of a campaign promise that was fulfilled within days of the inaugural the President has run into difficulty with both Democrats and Republicans decrying the closure for fear our federal prisons would not be worthy of the contents of Guantánamo. With the fear argument still remaining in the hearts of the public President Obama has delivered a poignant speech on the subject, which would seem to address all issues.  Yet, his opposition remains resolved.

Pres. Obama did himself no favors towards this goal when he instructed his Justice Department to allow military tribunals to continue; transport prisoners to Bahgram Air Force Base in Afghanistan for further detention; and continued to refuse habeas corpus rights to those of his administration’s choosing.  The duplicity of this decision was not likely lost on Congress as they too, saw the need to keep these prisoners from our soil.

Cabinet appointments also remained vacant for longer than was practical. For Clinton it was the appointment of Attorney General, which resulted ultimately in the confirmation of Janet Reno.  Bringing a woman to this position in an attempt to diversify his cabinet positions resulted in difficulty finding a woman who would pass muster at confirmation. The press did a better job vetting his nominees than did his staff.  Federal court judgeships were also blocked for a lot longer time than necessary by Republican dissent. Clinton had great difficulty, throughout his term, bringing his appointees to the bench.

For Obama the nominations of several commerce secretaries has finally yielded a confirmed member, Gary Locke, to this cabinet post. Despite campaign assurances of strong ethics in all of his appointments his staff’s vetting process missed several key flaws with regard to Bill Richardson that were quite obvious to the press. Obama’s further folly in nominating republicans

to his cabinet resulted in Judd Gregg showing his true colors which, not surprisingly, were red. Tom Daschle also failed close examination, but Raum Emmanuel did slip by, just barely.

Considering Mr. Obama’s stated dislike for lobbyists in cabinet positions several have filled Cabinet posts.  After eight years of a Republican Cabinet lined with lobbyists this was a campaign promise that was not only necessary, but essential, if the populist platform that he promised to the voters was to be fulfilled. When Karl Rove calls your Cabinet appointments, “reassuring” and Joseph Lieberman, the turn coat republican, states that the Democratic Cabinet appointments are “virtually perfect”, they bear witness to these appointments being less than in the interests of this election’s voters.

The issue of gay rights was highlighted as a campaign topic for the 1992 election. The promises of Clinton attracted a large, organized, and very vocal voting bloc.  Members of the gay community overwhelmingly voted for Clinton due to his promises to support gay rights. The issue of gays in the military was widely discussed during the campaign and Clinton, then, stood firmly in favor of it. His further promise was to immediately address gay-rights after his election. To his credit he did move quickly on this issue causing the immediate first test of wills.  The military, arguably the strongest lobbying group within Congress, was adamantly opposed and this started a very public debate that took place for more than six months. “Don’t ask, Don’t tell”, was the watered-down result. This political Band-Aid was seen as a great betrayal by the gay community. It has been an albatross for succeeding administrations since it amounted to almost no legislation at all. Keeping the subject discretionary and at the whim of the military continued to result in the discharge of highly qualified and dedicated men and women. The lack of political will shown by Clinton was foreshadowing for issues to come.

The furor of the gay-rights issue is much stronger  16 years later.  “Don’t ask, Don’t tell”, is still in effect and enforced.  Similarly to Clinton Obama addressed this issue, and his support for treating all Americans equally, including during military service, during his campaign.  As in 1992 Obama drew very strong support from gay voters with his promises of equality and of rescinding this antiquated bill.

This issue might still lay untested at this point in his first term, if it were not for Lt. Dan Choi.  A decorated Marine and West Point graduate with an unimpeachable career spanning two tours in Iraq, Lt. Choi, as one of the few translators available to our troops, was discharged solely because of sexual orientation via “Don’t ask, Don’t tell”.  Considering President Obama’s promises to the contrary supporters of Lt. Choi sought intervention from their president.  Sadly, the White House remains ominously silent on aiding Lt. Choi and, despite his wish to rejoin the military, this valuable military asset remains in street clothes. Press Secretary Robert Gibbs, on behalf of the President said that the White House would “not intervene in individual cases”. The lack of leadership, so far, regarding gay rights does not bode well for when the president must eventually attempt legislation that clearly addresses, collectively, this modern issue.

Next in this chronology was the promise to fix the ailing economy.  This was the linchpin in both campaigns, and certainly dear to the hearts of the voter is both elections. Clinton had the luxury of the very pliant, Federal Reserve Chairman in Alan Greenspan.  Mr. Greenspan had much latitude available to him regarding the lowering of interest rates.  Clinton had the luxury of a constituency that, despite ousting former President Bush due to tax increases, was talked into accepting a tax cut, or an increase ,depending on the level of income.  This was so subtle and convoluted that little resistance was offered to what was, again, a middle-class tax increase. It did, however, raise needed revenue in an effort to balance the budget and stimulate the economy. Divisively low interest rates stimulated business and help restore rapid growth in the economy and GDP.

