Friday, November 7, 2008

Change I can't quite believe in

I wanted Obama to win. I really, really, really wanted Obama to win. McCain/Palin gave me nightmares. Just about the whole world held it’s collective breath willing Obama to win on Tuesday.

Obama’s election is powerful confirmation that America remains a land of opportunity, a democracy where power is allocated at the ballot box. It reassured the world that despite the lawlessness and arrogance of the past eight years, Americans are capable of enlightened, rational self-determination. It restores hope in much of the world that America can reorient itself toward tolerance and dialogue.

For all of that, I haven’t been happy since watching Obama’s acceptance speech live Wednesday morning on the BBC.

I have a bad feeling that America has just elected its Tony Blair. The package of Change the voters ordered isn’t what is being delivered to the White House.

The appointment of Rahm Emanuel as White House chief of staff didn’t ease my mind. Like Mr Blair’s close advisors Lord Goldsmith and Baron Levy, Mr Emanuel may inflame the suspicions in the Middle East that the agenda for the region under Obama will be no different than under Bush. The credibility of the United States as an honest broker and agent for peace will be further eroded if Obama’s gatekeeper is viewed as pre-disposed to more of the same policies which have fuelled hostilities. I hope it is not anti-Semitic to make the point that objectivity and fair dealing will be suspect with a chief of staff who is the son of an militant Israeli, who served as a civilian volunteer for the Israeli Army, and who has used his public positions in American politics – except for a brief stint at Dresdner Kleinwort Wasserstein – to promote Israel’s interests.

Those who know Mr Emanuel suggest that because his devotion to Israel is unquestionable, he will be able to push Israelis toward moderation. Perhaps the combination of a Kenyan goat herder's son with an Irgun terrorist's son will be a winning combination for crafting a durable peace. But many in Israel, the Middle East and Washington will expect that future acts of aggression by Israel against Iran or other neighbours will be defended – if not promoted – by the man at Obama’s elbow.

It is now emerging that Mr Emanuel was also a director of Freddie Mac when it stands accused of misreporting profits and ignoring red flags.

The rumours that either Larry Summers or Tim Geithner will be made Treasury Secretary made me even queasier. The appointment of either of these architects of the current global financial disaster, these arch-deregulators and serial-forbearance artists, would be a great middle-finger to America’s foreign creditors and the global investors suffering asset deflation. Both men have been instrumental in, first, the Fed’s exported inflation via massive monetary bubble-blowing and, now, the Fed/FDIC/SIPC exported deflation through Chapter 11 and margin call orchestrations ensuring more pain abroad than at home.

Summers would be particularly egregious. Not only did Summers promote the Friedmanite export of toxic debt to the rest of the world at the Clinton Treasury, at the World Bank he promoted the export of toxic pollution to underdeveloped nations to add poison to poverty. To quote from his 1991 memo, "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that."

The much bandied idea that Robert Gates, former deputy director of the CIA under President G.H.W. Bush, architect and financier of Saddam’s military machine and Bin Laden’s Al Qaida, might be kept as Secretary of Defense under Obama “for continuity’s sake” after six years of failed and callous military adventurism in Iraq and Afghanistan, with occasional illegal forays into Pakistan, Georgia, Syria and Iran, makes me frankly nauseous. If America is ever to restore its fiscal balance, cuts in the bloated military/security/intelligence apparatus will have to be implemented. A career insider central to the creation and export of the bloat is the wrong man for the job.

Maybe the problem in America is not a struggle between rich and poor. Overtaxed and undertaxed. Empowered and disenfranchised. Educated and illiterate. Insured and uninsured. Law abiding and lawless. Godless and God-fearing. Republican and Democrat. Red and Blue.

Maybe the problem in America is there is no struggle about the fundamental mechanisms of American oppression and aggression: debt and threat.

American policies promote debt and force as the hammer and anvil for shaping the economy and the political dialogue. What cannot be financed into penury must be crushed into submission. The bulk of the economy is designed to prosper either the bankers or the police/prison/military/intelligence industries at everyone else’s expense. Propped up on these twin pillars of debt and threat, America remains staunchly and irrevocably American whoever wins the elections.

The restoration of fiscal prudence has been swiftly repudiated post-election in favour of more debt-financed “stimulus” and “stabilisation”.

The restoration of the rule of law and holding those who committed crimes accountable – both within America and internationally – has received no post-election endorsement from Obama.

I asked the asylum Iraqis at the local kebab shop last night what they made of the American election. They follow the news, and I’ve always found them knowledgeable and articulate. The kebab chef (a former civil engineer from northern Iraq) looked glum. “It makes no difference. They are all the same.” I fear his well-informed cynicism is sound.

Our unglamorous and unelected British prime minister, Gordon Brown, called for more international cooperation “with American leadership central to its success” – as he toured the Arab Gulf with his begging bowl. He was physically following American “leadership” as he trailed Deputy Secretary of the Treasury Robert Kimmet’s pilgrimage to the Gulf last week. American leadership got us successfully into this debt crisis, and Brown appears determined to follow it even deeper.

The central banks in the UK, EU and Switzerland obliged yesterday by following the Fed toward negative real interest rates, discouraging savers and lenders alike by cutting 150bps, 50bps and 50bps respectively. Jean-Claude Trichet spoke of the cooperation of the central banks as a “brotherhood”. He made me think of the mafia or the Freemasons. Perhaps he meant to.

Obama’s election still inspires me. I still hope for change.

Obama demonstrated good judgement throughout the campaign, and good management of the people working for him. That in itself will bring major change to the White House.

Better managed American debt and threat policies under Obama will be an improvement over the horribly managed debt and threat policies under Bush. Some hope.

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