TRADING ON CHANGE
“I promised you change you can
believe in, I did not promise you
change you can actually see”
The Daily Mash, online satire ushers in the Obama dawn Barack Obama has now been inaugurated as the new president of the USA. But what effect will this purportedly post-racial, democratic president have on global politics and economics? Countless news commentators have argued that Obama’s victory was due to the ‘global economic crisis’ and will mean that ultimately people are more likely to invest in US companies, thus improving US markets, with positive knock-on effects for the rest of the world. Others have suggested that rich, white Americans will leave the US, or at least move their money off shore. Obama will probably have one of the most difficult financial jobs of any American president, but the most problematic and distorting belief at the moment is that Obama’s injection of a new type of energy into the capitalist system will mean a radical shift in the status quo. It is too easy to hope that he is a solution to our steadily worsening economic and political problems. Although focusing on Obama is far too restrictive if we want to understand the current political and economic landscape, it does provide a framework through which we can analyse what is changing and what remains constant: factors which are essential to understanding the ‘new’ situation and how social and ecological justice movements might fruitfully respond to the much vaunted ‘crisis’. What is the Crisis? Neoliberalism has sustained itself by continuously attacking the welfare and wages of the working classes in the global north, and entrenching poverty in the south through debts, the extraction of natural resources and sweatshop labour. This, however, has been proved unsustainable, even on its own unethical terms, as evidenced by the current ‘downturn’. The recent government bailout of banks was necessary to ‘save’ the state and its associate corporations, demonstrating the extremes to which capitalist governments will go to save capitalism. In the UK, for instance, the service sector is contracting, leading to cuts in interest rates; the manufacturing industry experienced its largest decline in 28 years this September; and around half a million homes are in negative equity, with repossessions up by between 50 and 71 percent. These are clearly difficult times, yet the ‘downturn’ was to be expected. All the speculation regarding Obama both distracts from and adds to our understanding of these economic and political crises happening globally. Many have mistakenly blamed the greed of a few in the City for the crises, and many of the same people are now mistakenly expecting that such greed can be eliminated if only we all follow the ‘right values’, as proclaimed by Obama. Crucial questions remain, such as: which crises are the most significant? Focusing on the election of a new president or one ‘global economic crisis’ oversimplifies the situation. It is true, though, that both events have undoubtedly shifted our perceptions of what is possible, reminding many people that the world is precarious and that we should be scrutinising these political and economic processes more than ever. However, it is simultaneously impossible not to observe that as the White House turns from red to blue and Western economies move from boom to bust, the fundamental problems remain the same: the destruction of the world’s life support systems, exploitation of resources and labour, and the concentration of wealth in the hands of fewer and fewer people. The president and the money Elected with the most expensive election campaign and without the ancestral legacy of slavery that would hinder the election of another African American by his or her white peers, Obama’s victory reveals more about the power of money, the types of black identity that are tolerated and embraced, and the extent to which the disarray of the Bush administration has disaffected Americans of all ‘races’ from their norms than it reveals about victories for black liberation and equality. The extent to which media and political commentary in the West has basked in his identity as a black man is instructive. In foregrounding race and eliding class, commentators seem keen to prove beyond doubt that racism is an anachronism. Yet, the same media outlets daily create a culture, and enable a politico-economic regime, of intolerance and racism by publishing sensationalist scare stories concerning migration in which people arriving in the UK with the ‘wrong’ complexion, language and economic means are construed as malignant bodies. Obama’s victory provides comfort for all those who prefer to deny the punitive intolerance emergent in the UK and broadly across the West. The Obama campaign raised $750,767,963 for his election campaign: the first time ever the Democrats have raised more money than the Republicans. The new president received more donations from employees of investment banks and hedge funds - including Lehman Brothers, Goldman Sachs and JP Morgan Chase - than from any other sector. His campaign team have not listed bundlers who donated under $50,000, but those who were listed included employees of the Carlyle Group, Center for Strategic and International Studies (CSIS) and Exxon Mobil Corporation. Richard J. Danzig of CSIS raised at least $500,000 for the Obama campaign. The CSIS was founded in 1962, at the height of the Cold War, and was, in the think-tank’s own words, “dedicated to finding ways for America to sustain its prominence and prosperity as a force for good in the world.” Amongst its trustees are former national security adviser