Obama’s Change Leaves By The Back Door

Tom Eley
Countercurrents
November 7, 2008

Three days after Barack Obama’s election victory, the initial moves by the president-elect to prepare his administration already show that his policies will be determined not by popular expectations, but by the domestic and foreign policy interests of the American financial and corporate elite.

Obama and Democratic congressional leaders are well aware that these policies—further measures to secure the social interests and personal wealth of the financial aristocracy at public expense and the continued use of military violence in the Middle East and Central Asia—clash with the will of the electorate, which sought to reverse these policies by sweeping the Republicans out of power. That is why the Democrats are seeking to dampen expectations of a serious change of course.

The personnel of Obama’s transition team and his first major appointment stand in obvious contradiction to his campaign rhetoric about "change," "new politics," and "building a movement from the ground up." The individuals selected are all fixtures of the political establishment, with close ties to powerful corporate and financial interests.

Obama’s transition team, which will assist in assembling his cabinet, is headed by John Podesta, former chief of staff to Bill Clinton and one of Washington’s most successful corporate lobbyists. Co-chairing the transition team are Valerie Jarrett, a long-time Obama advisor, Chicago real estate executive and influential figure within the Chicago Democratic Party machine, and Pete Rouse, a Washington insider and Obama’s senate chief of staff. (See: "A closer look at Obama’s transition team").

Obama’s first appointee is Rahm Emanuel, who will serve as his chief of staff. The Illinois Congressman is a leading member of the right-wing Democratic Leadership Council. While running for Congress in 2002, he supported Bush’s bill to authorize military force against Iraq. A former investment banker, he has close ties to financial interests and is one of the biggest recipients of campaign cash from banks and investment firms.

Sources close to Obama have leaked names on the list of candidates for the position of treasury secretary—no doubt as a means of reassuring Wall Street. Included are former Federal Reserve Chairman Paul Volcker, former Clinton treasury secretary and current Citigroup executive Robert Rubin, another former Clinton treasury secretary, Lawrence Summers, and Timothy Geithner, the New York Federal Reserve Bank president.

All of these individuals played leading roles in the deregulation of the banks and investment houses that facilitated the super-profits and massive CEO compensation packages of the 1990s and first half of the current decade, and contributed to the financial collapse that is now plunging the US and the rest of the world into the deepest recession since the 1930s.

Geithner has played a central role in the government bailout of Wall Street banks and other major firms, such as insurance conglomerate AIG and the mortgage finance giants Fannie Mae and Freddie Mac.

As Federal Reserve chief under Jimmy Carter and Ronald Reagan, Volcker was responsible for the high interest rate "shock therapy" which decimated American industry in the early 1980s and led to the impoverishment of entire regions.

There is much speculation that Obama will ask current Defense Secretary Robert Gates to stay on in the same capacity, at least on an interim basis. Gates recently gave a speech expanding the doctrine of "pre-emptive war" to include the use of first-strike nuclear attacks.

Other names broached for the positions of defense secretary and secretary of state include former Bush Secretary of State Colin Powell, outgoing Republican Senator Chuck Hagel of Nebraska, and Anthony Lake, who as Clinton’s national security advisor played a key role in organizing the US-NATO war against Yugoslavia.

Obama’s actions since Election Day have been calculated to signal to the ruling elite his readiness to defend their interests and not be swayed by the will of the electorate. To underscore his intention to seek a consensus with the defeated and discredited Republican minority, he will meet on Monday with Bush. The traditional White House meeting between a president-elect and the outgoing president normally takes place much later in the transition period between administrations.

To demonstrate that his first priority is shoring up the major banks, Obama’s first post-Election Day meeting will be held today with his top economic policy advisers. The meeting will include Volcker, Rubin and Summers, along with billionaire investor Warren Buffett, former Clinton labor and commerce secretaries Robert Reich and William Daley, Clinton economic advisor Laura Tyson, Google Chairman Eric Schmidt, Time Warner Chairman Richard Parsons, XEROX CEO Anne Mulcahy, Residence by Hyatt CEO Penny Pritzker, former Bush administration Securities and Exchange Commissioner William Donaldson, and Michigan Governor Jennifer Granholm.

