Obama’s inauguration as US president has attracted enormous goodwill and support for his new administration, both within and without the US. He connects both symbolically and in reality to the history of the civil rights movement and other struggles for fairness and justice. As the first African-American to become president in this nation built on plantation slavery, he embodies the hope that he so assiduously canvassed throughout his campaign: its success signalled a socio-political shift across the whole of the country, a shift towards engagement in the political process, towards a state which would support individuals and families through healthcare and social service provisions, the defence of jobs, the ending of injustice and arrogant privilege, and so on.
“Hope” in this context is loaded with meaning: safety from the bitter consequences of the economic downturn, a return to the chance of a reasonable life based on hard work. Voters displayed their desire for change as well as confidence in Obama’s leadership at a time of increasing economic uncertainty and financial turbulence throughout the world.
Obama’s plan to revive the US economy relies on a neo-Keynesian theory of government spending in order to increase demand, as opposed to the outgoing administration’s approach of manipulating money supply. However, there is no proof that any government ever adopted Keynes’ plans in the 1930s, or that if they had been followed the crisis would have been solved. Essentially it means rebuilding the US with borrowed money; but who is to lend it when the indebtedness of the US government is already in the tens of trillions?
The problem is that Obama’s plan is based on an ideology which, however thoughtfully he examines the problem, commits him to restoring the circulation of capital at a time when US industrial manufacturing is unable to generate a surplus. State credit is simply a claim on future revenues to be obtained from taxation – that is the only way that governments can raise money. It is a reallocation of an overall surplus generated in industry. This part of the surplus is then unavailable for use in future industrial expansion. Without resolving this fundamental problem of capital accumulation, the basis of US state credit will be further undermined and, as looks likely, the dollar will lose its reserve currency status and the privileged position which enabled the US financial industry to dominate a globalized world economy.
Obama is asking people to serve, but chants of “Yes We Can” won’t deliver jobs. If the hope he has generated is dashed, it could well turn into anger: not only with Obama, but also with the whole political system.