Henry Kissinger; president of the Coca-Cola Company, Muhtar Kent; former Chairman and CEO of Glaxo Inc., Charles Sanders; former Secretary of Defense and Energy, James Schlesinger; former Chairman and CEO of Time Inc., Reginald K. Brack; and stalwart of US foreign policy, proponent of American imperialism through ‘soft power’ and foreign policy advisor to Obama, Zbigniew Brzezinski. Members of CSIS’s Advisory Board, chaired by Brzezinski and Carla A. Hills, of Hills & Company, include representatives from the highest executive and managerial strata of BAE Systems, Inc; Petroplus Holdings AG; Raytheon International Inc.; and Lockheed Martin Corporation; to name but a few. To further illuminate the channels, and revolving doors, through which power operates, it is worth noting the nature of the businesses in which other protagonists are involved, such as Carla A. Hills, former U.S. Secretary of Trade, of Hills & Company. Established in 1993, Hills & Company “helps businesses expand trade and investment” in Asia, Latin America, the European Union, Eastern and Central Europe, Russia and Eurasia, and Africa. Its work includes “bring[ing] about policy change in a foreign country or region on behalf of a client”. Clients have included the Coca-Cola Company, Novartis AG. Procter & Gamble, Bechtel Corporation, the Boeing Company, the pro-biofuels Inter-American Development Bank and the Rolls Royce Company. Although the extent to which Obama is indebted to different interest groups is not yet clear, it is clear that some multinationals believe a seemingly grassroots Democrat may offer an ideal climate in which they can flourish. This is Corporate Social Responsibility and greenwash operating at a presidential level. The snake oil tactics of the salesman have, of course, long been analogous to the insincere charm of the politician, and in the instance of Obama and his corporate allies, the parallels between CSR in corporate and political practice are compelling; both personnel and practice move through the revolving door of business and politics. It is true that people can hope for some improvements from Obama’s tenure. However, Obama is surrounding himself with people from Bill Clinton’s administration, which gutted social spending, increased prison overcrowding and implemented a devastating foreign policy. By appointing Clintonian ‘liberals’, Obama is rewarding the corporations that funded him, further convincing them that the Democrats will be good for business. Such corporations will certainly be happy to see that the newly created Transition Economic Advisory Board includes billionaire investor Warren Buffett, former Fed chairman Paul Volcker (key in ushering neoliberalism’s dawn) and Google’s CEO Eric Schmidt. While analysts expect the renewable energy sector to do well under Obama, one industry seems to have already benefited from his election, that is agrofuels, a sector whose green credentials are in tatters. US biofuel makers are struggling to make a profit at a time of tumbling oil and gasoline prices, but Obama has expressed support for the federal requirement to use ethanol, made mostly from corn, as a motor fuel and says he will accelerate the development of new feedstocks. In recent times, military and bailout funding have exceeded every other area of expenditure in the US and the UK. Obama has pledged to increase military funding (for example, he proposes more troops in Afghanistan) and it is likely that the US will gradually get other countries to fund wars, such as using Iraqi oil revenues to pay for US soldiers. On the other hand, the International Monetary Fund (IMF) is apparently in need of serious structural adjustment, which will most likely include more involvement from emerging economies, such as Brazil, India and China, meaning developed countries can get the much-needed ‘assistance’ of emerging developing countries.
So the questions remain: what will Obama’s victory mean for the 33 percent of black Americans living below the poverty line? What will a Democrat US presidency mean for capitalism’s wars? Will it change global corporations and their activities in the slightest? Can we rely on the US to realise our ‘hopes’, given that it is its very system that partly caused much of the current economic and social crises? What will an Obama presidency mean for economics? Historically, the US presidential elections have a major effect on markets, with the stock market rising much faster under a Democratic president than a Republican. However, there are serious doubts whether the same will happen now, when the US economy is awash with uncertainty, debt is at record levels and the housing market is in free fall. Manus Cranny, of MF Global Spreads, suggested Obama has actually limited the ability to pull the world out of recession quickly. The European Commission, on the other hand, has optimistically urged the president-elect to “help create a new economic order”. Obama himself has already outlined plans to ‘tackle the crisis’, including providing tax credits to firms that keep hiring, a 90-day freeze on home repossessions, and support for the car industry. Obama may well prove to be the key to restoring faith in the (capitalist) system to which economic crises are endemic. It is, therefore, very important now to keep in clear sight the problems, the iniquities created by the system, which cannot be eradicated by a narrow plutocracy operating squarely within and for that same system. In other words, any bid for greater equality globally cannot be delivered by one man, regardless of race, operating in the upper echelons of a global and national hierarchy.