Meanwhile, a series of statements by leading Democratic figures have emphasized their intention to pursue a "centrist" policy—by which they mean a conventional, i.e., right-wing, policy.

Speaker of the House Nancy Pelosi, Democrat of California, spelled this out in no uncertain terms on Wednesday, advising Obama that he must "bring people together to reach consensus" on issues like the economy and the war. "A new president must govern from the middle," she said.

Leon Panetta, former chief of staff to Bill Clinton, said, "He’s got to lower some expectations, indicate the limits he’s confronting."

A basic premise of the talk about lowering expectations and delaying making good on campaign promises for health care reform, middle class tax cuts and other social measures is the claim that massive increases in the budget deficit preclude such outlays. Of course, the worsening budget crisis is the direct result of the allocation of more than $2 trillion in taxpayer money to bail out the banks, with the auto companies and other industries lining up for similar government handouts.

No Democratic leader has explained why there are unlimited taxpayer funds available for the banks, but no money to address the increasingly desperate economic situation facing the working class, including millions of home foreclosures, soaring utility shut-offs, collapsing retirement accounts and mounting layoffs.

The media has joined in the effort to dampen expectations. Newsweek warns, "Obama Won’t Meet Everybody’s Expectations." The San Francisco Chronicle explains, "Surely, President-Elect Barack Obama must prepare his supporters for the difficult circumstances that he, and this country," must undergo.

Yesterday’s New York Times published an article, "Obama Aides Tamp Down Expectations," describing Obama’s efforts to "temper hopes that he would be able to solve the nation’s problems." "The economic crisis" the Times notes, "will certainly complicate Mr. Obama’s more ambitious domestic efforts."

On the same day, under the headline "Next Administration Shows Signs It will Seek Middle Ground with Business on Thorny Issues," the Wall Street Journal reassured the moneyed elite that in an Obama administration, "a bill that would make it easier for unions to organize workers, efforts to regulate greenhouse gas emissions, and a slew of contemplated taxes will likely take a back seat." The article continued, "Several of Mr. Obama’s top economic advisers, including former Federal Reserve Chairman Paul Volcker, billionaire investor Warren Buffett, and former Treasury Secretary Robert Rubin—are moderates and reassuring figures to the business community."

Obama’s first moves as president-elect have underscored some basic political facts. First, there is a fundamental contradiction between the hopes and aspirations of the vast majority of people who voted for him out of anger and disgust with the Bush administration and the Republicans, and the class character of the Democratic Party and the social and economic interests it defends.

Second, these moves underscore the cynical and fundamentally anti-democratic character of the electoral process itself, in which promises are made by candidates who know full well that, once in office, their polices will be determined not by election promises but by the demands of the ruling elite and the exigencies of American imperialism.

A closer look at Obama’s transition team

By Joe Kishore

Barack Obama’s transition team is a collection of Washington insiders, former Clinton administration officials, corporate and banking executives, and individuals with roots in the Chicago Democratic Party political machine.

The Obama-Biden Transition Project is led by three co-chairmen. They are John Podesta, former chief of staff for Bill Clinton; Valerie Jarrett, a long-time Obama adviser, Chicago real estate executive and influential figure in the Chicago Democratic Party; and Pete Rouse, Obama’s Senate chief of staff.

John Podesta

Podesta, chief of staff for Clinton from 1998 to 2001, will serve as the Transition Project’s leader. Podesta is a long-time Washington insider, where he served, beginning in the early 1980s, as legal counsel for a number of congressional committees. As is the custom in Washington, Podesta made use of his political influence to establish a lucrative Washington lobbying firm, the Podesta Group.

Podesta authored a recent book entitled The Power of Progress: How America’s Progressives Can (Once Again) Save Our Economy, Our Climate, and Our Country. The lobbying firm of this "progressive" includes among its top clients the oil giant BP, defense industry corporations Lockheed Martin and General Dynamics, biotech firms Genentech and Amgen, Swiss pharmaceuticals corporation Novartis Interational AG, and Wal-Mart.

Podesta has the dubious distinction of having been ranked the third most powerful lobbyist in Washington DC by the Washingtonian. According to the newspaper, BP, whose "pipeline problems and refinery fires have created regulatory and public relations issues," has turned to Podesta, who "has quietly been guiding BP through congressional hearings."

