Hot Delivery, Cold Comfort: Obama’s Message to the 99 Percent


Although the winter has meant that the Occupy movement has not been able to maintain its most visible presences, it still dominates political discourse in America. It cast a long shadow over Obama’s State of the Union speech Tuesday, which, while delivered with a preacher’s skill, was a piece of political theater aimed at diffusing Occupy’s message.

Obama framed his narrative with multiple appeals to national unity as a counter to economic inequality – spinning a patriotic fantasy of energy and manufacturing self-sufficiency. The country’s victory in the Second World War was followed, he said, by “a story of success that every American had a chance to share.” He ignored the divisiveness of racism and the struggle of black Americans in the Civil Rights movement in order to get that same chance.

He cajoled the rich to contribute to economic fairness. The Washington Post commented: “the heart of Obama’s message — one he has underscored in appearances around the country in recent months — was that America’s wealthiest citizens must do more to cement the economic recovery and pull the country from its dire fiscal condition.”

Appealing to the rich sounds good, but achieves nothing without state compulsion. According to Talking Points Memo “the new push suggests a growing confidence on [the Democratic leaders’] part that the public has tired significantly of the anti-government themes of 2010 and 2011 like slashing federal programs and shrinking the size of the federal government. They represent a populist turn for a Democratic incumbent, suggesting a recognition that these views have gone mainstream…”

So the whole speech was attuned to the change in the public mood, but without any substantive change in the administration’s political strategy. The populist turn was encapsulated by Obama’s call for a 30 percent tax on millionaires’ income. Given Romney’s tax disclosures less than 24 hours before, this was an easy target; but achieving such a tax would involve mobilizing the public for an all-out war on the political influence of the ruling elite – not marshaling them to vote for another presidential term.

Obama’s most cynical political ploy was his announcement of a federal investigation into Wall Street. Obama’s exact words were: “I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”

MoveOn was completely taken in by this rhetoric and lost no time emailing its constituents asking them to thank Obama for a “progressive victory.” It is no such thing. The Washington Post commented: “This is nothing new. Obama formed a similar task force over two years ago to accomplish the same objective. The task force has brought a number of high profile cases, but many observers have been disappointed that regulators and prosecutors have been unable to bring a criminal case against a high-profile banking executive involved in the financial crisis.” Attorney General Eric Holder has been unable to prosecute a single banker, while he has brought six prosecutions against alleged leakers under draconian espionage laws.

The NYT pointed out: “the proposals seek to acknowledge the continuing frustration among many Americans — exemplified by the Occupy Wall Street movement — that few financial executives have been prosecuted for their actions leading up to the crisis. Given the election-year pressures and the continuing gridlock on Capitol Hill, neither measure is certain to win approval in this session of Congress.”

Far from embracing the demands of the 99 percent, Obama has simply made a tactical change, acknowledging the extent of frustration with economic inequality, while doing nothing in practice to change the political control of Washington by the financial industry – the NYT comments that his ultimate goal “remains a bipartisan deficit deal along the lines of the one he nearly negotiated with Speaker John A. Boehner.”

Yves Smith was scornful of the whole thing. She points out that the proposal simply creates another task force staffed with people who have deep ties to the financial industry. “If you wanted a real investigation, you get a real independent investigator, with a real budget and staffing, and turn him loose. We had the FCIC which had a lot of hearings and produced a readable book that said everyone was responsible for the mortgage crisis, which was tantamount to saying no one was responsible. We even had an eleven-regulator Foreclosure Task Force that looked at 2800 loan files (and a mere 100 foreclosures) and found nothing very much wrong.

“Now we have a committee full of people who have made numerous statements in the media and to Congressional committee minimizing the severity of the mortgage mess. Are we to believe they all had a conversion experience on the eve of the State of the Union address? But apparently the members of what passes for the left are prepared to take ‘investigation’ at face value since it would be unpleasant to consider the possibility that they are being snookered again.

“And it seems awfully plausible that the aim of getting [New York Attorney General] Schneiderman on board with an Administration ‘investigation’ is to undermine the effort by 15 Democrat attorneys general to devise their own strategy for dealing with mortgage abuses. … It would be better if I were proven wrong, but this looks to be yet another clever Obama gambit to neutralize his opposition. With all the same key actors in place – Geithner, Walsh, Holder – there is no reason to believe the Administration has had a change of heart until there is compelling evidence otherwise.”

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Filed under 2012 Election, bank foreclosures, debt limit impasse, financiers, Obama, occupy wall street, populism, We are the 99 percent

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