What does this mean for the anti-capitalist movement? Following the bail-outs of major banks by the US and UK governments, many argued that, if financial institutions remained nationalised, or part-nationalised, business operations could, in theory, be more easily held to account. However, increasing integration between government and business would conveniently set in clearer terms the move from citizenship to ‘stakeholderness’ that privatisation and the corporatisation of government have contrived in the last 30 years. This will effectively bind workers to the system through greater integration; their interests will become indissoluble from those of banks and investment funds. In this scenario, opposition from a populace so embedded in that very system would become increasingly difficult. There may well be great political potential in popular disillusionment with the neo-Democrats and neo-Labour, as people’s hopes are raised but not delivered, and as people continue to be frustrated with the cost of living. We can, perhaps, learn some lessons from the movements of the 1930s Great Depression, when the employed and unemployed struggled together against oppressive reforms. We can perhaps also be inspired by the fact that some welcomed the 1970s recession and freedom from work. After all, those in power much fear people who have time on their hands. It will be interesting, in any case, to see what rhetoric is used about the ‘shared risks’, as David Miliband and others have called them, of terrorism and climate change in order to ‘discipline’ people. In recent months, we have seen Chinese workers riot over wages, working conditions and corruption; mass student strikes and occupations in Germany and Italy; anti-eviction movements emerging in the US and the UK; police in Chicago refusing to evict tenants defaulting on their mortgages; and the neoliberal war machine failing in Iraq. We need to ensure that the inevitable re-structuring is not a substitute for political engagement for all. Accusations of cynicism will undoubtedly be thrown at those criticising Obama, but such criticism must be sustained if we are to continue the struggle for direct democracy.
believe in, I did not promise you
change you can actually see”
The Daily Mash, online satire ushers in the Obama dawn Barack Obama has now been inaugurated as the new president of the USA. But what effect will this purportedly post-racial, democratic president have on global politics and economics? Countless news commentators have argued that Obama’s victory was due to the ‘global economic crisis’ and will mean that ultimately people are more likely to invest in US companies, thus improving US markets, with positive knock-on effects for the rest of the world. Others have suggested that rich, white Americans will leave the US, or at least move their money off shore. Obama will probably have one of the most difficult financial jobs of any American president, but the most problematic and distorting belief at the moment is that Obama’s injection of a new type of energy into the capitalist system will mean a radical shift in the status quo. It is too easy to hope that he is a solution to our steadily worsening economic and political problems. Although focusing on Obama is far too restrictive if we want to understand the current political and economic landscape, it does provide a framework through which we can analyse what is changing and what remains constant: factors which are essential to understanding the ‘new’ situation and how social and ecological justice movements might fruitfully respond to the much vaunted ‘crisis’. What is the Crisis? Neoliberalism has sustained itself by continuously attacking the welfare and wages of the working classes in the global north, and entrenching poverty in the south through debts, the extraction of natural resources and sweatshop labour. This, however, has been proved unsustainable, even on its own unethical terms, as evidenced by the current ‘downturn’. The recent government bailout of banks was necessary to ‘save’ the state and its associate corporations, demonstrating the extremes to which capitalist governments will go to save capitalism. In the UK, for instance, the service sector is contracting, leading to cuts in interest rates; the manufacturing industry experienced its largest decline in 28 years this September; and around half a million homes are in negative equity, with repossessions up by between 50 and 71 percent. These are clearly difficult times, yet the ‘downturn’ was to be expected. All the speculation regarding Obama both distracts from and adds to our understanding of these economic and political crises happening globally. Many have mistakenly blamed the greed of a few in the City for the crises, and many of the same people are now mistakenly expecting that such greed can be eliminated if only we all follow the ‘right values’, as proclaimed by Obama. Crucial questions remain, such as: which crises are the most significant? Focusing on the election of a new president or one ‘global economic crisis’ oversimplifies the situation. It is true, though, that both events have undoubtedly shifted our perceptions of what is possible, reminding many people that the world is precarious and that we should be scrutinising these political and economic processes more than ever. However, it is simultaneously impossible not to observe that as the White House turns from red to blue and Western economies move from boom to bust, the fundamental problems remain the same: the destruction of the world’s life support systems, exploitation of resources and labour, and the concentration of wealth in the hands of fewer and fewer people. The president and the money Elected with the most expensive election campaign and without the ancestral legacy of slavery that would hinder the