Obama has no such resources.  Upon his election Federal Reserve interest rates stood at virtually 0% giving him no room at all for a discount.  The supposed, and again promised, tax increase for incomes over $200,000 per year has been put on hold for a full three years by our new President so the tax revenue he promised to dedicate to the economy is not available for the  budget this year or in the next two.  So an increase in tax-based revenues is not possible.  Leaving this issue to be revisited just before the next election will likely mean this promise will also be ignored.  Should President Obama bring a tax increase to bear on the middle class, he will likely be met with resistance on all fronts.  So, unlike Clinton, who had available resources to fix his economy, Obama has had to turn to spending funds that are in excess of the public funds available.  Deficit spending, a root cause of our current economic troubles, has been forced upon Obama and the nation’s taxpayers as a legacy of the Bush years. Obama has decided to put foward a budget of $3.5 trillion. For this year alone.

Where Clinton managed to balance the budget, Bush created a huge deficit by using deficit spending as the cash cow for his form of trickle-down economics.   This deficit has handcuffed Obama into it using this same policy which has put the nation into its current national problem.

$3.5 trillion represents four times the largest previous budget, and budget deficit, in US history. With this Obama promises to cure the economy. With no resources to do it Obama must attempt a cure, regardless.  Due to campaign promises made, and this now available staggering warchest, it would follow that Obama would use this borrowed cash to directly create jobs and infuse this cash at the grassroots level for the good of the American workers and their families..  Close examination of his many faceted stimulus package shows that this is not the case.  Despite eight years of deficit spending, tax cuts for the wealthy, and the continued promise of trickle-down economics actually working, this stimulus package, again, subscribes to this historically flawed economic thinking. With this much cash borrowed, yet distributed via Wall Streets usual players, close examination of the terms of this distribution show the stimulus package to be as misleading in supporting the American worker as the previous administration’s ” Clean Sky’s Initiative”, was to the environment. Due to a lack of political will Obama’s plan shows itself to be merely “Trickle down” repackaged in Democratic form.

There has been much routine fanfare attached to all ongoing progressions of the Obama stimulus package.  Restoring confidence in the markets has been a primary goal of the stimulus package and the multitude of press opportunities is obviously designed to reassure the public that they should have confidence in reinvesting what remains of their discretionary cash. In Edward Chancellor’s outstanding book on the history of speculation,” Devil  Take the Hind Most”, his in depth look at three centuries of varied speculative markets shows repeatedly that a lack of confidence is the primary reason for all speculative markets to fail. Always preceding this is an irrational over confidence that creates the bull market bubble that ,historically, always bursts. These bubbles are always directly propagated by various legal and/or nefarious accounting tricks and business laws Our current economic problems are as predictable as those of the Savings and Loan fiasco, and Enron, etc al.

$3.5 trillion is no small amount of money, especially when that amount comes in the form of a loan.  The strategy that Treasury must restore confidence in the market by using these funds seems sound logic at least when viewed through the many examples in Chancellors book.  Historically, the central banks involved in the various speculative downturns did resort to increasing credit as a means to stimulate the economy at that time.  In our current situation Obama and his economic team are more than willing to infuse this capital, but it is a matter of where this infusion takes place and the terms under which the banks receiving these funds are enticed to perform for the good of the public..

In Jim Genova,s excellent article, “Geithner’s Hundred Days at Treasury” he takes a close examination of the economic stimulus package, and where the $3.5 trillion is being diverted. This closer look on the matter shows that we have business as usual since the funds are being diverted primarily to some of the key players guilty of causing the problems we are currently in.  The Troubled Assets Relief Program (TARP) that we hear so much about was spawned by the Emergency Economic Stabilization Act, which in turn created a total of eight separate programs.  All of which receive public funding.

Considering the most recent “stress tests” of the nation’s banking institutions Mr.Genova points out that the recent positive fiscal reports by these same banks was the direct result of a quite divisive accounting revision.  Under the new rules, the banks can assign their own arbitrary value to the toxic assets they hold giving these banks an artificial increase in net worth due to these worthless toxic assets suddenly having value. “Thus, they can take a bundle of loans in default, mortgages in foreclosure, and credit cards that are delinquent, and assess the value on them of the bank’s own choosing. Suddenly, those steep losses on the banks balance sheets turn into profits”, he states in his article.  The other convenient change in rules allowed the banks to designate the billions of dollars in loans given them under the TARP act as assets.  When combining these two new, and timely, accounting tricks with interest rates at 0%, it is no wonder the banks suddenly showed record profits.

Further analysis within Mr. Genova’s articles illustrates that, despite the Treasury Department diverting these trillions of dollars, the banking industry  continues to be under very little control as to where and how they spend these public funds. The finance industry acts as if it is under no mandate to ease credit or provide mortgage relief. The Treasury Department has had to go even further to entice the banks to actually use the taxpayer’s capital for the taxpayer’s best interests by providing guarantees to the banks against any losses incurred when providing these public funds to the public via any form of credit. One of the results of this, put in the guise of helping the public, has been to extend the normal mortgage term of 30 years to 40 and to increase the amount of time given for repayment of other debts.  Although, this may allow certain individuals to keep their homes by lessening their short-term monthly payment, in the long-term the consumer again loses, as this additional 10 year term equals an extraordinary amount of additional revenue for the bank that authors the new loan. The banks seem to be acting as if this publicly financed capital need not be necessarily used for the public good, unless they are additionally compensated. Should this trend go unchecked the 3.5 trillion dollars will not likely do much in the way of helping the consumer or with creating jobs. It looks far more like ‘trickle down’ again.  Expecting the wealthy institutions to attend to the public good has not ever proven to be an efficient means of infusing capital for the good of the public.

END OF PART ONE

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