For Lockheed Martin and General Dynamics, Podesta has been busy "trying to sell Congress and the Pentagon on another version of their Stryker troop transport vehicle."

Podesta is president and chief executive officer of the Center for American Progress, a Washington think tank. The center was set up with substantial funding from billionaire investor and Obama adviser Warren Buffet.

Valerie Jarrett

Jarrett began her political career in 1987 under then-Chicago Mayor Harold Washington. She became deputy chief of staff for Mayor Richard Daley and later served as Chicago’s commissioner of the Department of Planning and chair of the Chicago Transit Board.

Jarrett has also held leading positions on the Chicago Stock Exchange (member of the board from 2000 to 2007 and chairman from 2004 to 2007), the University of Chicago Medical Center (chairman of the board of trustees), the University of Chicago (vice chairman of the board of trustees) and the Chicago Museum of Science and Industry (board of trustees).

Jarrett is the CEO of The Habitat Company, a real estate development firm in Chicago. She has been a top executive at the company since 1995, becoming CEO in 2007. Habitat has worked closely with the Chicago city administration to oversee public housing, receiving millions in local and federal subsidies.

A Boston Globe article from June 27, 2008 ("Grim Proving Ground for Obama’s Housing Policy," by Binyamin Appelbaum) describes the state of one 504-unit public housing complex, Grove Parc Plaza, located in Obama’s former state Senate district.

"About 99 units are vacant, many rendered uninhabitable by unfixed problems, such as collapsed roofs and fire damage. Mice scamper through the halls. Battered mailboxes hang open. Sewage backs up into kitchen sinks. In 2006, federal inspectors graded the condition of the complex an 11 on a 100-point scale—a score so bad the buildings now face demolition."

"Grove Parc has become a symbol," the newspaper noted, "for some in Chicago of the broader failures of giving public subsidies to private companies to build and manage affordable housing—an approach strongly backed by Obama as the best replacement for public housing."

The Globe reports "thousands of apartments" throughout Chicago, overseen by Habitat, that are characterized by similar disrepair. The Habitat Company "managed Grove Parc Plaza from 2001 until this winter and co-managed an even larger subsidized complex in Chicago that was seized by the federal government in 2006, after city inspectors found widespread problems."

There is some talk that Jarrett will be named housing secretary in the Obama administration.

Pete Rouse

Pete Rouse is an interesting case, whose political trajectory says much about the Obama campaign. Rouse was the chief of staff to Tom Daschle, the former Democratic leader in the Senate. Rouse was known as the "101st senator" in Washington circles due to the power he commanded, particularly when Daschle was the majority leader. He has worked on Capitol Hill for over 30 years.

After Daschle lost his seat in 2004, Rouse decided to take a position as chief of staff for Obama, then just beginning his first term in the Senate. The fact that an individual with Rouse’s history and political ties decided to throw in his lot with a freshman senator with little political power or influence indicates that Obama was being groomed at an early stage by sections of the Democratic Party establishment, including Daschle, for bigger things.

Rouse has been a strong advocate of bipartisanship and "reaching across the aisle" to work with Republicans.

Also included on the Transition Project are:

* Carol Browner, administrator of the Environmental Protection Agency for eight years in the Clinton administration. After 2001, Browner took a position at the Albright Group, a firm headed by former Clinton administration Secretary of State Madeleine Albright that advises businesses on policy.

* William Daley, brother of Chicago Mayor Richard M. Daley. Daley was special counsel to President Clinton on trade (helping pass the North American Free Trade Agreement) and Clinton’s secretary of commerce from 1997 to 1998. After leaving government, Daley took a position as president of SBC Communications and later served as Midwest chairman of JPMorgan Chase and Bank One. He serves on the boards of directors of airline manufacturer and defense contractor Boeing and drug giant Merck.

* Michael Froman is president and CEO of CitiInsurance, a branch of banking giant Citigroup. During the 1990s, Froman served in the US Department of Treasury as deputy assistant secretary for Eurasia and the Middle East, and later as chief of staff.

* Federico Peña was secretary of transportation (1993 to 1997) and secretary of energy (1997 to 1998) under Clinton. After leaving government, he took a post in Vestar Capital Partners, an investment firm.