election of another African American by his or her white peers, Obama’s victory reveals more about the power of money, the types of black identity that are tolerated and embraced, and the extent to which the disarray of the Bush administration has disaffected Americans of all ‘races’ from their norms than it reveals about victories for black liberation and equality. The extent to which media and political commentary in the West has basked in his identity as a black man is instructive. In foregrounding race and eliding class, commentators seem keen to prove beyond doubt that racism is an anachronism. Yet, the same media outlets daily create a culture, and enable a politico-economic regime, of intolerance and racism by publishing sensationalist scare stories concerning migration in which people arriving in the UK with the ‘wrong’ complexion, language and economic means are construed as malignant bodies. Obama’s victory provides comfort for all those who prefer to deny the punitive intolerance emergent in the UK and broadly across the West. The Obama campaign raised $750,767,963 for his election campaign: the first time ever the Democrats have raised more money than the Republicans. The new president received more donations from employees of investment banks and hedge funds - including Lehman Brothers, Goldman Sachs and JP Morgan Chase - than from any other sector. His campaign team have not listed bundlers who donated under $50,000, but those who were listed included employees of the Carlyle Group, Center for Strategic and International Studies (CSIS) and Exxon Mobil Corporation. Richard J. Danzig of CSIS raised at least $500,000 for the Obama campaign. The CSIS was founded in 1962, at the height of the Cold War, and was, in the think-tank’s own words, “dedicated to finding ways for America to sustain its prominence and prosperity as a force for good in the world.” Amongst its trustees are former national security adviser Henry Kissinger; president of the Coca-Cola Company, Muhtar Kent; former Chairman and CEO of Glaxo Inc., Charles Sanders; former Secretary of Defense and Energy, James Schlesinger; former Chairman and CEO of Time Inc., Reginald K. Brack; and stalwart of US foreign policy, proponent of American imperialism through ‘soft power’ and foreign policy advisor to Obama, Zbigniew Brzezinski. Members of CSIS’s Advisory Board, chaired by Brzezinski and Carla A. Hills, of Hills & Company, include representatives from the highest executive and managerial strata of BAE Systems, Inc; Petroplus Holdings AG; Raytheon International Inc.; and Lockheed Martin Corporation; to name but a few. To further illuminate the channels, and revolving doors, through which power operates, it is worth noting the nature of the businesses in which other protagonists are involved, such as Carla A. Hills, former U.S. Secretary of Trade, of Hills & Company. Established in 1993, Hills & Company “helps businesses expand trade and investment” in Asia, Latin America, the European Union, Eastern and Central Europe, Russia and Eurasia, and Africa. Its work includes “bring[ing] about policy change in a foreign country or region on behalf of a client”. Clients have included the Coca-Cola Company, Novartis AG. Procter & Gamble, Bechtel Corporation, the Boeing Company, the pro-biofuels Inter-American Development Bank and the Rolls Royce Company. Although the extent to which Obama is indebted to different interest groups is not yet clear, it is clear that some multinationals believe a seemingly grassroots Democrat may offer an ideal climate in which they can flourish. This is Corporate Social Responsibility and greenwash operating at a presidential level. The snake oil tactics of the salesman have, of course, long been analogous to the insincere charm of the politician, and in the instance of Obama and his corporate allies, the parallels between CSR in corporate and political practice are compelling; both personnel and practice move through the revolving door of business and politics. It is true that people can hope for some improvements from Obama’s tenure. However, Obama is surrounding himself with people from Bill Clinton’s administration, which gutted social spending, increased prison overcrowding and implemented a devastating foreign policy. By appointing Clintonian ‘liberals’, Obama is rewarding the corporations that funded him, further convincing them that the Democrats will be good for business. Such corporations will certainly be happy to see that the newly created Transition Economic Advisory Board includes billionaire investor Warren Buffett, former Fed chairman Paul Volcker (key in ushering neoliberalism’s dawn) and Google’s CEO Eric Schmidt. While analysts expect the renewable energy sector to do well under Obama, one industry seems to have already benefited from his election, that is agrofuels, a sector whose green credentials are in tatters. US biofuel makers are struggling to make a profit at a time of tumbling oil and gasoline prices, but Obama has expressed support for the federal requirement to use ethanol, made mostly from corn, as a motor fuel and says he will accelerate the development of new feedstocks. In recent times, military and bailout funding have exceeded every other area of expenditure in the US and the UK. Obama has pledged to increase military funding (for example, he proposes more troops in Afghanistan) and it is likely that the US will gradually get other countries to fund wars, such as using Iraqi oil revenues to pay for US soldiers. On the other hand, the International Monetary Fund (IMF) is apparently in need of serious structural adjustment, which will most likely include more involvement from emerging economies, such as Brazil, India and China, meaning developed countries can get the much-needed ‘assistance’ of emerging developing countries.
