Is Obama passing the acid test?

Back in January I posted This is the acid test shortly after the Obama presidential inauguration. I was feeling the hopefulness that the excitement of the moment brought but pointed out that we would have to wait and see if 'real change' would be brought to Washington. My (some would call it cynicism) cautious optimism runs along the lines that if Obama can't break the various maladaptive cycles in our government (like the influence of lobbyists and big money on governance) then very likely no one ever could. The system would be seen to be permanently broken.

Then at the end of February I revisited this concern, The acid test revisited with some good and bad news. The good news was that Obama did seem to have a more holistic concept of the problems we face and had chosen a few key leverage points to work on. The bad news was, however, that his pattern of key office appointments (like Treasury Secretary) portended that his attempts to 'fix' things meant simply getting the economy back to a borrow-and-spend consumption-based, jobs-creating, growth-oriented business as usual. I thought that was a bad idea. I gave him the benefit of the doubt that he might actually learn by doing and begin to see the folly of this approach.

But seven months in now, I am losing hope.

It seems very clear to me now that his stimulus package amounts to little more than a way to allow bankers, brokers, and hedge fund managers to continue reaping exorbitant rewards for driving our civilization deeper into the hole. He (with the complicity of Congress) have bailed out auto makers at a time when instead of promoting automobiles we should be directing our resources into building localized infrastructure and rejuvenating our rail system. Incidentally, the auto worker jobs could have just as easily been saved by an all out effort to build a worthy rail system.

Had Obama made efforts to 1) tell the American people the truth about what kind of future to expect, 2) made efforts to vastly reform the whole financial superstructure so that it would serve its original function, facilitating the channeling of capital into productive purposes rather than fat cats' wallets, 3) provided vision of a new America living in a much lower energy environment, and a few other things, I would have said he at least had passed the acid test of his competency. Even if he failed in getting the country moving in the right direction (as Rush Limbaugh wanted) I would have saluted him for trying to do the right thing. Instead, he has basically given in to the financial powers that control every aspect of our society. His recent deal with Big Pharma, to eliminate the ability to dicker over drug prices, is just the latest evidence that he is playing the game by their rules.

No knight in shining armor. No savior. No 'change we can believe in.' The irony of this is that neither he nor all of those financial masters have grasped the fundamental reality of what it means when energy flow starts to diminish. They just don't grasp basic physics. For them it is just a matter of getting the bus moving again and everything will be OK. Then we can worry about 'energy independence' (as if there really were such a thing), and really doing something about CO₂ emissions. Then we can turn our attention to fixing education (especially with all the money we are saving on reduced health care costs!) Their model is a growing economy fixes all problems. And, oh yes, when the economy is growing, those who are responsible (bankers, et al) should be rewarded handsomely for their wisdom and action. Thank you very much.

I've pretty well gone from mild hopefulness, with a healthy bit of skepticism, to complete lack of any hope. What I still believe could have been achieved, had Obama really understood the way the world works, is a managed (though by no means easily accomplished) restructuring of our economy and life styles that would have prevented the very worst consequences. But I also believe this had to start as soon as Obama took office. It had to start with facing the truth about how the world works and taking actions to adapt ourselves to the true reality. Our example might also have helped other nations face reality. I was lulled into thinking that that part of his inaugural speech where he talked about sacrifice by all of us was a signal that he did understand and would begin the process. Fool me once.

But not only has it not happened, I think the evidence screams loudly that it will never happen. Oh we might experience a minor up-tick in the economy — you'd think so by watching the stock market. Energy prices have remained stable (oil around $70 is about right to spur new development meaning supplies ought to be stable for a while) as the general economic activity has adjusted. This takes some of the pressure off price inflation, such as for food. But as long as we are talking about a so-called 'jobless recovery' we are blowing smoke into the house of mirrors. The developed world needs easy credit and buying junk so that people have jobs in retail. The developing world works on building the junk and selling it to the developed world consumers. It's worked pretty well because developed-world consumers could borrow from the savings of developing-world (China) folks to pay for the junk. But if people in the developed world don't have jobs, do you really think they will continue buying junk? Moreover, since it appears that a lot of that bailout money to the banks and Wall Street has been used for bonuses, and the credit card companies have raised the APR right through the roof, people are probably not able or willing to borrow more money just to buy junk. Back when their houses were worth a lot of money (on paper anyway) they felt rich. They borrowed and spent. That meant jobs for a lot of Chinese workers. What now? You can't have a growing economy that depends entirely on borrowing, spending, and consuming (to start the cycle over again). More to the point, the money that has been borrowed from Chinese savings is presumably going to have to be paid back some day, with interest. What happens when the developed world borrowers default? The Chinese savers funds will be lost and without developed-world spenders buying the junk so will their incomes. How do you suppose they are going to feel about that?

