the situation facing Obama (and us)
October 9, 2008 § Leave a comment
The core as I see it,of what is happening,is that we have debt, and the question is, who will pay it? the bankers want to shift debt (theirs) to taxes (ours). What looks like minor issues, but are profound, are details in play like getting communities to lower real estate taxes so people have money to pay mortgages, and home prices can rise, making those mortgages inflate (again) in value. But then sales taxes will replace property taxes and these market place taxes are regressive.
This struggle is likely to be the key struggle of the Obama presidency,which means progresives pushing against big money in a perhaps losing battle, with Obama trying to mediate. A collapse of course would be terrible, but a debt prison would also be terrible. Is it possible to get beyond this struggle to deal with the other large systemic issues?
I am inclined to be pessimistic. After all, the rich can hire half the poor to protect themselves from the other half of the poor. Where would you and I be in such a struggle? As has been pointed out, the tactical situation will be different by inauguration. Imagine a bankers revolt saying to Obama, protect the financial system (and its 28 % of all business activity in the US economy in 2007), or we will form a coup against you in the name of the public necessity and good of the people. Will he rich pay the debt, or the rest of us?
FDR could play off the bankers against the rest of the economy, mostly agriculture and manufacturing. Now the bankers have much more power and there is little force that can stand up with a confrontation. We can hope, but what would it be? And,is not Obama’s course of action, centrist and “to protect the financial system because we need it” going to be the course?