So the questions remain: what will Obama’s victory mean for the 33 percent of black Americans living below the poverty line? What will a Democrat US presidency mean for capitalism’s wars? Will it change global corporations and their activities in the slightest? Can we rely on the US to realise our ‘hopes’, given that it is its very system that partly caused much of the current economic and social crises? What will an Obama presidency mean for economics? Historically, the US presidential elections have a major effect on markets, with the stock market rising much faster under a Democratic president than a Republican. However, there are serious doubts whether the same will happen now, when the US economy is awash with uncertainty, debt is at record levels and the housing market is in free fall. Manus Cranny, of MF Global Spreads, suggested Obama has actually limited the ability to pull the world out of recession quickly. The European Commission, on the other hand, has optimistically urged the president-elect to “help create a new economic order”. Obama himself has already outlined plans to ‘tackle the crisis’, including providing tax credits to firms that keep hiring, a 90-day freeze on home repossessions, and support for the car industry. Obama may well prove to be the key to restoring faith in the (capitalist) system to which economic crises are endemic. It is, therefore, very important now to keep in clear sight the problems, the iniquities created by the system, which cannot be eradicated by a narrow plutocracy operating squarely within and for that same system. In other words, any bid for greater equality globally cannot be delivered by one man, regardless of race, operating in the upper echelons of a global and national hierarchy.
What does this mean for the anti-capitalist movement? Following the bail-outs of major banks by the US and UK governments, many argued that, if financial institutions remained nationalised, or part-nationalised, business operations could, in theory, be more easily held to account. However, increasing integration between government and business would conveniently set in clearer terms the move from citizenship to ‘stakeholderness’ that privatisation and the corporatisation of government have contrived in the last 30 years. This will effectively bind workers to the system through greater integration; their interests will become indissoluble from those of banks and investment funds. In this scenario, opposition from a populace so embedded in that very system would become increasingly difficult. There may well be great political potential in popular disillusionment with the neo-Democrats and neo-Labour, as people’s hopes are raised but not delivered, and as people continue to be frustrated with the cost of living. We can, perhaps, learn some lessons from the movements of the 1930s Great Depression, when the employed and unemployed struggled together against oppressive reforms. We can perhaps also be inspired by the fact that some welcomed the 1970s recession and freedom from work. After all, those in power much fear people who have time on their hands. It will be interesting, in any case, to see what rhetoric is used about the ‘shared risks’, as David Miliband and others have called them, of terrorism and climate change in order to ‘discipline’ people. In recent months, we have seen Chinese workers riot over wages, working conditions and corruption; mass student strikes and occupations in Germany and Italy; anti-eviction movements emerging in the US and the UK; police in Chicago refusing to evict tenants defaulting on their mortgages; and the neoliberal war machine failing in Iraq. We need to ensure that the inevitable re-structuring is not a substitute for political engagement for all. Accusations of cynicism will undoubtedly be thrown at those criticising Obama, but such criticism must be sustained if we are to continue the struggle for direct democracy.
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