No matter that some economists and politicians think they see green shoots. No matter if there is a brief respite from the sickening drop. We have not reached the bottom; we're not even close. As long as net energy is declining we have nowhere to go but down. Sorry, but that is really the story Obama owed us. Instead he wasted whatever resources we had (mainly China's willingness to lend us money) to put us right back where we were. You know the place, where the economy was seeming to be chugging along and almost NO economists predicted a crash. If we could just get back to seeming to be chugging along, maybe this time things will be different. Maybe this time the economy will work the way the economists say. Yeah, and maybe pigs will learn to fly.

In the end, the acid test isn't really so much about Obama as it is about us. We are the failures. We are the ones who want things to be the way they were before. We want to go on happily consuming. We don't want the world to change. We don't want to have to struggle and sacrifice so that our grandchildren might have a livable world. We ordinary humans are failing the acid test. Obama is just the symbol of that failure.

Comments

[Beerzie]

This is a pessimistic and depressing scenario. And of course, it is absolutely right. Unfortunately.

[Glenn Atias]

I think even better than the rail system would have been the electrical grid. Most of it is 50 year-old hunk of disconnected junk.

It got something like $3 bln, when it need $150 bln.

Instead, Obama goes and pushed $2 trillion over to the banks. They're now laundering it into the stock market through the back door. There are no fundamentals driving this run-up. Little of the money is coming from mutual funds, almost none by ma ans pa investors - it's the banks who are recapitalizing by playing the market with our borrowed money.

Bernanke is pulling off nothing less than a Generational Ponzi Scheme right under our noses, and nobody seems to care. None of the structural imbalances have ben fixed - we just ponzied over our future to the fatcats to reward us for getting into this mess to begin with.

And through it all the media jumps up and down yelling "green shoots green shoots" because Obama is their guy. Truly we are through the looking glass. All bets are off.

[GaryA]

Over the pond here in the UK things are no better. A few days ago the government announced assistance of 340million for the Airbus commercial aircraft industry but will not give a penny to Vestas, a wind turbine manufacturer on the Isle of Wight who are in trouble through lack of UK orders/investment..not that I'm a fan of wind power as a salvation but its a illustration of their insane priorities.
They have spent 775 million on bonuses for failed RSB bankers but only 100 million on all green projects combined...the recent scandal over literally hundreds of MP's (in all parties) fiddling their expenses resulted in some payback of stolen monies due to these 'mistakes' Strange how every single 'mistake' resulted in an increase in the MP's bank balance and none a reduction....
The present corrupt neoliberal bunch will be replaced by another flock of neoliberal turds next year..Pepsi,Coke or Tango thats the choice.
The best thing to help the environment of the UK would be a few hundred Sulphur candles under the Houses of Parliament to fumigate all 652 of the worthless maggots.
Apologies for the Rant George.

[George Mobus]

No worries GaryA, there are a lot of rants going on these days.

Beerzie, not to worry. Don't get depressed because all of what is happening is just the prelude to an evolutionary event! More in the future.

Glenn, I'm betting many of the so-called "green shoots" are actually weeds. I had that idea while weeding one of my planting areas yesterday afternoon. I try to pull the weeds out regularly before they get to be large and go to seed or spread. Too bad there isn't a great gardener who could expose these weeds for what they are and pull them out.

George

[Neven]

The man is a puppet, wielded by the same people that wielded the former puppet.

"We are the failures. We are the ones who want things to be the way they were before."

There is no way people will take a proactive stance on this, because it's all about changing habits and facing the pain of life as a mortal, conscious being. Yes, the Change campaign and the 'Yes, We Can' emo-trip was a great moment to feel united, to feel drunk and love everybody at the party, like everyone did when MJ died except the other way round, but it never was about Change beyond the abstract level. As usual it was a brief and temporary period of mass onanism. I was living in the Netherlands at the time and was amazed to see so many people around me were infected with the Obama-fever. I even remember translating a French current affairs program that only dealt with the 'Obamamanie' sweeping through France. 'Ooooh, now he's going to do the Martin Luther King speech, isn't it marvellous and so recognizable'. These weren't our elections, it wasn't our president, but people were acting as if the Beatles had landed. I fell for that once when I was 14 and watched the 1988 elections on CNN (I believe it was Dukakis vs Bush II), you know, when CNN still meant something.

It's a paradoxical kind of optimism, but it can only get better when things start coming apart. I wanted to write about which things will be important then, but couldn't get my head around it. Things like permaculture design and the importance of the survival of the Internet, blah blah blah. Nothing new really, just putting it into words for myself.

"Too bad there isn't a great gardener who could expose these weeds for what they are and pull them out."

And then put a thick mulch on the soil so the weeds get limits imposed on them and the soil life (that most important part that we cannot see) can start to replenish itself.